485BPOS 1 d394850d485bpos.txt PREMIER BB Filed with the Securities and Exchange Commission on August 16, 2012 Registration No. 333-144639 Investment Company Act No. 811-07325 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Post-Effective Amendment No. 30 and REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 123 PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT (Exact Name of Registrant) PRUCO LIFE INSURANCE COMPANY (Name of Depositor) 213 WASHINGTON STREET NEWARK, NEW JERSEY 07102-2992 (973) 367-1730 (Address and telephone number of depositor's principal executive offices) J. MICHAEL LOW, ESQ. Low & Cohen, PLLC 2999 North 44/th/ Street, Suite 550 Phoenix, Arizona 85018 (602) 648-4040 (Name, address and telephone number of agent for service) Copies to: LYNN K. STONE VICE PRESIDENT PRUCO LIFE INSURANCE COMPANY 213 WASHINGTON STREET NEWARK, NJ 07102-2992 (203) 402-1382 Approximate Date of Proposed Sale to the Public: Continuous It is proposed that this filing become effective: (check appropriate space) [_] immediately upon filing pursuant to paragraph (b) of Rule 485 [X] on August 20, 2012 pursuant to paragraph (b) of Rule 485 [_] 60 days after filing pursuant to paragraph (a) (i) of Rule 485 [_]onpursuant to paragraph (a) (i) of Rule 485 [_] 75 days after filing pursuant to paragraph (a) (ii) of Rule 485 [_] on ______________ pursuant to paragraph (a) (ii) of Rule 485 If appropriate, check the following box: [_] This post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities Being Registered: Interest in Individual Variable Annuity Contracts. ================================================================================ Premier Bb EXPLANATORY NOTE: Registrant is filing this Post-Effective Amendment No. 30 to Registration Statement No. 333-144639 for the purpose of including in the Registration Statement a prospectus supplement, the Statement of Additional Information, including financial statements filed therewith, and Part C. This Post-Effective Amendment No. 30 incorporates by reference the prospectus dated May 1, 2012, contained in Part A of Post-Effective Amendment No. 28, filed on April 23, 2012. PRUCO LIFE INSURANCE COMPANY PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY PRUCO LIFE OF NEW JERSEY FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION VARIABLE ACCOUNT B SUPPLEMENT, DATED AUGUST 20, 2012, TO PROSPECTUSES DATED APRIL 30 AND MAY 1, 2012 This Supplement should be read and retained with the Prospectus for your Annuity. This supplement is intended to update certain information in the Prospectus for the variable annuity you own and is not intended to be a prospectus or offer for any other variable annuity listed here that you do not own. If you would like another copy of the current Prospectus, please call us at 1-888-PRU-2888. -------------------------------------------------------------------------------- We are issuing this supplement to reflect changes to the Advanced Series Trust - the addition of two new funds, the repositioning of an existing fund, and a subadvisor change; and a change to certain Annuities purchased in the state of Illinois. I. TWO NEW FUND ADDITIONS AND A FUND REPOSITIONING. Effective on or about August 20, 2012, the AST MFS Large-Cap Value Portfolio and the AST Western Asset Emerging Markets Debt Portfolio will be added as new Sub-accounts to the following Annuities: ASL II; ASAP III; APEX II; XT6; XT8; Optimum; Optimum 4; Optimum Plus; Optimum XTRA; AS Cornerstone; Advisors Choice 2000; Prudential Premier B, L, X; Premier Bb; Prudential Premier Retirement Variable Annuities - X, B, L, C and Advisors Series; and the Prudential Premier Retirement Variable Annuity. Also, the AST Horizon Growth Asset Allocation Portfolio will be repositioned, and its name will be changed to the AST J.P. Morgan Global Thematic Portfolio. The AST Horizon Growth Asset Allocation Portfolio is not available with the Optimum suite of Annuities. Therefore, the disclosure changes for the AST Horizon Growth Asset Allocation Portfolio that are described in this Supplement do not apply to your Prospectus if you own an Optimum, Optimum Four, Optimum Plus or Optimum XTra Annuity. Accordingly and where applicable, we make the following disclosure changes to your Prospectus: . We replace in your Prospectus all references to the AST Horizon Growth Asset Allocation Portfolio with AST J.P. MORGAN GLOBAL THEMATIC PORTFOLIO. . We add the names AST MFS LARGE-CAP VALUE PORTFOLIO and AST WESTERN ASSET EMERGING MARKETS DEBT PORTFOLIO to your Prospectus. . In the section titled, "Summary of Contract Fees and Charges" we add the following fees for the AST J.P. Morgan Global Thematic Portfolio, the AST MFS Large-Cap Value Portfolio and the AST Western Asset Emerging Markets Debt Portfolio in the table of Underlying Mutual Fund Portfolio Annual Expenses:
-------------------------------------------------------------------------------------------------------------------------------- UNDERLYING MUTUAL FUND PORTFOLIO ANNUAL EXPENSES (as a percentage of the average net assets of the underlying Portfolios) -------------------------------------------------------------------------------------------------------------------------------- For the year ended December 31, 2011 ------------------------------------------------------------------------------------------------------ UNDERLYING PORTFOLIO Total Broker Fees Acquired Annual Contractual Net Annual Dividend and Expenses Portfolio Portfolio Fee Waiver Fund Management Other Distribution Expense on on Short Fees & Operating or Expense Operating Fees Expenses (12b-1) Fees Short Sales Sales Expenses Expenses Reimbursement Expenses -------------------------------------------------------------------------------------------------------------------------------- ADVANCED SERIES TRUST AST J.P. Morgan Global Thematic/ 1/ 0.95% 0.15% 0.00% 0.00% 0.00% 0.00% 1.10% 0.00% 1.10% AST MFS Large-Cap Value /2/ 0.85% 0.16% 0.00% 0.00% 0.00% 0.00% 1.01% 0.00% 1.01% AST Western Asset Emerging Markets Debt/ 3/ 0.85% 0.21% 0.00% 0.00% 0.00% 0.00% 1.06% 0.05%/ 4/ 1.01%
* The AST Horizon Growth Asset Allocation Portfolio is not available with the Optimum suite of Annuities. Therefore, the disclosure changes for the AST Horizon Growth Asset Allocation Portfolio that are described in this Supplement do not apply to your Prospectus if you own an Optimum, Optimum Four, Optimum Plus or Optimum XTra Annuity. 1 1 Effective August 20, 2012, the AST Horizon Growth Asset Allocation Portfolio will change its subadviser, investment objective, policies, strategy, expense structure, and its name to the AST J.P. Morgan Global Thematic Portfolio. The fees and expenses identified in this table reflect these changes and are estimates based in part on assumed average daily net assets of $1.5 billion for the Portfolio (i.e., the approximate amount of the Portfolio's net assets as of December 31, 2011) for the fiscal year ending December 31, 2012. 2 The AST MFS Large-Cap Value Portfolio will commence operations on or about August 20, 2012. Estimate based in part on assumed average daily net assets of approximately $500 million for the Portfolio for the fiscal period ending December 31, 2012. 3 The AST Western Asset Emerging Markets Debt Portfolio will commence operations on or about August 20, 2012. Estimate based in part on assumed average daily net assets of approximately $650 million for the Portfolio for the fiscal period ending December 31, 2012. 4 Prudential Investments LLC ("PI") and AST Investment Services, Inc. ("AST") have contractually agreed to waive a portion of their investment management fee so that the effective management fee rate paid by the Portfolio is 0.80% of the average daily net assets of the Portfolio through July 1, 2014. This arrangement may not be terminated or modified prior to July 1, 2014 and may be discontinued or modified thereafter. The decision on whether to renew, modify or discontinue the arrangement after July 1, 2014 will be subject to review by PI, AST and the Portfolio's Board of Trustees. . In the section titled, "Investment Options" we add the following summary description of the AST J.P. Morgan Global Thematic Portfolio, the AST MFS Large-Cap Value Portfolio and the AST Western Asset Emerging Markets Debt Portfolio to the Investment Objectives/Policies table as follows:
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO TYPE ADVISOR/ SUBADVISOR ------------------------------------------------------------------------ AST FUNDS ------------------------------------------------------------------------ ASSET AST J.P. MORGAN GLOBAL THEMATIC J.P. Morgan ALLOCATION PORTFOLIO: (formerly AST Horizon Investment Growth Asset Allocation Portfolio): Management, Inc. seeks capital appreciation consistent with its specified level of risk tolerance. The Portfolio will provide exposure to a long-term strategic asset allocation while having the flexibility to express shorter-term tactical views by capitalizing upon market opportunities globally. The Portfolio will invest across a broad range of asset classes, including, without limitation, domestic equity and debt, international and global developed equity, emerging markets equity and debt, high yield debt, convertible bonds, and real estate investment trusts. The Portfolio will invest primarily in individual securities in order to meet its investment objective and will also utilize derivative instruments for tactical positioning and risk management. Under normal circumstances, approximately 65% of the Portfolio's net assets (ranging between 55-75% depending on market conditions) will be invested to provide exposure to equity securities and approximately 35% of its net assets (ranging between 25-45% depending on market conditions) will be invested to provide exposure to fixed-income securities. Such exposures may be obtained through: (i) the purchase of "physical" securities (e.g., common stocks, bonds, etc.); (ii) the use of derivatives (e.g., options and futures contracts on indices, securities, and commodities, currency forwards, etc.); and (iii) the purchase of certain exchange-traded funds. ------------------------------------------------------------------------ LARGE CAP AST MFS LARGE-CAP VALUE PORTFOLIO: Massachusetts VALUE seeks capital appreciation. The Financial Services Portfolio seeks to achieve its Company investment objective by investing at least 80% of its net assets in issuers with large market capitalizations of at least $5 billion at the time of purchase. The Portfolio will invest primarily in equity securities and may invest in foreign securities. The Subadviser focuses on investing the Portfolio's assets in the stocks of companies it believes are undervalued compared to their perceived worth (value companies). The Subadviser uses a "bottom-up" investment approach to buying and selling investments for the Portfolio. Investments are selected primarily based on fundamental analysis of individual issuers. Quantitative models that systematically evaluate issuers may also be considered. ------------------------------------------------------------------------ FIXED AST WESTERN ASSET EMERGING MARKETS Western Asset INCOME DEBT PORTFOLIO: seeks to maximize Management total return. The Portfolio pursues Company; Western its objective, under normal market Asset Management conditions, by investing at least Company Limited 80% of its assets in fixed-income securities issued by governments, government related entities and corporations located in emerging markets, and related instruments. The Portfolio may invest without limit in high yield debt securities and related investments rated below investment grade (that is, securities rated below Baa/BBB), or, if unrated, determined to be of comparable credit quality by one of the Subadvisers. The Portfolio may invest in Below-investment grade securities that are commonly referred to as "junk bonds". The Western Asset Emerging Markets Debt Portfolio also may invest up to 50% of its assets in non-U.S. dollar denominated fixed income securities. ------------------------------------------------------------------------
. Also in the section titled, "Investment Options," AST J.P. Morgan Global Thematic Portfolio replaces AST Horizon Growth Asset Allocation Portfolio in both the Group I and Group II lists; and AST MFS Large-Cap Value Portfolio is added to the Group II list. 2 II. SUBADVISOR CHANGE. Effective on or about August 20, 2012, Eaton Vance Management will be terminated as a subadvisor on the AST Large-Cap Value Portfolio. Accordingly, in "Investment Options," the section describing the investment objectives and policies for the AST Large-Cap Value Portfolio will be modified as follows:
STYLE/ INVESTMENT OBJECTIVES/POLICIES PORTFOLIO TYPE ADVISOR/ SUBADVISOR -------------------------------------------------------------------- AST FUNDS -------------------------------------------------------------------- LARGE CAP AST LARGE-CAP VALUE PORTFOLIO: seeks Hotchkis and VALUE current income and long-term growth Wiley Capital of income, as well as capital Management, LLC appreciation. The Portfolio invests, under normal circumstances, at least 80% of its net assets in securities of large capitalization companies. Large capitalization companies are those companies with market capitalizations within the market capitalization range of the Russell 1000 Value Index. --------------------------------------------------------------------
III. MARKET VALUE ADJUSTMENT OPTIONS AND 6 AND 12 MONTH DCA OPTIONS ARE NO LONGER AVAILABLE TO CERTAIN ANNUITIES PURCHASED IN THE STATE OF ILLINOIS. For Prudential Premier(R) Retirement Variable Annuities (X Series, B Series, L Series, C Series and Advisor Series), and the Prudential Premier(R) Retirement Variable Annuity, effective August 20, 2012, Market Value Adjustment Options and 6 and 12 Month DCA Options are not available in the state of Illinois. If you currently have allocations in the Market Value Adjustment Options and/or a 6 or 12 Month DCA Option, you will not be able to renew those options after they mature. THIS SUPPLEMENT SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. 3 PART B STATEMENT OF ADDITIONAL INFORMATION May 1, 2012 as Supplemented July 24, 2012 PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT VARIABLE ANNUITY CONTRACTS The Prudential Premier Variable Annuity Bb Series/(SM)/ ("Bb Series"), annuity contract (the "Annuities" or the "Annuity") are individual variable annuity contract issued by Pruco Life Insurance Company ("Pruco Life"), a stock life insurance company that is a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential") and is funded through the Pruco Life Flexible Premium Variable Annuity Account (the "Account"). The Annuity could be purchased by making an initial purchase payment of $1,000 or more. With some restrictions, you can make additional purchase payments by means other than electronic fund transfer of no less than $100 at any time during the accumulation phase. However, we impose a minimum of $50 with respect to additional purchase payments made through electronic fund transfers. This Statement of Additional Information is not a prospectus and should be read in conjunction with the Bb Series dated May 1, 2012. To obtain a copy of the prospectus, without charge, you can write to the Prudential Annuity Service Center, P.O. Box 7960, Philadelphia, Pennsylvania 19176, or contact us by telephone at (888) PRU-2888. TABLE OF CONTENTS Company 2 Experts 2 Principal Underwriter 2 Payments Made to Promote Sale of Our Products 2 Determination of Accumulation Unit Values 4 Separate Account Financial Information A1 Company Financial Information B1 Pruco Life Insurance Company Prudential Annuity 213 Washington Street Service Center Newark, NJ 07102-2992 P.O. Box 7960 Philadelphia, Pennsylvania 19176 Telephone: (888) PRU-2888 Prudential Premier Variable Annuity Bb Series/(SM)/ is a service mark of The Prudential Insurance Company of America. COMPANY Pruco Life Insurance Company ("Pruco Life") is a stock life insurance company organized in 1971 under the laws of the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam, and in all states except New York. Pruco Life is a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"), a stock life insurance company founded in 1875 under the laws of the State of New Jersey. Prudential is an indirect wholly-owned subsidiary of Prudential Financial, Inc. ("Prudential Financial"), a New Jersey insurance holding company. EXPERTS The consolidated financial statements of Pruco Life Insurance Company and its subsidiaries as of December 31, 2011 and 2010 and for each of the three years in the period ended December 31, 2011 and the financial statements of Pruco Life Flexible Premium Variable Annuity Account as of December 31, 2011 and for each of the two years in the period ended December 31, 2011, included in this Statement of Additional Information have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP's principal business address is 300 Madison Avenue, New York, New York 10017. PRINCIPAL UNDERWRITER Prudential Annuities Distributors, Inc. ("PAD"), an indirect wholly-owned subsidiary of Prudential Financial, Inc., offers each Annuity on a continuous basis through corporate office and regional home office employees in those states in which annuities may be lawfully sold. It may also offer the Annuities through licensed insurance producers and agents, or through appropriately registered affiliates of Prudential, provided clearances to do so are obtained in any jurisdiction where such clearances may be necessary. With respect to all individual annuities issued by Pruco Life, PAD received commissions of 1,075,327,764, $790,486,771, and $231,193,283 in 2011, 2010, and 2009, respectively. PAD retained none of those commissions. As discussed in the prospectus, Pruco Life pays commissions to broker/dealers that sell the Annuities according to one or more schedules, and also may pay non-cash compensation. In addition, Pruco Life may pay trail commissions to selling firms to pay to its registered representatives who maintain an ongoing relationship with an annuity owner. Typically, a trail commission is compensation that is paid periodically, the amount of which is linked to the value of the Annuities and the amount of time that the Annuities have been in effect. PAYMENTS MADE TO PROMOTE SALE OF OUR PRODUCTS In an effort to promote the sale of our products (which may include the placement of Pruco Life and/or each Annuity on a preferred or recommended company or product list and/or access to the firm's registered representatives), we and/or PAD may enter into marketing service agreements with certain broker/dealer firms with respect to certain or all registered representatives of such firms under which such firms may receive separate compensation or reimbursement for, among other things, training of sales personnel and/or marketing, administrative services and/or other services they provide. These services may include, but are not limited to: educating customers of the firm on the Annuity's features; conducting due diligence and analysis, providing office access, operations and systems support; holding seminars intended to educate the firm's registered representatives and make them more knowledgeable about the annuity; providing a dedicated marketing coordinator; providing priority sales desk support; and providing expedited marketing compliance approval. We and/or PAD also may compensate third-party vendors, for services that such vendors render to broker-dealer firms. To the extent permitted by FINRA rules and other applicable laws and regulations, PAD may pay or allow other promotional incentives or payments in the form of cash or non-cash compensation. These arrangements may not be offered to all firms and the terms of such arrangements may differ between firms. The list below identifies three general types of payments that PAD pays which are broadly defined as follows: . Percentage Payments based upon "Assets under Management" or "AUM": This type of payment is a percentage payment that is based upon the total amount held in all Pruco Life products that were sold through the firm (or its affiliated broker/dealers). 2 . Percentage Payments based upon sales: This type of payment is a percentage payment that is based upon the total amount of money received as purchase payments under Pruco Life annuity products sold through the firm (or its affiliated broker/dealers). . Fixed payments: These types of payments are made directly to or in sponsorship of the firm (or its affiliated broker/dealers). Examples of arrangements under which such payments may be made currently include, but are not limited to: sponsorships, conferences (national, regional and top producer), speaker fees, promotional items, and reimbursements to firms for marketing activities or services paid by the firms and/or their individual representatives. The amount of these payments varies widely because some payments may encompass only a single event, such as a conference, and others have a much broader scope. In addition, we may make payments upon the initiation of a relationship for systems, operational and other support. The list in the prospectus includes the names of the firms (or their affiliated broker/dealers) that we are aware (as of December 31, 2011) received payment with respect to annuity business during 2011 (or as to which a payment amount was accrued during 2011). The firms listed include payments in connection with products issued by Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey. Your registered representative can provide you with more information about the compensation arrangements that apply upon the sale of the contract. During 2011, the least amount paid, and greatest amount paid, were $19.35 and $6,443,077.91, respectively. 3 DETERMINATION OF ACCUMULATION UNIT VALUES The value for each accumulation unit is computed as of the end of each business day. On any given business day the value of a Unit in each subaccount will be determined by multiplying the value of a Unit of that subaccount for the preceding business day by the net investment factor for that subaccount for the current business day. The net investment factor for any business day is determined by dividing the value of the assets of the subaccount for that day by the value of the assets of the subaccount for the preceding business day (ignoring, for this purpose, changes resulting from new purchase payments and withdrawals), and subtracting from the result the daily equivalent of the annual charge for all insurance and administrative expenses. The value of the assets of a subaccount is determined by multiplying the number of shares of Advanced Series Trust (the "Trust") or other fund held by that subaccount by the net asset value of each share and adding the value of dividends declared by the Trust or other fund but not yet paid. As we have indicated in the prospectus, each Annuity allows you to select or decline any of several benefit options that carries with it a specific asset-based charge. We maintain a unique unit value corresponding to each such annuity feature. In the prospectus, we set out historical unit values corresponding to the highest and lowest combination of charges. Here, we set out the remaining historical unit values. PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: WITH ONLY HD GRO (1.30%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.10439 $ 7.20298 42,369 01/01/2009 to 12/31/2009......... $ 7.20298 $ 8.84253 91,490 01/01/2010 to 12/31/2010......... $ 8.84253 $ 9.77347 42,393 01/01/2011 to 12/31/2011......... $ 9.77347 $ 9.39157 37,547 AST ADVANCED STRATEGIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.08847 $ 7.30819 56,411 01/01/2009 to 12/31/2009......... $ 7.30819 $ 9.10472 32,785 01/01/2010 to 12/31/2010......... $ 9.10472 $10.21977 32,553 01/01/2011 to 12/31/2011......... $10.21977 $10.10008 37,226 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.14809 $ 7.04726 7,929 01/01/2009 to 12/31/2009......... $ 7.04726 $ 8.19333 6,526 01/01/2010 to 12/31/2010......... $ 8.19333 $ 9.20808 7,518 01/01/2011 to 12/31/2011......... $ 9.20808 $ 9.41467 6,264 AST BALANCED ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.08643 $ 7.42670 93,398 01/01/2009 to 12/31/2009......... $ 7.42670 $ 9.03939 90,979 01/01/2010 to 12/31/2010......... $ 9.03939 $10.02216 11,379 01/01/2011 to 12/31/2011......... $10.02216 $ 9.77339 10,863 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99894 $ 9.18990 0 AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.20727 $ 6.75418 0 01/01/2009 to 12/31/2009......... $ 6.75418 $ 7.88493 0 01/01/2010 to 12/31/2010......... $ 7.88493 $ 8.75220 0 01/01/2011 to 12/31/2011......... $ 8.75220 $ 8.59746 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BOND PORTFOLIO 2016 01/02/2009* to 12/31/2009........ $ 9.99929 $ 9.42733 0 01/01/2010 to 12/31/2010......... $ 9.42733 $10.29055 0 01/01/2011 to 12/31/2011......... $10.29055 $11.13779 0 AST BOND PORTFOLIO 2018 01/28/2008* to 12/31/2008........ $ 9.99894 $12.09377 166,636 01/01/2009 to 12/31/2009......... $12.09377 $11.21615 193,423 01/01/2010 to 12/31/2010......... $11.21615 $12.31074 106,727 01/01/2011 to 12/31/2011......... $12.31074 $13.80307 56,605 AST BOND PORTFOLIO 2019 01/28/2008* to 12/31/2008........ $ 9.99894 $12.16291 221,272 01/01/2009 to 12/31/2009......... $12.16291 $11.08225 225,786 01/01/2010 to 12/31/2010......... $11.08225 $12.18296 154,755 01/01/2011 to 12/31/2011......... $12.18296 $13.94770 54,491 AST BOND PORTFOLIO 2020 01/02/2009* to 12/31/2009........ $ 9.99929 $ 8.83518 4,100 01/01/2010 to 12/31/2010......... $ 8.83518 $ 9.75485 207,599 01/01/2011 to 12/31/2011......... $ 9.75485 $11.42811 25,725 AST BOND PORTFOLIO 2021 01/04/2010* to 12/31/2010........ $ 9.99858 $11.06626 227,501 01/01/2011 to 12/31/2011......... $11.06626 $13.14210 143,792 AST BOND PORTFOLIO 2022 01/03/2011* to 12/31/2011........ $ 9.99894 $12.08351 238,101 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.12100 $ 6.97189 79,792 01/01/2009 to 12/31/2009......... $ 6.97189 $ 8.62574 96,982 01/01/2010 to 12/31/2010......... $ 8.62574 $ 9.65397 53,202 01/01/2011 to 12/31/2011......... $ 9.65397 $ 9.29898 55,767 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09938 $ 6.71438 53,682 01/01/2009 to 12/31/2009......... $ 6.71438 $ 8.40792 72,175 01/01/2010 to 12/31/2010......... $ 8.40792 $ 9.49048 42,784 01/01/2011 to 12/31/2011......... $ 9.49048 $ 9.14505 47,121 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08120 $ 7.36495 621 01/01/2009 to 12/31/2009......... $ 7.36495 $ 8.97091 1,814 01/01/2010 to 12/31/2010......... $ 8.97091 $ 9.91122 940 01/01/2011 to 12/31/2011......... $ 9.91122 $ 9.60638 1,752 AST COHEN & STEERS REALTY PORTFOLIO 01/28/2008 to 12/31/2008......... $10.37405 $ 6.63048 0 01/01/2009 to 12/31/2009......... $ 6.63048 $ 8.63524 0 01/01/2010 to 12/31/2010......... $ 8.63524 $10.97024 974 01/01/2011 to 12/31/2011......... $10.97024 $11.54327 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST DEAM SMALL-CAP VALUE PORTFOLIO 01/28/2008 to 07/18/2008......... $10.26336 $10.05061 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.12639 $ 6.26046 0 01/01/2009 to 12/31/2009......... $ 6.26046 $ 8.19873 3,172 01/01/2010 to 12/31/2010......... $ 8.19873 $10.72760 4,850 01/01/2011 to 12/31/2011......... $10.72760 $ 9.20156 4,168 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10371 $ 7.52556 7,197 01/01/2009 to 12/31/2009......... $ 7.52556 $ 9.00621 26,427 01/01/2010 to 12/31/2010......... $ 9.00621 $10.07518 15,713 01/01/2011 to 12/31/2011......... $10.07518 $ 9.70013 12,269 AST FIRST TRUST BALANCED TARGET PORTFOLIO 01/28/2008 to 12/31/2008......... $10.11777 $ 6.85749 379 01/01/2009 to 12/31/2009......... $ 6.85749 $ 8.38411 210 01/01/2010 to 12/31/2010......... $ 8.38411 $ 9.46532 218 01/01/2011 to 12/31/2011......... $ 9.46532 $ 9.20344 256 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 01/28/2008 to 12/31/2008......... $10.15577 $ 6.37685 0 01/01/2009 to 12/31/2009......... $ 6.37685 $ 7.93025 13,836 01/01/2010 to 12/31/2010......... $ 7.93025 $ 9.31741 6,813 01/01/2011 to 12/31/2011......... $ 9.31741 $ 8.62634 7,553 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99894 $ 7.48579 413 01/01/2009 to 11/13/2009......... $ 7.48579 $ 8.39963 0 AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17562 $ 6.12398 0 01/01/2009 to 12/31/2009......... $ 6.12398 $ 8.16733 0 01/01/2010 to 12/31/2010......... $ 8.16733 $ 9.69097 0 01/01/2011 to 12/31/2011......... $ 9.69097 $ 9.08469 0 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.08794 $ 6.65118 10,333 01/01/2009 to 12/31/2009......... $ 6.65118 $ 9.80921 6,925 01/01/2010 to 12/31/2010......... $ 9.80921 $10.67947 9,638 01/01/2011 to 12/31/2011......... $10.67947 $10.12542 7,539 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 01/28/2008 to 12/31/2008......... $10.16584 $ 6.41698 0 01/01/2009 to 12/31/2009......... $ 6.41698 $ 7.55020 5,234 01/01/2010 to 12/31/2010......... $ 7.55020 $ 8.41375 3,282 01/01/2011 to 12/31/2011......... $ 8.41375 $ 7.84754 3,903 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.19125 $ 6.59238 0 01/01/2009 to 12/31/2009......... $ 6.59238 $10.22335 4,054 01/01/2010 to 12/31/2010......... $10.22335 $12.09301 5,020 01/01/2011 to 12/31/2011......... $12.09301 $11.58263 3,365 AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03382 $ 7.65252 0 01/01/2009 to 12/31/2009......... $ 7.65252 $ 9.58245 2,822 01/01/2010 to 12/31/2010......... $ 9.58245 $11.99146 4,401 01/01/2011 to 12/31/2011......... $11.99146 $11.99191 1,251 AST HIGH YIELD PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.99894 $ 7.42367 2,642 01/01/2009 to 12/31/2009......... $ 7.42367 $ 9.93381 2,867 01/01/2010 to 12/31/2010......... $ 9.93381 $11.13015 1,392 01/01/2011 to 12/31/2011......... $11.13015 $11.33611 1,537 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11189 $ 7.15757 1,938 01/01/2009 to 12/31/2009......... $ 7.15757 $ 8.94985 6,705 01/01/2010 to 12/31/2010......... $ 8.94985 $10.05574 5,987 01/01/2011 to 12/31/2011......... $10.05574 $ 9.87022 7,104 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08938 $ 7.63484 81,939 01/01/2009 to 12/31/2009......... $ 7.63484 $ 9.29920 1,901 01/01/2010 to 12/31/2010......... $ 9.29920 $10.24452 1,325 01/01/2011 to 12/31/2011......... $10.24452 $10.06197 2,859 AST INTERNATIONAL GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.09807 $ 5.56317 0 01/01/2009 to 12/31/2009......... $ 5.56317 $ 7.42983 12,482 01/01/2010 to 12/31/2010......... $ 7.42983 $ 8.39779 7,591 01/01/2011 to 12/31/2011......... $ 8.39779 $ 7.21877 2,181 AST INTERNATIONAL VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.06551 $ 6.22962 0 01/01/2009 to 12/31/2009......... $ 6.22962 $ 8.02537 11,508 01/01/2010 to 12/31/2010......... $ 8.02537 $ 8.80034 6,995 01/01/2011 to 12/31/2011......... $ 8.80034 $ 7.59729 2,031 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST INVESTMENT GRADE BOND PORTFOLIO 01/28/2008* to 12/31/2008........ $ 9.99894 $10.76964 455,970 01/01/2009 to 12/31/2009......... $10.76964 $11.83321 129,907 01/01/2010 to 12/31/2010......... $11.83321 $12.94422 54,382 01/01/2011 to 12/31/2011......... $12.94422 $14.36852 180,107 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.12816 $ 8.04051 14,529 01/01/2009 to 12/31/2009......... $ 8.04051 $ 9.68501 44,258 01/01/2010 to 12/31/2010......... $ 9.68501 $10.26045 42,572 01/01/2011 to 12/31/2011......... $10.26045 $10.15261 55,208 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08433 $10.29565 0 01/01/2010 to 12/31/2010......... $10.29565 $11.31363 0 01/01/2011 to 12/31/2011......... $11.31363 $11.24266 0 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14571 $10.30543 0 01/01/2010 to 12/31/2010......... $10.30543 $11.56937 0 01/01/2011 to 12/31/2011......... $11.56937 $10.75048 0 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 01/28/2008 to 12/31/2008......... $10.08333 $ 6.42232 8,236 01/01/2009 to 12/31/2009......... $ 6.42232 $ 8.61481 10,496 01/01/2010 to 12/31/2010......... $ 8.61481 $ 9.11400 9,666 01/01/2011 to 12/31/2011......... $ 9.11400 $ 8.17393 8,268 AST LARGE-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.24678 $ 6.25411 0 01/01/2009 to 12/31/2009......... $ 6.25411 $ 7.37369 15,508 01/01/2010 to 12/31/2010......... $ 7.37369 $ 8.23695 9,367 01/01/2011 to 12/31/2011......... $ 8.23695 $ 7.79112 3,829 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.01659 $ 7.75694 0 01/01/2009 to 12/31/2009......... $ 7.75694 $10.30711 8,745 01/01/2010 to 12/31/2010......... $10.30711 $11.53974 2,680 01/01/2011 to 12/31/2011......... $11.53974 $12.55043 4,299 AST MARSICO CAPITAL GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.13317 $ 6.26305 3,560 01/01/2009 to 12/31/2009......... $ 6.26305 $ 8.02264 11,982 01/01/2010 to 12/31/2010......... $ 8.02264 $ 9.48403 7,090 01/01/2011 to 12/31/2011......... $ 9.48403 $ 9.27693 2,384 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MFS GLOBAL EQUITY PORTFOLIO 01/28/2008 to 12/31/2008......... $10.11112 $ 7.21708 9,076 01/01/2009 to 12/31/2009......... $ 7.21708 $ 9.36927 13,811 01/01/2010 to 12/31/2010......... $ 9.36927 $10.36325 8,688 01/01/2011 to 12/31/2011......... $10.36325 $ 9.90992 8,766 AST MFS GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.13173 $ 6.96848 0 01/01/2009 to 12/31/2009......... $ 6.96848 $ 8.55087 5,627 01/01/2010 to 12/31/2010......... $ 8.55087 $ 9.52023 3,283 01/01/2011 to 12/31/2011......... $ 9.52023 $ 9.34224 3,169 AST MID-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.23704 $ 6.75166 0 01/01/2009 to 12/31/2009......... $ 6.75166 $ 9.25678 11,367 01/01/2010 to 12/31/2010......... $ 9.25678 $11.29533 6,840 01/01/2011 to 12/31/2011......... $11.29533 $10.76575 3,068 AST MONEY MARKET PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.99999 $10.09598 101,102 01/01/2009 to 12/31/2009......... $10.09598 $ 9.99076 23,106 01/01/2010 to 12/31/2010......... $ 9.99076 $ 9.86491 32,689 01/01/2011 to 12/31/2011......... $ 9.86491 $ 9.74087 19,960 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.18499 $ 6.39885 1,599 01/01/2009 to 12/31/2009......... $ 6.39885 $ 8.88414 2,159 01/01/2010 to 12/31/2010......... $ 8.88414 $10.82540 1,354 01/01/2011 to 12/31/2011......... $10.82540 $10.42108 974 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.02885 $10.07723 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.12623 $ 6.43407 1,803 01/01/2009 to 12/31/2009......... $ 6.43407 $ 8.24353 9,297 01/01/2010 to 12/31/2010......... $ 8.24353 $10.47140 8,524 01/01/2011 to 12/31/2011......... $10.47140 $10.51151 9,944 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.06374 $ 6.57251 0 01/01/2009 to 12/31/2009......... $ 6.57251 $ 7.95208 0 01/01/2010 to 12/31/2010......... $ 7.95208 $ 9.44104 0 01/01/2011 to 04/29/2011......... $ 9.44104 $10.60247 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10168 $ 5.58342 1,985 01/01/2009 to 12/31/2009......... $ 5.58342 $ 9.17787 5,518 01/01/2010 to 12/31/2010......... $ 9.17787 $11.07776 5,107 01/01/2011 to 12/31/2011......... $11.07776 $ 8.71893 3,815 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.00750 $ 9.71676 199 01/01/2009 to 12/31/2009......... $ 9.71676 $10.57328 1,182 01/01/2010 to 12/31/2010......... $10.57328 $10.84447 633 01/01/2011 to 12/31/2011......... $10.84447 $10.94615 26,092 AST PIMCO TOTAL RETURN BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.01506 $ 9.41587 8,284 01/01/2009 to 12/31/2009......... $ 9.41587 $10.83111 22,887 01/01/2010 to 12/31/2010......... $10.83111 $11.51730 12,005 01/01/2011 to 12/31/2011......... $11.51730 $11.73093 10,560 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.06002 $ 8.17030 31,043 01/01/2009 to 12/31/2009......... $ 8.17030 $ 9.68149 28,049 01/01/2010 to 12/31/2010......... $ 9.68149 $10.56759 12,741 01/01/2011 to 12/31/2011......... $10.56759 $10.53603 14,786 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01886 $10.07711 0 AST QMA US EQUITY ALPHA PORTFOLIO 01/28/2008 to 12/31/2008......... $10.17636 $ 6.68980 0 01/01/2009 to 12/31/2009......... $ 6.68980 $ 8.04510 0 01/01/2010 to 12/31/2010......... $ 8.04510 $ 9.13702 0 01/01/2011 to 12/31/2011......... $ 9.13702 $ 9.33177 0 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99894 $ 8.92217 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.08245 $ 7.35331 5,986 01/01/2009 to 12/31/2009......... $ 7.35331 $ 9.24887 6,024 01/01/2010 to 12/31/2010......... $ 9.24887 $10.20869 2,280 01/01/2011 to 12/31/2011......... $10.20869 $ 9.73713 4,616 AST SMALL-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.18998 $ 7.28972 0 01/01/2009 to 12/31/2009......... $ 7.28972 $ 9.63618 6,860 01/01/2010 to 12/31/2010......... $ 9.63618 $12.97671 4,168 01/01/2011 to 12/31/2011......... $12.97671 $12.68487 1,221 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.23240 $ 7.62509 0 01/01/2009 to 12/31/2009......... $ 7.62509 $ 9.55967 9,411 01/01/2010 to 12/31/2010......... $ 9.55967 $11.89013 5,677 01/01/2011 to 12/31/2011......... $11.89013 $11.03624 2,237 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.09859 $ 7.74163 24,033 01/01/2009 to 12/31/2009......... $ 7.74163 $ 9.48714 33,393 01/01/2010 to 12/31/2010......... $ 9.48714 $10.44562 24,297 01/01/2011 to 12/31/2011......... $10.44562 $10.51628 24,990 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.24327 $ 6.29814 0 01/01/2009 to 12/31/2009......... $ 6.29814 $ 7.69684 17,035 01/01/2010 to 12/31/2010......... $ 7.69684 $ 8.60439 10,422 01/01/2011 to 12/31/2011......... $ 8.60439 $ 8.35484 2,809 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.03856 $ 9.44110 1,577 01/01/2009 to 12/31/2009......... $ 9.44110 $10.44910 1,711 01/01/2010 to 12/31/2010......... $10.44910 $10.90749 831 01/01/2011 to 12/31/2011......... $10.90749 $11.21175 918 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.10491 $ 6.64158 3,438 01/01/2009 to 12/31/2009......... $ 6.64158 $10.05576 19,708 01/01/2010 to 12/31/2010......... $10.05576 $11.49618 13,334 01/01/2011 to 12/31/2011......... $11.49618 $11.15642 8,474 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.18510 $ 5.58255 0 01/01/2009 to 12/31/2009......... $ 5.58255 $ 8.23044 4,005 01/01/2010 to 12/31/2010......... $ 8.23044 $ 9.78665 2,336 01/01/2011 to 12/31/2011......... $ 9.78665 $ 8.21992 2,255 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.14066 $ 6.35952 14,291 01/01/2009 to 12/31/2009......... $ 6.35952 $ 8.06289 10,268 01/01/2010 to 12/31/2010......... $ 8.06289 $ 9.12442 7,330 01/01/2011 to 12/31/2011......... $ 9.12442 $ 8.69622 11,451 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.00869 $ 9.12808 4,279 01/01/2009 to 12/31/2009......... $ 9.12808 $10.05881 4,644 01/01/2010 to 12/31/2010......... $10.05881 $10.70403 2,256 01/01/2011 to 12/31/2011......... $10.70403 $11.20336 2,490 FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07821 $ 6.65948 6,169 01/01/2009 to 12/31/2009......... $ 6.65948 $ 8.55057 36,686 01/01/2010 to 12/31/2010......... $ 8.55057 $ 9.30519 12,554 01/01/2011 to 12/31/2011......... $ 9.30519 $ 9.03247 13,052 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: COMBINATION 5% ROLL-UP AND HAV DEATH BENEFIT ONLY (1.45%) OR HIGHEST DAILY VALUE DEATH BENEFIT ONLY (1.45%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06605 $10.29884 0 01/01/2008 to 12/31/2008......... $10.29884 $ 6.92031 7,345 01/01/2009 to 12/31/2009......... $ 6.92031 $ 8.48293 20,013 01/01/2010 to 12/31/2010......... $ 8.48293 $ 9.36209 19,532 01/01/2011 to 12/31/2011......... $ 9.36209 $ 8.98306 15,459 AST ADVANCED STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.05143 $10.39752 0 01/01/2008 to 12/31/2008......... $10.39752 $ 7.19429 1,907 01/01/2009 to 12/31/2009......... $ 7.19429 $ 8.94949 3,791 01/01/2010 to 12/31/2010......... $ 8.94949 $10.03073 4,418 01/01/2011 to 12/31/2011......... $10.03073 $ 9.89859 265 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.12180 $ 9.63472 0 01/01/2008 to 12/31/2008......... $ 9.63472 $ 6.19723 0 01/01/2009 to 12/31/2009......... $ 6.19723 $ 7.19440 0 01/01/2010 to 12/31/2010......... $ 7.19440 $ 8.07352 375 01/01/2011 to 12/31/2011......... $ 8.07352 $ 8.24244 322 AST BALANCED ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06697 $10.32504 0 01/01/2008 to 12/31/2008......... $10.32504 $ 7.25636 0 01/01/2009 to 12/31/2009......... $ 7.25636 $ 8.81895 6,533 01/01/2010 to 12/31/2010......... $ 8.81895 $ 9.76337 6,436 01/01/2011 to 12/31/2011......... $ 9.76337 $ 9.50706 4,808 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99882 $ 9.18077 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.11279 $ 9.75980 0 01/01/2008 to 12/31/2008......... $ 9.75980 $ 6.03180 0 01/01/2009 to 12/31/2009......... $ 6.03180 $ 7.03129 0 01/01/2010 to 12/31/2010......... $ 7.03129 $ 7.79321 0 01/01/2011 to 12/31/2011......... $ 7.79321 $ 7.64417 0 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08941 $10.28805 0 01/01/2008 to 12/31/2008......... $10.28805 $ 6.59783 8,995 01/01/2009 to 12/31/2009......... $ 6.59783 $ 8.15083 13,557 01/01/2010 to 12/31/2010......... $ 8.15083 $ 9.10900 12,504 01/01/2011 to 12/31/2011......... $ 9.10900 $ 8.76109 8,534 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09933 $ 6.70773 0 01/01/2009 to 12/31/2009......... $ 6.70773 $ 8.38714 16,224 01/01/2010 to 12/31/2010......... $ 8.38714 $ 9.45299 15,866 01/01/2011 to 12/31/2011......... $ 9.45299 $ 9.09547 11,427 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08116 $ 7.35764 0 01/01/2009 to 12/31/2009......... $ 7.35764 $ 8.94874 0 01/01/2010 to 12/31/2010......... $ 8.94874 $ 9.87209 0 01/01/2011 to 12/31/2011......... $ 9.87209 $ 9.55454 0 AST COHEN & STEERS REALTY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.13635 $ 8.82166 0 01/01/2008 to 12/31/2008......... $ 8.82166 $ 5.64758 0 01/01/2009 to 12/31/2009......... $ 5.64758 $ 7.34437 0 01/01/2010 to 12/31/2010......... $ 7.34437 $ 9.31659 0 01/01/2011 to 12/31/2011......... $ 9.31659 $ 9.78880 0 AST DEAM SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07130 $ 8.91274 0 01/01/2008 to 07/18/2008......... $ 8.91274 $ 8.17615 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08699 $10.23905 0 01/01/2008 to 12/31/2008......... $10.23905 $ 5.64256 0 01/01/2009 to 12/31/2009......... $ 5.64256 $ 7.37852 0 01/01/2010 to 12/31/2010......... $ 7.37852 $ 9.64021 0 01/01/2011 to 12/31/2011......... $ 9.64021 $ 8.25662 309 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10367 $ 7.51815 0 01/01/2009 to 12/31/2009......... $ 7.51815 $ 8.98396 0 01/01/2010 to 12/31/2010......... $ 8.98396 $10.03546 0 01/01/2011 to 12/31/2011......... $10.03546 $ 9.64768 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST FIRST TRUST BALANCED TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.05119 $10.18603 0 01/01/2008 to 12/31/2008......... $10.18603 $ 6.57782 4,559 01/01/2009 to 12/31/2009......... $ 6.57782 $ 8.03026 44,280 01/01/2010 to 12/31/2010......... $ 8.03026 $ 9.05242 37,967 01/01/2011 to 12/31/2011......... $ 9.05242 $ 8.78893 23,714 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06811 $10.25767 0 01/01/2008 to 12/31/2008......... $10.25767 $ 5.99477 8,216 01/01/2009 to 12/31/2009......... $ 5.99477 $ 7.44399 76,659 01/01/2010 to 12/31/2010......... $ 7.44399 $ 8.73322 68,612 01/01/2011 to 12/31/2011......... $ 8.73322 $ 8.07355 49,606 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99882 $ 7.48075 0 01/01/2009 to 11/13/2009......... $ 7.48075 $ 8.38324 0 AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17550 $ 6.11981 0 01/01/2009 to 12/31/2009......... $ 6.11981 $ 8.14959 0 01/01/2010 to 12/31/2010......... $ 8.14959 $ 9.65569 313 01/01/2011 to 12/31/2011......... $ 9.65569 $ 9.03826 284 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.14202 $10.20844 0 01/01/2008 to 12/31/2008......... $10.20844 $ 6.01030 0 01/01/2009 to 12/31/2009......... $ 6.01030 $ 8.85096 0 01/01/2010 to 12/31/2010......... $ 8.85096 $ 9.62211 0 01/01/2011 to 12/31/2011......... $ 9.62211 $ 9.10934 0 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09226 $10.01835 0 01/01/2008 to 12/31/2008......... $10.01835 $ 5.85686 0 01/01/2009 to 12/31/2009......... $ 5.85686 $ 6.88090 0 01/01/2010 to 12/31/2010......... $ 6.88090 $ 7.65653 0 01/01/2011 to 12/31/2011......... $ 7.65653 $ 7.13069 0 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15604 $10.21339 0 01/01/2008 to 12/31/2008......... $10.21339 $ 5.96055 0 01/01/2009 to 12/31/2009......... $ 5.96055 $ 9.22992 0 01/01/2010 to 12/31/2010......... $ 9.22992 $10.90173 0 01/01/2011 to 12/31/2011......... $10.90173 $10.42623 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03370 $ 7.64731 0 01/01/2009 to 12/31/2009......... $ 7.64731 $ 9.56186 0 01/01/2010 to 12/31/2010......... $ 9.56186 $11.94804 0 01/01/2011 to 12/31/2011......... $11.94804 $11.93074 0 AST HIGH YIELD PORTFOLIO 09/04/2007 to 12/31/2007......... $10.02220 $10.19891 0 01/01/2008 to 12/31/2008......... $10.19891 $ 7.48515 0 01/01/2009 to 12/31/2009......... $ 7.48515 $10.00131 288 01/01/2010 to 12/31/2010......... $10.00131 $11.18927 0 01/01/2011 to 12/31/2011......... $11.18927 $11.37958 0 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11185 $ 7.15044 0 01/01/2009 to 12/31/2009......... $ 7.15044 $ 8.92777 0 01/01/2010 to 12/31/2010......... $ 8.92777 $10.01618 0 01/01/2011 to 12/31/2011......... $10.01618 $ 9.81691 0 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08934 $ 7.62724 0 01/01/2009 to 12/31/2009......... $ 7.62724 $ 9.27629 0 01/01/2010 to 12/31/2010......... $ 9.27629 $10.20417 0 01/01/2011 to 12/31/2011......... $10.20417 $10.00753 0 AST INTERNATIONAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07616 $10.88763 0 01/01/2008 to 12/31/2008......... $10.88763 $ 5.34102 0 01/01/2009 to 12/31/2009......... $ 5.34102 $ 7.12250 0 01/01/2010 to 12/31/2010......... $ 7.12250 $ 8.03865 0 01/01/2011 to 12/31/2011......... $ 8.03865 $ 6.89985 0 AST INTERNATIONAL VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07757 $10.28292 0 01/01/2008 to 12/31/2008......... $10.28292 $ 5.67570 0 01/01/2009 to 12/31/2009......... $ 5.67570 $ 7.30087 0 01/01/2010 to 12/31/2010......... $ 7.30087 $ 7.99406 0 01/01/2011 to 12/31/2011......... $ 7.99406 $ 6.89106 0 AST INVESTMENT GRADE BOND PORTFOLIO 01/28/2008* to 12/31/2008........ $ 9.99882 $10.75490 62,309 01/01/2009 to 12/31/2009......... $10.75490 $11.79957 2,680 01/01/2010 to 12/31/2010......... $11.79957 $12.88832 16 01/01/2011 to 12/31/2011......... $12.88832 $14.28535 23,767 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.04744 $ 9.66222 0 01/01/2008 to 12/31/2008......... $ 9.66222 $ 7.84633 0 01/01/2009 to 12/31/2009......... $ 7.84633 $ 9.43725 0 01/01/2010 to 12/31/2010......... $ 9.43725 $ 9.98324 303 01/01/2011 to 12/31/2011......... $ 9.98324 $ 9.86367 265 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08421 $10.29364 0 01/01/2010 to 12/31/2010......... $10.29364 $11.29477 268 01/01/2011 to 12/31/2011......... $11.29477 $11.20724 226 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14559 $10.30343 0 01/01/2010 to 12/31/2010......... $10.30343 $11.55004 262 01/01/2011 to 12/31/2011......... $11.55004 $10.71663 241 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07209 $10.29605 0 01/01/2008 to 12/31/2008......... $10.29605 $ 5.94912 0 01/01/2009 to 12/31/2009......... $ 5.94912 $ 7.96823 0 01/01/2010 to 12/31/2010......... $ 7.96823 $ 8.41747 0 01/01/2011 to 12/31/2011......... $ 8.41747 $ 7.53806 0 AST LARGE-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09138 $ 9.52253 0 01/01/2008 to 12/31/2008......... $ 9.52253 $ 5.49196 0 01/01/2009 to 12/31/2009......... $ 5.49196 $ 6.46539 0 01/01/2010 to 12/31/2010......... $ 6.46539 $ 7.21162 0 01/01/2011 to 12/31/2011......... $ 7.21162 $ 6.81122 0 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.02324 $10.19109 0 01/01/2008 to 12/31/2008......... $10.19109 $ 7.70952 0 01/01/2009 to 12/31/2009......... $ 7.70952 $10.22891 564 01/01/2010 to 12/31/2010......... $10.22891 $11.43528 265 01/01/2011 to 12/31/2011......... $11.43528 $12.41847 214 AST MARSICO CAPITAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.12109 $10.63036 0 01/01/2008 to 12/31/2008......... $10.63036 $ 5.90344 0 01/01/2009 to 12/31/2009......... $ 5.90344 $ 7.55074 0 01/01/2010 to 12/31/2010......... $ 7.55074 $ 8.91287 0 01/01/2011 to 12/31/2011......... $ 8.91287 $ 8.70535 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MFS GLOBAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06315 $10.28869 0 01/01/2008 to 12/31/2008......... $10.28869 $ 6.69443 0 01/01/2009 to 12/31/2009......... $ 6.69443 $ 8.67775 0 01/01/2010 to 12/31/2010......... $ 8.67775 $ 9.58414 0 01/01/2011 to 12/31/2011......... $ 9.58414 $ 9.15137 0 AST MFS GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.11665 $10.63174 0 01/01/2008 to 12/31/2008......... $10.63174 $ 6.67526 0 01/01/2009 to 12/31/2009......... $ 6.67526 $ 8.17908 0 01/01/2010 to 12/31/2010......... $ 8.17908 $ 9.09295 0 01/01/2011 to 12/31/2011......... $ 9.09295 $ 8.90984 0 AST MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.10883 $ 9.75817 0 01/01/2008 to 12/31/2008......... $ 9.75817 $ 5.95152 0 01/01/2009 to 12/31/2009......... $ 5.95152 $ 8.14768 0 01/01/2010 to 12/31/2010......... $ 8.14768 $ 9.92733 0 01/01/2011 to 12/31/2011......... $ 9.92733 $ 9.44800 0 AST MONEY MARKET PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99978 $10.10576 0 01/01/2008 to 12/31/2008......... $10.10576 $10.21118 0 01/01/2009 to 12/31/2009......... $10.21118 $10.09012 0 01/01/2010 to 12/31/2010......... $10.09012 $ 9.94829 0 01/01/2011 to 12/31/2011......... $ 9.94829 $ 9.80857 0 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15094 $10.11092 0 01/01/2008 to 12/31/2008......... $10.11092 $ 5.75471 0 01/01/2009 to 12/31/2009......... $ 5.75471 $ 7.97806 0 01/01/2010 to 12/31/2010......... $ 7.97806 $ 9.70711 0 01/01/2011 to 12/31/2011......... $ 9.70711 $ 9.33083 0 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.02873 $10.07465 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15127 $10.37611 0 01/01/2008 to 12/31/2008......... $10.37611 $ 5.81109 0 01/01/2009 to 12/31/2009......... $ 5.81109 $ 7.43429 0 01/01/2010 to 12/31/2010......... $ 7.43429 $ 9.42952 321 01/01/2011 to 12/31/2011......... $ 9.42952 $ 9.45166 269 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15164 $10.89740 0 01/01/2008 to 12/31/2008......... $10.89740 $ 6.17218 0 01/01/2009 to 12/31/2009......... $ 6.17218 $ 7.45664 0 01/01/2010 to 12/31/2010......... $ 7.45664 $ 8.83969 342 01/01/2011 to 04/29/2011......... $ 8.83969 $ 9.92231 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10156 $ 5.57966 0 01/01/2009 to 12/31/2009......... $ 5.57966 $ 9.15819 0 01/01/2010 to 12/31/2010......... $ 9.15819 $11.03759 274 01/01/2011 to 12/31/2011......... $11.03759 $ 8.67448 285 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99842 $10.30605 0 01/01/2008 to 12/31/2008......... $10.30605 $10.27203 0 01/01/2009 to 12/31/2009......... $10.27203 $11.16104 499 01/01/2010 to 12/31/2010......... $11.16104 $11.43040 53 01/01/2011 to 12/31/2011......... $11.43040 $11.52052 46 AST PIMCO TOTAL RETURN BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99842 $10.49431 0 01/01/2008 to 12/31/2008......... $10.49431 $10.11063 0 01/01/2009 to 12/31/2009......... $10.11063 $11.61306 1,440 01/01/2010 to 12/31/2010......... $11.61306 $12.33061 491 01/01/2011 to 12/31/2011......... $12.33061 $12.54083 422 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.03376 $10.37058 0 01/01/2008 to 12/31/2008......... $10.37058 $ 8.23042 11,895 01/01/2009 to 12/31/2009......... $ 8.23042 $ 9.73831 15,811 01/01/2010 to 12/31/2010......... $ 9.73831 $10.61391 17,350 01/01/2011 to 12/31/2011......... $10.61391 $10.56663 33,713 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01874 $10.07457 0 AST QMA US EQUITY ALPHA PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08959 $ 9.71045 0 01/01/2008 to 12/31/2008......... $ 9.71045 $ 5.86575 0 01/01/2009 to 12/31/2009......... $ 5.86575 $ 7.04364 0 01/01/2010 to 12/31/2010......... $ 7.04364 $ 7.98785 303 01/01/2011 to 12/31/2011......... $ 7.98785 $ 8.14600 259 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99882 $ 8.91334 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06804 $10.29769 0 01/01/2008 to 12/31/2008......... $10.29769 $ 7.08581 0 01/01/2009 to 12/31/2009......... $ 7.08581 $ 8.89921 0 01/01/2010 to 12/31/2010......... $ 8.89921 $ 9.80826 309 01/01/2011 to 12/31/2011......... $ 9.80826 $ 9.34142 277 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09145 $ 9.96928 0 01/01/2008 to 12/31/2008......... $ 9.96928 $ 6.38753 0 01/01/2009 to 12/31/2009......... $ 6.38753 $ 8.43118 0 01/01/2010 to 12/31/2010......... $ 8.43118 $11.33740 0 01/01/2011 to 12/31/2011......... $11.33740 $11.06613 0 AST SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08548 $ 9.33937 0 01/01/2008 to 12/31/2008......... $ 9.33937 $ 6.47012 0 01/01/2009 to 12/31/2009......... $ 6.47012 $ 8.09962 0 01/01/2010 to 12/31/2010......... $ 8.09962 $10.05929 0 01/01/2011 to 12/31/2011......... $10.05929 $ 9.32310 0 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06346 $10.11677 0 01/01/2008 to 12/31/2008......... $10.11677 $ 7.38495 0 01/01/2009 to 12/31/2009......... $ 7.38495 $ 9.03658 4,372 01/01/2010 to 12/31/2010......... $ 9.03658 $ 9.93489 3,642 01/01/2011 to 12/31/2011......... $ 9.93489 $ 9.98734 2,467 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09017 $ 9.44804 0 01/01/2008 to 12/31/2008......... $ 9.44804 $ 5.41221 0 01/01/2009 to 12/31/2009......... $ 5.41221 $ 6.60440 0 01/01/2010 to 12/31/2010......... $ 6.60440 $ 7.37219 0 01/01/2011 to 12/31/2011......... $ 7.37219 $ 7.14783 0 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.98171 $10.54736 0 01/01/2008 to 12/31/2008......... $10.54736 $10.14348 0 01/01/2009 to 12/31/2009......... $10.14348 $11.20990 246 01/01/2010 to 12/31/2010......... $11.20990 $11.68438 259 01/01/2011 to 12/31/2011......... $11.68438 $11.99252 218 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.14397 $10.01532 0 01/01/2008 to 12/31/2008......... $10.01532 $ 5.86720 0 01/01/2009 to 12/31/2009......... $ 5.86720 $ 8.87009 0 01/01/2010 to 12/31/2010......... $ 8.87009 $10.12570 0 01/01/2011 to 12/31/2011......... $10.12570 $ 9.81196 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.21185 $11.53717 0 01/01/2008 to 12/31/2008......... $11.53717 $ 5.68760 0 01/01/2009 to 12/31/2009......... $ 5.68760 $ 8.37294 0 01/01/2010 to 12/31/2010......... $ 8.37294 $ 9.94136 304 01/01/2011 to 12/31/2011......... $ 9.94136 $ 8.33750 296 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.10377 $10.23177 0 01/01/2008 to 12/31/2008......... $10.23177 $ 5.81656 0 01/01/2009 to 12/31/2009......... $ 5.81656 $ 7.36359 0 01/01/2010 to 12/31/2010......... $ 7.36359 $ 8.32072 0 01/01/2011 to 12/31/2011......... $ 8.32072 $ 7.91853 0 AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 11/19/2007* to 12/31/2007........ $ 9.99882 $ 9.98230 0 01/01/2008 to 12/31/2008......... $ 9.98230 $ 9.32688 0 01/01/2009 to 12/31/2009......... $ 9.32688 $10.26272 1,088 01/01/2010 to 12/31/2010......... $10.26272 $10.90493 555 01/01/2011 to 12/31/2011......... $10.90493 $11.39688 465 FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07817 $ 6.65282 14,584 01/01/2009 to 12/31/2009......... $ 6.65282 $ 8.52928 16,902 01/01/2010 to 12/31/2010......... $ 8.52928 $ 9.26833 16,532 01/01/2011 to 12/31/2011......... $ 9.26833 $ 8.98335 15,020 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: LIFETIME FIVE INCOME BENEFIT ONLY (1.55%) OR HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT ONLY (1.55%) OR HD GRO 60 BPS (1.55%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.09867 $11.35167 1,979,283 01/01/2008 to 12/31/2008......... $11.35167 $ 7.62021 5,470,612 01/01/2009 to 12/31/2009......... $ 7.62021 $ 9.33172 18,592,099 01/01/2010 to 12/31/2010......... $ 9.33172 $10.28882 23,265,499 01/01/2011 to 12/31/2011......... $10.28882 $ 9.86254 18,536,752 AST ADVANCED STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.94853 $11.32196 547,245 01/01/2008 to 12/31/2008......... $11.32196 $ 7.82619 2,348,236 01/01/2009 to 12/31/2009......... $ 7.82619 $ 9.72595 9,678,004 01/01/2010 to 12/31/2010......... $ 9.72595 $10.89021 12,279,526 01/01/2011 to 12/31/2011......... $10.89021 $10.73628 10,386,653 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.40677 $10.85441 83,061 01/01/2008 to 12/31/2008......... $10.85441 $ 6.97484 118,976 01/01/2009 to 12/31/2009......... $ 6.97484 $ 8.08917 252,108 01/01/2010 to 12/31/2010......... $ 8.08917 $ 9.06867 284,726 01/01/2011 to 12/31/2011......... $ 9.06867 $ 9.24936 345,414 AST BALANCED ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.01236 $11.29102 882,633 01/01/2008 to 12/31/2008......... $11.29102 $ 7.92738 6,284,486 01/01/2009 to 12/31/2009......... $ 7.92738 $ 9.62505 27,228,736 01/01/2010 to 12/31/2010......... $ 9.62505 $10.64526 34,178,015 01/01/2011 to 12/31/2011......... $10.64526 $10.35559 28,852,563 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99874 $ 9.17470 199,690 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.38749 $10.98653 109,965 01/01/2008 to 12/31/2008......... $10.98653 $ 6.78317 128,982 01/01/2009 to 12/31/2009......... $ 6.78317 $ 7.89930 289,901 01/01/2010 to 12/31/2010......... $ 7.89930 $ 8.74662 287,988 01/01/2011 to 12/31/2011......... $ 8.74662 $ 8.57090 432,406 AST BOND PORTFOLIO 2016 01/02/2009* to 12/31/2009........ $ 9.99916 $ 9.40418 0 01/01/2010 to 12/31/2010......... $ 9.40418 $10.24014 0 01/01/2011 to 12/31/2011......... $10.24014 $11.05603 0 AST BOND PORTFOLIO 2018 01/28/2008* to 12/31/2008........ $ 9.99874 $12.06604 0 01/01/2009 to 12/31/2009......... $12.06604 $11.16301 0 01/01/2010 to 12/31/2010......... $11.16301 $12.22219 0 01/01/2011 to 12/31/2011......... $12.22219 $13.67021 0 AST BOND PORTFOLIO 2019 01/28/2008* to 12/31/2008........ $ 9.99874 $12.13503 0 01/01/2009 to 12/31/2009......... $12.13503 $11.02965 0 01/01/2010 to 12/31/2010......... $11.02965 $12.09526 0 01/01/2011 to 12/31/2011......... $12.09526 $13.81329 0 AST BOND PORTFOLIO 2020 01/02/2009* to 12/31/2009........ $ 9.99916 $ 8.81338 0 01/01/2010 to 12/31/2010......... $ 8.81338 $ 9.70680 5,622 01/01/2011 to 12/31/2011......... $ 9.70680 $11.34394 0 AST BOND PORTFOLIO 2021 01/04/2010* to 12/31/2010........ $ 9.99831 $11.03896 7,734 01/01/2011 to 12/31/2011......... $11.03896 $13.07738 40,426 AST BOND PORTFOLIO 2022 01/03/2011* to 12/31/2011........ $ 9.99874 $12.05391 64,540 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.25110 $11.46891 2,304,166 01/01/2008 to 12/31/2008......... $11.46891 $ 7.34781 5,994,725 01/01/2009 to 12/31/2009......... $ 7.34781 $ 9.06844 27,340,546 01/01/2010 to 12/31/2010......... $ 9.06844 $10.12452 33,752,087 01/01/2011 to 12/31/2011......... $10.12452 $ 9.72831 24,195,132 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09931 $ 6.70326 384,017 01/01/2009 to 12/31/2009......... $ 6.70326 $ 8.37330 4,604,696 01/01/2010 to 12/31/2010......... $ 8.37330 $ 9.42811 6,724,473 01/01/2011 to 12/31/2011......... $ 9.42811 $ 9.06262 4,840,317 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08113 $ 7.35283 771,630 01/01/2009 to 12/31/2009......... $ 7.35283 $ 8.93400 6,054,382 01/01/2010 to 12/31/2010......... $ 8.93400 $ 9.84613 8,324,552 01/01/2011 to 12/31/2011......... $ 9.84613 $ 9.51998 7,450,224 AST COHEN & STEERS REALTY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.99032 $ 9.56185 129,875 01/01/2008 to 12/31/2008......... $ 9.56185 $ 6.11539 223,594 01/01/2009 to 12/31/2009......... $ 6.11539 $ 7.94483 402,409 01/01/2010 to 12/31/2010......... $ 7.94483 $10.06834 641,803 01/01/2011 to 12/31/2011......... $10.06834 $10.56835 520,567 AST DEAM SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.57832 $ 8.47377 54,692 01/01/2008 to 07/18/2008......... $ 8.47377 $ 7.76928 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.74584 $10.90438 57,968 01/01/2008 to 12/31/2008......... $10.90438 $ 6.00326 79,885 01/01/2009 to 12/31/2009......... $ 6.00326 $ 7.84248 315,327 01/01/2010 to 12/31/2010......... $ 7.84248 $10.23628 396,390 01/01/2011 to 12/31/2011......... $10.23628 $ 8.75847 436,732 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10364 $ 7.51323 188,606 01/01/2009 to 12/31/2009......... $ 7.51323 $ 8.96936 1,810,492 01/01/2010 to 12/31/2010......... $ 8.96936 $10.00929 2,473,569 01/01/2011 to 12/31/2011......... $10.00929 $ 9.61303 1,971,220 AST FIRST TRUST BALANCED TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $11.11671 $11.26222 283,687 01/01/2008 to 12/31/2008......... $11.26222 $ 7.26552 1,779,824 01/01/2009 to 12/31/2009......... $ 7.26552 $ 8.86111 8,593,359 01/01/2010 to 12/31/2010......... $ 8.86111 $ 9.97923 10,586,571 01/01/2011 to 12/31/2011......... $ 9.97923 $ 9.67928 8,705,424 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $11.11078 $11.31636 374,786 01/01/2008 to 12/31/2008......... $11.31636 $ 6.60696 1,947,722 01/01/2009 to 12/31/2009......... $ 6.60696 $ 8.19609 12,858,817 01/01/2010 to 12/31/2010......... $ 8.19609 $ 9.60610 16,273,232 01/01/2011 to 12/31/2011......... $ 9.60610 $ 8.87180 11,140,097 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99874 $ 7.47746 150,004 01/01/2009 to 11/13/2009......... $ 7.47746 $ 8.37230 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17542 $ 6.11700 5,945 01/01/2009 to 12/31/2009......... $ 6.11700 $ 8.13797 106,511 01/01/2010 to 12/31/2010......... $ 8.13797 $ 9.63255 192,701 01/01/2011 to 12/31/2011......... $ 9.63255 $ 9.00776 131,779 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.44789 $11.51919 118,236 01/01/2008 to 12/31/2008......... $11.51919 $ 6.77534 202,174 01/01/2009 to 12/31/2009......... $ 6.77534 $ 9.96770 816,286 01/01/2010 to 12/31/2010......... $ 9.96770 $10.82533 781,848 01/01/2011 to 12/31/2011......... $10.82533 $10.23845 519,567 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 09/04/2007 to 12/31/2007......... $11.52186 $11.43381 133,709 01/01/2008 to 12/31/2008......... $11.43381 $ 6.67776 175,361 01/01/2009 to 12/31/2009......... $ 6.67776 $ 7.83769 376,536 01/01/2010 to 12/31/2010......... $ 7.83769 $ 8.71263 432,046 01/01/2011 to 12/31/2011......... $ 8.71263 $ 8.10638 372,233 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.54577 $11.60729 69,386 01/01/2008 to 12/31/2008......... $11.60729 $ 6.76729 106,877 01/01/2009 to 12/31/2009......... $ 6.76729 $10.46870 740,477 01/01/2010 to 12/31/2010......... $10.46870 $12.35275 763,649 01/01/2011 to 12/31/2011......... $12.35275 $11.80230 509,810 AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03362 $ 7.64384 28,596 01/01/2009 to 12/31/2009......... $ 7.64384 $ 9.54810 263,795 01/01/2010 to 12/31/2010......... $ 9.54810 $11.91907 399,917 01/01/2011 to 12/31/2011......... $11.91907 $11.89024 269,954 AST High Yield Portfolio 09/04/2007 to 12/31/2007......... $10.49103 $10.67274 82,416 01/01/2008 to 12/31/2008......... $10.67274 $ 7.82524 107,722 01/01/2009 to 12/31/2009......... $ 7.82524 $10.44540 443,242 01/01/2010 to 12/31/2010......... $10.44540 $11.67447 621,288 01/01/2011 to 12/31/2011......... $11.67447 $11.86124 552,891 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11182 $ 7.14571 252,249 01/01/2009 to 12/31/2009......... $ 7.14571 $ 8.91307 3,437,241 01/01/2010 to 12/31/2010......... $ 8.91307 $ 9.98987 4,626,865 01/01/2011 to 12/31/2011......... $ 9.98987 $ 9.78156 3,706,411 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08931 $ 7.62229 594,087 01/01/2009 to 12/31/2009......... $ 7.62229 $ 9.26113 5,204,694 01/01/2010 to 12/31/2010......... $ 9.26113 $10.17744 6,865,530 01/01/2011 to 12/31/2011......... $10.17744 $ 9.97148 6,333,151 AST INTERNATIONAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.52056 $12.44440 160,902 01/01/2008 to 12/31/2008......... $12.44440 $ 6.09868 233,765 01/01/2009 to 12/31/2009......... $ 6.09868 $ 8.12488 394,964 01/01/2010 to 12/31/2010......... $ 8.12488 $ 9.16080 470,685 01/01/2011 to 12/31/2011......... $ 9.16080 $ 7.85528 350,301 AST INTERNATIONAL VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $12.37110 $12.61913 193,893 01/01/2008 to 12/31/2008......... $12.61913 $ 6.95843 217,704 01/01/2009 to 12/31/2009......... $ 6.95843 $ 8.94211 448,995 01/01/2010 to 12/31/2010......... $ 8.94211 $ 9.78154 522,920 01/01/2011 to 12/31/2011......... $ 9.78154 $ 8.42354 424,730 AST INVESTMENT GRADE BOND PORTFOLIO 01/28/2008* to 12/31/2008........ $ 9.99874 $10.74503 22,292,196 01/01/2009 to 12/31/2009......... $10.74503 $11.77700 8,071,944 01/01/2010 to 12/31/2010......... $11.77700 $12.85096 4,061,445 01/01/2011 to 12/31/2011......... $12.85096 $14.22998 35,214,108 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 09/04/2007 to 12/31/2007......... $11.01436 $10.58861 57,137 01/01/2008 to 12/31/2008......... $10.58861 $ 8.59008 2,495,791 01/01/2009 to 12/31/2009......... $ 8.59008 $10.32164 8,909,402 01/01/2010 to 12/31/2010......... $10.32164 $10.90809 9,450,984 01/01/2011 to 12/31/2011......... $10.90809 $10.76681 8,322,451 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08412 $10.29227 1,459 01/01/2010 to 12/31/2010......... $10.29227 $11.28218 54,941 01/01/2011 to 12/31/2011......... $11.28218 $11.18383 83,729 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14551 $10.30208 8,911 01/01/2010 to 12/31/2010......... $10.30208 $11.53709 70,990 01/01/2011 to 12/31/2011......... $11.53709 $10.69415 56,139 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $11.16975 $11.41442 141,891 01/01/2008 to 12/31/2008......... $11.41442 $ 6.58885 218,870 01/01/2009 to 12/31/2009......... $ 6.58885 $ 8.81640 648,708 01/01/2010 to 12/31/2010......... $ 8.81640 $ 9.30432 846,204 01/01/2011 to 12/31/2011......... $ 9.30432 $ 8.32407 668,977 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST LARGE-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.16313 $10.53044 127,887 01/01/2008 to 12/31/2008......... $10.53044 $ 6.06725 214,857 01/01/2009 to 12/31/2009......... $ 6.06725 $ 7.13569 385,899 01/01/2010 to 12/31/2010......... $ 7.13569 $ 7.95146 454,900 01/01/2011 to 12/31/2011......... $ 7.95146 $ 7.50265 399,727 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.78155 $10.95860 38,378 01/01/2008 to 12/31/2008......... $10.95860 $ 8.28202 46,938 01/01/2009 to 12/31/2009......... $ 8.28202 $10.97774 253,610 01/01/2010 to 12/31/2010......... $10.97774 $12.26034 336,988 01/01/2011 to 12/31/2011......... $12.26034 $13.30142 963,892 AST MARSICO CAPITAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.02636 $11.57756 132,600 01/01/2008 to 12/31/2008......... $11.57756 $ 6.42308 210,852 01/01/2009 to 12/31/2009......... $ 6.42308 $ 8.20734 436,573 01/01/2010 to 12/31/2010......... $ 8.20734 $ 9.67845 566,960 01/01/2011 to 12/31/2011......... $ 9.67845 $ 9.44386 454,529 AST MFS GLOBAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $11.71519 $11.97391 106,458 01/01/2008 to 12/31/2008......... $11.97391 $ 7.78320 172,126 01/01/2009 to 12/31/2009......... $ 7.78320 $10.07929 304,375 01/01/2010 to 12/31/2010......... $10.07929 $11.12120 379,744 01/01/2011 to 12/31/2011......... $11.12120 $10.60861 353,785 AST MFS GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.21343 $11.78062 57,864 01/01/2008 to 12/31/2008......... $11.78062 $ 7.38927 92,343 01/01/2009 to 12/31/2009......... $ 7.38927 $ 9.04493 149,026 01/01/2010 to 12/31/2010......... $ 9.04493 $10.04560 163,547 01/01/2011 to 12/31/2011......... $10.04560 $ 9.83366 169,713 AST MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.91824 $10.53613 68,861 01/01/2008 to 12/31/2008......... $10.53613 $ 6.41960 81,548 01/01/2009 to 12/31/2009......... $ 6.41960 $ 8.77984 212,717 01/01/2010 to 12/31/2010......... $ 8.77984 $10.68701 280,877 01/01/2011 to 12/31/2011......... $10.68701 $10.16087 207,670 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MONEY MARKET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.44745 $10.55481 439,666 01/01/2008 to 12/31/2008......... $10.55481 $10.65447 2,759,260 01/01/2009 to 12/31/2009......... $10.65447 $10.51751 2,267,294 01/01/2010 to 12/31/2010......... $10.51751 $10.35969 1,594,489 01/01/2011 to 12/31/2011......... $10.35969 $10.20379 1,713,284 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.37574 $10.33156 108,936 01/01/2008 to 12/31/2008......... $10.33156 $ 5.87444 133,061 01/01/2009 to 12/31/2009......... $ 5.87444 $ 8.13599 582,751 01/01/2010 to 12/31/2010......... $ 8.13599 $ 9.88948 766,853 01/01/2011 to 12/31/2011......... $ 9.88948 $ 9.49682 526,809 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.02865 $10.07295 2,905 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $12.02718 $12.28959 92,876 01/01/2008 to 12/31/2008......... $12.28959 $ 6.87585 136,526 01/01/2009 to 12/31/2009......... $ 6.87585 $ 8.78786 291,632 01/01/2010 to 12/31/2010......... $ 8.78786 $11.13543 421,493 01/01/2011 to 12/31/2011......... $11.13543 $11.15065 382,255 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.30178 $11.05501 48,803 01/01/2008 to 12/31/2008......... $11.05501 $ 6.25525 67,244 01/01/2009 to 12/31/2009......... $ 6.25525 $ 7.54954 189,275 01/01/2010 to 12/31/2010......... $ 7.54954 $ 8.94111 272,224 01/01/2011 to 04/29/2011......... $ 8.94111 $10.03294 0 AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10148 $ 5.57715 2,526 01/01/2009 to 12/31/2009......... $ 5.57715 $ 9.14495 1,041,944 01/01/2010 to 12/31/2010......... $ 9.14495 $11.01080 1,678,816 01/01/2011 to 12/31/2011......... $11.01080 $ 8.64490 876,131 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.38868 $10.70491 27,226 01/01/2008 to 12/31/2008......... $10.70491 $10.65895 273,679 01/01/2009 to 12/31/2009......... $10.65895 $11.56999 491,388 01/01/2010 to 12/31/2010......... $11.56999 $11.83776 692,562 01/01/2011 to 12/31/2011......... $11.83776 $11.91937 736,600 AST PIMCO TOTAL RETURN BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.48149 $10.99780 175,563 01/01/2008 to 12/31/2008......... $10.99780 $10.58517 737,508 01/01/2009 to 12/31/2009......... $10.58517 $12.14622 4,497,611 01/01/2010 to 12/31/2010......... $12.14622 $12.88400 6,521,873 01/01/2011 to 12/31/2011......... $12.88400 $13.09095 5,367,829 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PRESERVATION ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.80192 $11.16097 213,961 01/01/2008 to 12/31/2008......... $11.16097 $ 8.84892 4,320,625 01/01/2009 to 12/31/2009......... $ 8.84892 $10.45993 16,267,702 01/01/2010 to 12/31/2010......... $10.45993 $11.38917 20,251,502 01/01/2011 to 12/31/2011......... $11.38917 $11.32728 19,218,290 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01866 $10.07285 6,679 AST QMA US EQUITY ALPHA PORTFOLIO 09/04/2007 to 12/31/2007......... $11.22094 $10.79584 109,945 01/01/2008 to 12/31/2008......... $10.79584 $ 6.51497 137,469 01/01/2009 to 12/31/2009......... $ 6.51497 $ 7.81555 236,297 01/01/2010 to 12/31/2010......... $ 7.81555 $ 8.85453 252,083 01/01/2011 to 12/31/2011......... $ 8.85453 $ 9.02103 234,580 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99874 $ 8.90747 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $11.09854 $11.34807 50,902 01/01/2008 to 12/31/2008......... $11.34807 $ 7.80093 541,511 01/01/2009 to 12/31/2009......... $ 7.80093 $ 9.78770 5,527,106 01/01/2010 to 12/31/2010......... $ 9.78770 $10.77678 8,729,302 01/01/2011 to 12/31/2011......... $10.77678 $10.25384 6,982,765 AST SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.59999 $10.46833 49,715 01/01/2008 to 12/31/2008......... $10.46833 $ 6.70061 81,727 01/01/2009 to 12/31/2009......... $ 6.70061 $ 8.83559 185,740 01/01/2010 to 12/31/2010......... $ 8.83559 $11.86932 315,242 01/01/2011 to 12/31/2011......... $11.86932 $11.57388 281,553 AST SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.51386 $ 9.73292 127,547 01/01/2008 to 12/31/2008......... $ 9.73292 $ 6.73606 266,159 01/01/2009 to 12/31/2009......... $ 6.73606 $ 8.42432 409,674 01/01/2010 to 12/31/2010......... $ 8.42432 $10.45223 478,873 01/01/2011 to 12/31/2011......... $10.45223 $ 9.67773 389,214 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.08326 $11.13836 209,218 01/01/2008 to 12/31/2008......... $11.13836 $ 8.12262 1,854,755 01/01/2009 to 12/31/2009......... $ 8.12262 $ 9.92935 9,485,424 01/01/2010 to 12/31/2010......... $ 9.92935 $10.90571 12,526,458 01/01/2011 to 12/31/2011......... $10.90571 $10.95260 11,437,020 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.24033 $10.52167 90,758 01/01/2008 to 12/31/2008......... $10.52167 $ 6.02125 94,337 01/01/2009 to 12/31/2009......... $ 6.02125 $ 7.34030 423,253 01/01/2010 to 12/31/2010......... $ 7.34030 $ 8.18554 514,767 01/01/2011 to 12/31/2011......... $ 8.18554 $ 7.92860 365,775 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.53457 $11.12805 57,667 01/01/2008 to 12/31/2008......... $11.12805 $10.69133 156,631 01/01/2009 to 12/31/2009......... $10.69133 $11.80367 409,662 01/01/2010 to 12/31/2010......... $11.80367 $12.29119 466,177 01/01/2011 to 12/31/2011......... $12.29119 $12.60300 430,868 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.31184 $11.16482 124,564 01/01/2008 to 12/31/2008......... $11.16482 $ 6.53413 187,362 01/01/2009 to 12/31/2009......... $ 6.53413 $ 9.86862 558,526 01/01/2010 to 12/31/2010......... $ 9.86862 $11.25440 802,365 01/01/2011 to 12/31/2011......... $11.25440 $10.89495 646,172 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 09/04/2007 to 12/31/2007......... $12.05033 $13.60991 492,266 01/01/2008 to 12/31/2008......... $13.60991 $ 6.70277 838,493 01/01/2009 to 12/31/2009......... $ 6.70277 $ 9.85783 2,292,411 01/01/2010 to 12/31/2010......... $ 9.85783 $11.69296 2,773,962 01/01/2011 to 12/31/2011......... $11.69296 $ 9.79692 1,987,127 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.36107 $11.50135 828,348 01/01/2008 to 12/31/2008......... $11.50135 $ 6.53179 909,806 01/01/2009 to 12/31/2009......... $ 6.53179 $ 8.26091 1,274,354 01/01/2010 to 12/31/2010......... $ 8.26091 $ 9.32545 1,435,409 01/01/2011 to 12/31/2011......... $ 9.32545 $ 8.86601 1,575,912 AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 11/19/2007* to 12/31/2007........ $ 9.99874 $ 9.98107 0 01/01/2008 to 12/31/2008......... $ 9.98107 $ 9.31646 155,946 01/01/2009 to 12/31/2009......... $ 9.31646 $10.24119 940,945 01/01/2010 to 12/31/2010......... $10.24119 $10.87128 1,513,592 01/01/2011 to 12/31/2011......... $10.87128 $11.35046 1,420,753 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07814 $6.64843 792,320 01/01/2009 to 12/31/2009......... $ 6.64843 $8.51531 5,928,271 01/01/2010 to 12/31/2010......... $ 8.51531 $9.24408 8,882,311 01/01/2011 to 12/31/2011......... $ 9.24408 $8.95108 6,520,466 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: SPOUSAL LIFETIME FIVE INCOME BENEFIT ONLY (1.70%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06578 $10.29036 0 01/01/2008 to 12/31/2008......... $10.29036 $ 6.89756 0 01/01/2009 to 12/31/2009......... $ 6.89756 $ 8.43431 0 01/01/2010 to 12/31/2010......... $ 8.43431 $ 9.28559 0 01/01/2011 to 12/31/2011......... $ 9.28559 $ 8.88786 0 AST ADVANCED STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.05116 $10.38897 0 01/01/2008 to 12/31/2008......... $10.38897 $ 7.17072 0 01/01/2009 to 12/31/2009......... $ 7.17072 $ 8.89825 0 01/01/2010 to 12/31/2010......... $ 8.89825 $ 9.94879 0 01/01/2011 to 12/31/2011......... $ 9.94879 $ 9.79374 0 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.12153 $ 9.62685 0 01/01/2008 to 12/31/2008......... $ 9.62685 $ 6.17686 0 01/01/2009 to 12/31/2009......... $ 6.17686 $ 7.15315 0 01/01/2010 to 12/31/2010......... $ 7.15315 $ 8.00744 0 01/01/2011 to 12/31/2011......... $ 8.00744 $ 8.15490 0 AST BALANCED ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06670 $10.31656 0 01/01/2008 to 12/31/2008......... $10.31656 $ 7.23252 0 01/01/2009 to 12/31/2009......... $ 7.23252 $ 8.76833 0 01/01/2010 to 12/31/2010......... $ 8.76833 $ 9.68344 0 01/01/2011 to 12/31/2011......... $ 9.68344 $ 9.40606 0 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99861 $ 9.16560 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.11252 $ 9.75180 0 01/01/2008 to 12/31/2008......... $ 9.75180 $ 6.01200 0 01/01/2009 to 12/31/2009......... $ 6.01200 $ 6.99095 0 01/01/2010 to 12/31/2010......... $ 6.99095 $ 7.72945 0 01/01/2011 to 12/31/2011......... $ 7.72945 $ 7.56305 0 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08914 $10.27957 0 01/01/2008 to 12/31/2008......... $10.27957 $ 6.57609 0 01/01/2009 to 12/31/2009......... $ 6.57609 $ 8.10403 0 01/01/2010 to 12/31/2010......... $ 8.10403 $ 9.03449 0 01/01/2011 to 12/31/2011......... $ 9.03449 $ 8.66809 0 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09927 $ 6.69672 0 01/01/2009 to 12/31/2009......... $ 6.69672 $ 8.35282 0 01/01/2010 to 12/31/2010......... $ 8.35282 $ 9.39126 0 01/01/2011 to 12/31/2011......... $ 9.39126 $ 9.01392 0 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08109 $ 7.34558 0 01/01/2009 to 12/31/2009......... $ 7.34558 $ 8.91204 0 01/01/2010 to 12/31/2010......... $ 8.91204 $ 9.80747 0 01/01/2011 to 12/31/2011......... $ 9.80747 $ 9.46863 0 AST COHEN & STEERS REALTY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.13608 $ 8.81443 0 01/01/2008 to 12/31/2008......... $ 8.81443 $ 5.62898 0 01/01/2009 to 12/31/2009......... $ 5.62898 $ 7.30200 0 01/01/2010 to 12/31/2010......... $ 7.30200 $ 9.24005 0 01/01/2011 to 12/31/2011......... $ 9.24005 $ 9.68459 0 AST DEAM SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07103 $ 8.90547 0 01/01/2008 to 07/18/2008......... $ 8.90547 $ 8.15851 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08672 $10.23068 0 01/01/2008 to 12/31/2008......... $10.23068 $ 5.62413 0 01/01/2009 to 12/31/2009......... $ 5.62413 $ 7.33634 0 01/01/2010 to 12/31/2010......... $ 7.33634 $ 9.56141 0 01/01/2011 to 12/31/2011......... $ 9.56141 $ 8.16906 0 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10360 $ 7.50574 0 01/01/2009 to 12/31/2009......... $ 7.50574 $ 8.94713 0 01/01/2010 to 12/31/2010......... $ 8.94713 $ 9.96968 0 01/01/2011 to 12/31/2011......... $ 9.96968 $ 9.56090 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST FIRST TRUST BALANCED TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.05092 $10.17762 0 01/01/2008 to 12/31/2008......... $10.17762 $ 6.55614 0 01/01/2009 to 12/31/2009......... $ 6.55614 $ 7.98422 0 01/01/2010 to 12/31/2010......... $ 7.98422 $ 8.97842 0 01/01/2011 to 12/31/2011......... $ 8.97842 $ 8.69570 0 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06784 $10.24921 0 01/01/2008 to 12/31/2008......... $10.24921 $ 5.97509 5,571 01/01/2009 to 12/31/2009......... $ 5.97509 $ 7.40130 5,567 01/01/2010 to 12/31/2010......... $ 7.40130 $ 8.66171 5,564 01/01/2011 to 12/31/2011......... $ 8.66171 $ 7.98786 5,561 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99862 $ 7.47237 0 01/01/2009 to 11/13/2009......... $ 7.47237 $ 8.35589 0 AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17530 $ 6.11293 0 01/01/2009 to 12/31/2009......... $ 6.11293 $ 8.12045 0 01/01/2010 to 12/31/2010......... $ 8.12045 $ 9.59760 0 01/01/2011 to 12/31/2011......... $ 9.59760 $ 8.96179 0 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.14175 $10.20006 0 01/01/2008 to 12/31/2008......... $10.20006 $ 5.99060 0 01/01/2009 to 12/31/2009......... $ 5.99060 $ 8.80030 0 01/01/2010 to 12/31/2010......... $ 8.80030 $ 9.54348 0 01/01/2011 to 12/31/2011......... $ 9.54348 $ 9.01285 0 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09199 $10.01010 0 01/01/2008 to 12/31/2008......... $10.01010 $ 5.83767 0 01/01/2009 to 12/31/2009......... $ 5.83767 $ 6.84158 0 01/01/2010 to 12/31/2010......... $ 6.84158 $ 7.59413 0 01/01/2011 to 12/31/2011......... $ 7.59413 $ 7.05525 0 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15577 $10.20504 0 01/01/2008 to 12/31/2008......... $10.20504 $ 5.94093 0 01/01/2009 to 12/31/2009......... $ 5.94093 $ 9.17698 0 01/01/2010 to 12/31/2010......... $ 9.17698 $10.81269 0 01/01/2011 to 12/31/2011......... $10.81269 $10.31558 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03350 $ 7.63876 0 01/01/2009 to 12/31/2009......... $ 7.63876 $ 9.52759 0 01/01/2010 to 12/31/2010......... $ 9.52759 $11.87597 0 01/01/2011 to 12/31/2011......... $11.87597 $11.82991 0 AST HIGH YIELD PORTFOLIO 09/04/2007 to 12/31/2007......... $10.02193 $10.19061 0 01/01/2008 to 12/31/2008......... $10.19061 $ 7.46065 0 01/01/2009 to 12/31/2009......... $ 7.46065 $ 9.94415 0 01/01/2010 to 12/31/2010......... $ 9.94415 $11.09791 0 01/01/2011 to 12/31/2011......... $11.09791 $11.25890 0 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11178 $ 7.13867 0 01/01/2009 to 12/31/2009......... $ 7.13867 $ 8.89120 0 01/01/2010 to 12/31/2010......... $ 8.89120 $ 9.95052 0 01/01/2011 to 12/31/2011......... $ 9.95052 $ 9.72872 0 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08927 $ 7.61467 0 01/01/2009 to 12/31/2009......... $ 7.61467 $ 9.23814 0 01/01/2010 to 12/31/2010......... $ 9.23814 $10.13722 0 01/01/2011 to 12/31/2011......... $10.13722 $ 9.91746 0 AST INTERNATIONAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07589 $10.87865 0 01/01/2008 to 12/31/2008......... $10.87865 $ 5.32347 0 01/01/2009 to 12/31/2009......... $ 5.32347 $ 7.08178 0 01/01/2010 to 12/31/2010......... $ 7.08178 $ 7.97297 0 01/01/2011 to 12/31/2011......... $ 7.97297 $ 6.82656 0 AST INTERNATIONAL VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07730 $10.27451 0 01/01/2008 to 12/31/2008......... $10.27451 $ 5.65719 0 01/01/2009 to 12/31/2009......... $ 5.65719 $ 7.25920 0 01/01/2010 to 12/31/2010......... $ 7.25920 $ 7.92905 0 01/01/2011 to 12/31/2011......... $ 7.92905 $ 6.81816 0 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.04717 $ 9.65428 0 01/01/2008 to 12/31/2008......... $ 9.65428 $ 7.82060 1,319 01/01/2009 to 12/31/2009......... $ 7.82060 $ 9.38319 1,318 01/01/2010 to 12/31/2010......... $ 9.38319 $ 9.90157 1,318 01/01/2011 to 12/31/2011......... $ 9.90157 $ 9.75906 1,317 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08400 $10.29031 0 01/01/2010 to 12/31/2010......... $10.29031 $11.26343 0 01/01/2011 to 12/31/2011......... $11.26343 $11.14873 0 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14539 $10.30010 0 01/01/2010 to 12/31/2010......... $10.30010 $11.51790 0 01/01/2011 to 12/31/2011......... $11.51790 $10.66059 0 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.07182 $10.28751 0 01/01/2008 to 12/31/2008......... $10.28751 $ 5.92957 0 01/01/2009 to 12/31/2009......... $ 5.92957 $ 7.92252 0 01/01/2010 to 12/31/2010......... $ 7.92252 $ 8.34866 0 01/01/2011 to 12/31/2011......... $ 8.34866 $ 7.45810 0 AST LARGE-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09111 $ 9.51468 0 01/01/2008 to 12/31/2008......... $ 9.51468 $ 5.47387 0 01/01/2009 to 12/31/2009......... $ 5.47387 $ 6.42843 0 01/01/2010 to 12/31/2010......... $ 6.42843 $ 7.15276 0 01/01/2011 to 12/31/2011......... $ 7.15276 $ 6.73906 0 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.02297 $10.18268 0 01/01/2008 to 12/31/2008......... $10.18268 $ 7.68422 0 01/01/2009 to 12/31/2009......... $ 7.68422 $10.17046 0 01/01/2010 to 12/31/2010......... $10.17046 $11.34198 0 01/01/2011 to 12/31/2011......... $11.34198 $12.28703 0 AST MARSICO CAPITAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.12082 $10.62167 0 01/01/2008 to 12/31/2008......... $10.62167 $ 5.88400 0 01/01/2009 to 12/31/2009......... $ 5.88400 $ 7.50737 0 01/01/2010 to 12/31/2010......... $ 7.50737 $ 8.83994 0 01/01/2011 to 12/31/2011......... $ 8.83994 $ 8.61297 0 AST MFS GLOBAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06288 $10.28019 0 01/01/2008 to 12/31/2008......... $10.28019 $ 6.67246 0 01/01/2009 to 12/31/2009......... $ 6.67246 $ 8.62801 0 01/01/2010 to 12/31/2010......... $ 8.62801 $ 9.50583 0 01/01/2011 to 12/31/2011......... $ 9.50583 $ 9.05443 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MFS GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.11638 $10.62305 0 01/01/2008 to 12/31/2008......... $10.62305 $ 6.65333 0 01/01/2009 to 12/31/2009......... $ 6.65333 $ 8.13214 0 01/01/2010 to 12/31/2010......... $ 8.13214 $ 9.01845 0 01/01/2011 to 12/31/2011......... $ 9.01845 $ 8.81514 0 AST MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.10856 $ 9.75005 0 01/01/2008 to 12/31/2008......... $ 9.75005 $ 5.93190 0 01/01/2009 to 12/31/2009......... $ 5.93190 $ 8.10076 0 01/01/2010 to 12/31/2010......... $ 8.10076 $ 9.84588 0 01/01/2011 to 12/31/2011......... $ 9.84588 $ 9.34739 0 AST MONEY MARKET PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99951 $10.09744 0 01/01/2008 to 12/31/2008......... $10.09744 $10.17767 0 01/01/2009 to 12/31/2009......... $10.17767 $10.03209 0 01/01/2010 to 12/31/2010......... $10.03209 $ 9.86698 0 01/01/2011 to 12/31/2011......... $ 9.86698 $ 9.70434 0 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15067 $10.10265 0 01/01/2008 to 12/31/2008......... $10.10265 $ 5.73576 0 01/01/2009 to 12/31/2009......... $ 5.73576 $ 7.93225 0 01/01/2010 to 12/31/2010......... $ 7.93225 $ 9.62757 0 01/01/2011 to 12/31/2011......... $ 9.62757 $ 9.23167 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15100 $10.36749 0 01/01/2008 to 12/31/2008......... $10.36749 $ 5.79188 0 01/01/2009 to 12/31/2009......... $ 5.79188 $ 7.39154 0 01/01/2010 to 12/31/2010......... $ 7.39154 $ 9.35229 0 01/01/2011 to 12/31/2011......... $ 9.35229 $ 9.35130 0 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.15137 $10.88844 0 01/01/2008 to 12/31/2008......... $10.88844 $ 6.15199 0 01/01/2009 to 12/31/2009......... $ 6.15199 $ 7.41410 0 01/01/2010 to 12/31/2010......... $ 7.41410 $ 8.76777 0 01/01/2011 to 04/29/2011......... $ 8.76777 $ 9.83375 0 AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10136 $ 5.57335 0 01/01/2009 to 12/31/2009......... $ 5.57335 $ 9.12527 0 01/01/2010 to 12/31/2010......... $ 9.12527 $10.97104 0 01/01/2011 to 12/31/2011......... $10.97104 $ 8.60101 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PIMCO LIMITED MATURITY BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99815 $10.29756 0 01/01/2008 to 12/31/2008......... $10.29756 $10.23824 0 01/01/2009 to 12/31/2009......... $10.23824 $11.09694 0 01/01/2010 to 12/31/2010......... $11.09694 $11.33686 0 01/01/2011 to 12/31/2011......... $11.33686 $11.39825 0 AST PIMCO TOTAL RETURN BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.99815 $10.48561 0 01/01/2008 to 12/31/2008......... $10.48561 $10.07735 0 01/01/2009 to 12/31/2009......... $10.07735 $11.54657 0 01/01/2010 to 12/31/2010......... $11.54657 $12.22988 0 01/01/2011 to 12/31/2011......... $12.22988 $12.40784 0 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.03349 $10.36204 0 01/01/2008 to 12/31/2008......... $10.36204 $ 8.20346 0 01/01/2009 to 12/31/2009......... $ 8.20346 $ 9.68266 0 01/01/2010 to 12/31/2010......... $ 9.68266 $10.52738 0 01/01/2011 to 12/31/2011......... $10.52738 $10.45482 0 AST QMA US EQUITY ALPHA PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08932 $ 9.70245 0 01/01/2008 to 12/31/2008......... $ 9.70245 $ 5.84646 0 01/01/2009 to 12/31/2009......... $ 5.84646 $ 7.00319 0 01/01/2010 to 12/31/2010......... $ 7.00319 $ 7.92253 0 01/01/2011 to 12/31/2011......... $ 7.92253 $ 8.05960 0 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99861 $ 8.89866 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06777 $10.28928 0 01/01/2008 to 12/31/2008......... $10.28928 $ 7.06265 0 01/01/2009 to 12/31/2009......... $ 7.06265 $ 8.84835 0 01/01/2010 to 12/31/2010......... $ 8.84835 $ 9.72815 0 01/01/2011 to 12/31/2011......... $ 9.72815 $ 9.24234 0 AST SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.09118 $ 9.96110 0 01/01/2008 to 12/31/2008......... $ 9.96110 $ 6.36649 0 01/01/2009 to 12/31/2009......... $ 6.36649 $ 8.38268 0 01/01/2010 to 12/31/2010......... $ 8.38268 $11.24433 0 01/01/2011 to 12/31/2011......... $11.24433 $10.94837 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08521 $ 9.33168 0 01/01/2008 to 12/31/2008......... $ 9.33168 $ 6.44885 0 01/01/2009 to 12/31/2009......... $ 6.44885 $ 8.05322 0 01/01/2010 to 12/31/2010......... $ 8.05322 $ 9.97697 0 01/01/2011 to 12/31/2011......... $ 9.97697 $ 9.22409 0 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.06319 $10.10841 0 01/01/2008 to 12/31/2008......... $10.10841 $ 7.36066 0 01/01/2009 to 12/31/2009......... $ 7.36066 $ 8.98477 0 01/01/2010 to 12/31/2010......... $ 8.98477 $ 9.85367 0 01/01/2011 to 12/31/2011......... $ 9.85367 $ 9.88135 0 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.08990 $ 9.44027 0 01/01/2008 to 12/31/2008......... $ 9.44027 $ 5.39439 0 01/01/2009 to 12/31/2009......... $ 5.39439 $ 6.56645 0 01/01/2010 to 12/31/2010......... $ 6.56645 $ 7.31183 0 01/01/2011 to 12/31/2011......... $ 7.31183 $ 7.07190 0 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.98144 $10.53870 0 01/01/2008 to 12/31/2008......... $10.53870 $10.11020 0 01/01/2009 to 12/31/2009......... $10.11020 $11.14552 0 01/01/2010 to 12/31/2010......... $11.14552 $11.58863 0 01/01/2011 to 12/31/2011......... $11.58863 $11.86517 0 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.14370 $10.00708 0 01/01/2008 to 12/31/2008......... $10.00708 $ 5.84797 0 01/01/2009 to 12/31/2009......... $ 5.84797 $ 8.81937 0 01/01/2010 to 12/31/2010......... $ 8.81937 $10.04316 0 01/01/2011 to 12/31/2011......... $10.04316 $ 9.70810 0 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.21158 $11.52768 0 01/01/2008 to 12/31/2008......... $11.52768 $ 5.66891 0 01/01/2009 to 12/31/2009......... $ 5.66891 $ 8.32488 0 01/01/2010 to 12/31/2010......... $ 8.32488 $ 9.86005 0 01/01/2011 to 12/31/2011......... $ 9.86005 $ 8.24906 0 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.10350 $10.22335 0 01/01/2008 to 12/31/2008......... $10.22335 $ 5.79748 0 01/01/2009 to 12/31/2009......... $ 5.79748 $ 7.32143 0 01/01/2010 to 12/31/2010......... $ 7.32143 $ 8.25276 0 01/01/2011 to 12/31/2011......... $ 8.25276 $ 7.83460 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 11/19/2007* to 12/31/2007........ $ 9.99861 $ 9.97925 0 01/01/2008 to 12/31/2008......... $ 9.97925 $ 9.30103 0 01/01/2009 to 12/31/2009......... $ 9.30103 $10.20914 0 01/01/2010 to 12/31/2010......... $10.20914 $10.82122 0 01/01/2011 to 12/31/2011......... $10.82122 $11.28166 0 FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07810 $ 6.64193 0 01/01/2009 to 12/31/2009......... $ 6.64193 $ 8.49448 0 01/01/2010 to 12/31/2010......... $ 8.49448 $ 9.20782 0 01/01/2011 to 12/31/2011......... $ 9.20782 $ 8.90286 0 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: WITH COMBO 5%/HAV 80 BPS (1.75%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.58438 $ 9.26448 5,326,490 01/01/2010 to 12/31/2010......... $ 9.26448 $10.19462 5,089,366 01/01/2011 to 12/31/2011......... $10.19462 $ 9.75312 4,414,821 AST ADVANCED STRATEGIES PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.78881 $ 9.65571 1,546,021 01/01/2010 to 12/31/2010......... $ 9.65571 $10.79033 1,571,211 01/01/2011 to 12/31/2011......... $10.79033 $10.61693 1,431,282 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.47791 $ 8.03080 6,596 01/01/2010 to 12/31/2010......... $ 8.03080 $ 8.98555 11,755 01/01/2011 to 12/31/2011......... $ 8.98555 $ 9.14661 2,574 AST BALANCED ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.93555 $ 9.55557 2,782,580 01/01/2010 to 12/31/2010......... $ 9.55557 $10.54773 2,691,285 01/01/2011 to 12/31/2011......... $10.54773 $10.24057 2,316,352 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99857 $ 9.16255 12,751 AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.19335 $ 7.84238 2,315 01/01/2010 to 12/31/2010......... $ 7.84238 $ 8.66644 2,249 01/01/2011 to 12/31/2011......... $ 8.66644 $ 8.47561 1,076 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BOND PORTFOLIO 2016 05/01/2009 to 12/31/2009......... $ 9.68422 $ 9.38572 0 01/01/2010 to 12/31/2010......... $ 9.38572 $10.19992 0 01/01/2011 to 12/31/2011......... $10.19992 $10.99092 0 AST BOND PORTFOLIO 2018 05/01/2009 to 12/31/2009......... $11.37811 $11.12056 0 01/01/2010 to 12/31/2010......... $11.12056 $12.15179 0 01/01/2011 to 12/31/2011......... $12.15179 $13.56492 0 AST BOND PORTFOLIO 2019 05/01/2009 to 12/31/2009......... $11.33898 $10.98780 0 01/01/2010 to 12/31/2010......... $10.98780 $12.02578 100 01/01/2011 to 12/31/2011......... $12.02578 $13.70693 506 AST BOND PORTFOLIO 2020 05/01/2009 to 12/31/2009......... $ 9.37595 $ 8.79604 0 01/01/2010 to 12/31/2010......... $ 8.79604 $ 9.66876 58,389 01/01/2011 to 12/31/2011......... $ 9.66876 $11.27734 95 AST BOND PORTFOLIO 2021 01/04/2010* to 12/31/2010........ $ 9.99810 $11.01729 38,657 01/01/2011 to 12/31/2011......... $11.01729 $13.02623 638,952 AST BOND PORTFOLIO 2022 01/03/2011* to 12/31/2011........ $ 9.99857 $12.03025 286,401 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.32460 $ 9.00313 5,643,870 01/01/2010 to 12/31/2010......... $ 9.00313 $10.03170 5,740,105 01/01/2011 to 12/31/2011......... $10.03170 $ 9.62010 5,142,553 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.78100 $ 8.34595 120,538 01/01/2010 to 12/31/2010......... $ 8.34595 $ 9.37899 168,807 01/01/2011 to 12/31/2011......... $ 9.37899 $ 8.99772 123,003 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.47141 $ 8.90471 167,537 01/01/2010 to 12/31/2010......... $ 8.90471 $ 9.79462 219,911 01/01/2011 to 12/31/2011......... $ 9.79462 $ 9.45152 190,109 AST COHEN & STEERS REALTY PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.21355 $ 7.88735 3,042 01/01/2010 to 12/31/2010......... $ 7.88735 $ 9.97588 3,002 01/01/2011 to 12/31/2011......... $ 9.97588 $10.45070 1,299 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.97110 $ 7.78612 2,497 01/01/2010 to 12/31/2010......... $ 7.78612 $10.14271 7,539 01/01/2011 to 12/31/2011......... $10.14271 $ 8.66144 4,659 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.47031 $ 8.93974 26,953 01/01/2010 to 12/31/2010......... $ 8.93974 $ 9.95667 62,320 01/01/2011 to 12/31/2011......... $ 9.95667 $ 9.54376 42,822 AST FIRST TRUST BALANCED TARGET PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.14653 $ 8.79712 1,202,613 01/01/2010 to 12/31/2010......... $ 8.79712 $ 9.88773 1,180,706 01/01/2011 to 12/31/2011......... $ 9.88773 $ 9.57167 945,215 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.66755 $ 8.13678 1,588,708 01/01/2010 to 12/31/2010......... $ 8.13678 $ 9.51787 1,677,327 01/01/2011 to 12/31/2011......... $ 9.51787 $ 8.77313 1,401,227 AST GLOBAL REAL ESTATE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.72759 $ 8.11460 4,642 01/01/2010 to 12/31/2010......... $ 8.11460 $ 9.58600 8,225 01/01/2011 to 12/31/2011......... $ 9.58600 $ 8.94656 4,220 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.72494 $ 9.89579 4,004 01/01/2010 to 12/31/2010......... $ 9.89579 $10.72625 4,220 01/01/2011 to 12/31/2011......... $10.72625 $10.12478 1,716 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.43986 $ 7.78118 4,897 01/01/2010 to 12/31/2010......... $ 7.78118 $ 8.63286 9,895 01/01/2011 to 12/31/2011......... $ 8.63286 $ 8.01634 5,256 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.73522 $10.39351 7,059 01/01/2010 to 12/31/2010......... $10.39351 $12.24001 9,473 01/01/2011 to 12/31/2011......... $12.24001 $11.67165 4,236 AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.40937 $ 9.52067 0 01/01/2010 to 12/31/2010......... $ 9.52067 $11.86158 678 01/01/2011 to 12/31/2011......... $11.86158 $11.80975 427 AST HIGH YIELD PORTFOLIO 05/01/2009 to 12/31/2009......... $ 8.27974 $10.37011 4,733 01/01/2010 to 12/31/2010......... $10.37011 $11.56763 6,252 01/01/2011 to 12/31/2011......... $11.56763 $11.72970 3,189 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.26577 $ 8.88380 67,144 01/01/2010 to 12/31/2010......... $ 8.88380 $ 9.93736 119,181 01/01/2011 to 12/31/2011......... $ 9.93736 $ 9.71107 68,162 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.78411 $ 9.23061 196,954 01/01/2010 to 12/31/2010......... $ 9.23061 $10.12402 196,131 01/01/2011 to 12/31/2011......... $10.12402 $ 9.89972 158,625 AST INTERNATIONAL GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.15048 $ 8.06631 4,243 01/01/2010 to 12/31/2010......... $ 8.06631 $ 9.07693 5,838 01/01/2011 to 12/31/2011......... $ 9.07693 $ 7.76802 3,046 AST INTERNATIONAL VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.83892 $ 8.87760 3,530 01/01/2010 to 12/31/2010......... $ 8.87760 $ 9.69193 7,861 01/01/2011 to 12/31/2011......... $ 9.69193 $ 8.33006 3,732 AST INVESTMENT GRADE BOND PORTFOLIO 05/01/2009 to 12/31/2009......... $10.77146 $11.73237 128,909 01/01/2010 to 12/31/2010......... $11.73237 $12.77720 95,027 01/01/2011 to 12/31/2011......... $12.77720 $14.12060 187,387 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 05/01/2009 to 12/31/2009......... $ 8.83226 $10.24727 458,937 01/01/2010 to 12/31/2010......... $10.24727 $10.80817 460,917 01/01/2011 to 12/31/2011......... $10.80817 $10.64726 472,112 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08396 $10.28967 219 01/01/2010 to 12/31/2010......... $10.28967 $11.25705 2,266 01/01/2011 to 12/31/2011......... $11.25705 $11.13692 1,226 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14535 $10.29945 0 01/01/2010 to 12/31/2010......... $10.29945 $11.51148 3,884 01/01/2011 to 12/31/2011......... $11.51148 $10.64939 4,117 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.50773 $ 8.75281 5,437 01/01/2010 to 12/31/2010......... $ 8.75281 $ 9.21909 12,381 01/01/2011 to 12/31/2011......... $ 9.21909 $ 8.23160 7,644 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST LARGE-CAP VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.58515 $ 7.08407 1,262 01/01/2010 to 12/31/2010......... $ 7.08407 $ 7.87845 7,746 01/01/2011 to 12/31/2011......... $ 7.87845 $ 7.41911 3,072 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 9.02771 $10.89824 2,313 01/01/2010 to 12/31/2010......... $10.89824 $12.14768 1,264 01/01/2011 to 12/31/2011......... $12.14768 $13.15337 1,206 AST MARSICO CAPITAL GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.39753 $ 8.14798 7,793 01/01/2010 to 12/31/2010......... $ 8.14798 $ 9.58964 14,449 01/01/2011 to 12/31/2011......... $ 9.58964 $ 9.33879 7,967 AST MFS GLOBAL EQUITY PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.52319 $10.00657 4,376 01/01/2010 to 12/31/2010......... $10.00657 $11.01926 2,936 01/01/2011 to 12/31/2011......... $11.01926 $10.49074 1,831 AST MFS GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.39300 $ 8.97986 604 01/01/2010 to 12/31/2010......... $ 8.97986 $ 9.95374 4,601 01/01/2011 to 12/31/2011......... $ 9.95374 $ 9.72471 1,801 AST MID-CAP VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.56293 $ 8.71638 1,504 01/01/2010 to 12/31/2010......... $ 8.71638 $10.58897 1,510 01/01/2011 to 12/31/2011......... $10.58897 $10.04800 608 AST MONEY MARKET PORTFOLIO 05/01/2009 to 12/31/2009......... $10.55669 $10.44180 27,394 01/01/2010 to 12/31/2010......... $10.44180 $10.26477 20,194 01/01/2011 to 12/31/2011......... $10.26477 $10.09057 14,484 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.95154 $ 8.07728 1,187 01/01/2010 to 12/31/2010......... $ 8.07728 $ 9.79886 3,335 01/01/2011 to 12/31/2011......... $ 9.79886 $ 9.39128 1,377 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.02848 $10.06951 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.02355 $ 8.72450 3,055 01/01/2010 to 12/31/2010......... $ 8.72450 $11.03351 8,033 01/01/2011 to 12/31/2011......... $11.03351 $11.02690 3,421 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.15630 $ 7.49518 2,765 01/01/2010 to 12/31/2010......... $ 7.49518 $ 8.85927 3,680 01/01/2011 to 04/29/2011......... $ 8.85927 $ 9.93478 0 AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.18191 $ 9.11891 4,932 01/01/2010 to 12/31/2010......... $ 9.11891 $10.95795 14,211 01/01/2011 to 12/31/2011......... $10.95795 $ 8.58654 9,133 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 05/01/2009 to 12/31/2009......... $10.92079 $11.48658 3,251 01/01/2010 to 12/31/2010......... $11.48658 $11.72926 11,456 01/01/2011 to 12/31/2011......... $11.72926 $11.78694 9,762 AST PIMCO TOTAL RETURN BOND PORTFOLIO 05/01/2009 to 12/31/2009......... $10.86732 $12.05880 52,387 01/01/2010 to 12/31/2010......... $12.05880 $12.76610 80,428 01/01/2011 to 12/31/2011......... $12.76610 $12.94556 46,981 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 8.94421 $10.38444 1,417,628 01/01/2010 to 12/31/2010......... $10.38444 $11.28481 1,469,096 01/01/2011 to 12/31/2011......... $11.28481 $11.20146 1,377,189 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01849 $10.06939 0 AST QMA US EQUITY ALPHA PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.09113 $ 7.75928 534 01/01/2010 to 12/31/2010......... $ 7.75928 $ 8.77355 588 01/01/2011 to 12/31/2011......... $ 8.77355 $ 8.92102 5,253 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99857 $ 8.89568 1,189 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.89047 $ 9.71715 170,482 01/01/2010 to 12/31/2010......... $ 9.71715 $10.67818 242,375 01/01/2011 to 12/31/2011......... $10.67818 $10.13994 193,517 AST SMALL-CAP GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.66830 $ 8.77180 2,301 01/01/2010 to 12/31/2010......... $ 8.77180 $11.76047 3,732 01/01/2011 to 12/31/2011......... $11.76047 $11.44523 1,577 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.43141 $ 8.36348 4,832 01/01/2010 to 12/31/2010......... $ 8.36348 $10.35634 6,939 01/01/2011 to 12/31/2011......... $10.35634 $ 9.57011 3,019 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 8.12791 $ 9.85774 1,077,905 01/01/2010 to 12/31/2010......... $ 9.85774 $10.80580 1,134,743 01/01/2011 to 12/31/2011......... $10.80580 $10.83087 1,009,735 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 05/01/2009 to 12/31/2009......... $ 5.69039 $ 7.28736 229 01/01/2010 to 12/31/2010......... $ 7.28736 $ 8.11059 1,352 01/01/2011 to 12/31/2011......... $ 8.11059 $ 7.84060 530 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 05/01/2009 to 12/31/2009......... $10.54579 $11.71854 6,106 01/01/2010 to 12/31/2010......... $11.71854 $12.17856 5,121 01/01/2011 to 12/31/2011......... $12.17856 $12.46302 4,174 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.41735 $ 9.79749 6,044 01/01/2010 to 12/31/2010......... $ 9.79749 $11.15143 28,201 01/01/2011 to 12/31/2011......... $11.15143 $10.77407 8,146 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 05/01/2009 to 12/31/2009......... $ 7.31185 $ 9.78660 18,507 01/01/2010 to 12/31/2010......... $ 9.78660 $11.58555 26,610 01/01/2011 to 12/31/2011......... $11.58555 $ 9.68778 13,221 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 05/01/2009 to 12/31/2009......... $ 6.45011 $ 8.20138 38,652 01/01/2010 to 12/31/2010......... $ 8.20138 $ 9.24013 44,538 01/01/2011 to 12/31/2011......... $ 9.24013 $ 8.76758 26,079 AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 05/01/2009 to 12/31/2009......... $ 9.44766 $10.19841 6,401 01/01/2010 to 12/31/2010......... $10.19841 $10.80459 9,567 01/01/2011 to 12/31/2011......... $10.80459 $11.25875 5,671 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: WITH COMBO 5%/HAV AND HD GRO (1.80%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.66793 $ 7.57016 0 01/01/2009 to 12/31/2009......... $ 7.57016 $ 9.24767 0 01/01/2010 to 12/31/2010......... $ 9.24767 $10.17096 0 01/01/2011 to 12/31/2011......... $10.17096 $ 9.72567 0 AST ADVANCED STRATEGIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.78166 $ 7.77480 0 01/01/2009 to 12/31/2009......... $ 7.77480 $ 9.63835 0 01/01/2010 to 12/31/2010......... $ 9.63835 $10.76564 0 01/01/2011 to 12/31/2011......... $10.76564 $10.58741 0 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.02331 $ 6.92900 0 01/01/2009 to 12/31/2009......... $ 6.92900 $ 8.01628 0 01/01/2010 to 12/31/2010......... $ 8.01628 $ 8.96487 0 01/01/2011 to 12/31/2011......... $ 8.96487 $ 9.12113 0 AST BALANCED ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.74461 $ 7.87536 0 01/01/2009 to 12/31/2009......... $ 7.87536 $ 9.53832 0 01/01/2010 to 12/31/2010......... $ 9.53832 $10.52351 0 01/01/2011 to 12/31/2011......... $10.52351 $10.21197 0 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99853 $ 9.15952 0 AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.23053 $ 6.73868 0 01/01/2009 to 12/31/2009......... $ 6.73868 $ 7.82812 0 01/01/2010 to 12/31/2010......... $ 7.82812 $ 8.64657 0 01/01/2011 to 12/31/2011......... $ 8.64657 $ 8.45207 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BOND PORTFOLIO 2016 01/02/2009* to 12/31/2009........ $ 9.99902 $ 9.38108 0 01/01/2010 to 12/31/2010......... $ 9.38108 $10.18982 0 01/01/2011 to 12/31/2011......... $10.18982 $10.97479 0 AST BOND PORTFOLIO 2018 01/28/2008* to 12/31/2008........ $ 9.99854 $12.03844 0 01/01/2009 to 12/31/2009......... $12.03844 $11.11003 0 01/01/2010 to 12/31/2010......... $11.11003 $12.13429 0 01/01/2011 to 12/31/2011......... $12.13429 $13.53876 0 AST BOND PORTFOLIO 2019 01/28/2008* to 12/31/2008........ $ 9.99854 $12.10728 0 01/01/2009 to 12/31/2009......... $12.10728 $10.97728 0 01/01/2010 to 12/31/2010......... $10.97728 $12.00827 0 01/01/2011 to 12/31/2011......... $12.00827 $13.68041 0 AST BOND PORTFOLIO 2020 01/02/2009* to 12/31/2009........ $ 9.99902 $ 8.79160 0 01/01/2010 to 12/31/2010......... $ 8.79160 $ 9.65901 0 01/01/2011 to 12/31/2011......... $ 9.65901 $11.26044 0 AST BOND PORTFOLIO 2021 01/04/2010* to 12/31/2010........ $ 9.99804 $11.01180 8,111 01/01/2011 to 12/31/2011......... $11.01180 $13.01321 15,068 AST BOND PORTFOLIO 2022 01/03/2011* to 12/31/2011........ $ 9.99853 $12.02437 0 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.64512 $ 7.29960 0 01/01/2009 to 12/31/2009......... $ 7.29960 $ 8.98690 0 01/01/2010 to 12/31/2010......... $ 8.98690 $10.00882 0 01/01/2011 to 12/31/2011......... $10.00882 $ 9.59353 0 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09924 $ 6.69228 0 01/01/2009 to 12/31/2009......... $ 6.69228 $ 8.33899 0 01/01/2010 to 12/31/2010......... $ 8.33899 $ 9.36653 0 01/01/2011 to 12/31/2011......... $ 9.36653 $ 8.98138 0 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08106 $ 7.34068 0 01/01/2009 to 12/31/2009......... $ 7.34068 $ 8.89743 0 01/01/2010 to 12/31/2010......... $ 8.89743 $ 9.78180 0 01/01/2011 to 12/31/2011......... $ 9.78180 $ 9.43446 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST COHEN & STEERS REALTY PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.54882 $ 6.07516 0 01/01/2009 to 12/31/2009......... $ 6.07516 $ 7.87308 0 01/01/2010 to 12/31/2010......... $ 7.87308 $ 9.95295 0 01/01/2011 to 12/31/2011......... $ 9.95295 $10.42158 0 AST DEAM SMALL-CAP VALUE PORTFOLIO 01/28/2008 to 07/18/2008......... $ 7.90885 $ 7.72699 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.69091 $ 5.96393 0 01/01/2009 to 12/31/2009......... $ 5.96393 $ 7.77201 0 01/01/2010 to 12/31/2010......... $ 7.77201 $10.11934 0 01/01/2011 to 12/31/2011......... $10.11934 $ 8.63723 0 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10357 $ 7.50079 0 01/01/2009 to 12/31/2009......... $ 7.50079 $ 8.93234 0 01/01/2010 to 12/31/2010......... $ 8.93234 $ 9.94340 0 01/01/2011 to 12/31/2011......... $ 9.94340 $ 9.52637 0 AST FIRST TRUST BALANCED TARGET PORTFOLIO 01/28/2008 to 12/31/2008......... $10.69808 $ 7.21784 0 01/01/2009 to 12/31/2009......... $ 7.21784 $ 8.78121 0 01/01/2010 to 12/31/2010......... $ 8.78121 $ 9.86497 0 01/01/2011 to 12/31/2011......... $ 9.86497 $ 9.54494 0 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 01/28/2008 to 12/31/2008......... $10.50085 $ 6.56357 0 01/01/2009 to 12/31/2009......... $ 6.56357 $ 8.12237 0 01/01/2010 to 12/31/2010......... $ 8.12237 $ 9.49626 0 01/01/2011 to 12/31/2011......... $ 9.49626 $ 8.74891 0 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99854 $ 7.46903 0 01/01/2009 to 11/13/2009......... $ 7.46903 $ 8.34495 0 AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17522 $ 6.11016 0 01/01/2009 to 12/31/2009......... $ 6.11016 $ 8.10892 0 01/01/2010 to 12/31/2010......... $ 8.10892 $ 9.57456 0 01/01/2011 to 12/31/2011......... $ 9.57456 $ 8.93153 0 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.25527 $ 6.73082 0 01/01/2009 to 12/31/2009......... $ 6.73082 $ 9.87807 0 01/01/2010 to 12/31/2010......... $ 9.87807 $10.70162 0 01/01/2011 to 12/31/2011......... $10.70162 $10.09654 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 01/28/2008 to 12/31/2008......... $10.55757 $ 6.63384 0 01/01/2009 to 12/31/2009......... $ 6.63384 $ 7.76698 0 01/01/2010 to 12/31/2010......... $ 7.76698 $ 8.61281 0 01/01/2011 to 12/31/2011......... $ 8.61281 $ 7.99378 0 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.44056 $ 6.72291 0 01/01/2009 to 12/31/2009......... $ 6.72291 $10.37465 0 01/01/2010 to 12/31/2010......... $10.37465 $12.21170 0 01/01/2011 to 12/31/2011......... $12.21170 $11.63890 0 AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03342 $ 7.63533 0 01/01/2009 to 12/31/2009......... $ 7.63533 $ 9.51399 0 01/01/2010 to 12/31/2010......... $ 9.51399 $11.84749 0 01/01/2011 to 12/31/2011......... $11.84749 $11.78974 0 AST HIGH YIELD PORTFOLIO 01/28/2008 to 12/31/2008......... $10.51829 $ 7.77374 0 01/01/2009 to 12/31/2009......... $ 7.77374 $10.35129 0 01/01/2010 to 12/31/2010......... $10.35129 $11.54100 0 01/01/2011 to 12/31/2011......... $11.54100 $11.69693 0 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11176 $ 7.13394 0 01/01/2009 to 12/31/2009......... $ 7.13394 $ 8.87666 0 01/01/2010 to 12/31/2010......... $ 8.87666 $ 9.92453 0 01/01/2011 to 12/31/2011......... $ 9.92453 $ 9.69377 0 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08924 $ 7.60965 0 01/01/2009 to 12/31/2009......... $ 7.60965 $ 9.22304 0 01/01/2010 to 12/31/2010......... $ 9.22304 $10.11078 0 01/01/2011 to 12/31/2011......... $10.11078 $ 9.88185 0 AST INTERNATIONAL GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $11.04774 $ 6.05863 0 01/01/2009 to 12/31/2009......... $ 6.05863 $ 8.05179 0 01/01/2010 to 12/31/2010......... $ 8.05179 $ 9.05613 0 01/01/2011 to 12/31/2011......... $ 9.05613 $ 7.74633 0 AST INTERNATIONAL VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $11.22025 $ 6.91270 0 01/01/2009 to 12/31/2009......... $ 6.91270 $ 8.86147 0 01/01/2010 to 12/31/2010......... $ 8.86147 $ 9.66951 0 01/01/2011 to 12/31/2011......... $ 9.66951 $ 8.30663 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST INVESTMENT GRADE BOND PORTFOLIO 01/28/2008* to 12/31/2008........ $ 9.99854 $10.72041 0 01/01/2009 to 12/31/2009......... $10.72041 $11.72128 0 01/01/2010 to 12/31/2010......... $11.72128 $12.75879 0 01/01/2011 to 12/31/2011......... $12.75879 $14.09332 0 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.79862 $ 8.53380 0 01/01/2009 to 12/31/2009......... $ 8.53380 $10.22881 0 01/01/2010 to 12/31/2010......... $10.22881 $10.78339 0 01/01/2011 to 12/31/2011......... $10.78339 $10.61771 0 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08392 $10.28893 0 01/01/2010 to 12/31/2010......... $10.28893 $11.25088 0 01/01/2011 to 12/31/2011......... $11.25088 $11.12535 0 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14530 $10.29877 0 01/01/2010 to 12/31/2010......... $10.29877 $11.50507 0 01/01/2011 to 12/31/2011......... $11.50507 $10.63826 0 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 01/28/2008 to 12/31/2008......... $10.32384 $ 6.54565 0 01/01/2009 to 12/31/2009......... $ 6.54565 $ 8.73715 0 01/01/2010 to 12/31/2010......... $ 8.73715 $ 9.19808 0 01/01/2011 to 12/31/2011......... $ 9.19808 $ 8.20882 0 AST LARGE-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.92036 $ 6.02732 0 01/01/2009 to 12/31/2009......... $ 6.02732 $ 7.07131 0 01/01/2010 to 12/31/2010......... $ 7.07131 $ 7.86044 0 01/01/2011 to 12/31/2011......... $ 7.86044 $ 7.39857 0 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 01/28/2008 to 12/31/2008......... $10.67274 $ 8.22753 0 01/01/2009 to 12/31/2009......... $ 8.22753 $10.87864 0 01/01/2010 to 12/31/2010......... $10.87864 $12.11990 0 01/01/2011 to 12/31/2011......... $12.11990 $13.11683 0 AST MARSICO CAPITAL GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.37106 $ 6.38093 0 01/01/2009 to 12/31/2009......... $ 6.38093 $ 8.13344 0 01/01/2010 to 12/31/2010......... $ 8.13344 $ 9.56772 0 01/01/2011 to 12/31/2011......... $ 9.56772 $ 9.31287 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MFS GLOBAL EQUITY PORTFOLIO 01/28/2008 to 12/31/2008......... $10.88205 $ 7.73203 0 01/01/2009 to 12/31/2009......... $ 7.73203 $ 9.98846 0 01/01/2010 to 12/31/2010......... $ 9.98846 $10.99392 0 01/01/2011 to 12/31/2011......... $10.99392 $10.46150 0 AST MFS GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.72178 $ 7.34079 0 01/01/2009 to 12/31/2009......... $ 7.34079 $ 8.96358 0 01/01/2010 to 12/31/2010......... $ 8.96358 $ 9.93078 0 01/01/2011 to 12/31/2011......... $ 9.93078 $ 9.69742 0 AST MID-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.71384 $ 6.37746 0 01/01/2009 to 12/31/2009......... $ 6.37746 $ 8.70075 0 01/01/2010 to 12/31/2010......... $ 8.70075 $10.56476 0 01/01/2011 to 12/31/2011......... $10.56476 $10.02005 0 AST MONEY MARKET PORTFOLIO 01/28/2008 to 12/31/2008......... $10.53168 $10.58460 0 01/01/2009 to 12/31/2009......... $10.58460 $10.42287 0 01/01/2010 to 12/31/2010......... $10.42287 $10.24097 0 01/01/2011 to 12/31/2011......... $10.24097 $10.06247 0 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.33158 $ 5.83598 0 01/01/2009 to 12/31/2009......... $ 5.83598 $ 8.06289 0 01/01/2010 to 12/31/2010......... $ 8.06289 $ 9.77667 0 01/01/2011 to 12/31/2011......... $ 9.77667 $ 9.36543 0 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.02844 $10.06864 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $10.79963 $ 6.83068 0 01/01/2009 to 12/31/2009......... $ 6.83068 $ 8.70875 0 01/01/2010 to 12/31/2010......... $ 8.70875 $11.00805 0 01/01/2011 to 12/31/2011......... $11.00805 $10.99594 0 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.55849 $ 6.21411 0 01/01/2009 to 12/31/2009......... $ 6.21411 $ 7.48169 0 01/01/2010 to 12/31/2010......... $ 7.48169 $ 8.83896 0 01/01/2011 to 04/29/2011......... $ 8.83896 $ 9.91034 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10128 $ 5.57086 0 01/01/2009 to 12/31/2009......... $ 5.57086 $ 9.11223 0 01/01/2010 to 12/31/2010......... $ 9.11223 $10.94456 0 01/01/2011 to 12/31/2011......... $10.94456 $ 8.57180 0 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.95548 $10.58896 0 01/01/2009 to 12/31/2009......... $10.58896 $11.46586 0 01/01/2010 to 12/31/2010......... $11.46586 $11.70221 0 01/01/2011 to 12/31/2011......... $11.70221 $11.75406 0 AST PIMCO TOTAL RETURN BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $11.23573 $10.51549 0 01/01/2009 to 12/31/2009......... $10.51549 $12.03657 0 01/01/2010 to 12/31/2010......... $12.03657 $12.73627 0 01/01/2011 to 12/31/2011......... $12.73627 $12.90899 0 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.87352 $ 8.79094 0 01/01/2009 to 12/31/2009......... $ 8.79094 $10.36581 0 01/01/2010 to 12/31/2010......... $10.36581 $11.25907 0 01/01/2011 to 12/31/2011......... $11.25907 $11.17037 0 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01845 $10.06852 0 AST QMA US EQUITY ALPHA PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.89035 $ 6.47223 0 01/01/2009 to 12/31/2009......... $ 6.47223 $ 7.74505 0 01/01/2010 to 12/31/2010......... $ 7.74505 $ 8.75311 0 01/01/2011 to 12/31/2011......... $ 8.75311 $ 8.89581 0 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99853 $ 8.89271 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 01/28/2008 to 12/31/2008......... $10.67439 $ 7.74969 0 01/01/2009 to 12/31/2009......... $ 7.74969 $ 9.69959 20,237 01/01/2010 to 12/31/2010......... $ 9.69959 $10.65364 14,914 01/01/2011 to 12/31/2011......... $10.65364 $10.11172 10,650 AST SMALL-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.34751 $ 6.65658 0 01/01/2009 to 12/31/2009......... $ 6.65658 $ 8.75597 0 01/01/2010 to 12/31/2010......... $ 8.75597 $11.73364 0 01/01/2011 to 12/31/2011......... $11.73364 $11.41357 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.02102 $ 6.69183 0 01/01/2009 to 12/31/2009......... $ 6.69183 $ 8.34836 0 01/01/2010 to 12/31/2010......... $ 8.34836 $10.33253 0 01/01/2011 to 12/31/2011......... $10.33253 $ 9.54341 0 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.57406 $ 8.06926 0 01/01/2009 to 12/31/2009......... $ 8.06926 $ 9.83995 13,198 01/01/2010 to 12/31/2010......... $ 9.83995 $10.78102 9,823 01/01/2011 to 12/31/2011......... $10.78102 $10.80085 6,761 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.77313 $ 5.98171 0 01/01/2009 to 12/31/2009......... $ 5.98171 $ 7.27422 0 01/01/2010 to 12/31/2010......... $ 7.27422 $ 8.09199 0 01/01/2011 to 12/31/2011......... $ 8.09199 $ 7.81876 0 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $11.34463 $10.62110 0 01/01/2009 to 12/31/2009......... $10.62110 $11.69736 0 01/01/2010 to 12/31/2010......... $11.69736 $12.15050 0 01/01/2011 to 12/31/2011......... $12.15050 $12.42820 0 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 01/28/2008 to 12/31/2008......... $ 9.92140 $ 6.49123 0 01/01/2009 to 12/31/2009......... $ 6.49123 $ 9.77985 0 01/01/2010 to 12/31/2010......... $ 9.77985 $11.12583 0 01/01/2011 to 12/31/2011......... $11.12583 $10.74403 0 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 01/28/2008 to 12/31/2008......... $12.20388 $ 6.65868 0 01/01/2009 to 12/31/2009......... $ 6.65868 $ 9.76890 0 01/01/2010 to 12/31/2010......... $ 9.76890 $11.55903 0 01/01/2011 to 12/31/2011......... $11.55903 $ 9.66094 0 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 01/28/2008 to 12/31/2008......... $10.39432 $ 6.48888 0 01/01/2009 to 12/31/2009......... $ 6.48888 $ 8.18645 0 01/01/2010 to 12/31/2010......... $ 8.18645 $ 9.21884 0 01/01/2011 to 12/31/2011......... $ 9.21884 $ 8.74318 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 01/28/2008 to 12/31/2008......... $10.23348 $ 9.29077 0 01/01/2009 to 12/31/2009......... $ 9.29077 $10.18779 0 01/01/2010 to 12/31/2010......... $10.18779 $10.78811 0 01/01/2011 to 12/31/2011......... $10.78811 $11.23601 0 FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07808 $ 6.63754 0 01/01/2009 to 12/31/2009......... $ 6.63754 $ 8.48048 0 01/01/2010 to 12/31/2010......... $ 8.48048 $ 9.18367 0 01/01/2011 to 12/31/2011......... $ 9.18367 $ 8.87079 0 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: LIFETIME FIVE INCOME BENEFIT, OR HIGHEST DAILY LIFETIME FIVE INCOME BENEFIT, AND COMBINATION 5% ROLL-UP AND HAV DEATH BENEFIT (2.05%) OR LIFETIME FIVE INCOME BENEFIT AND HIGHEST DAILY VALUE DEATH BENEFIT (2.05%) OR HD GRO 60 BPS AND COMBO DB (2.05%) NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.02518 $11.25870 2,543,454 01/01/2008 to 12/31/2008......... $11.25870 $ 7.52065 4,290,790 01/01/2009 to 12/31/2009......... $ 7.52065 $ 9.16461 6,403,388 01/01/2010 to 12/31/2010......... $ 9.16461 $10.05503 6,481,639 01/01/2011 to 12/31/2011......... $10.05503 $ 9.59133 5,215,981 AST ADVANCED STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.87602 $11.22908 451,141 01/01/2008 to 12/31/2008......... $11.22908 $ 7.72388 1,193,763 01/01/2009 to 12/31/2009......... $ 7.72388 $ 9.55169 2,392,702 01/01/2010 to 12/31/2010......... $ 9.55169 $10.64273 2,509,896 01/01/2011 to 12/31/2011......... $10.64273 $10.44088 1,976,971 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.33105 $10.76521 50,360 01/01/2008 to 12/31/2008......... $10.76521 $ 6.88354 51,088 01/01/2009 to 12/31/2009......... $ 6.88354 $ 7.94405 56,131 01/01/2010 to 12/31/2010......... $ 7.94405 $ 8.86235 55,174 01/01/2011 to 12/31/2011......... $ 8.86235 $ 8.99478 72,443 AST BALANCED ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.93947 $11.19855 1,045,566 01/01/2008 to 12/31/2008......... $11.19855 $ 7.82382 3,006,296 01/01/2009 to 12/31/2009......... $ 7.82382 $ 9.45287 5,940,132 01/01/2010 to 12/31/2010......... $ 9.45287 $10.40364 6,021,508 01/01/2011 to 12/31/2011......... $10.40364 $10.07115 5,192,756 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99833 $ 9.14439 11,718 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.31210 $10.89644 110,209 01/01/2008 to 12/31/2008......... $10.89644 $ 6.69452 69,103 01/01/2009 to 12/31/2009......... $ 6.69452 $ 7.75779 96,419 01/01/2010 to 12/31/2010......... $ 7.75779 $ 8.54781 76,351 01/01/2011 to 12/31/2011......... $ 8.54781 $ 8.33514 85,319 AST BOND PORTFOLIO 2016 05/01/2009* to 12/31/2009........ $ 9.93822 $ 9.61299 0 01/01/2010 to 12/31/2010......... $ 9.61299 $10.41615 0 01/01/2011 to 12/31/2011......... $10.41615 $11.19107 0 AST BOND PORTFOLIO 2018 05/01/2009* to 12/31/2009........ $ 9.92265 $ 9.67902 0 01/01/2010 to 12/31/2010......... $ 9.67902 $10.54551 0 01/01/2011 to 12/31/2011......... $10.54551 $11.73731 0 AST BOND PORTFOLIO 2019 05/01/2009* to 12/31/2009........ $ 9.90543 $ 9.57969 0 01/01/2010 to 12/31/2010......... $ 9.57969 $10.45380 0 01/01/2011 to 12/31/2011......... $10.45380 $11.88036 0 AST BOND PORTFOLIO 2020 05/01/2009* to 12/31/2009........ $ 9.88414 $ 9.25455 0 01/01/2010 to 12/31/2010......... $ 9.25455 $10.14278 0 01/01/2011 to 12/31/2011......... $10.14278 $11.79550 0 AST BOND PORTFOLIO 2021 01/04/2010* to 12/31/2010........ $ 9.99778 $10.98498 0 01/01/2011 to 12/31/2011......... $10.98498 $12.94990 0 AST BOND PORTFOLIO 2022 01/03/2011* to 12/31/2011........ $ 9.99833 $11.99503 0 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.17672 $11.37500 2,558,602 01/01/2008 to 12/31/2008......... $11.37500 $ 7.25187 4,323,643 01/01/2009 to 12/31/2009......... $ 7.25187 $ 8.90621 7,701,858 01/01/2010 to 12/31/2010......... $ 8.90621 $ 9.89472 8,056,803 01/01/2011 to 12/31/2011......... $ 9.89472 $ 9.46090 6,257,591 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09917 $ 6.68122 138,308 01/01/2009 to 12/31/2009......... $ 6.68122 $ 8.30477 532,687 01/01/2010 to 12/31/2010......... $ 8.30477 $ 9.30511 678,275 01/01/2011 to 12/31/2011......... $ 9.30511 $ 8.90067 508,100 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08099 $ 7.32858 218,544 01/01/2009 to 12/31/2009......... $ 7.32858 $ 8.86096 858,467 01/01/2010 to 12/31/2010......... $ 8.86096 $ 9.71786 897,851 01/01/2011 to 12/31/2011......... $ 9.71786 $ 9.34997 818,528 AST COHEN & STEERS REALTY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.91754 $ 9.48340 85,556 01/01/2008 to 12/31/2008......... $ 9.48340 $ 6.03531 98,068 01/01/2009 to 12/31/2009......... $ 6.03531 $ 7.80228 99,922 01/01/2010 to 12/31/2010......... $ 7.80228 $ 9.83932 115,670 01/01/2011 to 12/31/2011......... $ 9.83932 $10.27737 91,118 AST DEAM SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.51485 $ 8.40420 40,522 01/01/2008 to 07/18/2008......... $ 8.40420 $ 7.68481 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.67469 $10.81494 51,954 01/01/2008 to 12/31/2008......... $10.81494 $ 5.92475 40,190 01/01/2009 to 12/31/2009......... $ 5.92475 $ 7.70205 69,359 01/01/2010 to 12/31/2010......... $ 7.70205 $10.00370 82,880 01/01/2011 to 12/31/2011......... $10.00370 $ 8.51771 98,852 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10350 $ 7.48844 188,704 01/01/2009 to 12/31/2009......... $ 7.48844 $ 8.89587 378,474 01/01/2010 to 12/31/2010......... $ 8.89587 $ 9.87870 410,194 01/01/2011 to 12/31/2011......... $ 9.87870 $ 9.44116 359,039 AST FIRST TRUST BALANCED TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $11.04320 $11.16999 355,077 01/01/2008 to 12/31/2008......... $11.16999 $ 7.17065 1,052,064 01/01/2009 to 12/31/2009......... $ 7.17065 $ 8.70250 2,453,023 01/01/2010 to 12/31/2010......... $ 8.70250 $ 9.75259 2,624,502 01/01/2011 to 12/31/2011......... $ 9.75259 $ 9.41320 2,330,805 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $11.03705 $11.22337 428,297 01/01/2008 to 12/31/2008......... $11.22337 $ 6.52045 992,417 01/01/2009 to 12/31/2009......... $ 6.52045 $ 8.04911 2,930,136 01/01/2010 to 12/31/2010......... $ 8.04911 $ 9.38759 2,993,576 01/01/2011 to 12/31/2011......... $ 9.38759 $ 8.62754 2,121,795 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99834 $ 7.46062 92,522 01/01/2009 to 11/13/2009......... $ 7.46062 $ 8.31782 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008....... $10.17501 $ 6.10332 2,015 01/01/2009 to 12/31/2009........ $ 6.10332 $ 8.07992 7,533 01/01/2010 to 12/31/2010........ $ 8.07992 $ 9.51698 8,974 01/01/2011 to 12/31/2011........ $ 9.51698 $ 8.85615 14,313 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 09/04/2007 to 12/31/2007........ $11.37188 $11.42452 117,879 01/01/2008 to 12/31/2008........ $11.42452 $ 6.68665 134,309 01/01/2009 to 12/31/2009........ $ 6.68665 $ 9.78901 210,444 01/01/2010 to 12/31/2010........ $ 9.78901 $10.57926 191,290 01/01/2011 to 12/31/2011........ $10.57926 $ 9.95673 183,045 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 09/04/2007 to 12/31/2007........ $11.44560 $11.34013 60,992 01/01/2008 to 12/31/2008........ $11.34013 $ 6.59044 59,215 01/01/2009 to 12/31/2009........ $ 6.59044 $ 7.69719 108,452 01/01/2010 to 12/31/2010........ $ 7.69719 $ 8.51452 108,896 01/01/2011 to 12/31/2011........ $ 8.51452 $ 7.88321 123,164 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007........ $11.46925 $11.51201 70,051 01/01/2008 to 12/31/2008........ $11.51201 $ 6.67880 74,451 01/01/2009 to 12/31/2009........ $ 6.67880 $10.28128 146,279 01/01/2010 to 12/31/2010........ $10.28128 $12.07219 125,854 01/01/2011 to 12/31/2011........ $12.07219 $11.47775 107,922 AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008....... $10.03322 $ 7.62678 11,741 01/01/2009 to 12/31/2009........ $ 7.62678 $ 9.47993 27,806 01/01/2010 to 12/31/2010........ $ 9.47993 $11.77620 35,349 01/01/2011 to 12/31/2011........ $11.77620 $11.69023 46,437 AST HIGH YIELD PORTFOLIO 09/04/2007 to 12/31/2007........ $10.42138 $10.58506 67,232 01/01/2008 to 12/31/2008........ $10.58506 $ 7.72288 52,614 01/01/2009 to 12/31/2009........ $ 7.72288 $10.25837 98,174 01/01/2010 to 12/31/2010........ $10.25837 $11.40941 117,981 01/01/2011 to 12/31/2011........ $11.40941 $11.53541 101,852 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008....... $10.11169 $ 7.12219 92,463 01/01/2009 to 12/31/2009........ $ 7.12219 $ 8.84025 303,986 01/01/2010 to 12/31/2010........ $ 8.84025 $ 9.85968 322,410 01/01/2011 to 12/31/2011........ $ 9.85968 $ 9.60684 288,926 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08918 $ 7.59716 111,892 01/01/2009 to 12/31/2009......... $ 7.59716 $ 9.18532 424,265 01/01/2010 to 12/31/2010......... $ 9.18532 $10.04474 457,592 01/01/2011 to 12/31/2011......... $10.04474 $ 9.79338 445,565 AST INTERNATIONAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.44416 $12.34222 115,136 01/01/2008 to 12/31/2008......... $12.34222 $ 6.01888 132,206 01/01/2009 to 12/31/2009......... $ 6.01888 $ 7.97937 144,204 01/01/2010 to 12/31/2010......... $ 7.97937 $ 8.95266 142,115 01/01/2011 to 12/31/2011......... $ 8.95266 $ 7.63921 121,556 AST INTERNATIONAL VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $12.28926 $12.51580 161,390 01/01/2008 to 12/31/2008......... $12.51580 $ 6.86748 157,577 01/01/2009 to 12/31/2009......... $ 6.86748 $ 8.78189 161,271 01/01/2010 to 12/31/2010......... $ 8.78189 $ 9.55932 143,460 01/01/2011 to 12/31/2011......... $ 9.55932 $ 8.19186 116,484 AST INVESTMENT GRADE BOND PORTFOLIO 01/28/2008* to 12/31/2008........ $ 9.99834 $10.69598 9,882,729 01/01/2009 to 12/31/2009......... $10.69598 $11.66588 3,643,097 01/01/2010 to 12/31/2010......... $11.66588 $12.66748 1,688,626 01/01/2011 to 12/31/2011......... $12.66748 $13.95826 6,300,372 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.94133 $10.50173 92,521 01/01/2008 to 12/31/2008......... $10.50173 $ 8.47786 881,341 01/01/2009 to 12/31/2009......... $ 8.47786 $10.13685 1,938,181 01/01/2010 to 12/31/2010......... $10.13685 $10.66025 1,964,380 01/01/2011 to 12/31/2011......... $10.66025 $10.47082 1,595,962 AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08372 $10.28564 0 01/01/2010 to 12/31/2010......... $10.28564 $11.21966 2,278 01/01/2011 to 12/31/2011......... $11.21966 $11.06744 6,036 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14510 $10.29546 3,105 01/01/2010 to 12/31/2010......... $10.29546 $11.47335 23,527 01/01/2011 to 12/31/2011......... $11.47335 $10.58293 19,439 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $11.09584 $11.32088 105,867 01/01/2008 to 12/31/2008......... $11.32088 $ 6.50272 129,416 01/01/2009 to 12/31/2009......... $ 6.50272 $ 8.65847 155,384 01/01/2010 to 12/31/2010......... $ 8.65847 $ 9.09287 151,899 01/01/2011 to 12/31/2011......... $ 9.09287 $ 8.09515 137,104 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST LARGE-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.08921 $10.44409 128,473 01/01/2008 to 12/31/2008......... $10.44409 $ 5.98792 156,705 01/01/2009 to 12/31/2009......... $ 5.98792 $ 7.00799 193,547 01/01/2010 to 12/31/2010......... $ 7.00799 $ 7.77093 189,197 01/01/2011 to 12/31/2011......... $ 7.77093 $ 7.29646 159,734 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.70998 $10.86861 19,664 01/01/2008 to 12/31/2008......... $10.86861 $ 8.17364 32,923 01/01/2009 to 12/31/2009......... $ 8.17364 $10.78110 62,345 01/01/2010 to 12/31/2010......... $10.78110 $11.98174 71,336 01/01/2011 to 12/31/2011......... $11.98174 $12.93561 180,918 AST MARSICO CAPITAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.95322 $11.48245 121,725 01/01/2008 to 12/31/2008......... $11.48245 $ 6.33900 158,966 01/01/2009 to 12/31/2009......... $ 6.33900 $ 8.06019 162,034 01/01/2010 to 12/31/2010......... $ 8.06019 $ 9.45837 169,419 01/01/2011 to 12/31/2011......... $ 9.45837 $ 9.18401 142,218 AST MFS GLOBAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $11.63760 $11.87567 27,105 01/01/2008 to 12/31/2008......... $11.87567 $ 7.68143 39,719 01/01/2009 to 12/31/2009......... $ 7.68143 $ 9.89869 46,304 01/01/2010 to 12/31/2010......... $ 9.89869 $10.86845 43,950 01/01/2011 to 12/31/2011......... $10.86845 $10.31678 63,362 AST MFS GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.13911 $11.68399 22,402 01/01/2008 to 12/31/2008......... $11.68399 $ 7.29262 35,994 01/01/2009 to 12/31/2009......... $ 7.29262 $ 8.88300 44,333 01/01/2010 to 12/31/2010......... $ 8.88300 $ 9.81745 73,010 01/01/2011 to 12/31/2011......... $ 9.81745 $ 9.56339 55,757 AST MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.84580 $10.44960 50,093 01/01/2008 to 12/31/2008......... $10.44960 $ 6.33563 46,590 01/01/2009 to 12/31/2009......... $ 6.33563 $ 8.62254 68,287 01/01/2010 to 12/31/2010......... $ 8.62254 $10.44421 75,740 01/01/2011 to 12/31/2011......... $10.44421 $ 9.88148 80,974 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MONEY MARKET PORTFOLIO 09/04/2007 to 12/31/2007........ $10.37810 $10.46814 175,527 01/01/2008 to 12/31/2008........ $10.46814 $10.51516 724,864 01/01/2009 to 12/31/2009........ $10.51516 $10.32932 319,983 01/01/2010 to 12/31/2010........ $10.32932 $10.12431 206,149 01/01/2011 to 12/31/2011........ $10.12431 $ 9.92340 219,016 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007........ $10.30703 $10.24685 61,947 01/01/2008 to 12/31/2008........ $10.24685 $ 5.79762 71,201 01/01/2009 to 12/31/2009........ $ 5.79762 $ 7.99019 124,978 01/01/2010 to 12/31/2010........ $ 7.99019 $ 9.66466 149,323 01/01/2011 to 12/31/2011........ $ 9.66466 $ 9.23545 113,194 AST NEUBERGER BERMAN CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011....... $10.02824 $10.06439 0 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007........ $11.94753 $12.18878 86,925 01/01/2008 to 12/31/2008........ $12.18878 $ 6.78592 79,919 01/01/2009 to 12/31/2009........ $ 6.78592 $ 8.63048 83,258 01/01/2010 to 12/31/2010........ $ 8.63048 $10.88248 98,518 01/01/2011 to 12/31/2011........ $10.88248 $10.84403 84,077 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007........ $10.23347 $10.96429 51,379 01/01/2008 to 12/31/2008........ $10.96429 $ 6.17342 59,718 01/01/2009 to 12/31/2009........ $ 6.17342 $ 7.41439 56,938 01/01/2010 to 12/31/2010........ $ 7.41439 $ 8.73801 57,476 01/01/2011 to 04/29/2011........ $ 8.73801 $ 9.78938 0 AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008....... $10.10108 $ 5.56466 868 01/01/2009 to 12/31/2009........ $ 5.56466 $ 9.07977 76,455 01/01/2010 to 12/31/2010........ $ 9.07977 $10.87894 147,559 01/01/2011 to 12/31/2011........ $10.87894 $ 8.49952 116,033 AST PIMCO LIMITED MATURITY BOND PORTFOLIO 09/04/2007 to 12/31/2007........ $10.31981 $10.61705 38,117 01/01/2008 to 12/31/2008........ $10.61705 $10.51970 171,215 01/01/2009 to 12/31/2009........ $10.51970 $11.36291 155,535 01/01/2010 to 12/31/2010........ $11.36291 $11.56869 218,728 01/01/2011 to 12/31/2011........ $11.56869 $11.59154 151,373 AST PIMCO TOTAL RETURN BOND PORTFOLIO 09/04/2007 to 12/31/2007........ $10.41205 $10.90759 232,812 01/01/2008 to 12/31/2008........ $10.90759 $10.44693 477,777 01/01/2009 to 12/31/2009........ $10.44693 $11.92891 789,347 01/01/2010 to 12/31/2010........ $11.92891 $12.59155 951,902 01/01/2011 to 12/31/2011........ $12.59155 $12.73127 781,155 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PRESERVATION ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.73032 $11.06941 280,016 01/01/2008 to 12/31/2008......... $11.06941 $ 8.73325 1,646,436 01/01/2009 to 12/31/2009......... $ 8.73325 $10.27253 4,619,314 01/01/2010 to 12/31/2010......... $10.27253 $11.13028 4,613,315 01/01/2011 to 12/31/2011......... $11.13028 $11.01569 4,303,458 AST PRUDENTIAL CORE BOND PORTFOLIO 10/31/2011* to 12/31/2011........ $10.01825 $10.06428 0 AST QMA US EQUITY ALPHA PORTFOLIO 09/04/2007 to 12/31/2007......... $11.14673 $10.70742 102,748 01/01/2008 to 12/31/2008......... $10.70742 $ 6.42985 105,318 01/01/2009 to 12/31/2009......... $ 6.42985 $ 7.67574 107,762 01/01/2010 to 12/31/2010......... $ 7.67574 $ 8.65355 99,843 01/01/2011 to 12/31/2011......... $ 8.65355 $ 8.77316 81,735 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99833 $ 8.87815 147 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $11.02495 $11.25493 52,850 01/01/2008 to 12/31/2008......... $11.25493 $ 7.69891 252,783 01/01/2009 to 12/31/2009......... $ 7.69891 $ 9.61241 564,588 01/01/2010 to 12/31/2010......... $ 9.61241 $10.53198 666,716 01/01/2011 to 12/31/2011......... $10.53198 $ 9.97185 558,660 AST SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.52962 $10.38230 43,610 01/01/2008 to 12/31/2008......... $10.38230 $ 6.61289 53,553 01/01/2009 to 12/31/2009......... $ 6.61289 $ 8.67722 60,460 01/01/2010 to 12/31/2010......... $ 8.67722 $11.59956 63,825 01/01/2011 to 12/31/2011......... $11.59956 $11.25555 63,905 AST SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.44420 $ 9.65301 77,915 01/01/2008 to 12/31/2008......... $ 9.65301 $ 6.64799 124,833 01/01/2009 to 12/31/2009......... $ 6.64799 $ 8.27329 134,882 01/01/2010 to 12/31/2010......... $ 8.27329 $10.21456 134,234 01/01/2011 to 12/31/2011......... $10.21456 $ 9.41140 133,500 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.00971 $11.04690 151,827 01/01/2008 to 12/31/2008......... $11.04690 $ 8.01637 729,439 01/01/2009 to 12/31/2009......... $ 8.01637 $ 9.75142 1,560,710 01/01/2010 to 12/31/2010......... $ 9.75142 $10.65781 1,608,768 01/01/2011 to 12/31/2011......... $10.65781 $10.65113 1,421,578 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.16594 $10.43535 59,523 01/01/2008 to 12/31/2008......... $10.43535 $ 5.94250 66,453 01/01/2009 to 12/31/2009......... $ 5.94250 $ 7.20882 114,365 01/01/2010 to 12/31/2010......... $ 7.20882 $ 7.99959 111,640 01/01/2011 to 12/31/2011......... $ 7.99959 $ 7.71059 128,242 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.46475 $11.03673 70,825 01/01/2008 to 12/31/2008......... $11.03673 $10.55165 155,019 01/01/2009 to 12/31/2009......... $10.55165 $11.59239 154,889 01/01/2010 to 12/31/2010......... $11.59239 $12.01191 102,119 01/01/2011 to 12/31/2011......... $12.01191 $12.25648 87,685 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.23701 $11.07338 105,160 01/01/2008 to 12/31/2008......... $11.07338 $ 6.44882 143,903 01/01/2009 to 12/31/2009......... $ 6.44882 $ 9.69200 172,730 01/01/2010 to 12/31/2010......... $ 9.69200 $10.99898 189,286 01/01/2011 to 12/31/2011......... $10.99898 $10.59556 190,812 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 09/04/2007 to 12/31/2007......... $11.97036 $13.49811 280,545 01/01/2008 to 12/31/2008......... $13.49811 $ 6.61501 448,501 01/01/2009 to 12/31/2009......... $ 6.61501 $ 9.68103 570,448 01/01/2010 to 12/31/2010......... $ 9.68103 $11.42701 540,982 01/01/2011 to 12/31/2011......... $11.42701 $ 9.52728 430,042 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $11.28590 $11.40714 614,520 01/01/2008 to 12/31/2008......... $11.40714 $ 6.44647 727,095 01/01/2009 to 12/31/2009......... $ 6.44647 $ 8.11299 709,214 01/01/2010 to 12/31/2010......... $ 8.11299 $ 9.11364 665,490 01/01/2011 to 12/31/2011......... $ 9.11364 $ 8.62227 578,409 AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 11/19/2007* to 12/31/2007........ $ 9.99833 $ 9.97497 0 01/01/2008 to 12/31/2008......... $ 9.97497 $ 9.26513 36,160 01/01/2009 to 12/31/2009......... $ 9.26513 $10.13485 183,941 01/01/2010 to 12/31/2010......... $10.13485 $10.70573 218,069 01/01/2011 to 12/31/2011......... $10.70573 $11.12302 217,013 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07801 $6.62657 292,960 01/01/2009 to 12/31/2009......... $ 6.62657 $8.44560 890,452 01/01/2010 to 12/31/2010......... $ 8.44560 $9.12346 1,223,525 01/01/2011 to 12/31/2011......... $ 9.12346 $8.79101 917,708 * Denotes the start date of these sub-accounts PREMIER Bb SERIES PRUCO LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION ACCUMULATION UNIT VALUES: BENEFICIARY CONTINUATION OPTION - 1.00% SETTLEMENT SERVICE CHARGE NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.65084 $10.91282 129,445 01/01/2008 to 12/31/2008......... $10.91282 $ 7.36563 142,405 01/01/2009 to 12/31/2009......... $ 7.36563 $ 9.06905 85,377 01/01/2010 to 12/31/2010......... $ 9.06905 $10.05357 99,862 01/01/2011 to 12/31/2011......... $10.05357 $ 9.68945 172,922 AST ADVANCED STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.45878 $10.83452 0 01/01/2008 to 12/31/2008......... $10.83452 $ 7.53017 0 01/01/2009 to 12/31/2009......... $ 7.53017 $ 9.40896 0 01/01/2010 to 12/31/2010......... $ 9.40896 $10.59254 0 01/01/2011 to 12/31/2011......... $10.59254 $10.49952 36,272 AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.68238 $10.18301 0 01/01/2008 to 12/31/2008......... $10.18301 $ 6.57914 0 01/01/2009 to 12/31/2009......... $ 6.57914 $ 7.67177 3,699 01/01/2010 to 12/31/2010......... $ 7.67177 $ 8.64764 4,096 01/01/2011 to 12/31/2011......... $ 8.64764 $ 8.86776 4,581 AST BALANCED ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.57427 $10.86097 3,120 01/01/2008 to 12/31/2008......... $10.86097 $ 7.66698 166,425 01/01/2009 to 12/31/2009......... $ 7.66698 $ 9.35958 160,708 01/01/2010 to 12/31/2010......... $ 9.35958 $10.40804 226,307 01/01/2011 to 12/31/2011......... $10.40804 $10.17985 366,569 AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99918 $ 9.20827 0 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST BLACKROCK VALUE PORTFOLIO FORMERLY, AST VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.54973 $10.19617 2,976 01/01/2008 to 12/31/2008......... $10.19617 $ 6.32963 0 01/01/2009 to 12/31/2009......... $ 6.32963 $ 7.41124 0 01/01/2010 to 12/31/2010......... $ 7.41124 $ 8.25078 0 01/01/2011 to 12/31/2011......... $ 8.25078 $ 8.12903 4,250 AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.78415 $11.01224 40,327 01/01/2008 to 12/31/2008......... $11.01224 $ 7.09376 47,327 01/01/2009 to 12/31/2009......... $ 7.09376 $ 8.80257 75,060 01/01/2010 to 12/31/2010......... $ 8.80257 $ 9.88109 85,112 01/01/2011 to 12/31/2011......... $ 9.88109 $ 9.54594 115,629 AST CLS GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.09946 $ 6.72784 0 01/01/2009 to 12/31/2009......... $ 6.72784 $ 8.44981 0 01/01/2010 to 12/31/2010......... $ 8.44981 $ 9.56609 0 01/01/2011 to 12/31/2011......... $ 9.56609 $ 9.24529 24,558 AST CLS MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08128 $ 7.37971 0 01/01/2009 to 12/31/2009......... $ 7.37971 $ 9.01552 0 01/01/2010 to 12/31/2010......... $ 9.01552 $ 9.99007 0 01/01/2011 to 12/31/2011......... $ 9.99007 $ 9.71160 5,942 AST COHEN & STEERS REALTY PORTFOLIO 09/04/2007 to 12/31/2007......... $ 8.96352 $ 7.81223 2,528 01/01/2008 to 12/31/2008......... $ 7.81223 $ 5.02371 2,463 01/01/2009 to 12/31/2009......... $ 5.02371 $ 6.56219 2,370 01/01/2010 to 12/31/2010......... $ 6.56219 $ 8.36127 3,255 01/01/2011 to 12/31/2011......... $ 8.36127 $ 8.82419 4,845 AST DEAM SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.40150 $ 8.33201 0 01/01/2008 to 07/18/2008......... $ 8.33201 $ 7.66199 0 AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.74191 $10.91958 0 01/01/2008 to 12/31/2008......... $10.91958 $ 6.04442 0 01/01/2009 to 12/31/2009......... $ 6.04442 $ 7.93932 3,166 01/01/2010 to 12/31/2010......... $ 7.93932 $10.41905 2,949 01/01/2011 to 12/31/2011......... $10.41905 $ 8.96343 2,264 AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.10379 $ 7.54057 0 01/01/2009 to 12/31/2009......... $ 7.54057 $ 9.05097 0 01/01/2010 to 12/31/2010......... $ 9.05097 $10.15522 0 01/01/2011 to 12/31/2011......... $10.15522 $ 9.80622 17,951 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST FIRST TRUST BALANCED TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.61251 $10.77036 7,255 01/01/2008 to 12/31/2008......... $10.77036 $ 6.98618 42,388 01/01/2009 to 12/31/2009......... $ 6.98618 $ 8.56682 35,985 01/01/2010 to 12/31/2010......... $ 8.56682 $ 9.70021 34,782 01/01/2011 to 12/31/2011......... $ 9.70021 $ 9.45972 70,843 AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.96857 $11.19117 469 01/01/2008 to 12/31/2008......... $11.19117 $ 6.56949 393 01/01/2009 to 12/31/2009......... $ 6.56949 $ 8.19394 29,491 01/01/2010 to 12/31/2010......... $ 8.19394 $ 9.65573 34,201 01/01/2011 to 12/31/2011......... $ 9.65573 $ 8.96603 49,820 AST FOCUS FOUR PLUS PORTFOLIO 07/21/2008* to 12/31/2008........ $ 9.99918 $ 7.49594 5,059 01/01/2009 to 11/13/2009......... $ 7.49594 $ 8.43273 0 AST GLOBAL REAL ESTATE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.17586 $ 6.13224 0 01/01/2009 to 12/31/2009......... $ 6.13224 $ 8.20276 146 01/01/2010 to 12/31/2010......... $ 8.20276 $ 9.76197 137 01/01/2011 to 12/31/2011......... $ 9.76197 $ 9.17833 541 AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.44473 $11.53628 4,723 01/01/2008 to 12/31/2008......... $11.53628 $ 6.82244 4,600 01/01/2009 to 12/31/2009......... $ 6.82244 $10.09167 4,428 01/01/2010 to 12/31/2010......... $10.09167 $11.01965 5,277 01/01/2011 to 12/31/2011......... $11.01965 $10.47885 6,194 AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN GROWTH & INCOME PORTFOLIO 09/04/2007 to 12/31/2007......... $10.68301 $10.62005 0 01/01/2008 to 12/31/2008......... $10.62005 $ 6.23634 0 01/01/2009 to 12/31/2009......... $ 6.23634 $ 7.35950 6,458 01/01/2010 to 12/31/2010......... $ 7.35950 $ 8.22556 5,948 01/01/2011 to 12/31/2011......... $ 8.22556 $ 7.69478 7,670 AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.40892 $11.48986 1,492 01/01/2008 to 12/31/2008......... $11.48986 $ 6.73541 0 01/01/2009 to 12/31/2009......... $ 6.73541 $10.47635 231 01/01/2010 to 12/31/2010......... $10.47635 $12.42903 782 01/01/2011 to 12/31/2011......... $12.42903 $11.93976 1,490 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO 07/21/2008* to 12/31/2008........ $10.03407 $ 7.66279 431 01/01/2009 to 12/31/2009......... $ 7.66279 $ 9.62383 517 01/01/2010 to 12/31/2010......... $ 9.62383 $12.07909 1,114 01/01/2011 to 12/31/2011......... $12.07909 $12.11532 1,906 AST HIGH YIELD PORTFOLIO 09/04/2007 to 12/31/2007......... $ 9.77923 $ 9.96607 0 01/01/2008 to 12/31/2008......... $ 9.96607 $ 7.34697 0 01/01/2009 to 12/31/2009......... $ 7.34697 $ 9.86035 3,032 01/01/2010 to 12/31/2010......... $ 9.86035 $11.08074 18,004 01/01/2011 to 12/31/2011......... $11.08074 $11.31919 24,364 AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.11197 $ 7.17178 0 01/01/2009 to 12/31/2009......... $ 7.17178 $ 8.99427 0 01/01/2010 to 12/31/2010......... $ 8.99427 $10.13569 0 01/01/2011 to 12/31/2011......... $10.13569 $ 9.97825 1,208 AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO 05/01/2008* to 12/31/2008........ $10.08946 $ 7.64998 744 01/01/2009 to 12/31/2009......... $ 7.64998 $ 9.34543 2,369 01/01/2010 to 12/31/2010......... $ 9.34543 $10.32606 7,551 01/01/2011 to 12/31/2011......... $10.32606 $10.17206 13,151 AST INTERNATIONAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.13767 $12.05201 0 01/01/2008 to 12/31/2008......... $12.05201 $ 5.93863 0 01/01/2009 to 12/31/2009......... $ 5.93863 $ 7.95483 448 01/01/2010 to 12/31/2010......... $ 7.95483 $ 9.01789 458 01/01/2011 to 12/31/2011......... $ 9.01789 $ 7.77483 437 AST INTERNATIONAL VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $11.40158 $11.65068 0 01/01/2008 to 12/31/2008......... $11.65068 $ 6.45950 0 01/01/2009 to 12/31/2009......... $ 6.45950 $ 8.34615 0 01/01/2010 to 12/31/2010......... $ 8.34615 $ 9.17929 607 01/01/2011 to 12/31/2011......... $ 9.17929 $ 7.94794 1,773 AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.56432 $10.17383 0 01/01/2008 to 12/31/2008......... $10.17383 $ 8.29858 10,258 01/01/2009 to 12/31/2009......... $ 8.29858 $10.02568 41,174 01/01/2010 to 12/31/2010......... $10.02568 $10.65289 41,076 01/01/2011 to 12/31/2011......... $10.65289 $10.57215 44,156 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST JENNISON LARGE-CAP GROWTH PORTFOLIO 11/16/2009* to 12/31/2009........ $10.08457 $10.29963 0 01/01/2010 to 12/31/2010......... $10.29963 $11.35164 0 01/01/2011 to 12/31/2011......... $11.35164 $11.31377 0 AST JENNISON LARGE-CAP VALUE PORTFOLIO 11/16/2009* to 12/31/2009........ $10.14595 $10.30944 0 01/01/2010 to 12/31/2010......... $10.30944 $11.60815 678 01/01/2011 to 12/31/2011......... $11.60815 $10.81845 1,493 AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.72520 $10.97941 2,000 01/01/2008 to 12/31/2008......... $10.97941 $ 6.37232 7,415 01/01/2009 to 12/31/2009......... $ 6.37232 $ 8.57302 10,158 01/01/2010 to 12/31/2010......... $ 8.57302 $ 9.09678 10,379 01/01/2011 to 12/31/2011......... $ 9.09678 $ 8.18270 11,011 AST LARGE-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.41786 $ 9.84473 0 01/01/2008 to 12/31/2008......... $ 9.84473 $ 5.70314 0 01/01/2009 to 12/31/2009......... $ 5.70314 $ 6.74404 0 01/01/2010 to 12/31/2010......... $ 6.74404 $ 7.55590 197 01/01/2011 to 12/31/2011......... $ 7.55590 $ 7.16817 1,094 AST LORD ABBETT CORE FIXED INCOME PORTFOLIO FORMERLY, AST LORD ABBETT BOND-DEBENTURE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.13724 $10.32185 0 01/01/2008 to 12/31/2008......... $10.32185 $ 7.84324 0 01/01/2009 to 12/31/2009......... $ 7.84324 $10.45274 5,287 01/01/2010 to 12/31/2010......... $10.45274 $11.73757 4,794 01/01/2011 to 12/31/2011......... $11.73757 $12.80336 8,496 AST MARSICO CAPITAL GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.90804 $11.47337 2,345 01/01/2008 to 12/31/2008......... $11.47337 $ 6.40005 0 01/01/2009 to 12/31/2009......... $ 6.40005 $ 8.22241 6,687 01/01/2010 to 12/31/2010......... $ 8.22241 $ 9.74903 6,413 01/01/2011 to 12/31/2011......... $ 9.74903 $ 9.56442 5,154 AST MFS GLOBAL EQUITY PORTFOLIO 09/04/2007 to 12/31/2007......... $10.69618 $10.95164 0 01/01/2008 to 12/31/2008......... $10.95164 $ 7.15759 1,243 01/01/2009 to 12/31/2009......... $ 7.15759 $ 9.31966 15,605 01/01/2010 to 12/31/2010......... $ 9.31966 $10.33903 12,339 01/01/2011 to 12/31/2011......... $10.33903 $ 9.91614 18,473 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST MFS GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.01515 $11.59267 0 01/01/2008 to 12/31/2008......... $11.59267 $ 7.31108 440 01/01/2009 to 12/31/2009......... $ 7.31108 $ 8.99798 3,010 01/01/2010 to 12/31/2010......... $ 8.99798 $10.04775 2,559 01/01/2011 to 12/31/2011......... $10.04775 $ 9.88927 3,386 AST MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.45914 $10.11084 0 01/01/2008 to 12/31/2008......... $10.11084 $ 6.19415 0 01/01/2009 to 12/31/2009......... $ 6.19415 $ 8.51751 0 01/01/2010 to 12/31/2010......... $ 8.51751 $10.42410 0 01/01/2011 to 12/31/2011......... $10.42410 $ 9.96483 972 AST MONEY MARKET PORTFOLIO 09/04/2007 to 12/31/2007......... $10.17709 $10.29973 0 01/01/2008 to 12/31/2008......... $10.29973 $10.45357 10,390 01/01/2009 to 12/31/2009......... $10.45357 $10.37528 8,118 01/01/2010 to 12/31/2010......... $10.37528 $10.27485 23,603 01/01/2011 to 12/31/2011......... $10.27485 $10.17598 28,226 AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.28279 $10.25701 2,202 01/01/2008 to 12/31/2008......... $10.25701 $ 5.86395 1,930 01/01/2009 to 12/31/2009......... $ 5.86395 $ 8.16575 10,813 01/01/2010 to 12/31/2010......... $ 8.16575 $ 9.97960 10,171 01/01/2011 to 12/31/2011......... $ 9.97960 $ 9.63540 10,393 AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.54987 $11.82260 0 01/01/2008 to 12/31/2008......... $11.82260 $ 6.65075 0 01/01/2009 to 12/31/2009......... $ 6.65075 $ 8.54648 0 01/01/2010 to 12/31/2010......... $ 8.54648 $10.88845 0 01/01/2011 to 12/31/2011......... $10.88845 $10.96268 424 AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.93215 $11.75209 0 01/01/2008 to 12/31/2008......... $11.75209 $ 6.68601 0 01/01/2009 to 12/31/2009......... $ 6.68601 $ 8.11354 149 01/01/2010 to 12/31/2010......... $ 8.11354 $ 9.66127 139 01/01/2011 to 04/29/2011......... $ 9.66127 $10.86028 0 AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO 07/21/2008* to 12/31/2008........ $10.10192 $ 5.59093 0 01/01/2009 to 12/31/2009......... $ 5.59093 $ 9.21761 129 01/01/2010 to 12/31/2010......... $ 9.21761 $11.15868 125 01/01/2011 to 12/31/2011......... $11.15868 $ 8.80869 2,616 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST PIMCO LIMITED MATURITY BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.14687 $10.47408 6,233 01/01/2008 to 12/31/2008......... $10.47408 $10.48603 6,071 01/01/2009 to 12/31/2009......... $10.48603 $11.44430 46,373 01/01/2010 to 12/31/2010......... $11.44430 $11.77276 96,945 01/01/2011 to 12/31/2011......... $11.77276 $11.91843 101,716 AST PIMCO TOTAL RETURN BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.04735 $10.56075 0 01/01/2008 to 12/31/2008......... $10.56075 $10.21988 1,836 01/01/2009 to 12/31/2009......... $10.21988 $11.79093 23,401 01/01/2010 to 12/31/2010......... $11.79093 $12.57524 35,839 01/01/2011 to 12/31/2011......... $12.57524 $12.84647 42,310 AST PRESERVATION ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.39240 $10.75670 0 01/01/2008 to 12/31/2008......... $10.75670 $ 8.57497 34,793 01/01/2009 to 12/31/2009......... $ 8.57497 $10.19125 87,454 01/01/2010 to 12/31/2010......... $10.19125 $11.15697 108,923 01/01/2011 to 12/31/2011......... $11.15697 $11.15675 207,615 AST QMA US EQUITY ALPHA PORTFOLIO 09/04/2007 to 12/31/2007......... $10.76093 $10.37151 0 01/01/2008 to 12/31/2008......... $10.37151 $ 6.29304 0 01/01/2009 to 12/31/2009......... $ 6.29304 $ 7.59041 0 01/01/2010 to 12/31/2010......... $ 7.59041 $ 8.64622 0 01/01/2011 to 12/31/2011......... $ 8.64622 $ 8.85664 491 AST QUANTITATIVE MODELING PORTFOLIO 05/02/2011* to 12/31/2011........ $ 9.99918 $ 8.93992 0 AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO 09/04/2007 to 12/31/2007......... $10.61370 $10.87140 1,400 01/01/2008 to 12/31/2008......... $10.87140 $ 7.51399 1,359 01/01/2009 to 12/31/2009......... $ 7.51399 $ 9.47895 9,547 01/01/2010 to 12/31/2010......... $ 9.47895 $10.49368 18,919 01/01/2011 to 12/31/2011......... $10.49368 $10.03860 22,204 AST SMALL-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $10.58104 $10.46802 0 01/01/2008 to 12/31/2008......... $10.46802 $ 6.73693 0 01/01/2009 to 12/31/2009......... $ 6.73693 $ 8.93194 0 01/01/2010 to 12/31/2010......... $ 8.93194 $12.06406 0 01/01/2011 to 12/31/2011......... $12.06406 $11.82778 819 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST SMALL-CAP VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.17574 $ 9.43656 1,552 01/01/2008 to 12/31/2008......... $ 9.43656 $ 6.56669 0 01/01/2009 to 12/31/2009......... $ 6.56669 $ 8.25723 0 01/01/2010 to 12/31/2010......... $ 8.25723 $10.30053 0 01/01/2011 to 12/31/2011......... $10.30053 $ 9.58913 680 AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.50779 $10.57860 492 01/01/2008 to 12/31/2008......... $10.57860 $ 7.75653 39,334 01/01/2009 to 12/31/2009......... $ 7.75653 $ 9.53361 42,393 01/01/2010 to 12/31/2010......... $ 9.53361 $10.52807 33,991 01/01/2011 to 12/31/2011......... $10.52807 $10.63067 60,944 AST T. ROWE PRICE EQUITY INCOME PORTFOLIO FORMERLY, AST ALLIANCEBERNSTEIN CORE VALUE PORTFOLIO 09/04/2007 to 12/31/2007......... $10.48097 $ 9.82815 5,487 01/01/2008 to 12/31/2008......... $ 9.82815 $ 5.65507 5,921 01/01/2009 to 12/31/2009......... $ 5.65507 $ 6.93144 5,658 01/01/2010 to 12/31/2010......... $ 6.93144 $ 7.77169 5,028 01/01/2011 to 12/31/2011......... $ 7.77169 $ 7.56873 6,045 AST T. ROWE PRICE GLOBAL BOND PORTFOLIO 09/04/2007 to 12/31/2007......... $10.13991 $10.73003 0 01/01/2008 to 12/31/2008......... $10.73003 $10.36499 3,077 01/01/2009 to 12/31/2009......... $10.36499 $11.50569 10,277 01/01/2010 to 12/31/2010......... $11.50569 $12.04612 11,386 01/01/2011 to 12/31/2011......... $12.04612 $12.41886 12,041 AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO 09/04/2007 to 12/31/2007......... $11.06436 $10.93976 0 01/01/2008 to 12/31/2008......... $10.93976 $ 6.43744 1,333 01/01/2009 to 12/31/2009......... $ 6.43744 $ 9.77555 3,241 01/01/2010 to 12/31/2010......... $ 9.77555 $11.20897 3,920 01/01/2011 to 12/31/2011......... $11.20897 $10.91000 4,699 AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO 09/04/2007 to 12/31/2007......... $12.32146 $13.94064 0 01/01/2008 to 12/31/2008......... $13.94064 $ 6.90317 6,773 01/01/2009 to 12/31/2009......... $ 6.90317 $10.20784 15,445 01/01/2010 to 12/31/2010......... $10.20784 $12.17409 13,337 01/01/2011 to 12/31/2011......... $12.17409 $10.25550 19,083 AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO FORMERLY, AST AGGRESSIVE ASSET ALLOCATION PORTFOLIO 09/04/2007 to 12/31/2007......... $10.89704 $11.05096 1,576 01/01/2008 to 12/31/2008......... $11.05096 $ 6.31035 3,962 01/01/2009 to 12/31/2009......... $ 6.31035 $ 8.02421 13,667 01/01/2010 to 12/31/2010......... $ 8.02421 $ 9.10752 13,459 01/01/2011 to 12/31/2011......... $ 9.10752 $ 8.70580 20,325 NUMBER OF ACCUMULATION ACCUMULATION ACCUMULATION UNIT VALUE UNIT VALUE UNITS AT BEGINNING AT END OUTSTANDING AT SUB-ACCOUNTS OF PERIOD OF PERIOD END OF PERIOD ------------ ------------ ------------ -------------- AST WESTERN ASSET CORE PLUS BOND PORTFOLIO 11/19/2007* to 12/31/2007........ $ 9.99918 $ 9.98774 0 01/01/2008 to 12/31/2008......... $ 9.98774 $ 9.37351 0 01/01/2009 to 12/31/2009......... $ 9.37351 $10.35999 3,687 01/01/2010 to 12/31/2010......... $10.35999 $11.05727 3,593 01/01/2011 to 12/31/2011......... $11.05727 $11.60740 6,542 FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND 05/01/2008* to 12/31/2008........ $10.07829 $ 6.67267 5,683 01/01/2009 to 12/31/2009......... $ 6.67267 $ 8.59292 9,582 01/01/2010 to 12/31/2010......... $ 8.59292 $ 9.37902 8,610 01/01/2011 to 12/31/2011......... $ 9.37902 $ 9.13111 22,166 * Denotes the start date of these sub-accounts FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011 SUBACCOUNTS -------------------------------------------------------------- PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL MONEY DIVERSIFIED PRUDENTIAL FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ----------- ----------- ASSETS Investment in the portfolios, at fair value... $207,800,002 $230,380,167 $188,372,823 $13,558,866 $20,228,188 ------------ ------------ ------------ ----------- ----------- Net Assets..... $207,800,002 $230,380,167 $188,372,823 $13,558,866 $20,228,188 ============ ============ ============ =========== =========== NET ASSETS, representing: Accumulation units........... $207,800,002 $230,380,167 $188,372,823 $13,558,866 $20,228,188 ------------ ------------ ------------ ----------- ----------- $207,800,002 $230,380,167 $188,372,823 $13,558,866 $20,228,188 ============ ============ ============ =========== =========== Units outstanding..... 171,806,696 102,709,902 103,849,001 7,096,022 10,584,191 ============ ============ ============ =========== =========== Portfolio shares held............ 20,780,000 19,623,524 7,938,172 847,959 1,239,472 Portfolio net asset value per share........... $ 10.00 $ 11.74 $ 23.73 $ 15.99 $ 16.32 Investment in portfolio shares, at cost......... $207,800,002 $217,114,531 $211,774,217 $14,423,605 $18,949,329 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ----------------------------------------------------------------- PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL MONEY DIVERSIFIED PRUDENTIAL FLEXIBLE CONSERVATIVE MARKET BOND EQUITY MANAGED BALANCED PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------ ------------ ------------ ----------- ----------- INVESTMENT INCOME Dividend income....... $ 48,782 $ 10,181,514 $ 1,459,371 $ 281,726 $ 493,665 ------------ ------------ ------------ ----------- ----------- EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration 3,259,926 3,298,045 3,091,127 198,966 300,598 ------------ ------------ ------------ ----------- ----------- NET INVESTMENT INCOME (LOSS). (3,211,144) 6,883,469 (1,631,756) 82,760 193,067 ------------ ------------ ------------ ----------- ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received..... 0 5,480,515 0 0 0 Realized gain (loss) on shares redeemed..... 0 2,035,267 (1,520,114) (151,930) 185,786 Net change in unrealized gain (loss) on investments.. 0 (489,164) (6,262,149) 480,056 284,079 ------------ ------------ ------------ ----------- ----------- NET GAIN (LOSS) ON INVESTMENTS... 0 7,026,618 (7,782,263) 328,126 469,865 ------------ ------------ ------------ ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.... $ (3,211,144) $ 13,910,087 $ (9,414,019) $ 410,886 $ 662,932 ============ ============ ============ =========== =========== THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A1
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL HIGH NATURAL PRUDENTIAL SMALL T. ROWE PRICE VALUE YIELD BOND RESOURCES PRUDENTIAL STOCK PRUDENTIAL JENNISON CAPITALIZATION INTERNATIONAL PORTFOLIO PORTFOLIO PORTFOLIO INDEX PORTFOLIO GLOBAL PORTFOLIO PORTFOLIO STOCK PORTFOLIO STOCK PORTFOLIO ------------ --------------- ----------- ---------------- ---------------- ------------ --------------- --------------- $283,060,593 $219,330,891 $10,005,062 $276,320,510 $59,072,342 $263,804,876 $53,030,568 $20,659,880 ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- $283,060,593 $219,330,891 $10,005,062 $276,320,510 $59,072,342 $263,804,876 $53,030,568 $20,659,880 ============ ============ =========== ============ =========== ============ =========== =========== $283,060,593 $219,330,891 $10,005,062 $276,320,510 $59,072,342 $263,804,876 $53,030,568 $20,659,880 ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- $283,060,593 $219,330,891 $10,005,062 $276,320,510 $59,072,342 $263,804,876 $53,030,568 $20,659,880 ============ ============ =========== ============ =========== ============ =========== =========== 154,554,980 59,815,434 1,344,833 169,900,405 39,339,355 156,398,185 19,186,425 16,365,412 ============ ============ =========== ============ =========== ============ =========== =========== 17,769,027 44,489,025 261,570 8,780,442 3,487,151 11,341,568 3,119,445 1,739,047 $ 15.93 $ 4.93 $ 38.25 $ 31.47 $ 16.94 $ 23.26 $ 17.00 $ 11.88 $334,392,074 $235,316,651 $ 9,089,114 $279,808,327 $66,909,280 $252,872,982 $50,395,678 $22,586,069 SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------- PRUDENTIAL PRUDENTIAL PRUDENTIAL PRUDENTIAL HIGH NATURAL PRUDENTIAL SMALL T. ROWE PRICE VALUE YIELD BOND RESOURCES PRUDENTIAL STOCK PRUDENTIAL JENNISON CAPITALIZATION INTERNATIONAL PORTFOLIO PORTFOLIO PORTFOLIO INDEX PORTFOLIO GLOBAL PORTFOLIO PORTFOLIO STOCK PORTFOLIO STOCK PORTFOLIO ------------ --------------- ----------- ---------------- ---------------- ------------ --------------- --------------- $ 3,314,788 $ 17,457,520 $ 25,254 $ 4,841,325 $ 1,066,748 $ 879,802 $ 463,568 $ 359,567 ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- 4,938,549 3,530,722 184,188 4,440,698 1,006,926 4,277,768 800,850 337,995 ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- (1,623,761) 13,926,798 (158,934) 400,627 59,822 (3,397,966) (337,282) 21,572 ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- 0 0 0 0 0 0 768,485 0 (5,024,689) (1,523,153) 689,319 18,144 (402,415) 4,568,260 650,646 225,904 (14,627,047) (4,105,143) (3,321,980) 1,116,285 (5,106,244) (3,189,625) (1,511,159) (3,615,512) ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- (19,651,736) (5,628,296) (2,632,661) 1,134,429 (5,508,659) 1,378,635 (92,028) (3,389,608) ------------ ------------ ----------- ------------ ----------- ------------ ----------- ----------- $(21,275,497) $ 8,298,502 $(2,791,595) $ 1,535,056 $(5,448,837) $ (2,019,331) $ (429,310) $(3,368,036) ============ ============ =========== ============ =========== ============ =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A2 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ------------------------------------------------------------------------------- JANUS ASPEN JANUS ASPEN OVERSEAS T. ROWE PRICE JANUS PORTFOLIO - PORTFOLIO - MFS(R) RESEARCH EQUITY INCOME INVESCO V.I. CORE INSTITUTIONAL INSTITUTIONAL SERIES - INITIAL PORTFOLIO EQUITY FUND SHARES SHARES CLASS ------------- ----------------- ----------------- ------------- ---------------- ASSETS Investment in the portfolios, at fair value. $64,733,818 $86,494,336 $52,764,624 $ 96,776,335 $16,927,596 ----------- ----------- ----------- ------------ ----------- Net Assets.................................. $64,733,818 $86,494,336 $52,764,624 $ 96,776,335 $16,927,596 =========== =========== =========== ============ =========== NET ASSETS, representing: Accumulation units.......................... $64,733,818 $86,494,336 $52,764,624 $ 96,776,335 $16,927,596 ----------- ----------- ----------- ------------ ----------- $64,733,818 $86,494,336 $52,764,624 $ 96,776,335 $16,927,596 =========== =========== =========== ============ =========== Units outstanding........................... 31,233,374 49,252,234 35,341,455 32,274,129 10,468,369 =========== =========== =========== ============ =========== Portfolio shares held....................... 3,333,358 3,237,063 2,310,185 2,536,732 901,363 Portfolio net asset value per share......... $ 19.42 $ 26.72 $ 22.84 $ 38.15 $ 18.78 Investment in portfolio shares, at cost..... $64,784,776 $78,467,774 $60,097,123 $ 80,175,032 $15,357,120 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ------------------------------------------------------------------------------- JANUS ASPEN JANUS ASPEN OVERSEAS T. ROWE PRICE JANUS PORTFOLIO - PORTFOLIO - MFS(R) RESEARCH EQUITY INCOME INVESCO V.I. CORE INSTITUTIONAL INSTITUTIONAL SERIES - INITIAL PORTFOLIO EQUITY FUND SHARES SHARES CLASS ------------- ----------------- ----------------- ------------- ---------------- INVESTMENT INCOME Dividend income............................. $ 1,196,608 $ 899,384 $ 348,410 $ 627,220 $ 156,162 ----------- ----------- ----------- ------------ ----------- EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration............................. 960,882 1,330,513 831,072 1,870,729 255,421 ----------- ----------- ----------- ------------ ----------- NET INVESTMENT INCOME (LOSS).................. 235,726 (431,129) (482,662) (1,243,509) (99,259) ----------- ----------- ----------- ------------ ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 0 1,308,043 0 Realized gain (loss) on shares redeemed..... 223,476 1,830,225 (782,889) 9,420,957 274,986 Net change in unrealized gain (loss) on investments................................ (1,844,140) (2,414,289) (2,599,315) (59,879,596) (509,887) ----------- ----------- ----------- ------------ ----------- NET GAIN (LOSS) ON INVESTMENTS................ (1,620,664) (584,064) (3,382,204) (49,150,596) (234,901) ----------- ----------- ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $(1,384,938) $(1,015,193) $(3,864,866) $(50,394,105) $ (334,160) =========== =========== =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A3
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------- FTVIP FRANKLIN SMALL-MID CAP ALLIANCEBERNSTEIN MFS(R) GROWTH AMERICAN GROWTH PRUDENTIAL VPS LARGE CAP PRUDENTIAL SP JANUS ASPEN SERIES - INITIAL CENTURY VP SECURITIES FUND - JENNISON 20/20 DAVIS VALUE GROWTH PORTFOLIO SMALL CAP VALUE JANUS PORTFOLIO - CLASS VALUE FUND CLASS 2 FOCUS PORTFOLIO PORTFOLIO CLASS B PORTFOLIO SERVICE SHARES ---------------- ----------- ----------------- --------------- ----------- ----------------- --------------- ----------------- $50,594,700 $24,680,892 $25,731,478 $48,159,599 $28,266,090 $4,531,724 $103,380,990 $10,839,280 ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- $50,594,700 $24,680,892 $25,731,478 $48,159,599 $28,266,090 $4,531,724 $103,380,990 $10,839,280 =========== =========== =========== =========== =========== ========== ============ =========== $50,594,700 $24,680,892 $25,731,478 $48,159,599 $28,266,090 $4,531,724 $103,380,990 $10,839,280 ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- $50,594,700 $24,680,892 $25,731,478 $48,159,599 $28,266,090 $4,531,724 $103,380,990 $10,839,280 =========== =========== =========== =========== =========== ========== ============ =========== 30,886,054 12,508,696 14,859,811 29,075,628 27,280,316 7,628,132 62,060,033 11,018,784 =========== =========== =========== =========== =========== ========== ============ =========== 2,060,045 4,255,326 1,255,807 3,234,359 2,699,722 173,165 8,716,778 479,614 $ 24.56 $ 5.80 $ 20.49 $ 14.89 $ 10.47 $ 26.17 $ 11.86 $ 22.60 $47,347,086 $27,885,922 $27,261,942 $40,600,850 $29,032,531 $4,355,326 $104,320,510 $ 9,562,178 SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------- FTVIP FRANKLIN SMALL-MID CAP ALLIANCEBERNSTEIN MFS(R) GROWTH AMERICAN GROWTH PRUDENTIAL VPS LARGE CAP PRUDENTIAL SP JANUS ASPEN SERIES - INITIAL CENTURY VP SECURITIES FUND - JENNISON 20/20 DAVIS VALUE GROWTH PORTFOLIO SMALL CAP VALUE JANUS PORTFOLIO - CLASS VALUE FUND CLASS 2 FOCUS PORTFOLIO PORTFOLIO CLASS B PORTFOLIO SERVICE SHARES ---------------- ----------- ----------------- --------------- ----------- ----------------- --------------- ----------------- $ 105,079 $ 526,763 $ 0 $ 44,507 $ 254,207 $ 4,437 $ 779,776 $ 53,830 ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- 775,610 361,883 405,887 752,786 439,830 71,591 1,831,702 205,301 ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- (670,531) 164,880 (405,887) (708,279) (185,623) (67,154) (1,051,926) (151,471) ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- 0 0 0 0 2,217,438 0 0 0 761,229 (472,977) (54,024) 1,931,010 439,402 90,011 552,718 458,378 (899,566) 169,663 (1,307,821) (4,069,821) (4,192,170) (292,304) (4,213,004) (1,136,482) ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- (138,337) (303,314) (1,361,845) (2,138,811) (1,535,330) (202,293) (3,660,286) (678,104) ----------- ----------- ----------- ----------- ----------- ---------- ------------ ----------- $ (808,868) $ (138,434) $(1,767,732) $(2,847,090) $(1,720,953) $ (269,447) $ (4,712,212) $ (829,575) =========== =========== =========== =========== =========== ========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A4 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ---------------------------------------------------------------------------- PRUDENTIAL SP PRUDENTIAL SP AST GOLDMAN PRUDENTIAL U.S. GROWTH ASSET PRUDENTIAL SP PRUDENTIAL SP SACHS LARGE EMERGING ALLOCATION INTERNATIONAL INTERNATIONAL CAP VALUE GROWTH PORTFOLIO PORTFOLIO* GROWTH PORTFOLIO VALUE PORTFOLIO PORTFOLIO ---------------- ------------- ---------------- --------------- ------------ ASSETS Investment in the portfolios, at fair value. $128,003,204 $ 0 $41,591,579 $39,900,534 $ 86,331,576 ------------ ----------- ----------- ----------- ------------ Net Assets.................................. $128,003,204 $ 0 $41,591,579 $39,900,534 $ 86,331,576 ============ =========== =========== =========== ============ NET ASSETS, representing: Accumulation units.......................... $128,003,204 $ 0 $41,591,579 $39,900,534 $ 86,331,576 ------------ ----------- ----------- ----------- ------------ $128,003,204 $ 0 $41,591,579 $39,900,534 $ 86,331,576 ============ =========== =========== =========== ============ Units outstanding........................... 69,627,130 0 35,231,858 29,946,196 9,454,926 ============ =========== =========== =========== ============ Portfolio shares held....................... 16,410,667 0 9,539,353 6,844,002 5,790,179 Portfolio net asset value per share......... $ 7.80 $ 0.00 $ 4.36 $ 5.83 $ 14.91 Investment in portfolio shares, at cost..... $114,549,717 $ 0 $59,456,078 $55,833,212 $ 87,659,053 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ---------------------------------------------------------------------------- PRUDENTIAL SP PRUDENTIAL SP AST GOLDMAN PRUDENTIAL U.S. GROWTH ASSET PRUDENTIAL SP PRUDENTIAL SP SACHS LARGE EMERGING ALLOCATION INTERNATIONAL INTERNATIONAL CAP VALUE GROWTH PORTFOLIO PORTFOLIO* GROWTH PORTFOLIO VALUE PORTFOLIO PORTFOLIO ---------------- ------------- ---------------- --------------- ------------ INVESTMENT INCOME Dividend income............................. $ 844,863 $ 0 $ 668,940 $ 1,227,004 $ 837,899 ------------ ----------- ----------- ----------- ------------ EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration............................. 2,299,176 3,867,271 814,751 806,272 1,283,161 ------------ ----------- ----------- ----------- ------------ NET INVESTMENT INCOME (LOSS).................. (1,454,313) (3,867,271) (145,811) 420,732 (445,262) ------------ ----------- ----------- ----------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 1,223,782 0 0 0 0 Realized gain (loss) on shares redeemed..... 4,329,371 21,141,795 (3,058,173) (2,654,708) (6,037,352) Net change in unrealized gain (loss) on investments................................ (2,602,784) 19,518,597 (5,328,824) (4,763,625) (4,702,899) ------------ ----------- ----------- ----------- ------------ NET GAIN (LOSS) ON INVESTMENTS................ 2,950,369 40,660,392 (8,386,997) (7,418,333) (10,740,251) ------------ ----------- ----------- ----------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $ 1,496,056 $36,793,121 $(8,532,808) $(6,997,601) $(11,185,513) ============ =========== =========== =========== ============
* The subaccount is no longer available for investment as of December 31, 2011. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A5
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------------- AST SCHRODERS AST J.P. MORGAN AST NEUBERGER AST AMERICAN MULTI-ASSET AST COHEN & STRATEGIC BERMAN SMALL- AST FEDERATED CENTURY INCOME & WORLD STRATEGIES STEERS REALTY OPPORTUNITIES AST BLACKROCK CAP GROWTH AST HIGH YIELD AGGRESSIVE GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO* PORTFOLIO GROWTH PORTFOLIO ---------------- ---------------- ------------- --------------- --------------- ------------- -------------- ---------------- $73,988,299 $1,453,229,080 $87,242,676 $808,699,475 $54,138,903 $ 0 $107,095,346 $ 59,776,807 ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ $73,988,299 $1,453,229,080 $87,242,676 $808,699,475 $54,138,903 $ 0 $107,095,346 $ 59,776,807 =========== ============== =========== ============ =========== =========== ============ ============ $73,988,299 $1,453,229,080 $87,242,676 $808,699,475 $54,138,903 $ 0 $107,095,346 $ 59,776,807 ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ $73,988,299 $1,453,229,080 $87,242,676 $808,699,475 $54,138,903 $ 0 $107,095,346 $ 59,776,807 =========== ============== =========== ============ =========== =========== ============ ============ 6,969,587 141,598,371 7,109,028 76,238,767 5,453,622 0 9,601,679 5,924,650 =========== ============== =========== ============ =========== =========== ============ ============ 5,673,949 114,068,217 13,505,058 62,689,882 6,361,798 0 14,853,723 7,453,467 $ 13.04 $ 12.74 $ 6.46 $ 12.90 $ 8.51 $ 0.00 $ 7.21 $ 8.02 $70,945,773 $1,467,180,618 $85,417,326 $785,766,188 $55,517,308 $ 0 $106,696,971 $ 63,731,716 SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------------- AST SCHRODERS AST J.P. MORGAN AST NEUBERGER AST AMERICAN MULTI-ASSET AST COHEN & STRATEGIC BERMAN SMALL- AST FEDERATED CENTURY INCOME & WORLD STRATEGIES STEERS REALTY OPPORTUNITIES AST BLACKROCK CAP GROWTH AST HIGH YIELD AGGRESSIVE GROWTH PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO PORTFOLIO* PORTFOLIO GROWTH PORTFOLIO ---------------- ---------------- ------------- --------------- --------------- ------------- -------------- ---------------- $ 632,711 $ 23,972,004 $ 647,209 $ 6,754,236 $ 350,514 $ 0 $ 6,491,086 $ 294,393 ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ 1,049,682 25,737,293 1,484,359 12,847,149 717,570 184,427 1,580,026 1,112,648 ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ (416,971) (1,765,289) (837,150) (6,092,913) (367,056) (184,427) 4,911,060 (818,255) ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ 0 13,873,907 0 0 0 0 0 0 (1,401,039) (31,440,539) (4,779,918) 3,191,430 (4,626,800) 7,630,577 (1,792,319) (9,712,881) (851,129) (110,292,703) 1,709,260 (22,030,615) (314,958) (3,488,762) (3,142,457) (9,395,968) ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ (2,252,168) (127,859,335) (3,070,658) (18,839,185) (4,941,758) 4,141,815 (4,934,776) (19,108,849) ----------- -------------- ----------- ------------ ----------- ----------- ------------ ------------ $(2,669,139) $ (129,624,624) $(3,907,808) $(24,932,098) $(5,308,814) $ 3,957,388 $ (23,716) $(19,927,104) =========== ============== =========== ============ =========== =========== ============ ============
* The subaccount is no longer available for investment as of December 31, 2011. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A6 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS -------------------------------------------------------------------------------- AST GOLDMAN SACHS AST GOLDMAN AST MID-CAP AST SMALL-CAP CONCENTRATED SACHS MID-CAP AST LARGE-CAP VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO --------------- --------------- ---------------- ---------------- --------------- ASSETS Investment in the portfolios, at fair value. $39,678,934 $45,405,237 $58,548,236 $ 93,020,418 $105,205,533 ----------- ----------- ----------- ------------ ------------ Net Assets.................................. $39,678,934 $45,405,237 $58,548,236 $ 93,020,418 $105,205,533 =========== =========== =========== ============ ============ NET ASSETS, representing: Accumulation units.......................... $39,678,934 $45,405,237 $58,548,236 $ 93,020,418 $105,205,533 ----------- ----------- ----------- ------------ ------------ $39,678,934 $45,405,237 $58,548,236 $ 93,020,418 $105,205,533 =========== =========== =========== ============ ============ Units outstanding........................... 3,654,808 4,291,191 5,660,773 8,275,740 12,016,442 =========== =========== =========== ============ ============ Portfolio shares held....................... 3,465,409 3,578,033 2,231,259 18,566,950 8,349,645 Portfolio net asset value per share......... $ 11.45 $ 12.69 $ 26.24 $ 5.01 $ 12.60 Investment in portfolio shares, at cost..... $39,015,400 $44,671,207 $56,847,328 $ 91,111,066 $116,368,881 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS -------------------------------------------------------------------------------- AST GOLDMAN SACHS AST GOLDMAN AST MID-CAP AST SMALL-CAP CONCENTRATED SACHS MID-CAP AST LARGE-CAP VALUE PORTFOLIO VALUE PORTFOLIO GROWTH PORTFOLIO GROWTH PORTFOLIO VALUE PORTFOLIO --------------- --------------- ---------------- ---------------- --------------- INVESTMENT INCOME Dividend income............................. $ 296,815 $ 287,552 $ 106,350 $ 0 $ 1,002,028 ----------- ----------- ----------- ------------ ------------ EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration............................. 733,161 814,222 1,125,294 1,775,403 1,288,772 ----------- ----------- ----------- ------------ ------------ NET INVESTMENT INCOME (LOSS).................. (436,346) (526,670) (1,018,944) (1,775,403) (286,744) ----------- ----------- ----------- ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 0 6,085,586 0 Realized gain (loss) on shares redeemed..... (2,291,849) (2,091,081) 55,282 (7,118,478) (4,568,054) Net change in unrealized gain (loss) on investments................................ (3,243,340) (4,159,165) (6,320,145) (10,861,651) (819,842) ----------- ----------- ----------- ------------ ------------ NET GAIN (LOSS) ON INVESTMENTS................ (5,535,189) (6,250,246) (6,264,863) (11,894,543) (5,387,896) ----------- ----------- ----------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $(5,971,535) $(6,776,916) $(7,283,807) $(13,669,946) $ (5,674,640) =========== =========== =========== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A7
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------- AST NEUBERGER AST AST LORD ABBETT AST MARSICO AST AST NEUBERGER BERMAN/LSV AST PIMCO T. ROWE PRICE AST QMA US CORE FIXED CAPITAL GROWTH MFS GROWTH BERMAN MID-CAP MID-CAP VALUE LIMITED MATURITY EQUITY INCOME EQUITY ALPHA INCOME PORTFOLIO PORTFOLIO PORTFOLIO GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO PORTFOLIO ---------------- -------------- ----------- ---------------- ------------- ---------------- ------------- ------------ $245,854,864 $117,840,825 $33,300,548 $100,644,730 $ 86,810,030 $164,142,598 $53,933,489 $27,992,365 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- $245,854,864 $117,840,825 $33,300,548 $100,644,730 $ 86,810,030 $164,142,598 $53,933,489 $27,992,365 ============ ============ =========== ============ ============ ============ =========== =========== $245,854,864 $117,840,825 $33,300,548 $100,644,730 $ 86,810,030 $164,142,598 $53,933,489 $27,992,365 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- $245,854,864 $117,840,825 $33,300,548 $100,644,730 $ 86,810,030 $164,142,598 $53,933,489 $27,992,365 ============ ============ =========== ============ ============ ============ =========== =========== 20,912,041 11,182,192 3,218,197 8,614,440 8,186,522 15,356,638 5,793,434 2,688,164 ============ ============ =========== ============ ============ ============ =========== =========== 21,757,068 6,166,448 3,490,624 4,633,735 5,929,647 15,558,540 6,642,055 2,423,581 $ 11.30 $ 19.11 $ 9.54 $ 21.72 $ 14.64 $ 10.55 $ 8.12 $ 11.55 $238,506,646 $116,398,976 $32,428,005 $ 97,123,338 $ 85,632,667 $164,852,401 $53,494,640 $27,343,021 SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------- AST NEUBERGER AST AST LORD ABBETT AST MARSICO AST AST NEUBERGER BERMAN/LSV AST PIMCO T. ROWE PRICE AST QMA US CORE FIXED CAPITAL GROWTH MFS GROWTH BERMAN MID-CAP MID-CAP VALUE LIMITED MATURITY EQUITY INCOME EQUITY ALPHA INCOME PORTFOLIO PORTFOLIO PORTFOLIO GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO PORTFOLIO ---------------- -------------- ----------- ---------------- ------------- ---------------- ------------- ------------ $ 1,311,425 $ 370,469 $ 117,814 $ 0 $ 953,808 $ 1,149,226 $ 562,666 $ 185,763 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- 1,748,786 2,032,271 533,039 1,538,448 1,637,003 2,218,355 820,741 424,918 ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- (437,361) (1,661,802) (415,225) (1,538,448) (683,195) (1,069,129) (258,075) (239,155) ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- 0 0 0 0 0 2,107,308 0 0 2,223,162 (1,571,416) (92,841) (16,785) (5,513,425) (430,496) (2,322,679) (734,646) 5,151,208 (6,299,604) (1,865,905) (5,915,307) (6,465,566) (43,486) (2,157,358) (318,308) ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- 7,374,370 (7,871,020) (1,958,746) (5,932,092) (11,978,991) 1,633,326 (4,480,037) (1,052,954) ------------ ------------ ----------- ------------ ------------ ------------ ----------- ----------- $ 6,937,009 $ (9,532,822) $(2,373,971) $ (7,470,540) $(12,662,186) $ 564,197 $(4,738,112) $(1,292,109) ============ ============ =========== ============ ============ ============ =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A8 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ---------------------------------------------------------------------------- AST T. ROWE AST T. ROWE AST T. ROWE PRICE NATURAL PRICE ASSET AST JPMORGAN PRICE GLOBAL RESOURCES ALLOCATION AST MFS GLOBAL INTERNATIONAL BOND PORTFOLIO PORTFOLIO EQUITY PORTFOLIO EQUITY PORTFOLIO PORTFOLIO ------------- -------------- ---------------- ---------------- ------------ ASSETS Investment in the portfolios, at fair value. $220,749,203 $2,473,645,387 $ 87,581,103 $ 90,597,501 $113,538,785 ------------ -------------- ------------ ------------ ------------ Net Assets.................................. $220,749,203 $2,473,645,387 $ 87,581,103 $ 90,597,501 $113,538,785 ============ ============== ============ ============ ============ NET ASSETS, representing: Accumulation units.......................... $220,749,203 $2,473,645,387 $ 87,581,103 $ 90,597,501 $113,538,785 ------------ -------------- ------------ ------------ ------------ $220,749,203 $2,473,645,387 $ 87,581,103 $ 90,597,501 $113,538,785 ============ ============== ============ ============ ============ Units outstanding........................... 21,580,986 229,101,436 8,288,403 9,784,710 10,425,673 ============ ============== ============ ============ ============ Portfolio shares held....................... 11,551,502 143,733,027 8,964,289 4,868,216 10,219,513 Portfolio net asset value per share......... $ 19.11 $ 17.21 $ 9.77 $ 18.61 $ 11.11 Investment in portfolio shares, at cost..... $243,494,846 $2,383,701,794 $ 88,429,221 $ 95,141,412 $113,961,386 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ---------------------------------------------------------------------------- AST T. ROWE AST T. ROWE AST T. ROWE PRICE NATURAL PRICE ASSET AST JPMORGAN PRICE GLOBAL RESOURCES ALLOCATION AST MFS GLOBAL INTERNATIONAL BOND PORTFOLIO PORTFOLIO EQUITY PORTFOLIO EQUITY PORTFOLIO PORTFOLIO ------------- -------------- ---------------- ---------------- ------------ INVESTMENT INCOME Dividend income............................. $ 1,653,883 $ 23,551,090 $ 442,558 $ 1,480,001 $ 2,394,570 ------------ -------------- ------------ ------------ ------------ EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration............................. 4,587,737 35,790,224 1,451,393 1,758,387 1,592,594 ------------ -------------- ------------ ------------ ------------ NET INVESTMENT INCOME (LOSS).................. (2,933,854) (12,239,134) (1,008,835) (278,386) 801,976 ------------ -------------- ------------ ------------ ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 0 0 669,467 Realized gain (loss) on shares redeemed................................... (21,424,084) (23,561,430) (3,065,557) (8,244,379) 353,711 Net change in unrealized gain (loss) on investments................................ (42,683,044) (45,536,830) (6,204,187) (11,089,319) (362,314) ------------ -------------- ------------ ------------ ------------ NET GAIN (LOSS) ON INVESTMENTS................ (64,107,128) (69,098,260) (9,269,744) (19,333,698) 660,864 ------------ -------------- ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $(67,040,982) $ (81,337,394) $(10,278,579) $(19,612,084) $ 1,462,840 ============ ============== ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A9
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------------- AST AST ACADEMIC AST AST FIRST TRUST WELLINGTON AST CAPITAL STRATEGIES AST BALANCED PRESERVATION AST FIRST TRUST CAPITAL MANAGEMENT GROWTH ASSET ASSET ASSET ASSET BALANCED APPRECIATION AST ADVANCED HEDGED EQUITY ALLOCATION ALLOCATION ALLOCATION ALLOCATION TARGET TARGET STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------- -------------- -------------- -------------- -------------- --------------- --------------- -------------- $265,955,531 $2,893,895,218 $2,725,760,213 $3,548,073,243 $2,869,172,693 $1,346,839,609 $1,485,878,707 $2,075,519,637 ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- $265,955,531 $2,893,895,218 $2,725,760,213 $3,548,073,243 $2,869,172,693 $1,346,839,609 $1,485,878,707 $2,075,519,637 ============ ============== ============== ============== ============== ============== ============== ============== $265,955,531 $2,893,895,218 $2,725,760,213 $3,548,073,243 $2,869,172,693 $1,346,839,609 $1,485,878,707 $2,075,519,637 ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- $265,955,531 $2,893,895,218 $2,725,760,213 $3,548,073,243 $2,869,172,693 $1,346,839,609 $1,485,878,707 $2,075,519,637 ============ ============== ============== ============== ============== ============== ============== ============== 29,415,891 287,988,840 269,021,934 339,582,149 264,390,353 130,049,406 148,843,360 193,663,052 ============ ============== ============== ============== ============== ============== ============== ============== 29,583,485 285,394,006 265,409,953 325,212,946 243,977,270 142,372,052 161,508,555 191,468,601 $ 8.99 $ 10.14 $ 10.27 $ 10.91 $ 11.76 $ 9.46 $ 9.20 $ 10.84 $263,390,810 $2,871,824,725 $2,710,752,078 $3,372,621,344 $2,710,549,863 $1,323,461,399 $1,496,074,538 $2,016,496,787 SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------------------- AST AST ACADEMIC AST AST FIRST TRUST WELLINGTON AST CAPITAL STRATEGIES AST BALANCED PRESERVATION AST FIRST TRUST CAPITAL MANAGEMENT GROWTH ASSET ASSET ASSET ASSET BALANCED APPRECIATION AST ADVANCED HEDGED EQUITY ALLOCATION ALLOCATION ALLOCATION ALLOCATION TARGET TARGET STRATEGIES PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO ------------- -------------- -------------- -------------- -------------- --------------- --------------- -------------- $ 506,711 $ 16,765,390 $ 17,941,221 $ 22,969,432 $ 23,075,840 $ 21,934,023 $ 19,634,830 $ 20,169,570 ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- 3,102,824 58,784,576 51,320,789 62,166,310 44,250,351 21,595,011 28,589,633 33,568,309 ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- (2,596,113) (42,019,186) (33,379,568) (39,196,878) (21,174,511) 339,012 (8,954,803) (13,398,739) ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- 0 0 0 0 0 0 0 0 (1,567,286) (16,206,064) (21,159,293) 28,966,827 27,118,606 (23,367,311) (60,826,394) (18,773,736) (8,905,749) (207,253,142) (155,056,758) (179,039,480) (41,348,326) (65,186,924) (165,228,575) (76,239,653) ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- (10,473,035) (223,459,206) (176,216,051) (150,072,653) (14,229,720) (88,554,235) (226,054,969) (95,013,389) ------------ -------------- -------------- -------------- -------------- -------------- -------------- -------------- $(13,069,148) $ (265,478,392) $ (209,595,619) $ (189,269,531) $ (35,404,231) $ (88,215,223) $ (235,009,772) $ (108,412,128) ============ ============== ============== ============== ============== ============== ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A10 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ----------------------------------------------------------------------- AST T. ROWE PRICE AST AST LARGE-CAP AST SMALL-CAP PIMCO TOTAL AST GROWTH MONEY MARKET GROWTH RETURN BOND INTERNATIONAL PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO ------------- ------------ ----------- -------------- --------------- ASSETS Investment in the portfolios, at fair value. $173,496,539 $236,146,926 $91,234,103 $1,518,000,524 $ 43,195,863 ------------ ------------ ----------- -------------- ------------ Net Assets.................................. $173,496,539 $236,146,926 $91,234,103 $1,518,000,524 $ 43,195,863 ============ ============ =========== ============== ============ NET ASSETS, representing: Accumulation units.......................... $173,496,539 $236,146,926 $91,234,103 $1,518,000,524 $ 43,195,863 ------------ ------------ ----------- -------------- ------------ $173,496,539 $236,146,926 $91,234,103 $1,518,000,524 $ 43,195,863 ============ ============ =========== ============== ============ Units outstanding........................... 16,189,549 24,015,202 7,585,608 139,943,096 4,762,994 ============ ============ =========== ============== ============ Portfolio shares held....................... 14,256,084 236,146,926 4,516,540 127,455,963 3,190,241 Portfolio net asset value per share......... $ 12.17 $ 1.00 $ 20.20 $ 11.91 $ 13.54 Investment in portfolio shares, at cost..... $167,632,428 $236,146,926 $85,514,190 $1,522,158,351 $ 46,710,479 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ----------------------------------------------------------------------- AST T. ROWE PRICE AST AST LARGE-CAP AST SMALL-CAP PIMCO TOTAL AST GROWTH MONEY MARKET GROWTH RETURN BOND INTERNATIONAL PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO VALUE PORTFOLIO ------------- ------------ ----------- -------------- --------------- INVESTMENT INCOME Dividend income............................. $ 0 $ 35,960 $ 0 $ 26,749,445 $ 744,282 ------------ ------------ ----------- -------------- ------------ EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration................ 3,091,621 3,023,289 1,571,296 24,275,358 824,249 ------------ ------------ ----------- -------------- ------------ NET INVESTMENT INCOME (LOSS).................. (3,091,621) (2,987,329) (1,571,296) 2,474,087 (79,967) ------------ ------------ ----------- -------------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 0 51,974,246 0 Realized gain (loss) on shares redeemed................................... (1,308,224) 0 (451,960) (8,804,208) (4,951,198) Net change in unrealized gain (loss) on investments................................ (13,857,020) 0 (6,987,997) (23,889,764) (5,888,431) ------------ ------------ ----------- -------------- ------------ NET GAIN (LOSS) ON INVESTMENTS................ (15,165,244) 0 (7,439,957) 19,280,274 (10,839,629) ------------ ------------ ----------- -------------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $(18,256,865) $ (2,987,329) $(9,011,253) $ 21,754,361 $(10,919,596) ============ ============ =========== ============== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A11
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------- AST NVIT AST AST PARAMETRIC INTERNATIONAL DEVELOPING INVESTMENT AST WESTERN AST BOND AST BOND AST GLOBAL EMERGING GROWTH MARKETS GRADE BOND ASSET CORE PLUS PORTFOLIO PORTFOLIO REAL ESTATE MARKETS EQUITY PORTFOLIO FUND PORTFOLIO BOND PORTFOLIO 2018 2019 PORTFOLIO PORTFOLIO ------------- ----------- -------------- --------------- -------------- -------------- ----------- -------------- $ 63,232,072 $13,856,365 $7,606,941,607 $263,296,951 $174,656,963 $11,027,158 $28,411,408 $123,992,821 ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ $ 63,232,072 $13,856,365 $7,606,941,607 $263,296,951 $174,656,963 $11,027,158 $28,411,408 $123,992,821 ============ =========== ============== ============ ============ =========== =========== ============ $ 63,232,072 $13,856,365 $7,606,941,607 $263,296,951 $174,656,963 $11,027,158 $28,411,408 $123,992,821 ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ $ 63,232,072 $13,856,365 $7,606,941,607 $263,296,951 $174,656,963 $11,027,158 $28,411,408 $123,992,821 ============ =========== ============== ============ ============ =========== =========== ============ 7,248,430 1,065,619 624,194,989 23,998,953 14,702,403 809,058 2,702,253 13,670,484 ============ =========== ============== ============ ============ =========== =========== ============ 6,335,879 2,565,994 1,242,964,315 24,607,192 14,738,984 995,231 3,753,158 15,795,264 $ 9.98 $ 5.40 $ 6.12 $ 10.70 $ 11.85 $ 11.08 $ 7.57 $ 7.85 $ 66,593,700 $19,776,753 $7,453,107,306 $258,106,934 $169,264,390 $11,171,615 $28,903,915 $136,694,715 SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------- AST NVIT AST PARAMETRIC INTERNATIONAL DEVELOPING AST INVESTMENT AST WESTERN AST GLOBAL EMERGING GROWTH MARKETS GRADE BOND ASSET CORE PLUS AST BOND AST BOND REAL ESTATE MARKETS EQUITY PORTFOLIO FUND PORTFOLIO BOND PORTFOLIO PORTFOLIO 2018 PORTFOLIO 2019 PORTFOLIO PORTFOLIO ------------- ----------- -------------- --------------- -------------- -------------- ----------- -------------- $ 344,680 $ 54,200 $ 12,942,274 $ 6,307,048 $ 147,533 $ 127,421 $ 745,627 $ 1,531,885 ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ 859,263 322,865 48,941,653 3,892,607 1,709,552 248,294 541,527 2,811,663 ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ (514,583) (268,665) (35,999,379) 2,414,441 (1,562,019) (120,873) 204,100 (1,279,778) ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ 0 0 57,978,969 3,513,277 3,364,110 2,652,543 0 0 (4,755,991) (1,351,237) (8,996,000) 2,248,143 1,219,236 (313,601) (2,111,918) (13,539,987) (6,418,714) (3,333,373) 154,548,422 2,025,194 4,501,640 (503,158) (2,792,256) (30,211,989) ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ (11,174,705) (4,684,610) 203,531,391 7,786,614 9,084,986 1,835,784 (4,904,174) (43,751,976) ------------ ----------- -------------- ------------ ------------ ----------- ----------- ------------ $(11,689,288) $(4,953,275) $ 167,532,012 $ 10,201,055 $ 7,522,967 $ 1,714,911 $(4,700,074) $(45,031,754) ============ =========== ============== ============ ============ =========== =========== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A12 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ----------------------------------------------------------------------------- FRANKLIN AST CLS AST HORIZON TEMPLETON VIP AST GOLDMAN AST CLS GROWTH MODERATE ASSET GROWTH ASSET FOUNDING FUNDS SACHS SMALL-CAP ASSET ALLOCATION ALLOCATION ALLOCATION ALLOCATION FUND VALUE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------------- --------------- ---------------- -------------- ------------ ASSETS Investment in the portfolios, at fair value. $1,361,263,321 $99,212,647 $1,031,946,103 $1,292,495,096 $778,470,273 -------------- ----------- -------------- -------------- ------------ Net Assets.................................. $1,361,263,321 $99,212,647 $1,031,946,103 $1,292,495,096 $778,470,273 ============== =========== ============== ============== ============ NET ASSETS, representing: Accumulation units.......................... $1,361,263,321 $99,212,647 $1,031,946,103 $1,292,495,096 $778,470,273 -------------- ----------- -------------- -------------- ------------ $1,361,263,321 $99,212,647 $1,031,946,103 $1,292,495,096 $778,470,273 ============== =========== ============== ============== ============ Units outstanding........................... 136,048,705 8,706,892 100,743,415 126,312,909 74,331,284 ============== =========== ============== ============== ============ Portfolio shares held....................... 179,349,581 9,421,904 99,801,364 134,634,906 80,754,178 Portfolio net asset value per share......... $ 7.59 $ 10.53 $ 10.34 $ 9.60 $ 9.64 Investment in portfolio shares, at cost..... $1,341,457,639 $93,637,619 $1,019,583,856 $1,273,336,098 $772,348,910 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ----------------------------------------------------------------------------- FRANKLIN AST CLS AST HORIZON TEMPLETON VIP AST GOLDMAN AST CLS GROWTH MODERATE ASSET GROWTH ASSET FOUNDING FUNDS SACHS SMALL-CAP ASSET ALLOCATION ALLOCATION ALLOCATION ALLOCATION FUND VALUE PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO --------------- --------------- ---------------- -------------- ------------ INVESTMENT INCOME Dividend income............................. $ 254,728 $ 494,062 $ 3,016,031 $ 4,696,330 $ 2,530,127 -------------- ----------- -------------- -------------- ------------ EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration............................. 24,083,222 1,666,970 17,579,897 19,566,480 12,347,417 -------------- ----------- -------------- -------------- ------------ NET INVESTMENT INCOME (LOSS).................. (23,828,494) (1,172,908) (14,563,866) (14,870,150) (9,817,290) -------------- ----------- -------------- -------------- ------------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 10,447,165 18,823,710 32,513,771 Realized gain (loss) on shares redeemed................................... (52,514,959) (4,397,236) (36,242,977) (22,353,121) (30,309,048) Net change in unrealized gain (loss) on investments................................ (59,183,445) (4,384,738) (71,741,590) (66,055,507) (49,167,076) -------------- ----------- -------------- -------------- ------------ NET GAIN (LOSS) ON INVESTMENTS................ (111,698,404) (8,781,974) (97,537,402) (69,584,918) (46,962,353) -------------- ----------- -------------- -------------- ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $ (135,526,898) $(9,954,882) $ (112,101,268) $ (84,455,068) $(56,779,643) ============== =========== ============== ============== ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A13
SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------------------------------------------- AST HORIZON MODERATE ASSET AST FI PYRAMIS(R) PROFUND VP PROFUND VP ALLOCATION ASSET ALLOCATION CONSUMER CONSUMER GOODS PROFUND VP PROFUND VP PROFUND VP PROFUND VP MID- PORTFOLIO PORTFOLIO SERVICES PORTFOLIO FINANCIALS HEALTH CARE INDUSTRIALS CAP GROWTH ------------ ----------------- ---------- -------------- ---------- ----------- ----------- --------------- $967,245,765 $603,154,421 $122,604 $358,247 $ 429,486 $693,261 $170,834 $325,787 ------------ ------------ -------- -------- --------- -------- -------- -------- $967,245,765 $603,154,421 $122,604 $358,247 $ 429,486 $693,261 $170,834 $325,787 ============ ============ ======== ======== ========= ======== ======== ======== $967,245,765 $603,154,421 $122,604 $358,247 $ 429,486 $693,261 $170,834 $325,787 ------------ ------------ -------- -------- --------- -------- -------- -------- $967,245,765 $603,154,421 $122,604 $358,247 $ 429,486 $693,261 $170,834 $325,787 ============ ============ ======== ======== ========= ======== ======== ======== 93,246,254 58,250,777 10,467 31,509 78,037 64,437 19,305 31,644 ============ ============ ======== ======== ========= ======== ======== ======== 97,113,029 64,508,494 3,631 9,810 25,160 21,842 4,736 9,807 $ 9.96 $ 9.35 $ 33.77 $ 36.52 $ 17.07 $ 31.74 $ 36.07 $ 33.22 $961,262,685 $605,403,491 $118,718 $342,893 $ 433,140 $623,057 $154,918 $321,592 SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------------------------------------------- AST HORIZON MODERATE ASSET AST FI PYRAMIS(R) PROFUND VP PROFUND VP ALLOCATION ASSET ALLOCATION CONSUMER CONSUMER GOODS PROFUND VP PROFUND VP PROFUND VP PROFUND VP MID- PORTFOLIO PORTFOLIO SERVICES PORTFOLIO FINANCIALS HEALTH CARE INDUSTRIALS CAP GROWTH ------------ ----------------- ---------- -------------- ---------- ----------- ----------- --------------- $ 4,243,440 $ 1,250,615 $ 0 $ 1,679 $ 0 $ 2,549 $ 860 $ 0 ------------ ------------ -------- -------- --------- -------- -------- -------- 14,495,176 9,620,815 1,108 2,562 12,665 13,130 3,270 6,928 ------------ ------------ -------- -------- --------- -------- -------- -------- (10,251,736) (8,370,200) (1,108) (883) (12,665) (10,581) (2,410) (6,928) ------------ ------------ -------- -------- --------- -------- -------- -------- 43,442,660 21,563,244 0 0 0 0 0 0 (20,175,403) (34,358,264) (11,655) (621) (53,683) 33,807 (95) (14,522) (57,101,570) (38,777,131) (6,395) (1,198) (112,339) (3,994) (22,957) (69,492) ------------ ------------ -------- -------- --------- -------- -------- -------- (33,834,313) (51,572,151) (18,050) (1,819) (166,022) 29,813 (23,052) (84,014) ------------ ------------ -------- -------- --------- -------- -------- -------- $(44,086,049) $(59,942,351) $(19,158) $ (2,702) $(178,687) $ 19,232 $(25,462) $(90,942) ============ ============ ======== ======== ========= ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A14 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS -------------------------------------------------------------- PROFUND VP PROFUND VP PROFUND VP MID-CAP PROFUND VP SMALL-CAP SMALL-CAP PROFUND VP VALUE REAL ESTATE GROWTH VALUE TELECOMMUNICATIONS ---------- ----------- ---------- ---------- ------------------ ASSETS Investment in the portfolios, at fair value. $665,093 $386,146 $403,047 $403,912 $132,597 -------- -------- -------- -------- -------- Net Assets.................................. $665,093 $386,146 $403,047 $403,912 $132,597 ======== ======== ======== ======== ======== NET ASSETS, representing: Accumulation units.......................... $665,093 $386,146 $403,047 $403,912 $132,597 -------- -------- -------- -------- -------- $665,093 $386,146 $403,047 $403,912 $132,597 ======== ======== ======== ======== ======== Units outstanding........................... 66,431 42,775 36,951 39,460 14,600 ======== ======== ======== ======== ======== Portfolio shares held....................... 26,657 8,539 13,898 15,434 17,751 Portfolio net asset value per share......... $ 24.95 $ 45.22 $ 29.00 $ 26.17 $ 7.47 Investment in portfolio shares, at cost..... $628,340 $338,676 $381,857 $381,773 $125,184 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS -------------------------------------------------------------- PROFUND VP PROFUND VP PROFUND VP MID-CAP PROFUND VP SMALL-CAP SMALL-CAP PROFUND VP VALUE REAL ESTATE GROWTH VALUE TELECOMMUNICATIONS ---------- ----------- ---------- ---------- ------------------ INVESTMENT INCOME Dividend income............................. $ 670 $ 0 $ 0 $ 0 $ 8,246 -------- -------- -------- -------- -------- EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration................ 6,278 8,599 6,831 3,569 3,253 -------- -------- -------- -------- -------- NET INVESTMENT INCOME (LOSS).................. (5,608) (8,599) (6,831) (3,569) 4,993 -------- -------- -------- -------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 0 831 0 0 Realized gain (loss) on shares redeemed................................... 15,163 56,390 (19,740) (1,699) (1,637) Net change in unrealized gain (loss) on investments................................ (45,692) (69,755) (52,034) (14,895) (14,458) -------- -------- -------- -------- -------- NET GAIN (LOSS) ON INVESTMENTS................ (30,529) (13,365) (70,943) (16,594) (16,095) -------- -------- -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $(36,137) $(21,964) $(77,774) $(20,163) $(11,102) ======== ======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A15
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------- AST AST CREDIT JENNISON JENNISON SUISSE TRUST PROFUND VP PROFUND VP LARGE-CAP LARGE-CAP INTERNATIONAL PROFUND VP LARGE-CAP LARGE-CAP VALUE GROWTH EQUITY FLEX III AST BOND AST BOND UTILITIES GROWTH VALUE PORTFOLIO PORTFOLIO PORTFOLIO* PORTFOLIO 2020 PORTFOLIO 2017 ---------- ---------- ---------- ----------- ----------- --------------- -------------- -------------- $588,644 $690,914 $850,786 $33,837,253 $32,383,935 $ 0 $3,602,548 $173,608,249 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ $588,644 $690,914 $850,786 $33,837,253 $32,383,935 $ 0 $3,602,548 $173,608,249 ======== ======== ======== =========== =========== =========== ========== ============ $588,644 $690,914 $850,786 $33,837,253 $32,383,935 $ 0 $3,602,548 $173,608,249 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ $588,644 $690,914 $850,786 $33,837,253 $32,383,935 $ 0 $3,602,548 $173,608,249 ======== ======== ======== =========== =========== =========== ========== ============ 54,664 69,496 97,281 3,424,716 3,023,508 0 313,789 15,086,505 ======== ======== ======== =========== =========== =========== ========== ============ 18,129 19,969 35,717 3,023,883 2,658,780 0 351,126 14,953,338 $ 32.47 $ 34.60 $ 23.82 $ 11.19 $ 12.18 $ 0.00 $ 10.26 $ 11.61 $521,872 $614,932 $818,712 $34,194,152 $32,366,941 $ 0 $3,464,086 $170,222,737 SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------- AST AST CREDIT JENNISON JENNISON SUISSE TRUST PROFUND VP PROFUND VP LARGE-CAP LARGE-CAP INTERNATIONAL PROFUND VP LARGE-CAP LARGE-CAP VALUE GROWTH EQUITY FLEX III AST BOND AST BOND UTILITIES GROWTH VALUE PORTFOLIO PORTFOLIO PORTFOLIO* PORTFOLIO 2020 PORTFOLIO 2017 ---------- ---------- ---------- ----------- ----------- --------------- -------------- -------------- $ 7,210 $ 0 $ 5,760 $ 115,342 $ 0 $ 264,998 $ 123,320 $ 49,912 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ 5,727 11,034 12,364 596,496 463,441 103,073 190,209 1,429,979 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ 1,483 (11,034) (6,604) (481,154) (463,441) 161,925 (66,889) (1,380,067) -------- -------- -------- ----------- ----------- ----------- ---------- ------------ 0 0 0 129,050 0 0 1,536,534 356,403 11,846 29,651 (42,359) (2,793,497) (954,647) (435,076) 67,199 739,451 37,775 (47,379) (40,958) (2,493,809) (1,425,053) (1,153,588) 13,305 3,411,695 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ 49,621 (17,728) (83,317) (5,158,256) (2,379,700) (1,588,664) 1,617,038 4,507,549 -------- -------- -------- ----------- ----------- ----------- ---------- ------------ $ 51,104 $(28,762) $(89,921) $(5,639,410) $(2,843,141) $(1,426,739) $1,550,149 $ 3,127,482 ======== ======== ======== =========== =========== =========== ========== ============
* The subaccount is no longer available for investment as of December 31, 2011. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A16 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF NET ASSETS December 31, 2011
SUBACCOUNTS ------------------------------------------------------------------------------- WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT CORE EQUITY INTERNATIONAL OMEGA GROWTH SMALL CAP AST BOND PORTFOLIO SHARE EQUITY PORTFOLIO PORTFOLIO SHARE GROWTH PORTFOLIO PORTFOLIO 2021 CLASS 1* SHARE CLASS 1 CLASS 1 SHARE CLASS 1 -------------- --------------- ---------------- --------------- ---------------- ASSETS Investment in the portfolios, at fair value. $232,734,063 $ 0 $ 648,670 $1,249,300 $544,514 ------------ --------- --------- ---------- -------- Net Assets.................................. $232,734,063 $ 0 $ 648,670 $1,249,300 $544,514 ============ ========= ========= ========== ======== NET ASSETS, representing: Accumulation units.......................... $232,734,063 $ 0 $ 648,670 $1,249,300 $544,514 ------------ --------- --------- ---------- -------- $232,734,063 $ 0 $ 648,670 $1,249,300 $544,514 ============ ========= ========= ========== ======== Units outstanding........................... 18,356,147 0 52,493 682,604 47,275 ============ ========= ========= ========== ======== Portfolio shares held....................... 17,277,956 0 135,990 54,842 70,624 Portfolio net asset value per share......... $ 13.47 $ 0.00 $ 4.77 $ 22.78 $ 7.71 Investment in portfolio shares, at cost..... $218,478,801 $ 0 $ 648,099 $1,059,695 $453,981 STATEMENT OF OPERATIONS For the year ended December 31, 2011 SUBACCOUNTS ------------------------------------------------------------------------------- WELLS FARGO WELLS FARGO WELLS FARGO WELLS FARGO ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT ADVANTAGE VT CORE EQUITY INTERNATIONAL OMEGA GROWTH SMALL CAP AST BOND PORTFOLIO SHARE EQUITY PORTFOLIO PORTFOLIO SHARE GROWTH PORTFOLIO PORTFOLIO 2021 CLASS 1* SHARE CLASS 1 CLASS 1 SHARE CLASS 1 -------------- --------------- ---------------- --------------- ---------------- INVESTMENT INCOME Dividend income............................. $ 67,240 $ 17,996 $ 5,474 $ 0 $ 0 ------------ --------- --------- ---------- -------- EXPENSES Charges to contract owners for assuming mortality risk and expense risk and for administration..................... 2,439,292 22,499 14,496 26,631 11,453 ------------ --------- --------- ---------- -------- NET INVESTMENT INCOME (LOSS).................. (2,372,052) (4,503) (9,022) (26,631) (11,453) ------------ --------- --------- ---------- -------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS Capital gains distributions received........ 0 381,228 38,520 13,281 0 Realized gain (loss) on shares redeemed..... 6,295,875 (160,973) 23,264 134,548 58,190 Net change in unrealized gain (loss) on investments................................ 14,846,592 (393,326) (175,830) (203,172) (88,021) ------------ --------- --------- ---------- -------- NET GAIN (LOSS) ON INVESTMENTS................ 21,142,467 (173,071) (114,046) (55,343) (29,831) ------------ --------- --------- ---------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS................................. $ 18,770,415 $(177,574) $(123,068) $ (81,974) $(41,284) ============ ========= ========= ========== ========
* The subaccount is no longer available for investment as of December 31, 2011. THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A17
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT WELLS FARGO SMALL CAP VALUE AST QUANTITATIVE AST BLACKROCK ADVANTAGE VT AST PRUDENTIAL AST NEUBERGER PORTFOLIO SHARE AST BOND MODELING GLOBAL STRATEGIES OPPORTUNITY CORE BOND BERMAN CORE CLASS 1 PORTFOLIO 2022 PORTFOLIO PORTFOLIO FUND - CLASS 1 PORTFOLIO BOND PORTFOLIO --------------- -------------- ---------------- ----------------- -------------- -------------- -------------- $1,409,239 $84,496,267 $81,124,295 $816,028,974 $1,340,592 $11,039,255 $4,305,735 ---------- ----------- ----------- ------------ ---------- ----------- ---------- $1,409,239 $84,496,267 $81,124,295 $816,028,974 $1,340,592 $11,039,255 $4,305,735 ========== =========== =========== ============ ========== =========== ========== $1,409,239 $84,496,267 $81,124,295 $816,028,974 $1,340,592 $11,039,255 $4,305,735 ---------- ----------- ----------- ------------ ---------- ----------- ---------- $1,409,239 $84,496,267 $81,124,295 $816,028,974 $1,340,592 $11,039,255 $4,305,735 ========== =========== =========== ============ ========== =========== ========== 130,611 7,050,755 9,115,978 89,095,942 125,255 1,096,258 427,636 ========== =========== =========== ============ ========== =========== ========== 169,176 6,903,290 9,013,811 88,029,016 77,046 1,088,684 425,048 $ 8.33 $ 12.24 $ 9.00 $ 9.27 $ 17.40 $ 10.14 $ 10.13 $1,260,028 $81,182,722 $82,625,631 $859,957,359 $1,272,423 $10,948,863 $4,273,548 SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------- WELLS FARGO ADVANTAGE VT WELLS FARGO SMALL CAP VALUE AST QUANTITATIVE AST BLACKROCK ADVANTAGE VT AST PRUDENTIAL AST NEUBERGER PORTFOLIO SHARE AST BOND MODELING GLOBAL STRATEGIES OPPORTUNITY CORE BOND BERMAN CORE CLASS 1 PORTFOLIO 2022 PORTFOLIO PORTFOLIO FUND - CLASS 1 PORTFOLIO BOND PORTFOLIO --------------- -------------- ---------------- ----------------- -------------- -------------- -------------- $ 14,711 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 ---------- ----------- ----------- ------------ ---------- ----------- ---------- 28,692 523,180 410,093 8,573,981 8,075 13,496 6,875 ---------- ----------- ----------- ------------ ---------- ----------- ---------- (13,981) (523,180) (410,093) (8,573,981) (8,075) (13,496) (6,875) ---------- ----------- ----------- ------------ ---------- ----------- ---------- 0 0 0 0 0 0 0 113,941 781,609 (28,323) (7,687,566) 2,455 (136) (2,189) (248,068) 3,313,545 (1,501,336) (43,928,385) 68,169 90,392 32,187 ---------- ----------- ----------- ------------ ---------- ----------- ---------- (134,127) 4,095,154 (1,529,659) (51,615,951) 70,624 90,256 29,998 ---------- ----------- ----------- ------------ ---------- ----------- ---------- $ (148,108) $ 3,571,974 $(1,939,752) $(60,189,932) $ 62,549 $ 76,760 $ 23,123 ========== =========== =========== ============ ========== =========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A18 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------------ PRUDENTIAL MONEY MARKET PRUDENTIAL DIVERSIFIED BOND PRUDENTIAL EQUITY PORTFOLIO PORTFOLIO PORTFOLIO ---------------------------- -------------------------- -------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------- ------------- ------------ ------------ ------------ ------------ OPERATIONS Net investment income (loss)......................... $ (3,211,144) $ (3,626,799) $ 6,883,469 $ 7,016,896 $ (1,631,756) $ (1,462,493) Capital gains distributions received....................... 0 0 5,480,515 3,233,084 0 0 Realized gain (loss) on shares redeemed....................... 0 0 2,035,267 1,772,489 (1,520,114) (5,687,945) Net change in unrealized gain (loss) on investments.......... 0 0 (489,164) 9,664,813 (6,262,149) 28,662,419 ------------- ------------- ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (3,211,144) (3,626,799) 13,910,087 21,687,282 (9,414,019) 21,511,981 ------------- ------------- ------------ ------------ ------------ ------------ CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 1,685,754 1,524,976 581,923 610,713 715,829 560,814 Annuity Payments................ (3,008,457) (1,073,400) (1,354,983) (1,192,494) (796,788) (630,780) Surrenders, withdrawals and death benefits................. (59,838,743) (68,717,394) (27,927,476) (32,080,001) (25,937,020) (24,417,857) Net transfers between other subaccounts or fixed rate option......................... 30,397,104 86,086,981 2,982,025 6,211,706 (5,529,436) (3,216,029) Withdrawal and other charges........................ (304,157) (328,972) (87,945) (93,953) (236,059) (263,070) ------------- ------------- ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (31,068,499) 17,492,191 (25,806,456) (26,544,029) (31,783,474) (27,966,922) ------------- ------------- ------------ ------------ ------------ ------------ TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (34,279,643) 13,865,392 (11,896,369) (4,856,747) (41,197,493) (6,454,941) NET ASSETS Beginning of period............. 242,079,645 228,214,253 242,276,536 247,133,283 229,570,316 236,025,257 ------------- ------------- ------------ ------------ ------------ ------------ End of period................... $ 207,800,002 $ 242,079,645 $230,380,167 $242,276,536 $188,372,823 $229,570,316 ============= ============= ============ ============ ============ ============ Beginning units................. 198,480,050 193,139,396 114,525,756 127,375,981 120,852,569 137,058,192 ------------- ------------- ------------ ------------ ------------ ------------ Units issued.................... 90,308,372 148,653,668 8,196,841 9,656,151 2,973,594 4,063,477 Units redeemed.................. (116,981,726) (143,313,014) (20,012,695) (22,506,376) (19,977,162) (20,269,100) ------------- ------------- ------------ ------------ ------------ ------------ Ending units.................... 171,806,696 198,480,050 102,709,902 114,525,756 103,849,001 120,852,569 ============= ============= ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A19
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------ PRUDENTIAL FLEXIBLE MANAGED PRUDENTIAL CONSERVATIVE PRUDENTIAL VALUE PRUDENTIAL HIGH YIELD BOND PORTFOLIO BALANCED PORTFOLIO PORTFOLIO PORTFOLIO -------------------------- ------------------------ -------------------------- -------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ $ 82,760 $ 126,167 $ 193,067 $ 240,236 $ (1,623,761) $ (1,548,142) $ 13,926,798 $ 16,830,622 0 0 0 0 0 0 0 0 (151,930) (383,680) 185,786 (45,666) (5,024,689) (11,709,663) (1,523,153) (2,641,496) 480,056 1,727,915 284,079 2,011,209 (14,627,047) 43,577,190 (4,105,143) 14,660,194 ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ 410,886 1,470,402 662,932 2,205,779 (21,275,497) 30,319,385 8,298,502 28,849,320 ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ 27,795 11,613 60,104 21,136 878,969 1,145,675 781,928 686,363 (81,671) (74,240) (35,408) (155,156) (919,326) (539,596) (802,983) (544,645) (1,708,814) (1,755,335) (2,862,479) (3,382,561) (40,494,144) (35,253,515) (31,041,271) (31,930,585) 88,468 (229,117) (87,592) 100,429 (7,886,251) 129,236,877 (1,963,851) (2,725,985) 0 0 0 0 (541,218) (476,274) (363,536) (389,674) ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ (1,674,222) (2,047,079) (2,925,375) (3,416,152) (48,961,970) 94,113,167 (33,389,713) (34,904,526) ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ (1,263,336) (576,677) (2,262,443) (1,210,373) (70,237,467) 124,432,552 (25,091,211) (6,055,206) 14,822,202 15,398,879 22,490,631 23,701,004 353,298,060 228,865,508 244,422,102 250,477,308 ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ $13,558,866 $14,822,202 $20,228,188 $22,490,631 $283,060,593 $353,298,060 $219,330,891 $244,422,102 =========== =========== =========== =========== ============ ============ ============ ============ 7,981,886 9,161,800 12,139,774 14,097,671 180,227,613 112,546,024 67,908,416 77,866,851 ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ 221,204 128,300 323,214 343,867 6,929,950 100,381,450 5,563,797 5,570,847 (1,107,068) (1,308,214) (1,878,797) (2,301,764) (32,602,583) (32,699,861) (13,656,779) (15,529,282) ----------- ----------- ----------- ----------- ------------ ------------ ------------ ------------ 7,096,022 7,981,886 10,584,191 12,139,774 154,554,980 180,227,613 59,815,434 67,908,416 =========== =========== =========== =========== ============ ============ ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A20 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ---------------------------------------------------------------------------------- PRUDENTIAL NATURAL RESOURCES PRUDENTIAL STOCK INDEX PRUDENTIAL GLOBAL PORTFOLIO PORTFOLIO PORTFOLIO --------------------------- -------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- ------------ ------------ ------------ ----------- OPERATIONS Net investment income (loss)......................... $ (158,934) $ (131,834) $ 400,627 $ 865,953 $ 59,822 $ 66,788 Capital gains distributions received....................... 0 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... 689,319 204,884 18,144 (5,446,059) (402,415) (1,417,953) Net change in unrealized gain (loss) on investments.......... (3,321,980) 3,237,458 1,116,285 41,566,663 (5,106,244) 8,822,233 ----------- ----------- ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (2,791,595) 3,310,508 1,535,056 36,986,557 (5,448,837) 7,471,068 ----------- ----------- ------------ ------------ ------------ ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 14,459 27,396 1,255,423 862,386 298,224 206,666 Annuity Payments................ (25,630) (17,958) (1,104,844) (1,092,397) (171,443) (104,541) Surrenders, withdrawals and death benefits................. (1,807,865) (1,437,909) (33,054,110) (31,849,813) (7,650,241) (7,338,127) Net transfers between other subaccounts or fixed rate option......................... (1,084,315) (208,575) (9,926,920) (5,313,807) (2,330,582) (651,682) Withdrawal and other charges........................ (97) 0 (478,005) (513,272) (98,182) (108,269) ----------- ----------- ------------ ------------ ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (2,903,448) (1,637,046) (43,308,456) (37,906,903) (9,952,224) (7,995,953) ----------- ----------- ------------ ------------ ------------ ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (5,695,043) 1,673,462 (41,773,400) (920,346) (15,401,061) (524,885) NET ASSETS Beginning of period............. 15,700,105 14,026,643 318,093,910 319,014,256 74,473,403 74,998,288 ----------- ----------- ------------ ------------ ------------ ----------- End of period................... $10,005,062 $15,700,105 $276,320,510 $318,093,910 $ 59,072,342 $74,473,403 =========== =========== ============ ============ ============ =========== Beginning units................. 1,685,027 1,900,099 197,333,999 224,226,235 45,508,675 51,130,955 ----------- ----------- ------------ ------------ ------------ ----------- Units issued.................... 49,742 81,577 8,494,144 11,355,101 1,968,706 2,443,544 Units redeemed.................. (389,936) (296,649) (35,927,738) (38,247,337) (8,138,026) (8,065,824) ----------- ----------- ------------ ------------ ------------ ----------- Ending units.................... 1,344,833 1,685,027 169,900,405 197,333,999 39,339,355 45,508,675 =========== =========== ============ ============ ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A21
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------ PRUDENTIAL JENNISON PRUDENTIAL SMALL CAPITALIZATION T. ROWE PRICE INTERNATIONAL STOCK T. ROWE PRICE EQUITY INCOME PORTFOLIO STOCK PORTFOLIO PORTFOLIO PORTFOLIO -------------------------- ------------------------------ -------------------------------- -------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- $ (3,397,966) $ (2,998,345) $ (337,282) $ (320,933) $ 21,572 $ (115,480) $ 235,726 $ 351,179 0 0 768,485 0 0 77,453 0 0 4,568,260 (2,066,766) 650,646 (741,434) 225,904 (188,612) 223,476 (713,331) (3,189,625) 33,352,576 (1,511,159) 13,407,491 (3,615,512) 3,252,169 (1,844,140) 9,170,854 ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- (2,019,331) 28,287,465 (429,310) 12,345,124 (3,368,036) 3,025,530 (1,384,938) 8,808,702 ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- 840,619 664,947 158,569 172,141 36,102 46,308 86,201 63,749 (902,626) (604,216) (228,140) (64,360) (120,937) (53,895) (218,012) (161,648) (33,136,742) (32,555,833) (6,718,773) (5,961,500) (2,416,571) (2,314,677) (6,455,185) (7,382,966) (9,960,768) 11,187,034 (1,760,388) 396,932 (566,185) 800,661 (780,648) 321,278 (361,490) (372,227) (19,169) (21,077) (8,881) (9,637) (26,905) (30,257) ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- (43,521,007) (21,680,295) (8,567,901) (5,477,864) (3,076,472) (1,531,240) (7,394,549) (7,189,844) ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- (45,540,338) 6,607,170 (8,997,211) 6,867,260 (6,444,508) 1,494,290 (8,779,487) 1,618,858 309,345,214 302,738,044 62,027,779 55,160,519 27,104,388 25,610,098 73,513,305 71,894,447 ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- $263,804,876 $309,345,214 $53,030,568 $62,027,779 $20,659,880 $27,104,388 $64,733,818 $73,513,305 ============ ============ =========== =========== =========== =========== =========== =========== 182,467,612 193,983,301 22,233,629 24,532,895 18,468,757 19,690,211 34,754,545 38,561,067 ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- 5,319,519 22,702,037 1,240,309 1,835,739 1,330,336 2,512,209 1,540,578 2,193,477 (31,388,946) (34,217,726) (4,287,513) (4,135,005) (3,433,681) (3,733,663) (5,061,749) (5,999,999) ------------ ------------ ----------- ----------- ----------- ----------- ----------- ----------- 156,398,185 182,467,612 19,186,425 22,233,629 16,365,412 18,468,757 31,233,374 34,754,545 ============ ============ =========== =========== =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A22 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ---------------------------------------------------------------------------------------------- JANUS ASPEN JANUS JANUS ASPEN OVERSEAS INVESCO V.I. CORE EQUITY FUND PORTFOLIO - INSTITUTIONAL SHARES PORTFOLIO - INSTITUTIONAL SHARES ---------------------------- ------------------------------- ------------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ ------------ ----------- ------------ ------------ OPERATIONS Net investment income (loss)......................... $ (431,129) $ (436,505) $ (482,662) $ (188,662) $ (1,243,509) $ (1,107,192) Capital gains distributions received....................... 0 0 0 0 1,308,043 0 Realized gain (loss) on shares redeemed....................... 1,830,225 465,914 (782,889) (1,582,081) 9,420,957 9,834,799 Net change in unrealized gain (loss) on investments.......... (2,414,289) 7,470,681 (2,599,315) 9,340,871 (59,879,596) 24,341,809 ------------ ------------ ------------ ----------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (1,015,193) 7,500,090 (3,864,866) 7,570,128 (50,394,105) 33,069,416 ------------ ------------ ------------ ----------- ------------ ------------ CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 219,646 130,467 216,645 127,969 240,816 248,170 Annuity Payments................ (529,470) (263,157) (212,300) (102,429) (340,422) (327,997) Surrenders, withdrawals and death benefits................. (9,924,201) (10,734,700) (6,198,036) (6,473,567) (14,935,818) (15,813,044) Net transfers between other subaccounts or fixed rate option......................... (3,003,730) (1,940,096) (1,829,434) (489,299) (4,402,807) (5,002,136) Withdrawal and other charges........................ (48,662) (54,251) (34,235) (38,459) (51,948) (63,073) ------------ ------------ ------------ ----------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (13,286,417) (12,861,737) (8,057,360) (6,975,785) (19,490,179) (20,958,080) ------------ ------------ ------------ ----------- ------------ ------------ TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (14,301,610) (5,361,647) (11,922,226) 594,343 (69,884,284) 12,111,336 NET ASSETS Beginning of period............. 100,795,946 106,157,593 64,686,850 64,092,507 166,660,619 154,549,283 ------------ ------------ ------------ ----------- ------------ ------------ End of period................... $ 86,494,336 $100,795,946 $ 52,764,624 $64,686,850 $ 96,776,335 $166,660,619 ============ ============ ============ =========== ============ ============ Beginning units................. 56,457,217 64,231,154 40,445,401 45,285,739 37,126,904 42,555,453 ------------ ------------ ------------ ----------- ------------ ------------ Units issued.................... 1,077,054 1,483,566 979,438 1,574,553 2,604,859 2,293,196 Units redeemed.................. (8,282,037) (9,257,503) (6,083,384) (6,414,891) (7,457,634) (7,721,745) ------------ ------------ ------------ ----------- ------------ ------------ Ending units.................... 49,252,234 56,457,217 35,341,455 40,445,401 32,274,129 37,126,904 ============ ============ ============ =========== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A23
SUBACCOUNTS (CONTINUED) --------------------------------------------------------------------------------------------------------------------- FTVIP FRANKLIN SMALL-MID CAP MFS(R) RESEARCH SERIES - INITIAL MFS(R) GROWTH SERIES - INITIAL AMERICAN CENTURY VP VALUE GROWTH SECURITIES CLASS CLASS FUND FUND - CLASS 2 ------------------------------- ----------------------------- ------------------------ --------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $ (99,259) $ (84,140) $ (670,531) $ (716,552) $ 164,880 $ 208,981 $ (405,887) $ (377,184) 0 0 0 0 0 0 0 0 274,986 (17,579) 761,229 (450,836) (472,977) (773,562) (54,024) (686,301) (509,887) 2,554,619 (899,566) 8,389,481 169,663 3,462,698 (1,307,821) 7,421,490 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- (334,160) 2,452,900 (808,868) 7,222,093 (138,434) 2,898,117 (1,767,732) 6,358,005 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 41,784 32,401 126,270 138,742 69,825 31,333 82,938 35,733 (3,612) (89,622) (125,150) (178,215) (122,171) (17,148) (80,193) (23,700) (1,867,187) (2,316,135) (6,022,522) (5,977,638) (2,363,318) (2,598,485) (2,994,760) (2,518,407) (267,535) (167,368) (1,867,628) (865,273) 26,025 281,032 (58,229) 455,927 (8,329) (9,736) (29,999) (33,089) (10,038) (10,772) (13,115) (13,373) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- (2,104,879) (2,550,460) (7,919,029) (6,915,473) (2,399,677) (2,314,040) (3,063,359) (2,063,820) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- (2,439,039) (97,560) (8,727,897) 306,620 (2,538,111) 584,077 (4,831,091) 4,294,185 19,366,635 19,464,195 59,322,597 59,015,977 27,219,003 26,634,926 30,562,569 26,268,384 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $16,927,596 $19,366,635 $50,594,700 $59,322,597 $24,680,892 $27,219,003 $25,731,478 $30,562,569 =========== =========== =========== =========== =========== =========== =========== =========== 11,770,106 13,510,884 35,471,042 40,131,884 13,741,831 15,043,347 16,565,613 17,917,739 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 399,051 527,254 1,228,934 1,232,928 885,872 1,050,171 1,733,050 1,413,513 (1,700,788) (2,268,032) (5,813,922) (5,893,770) (2,119,007) (2,351,687) (3,438,852) (2,765,639) ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 10,468,369 11,770,106 30,886,054 35,471,042 12,508,696 13,741,831 14,859,811 16,565,613 =========== =========== =========== =========== =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A24 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ---------------------------------------------------------------------------- ALLIANCEBERNSTEIN PRUDENTIAL JENNISON 20/20 VPS LARGE CAP GROWTH FOCUS PORTFOLIO DAVIS VALUE PORTFOLIO PORTFOLIO CLASS B ------------------------ ------------------------ ------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- ----------- ----------- ----------- ----------- OPERATIONS Net investment income (loss)......................... $ (708,279) $ (754,303) $ (185,623) $ (29,219) $ (67,154) $ (57,055) Capital gains distributions received....................... 0 0 2,217,438 0 0 0 Realized gain (loss) on shares redeemed....................... 1,931,010 953,018 439,402 67,153 90,011 (25,033) Net change in unrealized gain (loss) on investments.......... (4,069,821) 2,827,922 (4,192,170) 3,406,130 (292,304) 436,723 ----------- ----------- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (2,847,090) 3,026,637 (1,720,953) 3,444,064 (269,447) 354,635 ----------- ----------- ----------- ----------- ----------- ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 191,582 142,358 38,707 76,633 28,894 1,080 Annuity Payments................ (94,016) (99,303) (125,347) (52,769) (38,340) (13,020) Surrenders, withdrawals and death benefits................. (4,566,566) (5,218,514) (3,139,325) (3,059,678) (519,478) (540,866) Net transfers between other subaccounts or fixed rate option......................... (729,000) (438,527) (854,802) (534,574) 136,912 (159,683) Withdrawal and other charges........................ (20,133) (23,175) (11,112) (12,532) (2,343) (2,025) ----------- ----------- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (5,218,133) (5,637,161) (4,091,879) (3,582,920) (394,355) (714,514) ----------- ----------- ----------- ----------- ----------- ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (8,065,223) (2,610,524) (5,812,832) (138,856) (663,802) (359,879) NET ASSETS Beginning of period............. 56,224,822 58,835,346 34,078,922 34,217,778 5,195,526 5,555,405 ----------- ----------- ----------- ----------- ----------- ----------- End of period................... $48,159,599 $56,224,822 $28,266,090 $34,078,922 $ 4,531,724 $ 5,195,526 =========== =========== =========== =========== =========== =========== Beginning units................. 32,077,679 35,691,676 31,082,791 34,701,087 8,340,614 9,659,067 ----------- ----------- ----------- ----------- ----------- ----------- Units issued.................... 3,740,387 3,696,040 1,074,079 2,449,155 1,368,372 984,974 Units redeemed.................. (6,742,438) (7,310,037) (4,876,554) (6,067,451) (2,080,854) (2,303,427) ----------- ----------- ----------- ----------- ----------- ----------- Ending units.................... 29,075,628 32,077,679 27,280,316 31,082,791 7,628,132 8,340,614 =========== =========== =========== =========== =========== ===========
** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A25
SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------------------------------------------------- PRUDENTIAL SP SMALL CAP VALUE JANUS ASPEN JANUS PRUDENTIAL SP PRUDENTIAL U.S. PRUDENTIAL SP GROWTH ASSET PORTFOLIO PORTFOLIO - SERVICE SHARES EMERGING GROWTH PORTFOLIO ALLOCATION PORTFOLIO ---------------------------- ------------------------ ---------------------------- --------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 04/29/2011** 12/31/2010 ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ $ (1,051,926) $ (1,128,368) $ (151,471) $ (179,663) $ (1,454,313) $ (1,549,390) $ (3,867,271) $ 654,508 0 0 0 0 1,223,782 0 0 0 552,718 (3,205,966) 458,378 291,174 4,329,371 (366,282) 21,141,795 (10,522,930) (4,213,004) 30,289,967 (1,136,482) 1,498,035 (2,602,784) 22,851,773 19,518,597 78,394,403 ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ (4,712,212) 25,955,633 (829,575) 1,609,546 1,496,056 20,936,101 36,793,121 68,525,981 ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ 302,414 355,982 49,159 90,180 400,309 420,022 1,024,912 3,352,764 (241,728) (150,015) (6,316) (36,101) (394,353) (205,346) (670,343) (434,480) (13,989,963) (13,076,606) (1,964,355) (1,578,033) (20,212,727) (14,341,659) (23,840,495) (52,962,282) (4,683,943) (4,715,019) (368,371) (1,040,860) (8,150,159) 52,581,810 (648,590,204) (17,529,368) (326,400) (353,864) (39,612) (44,777) (425,214) (385,059) (550,077) (1,753,876) ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ (18,939,620) (17,939,522) (2,329,495) (2,609,591) (28,782,144) 38,069,768 (672,626,207) (69,327,242) ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ (23,651,832) 8,016,111 (3,159,070) (1,000,045) (27,286,088) 59,005,869 (635,833,086) (801,261) 127,032,822 119,016,711 13,998,350 14,998,395 155,289,292 96,283,423 635,833,086 636,634,347 ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ $103,380,990 $127,032,822 $10,839,280 $13,998,350 $128,003,204 $155,289,292 $ 0 $635,833,086 ============ ============ =========== =========== ============ ============ ============= ============ 72,892,210 84,746,667 13,322,774 16,117,072 84,601,871 63,067,839 314,272,056 358,633,447 ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ 3,850,151 6,052,711 456,056 536,501 4,536,583 38,261,180 2,439,986 6,810,756 (14,682,328) (17,907,168) (2,760,046) (3,330,799) (19,511,324) (16,727,148) (316,712,042) (51,172,147) ------------ ------------ ----------- ----------- ------------ ------------ ------------- ------------ 62,060,033 72,892,210 11,018,784 13,322,774 69,627,130 84,601,871 0 314,272,056 ============ ============ =========== =========== ============ ============ ============= ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A26 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------- PRUDENTIAL SP INTERNATIONAL PRUDENTIAL SP INTERNATIONAL AST GOLDMAN SACHS LARGE GROWTH PORTFOLIO VALUE PORTFOLIO CAP VALUE PORTFOLIO ------------------------- ------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ------------ ----------- ------------ ----------- OPERATIONS Net investment income (loss)......................... $ (145,811) $ (41,871) $ 420,732 $ 297,776 $ (445,262) $ (118,559) Capital gains distributions received....................... 0 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... (3,058,173) (4,150,829) (2,654,708) (3,527,991) (6,037,352) (596,158) Net change in unrealized gain (loss) on investments.......... (5,328,824) 10,456,066 (4,763,625) 7,700,471 (4,702,899) 5,785,081 ------------ ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (8,532,808) 6,263,366 (6,997,601) 4,470,256 (11,185,513) 5,070,364 ------------ ----------- ------------ ----------- ------------ ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 126,007 178,434 172,141 175,580 49,003,657 30,143,475 Annuity Payments................ (85,864) (4,259) (74,526) (48,914) (779) 0 Surrenders, withdrawals and death benefits................. (6,518,118) (5,596,598) (6,437,172) (6,388,274) (1,313,896) (851,876) Net transfers between other subaccounts or fixed rate option......................... (1,737,718) (1,824,976) (1,225,425) (1,374,888) (10,280,925) 4,798,177 Withdrawal and other charges........................ (138,151) (150,016) (149,951) (164,731) (462,473) (179,663) ------------ ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (8,353,844) (7,397,415) (7,714,933) (7,801,227) 36,945,584 33,910,113 ------------ ----------- ------------ ----------- ------------ ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (16,886,652) (1,134,049) (14,712,534) (3,330,971) 25,760,071 38,980,477 NET ASSETS Beginning of period............. 58,478,231 59,612,280 54,613,068 57,944,039 60,571,505 21,591,028 ------------ ----------- ------------ ----------- ------------ ----------- End of period................... $ 41,591,579 $58,478,231 $ 39,900,534 $54,613,068 $ 86,331,576 $60,571,505 ============ =========== ============ =========== ============ =========== Beginning units................. 41,903,584 48,242,481 35,175,295 41,016,095 6,153,488 2,659,507 ------------ ----------- ------------ ----------- ------------ ----------- Units issued.................... 2,686,430 3,331,195 3,035,572 2,675,236 12,237,351 4,957,220 Units redeemed.................. (9,358,156) (9,670,092) (8,264,671) (8,516,036) (8,935,913) (1,463,239) ------------ ----------- ------------ ----------- ------------ ----------- Ending units.................... 35,231,858 41,903,584 29,946,196 35,175,295 9,454,926 6,153,488 ============ =========== ============ =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A27
SUBACCOUNTS (CONTINUED) --------------------------------------------------------------------------------------------------------------- AST AMERICAN CENTURY AST SCHRODERS MULTI-ASSET WORLD AST COHEN & STEERS REALTY AST J.P. MORGAN STRATEGIC INCOME & GROWTH PORTFOLIO STRATEGIES PORTFOLIO PORTFOLIO OPPORTUNITIES PORTFOLIO ------------------------ ------------------------------ ------------------------- -------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ $ (416,971) $ (134,681) $ (1,765,289) $ (6,096,495) $ (837,150) $ (118,739) $ (6,092,913) $ (5,004,664) 0 0 13,873,907 0 0 0 0 0 (1,401,039) (32,679) (31,440,539) 1,123,369 (4,779,918) (1,730,120) 3,191,430 2,465,389 (851,129) 4,135,949 (110,292,703) 82,400,245 1,709,260 9,187,784 (22,030,615) 29,522,333 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ (2,669,139) 3,968,589 (129,624,624) 77,427,119 (3,907,808) 7,338,925 (24,932,098) 26,983,058 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ 35,975,232 23,231,353 833,336,340 764,641,185 47,760,383 29,669,042 339,325,910 278,743,825 (284) (15,026) (70,651) 0 (49,051) (4,849) (11,753) 0 (2,005,800) (756,220) (19,083,412) (6,538,700) (2,374,621) (1,204,542) (17,302,354) (8,950,096) (3,283,831) 5,908,505 (383,306,958) 113,483,224 (16,633,773) 10,059,196 (92,765,162) 32,231,222 (392,383) (127,746) (10,985,821) (3,795,343) (537,800) (155,585) (4,962,430) (2,217,075) ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ 30,292,934 28,240,866 419,889,498 867,790,366 28,165,138 38,363,262 224,284,211 299,807,876 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ 27,623,795 32,209,455 290,264,874 945,217,485 24,257,330 45,702,187 199,352,113 326,790,934 46,364,504 14,155,049 1,162,964,206 217,746,721 62,985,346 17,283,159 609,347,362 282,556,428 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ $73,988,299 $46,364,504 $1,453,229,080 $1,162,964,206 $ 87,242,676 $62,985,346 $808,699,475 $609,347,362 =========== =========== ============== ============== ============ =========== ============ ============ 4,546,974 1,691,133 107,549,779 22,056,563 5,413,486 1,873,063 56,172,490 26,845,430 ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ 9,203,882 3,962,290 161,763,835 102,644,784 11,121,959 4,955,772 64,235,420 38,783,189 (6,781,269) (1,106,449) (127,715,243) (17,151,568) (9,426,417) (1,415,349) (44,169,143) (9,456,129) ----------- ----------- -------------- -------------- ------------ ----------- ------------ ------------ 6,969,587 4,546,974 141,598,371 107,549,779 7,109,028 5,413,486 76,238,767 56,172,490 =========== =========== ============== ============== ============ =========== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A28 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------ AST BLACKROCK AST NEUBERGER BERMAN VALUE PORTFOLIO SMALL-CAP GROWTH PORTFOLIO AST HIGH YIELD PORTFOLIO ------------------------ ------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 04/29/2011** 12/31/2010 12/31/2011 12/31/2010 ----------- ----------- ------------ ----------- ------------ ----------- OPERATIONS Net investment income (loss)......................... $ (367,056) $ (40,357) $ (184,427) $ (206,624) $ 4,911,060 $ 756,195 Capital gains distributions received....................... 0 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... (4,626,800) (1,031,220) 7,630,577 141,055 (1,792,319) 598,082 Net change in unrealized gain (loss) on investments.......... (314,958) 2,970,299 (3,488,762) 3,462,462 (3,142,457) 2,566,798 ----------- ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (5,308,814) 1,898,722 3,957,388 3,396,893 (23,716) 3,921,075 ----------- ----------- ------------ ----------- ------------ ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 32,200,500 7,432,184 9,586,670 13,100,972 48,033,624 39,410,195 Annuity Payments................ 0 0 0 0 (3,884) (3,842) Surrenders, withdrawals and death benefits................. (1,617,819) (768,188) (293,804) (355,752) (3,038,293) (1,576,859) Net transfers between other subaccounts or fixed rate option......................... 7,686,589 236,174 (38,432,214) 1,806,431 (6,866,588) 8,483,197 Withdrawal and other charges........................ (213,944) (68,640) (72,333) (66,915) (562,777) (183,313) ----------- ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 38,055,326 6,831,530 (29,211,681) 14,484,736 37,562,082 46,129,378 ----------- ----------- ------------ ----------- ------------ ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 32,746,512 8,730,252 (25,254,293) 17,881,629 37,538,366 50,050,453 NET ASSETS Beginning of period............. 21,392,391 12,662,139 25,254,293 7,372,664 69,556,980 19,506,527 ----------- ----------- ------------ ----------- ------------ ----------- End of period................... $54,138,903 $21,392,391 $ 0 $25,254,293 $107,095,346 $69,556,980 =========== =========== ============ =========== ============ =========== Beginning units................. 2,188,804 1,482,708 2,395,675 914,600 6,242,860 1,857,604 ----------- ----------- ------------ ----------- ------------ ----------- Units issued.................... 8,998,032 1,685,223 1,552,863 2,216,343 12,647,564 6,675,943 Units redeemed.................. (5,733,214) (979,127) (3,948,538) (735,268) (9,288,745) (2,290,687) ----------- ----------- ------------ ----------- ------------ ----------- Ending units.................... 5,453,622 2,188,804 0 2,395,675 9,601,679 6,242,860 =========== =========== ============ =========== ============ ===========
** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A29
SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------------------------------------------------- AST FEDERATED AGGRESSIVE AST GOLDMAN SACHS GROWTH PORTFOLIO AST MID-CAP VALUE PORTFOLIO AST SMALL-CAP VALUE PORTFOLIO CONCENTRATED GROWTH PORTFOLIO ------------------------- -------------------------- ---------------------------- ---------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- $ (818,255) $ (317,239) $ (436,346) $ (180,871) $ (526,670) $ (323,545) $ (1,018,944) $ (639,108) 0 0 0 0 0 0 0 0 (9,712,881) 39,936 (2,291,849) 256,047 (2,091,081) (183,616) 55,282 1,552,953 (9,395,968) 6,640,238 (3,243,340) 3,738,145 (4,159,165) 6,894,486 (6,320,145) 3,696,339 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- (19,927,104) 6,362,935 (5,971,535) 3,813,321 (6,776,916) 6,387,325 (7,283,807) 4,610,184 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- 27,072,834 16,975,746 24,456,906 15,455,686 20,327,321 14,903,922 25,612,257 27,623,878 (5,390) (3,646) (18,251) 0 (17,562) 0 (996) (3,116) (1,573,726) (694,464) (914,772) (458,999) (1,908,424) (1,070,190) (2,041,859) (1,217,823) 13,796,160 5,498,653 (8,514,304) 3,687,327 (7,870,116) 4,049,797 (20,337,365) 59,235 (417,988) (103,918) (260,582) (79,643) (251,714) (110,463) (449,837) (233,662) ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- 38,871,890 21,672,371 14,748,997 18,604,371 10,279,505 17,773,066 2,782,200 26,228,512 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- 18,944,786 28,035,306 8,777,462 22,417,692 3,502,589 24,160,391 (4,501,607) 30,838,696 40,832,021 12,796,715 30,901,472 8,483,780 41,902,648 17,742,257 63,049,843 32,211,147 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- $ 59,776,807 $40,832,021 $39,678,934 $30,901,472 $45,405,237 $41,902,648 $ 58,548,236 $63,049,843 ============ =========== =========== =========== =========== =========== ============ =========== 3,502,874 1,490,014 2,712,491 919,017 3,661,163 1,917,300 5,726,803 3,085,083 ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- 11,939,382 3,275,238 5,971,358 2,451,782 5,647,150 3,070,549 6,917,515 5,221,149 (9,517,606) (1,262,378) (5,029,041) (658,308) (5,017,122) (1,326,686) (6,983,545) (2,579,429) ------------ ----------- ----------- ----------- ----------- ----------- ------------ ----------- 5,924,650 3,502,874 3,654,808 2,712,491 4,291,191 3,661,163 5,660,773 5,726,803 ============ =========== =========== =========== =========== =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A30 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------- AST GOLDMAN SACHS MID-CAP AST LARGE-CAP VALUE AST LORD ABBETT CORE GROWTH PORTFOLIO PORTFOLIO FIXED INCOME PORTFOLIO ------------------------- ------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ------------ ----------- ------------ ----------- OPERATIONS Net investment income (loss)......................... $ (1,775,403) $ (806,279) $ (286,744) $ (386,410) $ (437,361) $ 1,224,819 Capital gains distributions received....................... 6,085,586 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... (7,118,478) 1,491,196 (4,568,054) (3,494,439) 2,223,162 329,933 Net change in unrealized gain (loss) on investments.......... (10,861,651) 9,438,906 (819,842) 11,241,128 5,151,208 2,045,135 ------------ ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (13,669,946) 10,123,823 (5,674,640) 7,360,279 6,937,009 3,599,887 ------------ ----------- ------------ ----------- ------------ ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 52,176,656 46,971,408 38,959,343 14,412,984 117,462,662 23,322,629 Annuity Payments................ (13,140) 0 (86,993) (14,542) (4,121) (3,318) Surrenders, withdrawals and death benefits................. (2,443,845) (1,200,568) (6,367,567) (5,642,751) (5,038,422) (2,894,558) Net transfers between other subaccounts or fixed rate option......................... (30,926,137) 2,205,923 4,925,802 871,150 76,255,647 5,089,903 Withdrawal and other charges........................ (684,007) (278,411) (321,405) (206,520) (473,044) (132,158) ------------ ----------- ------------ ----------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 18,109,527 47,698,352 37,109,180 9,420,321 188,202,722 25,382,498 ------------ ----------- ------------ ----------- ------------ ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 4,439,581 57,822,175 31,434,540 16,780,600 195,139,731 28,982,385 NET ASSETS Beginning of period............. 88,580,837 30,758,662 73,770,993 56,990,393 50,715,133 21,732,748 ------------ ----------- ------------ ----------- ------------ ----------- End of period................... $ 93,020,418 $88,580,837 $105,205,533 $73,770,993 $245,854,864 $50,715,133 ============ =========== ============ =========== ============ =========== Beginning units................. 7,399,862 2,817,570 8,210,451 7,330,647 4,379,205 1,958,401 ------------ ----------- ------------ ----------- ------------ ----------- Units issued.................... 12,869,263 7,075,748 8,900,083 2,772,012 25,844,630 3,847,437 Units redeemed.................. (11,993,385) (2,493,456) (5,094,092) (1,892,208) (9,311,794) (1,426,633) ------------ ----------- ------------ ----------- ------------ ----------- Ending units.................... 8,275,740 7,399,862 12,016,442 8,210,451 20,912,041 4,379,205 ============ =========== ============ =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A31
SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------------------------------------------- AST MARSICO CAPITAL GROWTH AST NEUBERGER BERMAN MID-CAP AST NEUBERGER BERMAN/LSV PORTFOLIO AST MFS GROWTH PORTFOLIO GROWTH PORTFOLIO MID-CAP VALUE PORTFOLIO ------------------------- ------------------------ --------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- $ (1,661,802) $ (663,419) $ (415,225) $ (218,408) $ (1,538,448) $ (530,649) $ (683,195) $ (264,614) 0 0 0 0 0 0 0 0 (1,571,416) (863,107) (92,841) 51,437 (16,785) 571,644 (5,513,425) (640,332) (6,299,604) 14,435,435 (1,865,905) 2,479,275 (5,915,307) 9,292,173 (6,465,566) 10,590,682 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- (9,532,822) 12,908,909 (2,373,971) 2,312,304 (7,470,540) 9,333,168 (12,662,186) 9,685,736 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- 57,454,010 36,349,073 14,742,856 11,455,971 62,217,195 27,278,317 46,536,831 36,110,174 (19,408) (8,960) 0 0 (990) (14,838) (6,057) 0 (5,371,138) (3,975,655) (1,117,920) (468,820) (2,061,611) (993,539) (2,647,594) (1,526,927) (23,306,496) 4,184,659 (5,342,908) 5,049,503 (15,981,311) 8,387,721 (22,194,283) 7,726,488 (672,685) (262,992) (212,546) (81,643) (539,513) (154,789) (608,799) (232,004) ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- 28,084,283 36,286,125 8,069,482 15,955,011 43,633,770 34,502,872 21,080,098 42,077,731 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- 18,551,461 49,195,034 5,695,511 18,267,315 36,163,230 43,836,040 8,417,912 51,763,467 99,289,364 50,094,330 27,605,037 9,337,722 64,481,500 20,645,460 78,392,118 26,628,651 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- $117,840,825 $99,289,364 $33,300,548 $27,605,037 $100,644,730 $64,481,500 $ 86,810,030 $78,392,118 ============ =========== =========== =========== ============ =========== ============ =========== 9,228,317 5,648,986 2,603,376 986,236 5,335,094 2,096,148 7,173,550 3,024,362 ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- 13,485,414 6,182,159 4,051,956 2,284,624 13,577,914 4,670,481 12,333,462 6,733,936 (11,531,539) (2,602,828) (3,437,135) (667,484) (10,298,568) (1,431,535) (11,320,490) (2,584,748) ------------ ----------- ----------- ----------- ------------ ----------- ------------ ----------- 11,182,192 9,228,317 3,218,197 2,603,376 8,614,440 5,335,094 8,186,522 7,173,550 ============ =========== =========== =========== ============ =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A32 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------ AST PIMCO LIMITED MATURITY AST T. ROWE PRICE EQUITY AST QMA US EQUITY ALPHA BOND PORTFOLIO INCOME PORTFOLIO PORTFOLIO -------------------------- ------------------------ ------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ ----------- ----------- ----------- ----------- OPERATIONS Net investment income (loss)......................... $ (1,069,129) $ 500,499 $ (258,075) $ (124,816) $ (239,155) $ (122,219) Capital gains distributions received....................... 2,107,308 100,551 0 0 0 0 Realized gain (loss) on shares redeemed....................... (430,496) (284,311) (2,322,679) (513,232) (734,646) (177,948) Net change in unrealized gain (loss) on investments.......... (43,486) 881,807 (2,157,358) 4,388,991 (318,308) 2,182,015 ------------ ------------ ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... 564,197 1,198,546 (4,738,112) 3,750,943 (1,292,109) 1,881,848 ------------ ------------ ----------- ----------- ----------- ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 63,799,009 49,213,544 26,011,071 21,984,660 12,314,263 8,410,772 Annuity Payments................ (31,083) (34,271) 0 0 (850) 0 Surrenders, withdrawals and death benefits................. (10,828,361) (6,080,815) (1,054,509) (694,568) (974,519) (411,747) Net transfers between other subaccounts or fixed rate option......................... 8,341,377 10,642,736 (9,633,674) 2,253,303 (1,060,622) 1,493,264 Withdrawal and other charges........................ (662,038) (292,548) (329,735) (157,685) (147,478) (50,175) ------------ ------------ ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 60,618,904 53,448,646 14,993,153 23,385,710 10,130,794 9,442,114 ------------ ------------ ----------- ----------- ----------- ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 61,183,101 54,647,192 10,255,041 27,136,653 8,838,685 11,323,962 NET ASSETS Beginning of period............. 102,959,497 48,312,305 43,678,448 16,541,795 19,153,680 7,829,718 ------------ ------------ ----------- ----------- ----------- ----------- End of period................... $164,142,598 $102,959,497 $53,933,489 $43,678,448 $27,992,365 $19,153,680 ============ ============ =========== =========== =========== =========== Beginning units................. 9,358,496 4,167,693 4,615,182 2,161,472 1,934,062 983,307 ------------ ------------ ----------- ----------- ----------- ----------- Units issued.................... 15,646,583 8,747,168 6,741,661 4,312,924 3,425,804 1,483,986 Units redeemed.................. (9,648,441) (3,556,365) (5,563,409) (1,859,214) (2,671,702) (533,231) ------------ ------------ ----------- ----------- ----------- ----------- Ending units.................... 15,356,638 9,358,496 5,793,434 4,615,182 2,688,164 1,934,062 ============ ============ =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A33
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------- AST T. ROWE PRICE NATURAL AST T. ROWE PRICE ASSET AST MFS GLOBAL EQUITY AST JPMORGAN INTERNATIONAL RESOURCES PORTFOLIO ALLOCATION PORTFOLIO PORTFOLIO EQUITY PORTFOLIO -------------------------- ------------------------------ ------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- $ (2,933,854) $ (1,727,306) $ (12,239,134) $ (7,039,787) $ (1,008,835) $ (426,241) $ (278,386) $ (345,855) 0 0 0 0 0 0 0 0 (21,424,084) (8,068,734) (23,561,430) 4,334,623 (3,065,557) (637,063) (8,244,379) (1,080,192) (42,683,044) 43,192,200 (45,536,830) 106,443,753 (6,204,187) 6,859,834 (11,089,319) 6,733,835 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- (67,040,982) 33,396,160 (81,337,394) 103,738,589 (10,278,579) 5,796,530 (19,612,084) 5,307,788 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- 125,329,516 81,759,033 1,366,449,922 960,125,293 48,630,665 38,254,873 46,028,814 45,271,111 (73,128) (117,544) (324,528) (6,658) (28,507) (3,431) 0 0 (9,583,248) (7,510,721) (36,288,762) (12,801,562) (1,927,519) (918,731) (2,276,672) (1,505,812) (63,438,016) 19,049,551 (342,122,960) 113,675,040 (15,603,046) 6,157,444 (23,340,361) 5,651,681 (1,562,649) (658,679) (14,390,187) (4,985,770) (579,797) (199,562) (696,995) (307,260) ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- 50,672,475 92,521,640 973,323,485 1,056,006,343 30,491,796 43,290,593 19,714,786 49,109,720 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- (16,368,507) 125,917,800 891,986,091 1,159,744,932 20,213,217 49,087,123 102,702 54,417,508 237,117,710 111,199,910 1,581,659,296 421,914,364 67,367,886 18,280,763 90,494,799 36,077,291 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- $220,749,203 $237,117,710 $2,473,645,387 $1,581,659,296 $ 87,581,103 $67,367,886 $ 90,597,501 $90,494,799 ============ ============ ============== ============== ============ =========== ============ =========== 18,819,743 9,564,384 146,125,937 42,023,411 6,014,635 1,712,519 8,841,943 3,787,595 ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- 32,314,613 15,994,557 245,354,653 124,785,390 11,677,053 5,796,557 13,180,716 7,949,201 (29,553,370) (6,739,198) (162,379,154) (20,682,864) (9,403,285) (1,494,441) (12,237,949) (2,894,853) ------------ ------------ -------------- -------------- ------------ ----------- ------------ ----------- 21,580,986 18,819,743 229,101,436 146,125,937 8,288,403 6,014,635 9,784,710 8,841,943 ============ ============ ============== ============== ============ =========== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A34 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------------- AST T. ROWE PRICE GLOBAL AST WELLINGTON MANAGEMENT AST CAPITAL GROWTH ASSET BOND PORTFOLIO HEDGED EQUITY PORTFOLIO ALLOCATION PORTFOLIO ------------------------- -------------------------- ------------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ------------ ------------ -------------- -------------- OPERATIONS Net investment income (loss)........................ $ 801,976 $ 334,647 $ (2,596,113) $ (1,676,236) $ (42,019,186) $ (17,292,134) Capital gains distributions received...................... 669,467 194,654 0 0 0 0 Realized gain (loss) on shares redeemed...................... 353,711 (513,846) (1,567,286) (695,081) (16,206,064) (3,821,726) Net change in unrealized gain (loss) on investments......... (362,314) 1,488,631 (8,905,749) 19,494,071 (207,253,142) 280,116,164 ------------ ----------- ------------ ------------ -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS.................... 1,462,840 1,504,086 (13,069,148) 17,122,754 (265,478,392) 259,002,304 ------------ ----------- ------------ ------------ -------------- -------------- CONTRACT OWNER TRANSACTIONS Contract owner net payments...................... 51,141,725 37,742,204 122,860,736 6,538,798 1,024,782,927 1,134,507,274 Annuity Payments............... (100,113) (4,616) (291,402) (28,721) (34,614) (48,067) Surrenders, withdrawals and death benefits................ (3,211,076) (2,071,133) (11,080,745) (9,528,323) (77,251,951) (50,543,240) Net transfers between other subaccounts or fixed rate option........................ (5,680,313) 3,342,661 16,310,286 (3,610,461) (870,888,167) 96,224,309 Withdrawal and other charges....................... (556,889) (186,846) (672,530) (569,984) (18,936,710) (10,012,672) ------------ ----------- ------------ ------------ -------------- -------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS.................. 41,593,334 38,822,270 127,126,345 (7,198,691) 57,671,485 1,170,127,604 ------------ ----------- ------------ ------------ -------------- -------------- TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 43,056,174 40,326,356 114,057,197 9,924,063 (207,806,907) 1,429,129,908 NET ASSETS Beginning of period............ 70,482,611 30,156,255 151,898,334 141,974,271 3,101,702,125 1,672,572,217 ------------ ----------- ------------ ------------ -------------- -------------- End of period.................. $113,538,785 $70,482,611 $265,955,531 $151,898,334 $2,893,895,218 $3,101,702,125 ============ =========== ============ ============ ============== ============== Beginning units................ 6,414,856 2,630,885 15,550,715 16,368,619 297,588,583 182,178,728 ------------ ----------- ------------ ------------ -------------- -------------- Units issued................... 12,203,682 5,756,173 26,361,479 3,206,431 249,637,970 197,056,548 Units redeemed................. (8,192,865) (1,972,202) (12,496,303) (4,024,335) (259,237,713) (81,646,693) ------------ ----------- ------------ ------------ -------------- -------------- Ending units................... 10,425,673 6,414,856 29,415,891 15,550,715 287,988,840 297,588,583 ============ =========== ============ ============ ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A35
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------------------------ AST ACADEMIC STRATEGIES ASSET AST BALANCED ASSET ALLOCATION AST PRESERVATION ASSET AST FIRST TRUST BALANCED TARGET ALLOCATION PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO PORTFOLIO ------------------------------ ------------------------------ ------------------------------ ------------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- $ (33,379,568) $ (16,804,080) $ (39,196,878) $ (22,594,249) $ (21,174,511) $ (7,125,182) $ 339,012 $ (1,964,543) 0 0 0 0 0 0 0 0 (21,159,293) (3,273,089) 28,966,827 15,668,623 27,118,606 13,144,293 (23,367,311) 1,519,426 (155,056,758) 207,238,250 (179,039,480) 276,659,761 (41,348,326) 137,638,945 (65,186,924) 82,435,956 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- (209,595,619) 187,161,081 (189,269,531) 269,734,135 (35,404,231) 143,658,056 (88,215,223) 81,990,839 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 1,060,310,000 1,012,386,393 1,120,558,937 1,158,246,684 913,541,256 889,173,216 715,533,090 558,240,620 (54,777) (50,158) (1,652,150) (1,191,070) (1,304,838) (1,012,294) (357) 0 (75,450,434) (53,522,398) (167,162,173) (130,696,229) (132,466,652) (99,177,670) (27,306,788) (13,636,165) (571,845,510) 125,342,254 (516,151,435) 118,993,299 (72,746,815) 75,408,953 (253,929,536) 59,532,530 (16,585,901) (7,372,183) (20,900,183) (11,619,089) (14,013,495) (7,020,160) (8,040,472) (3,106,468) -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 396,373,378 1,076,783,908 414,692,996 1,133,733,595 693,009,456 857,372,045 426,255,937 601,030,517 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 186,777,759 1,263,944,989 225,423,465 1,403,467,730 657,605,225 1,001,030,101 338,040,714 683,021,356 2,538,982,454 1,275,037,465 3,322,649,778 1,919,182,048 2,211,567,468 1,210,537,367 1,008,798,895 325,777,539 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- $2,725,760,213 $2,538,982,454 $3,548,073,243 $3,322,649,778 $2,869,172,693 $2,211,567,468 $1,346,839,609 $1,008,798,895 ============== ============== ============== ============== ============== ============== ============== ============== 241,208,278 135,487,612 308,411,300 196,484,156 199,628,107 115,717,040 95,850,727 37,024,284 -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 217,981,554 145,578,743 235,969,405 166,493,716 161,870,456 116,132,851 132,561,079 73,705,639 (190,167,898) (39,858,077) (204,798,556) (54,566,572) (97,108,210) (32,221,784) (98,362,400) (14,879,196) -------------- -------------- -------------- -------------- -------------- -------------- -------------- -------------- 269,021,934 241,208,278 339,582,149 308,411,300 264,390,353 199,628,107 130,049,406 95,850,727 ============== ============== ============== ============== ============== ============== ============== ==============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A36 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------------------ AST FIRST TRUST CAPITAL AST T. ROWE PRICE APPRECIATION TARGET AST ADVANCED STRATEGIES LARGE-CAP GROWTH PORTFOLIO PORTFOLIO PORTFOLIO ------------------------------ ------------------------------ -------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 -------------- -------------- -------------- -------------- ------------ ------------ OPERATIONS Net investment income (loss)......................... $ (8,954,803) $ (6,629,686) $ (13,398,739) $ (6,818,107) $ (3,091,621) $ (1,532,065) Capital gains distributions received....................... 0 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... (60,826,394) (54,691) (18,773,736) 6,033,951 (1,308,224) 1,286,756 Net change in unrealized gain (loss) on investments.......... (165,228,575) 154,800,544 (76,239,653) 112,222,331 (13,857,020) 17,175,619 -------------- -------------- -------------- -------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (235,009,772) 148,116,167 (108,412,128) 111,438,175 (18,256,865) 16,930,310 -------------- -------------- -------------- -------------- ------------ ------------ CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 959,511,469 693,837,514 1,173,196,706 801,621,593 84,639,943 66,740,548 Annuity Payments................ (334) (199,015) (3,071) (94,085) (30,734) (10,141) Surrenders, withdrawals and death benefits................. (27,930,901) (14,284,170) (36,064,453) (15,477,683) (7,268,529) (5,449,068) Net transfers between other subaccounts or fixed rate option......................... (580,355,383) 74,477,940 (437,156,233) 100,597,532 (36,874,340) 7,587,667 Withdrawal and other charges........................ (11,020,522) (4,615,340) (12,395,922) (4,375,538) (1,134,842) (469,648) -------------- -------------- -------------- -------------- ------------ ------------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 340,204,329 749,216,929 687,577,027 882,271,819 39,331,498 68,399,358 -------------- -------------- -------------- -------------- ------------ ------------ TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 105,194,557 897,333,096 579,164,899 993,709,994 21,074,633 85,329,668 NET ASSETS Beginning of period............. 1,380,684,150 483,351,054 1,496,354,738 502,644,744 152,421,906 67,092,238 -------------- -------------- -------------- -------------- ------------ ------------ End of period................... $1,485,878,707 $1,380,684,150 $2,075,519,637 $1,496,354,738 $173,496,539 $152,421,906 ============== ============== ============== ============== ============ ============ Beginning units................. 131,381,152 58,997,833 137,362,458 51,794,376 13,776,574 6,994,431 -------------- -------------- -------------- -------------- ------------ ------------ Units issued.................... 198,371,369 110,728,897 211,387,522 108,936,661 21,040,767 10,988,988 Units redeemed.................. (180,909,161) (38,345,578) (155,086,928) (23,368,579) (18,627,792) (4,206,845) -------------- -------------- -------------- -------------- ------------ ------------ Ending units.................... 148,843,360 131,381,152 193,663,052 137,362,458 16,189,549 13,776,574 ============== ============== ============== ============== ============ ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A37
SUBACCOUNTS (CONTINUED) ---------------------------------------------------------------------------------------------------------------- AST MONEY MARKET AST SMALL-CAP GROWTH AST PIMCO TOTAL RETURN AST INTERNATIONAL VALUE PORTFOLIO PORTFOLIO BOND PORTFOLIO PORTFOLIO --------------------------- ------------------------ ------------------------------ ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- $ (2,987,329) $ (1,555,369) $(1,571,296) $ (589,824) $ 2,474,087 $ (638,399) $ (79,967) $ (193,294) 0 0 0 0 51,974,246 12,039,158 0 0 0 0 (451,960) 589,430 (8,804,208) 4,406,098 (4,951,198) (637,350) 0 0 (6,987,997) 14,065,972 (23,889,764) 17,632,983 (5,888,431) 3,619,814 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- (2,987,329) (1,555,369) (9,011,253) 14,065,578 21,754,361 33,439,840 (10,919,596) 2,789,170 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- 132,143,564 128,089,748 45,239,082 20,868,909 597,815,509 609,450,840 26,442,789 22,859,103 0 (47,312) 0 (39,543) (1,186,972) (349,536) 0 0 (175,207,370) (85,621,655) (5,021,210) (2,956,449) (74,088,986) (59,322,567) (822,124) (335,723) 154,512,075 16,169,330 (9,704,905) 6,659,694 (249,761,461) 111,560,017 (10,220,283) 2,172,881 (895,077) (428,047) (489,227) (173,977) (8,492,634) (3,501,713) (323,992) (118,912) ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- 110,553,192 58,162,064 30,023,740 24,358,634 264,285,456 657,837,041 15,076,390 24,577,349 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- 107,565,863 56,606,695 21,012,487 38,424,212 286,039,817 691,276,881 4,156,794 27,366,519 128,581,063 71,974,368 70,221,616 31,797,404 1,231,960,707 540,683,826 39,039,069 11,672,550 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- $ 236,146,926 $128,581,063 $91,234,103 $70,221,616 $1,518,000,524 $1,231,960,707 $ 43,195,863 $39,039,069 ============= ============ =========== =========== ============== ============== ============ =========== 12,762,620 6,855,677 5,748,993 3,575,253 113,265,777 51,426,484 3,757,056 1,307,082 ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- 66,184,250 30,368,495 11,121,180 3,745,444 136,000,768 89,114,809 7,003,568 3,574,739 (54,931,668) (24,461,552) (9,284,565) (1,571,704) (109,323,449) (27,275,516) (5,997,630) (1,124,765) ------------- ------------ ----------- ----------- -------------- -------------- ------------ ----------- 24,015,202 12,762,620 7,585,608 5,748,993 139,943,096 113,265,777 4,762,994 3,757,056 ============= ============ =========== =========== ============== ============== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A38 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------------ AST INTERNATIONAL GROWTH NVIT DEVELOPING MARKETS AST INVESTMENT GRADE BOND PORTFOLIO FUND PORTFOLIO ------------------------- ------------------------- ------------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ------------ ----------- --------------- ------------- OPERATIONS Net investment income (loss)......................... $ (514,583) $ (280,062) $ (268,665) $ (357,844) $ (35,999,379) $ 21,076,036 Capital gains distributions received....................... 0 0 0 0 57,978,969 72,866,958 Realized gain (loss) on shares redeemed....................... (4,755,991) (577,695) (1,351,237) (1,701,140) (8,996,000) (14,525,846) Net change in unrealized gain (loss) on investments.......... (6,418,714) 4,535,610 (3,333,373) 4,854,884 154,548,422 (31,643,393) ------------ ----------- ------------ ----------- --------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (11,689,288) 3,677,853 (4,953,275) 2,795,900 167,532,012 47,773,755 ------------ ----------- ------------ ----------- --------------- ------------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 42,627,905 21,946,483 52,248 111,808 0 0 Policy loans.................... 0 0 (28,320) 0 0 0 Surrenders, withdrawals and death benefits................. (720,127) (399,400) (2,071,904) (2,009,133) (50,244,306) (10,642,172) Net transfers between other subaccounts or fixed rate option......................... (7,176,604) 3,606,957 (4,615,879) 3,227,953 7,361,610,289 (157,784,793) Withdrawal and other charges........................ (318,470) (118,330) (50,348) (56,146) (25,511,523) (3,462,835) ------------ ----------- ------------ ----------- --------------- ------------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 34,412,704 25,035,710 (6,714,203) 1,274,482 7,285,854,460 (171,889,800) ------------ ----------- ------------ ----------- --------------- ------------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 22,723,416 28,713,563 (11,667,478) 4,070,382 7,453,386,472 (124,116,045) NET ASSETS Beginning of period............. 40,508,656 11,795,093 25,523,843 21,453,461 153,555,135 277,671,180 ------------ ----------- ------------ ----------- --------------- ------------- End of period................... $ 63,232,072 $40,508,656 $ 13,856,365 $25,523,843 $ 7,606,941,607 $ 153,555,135 ============ =========== ============ =========== =============== ============= Beginning units................. 3,921,125 1,454,945 1,496,359 1,437,186 11,978,281 23,600,420 ------------ ----------- ------------ ----------- --------------- ------------- Units issued.................... 9,708,084 3,683,648 269,076 531,954 1,647,509,094 179,733,716 Units redeemed.................. (6,380,779) (1,217,468) (699,816) (472,781) (1,035,292,386) (191,355,855) ------------ ----------- ------------ ----------- --------------- ------------- Ending units.................... 7,248,430 3,921,125 1,065,619 1,496,359 624,194,989 11,978,281 ============ =========== ============ =========== =============== =============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A39
SUBACCOUNTS (CONTINUED) --------------------------------------------------------------------------------------------------------- AST WESTERN ASSET CORE PLUS AST GLOBAL REAL ESTATE BOND PORTFOLIO AST BOND PORTFOLIO 2018 AST BOND PORTFOLIO 2019 PORTFOLIO -------------------------- ------------------------- ------------------------ ------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- $ 2,414,441 $ (305,774) $ (1,562,019) $ (204,223) $ (120,873) $ (185,962) $ 204,100 $ (44,178) 3,513,277 423,690 3,364,110 795,479 2,652,543 960,788 0 0 2,248,143 1,159,754 1,219,236 1,608,555 (313,601) 1,079,520 (2,111,918) 119,858 2,025,194 1,889,443 4,501,640 474,794 (503,158) (51,345) (2,792,256) 2,021,554 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 10,201,055 3,167,113 7,522,967 2,674,605 1,714,911 1,803,001 (4,700,074) 2,097,234 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 125,407,380 103,078,513 0 0 34 17 19,976,163 15,407,127 0 0 0 0 0 0 0 0 (5,253,961) (1,638,950) (2,695,970) (1,048,001) (1,000,459) (856,879) (338,643) (71,221) (27,326,369) 18,921,335 152,617,157 (8,679,907) (4,412,548) (2,307,892) (9,714,690) 3,127,754 (1,632,686) (588,096) (10,705) (11,708) (6,393) (8,396) (217,513) (65,514) ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 91,194,364 119,772,802 149,910,482 (9,739,616) (5,419,366) (3,173,150) 9,705,317 18,398,146 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 101,395,419 122,939,915 157,433,449 (7,065,011) (3,704,455) (1,370,149) 5,005,243 20,495,380 161,901,532 38,961,617 17,223,514 24,288,525 14,731,613 16,101,762 23,406,165 2,910,785 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- $263,296,951 $161,901,532 $174,656,963 $17,223,514 $11,027,158 $14,731,613 $28,411,408 $23,406,165 ============ ============ ============ =========== =========== =========== =========== =========== 15,298,556 3,800,958 1,423,064 2,189,161 1,228,899 1,467,447 2,119,576 354,543 ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 33,133,655 16,135,520 20,485,724 1,123,532 865,272 1,680,859 4,389,933 2,348,512 (24,433,258) (4,637,922) (7,206,385) (1,889,629) (1,285,113) (1,919,407) (3,807,256) (583,479) ------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- 23,998,953 15,298,556 14,702,403 1,423,064 809,058 1,228,899 2,702,253 2,119,576 ============ ============ ============ =========== =========== =========== =========== ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A40 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------------------- AST PARAMETRIC EMERGING FRANKLIN TEMPLETON VIP FOUNDING AST GOLDMAN SACHS MARKETS EQUITY PORTFOLIO FUNDS ALLOCATION FUND SMALL-CAP VALUE PORTFOLIO -------------------------- ------------------------------ ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ------------ -------------- -------------- ------------ ----------- OPERATIONS Net investment income (loss)......................... $ (1,279,778) $ (860,193) $ (23,828,494) $ 12,896,017 $ (1,172,908) $ (364,648) Capital gains distributions received....................... 0 0 0 83,847 0 0 Realized gain (loss) on shares redeemed....................... (13,539,987) 899,561 (52,514,959) 2,778,929 (4,397,236) 602,897 Net change in unrealized gain (loss) on investments.......... (30,211,989) 14,238,068 (59,183,445) 55,525,137 (4,384,738) 8,694,476 ------------ ------------ -------------- -------------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (45,031,754) 14,277,436 (135,526,898) 71,283,930 (9,954,882) 8,932,725 ------------ ------------ -------------- -------------- ------------ ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 90,380,080 83,237,916 840,535,790 779,140,362 67,063,374 46,248,187 Annuity Payments................ 0 0 0 0 0 0 Surrenders, withdrawals and death benefits................. (1,615,264) (492,394) (20,954,857) (5,973,947) (1,150,224) (275,085) Net transfers between other subaccounts or fixed rate option......................... (63,400,945) 22,678,991 (477,641,251) 96,307,002 (28,383,706) 7,807,178 Withdrawal and other charges........................ (1,221,160) (448,922) (10,639,733) (4,028,615) (695,724) (187,783) ------------ ------------ -------------- -------------- ------------ ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 24,142,711 104,975,591 331,299,949 865,444,802 36,833,720 53,592,497 ------------ ------------ -------------- -------------- ------------ ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (20,889,043) 119,253,027 195,773,051 936,728,732 26,878,838 62,525,222 NET ASSETS Beginning of period............. 144,881,864 25,628,837 1,165,490,270 228,761,538 72,333,809 9,808,587 ------------ ------------ -------------- -------------- ------------ ----------- End of period................... $123,992,821 $144,881,864 $1,361,263,321 $1,165,490,270 $ 99,212,647 $72,333,809 ============ ============ ============== ============== ============ =========== Beginning units................. 12,639,741 2,786,558 114,431,062 26,708,781 6,209,379 1,010,377 ------------ ------------ -------------- -------------- ------------ ----------- Units issued.................... 22,940,141 13,559,592 175,793,466 112,313,681 14,794,166 6,793,399 Units redeemed.................. (21,909,398) (3,706,409) (154,175,823) (24,591,400) (12,296,653) (1,594,397) ------------ ------------ -------------- -------------- ------------ ----------- Ending units.................... 13,670,484 12,639,741 136,048,705 114,431,062 8,706,892 6,209,379 ============ ============ ============== ============== ============ ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A41
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------------------------------------------------- AST CLS GROWTH ASSET AST CLS MODERATE ASSET AST HORIZON GROWTH ASSET AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO ALLOCATION PORTFOLIO ALLOCATION PORTFOLIO ALLOCATION PORTFOLIO ---------------------------- ---------------------------- --------------------------- --------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ $ (14,563,866) $ (5,258,729) $ (14,870,150) $ (5,399,400) $ (9,817,290) $ (3,698,970) $ (10,251,736) $ (4,390,956) 10,447,165 0 18,823,710 0 32,513,771 0 43,442,660 0 (36,242,977) 3,236,488 (22,353,121) 2,133,841 (30,309,048) 2,302,123 (20,175,403) 2,068,033 (71,741,590) 66,974,826 (66,055,507) 64,996,847 (49,167,076) 43,550,901 (57,101,570) 46,984,034 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ (112,101,268) 64,952,585 (84,455,068) 61,731,288 (56,779,643) 42,154,054 (44,086,049) 44,661,111 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ 714,180,565 537,509,494 698,014,324 582,027,669 466,234,815 365,914,756 469,447,310 434,062,950 0 0 0 0 0 0 (56,005) 0 (10,686,227) (3,042,076) (16,134,220) (5,437,364) (7,244,868) (2,351,092) (14,222,028) (4,210,024) (367,547,846) 56,802,522 (213,983,463) 76,008,067 (182,187,810) 41,288,601 (124,217,174) 50,134,859 (7,739,074) (2,755,163) (8,538,964) (3,251,925) (5,557,061) (1,948,906) (6,544,721) (2,578,956) -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ 328,207,418 588,514,777 459,357,677 649,346,447 271,245,076 402,903,359 324,407,382 477,408,829 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ 216,106,150 653,467,362 374,902,609 711,077,735 214,465,433 445,057,413 280,321,333 522,069,940 815,839,953 162,372,591 917,592,487 206,514,752 564,004,840 118,947,427 686,924,432 164,854,492 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ $1,031,946,103 $815,839,953 $1,292,495,096 $917,592,487 $ 778,470,273 $564,004,840 $ 967,245,765 $686,924,432 ============== ============ ============== ============ ============= ============ ============= ============ 78,030,921 19,248,102 87,540,737 22,971,095 53,201,358 13,284,062 65,121,003 17,716,689 -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ 142,081,443 77,608,107 133,035,078 73,507,465 91,698,121 51,146,449 90,270,574 54,859,775 (119,368,949) (18,825,288) (94,262,906) (8,937,823) (70,568,195) (11,229,153) (62,145,323) (7,455,461) -------------- ------------ -------------- ------------ ------------- ------------ ------------- ------------ 100,743,415 78,030,921 126,312,909 87,540,737 74,331,284 53,201,358 93,246,254 65,121,003 ============== ============ ============== ============ ============= ============ ============= ============
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A42 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ----------------------------------------------------------------------------- AST FI PYRAMIS(R) ASSET ALLOCATION PROFUND VP CONSUMER PROFUND VP CONSUMER PORTFOLIO SERVICES GOODS PORTFOLIO --------------------------------- -------------------- -------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------- ------------ ---------- ---------- ---------- ---------- OPERATIONS Net investment income (loss)......................... $ (8,370,200) $ (2,218,098) $ (1,108) $ (1,062) $ (883) $ (1,423) Capital gains distributions received....................... 21,563,244 0 0 0 0 0 Realized gain (loss) on shares redeemed....................... (34,358,264) 1,328,971 (11,655) 9,311 (621) 13,522 Net change in unrealized gain (loss) on investments.......... (38,777,131) 30,221,179 (6,395) 7,996 (1,198) 5,787 ------------- ------------ -------- -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (59,942,351) 29,332,052 (19,158) 16,245 (2,702) 17,886 ------------- ------------ -------- -------- -------- -------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 457,424,779 278,063,187 9,999 23,347 11,268 32,548 Annuity Payments................ (103,749) 0 0 0 0 0 Surrenders, withdrawals and death benefits................. (6,971,923) (1,312,492) (13) 0 (7,246) 0 Net transfers between other subaccounts or fixed rate option......................... (175,163,948) 27,995,209 52,513 25,336 232,480 1,467 Withdrawal and other charges........................ (3,971,570) (1,102,940) (905) (584) (987) (658) ------------- ------------ -------- -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 271,213,589 303,642,964 61,594 48,099 235,515 33,357 ------------- ------------ -------- -------- -------- -------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 211,271,238 332,975,016 42,436 64,344 232,813 51,243 NET ASSETS Beginning of period............. 391,883,183 58,908,167 80,168 15,824 125,434 74,191 ------------- ------------ -------- -------- -------- -------- End of period................... $ 603,154,421 $391,883,183 $122,604 $ 80,168 $358,247 $125,434 ============= ============ ======== ======== ======== ======== Beginning units................. 36,638,038 6,536,221 7,362 1,750 11,873 8,079 ------------- ------------ -------- -------- -------- -------- Units issued.................... 83,559,824 36,756,997 27,180 16,740 52,852 22,669 Units redeemed.................. (61,947,085) (6,655,180) (24,075) (11,128) (33,216) (18,875) ------------- ------------ -------- -------- -------- -------- Ending units.................... 58,250,777 36,638,038 10,467 7,362 31,509 11,873 ============= ============ ======== ======== ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A43
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------------------- PROFUND VP PROFUND VP HEALTH PROFUND VP PROFUND VP MID-CAP FINANCIALS CARE INDUSTRIALS GROWTH -------------------- -------------------- -------------------- -------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $ (12,665) $ (12,261) $ (10,581) $ (8,965) $ (2,410) $ (2,112) $ (6,928) $ (4,909) 0 0 0 0 0 0 0 0 (53,683) 15,818 33,807 10,573 (95) 1,054 (14,522) 40,655 (112,339) 48,398 (3,994) 14,586 (22,957) 33,328 (69,492) 52,722 --------- --------- --------- -------- --------- -------- --------- -------- (178,687) 51,955 19,232 16,194 (25,462) 32,270 (90,942) 88,468 --------- --------- --------- -------- --------- -------- --------- -------- 31,086 286,087 55,035 155,411 131,749 57,489 119,701 47,618 0 0 0 0 0 0 0 0 (2,165) (3,081) (36,093) (1,106) (6,193) 0 (53,334) (2,135) (401,772) (63,030) (202,975) 298,168 (141,387) 40,111 (225,522) 301,971 (5,871) (6,704) (6,374) (4,860) (1,908) (1,171) (2,693) (2,299) --------- --------- --------- -------- --------- -------- --------- -------- (378,722) 213,272 (190,407) 447,613 (17,739) 96,429 (161,848) 345,155 --------- --------- --------- -------- --------- -------- --------- -------- (557,409) 265,227 (171,175) 463,807 (43,201) 128,699 (252,790) 433,623 986,895 721,668 864,436 400,629 214,035 85,336 578,577 144,954 --------- --------- --------- -------- --------- -------- --------- -------- $ 429,486 $ 986,895 $ 693,261 $864,436 $ 170,834 $214,035 $ 325,787 $578,577 ========= ========= ========= ======== ========= ======== ========= ======== 151,835 121,143 87,079 40,894 23,563 11,449 52,417 17,158 --------- --------- --------- -------- --------- -------- --------- -------- 84,150 150,328 80,037 80,712 30,292 22,105 109,132 120,848 (157,948) (119,636) (102,679) (34,527) (34,550) (9,991) (129,905) (85,589) --------- --------- --------- -------- --------- -------- --------- -------- 78,037 151,835 64,437 87,079 19,305 23,563 31,644 52,417 ========= ========= ========= ======== ========= ======== ========= ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A44 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ---------------------------------------------------------------- PROFUND VP MID-CAP PROFUND VP REAL PROFUND VP SMALL-CAP VALUE ESTATE GROWTH -------------------- -------------------- -------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ---------- ---------- ---------- ---------- ---------- ---------- OPERATIONS Net investment income (loss)......................... $ (5,608) $ (4,307) $ (8,599) $ 13,569 $ (6,831) $ (5,269) Capital gains distributions received....................... 0 0 0 0 831 0 Realized gain (loss) on shares redeemed....................... 15,163 28,586 56,390 38,753 (19,740) 18,564 Net change in unrealized gain (loss) on investments.......... (45,692) 26,698 (69,755) 58,867 (52,034) 54,530 -------- -------- --------- -------- --------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (36,137) 50,977 (21,964) 111,189 (77,774) 67,825 -------- -------- --------- -------- --------- -------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 21,630 68,744 74,968 178,086 116,710 85,066 Annuity Payments................ 0 0 0 0 0 0 Surrenders, withdrawals and death benefits................. (9,320) (1,855) (10,233) (4,171) (52,325) (645) Net transfers between other subaccounts or fixed rate option......................... 235,308 125,976 (359,505) (40,391) (131,037) 229,389 Withdrawal and other charges........................ (2,851) (2,621) (3,687) (4,663) (2,554) (2,448) -------- -------- --------- -------- --------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 244,767 190,244 (298,457) 128,861 (69,206) 311,362 -------- -------- --------- -------- --------- -------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 208,630 241,221 (320,421) 240,050 (146,980) 379,187 NET ASSETS Beginning of period............. 456,463 215,242 706,567 466,517 550,027 170,840 -------- -------- --------- -------- --------- -------- End of period................... $665,093 $456,463 $ 386,146 $706,567 $ 403,047 $550,027 ======== ======== ========= ======== ========= ======== Beginning units................. 46,242 25,833 83,091 67,246 50,538 20,201 -------- -------- --------- -------- --------- -------- Units issued.................... 100,172 57,366 35,675 76,262 104,290 92,817 Units redeemed.................. (79,983) (36,957) (75,991) (60,417) (117,877) (62,480) -------- -------- --------- -------- --------- -------- Ending units.................... 66,431 46,242 42,775 83,091 36,951 50,538 ======== ======== ========= ======== ========= ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A45
SUBACCOUNTS (CONTINUED) -------------------------------------------------------------------------------------- PROFUND VP SMALL-CAP PROFUND VP PROFUND VP LARGE-CAP VALUE TELECOMMUNICATIONS PROFUND VP UTILITIES GROWTH -------------------- -------------------- -------------------- -------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- $ (3,569) $ (4,163) $ 4,993 $ 1,334 $ 1,483 $ 2,516 $ (11,034) $ (9,961) 0 0 0 0 0 0 0 0 (1,699) 17,490 (1,637) 3,083 11,846 8,108 29,651 47,103 (14,895) 19,221 (14,458) 16,440 37,775 (2,710) (47,379) 29,370 -------- -------- --------- -------- -------- -------- --------- -------- (20,163) 32,548 (11,102) 20,857 51,104 7,914 (28,762) 66,512 -------- -------- --------- -------- -------- -------- --------- -------- 27,627 25,897 3,346 31,772 63,415 50,357 58,985 43,716 0 0 0 0 0 0 0 0 (8,176) (598) (9) (79) (342) (204) (63,979) (3,083) 147,548 16,417 (104,890) 73,275 181,656 (57,399) 52,518 419 (1,429) (2,323) (1,046) (852) (2,440) (2,124) (4,672) (5,139) -------- -------- --------- -------- -------- -------- --------- -------- 165,570 39,393 (102,599) 104,116 242,289 (9,370) 42,852 35,913 -------- -------- --------- -------- -------- -------- --------- -------- 145,407 71,941 (113,701) 124,973 293,393 (1,456) 14,090 102,425 258,505 186,564 246,298 121,325 295,251 296,707 676,824 574,399 -------- -------- --------- -------- -------- -------- --------- -------- $403,912 $258,505 $ 132,597 $246,298 $588,644 $295,251 $ 690,914 $676,824 ======== ======== ========= ======== ======== ======== ========= ======== 25,324 21,915 25,387 15,804 36,030 37,739 70,690 66,952 -------- -------- --------- -------- -------- -------- --------- -------- 71,486 62,761 17,644 28,097 65,007 26,647 102,147 65,856 (57,350) (59,352) (28,431) (18,514) (46,373) (28,356) (103,341) (62,118) -------- -------- --------- -------- -------- -------- --------- -------- 39,460 25,324 14,600 25,387 54,664 36,030 69,496 70,690 ======== ======== ========= ======== ======== ======== ========= ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A46 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ------------------------------------------------------------------------ PROFUND VP LARGE-CAP AST JENNISON LARGE-CAP AST JENNISON LARGE-CAP VALUE VALUE PORTFOLIO GROWTH PORTFOLIO -------------------- ------------------------ ------------------------ 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/01/2010 TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ---------- ---------- ----------- ----------- ----------- ----------- OPERATIONS Net investment income (loss)......................... $ (6,604) $ (4,307) $ (481,154) $ (143,955) $ (463,441) $ (93,986) Capital gains distributions received....................... 0 0 129,050 14,850 0 0 Realized gain (loss) on shares redeemed....................... (42,359) (6,405) (2,793,497) (99,339) (954,647) (23,619) Net change in unrealized gain (loss) on investments.......... (40,958) 56,279 (2,493,809) 2,127,994 (1,425,053) 1,436,671 --------- -------- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (89,921) 45,567 (5,639,410) 1,899,550 (2,843,141) 1,319,066 --------- -------- ----------- ----------- ----------- ----------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 87,706 311,992 24,780,520 18,347,732 22,060,185 12,060,589 Annuity Payments................ 0 0 0 0 0 0 Surrenders, withdrawals and death benefits................. (56,894) (218) (395,637) (89,452) (306,409) (42,002) Net transfers between other subaccounts or fixed rate option......................... 182,086 49,815 (9,485,344) 4,214,808 (2,389,885) 2,484,324 Withdrawal and other charges........................ (4,955) (4,625) (232,029) (50,576) (175,376) (32,878) --------- -------- ----------- ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 207,943 356,964 14,667,510 22,422,512 19,188,515 14,470,033 --------- -------- ----------- ----------- ----------- ----------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 118,022 402,531 9,028,100 24,322,062 16,345,374 15,789,099 NET ASSETS Beginning of period............. 732,764 330,233 24,809,153 487,091 16,038,561 249,462 --------- -------- ----------- ----------- ----------- ----------- End of period................... $ 850,786 $732,764 $33,837,253 $24,809,153 $32,383,935 $16,038,561 ========= ======== =========== =========== =========== =========== Beginning units................. 89,036 44,746 2,319,311 47,286 1,477,715 24,230 --------- -------- ----------- ----------- ----------- ----------- Units issued.................... 231,178 123,013 5,579,780 2,628,218 6,022,523 1,724,146 Units redeemed.................. (222,933) (78,723) (4,474,375) (356,193) (4,476,730) (270,661) --------- -------- ----------- ----------- ----------- ----------- Ending units.................... 97,281 89,036 3,424,716 2,319,311 3,023,508 1,477,715 ========= ======== =========== =========== =========== ===========
* Date subaccount became available for investment ** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A47
SUBACCOUNTS (CONTINUED) ------------------------------------------------------------------------------------------------------------- CREDIT SUISSE TRUST INTERNATIONAL EQUITY FLEX III PORTFOLIO AST BOND PORTFOLIO 2020 AST BOND PORTFOLIO 2017 AST BOND PORTFOLIO 2021 ---------------------------- ------------------------- ------------------------- ------------------------- 01/01/2011 01/01/2010 01/01/2011 01/01/2010 01/01/2011 01/04/2010* 01/01/2011 01/04/2010* TO TO TO TO TO TO TO TO 10/21/2011** 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ---------- ------------ ----------- ------------ ----------- ------------ ----------- $ 161,925 $ (119,376) $ (66,889) $ (320,238) $ (1,380,067) $ (120,888) $ (2,372,052) $ (123,369) 0 0 1,536,534 0 356,403 0 0 0 (435,076) (2,119) 67,199 1,543,442 739,451 734,749 6,295,875 (394,532) (1,153,588) 1,054,177 13,305 155,536 3,411,695 (26,183) 14,846,592 (591,330) ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- (1,426,739) 932,682 1,550,149 1,378,740 3,127,482 587,678 18,770,415 (1,109,231) ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- 6,260 56,224 62 954 0 0 0 0 (7,148) (6,941) 0 0 0 0 0 0 (778,858) (911,480) (290,634) (763,323) (2,838,068) (448,217) (4,036,042) (310,835) (7,741,280) 176,706 (14,787,484) 15,532,076 168,630,258 4,606,659 193,199,248 26,303,043 (3,588) (4,929) (2,730) (11,533) (57,543) 0 (82,427) (108) ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- (8,524,614) (690,420) (15,080,786) 14,758,174 165,734,647 4,158,442 189,080,779 25,992,100 ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- (9,951,353) 242,262 (13,530,637) 16,136,914 168,862,129 4,746,120 207,851,194 24,882,869 9,951,353 9,709,091 17,133,185 996,271 4,746,120 0 24,882,869 0 ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- $ 0 $9,951,353 $ 3,602,548 $17,133,185 $173,608,249 $ 4,746,120 $232,734,063 $24,882,869 =========== ========== ============ =========== ============ =========== ============ =========== 890,619 961,736 1,771,066 113,597 449,557 0 2,261,043 0 ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- 42,042 91,617 1,231,594 6,821,656 23,744,431 2,279,990 30,873,753 4,286,029 (932,661) (162,734) (2,688,871) (5,164,187) (9,107,483) (1,830,433) (14,778,649) (2,024,986) ----------- ---------- ------------ ----------- ------------ ----------- ------------ ----------- 0 890,619 313,789 1,771,066 15,086,505 449,557 18,356,147 2,261,043 =========== ========== ============ =========== ============ =========== ============ ===========
* Date subaccount became available for investment ** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A48 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ---------------------------------------------------------------------- WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE VT CORE EQUITY VT INTERNATIONAL EQUITY VT OMEGA GROWTH PORTFOLIO SHARE CLASS 1 PORTFOLIO SHARE CLASS 1 PORTFOLIO SHARE CLASS 1 ----------------------- --------------------- ---------------------- 01/01/2011 07/16/2010* 01/01/2011 07/16/2010* 01/01/2011 07/16/2010* TO TO TO TO TO TO 08/26/2011** 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2010 ------------ ----------- ---------- ----------- ---------- ----------- OPERATIONS Net investment income (loss)......................... $ (4,503) $ (15,987) $ (9,022) $ (7,731) $ (26,631) $ (13,737) Capital gains distributions received....................... 381,228 0 38,520 0 13,281 0 Realized gain (loss) on shares redeemed....................... (160,973) 33,375 23,264 18,392 134,548 33,466 Net change in unrealized gain (loss) on investments.......... (393,326) 393,326 (175,830) 176,401 (203,172) 392,777 ----------- ---------- --------- -------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (177,574) 410,714 (123,068) 187,062 (81,974) 412,506 ----------- ---------- --------- -------- ---------- ---------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 0 436 0 0 0 17 Annuity Payments................ 0 0 0 0 (1,208) 0 Surrenders, withdrawals and death benefits................. (544,049) (226,234) (135,129) (90,145) (489,018) (216,468) Net transfers between other subaccounts or fixed rate option......................... (1,377,644) 1,919,017 (75,892) 888,420 (61,690) 1,694,559 Withdrawal and other charges........................ (2,657) (2,009) (1,666) (912) (5,338) (2,086) ----------- ---------- --------- -------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... (1,924,350) 1,691,210 (212,687) 797,363 (557,254) 1,476,022 ----------- ---------- --------- -------- ---------- ---------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... (2,101,924) 2,101,924 (335,755) 984,425 (639,228) 1,888,528 NET ASSETS Beginning of period............. 2,101,924 0 984,425 0 1,888,528 0 ----------- ---------- --------- -------- ---------- ---------- End of period................... $ 0 $2,101,924 $ 648,670 $984,425 $1,249,300 $1,888,528 =========== ========== ========= ======== ========== ========== Beginning units................. 147,588 0 68,335 0 960,874 0 ----------- ---------- --------- -------- ---------- ---------- Units issued.................... 453 168,512 3,338 78,496 56,747 1,100,909 Units redeemed.................. (148,041) (20,924) (19,180) (10,161) (335,017) (140,035) ----------- ---------- --------- -------- ---------- ---------- Ending units.................... 0 147,588 52,493 68,335 682,604 960,874 =========== ========== ========= ======== ========== ==========
* Date subaccount became available for investment ** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A49
SUBACCOUNTS (CONTINUED) ----------------------------------------------------------------------- AST WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE AST BOND QUANTITATIVE VT SMALL CAP GROWTH VT SMALL CAP VALUE PORTFOLIO MODELING PORTFOLIO SHARE CLASS 1 PORTFOLIO SHARE CLASS 1 2022 PORTFOLIO --------------------- ---------------------- ----------- ------------ 01/01/2011 07/16/2010* 01/01/2011 07/16/2010* 01/03/2011* 05/02/2011* TO TO TO TO TO TO 12/31/2011 12/31/2010 12/31/2011 12/31/2010 12/31/2011 12/31/2011 ---------- ----------- ---------- ----------- ----------- ------------ $ (11,453) $ (5,898) $ (13,981) $ (16,134) $ (523,180) $ (410,093) 0 0 0 0 0 0 58,190 12,918 113,941 32,270 781,609 (28,323) (88,021) 178,554 (248,068) 397,279 3,313,545 (1,501,336) --------- -------- ---------- ---------- ----------- ----------- (41,284) 185,574 (148,108) 413,415 3,571,974 (1,939,752) --------- -------- ---------- ---------- ----------- ----------- 11,422 0 49 46 0 82,822,404 0 0 0 0 0 0 (216,445) (81,224) (564,394) (271,331) (534,212) (424,353) (11,622) 700,216 (29,218) 2,016,712 81,458,818 666,048 (1,452) (671) (5,127) (2,805) (313) (52) --------- -------- ---------- ---------- ----------- ----------- (218,097) 618,321 (598,690) 1,742,622 80,924,293 83,064,047 --------- -------- ---------- ---------- ----------- ----------- (259,381) 803,895 (746,798) 2,156,037 84,496,267 81,124,295 803,895 0 2,156,037 0 0 0 --------- -------- ---------- ---------- ----------- ----------- $ 544,514 $803,895 $1,409,239 $2,156,037 $84,496,267 $81,124,295 ========= ======== ========== ========== =========== =========== 65,643 0 182,670 0 0 0 --------- -------- ---------- ---------- ----------- ----------- 6,142 75,490 7,388 214,443 10,939,930 9,571,626 (24,510) (9,847) (59,447) (31,773) (3,889,175) (455,648) --------- -------- ---------- ---------- ----------- ----------- 47,275 65,643 130,611 182,670 7,050,755 9,115,978 ========= ======== ========== ========== =========== ===========
* Date subaccount became available for investment ** Date subaccount was no longer available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A50 FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT STATEMENT OF CHANGES IN NET ASSETS For the years ended December 31, 2011 and 2010
SUBACCOUNTS ----------------------------------------------------------- WELLS FARGO AST BLACKROCK ADVANTAGE VT GLOBAL OPPORTUNITY AST PRUDENTIAL AST NEUBERGER STRATEGIES FUND - CORE BOND BERMAN CORE PORTFOLIO CLASS 1 PORTFOLIO BOND PORTFOLIO ------------- ------------ -------------- -------------- 04/29/2011* 08/26/2011* 10/31/2011* 10/31/2011* TO TO TO TO 12/31/2011 12/31/2011 12/31/2011 12/31/2011 ------------- ------------ -------------- -------------- OPERATIONS Net investment income (loss)......................... $ (8,573,981) $ (8,075) $ (13,496) $ (6,875) Capital gains distributions received....................... 0 0 0 0 Realized gain (loss) on shares redeemed....................... (7,687,566) 2,455 (136) (2,189) Net change in unrealized gain (loss) on investments.......... (43,928,385) 68,169 90,392 32,187 ------------ ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..................... (60,189,932) 62,549 76,760 23,123 ------------ ---------- ----------- ---------- CONTRACT OWNER TRANSACTIONS Contract owner net payments....................... 253,055,390 10 4,956,253 2,439,712 Annuity Payments................ (224,690) 0 0 0 Surrenders, withdrawals and death benefits................. (40,482,449) (72,345) (14,011) (5,109) Net transfers between other subaccounts or fixed rate option......................... 665,067,409 1,351,211 6,022,443 1,849,594 Withdrawal and other charges........................ (1,196,754) (833) (2,190) (1,585) ------------ ---------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS................... 876,218,906 1,278,043 10,962,495 4,282,612 ------------ ---------- ----------- ---------- TOTAL INCREASE (DECREASE) IN NET ASSETS......................... 816,028,974 1,340,592 11,039,255 4,305,735 NET ASSETS Beginning of period............. 0 0 0 0 ------------ ---------- ----------- ---------- End of period................... $816,028,974 $1,340,592 $11,039,255 $4,305,735 ============ ========== =========== ========== Beginning units................. 0 0 0 0 ------------ ---------- ----------- ---------- Units issued.................... 106,540,937 133,947 1,194,460 550,029 Units redeemed.................. (17,444,995) (8,692) (98,202) (122,393) ------------ ---------- ----------- ---------- Ending units.................... 89,095,942 125,255 1,096,258 427,636 ============ ========== =========== ==========
* Date subaccount became available for investment THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS. A51 NOTES TO FINANCIAL STATEMENTS OF PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT DECEMBER 31, 2011 NOTE 1: GENERAL Pruco Life Flexible Premium Variable Annuity Account (the "Account") was established on June 16, 1995 under Arizona law as a separate investment account of Pruco Life Insurance Company ("Pruco Life"), a wholly-owned subsidiary of The Prudential Insurance Company of America ("Prudential"), which is a wholly-owned subsidiary of Prudential Financial, Inc. ("PFI"). Under applicable insurance law, the assets and liabilities of the Account are clearly identified and distinguished from Pruco Life's other assets and liabilities. The portion of the Account's assets applicable to the variable annuity contracts is not chargeable with liabilities arising out of any other business Pruco Life may conduct. Proceeds from purchases of Strategic Partners Variable Annuity One, Strategic Partners Variable Annuity One 3, Strategic Partners Select, Strategic Partners Advisor, Strategic Partners Plus, Strategic Partners FlexElite, Discovery Preferred, Discovery Select, Discovery Choice, Prudential Premier B, L, X Series, Prudential Premier Bb Series, Prudential Premier Retirement X, B, L, C Series, Prudential Premier Advisor and Prudential Premier Retirement Variable Annuity contracts are invested in the Account. The Account is registered under the Investment Company Act of 1940, as amended, as a unit investment trust. The Account is a funding vehicle for individual variable annuity contracts. There are one hundred and thirteen subaccounts within the Account, of which one hundred and twelve had activity during 2011. Each contract offers the option to invest in various subaccounts, each of which invests in either a corresponding portfolio of The Prudential Series Fund, Advanced Series Trust (collectively the "Series Funds") or one of the non-Prudential administered funds (collectively, the "Portfolios"). Investment options vary by contract. The name of each Portfolio and the corresponding subaccount name are as follows: AllianceBernstein VPS Large Cap Growth Portfolio Class B American Century VP Value Fund AST Academic Strategies Asset Allocation Portfolio AST Advanced Strategies Portfolio AST American Century Income & Growth Portfolio AST Balanced Asset Allocation Portfolio AST BlackRock Global Strategies Portfolio (merged from Prudential SP Growth Asset Allocation Portfolio) AST BlackRock Value Portfolio (formerly AST Value Portfolio) AST Bond Portfolio 2016* AST Bond Portfolio 2017 AST Bond Portfolio 2018 AST Bond Portfolio 2019 AST Bond Portfolio 2020 AST Bond Portfolio 2021 AST Bond Portfolio 2022 AST Capital Growth Asset Allocation Portfolio AST CLS Growth Asset Allocation Portfolio AST CLS Moderate Asset Allocation Portfolio AST Cohen & Steers Realty Portfolio AST Federated Aggressive Growth Portfolio (merged from AST Neuberger Berman Small-Cap Growth Portfolio) AST FI Pyramis(R) Asset Allocation Portfolio AST First Trust Balanced Target Portfolio AST First Trust Capital Appreciation Target Portfolio AST Global Real Estate Portfolio AST Goldman Sachs Concentrated Growth Portfolio AST Goldman Sachs Large-Cap Value Portfolio (formerly AST AllianceBernstein Growth & Income Portfolio) AST Goldman Sachs Mid-Cap Growth Portfolio AST Goldman Sachs Small-Cap Value Portfolio AST High Yield Portfolio AST Horizon Growth Asset Allocation Portfolio AST Horizon Moderate Asset Allocation Portfolio AST International Growth Portfolio AST International Value Portfolio AST Investment Grade Bond Portfolio AST J.P. Morgan Strategic Opportunities Portfolio AST Jennison Large-Cap Growth Portfolio AST Jennison Large-Cap Value Portfolio AST JPMorgan International Equity Portfolio AST Large-Cap Value Portfolio AST Lord Abbett Core Fixed Income Portfolio (formerly AST Lord Abbett Bond-Debenture Portfolio) AST Marsico Capital Growth Portfolio AST MFS Global Equity Portfolio AST MFS Growth Portfolio AST Mid-Cap Value Portfolio AST Money Market Portfolio AST Neuberger Berman/LSV Mid-Cap Value Portfolio AST Neuberger Berman Core Bond Portfolio A52 NOTE 1: GENERAL (CONTINUED) AST Neuberger Berman Mid-Cap Growth Portfolio AST Neuberger Berman Small-Cap Growth Portfolio (merged to AST Federated Aggressive Growth Portfolio)** AST Parametric Emerging Markets Equity Portfolio AST PIMCO Limited Maturity Bond Portfolio AST PIMCO Total Return Bond Portfolio AST Preservation Asset Allocation Portfolio AST Prudential Core Bond Portfolio AST QMA US Equity Alpha Portfolio AST Quantitative Modeling Portfolio AST Schroders Multi-Asset World Strategies Portfolio AST Small-Cap Growth Portfolio AST Small-Cap Value Portfolio AST T. Rowe Price Asset Allocation Portfolio AST T. Rowe Price Equity Income Portfolio (formerly AST AllianceBernstein Core Value Portfolio) AST T. Rowe Price Global Bond Portfolio AST T. Rowe Price Large-Cap Growth Portfolio AST T. Rowe Price Natural Resources Portfolio AST Wellington Management Hedged Equity Portfolio (formerly AST Aggressive Asset Allocation Portfolio) AST Western Asset Core Plus Bond Portfolio Credit Suisse Trust International Equity Flex III Portfolio** Davis Value Portfolio Franklin Templeton VIP Founding Funds Allocation Fund FTVIP Franklin Small-Mid Cap Growth Securities Fund - Class 2 Invesco V.I. Core Equity Fund Janus Aspen Janus Portfolio - Institutional Shares Janus Aspen Janus Portfolio - Service Shares Janus Aspen Overseas Portfolio - Institutional Shares MFS(R) Growth Series - Initial Class MFS(R) Research Series - Initial Class NVIT Developing Markets Fund ProFund VP Consumer Goods Portfolio ProFund VP Consumer Services ProFund VP Financials ProFund VP Health Care ProFund VP Industrials ProFund VP Large-Cap Growth ProFund VP Large-Cap Value ProFund VP Mid-Cap Growth ProFund VP Mid-Cap Value ProFund VP Real Estate ProFund VP Small-Cap Growth ProFund VP Small-Cap Value ProFund VP Telecommunications ProFund VP Utilities Prudential Conservative Balanced Portfolio Prudential Diversified Bond Portfolio Prudential Equity Portfolio Prudential Flexible Managed Portfolio Prudential Global Portfolio Prudential High Yield Bond Portfolio Prudential Jennison 20/20 Focus Portfolio Prudential Jennison Portfolio Prudential Money Market Portfolio Prudential Natural Resources Portfolio Prudential Small Capitalization Stock Portfolio Prudential SP Growth Asset Allocation Portfolio (merged to AST BlackRock Global Strategies Portfolio)** Prudential SP International Growth Portfolio Prudential SP International Value Portfolio Prudential SP Small Cap Value Portfolio Prudential Stock Index Portfolio Prudential Value Portfolio Prudential SP Prudential U.S. Emerging Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price International Stock Portfolio Wells Fargo Advantage VT Core Equity Portfolio Share Class 1 (merged to Wells Fargo Advantage VT Opportunity Fund - Class 1)** Wells Fargo Advantage VT International Equity Portfolio Share Class 1 Wells Fargo Advantage VT Omega Growth Portfolio Share Class 1 Wells Fargo Advantage VT Opportunity Fund - Class 1 (merged from Wells Fargo Advantage VT Core Equity Portfolio Share Class 1) Wells Fargo Advantage VT Small Cap Growth Portfolio Share Class 1 Wells Fargo Advantage VT Small Cap Value Portfolio Share Class 1 -------- * Subaccount available for investment, but had no assets as of December 31, 2011 ** Subaccount no longer available for investment as of December 31, 2011 The Series Funds are diversified open-ended management investment companies, and each portfolio of the Series Funds is managed by affiliates of Prudential. Each of the variable investment options of the Account indirectly bears exposure to the market, credit and liquidity risks of the portfolio in which it invests. These financial statements should be read in conjunction with the financial statements and footnotes of the Series Funds and externally managed portfolios. Additional information on these subaccounts is available upon request to the appropriate companies. At December 31, 2011, there were no balances or transactions for the period then ended pertaining to AST Bond Portfolio 2016. The following table sets forth the dates on which mergers took place in the Account along with relevant information pertaining to each merger. The transfers from the old subaccounts to the new subaccounts are reflected in the Statement of Changes in Net Assets for the A53 NOTE 1: GENERAL (CONTINUED) year ended December 31, 2011 as net transfers between subaccounts. The transfers occurred as follows:
REMOVED PORTFOLIO SURVIVING PORTFOLIO APRIL 29, 2011 ------------------------------ -------------------------- AST NEUBERGER BERMAN SMALL-CAP AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO GROWTH PORTFOLIO ------------------------------ -------------------------- Shares.................... 4,197,465 10,146,241 Net asset value per share. $ 10.24 $ 10.01 Net assets before merger.. $ 42,982,042 $ 58,581,833 Net assets after merger... $ 0 $101,563,875 PRUDENTIAL SP GROWTH ASSET AST BLACKROCK GLOBAL ALLOCATION PORTFOLIO STRATEGIES PORTFOLIO ------------------------------ -------------------------- Shares.................... 67,455,389 64,419,897 Net asset value per share. $ 9.55 $ 10.00 Net assets before merger.. $644,198,965 $ 0 Net assets after merger... $ 0 $644,198,965 REMOVED PORTFOLIO SURVIVING PORTFOLIO AUGUST 26, 2011 ------------------------------ -------------------------- WELLS FARGO ADVANTAGE VT CORE WELLS FARGO ADVANTAGE VT EQUITY PORTFOLIO SHARE CLASS 1 OPPORTUNITY FUND - CLASS 1 ------------------------------ -------------------------- Shares.................... 106,493 81,746 Net asset value per share. $ 12.68 $ 16.52 Net assets before merger.. $ 1,350,431 $ 0 Net assets after merger... $ 0 $ 1,350,431
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Investments--The investments in shares of the portfolios are stated at the net asset value of the respective portfolios, which is obtained from the custodian and is based on the fair value of the underlying securities in the respective portfolios. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Subaccount. Security Transactions--Realized gains and losses on security transactions are determined based upon an average cost of the investment sold. Purchase and sale transactions are recorded as of the trade date of the security being purchased or sold. Dividend Income and Distributions Received--Dividend and capital gain distributions received are reinvested in additional shares of the portfolios and are recorded on the ex-distribution date. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENTS In May 2011, the Financial Accounting Standards Board ("FASB") issued updated guidance regarding the fair value measurements and disclosure requirements. The updated guidance clarifies existing guidance related to the application of fair value measurement methods and requires expanded disclosures. This new guidance is effective for the first interim or annual reporting period beginning after December 15, 2011 and should be applied prospectively. The Account expects this guidance to have an impact on its financial statement disclosures but limited, if any, impact on the Account's financial position or results of operations. A54 NOTE 3: FAIR VALUE Fair Value Measurement--Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance around fair value established a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1--Fair value is based on unadjusted quoted prices in active markets that are accessible to the Account for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following characteristics for the measured asset/liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information publicly available. Investments which have a net asset value which is readily available to the public are classified as Level 1. Level 2--Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset, either directly or indirectly, for substantially the full term of the asset through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. Investments which have a net asset value which is only available to institutional clients are classified as Level 2. Level 3--Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the Account's assumptions about the inputs market participants would use in pricing the asset or liability. As of December 31, 2011, the Account did not have any Level 3 assets or liabilities. As of December 31, 2011, all funds have been classified as Level 1 with the exception of proprietary funds, consisting of "Series Funds", and any non-proprietary funds not available for public investment, which are classified as level 2. The Level 2 fund balances of assets and liabilities measured at fair value on a recurring basis, as of December 31, 2011, are presented below. Proprietary Funds ("Series Funds")....................... $42,865,405,407 AllianceBernstein VPS Large Cap Growth Portfolio Class B. $ 4,531,724 Davis Value Portfolio.................................... $ 28,266,090 Janus Aspen Janus Portfolio - Service Shares............. $ 10,839,280 Janus Aspen Janus Portfolio - Institutional Shares....... $ 52,764,624 Janus Aspen Overseas Portfolio - Institutional Shares.... $ 96,776,335 NVIT Developing Markets Fund............................. $ 13,856,365 ProFund VP Consumer Services............................. $ 122,604 ProFund VP Consumer Goods Portfolio...................... $ 358,247 ProFund VP Financials.................................... $ 429,486 ProFund VP Health Care................................... $ 693,261 ProFund VP Industrials................................... $ 170,834 ProFund VP Mid-Cap Growth................................ $ 325,787 ProFund VP Mid-Cap Value................................. $ 665,093 ProFund VP Real Estate................................... $ 386,146 ProFund VP Small-Cap Growth.............................. $ 403,047 ProFund VP Small-Cap Value............................... $ 403,912 ProFund VP Telecommunications............................ $ 132,597 ProFund VP Utilities..................................... $ 588,644 ProFund VP Large-Cap Growth.............................. $ 690,914
A55 NOTE 3: FAIR VALUE (CONTINUED) ProFund VP Large-Cap Value............................................ $ 850,786 Wells Fargo Advantage VT International Equity Portfolio Share Class 1. $ 648,670 Wells Fargo Advantage VT Omega Growth Portfolio Share Class 1......... $1,249,300 Wells Fargo Advantage VT Opportunity Fund - Class 1................... $1,340,592 Wells Fargo Advantage VT Small Cap Growth Portfolio Share Class 1..... $ 544,514 Wells Fargo Advantage VT Small Cap Value Portfolio Share Class 1...... $1,409,239
TRANSFERS BETWEEN LEVEL 1 AND LEVEL 2 During 2011, there were no significant transfers from Level 1 to Level 2. There were significant transfers from Level 2 to Level 1 of $100,795,946 in respect of the Invesco V.I. Core Equity Fund. The transfers are based on values as of December 31, 2010. Investments are transferred out of Level 1 and into Level 2 when a net asset value is no longer readily available to the public and conversely transferred out of Level 2 and into Level 1 when a net asset value becomes readily available to the public. As there are no Level 3 assets for either period, a presentation of the reconciliation of Level 3 assets is not required at this time. In addition, there are no other financial assets or liabilities valued on a non-recurring basis. NOTE 4: TAXES Pruco Life is taxed as a "life insurance company" as defined by the Internal Revenue Code. The results of operations of the Account form a part of PFI's consolidated federal tax return. No federal income taxes are payable by the Account. As such, no provision for tax liability has been recorded in these financial statements. Prudential management will review periodically the status of the policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts. NOTE 5: PURCHASES AND SALES OF INVESTMENTS The aggregate costs of purchases and proceeds from sales, excluding distributions received and reinvested, of investments in the portfolios for the year ended December 31, 2011 were as follows:
PURCHASES SALES ----------- ------------- Prudential Money Market Portfolio..................... $70,860,154 $(105,188,577) Prudential Diversified Bond Portfolio................. $ 3,454,190 $ (32,558,689) Prudential Equity Portfolio........................... $ 1,678,821 $ (36,553,421) Prudential Flexible Managed Portfolio................. $ 245,225 $ (2,118,412) Prudential Conservative Balanced Portfolio............ $ 306,712 $ (3,532,685) Prudential Value Portfolio............................ $ 3,996,373 $ (57,896,892) Prudential High Yield Bond Portfolio.................. $12,396,373 $ (49,316,807) Prudential Natural Resources Portfolio................ $ 211,535 $ (3,299,170) Prudential Stock Index Portfolio...................... $ 6,238,644 $ (53,987,798) Prudential Global Portfolio........................... $ 1,315,056 $ (12,274,205) Prudential Jennison Portfolio......................... $ 2,582,495 $ (50,381,268) Prudential Small Capitalization Stock Portfolio....... $ 1,047,105 $ (10,415,856) T. Rowe Price International Stock Portfolio........... $ 578,668 $ (3,993,136) T. Rowe Price Equity Income Portfolio................. $ 861,307 $ (9,216,739) Invesco V.I. Core Equity Fund......................... $ 155,694 $ (14,772,623) Janus Aspen Janus Portfolio - Institutional Shares.... $ 357,944 $ (9,246,376) Janus Aspen Overseas Portfolio - Institutional Shares. $ 3,250,714 $ (24,611,622) MFS(R) Research Series - Initial Class................ $ 262,752 $ (2,623,053) MFS(R) Growth Series - Initial Class.................. $ 537,394 $ (9,232,033) American Century VP Value Fund........................ $ 810,460 $ (3,572,018) FTVIP Franklin Small-Mid Cap Growth Securities Fund... $ 1,625,733 $ (5,094,978) Prudential Jennison 20/20 Focus Portfolio............. $ 3,724,313 $ (9,695,233) Davis Value Portfolio................................. $ 450,382 $ (4,982,091)
A56 NOTE 5: PURCHASES AND SALES OF INVESTMENTS (CONTINUED)
PURCHASES SALES --------------- ---------------- AllianceBernstein VPS Large Cap Growth Portfolio Class B. $ 723,937 $ (1,212,660) Prudential SP Small Cap Value Portfolio.................. $ 3,654,141 $ (24,425,462) Janus Aspen Janus Portfolio - Service Shares............. $ 262,402 $ (2,797,198) Prudential SP Prudential U.S. Emerging Growth Portfolio.. $ 3,897,160 $ (34,978,481) Prudential SP Growth Asset Allocation Portfolio.......... $ 2,933,141 $ (679,426,618) Prudential SP International Growth Portfolio............. $ 1,633,319 $ (10,801,914) Prudential SP International Value Portfolio.............. $ 2,752,927 $ (11,274,131) AST Goldman Sachs Large-Cap Value Portfolio.............. $ 100,720,170 $ (65,057,747) AST American Century Income & Growth Portfolio........... $ 83,109,491 $ (53,866,239) AST Schroders Multi-Asset World Strategies Portfolio..... $ 1,483,884,844 $ (1,089,732,640) AST Cohen & Steers Realty Portfolio...................... $ 110,585,418 $ (83,904,639) AST J.P. Morgan Strategic Opportunities Portfolio........ $ 572,034,069 $ (360,597,007) AST BlackRock Value Portfolio............................ $ 78,772,536 $ (41,434,780) AST Neuberger Berman Small-Cap Growth Portfolio.......... $ 16,057,523 $ (45,453,631) AST High Yield Portfolio................................. $ 114,428,152 $ (78,446,097) AST Federated Aggressive Growth Portfolio................ $ 118,977,041 $ (81,217,799) AST Mid-Cap Value Portfolio.............................. $ 57,459,595 $ (43,443,760) AST Small-Cap Value Portfolio............................ $ 50,973,860 $ (41,508,578) AST Goldman Sachs Concentrated Growth Portfolio.......... $ 62,640,083 $ (60,983,177) AST Goldman Sachs Mid-Cap Growth Portfolio............... $ 117,818,411 $ (101,484,288) AST Large-Cap Value Portfolio............................ $ 72,547,515 $ (36,727,106) AST Lord Abbett Core Fixed Income Portfolio.............. $ 241,164,273 $ (54,710,339) AST Marsico Capital Growth Portfolio..................... $ 126,160,002 $ (100,107,991) AST MFS Growth Portfolio................................. $ 36,982,418 $ (29,445,975) AST Neuberger Berman Mid-Cap Growth Portfolio............ $ 134,360,300 $ (92,264,979) AST Neuberger Berman/LSV Mid-Cap Value Portfolio......... $ 109,366,394 $ (89,923,299) AST PIMCO Limited Maturity Bond Portfolio................ $ 127,819,376 $ (69,418,826) AST T. Rowe Price Equity Income Portfolio................ $ 56,922,964 $ (42,750,550) AST QMA US Equity Alpha Portfolio........................ $ 32,615,794 $ (22,909,918) AST T. Rowe Price Natural Resources Portfolio............ $ 278,790,253 $ (232,705,516) AST T. Rowe Price Asset Allocation Portfolio............. $ 2,327,686,287 $ (1,390,153,026) AST MFS Global Equity Portfolio.......................... $ 109,213,906 $ (80,173,503) AST JPMorgan International Equity Portfolio.............. $ 113,153,829 $ (95,197,431) AST T. Rowe Price Global Bond Portfolio.................. $ 102,297,650 $ (62,296,910) AST Wellington Management Hedged Equity Portfolio........ $ 201,481,288 $ (77,457,767) AST Capital Growth Asset Allocation Portfolio............ $ 2,269,338,268 $ (2,270,451,359) AST Academic Strategies Asset Allocation Portfolio....... $ 1,989,589,685 $ (1,644,537,096) AST Balanced Asset Allocation Portfolio.................. $ 2,158,973,130 $ (1,806,446,444) AST Preservation Asset Allocation Portfolio.............. $ 1,314,078,308 $ (665,319,204) AST First Trust Balanced Target Portfolio................ $ 1,228,892,348 $ (824,231,423) AST First Trust Capital Appreciation Target Portfolio.... $ 1,844,805,924 $ (1,533,191,228) AST Advanced Strategies Portfolio........................ $ 2,018,513,607 $ (1,364,504,889) AST T. Rowe Price Large-Cap Growth Portfolio............. $ 196,846,500 $ (160,606,623) AST Money Market Portfolio............................... $ 371,207,015 $ (263,677,112) AST Small-Cap Growth Portfolio........................... $ 116,304,529 $ (87,852,086) AST PIMCO Total Return Bond Portfolio.................... $ 1,043,172,511 $ (803,162,414) AST International Value Portfolio........................ $ 60,813,936 $ (46,561,794) AST International Growth Portfolio....................... $ 81,292,285 $ (47,738,844) NVIT Developing Markets Fund............................. $ 2,365,782 $ (9,402,850) AST Investment Grade Bond Portfolio...................... $18,935,684,663 $(11,698,771,856) AST Western Asset Core Plus Bond Portfolio............... $ 256,478,801 $ (169,177,044) AST Bond Portfolio 2018.................................. $ 227,245,710 $ (79,044,781) AST Bond Portfolio 2019.................................. $ 9,461,715 $ (15,129,375) AST Global Real Estate Portfolio......................... $ 41,545,551 $ (32,381,760) AST Parametric Emerging Markets Equity Portfolio......... $ 194,801,604 $ (173,470,556) Franklin Templeton VIP Founding Funds Allocation Fund.... $ 1,563,405,759 $ (1,256,189,032) AST Goldman Sachs Small-Cap Value Portfolio.............. $ 139,025,983 $ (103,859,232) AST CLS Growth Asset Allocation Portfolio................ $ 1,331,419,140 $ (1,020,791,620) AST CLS Moderate Asset Allocation Portfolio.............. $ 1,224,750,594 $ (784,959,397) AST Horizon Growth Asset Allocation Portfolio............ $ 863,740,097 $ (604,842,437) AST Horizon Moderate Asset Allocation Portfolio.......... $ 829,661,711 $ (519,749,505)
A57 NOTE 5: PURCHASES AND SALES OF INVESTMENTS (CONTINUED)
PURCHASES SALES ------------ ------------- AST FI Pyramis(R) Asset Allocation Portfolio.......................... $787,743,088 $(526,150,314) ProFund VP Consumer Services.......................................... $ 308,645 $ (248,159) ProFund VP Consumer Goods Portfolio................................... $ 584,773 $ (351,820) ProFund VP Financials................................................. $ 442,160 $ (833,547) ProFund VP Health Care................................................ $ 804,065 $ (1,007,602) ProFund VP Industrials................................................ $ 299,582 $ (320,591) ProFund VP Mid-Cap Growth............................................. $ 1,258,813 $ (1,427,589) ProFund VP Mid-Cap Value.............................................. $ 1,025,249 $ (786,759) ProFund VP Real Estate................................................ $ 317,118 $ (624,174) ProFund VP Small-Cap Growth........................................... $ 1,207,763 $ (1,283,799) ProFund VP Small-Cap Value............................................ $ 726,617 $ (564,616) ProFund VP Telecommunications......................................... $ 159,589 $ (265,442) ProFund VP Utilities.................................................. $ 655,359 $ (418,797) ProFund VP Large-Cap Growth........................................... $ 1,057,632 $ (1,025,814) ProFund VP Large-Cap Value............................................ $ 2,234,915 $ (2,039,336) AST Jennison Large-Cap Value Portfolio................................ $ 49,698,553 $ (35,627,538) AST Jennison Large-Cap Growth Portfolio............................... $ 57,178,132 $ (38,453,058) Credit Suisse Trust International Equity Flex III Portfolio........... $ 188,255 $ (8,815,943) AST Bond Portfolio 2020............................................... $ 9,449,918 $ (24,720,913) AST Bond Portfolio 2017............................................... $264,443,636 $(100,138,969) AST Bond Portfolio 2021............................................... $342,842,551 $(156,201,064) Wells Fargo Advantage VT Core Equity Portfolio Share Class 1.......... $ 6,331 $ (1,953,181) Wells Fargo Advantage VT International Equity Portfolio Share Class 1. $ 16,016 $ (243,199) Wells Fargo Advantage VT Omega Growth Portfolio Share Class 1......... $ 19,120 $ (603,005) Wells Fargo Advantage VT Small Cap Growth Portfolio Share Class 1..... $ 64,767 $ (294,317) Wells Fargo Advantage VT Small Cap Value Portfolio Share Class 1...... $ 71,537 $ (698,920) AST Bond Portfolio 2022............................................... $121,926,925 $ (41,525,813) AST Quantitative Modeling Portfolio................................... $ 83,831,791 $ (1,177,837) AST BlackRock Global Strategies Portfolio............................. $991,747,052 $(124,102,126) Wells Fargo Advantage VT Opportunity Fund-Class 1..................... $ 1,365,293 $ (95,325) AST Prudential Core Bond Portfolio.................................... $ 11,622,490 $ (673,491) AST Neuberger Berman Core Bond Portfolio.............................. $ 5,208,355 $ (932,618)
NOTE 6: RELATED PARTY TRANSACTIONS PFI and its affiliates perform various services on behalf of the portfolios of the Series Funds in which the Account invests and may receive fees for the services performed. These services include, among other things, investment management, subadvisory, shareholder communications, preparation, postage, fund transfer agency and various other record keeping, administrative and customer service functions. The Prudential Series Fund has entered into a management agreement with Prudential Investments LLC ("PI") and the Advanced Series Trust has entered into an agreement with PI and AST Investment Services, Inc, both indirect, wholly-owned subsidiaries of PFI (together the "Investment Managers"). Pursuant to these agreements, the Investment Managers have responsibility for all investment advisory services and supervise the subadvisors' performance of such services with respect to each portfolio. The Investment Managers entered into subadvisory agreements with several subadvisors, including Prudential Investment Management, Inc. and Jennison Associates LLC, which are indirect, wholly-owned subsidiaries of PFI. The Series Funds have distribution agreements with Prudential Investment Management Services LLC ("PIMS"), an indirect, wholly-owned subsidiary of PFI, which acts as the distributor of the Class I and Class II shares of the Series Funds. No distribution or service fees are paid to PIMS as distributor of the Class I shares of the portfolios of the Series Funds. However, service fees are paid to PIMS as distributor of the Class II shares of the portfolios of the Series Funds. The Investment Managers have agreed to reimburse certain portfolios of the Series Funds the portion of the management fee for that Portfolio equal to A58 NOTE 6: RELATED PARTY TRANSACTIONS (CONTINUED) the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, brokerage commissions, and acquired fund expenses, as applicable) exceeds various agreed upon percentages of the portfolio's average daily net assets. Prudential Mutual Fund Services LLC, an affiliate of the Investment Managers and an indirect, wholly-owned subsidiary of PFI, serves as the transfer agent of each portfolio of the Series Funds. The Account has extensive transactions and relationships with Prudential and other affiliates. Due to these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among wholly unrelated parties. NOTE 7: FINANCIAL HIGHLIGHTS Pruco Life sells a number of variable annuity products that are funded by the Account. These products have unique combinations of features and fees that are charged against the contract owner's account balance. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. The following table was developed by determining which products offered by Pruco Life and funded by the Account have the lowest and highest expense ratio. Only product designs within each subaccount that had units outstanding during the respective periods were considered when determining the lowest and highest expense ratio. The summary may not reflect the minimum and maximum contract charges offered by Pruco Life as contract owners may not have selected all available and applicable contract options.
AT YEAR ENDED FOR YEAR ENDED -------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- --------------------- -------- ---------- ----------------- ------------------ PRUDENTIAL MONEY MARKET PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 171,807 $0.99939 to $10.22387 $207,800 0.02% 1.00% to 2.10% -2.03% to -0.96% December 31, 2010 198,480 $1.01818 to $10.32322 $242,080 0.03% 1.00% to 2.45% -2.36% to -0.96% December 31, 2009 193,139 $1.03827 to $10.51904 $228,214 0.44% 1.00% to 2.10% -1.91% to -0.60% December 31, 2008 322,560 $1.05484 to $10.69759 $382,009 2.58% 1.00% to 2.45% 0.19% to 1.63% December 31, 2007 244,095 $1.04749 to $10.66982 $291,003 4.93% 1.00% to 2.20% 2.79% to 3.63% PRUDENTIAL DIVERSIFIED BOND PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 102,710 $1.86014 to $ 2.24741 $230,380 4.29% 1.35% to 1.65% 5.78% to 6.08% December 31, 2010 114,526 $1.75857 to $ 2.11964 $242,277 4.20% 1.35% to 1.65% 8.78% to 9.10% December 31, 2009 127,376 $1.61669 to $ 1.94392 $247,133 4.69% 1.35% to 1.65% 18.56% to 18.91% December 31, 2008 144,786 $1.36361 to $ 1.63556 $236,342 5.11% 1.35% to 1.65% -5.02% to -4.74% December 31, 2007 177,980 $1.43562 to $ 1.71791 $305,167 5.00% 1.35% to 1.65% 4.00% to 4.31% PRUDENTIAL EQUITY PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 103,849 $1.15047 to $ 1.96226 $188,373 0.68% 1.35% to 2.00% -5.36% to -4.75% December 31, 2010 120,853 $1.21137 to $ 2.06117 $229,570 0.79% 1.35% to 2.00% 9.71% to 10.41% December 31, 2009 137,058 $1.10036 to $ 1.86775 $236,025 1.60% 1.35% to 2.00% 35.47% to 36.32% December 31, 2008 155,514 $0.80955 to $ 1.37073 $197,063 1.44% 1.35% to 2.00% -39.37% to -38.98% December 31, 2007 183,783 $1.33060 to $ 2.24766 $382,486 1.01% 1.35% to 2.00% 7.17% to 7.86% PRUDENTIAL FLEXIBLE MANAGED PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 7,096 $1.91077 to $ 1.91077 $ 13,559 1.97% 1.40% to 1.40% 2.90% to 2.90% December 31, 2010 7,982 $1.85698 to $ 1.85698 $ 14,822 2.24% 1.40% to 1.40% 10.48% to 10.48% December 31, 2009 9,162 $1.68077 to $ 1.68077 $ 15,399 3.51% 1.40% to 1.40% 18.30% to 18.30% December 31, 2008 10,713 $1.42078 to $ 1.42078 $ 15,220 2.99% 1.40% to 1.40% -25.86% to -25.86% December 31, 2007 13,097 $1.91640 to $ 1.91640 $ 25,100 2.25% 1.40% to 1.40% 4.89% to 4.89% PRUDENTIAL CONSERVATIVE BALANCED PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 10,584 $1.91117 to $ 1.91117 $ 20,228 2.28% 1.40% to 1.40% 3.16% to 3.16% December 31, 2010 12,140 $1.85264 to $ 1.85264 $ 22,491 2.45% 1.40% to 1.40% 10.20% to 10.20% December 31, 2009 14,098 $1.68120 to $ 1.68120 $ 23,701 3.77% 1.40% to 1.40% 18.36% to 18.36% December 31, 2008 16,534 $1.42042 to $ 1.42042 $ 23,485 3.49% 1.40% to 1.40% -22.49% to -22.49% December 31, 2007 20,216 $1.83259 to $ 1.83259 $ 37,048 2.81% 1.40% to 1.40% 4.65% to 4.65%
A59 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED -------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- --------------------- -------- ---------- ----------------- ------------------ PRUDENTIAL VALUE PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 154,555 $1.27064 to $ 2.51241 $283,061 1.02% 1.35% to 2.00% -7.43% to -6.83% December 31, 2010 180,228 $1.37128 to $ 2.69800 $353,298 0.99% 1.35% to 2.00% 11.63% to 12.34% December 31, 2009 112,546 $1.22726 to $10.34659 $228,866 2.07% 1.35% to 2.00% 38.67% to 40.04% December 31, 2008 129,517 $0.88118 to $ 1.71665 $188,188 1.86% 1.35% to 2.00% -43.43% to -43.07% December 31, 2007 158,069 $1.55562 to $ 3.01663 $400,689 1.31% 1.35% to 2.00% 1.15% to 1.81% PRUDENTIAL HIGH YIELD BOND PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 59,815 $1.74036 to $12.08103 $219,331 7.45% 1.35% to 2.50% 2.54% to 3.69% December 31, 2010 67,908 $1.68340 to $11.65524 $244,422 8.32% 1.35% to 2.60% 11.16% to 12.53% December 31, 2009 77,867 $1.50037 to $10.36252 $250,477 5.55% 1.35% to 2.00% 3.33% to 45.21% December 31, 2008 74,439 $1.03639 to $ 1.28867 $ 95,747 8.53% 1.35% to 1.65% -23.54% to -23.32% December 31, 2007 95,300 $1.35549 to $ 1.68122 $159,924 7.01% 1.35% to 1.65% 0.96% to 1.26% PRUDENTIAL NATURAL RESOURCES PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 1,345 $7.43963 to $ 7.43963 $ 10,005 0.19% 1.40% to 1.40% -20.15% to -20.15% December 31, 2010 1,685 $9.31742 to $ 9.31742 $ 15,700 0.43% 1.40% to 1.40% 26.22% to 26.22% December 31, 2009 1,900 $7.38206 to $ 7.38206 $ 14,027 0.72% 1.40% to 1.40% 74.66% to 74.66% December 31, 2008 2,069 $4.22664 to $ 4.22664 $ 8,745 0.79% 1.40% to 1.40% -53.65% to -53.65% December 31, 2007 2,521 $9.11983 to $ 9.11983 $ 22,994 0.60% 1.40% to 1.40% 46.23% to 46.23% PRUDENTIAL STOCK INDEX PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 169,900 $0.86409 to $ 1.97156 $276,321 1.62% 1.35% to 2.00% -0.05% to 0.60% December 31, 2010 197,334 $0.86195 to $ 1.96089 $318,094 1.77% 1.35% to 2.00% 12.34% to 13.06% December 31, 2009 224,226 $0.76501 to $ 1.73514 $319,014 2.82% 1.35% to 2.00% 23.61% to 24.41% December 31, 2008 252,566 $0.61713 to $ 1.39552 $288,792 2.26% 1.35% to 2.00% -38.18% to -37.77% December 31, 2007 299,309 $0.99525 to $ 2.24407 $551,545 1.51% 1.35% to 2.00% 3.03% to 3.69% PRUDENTIAL GLOBAL PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 39,339 $0.79560 to $ 1.73216 $ 59,072 1.57% 1.35% to 2.00% -8.80% to -8.21% December 31, 2010 45,509 $0.86969 to $ 1.88807 $ 74,473 1.58% 1.35% to 2.00% 10.53% to 11.24% December 31, 2009 51,131 $0.78450 to $ 1.69810 $ 74,998 2.91% 1.35% to 2.00% 28.83% to 29.64% December 31, 2008 57,722 $0.60723 to $ 1.31055 $ 65,031 1.82% 1.35% to 2.00% -44.04% to -43.68% December 31, 2007 67,856 $1.08191 to $ 2.32839 $135,883 1.05% 1.35% to 2.00% 8.30% to 9.00% PRUDENTIAL JENNISON PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 156,398 $0.71775 to $ 2.08665 $263,805 0.30% 1.35% to 2.00% -1.67% to -1.03% December 31, 2010 182,468 $0.72779 to $ 2.10942 $309,345 0.44% 1.35% to 2.00% 9.76% to 10.46% December 31, 2009 193,983 $0.66114 to $ 1.91072 $302,738 0.68% 1.35% to 2.00% 40.23% to 41.12% December 31, 2008 223,476 $0.47008 to $ 1.35460 $246,262 0.52% 1.35% to 2.00% -38.51% to -38.11% December 31, 2007 269,108 $0.76233 to $ 2.19002 $479,398 0.28% 1.35% to 2.00% 9.79% to 10.50% PRUDENTIAL SMALL CAPITALIZATION STOCK PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 19,186 $2.10724 to $ 3.18624 $ 53,031 0.81% 1.35% to 1.65% -1.07% to -0.78% December 31, 2010 22,234 $2.13000 to $ 3.21282 $ 62,028 0.82% 1.35% to 1.65% 23.89% to 24.25% December 31, 2009 24,533 $1.71932 to $ 2.58701 $ 55,161 1.86% 1.35% to 1.65% 23.16% to 23.51% December 31, 2008 28,369 $1.39606 to $ 2.09568 $ 51,677 1.16% 1.35% to 1.65% -32.16% to -31.96% December 31, 2007 35,286 $2.05789 to $ 3.08163 $ 94,435 0.55% 1.35% to 1.65% -2.16% to -1.86% T. ROWE PRICE INTERNATIONAL STOCK PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 16,365 $0.92976 to $ 1.26936 $ 20,660 1.48% 1.35% to 1.65% -14.25% to -14.00% December 31, 2010 18,469 $1.08424 to $ 1.47671 $ 27,104 0.93% 1.35% to 1.65% 12.60% to 12.92% December 31, 2009 19,690 $0.96293 to $ 1.30828 $ 25,610 2.73% 1.35% to 1.65% 49.91% to 50.37% December 31, 2008 21,047 $0.64232 to $ 0.87049 $ 18,227 1.89% 1.35% to 1.65% -49.54% to -49.39% December 31, 2007 24,452 $1.27297 to $ 1.72087 $ 41,885 1.33% 1.35% to 1.65% 11.19% to 11.52% T. ROWE PRICE EQUITY INCOME PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 31,233 $1.34518 to $ 2.08566 $ 64,734 1.73% 1.35% to 1.65% -2.32% to -2.03% December 31, 2010 34,755 $1.37716 to $ 2.13003 $ 73,513 1.89% 1.35% to 1.65% 13.16% to 13.49% December 31, 2009 38,561 $1.21705 to $ 1.87780 $ 71,894 2.00% 1.35% to 1.65% 23.56% to 23.93% December 31, 2008 43,431 $0.98503 to $ 1.51606 $ 65,377 2.30% 1.35% to 1.65% -37.15% to -36.96% December 31, 2007 52,567 $1.56731 to $ 2.40627 $125,668 1.67% 1.35% to 1.65% 1.58% to 1.88%
A60 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ------------------------------------ ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------ -------------------- -------- ---------- ----------------- ------------------ INVESCO V.I. CORE EQUITY FUND ------------------------------------------------------------------------------------ December 31, 2011 49,252 $0.93773 to $1.78573 $ 86,494 0.94% 1.35% to 1.65% -1.68% to -1.40% December 31, 2010 56,457 $0.95379 to $1.81190 $100,796 0.96% 1.35% to 1.65% 7.77% to 8.09% December 31, 2009 64,231 $0.88500 to $1.67706 $106,158 1.83% 1.35% to 1.65% 26.20% to 26.61% December 31, 2008 72,675 $0.70126 to $1.32547 $ 95,030 2.04% 1.35% to 1.65% -31.28% to -31.08% December 31, 2007 87,692 $1.02044 to $1.92405 $166,656 1.04% 1.35% to 1.65% 6.35% to 6.66% JANUS ASPEN JANUS PORTFOLIO - INSTITUTIONAL SHARES ------------------------------------------------------------------------------------ December 31, 2011 35,341 $0.73068 to $1.52032 $ 52,765 0.58% 1.35% to 1.65% -6.83% to -6.57% December 31, 2010 40,445 $0.78421 to $1.62786 $ 64,687 1.09% 1.35% to 1.65% 12.67% to 12.99% December 31, 2009 45,286 $0.69604 to $1.44140 $ 64,093 0.53% 1.35% to 1.65% 34.14% to 34.54% December 31, 2008 51,812 $0.51888 to $1.07198 $ 54,523 0.73% 1.35% to 1.65% -40.70% to -40.53% December 31, 2007 61,484 $0.87503 to $1.80324 $109,043 0.70% 1.35% to 1.65% 13.21% to 13.55% JANUS ASPEN OVERSEAS PORTFOLIO - INSTITUTIONAL SHARES ------------------------------------------------------------------------------------ December 31, 2011 32,274 $1.68615 to $3.04341 $ 96,776 0.47% 1.35% to 1.65% -33.27% to -33.07% December 31, 2010 37,127 $2.52677 to $4.54962 $166,661 0.68% 1.35% to 1.65% 23.28% to 23.64% December 31, 2009 42,555 $2.04970 to $3.68158 $154,549 0.56% 1.35% to 1.65% 76.64% to 77.17% December 31, 2008 48,523 $1.16037 to $2.07911 $ 99,657 1.20% 1.35% to 1.65% -52.89% to -52.75% December 31, 2007 58,643 $2.46327 to $4.40276 $254,812 0.61% 1.35% to 1.65% 26.22% to 26.60% MFS(R) RESEARCH SERIES - INITIAL CLASS ------------------------------------------------------------------------------------ December 31, 2011 10,468 $1.00196 to $1.62522 $ 16,928 0.85% 1.35% to 1.65% -2.07% to -1.78% December 31, 2010 11,770 $1.02309 to $1.65543 $ 19,367 0.94% 1.35% to 1.65% 14.02% to 14.36% December 31, 2009 13,511 $0.89726 to $1.44843 $ 19,464 1.49% 1.35% to 1.65% 28.43% to 28.80% December 31, 2008 15,464 $0.69863 to $1.12501 $ 17,310 0.54% 1.35% to 1.65% -37.13% to -36.94% December 31, 2007 18,594 $1.11117 to $1.78496 $ 33,009 0.72% 1.35% to 1.65% 11.36% to 11.69% MFS(R) GROWTH SERIES - INITIAL CLASS ------------------------------------------------------------------------------------ December 31, 2011 30,886 $0.88728 to $1.65595 $ 50,595 0.19% 1.35% to 1.65% -1.95% to -1.65% December 31, 2010 35,471 $0.90488 to $1.68460 $ 59,323 0.12% 1.35% to 1.65% 13.46% to 13.80% December 31, 2009 40,132 $0.79756 to $1.48114 $ 59,016 0.32% 1.35% to 1.65% 35.43% to 35.83% December 31, 2008 45,316 $0.58889 to $1.09086 $ 49,106 0.23% 1.35% to 1.65% -38.43% to -38.25% December 31, 2007 54,292 $0.95653 to $1.76744 $ 95,336 0.00% 1.35% to 1.65% 19.20% to 19.55% AMERICAN CENTURY VP VALUE FUND ------------------------------------------------------------------------------------ December 31, 2011 12,509 $1.63512 to $1.98177 $ 24,681 2.03% 1.35% to 1.65% -0.62% to -0.33% December 31, 2010 13,742 $1.64535 to $1.98934 $ 27,219 2.20% 1.35% to 1.65% 11.58% to 11.91% December 31, 2009 15,043 $1.47454 to $1.77852 $ 26,635 5.79% 1.35% to 1.65% 17.92% to 18.27% December 31, 2008 17,240 $1.25041 to $1.50461 $ 25,826 2.56% 1.35% to 1.65% -27.97% to -27.75% December 31, 2007 21,699 $1.73593 to $2.08379 $ 44,987 1.66% 1.35% to 1.65% -6.68% to -6.41% FTVIP FRANKLIN SMALL-MID CAP GROWTH SECURITIES FUND - CLASS 2 ------------------------------------------------------------------------------------ December 31, 2011 14,860 $1.02535 to $1.77574 $ 25,731 0.00% 1.35% to 1.65% -6.37% to -6.09% December 31, 2010 16,566 $1.09508 to $1.89197 $ 30,563 0.00% 1.35% to 1.65% 25.55% to 25.93% December 31, 2009 17,918 $0.87224 to $1.50320 $ 26,268 0.00% 1.35% to 1.65% 41.25% to 41.68% December 31, 2008 19,232 $0.61753 to $1.06167 $ 19,939 0.00% 1.35% to 1.65% -43.43% to -43.26% December 31, 2007 22,773 $1.09168 to $1.87203 $ 41,618 0.00% 1.35% to 1.65% 9.41% to 9.75% PRUDENTIAL JENNISON 20/20 FOCUS PORTFOLIO ------------------------------------------------------------------------------------ December 31, 2011 29,076 $1.56151 to $1.65810 $ 48,160 0.08% 1.35% to 1.65% -5.72% to -5.44% December 31, 2010 32,078 $1.65622 to $1.75443 $ 56,225 0.00% 1.35% to 1.65% 6.08% to 6.40% December 31, 2009 35,692 $1.56131 to $1.64969 $ 58,835 0.48% 1.35% to 1.65% 55.28% to 55.73% December 31, 2008 38,183 $1.00550 to $1.05981 $ 40,440 0.56% 1.35% to 1.65% -40.14% to -39.96% December 31, 2007 44,588 $1.67967 to $1.76615 $ 78,700 0.56% 1.35% to 1.65% 8.79% to 9.12% DAVIS VALUE PORTFOLIO ------------------------------------------------------------------------------------ December 31, 2011 27,280 $1.00779 to $1.04304 $ 28,266 0.81% 1.35% to 1.65% -5.73% to -5.45% December 31, 2010 31,083 $1.06904 to $1.10314 $ 34,079 1.31% 1.35% to 1.65% 10.93% to 11.25% December 31, 2009 34,701 $0.96368 to $0.99157 $ 34,218 0.88% 1.35% to 1.65% 29.03% to 29.41% December 31, 2008 39,032 $0.74684 to $0.76620 $ 29,758 0.93% 1.35% to 1.65% -41.30% to -41.12% December 31, 2007 48,817 $1.27220 to $1.30132 $ 63,255 1.06% 1.35% to 1.65% 2.92% to 3.24%
A61 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ ALLIANCEBERNSTEIN VPS LARGE CAP GROWTH PORTFOLIO CLASS B ----------------------------------------------------------------------------------------- December 31, 2011 7,628 $ 0.57787 to $ 0.59869 $ 4,532 0.09% 1.35% to 1.65% -4.83% to -4.56% December 31, 2010 8,341 $ 0.60717 to $ 0.62731 $ 5,196 0.28% 1.35% to 1.65% 8.05% to 8.37% December 31, 2009 9,659 $ 0.56193 to $ 0.57885 $ 5,555 0.00% 1.35% to 1.65% 34.88% to 35.31% December 31, 2008 10,045 $ 0.41663 to $ 0.42781 $ 4,273 0.00% 1.35% to 1.65% -40.80% to -40.62% December 31, 2007 11,891 $ 0.70378 to $ 0.72051 $ 8,527 0.00% 1.35% to 1.65% 11.76% to 12.10% PRUDENTIAL SP SMALL CAP VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 62,060 $ 1.36006 to $ 1.79660 $ 103,381 0.68% 1.35% to 2.00% -4.67% to -4.06% December 31, 2010 72,892 $ 1.42540 to $ 1.87355 $ 127,033 0.65% 1.35% to 2.00% 23.80% to 24.59% December 31, 2009 84,747 $ 1.15021 to $ 1.50448 $ 119,017 1.52% 1.35% to 2.00% 28.23% to 29.05% December 31, 2008 94,790 $ 0.89606 to $ 1.16633 $ 103,259 1.11% 1.35% to 2.00% -31.87% to -31.43% December 31, 2007 113,884 $ 1.31385 to $ 1.70189 $ 181,132 0.71% 1.35% to 2.00% -5.53% to -4.92% JANUS ASPEN JANUS PORTFOLIO - SERVICE SHARES ----------------------------------------------------------------------------------------- December 31, 2011 11,019 $ 0.60888 to $ 1.36100 $ 10,839 0.43% 1.40% to 2.00% -7.39% to -6.84% December 31, 2010 13,323 $ 0.65560 to $ 1.46090 $ 13,998 0.36% 1.40% to 2.00% 12.02% to 12.68% December 31, 2009 16,117 $ 0.58350 to $ 1.29652 $ 14,998 0.39% 1.40% to 2.00% 33.34% to 34.14% December 31, 2008 18,115 $ 0.43625 to $ 0.96655 $ 12,589 0.58% 1.40% to 2.00% -41.05% to -40.70% December 31, 2007 20,946 $ 0.73781 to $ 1.62992 $ 24,219 0.58% 1.40% to 2.00% 12.54% to 13.21% PRUDENTIAL SP PRUDENTIAL U.S. EMERGING GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 69,627 $ 1.12252 to $ 2.49218 $ 128,003 0.59% 1.35% to 2.00% 0.22% to 0.86% December 31, 2010 84,602 $ 1.11678 to $ 2.47225 $ 155,289 0.41% 1.35% to 2.00% 18.08% to 18.82% December 31, 2009 63,068 $ 0.94298 to $ 2.08159 $ 96,283 0.74% 1.35% to 2.00% 39.10% to 40.00% December 31, 2008 71,243 $ 0.67589 to $ 1.48767 $ 77,729 0.30% 1.35% to 2.00% -37.48% to -37.08% December 31, 2007 87,699 $ 1.07786 to $ 2.36566 $ 151,175 0.31% 1.35% to 2.00% 14.52% to 15.25% PRUDENTIAL SP GROWTH ASSET ALLOCATION PORTFOLIO (EXPIRED APRIL 29, 2011) ----------------------------------------------------------------------------------------- December 31, 2011 0 $ 0 to $ 0 $ 0 0.00% 1.35% to 2.75% 5.65% to 6.12% December 31, 2010 314,272 $ 1.04647 to $11.11512 $ 635,833 1.96% 1.35% to 2.75% 10.85% to 12.37% December 31, 2009 358,633 $ 0.93437 to $ 9.94403 $ 636,634 2.20% 1.35% to 2.75% 22.84% to 24.54% December 31, 2008 410,509 $ 0.75284 to $ 8.02802 $ 576,128 1.71% 1.35% to 2.75% -38.07% to -37.21% December 31, 2007 486,656 $ 1.20299 to $12.85451 $1,076,920 1.43% 1.35% to 2.75% 6.29% to 7.77% PRUDENTIAL SP INTERNATIONAL GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 35,232 $ 0.63438 to $ 1.56912 $ 41,592 1.32% 1.35% to 2.00% -16.58% to -16.04% December 31, 2010 41,904 $ 0.75821 to $ 1.86993 $ 58,478 1.53% 1.35% to 2.00% 11.78% to 12.49% December 31, 2009 48,242 $ 0.67634 to $ 1.66303 $ 59,612 2.20% 1.35% to 2.00% 34.47% to 35.33% December 31, 2008 54,358 $ 0.50159 to $ 1.22951 $ 48,943 1.65% 1.35% to 2.00% -51.27% to -50.96% December 31, 2007 63,064 $ 1.02639 to $ 2.50846 $ 114,846 0.68% 1.35% to 2.00% 17.19% to 17.94% PRUDENTIAL SP INTERNATIONAL VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 29,946 $ 0.92278 to $ 1.60798 $ 39,901 2.49% 1.40% to 2.00% -14.80% to -14.29% December 31, 2010 35,175 $ 1.07986 to $ 1.88082 $ 54,613 2.19% 1.40% to 2.00% 8.64% to 9.28% December 31, 2009 41,016 $ 0.99108 to $ 1.72527 $ 57,944 3.14% 1.40% to 2.00% 29.75% to 30.52% December 31, 2008 46,484 $ 0.76162 to $ 1.32501 $ 50,078 2.78% 1.40% to 2.00% -45.16% to -44.83% December 31, 2007 60,179 $ 1.38459 to $ 2.40793 $ 116,626 2.04% 1.40% to 2.00% 15.75% to 16.44% AST GOLDMAN SACHS LARGE-CAP VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 9,455 $ 7.28539 to $12.53734 $ 86,332 1.05% 0.55% to 3.25% -15.50% to -6.04% December 31, 2010 6,153 $ 7.59413 to $13.52811 $ 60,572 1.29% 0.55% to 3.25% 6.61% to 11.82% December 31, 2009 2,660 $ 6.96102 to $12.21751 $ 21,591 3.03% 0.95% to 2.95% 16.39% to 20.67% December 31, 2008 1,268 $ 6.41698 to $ 7.21408 $ 8,747 1.64% 1.15% to 2.40% -42.08% to -36.88% December 31, 2007 1,200 $11.34013 to $12.33375 $ 14,251 1.20% 1.15% to 2.10% 2.95% to 3.93% AST AMERICAN CENTURY INCOME & GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 6,970 $ 8.24244 to $14.15216 $ 73,988 1.02% 0.55% to 3.15% -5.83% to 3.00% December 31, 2010 4,547 $ 8.07352 to $13.93020 $ 46,365 1.07% 0.55% to 3.15% 6.83% to 12.77% December 31, 2009 1,691 $ 7.27792 to $12.47459 $ 14,155 2.22% 0.95% to 2.95% 15.01% to 23.81% December 31, 2008 873 $ 6.57914 to $ 7.56473 $ 6,322 2.15% 1.00% to 2.40% -36.28% to -30.56% December 31, 2007 715 $10.76521 to $11.75498 $ 8,119 2.25% 1.15% to 2.05% -2.12% to -1.25%
A62 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ AST SCHRODERS MULTI-ASSET WORLD STRATEGIES PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 141,598 $ 9.34142 to $12.88722 $1,453,229 1.58% 0.55% to 3.25% -6.51% to -3.91% December 31, 2010 107,550 $ 9.72815 to $13.59785 $1,162,964 0.55% 0.55% to 3.25% 6.71% to 10.76% December 31, 2009 22,057 $ 9.00260 to $12.39836 $ 217,747 0.99% 0.95% to 2.95% 22.19% to 26.21% December 31, 2008 3,114 $ 7.13279 to $ 8.26716 $ 24,553 1.96% 0.95% to 2.65% -32.00% to -27.07% December 31, 2007 1,579 $10.87140 to $12.00848 $ 18,235 3.52% 1.00% to 2.65% 6.09% to 7.67% AST COHEN & STEERS REALTY PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 7,109 $ 8.82419 to $19.17281 $ 87,243 0.74% 0.55% to 3.25% -6.17% to 6.00% December 31, 2010 5,413 $ 8.36127 to $18.33755 $ 62,985 1.27% 0.55% to 3.25% 17.09% to 27.48% December 31, 2009 1,873 $ 6.56219 to $14.52687 $ 17,283 2.75% 0.95% to 2.95% 28.83% to 51.09% December 31, 2008 1,380 $ 5.02371 to $ 8.21151 $ 10,255 4.90% 1.00% to 2.40% -36.58% to -35.69% December 31, 2007 1,384 $ 7.81223 to $12.82033 $ 16,506 3.58% 1.00% to 2.50% -21.90% to -20.85% AST J.P. MORGAN STRATEGIC OPPORTUNITIES PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 76,239 $ 9.75906 to $12.08786 $ 808,699 0.90% 0.55% to 3.25% -3.02% to -0.32% December 31, 2010 56,172 $ 9.90157 to $12.29454 $ 609,347 0.37% 0.55% to 3.25% 4.24% to 7.11% December 31, 2009 26,845 $ 9.38319 to $11.67943 $ 282,556 0.82% 0.95% to 2.95% 15.12% to 20.87% December 31, 2008 12,707 $ 7.82060 to $ 9.52935 $ 113,204 0.32% 0.95% to 2.75% -21.01% to -18.39% December 31, 2007 3,548 $10.39915 to $11.72906 $ 39,597 1.61% 1.15% to 2.65% -0.70% to 0.78% AST BLACKROCK VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 5,454 $ 7.80945 to $13.74775 $ 54,139 0.80% 0.55% to 3.25% -10.70% to -1.04% December 31, 2010 2,189 $ 7.92255 to $14.08474 $ 21,392 1.38% 0.55% to 3.25% 5.71% to 11.38% December 31, 2009 1,483 $ 7.11289 to $12.77034 $ 12,662 0.86% 0.95% to 2.95% 15.49% to 26.46% December 31, 2008 1,121 $ 6.32963 to $ 7.95205 $ 8,361 2.41% 1.00% to 2.40% -38.77% to -37.92% December 31, 2007 1,646 $10.19617 to $12.86054 $ 20,277 1.06% 1.00% to 2.45% -1.25% to 0.02% AST NEUBERGER BERMAN SMALL-CAP GROWTH PORTFOLIO (EXPIRED APRIL 29, 2011) ----------------------------------------------------------------------------------------- December 31, 2011 0 $ 0 to $ 0 $ 0 0.00% 0.55% to 3.10% 11.62% to 12.57% December 31, 2010 2,396 $ 8.73801 to $14.24972 $ 25,254 0.00% 0.55% to 2.95% 13.76% to 19.14% December 31, 2009 915 $ 7.41439 to $12.07932 $ 7,373 0.00% 0.95% to 2.95% 19.69% to 21.59% December 31, 2008 487 $ 6.17342 to $ 7.28449 $ 3,314 0.00% 0.95% to 2.40% -43.89% to -43.08% December 31, 2007 466 $10.96429 to $12.85490 $ 5,667 0.00% 1.00% to 2.05% 16.32% to 17.36% AST HIGH YIELD PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 9,602 $ 9.75907 to $14.11698 $ 107,095 6.86% 0.55% to 3.25% -2.53% to 2.61% December 31, 2010 6,243 $10.64904 to $13.94919 $ 69,557 3.61% 0.55% to 3.25% 6.67% to 12.43% December 31, 2009 1,858 $ 9.86035 to $12.52966 $ 19,507 3.94% 0.95% to 2.90% 24.31% to 34.28% December 31, 2008 769 $ 7.42367 to $ 7.97763 $ 6,054 8.92% 0.95% to 2.40% -27.29% to -25.76% December 31, 2007 807 $10.58506 to $10.86456 $ 8,670 9.83% 1.15% to 2.15% 0.31% to 1.31% AST FEDERATED AGGRESSIVE GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 5,925 $ 7.99180 to $14.40189 $ 59,777 0.45% 0.55% to 3.25% -19.59% to -13.59% December 31, 2010 3,503 $ 9.80048 to $16.89809 $ 40,832 0.04% 0.55% to 3.25% 20.64% to 31.30% December 31, 2009 1,490 $ 7.46424 to $12.99734 $ 12,797 0.20% 0.95% to 2.55% 29.38% to 31.41% December 31, 2008 741 $ 5.92475 to $ 7.39352 $ 5,080 0.00% 1.15% to 2.40% -45.41% to -38.18% December 31, 2007 899 $10.81494 to $13.40975 $ 11,436 0.00% 1.15% to 2.45% 8.54% to 9.94% AST MID-CAP VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 3,655 $ 8.68256 to $15.20886 $ 39,679 0.70% 0.55% to 3.25% -12.84% to -3.98% December 31, 2010 2,712 $ 9.84588 to $16.05923 $ 30,901 0.46% 0.55% to 3.25% 13.94% to 22.45% December 31, 2009 919 $ 8.24232 to $13.24524 $ 8,484 1.75% 0.95% to 2.95% 31.78% to 37.58% December 31, 2008 519 $ 6.33563 to $ 7.22665 $ 3,559 1.05% 1.15% to 2.40% -39.58% to -34.05% December 31, 2007 540 $10.44960 to $11.84309 $ 6,093 0.38% 1.15% to 2.05% 0.68% to 1.58% AST SMALL-CAP VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 4,291 $ 8.56576 to $14.76666 $ 45,405 0.60% 0.55% to 3.25% -13.58% to -6.49% December 31, 2010 3,661 $10.21456 to $16.01106 $ 41,903 0.41% 0.55% to 3.25% 13.88% to 24.81% December 31, 2009 1,917 $ 8.19364 to $12.95541 $ 17,742 1.67% 0.95% to 2.95% 24.02% to 29.87% December 31, 2008 1,506 $ 6.56669 to $ 8.14863 $ 11,281 1.14% 1.00% to 2.40% -31.37% to -25.48% December 31, 2007 1,043 $ 9.43656 to $11.75648 $ 11,457 0.98% 1.00% to 2.50% -7.92% to -6.69%
A63 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED -------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------ ---------------------- -------- ---------- ----------------- ------------------ AST GOLDMAN SACHS CONCENTRATED GROWTH PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 5,661 $ 8.95362 to $13.09897 $ 58,548 0.16% 0.55% to 3.25% -10.43% to -4.48% December 31, 2010 5,727 $ 9.78196 to $13.90429 $ 63,050 0.07% 0.55% to 3.25% 6.48% to 9.25% December 31, 2009 3,085 $ 8.95378 to $12.85313 $ 32,211 0.00% 0.95% to 2.95% 27.10% to 47.99% December 31, 2008 1,115 $ 6.05017 to $ 7.74360 $ 8,051 0.14% 0.95% to 2.40% -41.67% to -34.07% December 31, 2007 1,013 $11.42452 to $13.14587 $ 12,624 0.00% 1.00% to 2.10% 11.64% to 12.69% AST GOLDMAN SACHS MID-CAP GROWTH PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 8,276 $ 8.81982 to $15.09953 $ 93,020 0.00% 0.55% to 3.25% -11.35% to -3.51% December 31, 2010 7,400 $10.81269 to $15.86600 $ 88,581 0.00% 0.55% to 3.25% 12.74% to 18.70% December 31, 2009 2,818 $ 9.33692 to $13.49906 $ 30,759 0.00% 0.95% to 2.95% 33.32% to 55.61% December 31, 2008 953 $ 6.59238 to $ 7.63476 $ 6,917 0.00% 1.00% to 2.40% -42.18% to -35.31% December 31, 2007 919 $11.48986 to $13.07586 $ 11,535 0.00% 1.00% to 2.50% 16.42% to 17.98% AST LARGE-CAP VALUE PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 12,016 $ 6.95898 to $13.29726 $105,206 1.21% 0.55% to 3.25% -10.31% to -4.71% December 31, 2010 8,210 $ 7.33176 to $14.14819 $ 73,771 0.98% 0.95% to 3.25% 5.18% to 12.09% December 31, 2009 7,331 $ 6.54070 to $12.74667 $ 56,990 2.87% 0.95% to 2.95% 16.63% to 26.67% December 31, 2008 7,349 $ 5.52836 to $ 6.82177 $ 48,882 2.22% 0.95% to 2.40% -42.86% to -39.90% December 31, 2007 1,453 $ 9.84473 to $11.82253 $ 16,500 1.17% 1.00% to 2.50% -5.37% to -4.10% AST LORD ABBETT CORE FIXED INCOME PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 20,912 $10.42419 to $14.54337 $245,855 1.20% 0.55% to 3.25% 4.25% to 9.56% December 31, 2010 4,379 $10.70748 to $13.45763 $ 50,715 5.46% 0.55% to 3.25% 7.21% to 12.35% December 31, 2009 1,958 $10.22891 to $12.09710 $ 21,733 7.38% 0.95% to 2.90% 19.82% to 33.34% December 31, 2008 1,183 $ 8.17364 to $ 8.54833 $ 9,951 8.49% 1.15% to 2.40% -25.05% to -24.13% December 31, 2007 1,292 $10.32185 to $11.29424 $ 14,416 6.93% 1.00% to 2.45% 3.54% to 4.87% AST MARSICO CAPITAL GROWTH PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 11,182 $ 8.89389 to $14.53184 $117,841 0.30% 0.55% to 3.25% -8.96% to -1.46% December 31, 2010 9,228 $ 9.06112 to $14.95140 $ 99,289 0.61% 0.55% to 3.25% 11.96% to 18.63% December 31, 2009 5,649 $ 7.63844 to $12.72864 $ 50,094 0.84% 0.95% to 2.95% 26.37% to 28.54% December 31, 2008 4,708 $ 6.23147 to $ 7.27809 $ 33,179 0.51% 1.00% to 2.40% -44.98% to -39.89% December 31, 2007 2,732 $11.47337 to $13.09923 $ 34,478 0.21% 1.00% to 2.50% 12.15% to 13.65% AST MFS GROWTH PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 3,218 $ 9.10275 to $13.12223 $ 33,301 0.36% 0.55% to 3.25% -7.50% to -1.14% December 31, 2010 2,603 $ 9.24407 to $13.45761 $ 27,605 0.10% 0.55% to 3.25% 7.59% to 11.72% December 31, 2009 986 $ 8.27409 to $12.16473 $ 9,338 0.16% 0.95% to 2.95% 20.52% to 23.13% December 31, 2008 674 $ 6.96848 to $ 8.31391 $ 5,322 0.26% 1.00% to 2.40% -37.80% to -31.22% December 31, 2007 521 $11.68399 to $13.23519 $ 6,623 0.04% 1.15% to 2.50% 12.29% to 13.79% AST NEUBERGER BERMAN MID-CAP GROWTH PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 8,614 $ 9.20532 to $15.58152 $100,645 0.00% 0.55% to 3.25% -7.23% to 1.13% December 31, 2010 5,335 $ 9.35229 to $15.62143 $ 64,482 0.00% 0.55% to 3.25% 18.48% to 27.47% December 31, 2009 2,096 $ 7.52062 to $12.37664 $ 20,645 0.00% 0.95% to 2.95% 23.25% to 28.57% December 31, 2008 1,398 $ 6.43407 to $ 8.62745 $ 11,182 0.00% 1.15% to 2.40% -44.52% to -36.46% December 31, 2007 1,637 $12.18878 to $15.39741 $ 23,863 0.00% 1.15% to 2.15% 19.62% to 20.81% AST NEUBERGER BERMAN / LSV MID-CAP VALUE PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 8,187 $ 8.70651 to $15.90297 $ 86,810 0.99% 0.55% to 3.25% -12.72% to -3.02% December 31, 2010 7,174 $ 9.62757 to $16.62562 $ 78,392 1.02% 0.55% to 3.25% 11.27% to 22.27% December 31, 2009 3,024 $ 7.99019 to $13.73161 $ 26,629 1.77% 0.95% to 2.90% 34.71% to 39.32% December 31, 2008 1,606 $ 5.79288 to $ 6.90162 $ 10,553 1.70% 0.95% to 2.40% -43.61% to -37.17% December 31, 2007 1,766 $10.24685 to $12.12014 $ 20,640 0.75% 1.00% to 2.05% 1.09% to 1.99% AST PIMCO LIMITED MATURITY BOND PORTFOLIO -------------------------------------------------------------------------------------- December 31, 2011 15,357 $ 9.86766 to $12.18917 $164,143 0.86% 0.55% to 3.25% -1.07% to 1.68% December 31, 2010 9,358 $ 9.97411 to $12.07057 $102,959 2.31% 0.55% to 3.25% -0.33% to 2.92% December 31, 2009 4,168 $10.42590 to $11.78015 $ 48,312 5.30% 0.95% to 2.95% 4.36% to 9.19% December 31, 2008 2,767 $ 9.71676 to $10.83660 $ 29,608 5.18% 1.00% to 2.40% -2.91% to 0.11% December 31, 2007 1,059 $10.47408 to $10.86715 $ 11,400 5.72% 1.00% to 2.45% 4.23% to 5.58%
A64 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ AST T. ROWE PRICE EQUITY INCOME PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 5,793 $ 7.30270 to $13.84402 $ 53,933 1.15% 0.55% to 3.25% -10.17% to -2.18% December 31, 2010 4,615 $ 7.31183 to $14.34884 $ 43,678 1.20% 0.95% to 3.25% 4.43% to 12.18% December 31, 2009 2,161 $ 6.68122 to $12.91774 $ 16,542 3.44% 0.95% to 2.95% 20.89% to 27.90% December 31, 2008 798 $ 5.65507 to $ 6.73924 $ 5,075 3.35% 1.00% to 2.40% -43.25% to -42.46% December 31, 2007 862 $ 9.82815 to $11.75873 $ 9,668 1.79% 1.00% to 2.15% -5.61% to -4.67% AST QMA US EQUITY ALPHA PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 2,688 $ 8.14600 to $14.68191 $ 27,992 0.73% 0.55% to 2.95% 0.50% to 2.89% December 31, 2010 1,934 $ 7.98785 to $14.46757 $ 19,154 0.58% 0.55% to 2.95% 8.14% to 13.97% December 31, 2009 983 $ 7.12555 to $12.82018 $ 7,830 1.73% 0.95% to 2.95% 18.97% to 27.22% December 31, 2008 754 $ 5.90465 to $ 7.04101 $ 5,014 2.28% 0.95% to 2.40% -40.16% to -39.29% December 31, 2007 749 $10.70742 to $11.65038 $ 8,305 2.05% 1.15% to 2.05% 0.02% to 0.92% AST T. ROWE PRICE NATURAL RESOURCES PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 21,581 $ 7.67745 to $13.57744 $ 220,749 0.61% 0.55% to 3.25% -22.38% to -15.39% December 31, 2010 18,820 $ 9.78665 to $16.26883 $ 237,118 0.41% 0.55% to 3.25% 15.18% to 19.32% December 31, 2009 9,564 $ 8.23044 to $13.76951 $ 111,200 1.38% 0.95% to 2.95% 32.80% to 47.95% December 31, 2008 6,046 $ 5.58255 to $ 9.18555 $ 50,318 0.62% 1.00% to 2.40% -51.16% to -45.19% December 31, 2007 5,783 $13.49811 to $18.62348 $ 101,044 0.63% 1.00% to 2.45% 37.13% to 38.90% AST T. ROWE PRICE ASSET ALLOCATION PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 229,101 $ 9.50439 to $13.30691 $2,473,645 1.10% 0.55% to 3.25% -4.90% to 1.42% December 31, 2010 146,126 $ 9.85367 to $13.30202 $1,581,659 0.78% 0.55% to 3.25% 5.89% to 10.49% December 31, 2009 42,023 $ 9.03658 to $12.15888 $ 421,914 2.06% 0.95% to 2.95% 20.34% to 22.97% December 31, 2008 16,314 $ 7.43372 to $ 8.81488 $ 135,699 1.83% 0.95% to 2.65% -27.86% to -23.34% December 31, 2007 12,963 $10.57860 to $12.06970 $ 149,839 1.72% 1.00% to 2.65% 3.56% to 5.11% AST MFS GLOBAL EQUITY PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 8,288 $ 8.75800 to $13.97222 $ 87,581 0.51% 0.55% to 3.25% -12.73% to -3.66% December 31, 2010 6,015 $ 9.74368 to $14.70491 $ 67,368 0.40% 0.55% to 3.25% 7.95% to 10.99% December 31, 2009 1,713 $ 8.77866 to $13.37974 $ 18,281 1.77% 0.95% to 2.95% 28.43% to 32.84% December 31, 2008 924 $ 7.15759 to $ 9.03881 $ 7,771 1.24% 1.00% to 2.40% -35.54% to -28.62% December 31, 2007 832 $10.95164 to $13.88494 $ 10,944 2.53% 1.00% to 2.05% 7.19% to 8.15% AST JPMORGAN INTERNATIONAL EQUITY PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 9,785 $ 7.70131 to $12.74350 $ 90,598 1.40% 0.55% to 3.25% -18.08% to -9.65% December 31, 2010 8,842 $ 8.34866 to $14.30022 $ 90,495 0.97% 0.55% to 3.25% 4.10% to 7.63% December 31, 2009 3,788 $ 8.06067 to $13.60349 $ 36,077 3.65% 0.95% to 2.95% 32.70% to 34.60% December 31, 2008 1,881 $ 5.98845 to $ 8.06508 $ 13,887 2.59% 0.95% to 2.40% -42.76% to -36.31% December 31, 2007 1,777 $10.97941 to $13.95132 $ 23,122 1.69% 1.00% to 2.50% 6.76% to 8.19% AST T. ROWE PRICE GLOBAL BOND PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 10,426 $ 9.89515 to $12.88781 $ 113,539 2.50% 0.55% to 3.25% -1.04% to 3.55% December 31, 2010 6,415 $10.20242 to $12.51967 $ 70,483 2.41% 0.55% to 3.25% 2.24% to 4.75% December 31, 2009 2,631 $10.44910 to $11.97584 $ 30,156 7.16% 0.95% to 2.55% 9.49% to 11.06% December 31, 2008 2,190 $ 9.44110 to $10.80461 $ 22,605 5.04% 1.00% to 2.40% -5.95% to -3.40% December 31, 2007 1,472 $10.42389 to $11.20170 $ 15,781 3.92% 1.15% to 2.45% 7.01% to 8.39% AST WELLINGTON MANAGEMENT HEDGED EQUITY PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 29,416 $ 8.08980 to $13.60557 $ 265,956 0.27% 0.55% to 3.25% -12.57% to -4.36% December 31, 2010 15,551 $ 8.45893 to $14.36696 $ 151,898 0.49% 0.95% to 2.95% 11.35% to 13.56% December 31, 2009 16,369 $ 7.44914 to $12.77693 $ 141,974 1.06% 0.95% to 2.95% 1.10% to 27.22% December 31, 2008 5,852 $ 5.85514 to $ 7.01024 $ 39,367 0.72% 0.95% to 2.40% -43.68% to -37.29% December 31, 2007 5,323 $11.05096 to $12.32551 $ 63,388 0.16% 1.00% to 2.65% 6.72% to 8.31% AST CAPITAL GROWTH ASSET ALLOCATION PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 287,989 $ 8.76109 to $13.11625 $2,893,895 0.51% 0.55% to 3.25% -9.16% to -2.96% December 31, 2010 297,589 $ 9.03449 to $13.70422 $3,101,702 1.02% 0.55% to 3.25% 7.43% to 12.31% December 31, 2009 182,179 $ 8.15083 to $12.32315 $1,672,572 1.87% 0.95% to 2.95% 21.96% to 24.15% December 31, 2008 113,271 $ 6.59783 to $ 7.79077 $ 849,426 0.98% 0.95% to 2.75% -36.68% to -31.11% December 31, 2007 126,428 $11.01224 to $12.14221 $1,492,030 0.24% 1.00% to 2.75% 6.78% to 8.48%
A65 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ AST ACADEMIC STRATEGIES ASSET ALLOCATION PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 269,022 $ 8.98306 to $12.82397 $2,725,760 0.62% 0.55% to 3.25% -5.82% to -3.20% December 31, 2010 241,208 $ 9.28559 to $13.43083 $2,538,982 0.83% 0.55% to 3.25% 7.15% to 10.91% December 31, 2009 135,488 $ 8.48293 to $12.22943 $1,275,037 2.33% 0.95% to 2.95% 21.03% to 23.19% December 31, 2008 99,125 $ 6.92031 to $ 7.99594 $ 766,747 1.13% 0.95% to 2.75% -33.66% to -28.71% December 31, 2007 103,751 $10.91282 to $11.89376 $1,203,763 0.37% 1.00% to 2.75% 6.27% to 7.96% AST BALANCED ASSET ALLOCATION PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 339,582 $ 9.27105 to $12.86748 $3,548,073 0.63% 0.55% to 3.25% -7.28% to -1.76% December 31, 2010 308,411 $ 9.68344 to $13.27946 $3,322,650 0.78% 0.55% to 3.25% 6.51% to 11.26% December 31, 2009 196,484 $ 8.76833 to $12.05401 $1,919,182 1.22% 0.95% to 2.95% 0.42% to 22.14% December 31, 2008 53,051 $ 7.30442 to $ 8.27064 $ 424,592 1.06% 0.95% to 2.75% -30.61% to -26.37% December 31, 2007 36,429 $10.86097 to $11.76251 $ 418,781 0.33% 1.00% to 2.75% 6.14% to 7.83% AST PRESERVATION ASSET ALLOCATION PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 264,390 $ 9.60825 to $12.48452 $2,869,173 0.90% 0.55% to 3.25% -3.91% to 0.44% December 31, 2010 199,628 $10.40137 to $12.60207 $2,211,567 1.26% 0.55% to 3.25% 4.97% to 9.53% December 31, 2009 115,717 $ 9.58079 to $11.61945 $1,210,537 0.92% 0.95% to 2.95% -0.03% to 18.91% December 31, 2008 30,030 $ 8.12914 to $ 9.09941 $ 265,987 0.81% 0.95% to 2.75% -21.64% to -18.78% December 31, 2007 11,972 $10.96110 to $11.45988 $ 134,485 0.30% 1.15% to 2.75% 5.80% to 7.48% AST FIRST TRUST BALANCED TARGET PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 130,049 $ 8.78893 to $13.34133 $1,346,840 1.74% 0.55% to 3.25% -6.65% to -2.05% December 31, 2010 95,851 $ 8.97842 to $13.80890 $1,008,799 1.36% 0.55% to 3.25% 9.25% to 13.29% December 31, 2009 37,024 $ 8.03026 to $12.30994 $ 325,778 3.84% 0.95% to 2.95% 20.65% to 23.42% December 31, 2008 18,094 $ 6.57782 to $ 7.34272 $ 130,124 2.24% 0.95% to 2.65% -36.18% to -32.22% December 31, 2007 16,265 $10.77036 to $11.35095 $ 181,880 0.53% 1.00% to 2.65% 5.74% to 7.32% AST FIRST TRUST CAPITAL APPRECIATION TARGET PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 148,843 $ 7.98786 to $13.06962 $1,485,879 1.18% 0.55% to 3.25% -11.82% to -6.73% December 31, 2010 131,381 $ 8.66171 to $14.20708 $1,380,684 0.85% 0.55% to 3.25% 14.30% to 17.90% December 31, 2009 58,998 $ 7.40130 to $12.16947 $ 483,351 2.18% 0.95% to 2.95% 0.09% to 24.79% December 31, 2008 23,483 $ 5.97509 to $ 6.74838 $ 154,549 1.25% 0.95% to 2.75% -42.30% to -37.21% December 31, 2007 23,824 $11.11363 to $11.54148 $ 270,043 0.32% 1.00% to 2.75% 8.42% to 10.14% AST ADVANCED STRATEGIES PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 193,663 $ 9.30664 to $13.61010 $2,075,520 1.03% 0.55% to 3.25% -6.93% to -0.44% December 31, 2010 137,362 $ 9.94879 to $13.85960 $1,496,355 0.91% 0.55% to 3.25% 8.08% to 12.64% December 31, 2009 51,794 $ 8.94949 to $12.42655 $ 502,645 2.84% 0.95% to 2.95% 22.94% to 25.01% December 31, 2008 27,547 $ 7.19429 to $ 7.98587 $ 214,852 1.96% 0.95% to 2.65% -31.62% to -27.56% December 31, 2007 27,228 $10.83452 to $11.53588 $ 308,459 0.51% 1.00% to 2.65% 6.67% to 8.26% AST T. ROWE PRICE LARGE-CAP GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 16,190 $ 9.07073 to $14.43104 $ 173,497 0.00% 0.55% to 3.25% -9.08% to -2.24% December 31, 2010 13,777 $10.04316 to $14.96577 $ 152,422 0.00% 0.55% to 3.25% 10.53% to 14.72% December 31, 2009 6,994 $ 8.97301 to $13.17447 $ 67,092 0.00% 0.95% to 2.95% 31.06% to 51.93% December 31, 2008 5,295 $ 6.20861 to $ 6.64158 $ 33,149 0.14% 1.00% to 2.40% -41.96% to -38.73% December 31, 2007 491 $11.05504 to $11.23891 $ 5,475 0.19% 1.15% to 2.15% 5.94% to 7.00% AST MONEY MARKET PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 24,015 $ 9.26367 to $10.43487 $ 236,147 0.02% 0.55% to 3.25% -3.22% to -0.52% December 31, 2010 12,763 $ 9.53428 to $10.55197 $ 128,581 0.02% 0.55% to 3.25% -2.84% to -0.43% December 31, 2009 6,856 $ 9.80318 to $10.67105 $ 71,974 0.24% 0.95% to 2.95% -2.34% to -0.70% December 31, 2008 6,401 $10.04509 to $10.76754 $ 68,076 2.25% 0.95% to 2.65% -0.14% to 1.54% December 31, 2007 1,486 $10.29973 to $10.62479 $ 15,685 4.76% 1.00% to 2.65% 2.18% to 3.70% AST SMALL-CAP GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 7,586 $ 8.71343 to $17.08879 $ 91,234 0.00% 0.55% to 3.25% -12.02% to -1.52% December 31, 2010 5,749 $11.41543 to $17.59375 $ 70,222 0.21% 0.55% to 3.25% 25.34% to 35.13% December 31, 2009 3,575 $ 8.52896 to $13.14833 $ 31,797 0.05% 0.95% to 2.95% 30.52% to 32.65% December 31, 2008 3,394 $ 6.42979 to $ 6.77186 $ 22,897 0.00% 0.95% to 2.40% -36.52% to -33.33% December 31, 2007 216 $10.38230 to $10.53785 $ 2,265 0.00% 1.15% to 2.05% 4.99% to 5.93%
A66 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ AST PIMCO TOTAL RETURN BOND PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 139,943 $ 9.99564 to $13.38718 $1,518,001 1.84% 0.55% to 3.25% -0.17% to 2.61% December 31, 2010 113,266 $10.24378 to $13.12390 $1,231,961 1.52% 0.55% to 3.25% 2.38% to 6.70% December 31, 2009 51,426 $ 9.92546 to $12.32370 $ 540,684 0.63% 0.95% to 2.95% -0.60% to 15.43% December 31, 2008 2,743 $ 9.36846 to $10.69755 $ 28,962 3.78% 0.95% to 2.40% -6.45% to -3.18% December 31, 2007 1,086 $10.89859 to $11.07079 $ 11,917 3.60% 1.15% to 2.10% 6.07% to 7.07% AST INTERNATIONAL VALUE PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 4,763 $ 7.04041 to $12.25942 $ 43,196 1.53% 0.55% to 3.25% -21.55% to -13.03% December 31, 2010 3,757 $ 7.92905 to $14.29181 $ 39,039 0.70% 0.55% to 3.25% 7.59% to 10.04% December 31, 2009 1,307 $ 7.38580 to $13.11671 $ 11,673 2.16% 0.95% to 2.95% 27.44% to 29.64% December 31, 2008 761 $ 6.22962 to $ 7.03242 $ 5,280 2.62% 1.15% to 2.40% -45.32% to -38.11% December 31, 2007 709 $12.39325 to $12.70293 $ 8,933 1.47% 1.15% to 2.65% 14.75% to 16.46% AST INTERNATIONAL GROWTH PORTFOLIO ----------------------------------------------------------------------------------------- December 31, 2011 7,248 $ 7.04917 to $12.74401 $ 63,232 0.64% 0.55% to 3.25% -18.51% to -13.40% December 31, 2010 3,921 $ 7.97297 to $14.92060 $ 40,509 0.29% 0.55% to 3.25% 11.22% to 14.67% December 31, 2009 1,455 $ 7.20534 to $13.28533 $ 11,795 1.59% 0.95% to 2.95% 30.13% to 34.02% December 31, 2008 761 $ 5.96394 to $ 6.16356 $ 4,624 1.46% 1.15% to 2.40% -51.40% to -50.80% December 31, 2007 550 $12.32194 to $12.52703 $ 6,830 0.67% 1.15% to 2.15% 16.53% to 17.69% NVIT DEVELOPING MARKETS FUND ----------------------------------------------------------------------------------------- December 31, 2011 1,066 $12.70790 to $13.22905 $ 13,856 0.27% 1.40% to 2.00% -23.92% to -23.48% December 31, 2010 1,496 $16.70438 to $17.28741 $ 25,524 0.00% 1.40% to 2.00% 13.86% to 14.54% December 31, 2009 1,437 $14.67036 to $15.09299 $ 21,453 1.15% 1.40% to 2.00% 59.05% to 59.99% December 31, 2008 1,133 $ 9.22392 to $ 9.43370 $ 10,589 0.72% 1.40% to 2.00% -58.69% to -58.44% December 31, 2007 1,575 $22.02354 to $22.70075 $ 35,530 0.45% 1.40% to 2.50% 39.99% to 41.52% AST INVESTMENT GRADE BOND PORTFOLIO (AVAILABLE JANUARY 28, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 624,195 $10.87605 to $14.56477 $7,606,942 0.43% 0.55% to 2.65% 8.68% to 11.82% December 31, 2010 11,978 $10.54049 to $13.07585 $ 153,555 6.62% 0.55% to 2.65% 5.34% to 9.77% December 31, 2009 23,600 $10.83253 to $11.91239 $ 277,671 1.31% 0.95% to 2.30% 8.49% to 10.26% December 31, 2008 65,795 $10.69598 to $10.80437 $ 706,744 0.00% 0.95% to 2.05% 6.98% to 8.05% AST WESTERN ASSET CORE PLUS BOND PORTFOLIO (AVAILABLE NOVEMBER 19, 2007) ----------------------------------------------------------------------------------------- December 31, 2011 23,999 $10.31578 to $11.84188 $ 263,297 2.74% 0.55% to 3.25% 2.59% to 5.44% December 31, 2010 15,299 $10.29052 to $11.38650 $ 161,902 1.28% 0.55% to 3.25% 2.93% to 6.78% December 31, 2009 3,801 $10.05881 to $10.76877 $ 38,962 3.37% 0.95% to 2.95% 7.10% to 10.58% December 31, 2008 543 $ 9.12808 to $ 9.37876 $ 5,058 0.13% 0.95% to 2.40% -8.80% to -6.10% December 31, 2007 3 $ 9.97564 to $ 9.97564 $ 25 0.00% 2.00% to 2.00% -0.23% to -0.23% AST BOND PORTFOLIO 2018 (AVAILABLE JANUARY 28, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 14,702 $11.55635 to $13.80307 $ 174,657 0.19% 1.15% to 3.25% 9.90% to 12.27% December 31, 2010 1,423 $11.92705 to $12.31074 $ 17,224 0.93% 1.30% to 2.40% 8.58% to 9.76% December 31, 2009 2,189 $10.98462 to $11.21615 $ 24,289 0.29% 1.30% to 2.40% -8.25% to -7.26% December 31, 2008 2,046 $11.97274 to $12.09377 $ 24,606 0.00% 1.30% to 2.40% 19.75% to 20.95% AST BOND PORTFOLIO 2019 (AVAILABLE JANUARY 28, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 809 $13.36844 to $13.94770 $ 11,027 0.95% 1.30% to 2.40% 13.26% to 14.49% December 31, 2010 1,229 $11.80330 to $12.18296 $ 14,732 0.74% 1.30% to 2.40% 8.75% to 9.93% December 31, 2009 1,467 $10.85345 to $11.08225 $ 16,102 0.28% 1.30% to 2.40% -9.86% to -8.88% December 31, 2008 1,619 $12.04125 to $12.16291 $ 19,590 0.00% 1.30% to 2.40% 20.44% to 21.64% AST GLOBAL REAL ESTATE PORTFOLIO (AVAILABLE JULY 21, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 2,702 $ 8.75182 to $15.32029 $ 28,411 2.36% 0.55% to 3.25% -12.17% to -5.56% December 31, 2010 2,120 $ 9.43708 to $16.44739 $ 23,406 1.16% 0.55% to 3.25% 14.58% to 19.07% December 31, 2009 355 $ 8.03953 to $13.95016 $ 2,911 1.02% 0.95% to 2.95% 31.93% to 41.49% December 31, 2008 27 $ 6.09375 to $ 6.12807 $ 164 0.00% 1.15% to 2.40% -40.11% to -39.78% AST PARAMETRIC EMERGING MARKETS EQUITY PORTFOLIO (AVAILABLE JULY 21, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 13,670 $ 7.61998 to $13.89229 $ 123,993 0.93% 0.55% to 3.25% -23.87% to -20.71% December 31, 2010 12,640 $10.78803 to $17.76396 $ 144,882 0.30% 0.55% to 3.25% 16.24% to 21.12% December 31, 2009 2,787 $ 9.03476 to $14.81166 $ 25,629 0.28% 0.95% to 2.95% 46.36% to 64.95% December 31, 2008 97 $ 5.55599 to $ 5.58718 $ 540 0.00% 1.15% to 2.40% -44.99% to -44.69%
A67 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ----------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------- ---------------------- ---------- ---------- ----------------- ------------------ FRANKLIN TEMPLETON VIP FOUNDING FUNDS ALLOCATION FUND (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 136,049 $ 8.60412 to $13.39083 $1,361,263 0.02% 0.55% to 3.25% -10.47% to -2.21% December 31, 2010 114,431 $ 8.98185 to $13.88351 $1,165,490 3.85% 0.55% to 3.25% 5.60% to 9.20% December 31, 2009 26,709 $ 8.36337 to $12.83927 $ 228,762 5.19% 0.95% to 2.95% 26.66% to 28.84% December 31, 2008 3,342 $ 6.60055 to $ 6.67497 $ 22,207 4.54% 0.95% to 2.65% -34.50% to -33.77% AST GOLDMAN SACHS SMALL-CAP VALUE PORTFOLIO (AVAILABLE JULY 21, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 8,707 $ 9.17568 to $15.78149 $ 99,213 0.50% 0.55% to 3.25% -7.35% to 0.75% December 31, 2010 6,209 $11.36904 to $15.88201 $ 72,334 0.34% 0.55% to 3.25% 14.10% to 25.57% December 31, 2009 1,010 $ 9.43289 to $12.77276 $ 9,809 0.89% 0.95% to 2.95% 23.87% to 28.33% December 31, 2008 71 $ 7.61489 to $ 7.66279 $ 545 0.00% 1.00% to 2.40% -24.10% to -23.63% AST CLS GROWTH ASSET ALLOCATION PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 100,743 $ 8.71154 to $13.26883 $1,031,946 0.29% 0.55% to 3.25% -8.49% to -2.93% December 31, 2010 78,031 $ 9.16080 to $13.85815 $ 815,840 0.26% 0.55% to 3.25% 8.82% to 13.27% December 31, 2009 19,248 $ 8.22388 to $12.35611 $ 162,373 0.37% 0.95% to 2.95% 22.12% to 25.66% December 31, 2008 1,750 $ 6.65498 to $ 6.73005 $ 11,717 0.03% 0.95% to 2.65% -34.10% to -33.36% AST CLS MODERATE ASSET ALLOCATION PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 126,313 $ 9.15103 to $12.63456 $1,292,495 0.40% 0.55% to 3.25% -6.86% to -2.36% December 31, 2010 87,541 $ 9.56692 to $13.11882 $ 917,592 0.43% 0.55% to 3.25% 6.86% to 10.86% December 31, 2009 22,971 $ 8.77459 to $11.95029 $ 206,515 0.28% 0.95% to 2.95% 18.25% to 22.23% December 31, 2008 3,073 $ 7.29981 to $ 7.38211 $ 22,578 0.01% 0.95% to 2.65% -27.59% to -26.77% AST HORIZON GROWTH ASSET ALLOCATION PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 74,331 $ 9.31537 to $13.35045 $ 778,470 0.34% 0.55% to 3.25% -6.67% to -1.12% December 31, 2010 53,201 $ 9.70638 to $13.68833 $ 564,005 0.23% 0.55% to 3.25% 7.84% to 12.75% December 31, 2009 13,284 $ 8.75409 to $12.26108 $ 118,947 0.26% 0.95% to 2.95% 21.32% to 25.48% December 31, 2008 1,149 $ 7.09425 to $ 7.17421 $ 8,203 0.01% 0.95% to 2.65% -29.84% to -29.05% AST HORIZON MODERATE ASSET ALLOCATION PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 93,246 $ 9.41906 to $12.68275 $ 967,246 0.48% 0.55% to 3.25% -5.72% to -1.05% December 31, 2010 65,121 $ 9.88878 to $12.99556 $ 686,924 0.37% 0.55% to 3.25% 6.02% to 10.55% December 31, 2009 17,717 $ 9.09584 to $11.87199 $ 164,854 0.20% 0.95% to 2.95% 17.66% to 22.22% December 31, 2008 2,161 $ 7.56739 to $ 7.65257 $ 16,459 0.01% 0.95% to 2.65% -24.99% to -24.15% AST FI PYRAMIS(R) ASSET ALLOCATION PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 58,251 $ 9.24016 to $12.74316 $ 603,154 0.22% 0.55% to 3.25% -5.64% to -3.01% December 31, 2010 36,638 $ 9.72512 to $13.32052 $ 391,883 0.27% 0.55% to 3.25% 7.69% to 12.26% December 31, 2009 6,536 $ 8.80911 to $11.98361 $ 58,908 0.32% 0.95% to 2.95% 18.10% to 20.09% December 31, 2008 746 $ 7.45897 to $ 7.54313 $ 5,599 0.01% 0.95% to 2.65% -26.17% to -25.34% PROFUND VP CONSUMER SERVICES (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 10 $11.09282 to $11.88626 $ 123 0.00% 0.55% to 2.00% 3.43% to 4.92% December 31, 2010 7 $10.64073 to $11.32891 $ 80 0.00% 0.55% to 2.30% 12.97% to 19.60% December 31, 2009 2 $ 8.95999 to $ 9.08577 $ 16 0.00% 1.50% to 2.00% 27.80% to 28.87% December 31, 2008 1 $ 7.01089 to $ 7.02706 $ 10 0.00% 2.00% to 2.35% -31.72% to -31.56% PROFUND VP CONSUMER GOODS PORTFOLIO (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 32 $10.88855 to $11.83570 $ 358 0.90% 0.55% to 2.30% 4.55% to 6.36% December 31, 2010 12 $10.41504 to $11.12815 $ 125 0.00% 0.55% to 2.30% 10.84% to 15.85% December 31, 2009 8 $ 9.07106 to $ 9.22877 $ 74 1.22% 1.30% to 2.00% 18.77% to 20.01% December 31, 2008 7 $ 7.65475 to $ 7.69024 $ 55 3.00% 1.30% to 2.00% -24.13% to -23.78% PROFUND VP FINANCIALS (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 78 $ 5.39074 to $ 8.81882 $ 429 0.00% 0.55% to 2.30% -15.77% to -14.31% December 31, 2010 152 $ 6.39982 to $10.29102 $ 987 0.32% 0.55% to 2.30% 3.05% to 9.29% December 31, 2009 121 $ 5.90194 to $ 5.98047 $ 722 2.96% 1.50% to 2.30% 12.42% to 13.31% December 31, 2008 36 $ 5.26042 to $ 5.27796 $ 192 2.57% 1.50% to 2.00% -49.35% to -49.18% PROFUND VP HEALTH CARE (AVAILABLE MAY 1, 2008) ----------------------------------------------------------------------------------------- December 31, 2011 64 $10.49885 to $10.88771 $ 693 0.29% 0.55% to 2.30% 7.64% to 9.51% December 31, 2010 87 $ 9.75359 to $10.01278 $ 864 0.23% 0.55% to 2.30% -1.37% to 1.52% December 31, 2009 41 $ 9.70197 to $ 9.86247 $ 401 0.76% 1.30% to 2.30% 16.81% to 18.02% December 31, 2008 21 $ 8.29892 to $ 8.35649 $ 172 0.44% 1.30% to 2.35% -18.25% to -17.69%
A68 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED ------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------ ---------------------- ------- ---------- ----------------- ------------------ PROFUND VP INDUSTRIALS (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 19 $ 8.53881 to $11.23828 $ 171 0.35% 0.55% to 2.35% -4.04% to -2.32% December 31, 2010 24 $ 8.89801 to $11.41249 $ 214 0.20% 1.50% to 2.35% 14.03% to 21.92% December 31, 2009 11 $ 7.35928 to $ 7.46270 $ 85 0.53% 1.50% to 2.35% 21.25% to 22.27% December 31, 2008 9 $ 6.06953 to $ 6.10367 $ 53 0.00% 1.50% to 2.35% -40.29% to -39.96% PROFUND VP MID-CAP GROWTH (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 32 $ 9.94731 to $11.40463 $ 326 0.00% 0.55% to 2.30% -5.07% to -3.43% December 31, 2010 52 $10.47890 to $11.80941 $ 579 0.00% 0.55% to 2.30% 18.01% to 26.77% December 31, 2009 17 $ 8.34760 to $ 8.48599 $ 145 0.00% 1.30% to 2.30% 35.21% to 36.54% December 31, 2008 8 $ 6.18606 to $ 6.21489 $ 48 0.00% 1.30% to 2.00% -38.58% to -38.30% PROFUND VP MID-CAP VALUE (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 66 $ 9.10660 to $10.67879 $ 665 0.15% 0.55% to 2.30% -6.08% to -4.45% December 31, 2010 46 $ 9.69632 to $11.17632 $ 456 0.26% 0.55% to 2.30% 11.96% to 18.91% December 31, 2009 26 $ 8.23508 to $ 8.37151 $ 215 1.47% 1.30% to 2.30% 27.93% to 29.19% December 31, 2008 5 $ 6.44994 to $ 6.47989 $ 32 0.00% 1.30% to 2.00% -36.69% to -36.40% PROFUND VP REAL ESTATE (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 43 $ 8.57465 to $12.12925 $ 386 0.00% 0.55% to 2.30% 2.40% to 4.17% December 31, 2010 83 $ 8.37375 to $11.60561 $ 707 3.90% 0.95% to 2.30% 15.86% to 22.85% December 31, 2009 67 $ 6.86993 to $ 6.96107 $ 467 4.03% 1.50% to 2.30% 25.02% to 26.01% December 31, 2008 11 $ 5.50600 to $ 5.52429 $ 63 0.00% 1.50% to 2.00% -46.33% to -46.15% PROFUND VP SMALL-CAP GROWTH (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 37 $10.17680 to $15.05725 $ 403 0.00% 0.55% to 2.90% -1.57% to 0.72% December 31, 2010 51 $10.27873 to $15.29722 $ 550 0.00% 0.55% to 2.90% 17.66% to 24.11% December 31, 2009 20 $ 8.36346 to $ 8.50207 $ 171 0.00% 1.30% to 2.30% 23.27% to 24.55% December 31, 2008 6 $ 6.79469 to $ 6.82623 $ 42 0.00% 1.30% to 2.00% -32.82% to -32.50% PROFUND VP SMALL-CAP VALUE (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 39 $ 9.41484 to $10.62040 $ 404 0.00% 0.55% to 2.30% -6.26% to -4.63% December 31, 2010 25 $10.04307 to $11.09991 $ 259 0.07% 0.95% to 2.30% 11.22% to 20.54% December 31, 2009 22 $ 8.41420 to $ 8.55355 $ 187 0.48% 1.30% to 2.30% 17.69% to 18.86% December 31, 2008 2 $ 7.18696 to $ 7.19653 $ 15 0.00% 1.30% to 1.50% -29.74% to -29.64% PROFUND VP TELECOMMUNICATIONS (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 15 $ 8.53611 to $12.42479 $ 133 3.63% 0.55% to 2.35% -0.47% to 1.31% December 31, 2010 25 $ 8.57621 to $12.26438 $ 246 2.48% 0.55% to 2.35% 13.03% to 22.07% December 31, 2009 16 $ 7.58749 to $ 7.69379 $ 121 10.90% 1.50% to 2.35% 4.86% to 5.73% December 31, 2008 6 $ 7.23615 to $ 7.27660 $ 40 0.00% 1.50% to 2.35% -29.60% to -29.20% PROFUND VP UTILITIES (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 55 $ 9.25352 to $12.69674 $ 589 1.69% 0.55% to 2.30% 14.87% to 16.86% December 31, 2010 36 $ 8.05537 to $10.86454 $ 295 2.48% 0.55% to 2.30% 3.57% to 8.26% December 31, 2009 38 $ 7.77777 to $ 7.88054 $ 297 5.44% 1.50% to 2.30% 8.25% to 9.10% December 31, 2008 5 $ 7.19947 to $ 7.22327 $ 39 0.93% 1.50% to 2.00% -28.71% to -28.47% PROFUND VP LARGE-CAP GROWTH (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 69 $ 9.46136 to $11.32042 $ 691 0.00% 0.55% to 2.30% 0.82% to 2.56% December 31, 2010 71 $ 9.38481 to $11.03756 $ 677 0.06% 0.55% to 2.30% 10.49% to 11.73% December 31, 2009 67 $ 8.48227 to $ 8.59420 $ 574 0.00% 1.50% to 2.30% 26.82% to 27.82% December 31, 2008 1 $ 6.70176 to $ 6.72390 $ 8 0.00% 1.50% to 2.00% -33.72% to -33.50% PROFUND VP LARGE-CAP VALUE (AVAILABLE MAY 1, 2008) ------------------------------------------------------------------------------------- December 31, 2011 97 $ 7.76766 to $10.56792 $ 851 0.69% 0.55% to 2.30% -3.49% to -1.82% December 31, 2010 89 $ 8.04896 to $10.76394 $ 733 0.89% 0.55% to 2.30% 7.47% to 11.78% December 31, 2009 45 $ 7.29354 to $ 7.45124 $ 330 3.70% 1.00% to 2.30% 16.78% to 18.28% December 31, 2008 2 $ 6.25789 to $ 6.28698 $ 15 2.52% 1.30% to 2.00% -38.90% to -38.61% AST JENNISON LARGE-CAP VALUE PORTFOLIO (AVAILABLE NOVEMBER 16, 2009) ------------------------------------------------------------------------------------- December 31, 2011 3,425 $ 8.50545 to $10.83000 $33,837 0.33% 0.55% to 3.25% -14.75% to -6.39% December 31, 2010 2,319 $10.44965 to $11.61473 $24,809 0.02% 0.55% to 3.25% 4.81% to 12.65% December 31, 2009 47 $10.29149 to $10.30741 $ 487 0.00% 1.15% to 2.35% 1.45% to 1.59%
A69 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
AT YEAR ENDED FOR YEAR ENDED -------------------------------------- ----------------------------------------------- NET INVESTMENT UNITS UNIT VALUE ASSETS INCOME EXPENSE RATIO** TOTAL RETURN*** (000S) LOWEST -- HIGHEST (000S) RATIO* LOWEST -- HIGHEST LOWEST -- HIGHEST ------ ---------------------- -------- ---------- ----------------- ------------------ AST JENNISON LARGE-CAP GROWTH PORTFOLIO (AVAILABLE NOVEMBER 16, 2009) -------------------------------------------------------------------------------------- December 31, 2011 3,024 $ 9.23751 to $11.32571 $ 32,384 0.00% 0.55% to 3.25% -7.55% to 0.11% December 31, 2010 1,478 $10.66273 to $11.35800 $ 16,039 0.00% 0.95% to 3.25% 6.95% to 10.27% December 31, 2009 24 $10.27380 to $10.30032 $ 249 0.00% 0.95% to 2.95% 1.89% to 2.14% CREDIT SUISSE TRUST INTERNATIONAL EQUITY FLEX III PORTFOLIO (AVAILABLE DECEMBER 14, 2009) (EXPIRED OCTOBER 21, 2011) -------------------------------------------------------------------------------------- December 31, 2011 0 $ 0 to $ 0 $ 0 2.91% 1.35% to 1.65% -16.68% to -16.48% December 31, 2010 891 $11.14481 to $11.17971 $ 9,951 0.10% 1.35% to 1.65% 10.41% to 10.74% December 31, 2009 962 $10.09396 to $10.09567 $ 9,709 0.00% 1.35% to 1.65% 0.27% to 0.28% AST BOND PORTFOLIO 2020 (AVAILABLE JANUARY 2, 2009) -------------------------------------------------------------------------------------- December 31, 2011 314 $11.06416 to $12.41953 $ 3,603 1.15% 1.30% to 2.95% 15.28% to 17.15% December 31, 2010 1,771 $ 9.54633 to $10.66744 $ 17,133 0.00% 1.30% to 3.25% 5.41% to 10.41% December 31, 2009 114 $ 8.74021 to $ 8.83518 $ 996 0.00% 1.30% to 2.40% -12.60% to -11.65% AST BOND PORTFOLIO 2017 (AVAILABLE JANUARY 4, 2010) -------------------------------------------------------------------------------------- December 31, 2011 15,087 $11.28966 to $11.73508 $173,608 0.08% 1.15% to 3.25% 7.80% to 10.13% December 31, 2010 450 $10.47326 to $10.59081 $ 4,746 0.00% 1.90% to 3.25% 4.76% to 5.92% AST BOND PORTFOLIO 2021 (AVAILABLE JANUARY 4, 2010) -------------------------------------------------------------------------------------- December 31, 2011 18,356 $12.39610 to $13.14210 $232,734 0.06% 1.15% to 3.25% 16.40% to 18.92% December 31, 2010 2,261 $10.64953 to $11.06626 $ 24,883 0.00% 1.30% to 3.25% 6.42% to 10.66% WELLS FARGO ADVANTAGE VT CORE EQUITY PORTFOLIO SHARE CLASS 1 (AVAILABLE JULY 16, 2010) (EXPIRED AUGUST 26, 2011) -------------------------------------------------------------------------------------- December 31, 2011 0 $ 0 to $ 0 $ 0 0.91% 1.40% to 1.85% -11.83% to -11.58% December 31, 2010 148 $14.13115 to $14.58096 $ 2,102 0.00% 1.40% to 1.85% 22.45% to 22.70% WELLS FARGO ADVANTAGE VT INTERNATIONAL EQUITY PORTFOLIO SHARE CLASS 1 (AVAILABLE JULY 16, 2010) -------------------------------------------------------------------------------------- December 31, 2011 52 $12.21604 to $12.66075 $ 649 0.64% 1.40% to 1.85% -14.37% to -13.99% December 31, 2010 68 $14.26638 to $14.72045 $ 984 0.00% 1.40% to 1.85% 20.82% to 21.07% WELLS FARGO ADVANTAGE VT OMEGA GROWTH PORTFOLIO SHARE CLASS 1 (AVAILABLE JULY 16, 2010) -------------------------------------------------------------------------------------- December 31, 2011 683 $ 1.30203 to $ 1.87829 $ 1,249 0.00% 1.40% to 1.85% -7.08% to -6.66% December 31, 2010 961 $ 1.39498 to $ 2.01236 $ 1,889 0.00% 1.40% to 1.85% 26.02% to 26.28% WELLS FARGO ADVANTAGE VT SMALL CAP GROWTH PORTFOLIO SHARE CLASS 1 (AVAILABLE JULY 16, 2010) -------------------------------------------------------------------------------------- December 31, 2011 47 $11.49507 to $11.56958 $ 545 0.00% 1.40% to 1.85% -6.08% to -5.66% December 31, 2010 66 $12.23884 to $12.26392 $ 804 0.00% 1.40% to 1.85% 27.58% to 27.84% WELLS FARGO ADVANTAGE VT SMALL CAP VALUE PORTFOLIO SHARE CLASS 1 (AVAILABLE JULY 16, 2010) -------------------------------------------------------------------------------------- December 31, 2011 131 $10.76329 to $10.83306 $ 1,409 0.86% 1.40% to 1.85% -8.74% to -8.34% December 31, 2010 183 $11.79431 to $11.81846 $ 2,156 0.00% 1.40% to 1.85% 21.79% to 22.03% AST BOND PORTFOLIO 2022 (AVAILABLE JANUARY 3, 2011) -------------------------------------------------------------------------------------- December 31, 2011 7,051 $11.84372 to $12.09978 $ 84,496 0.00% 1.15% to 3.25% 18.44% to 21.00% AST QUANTITATIVE MODELING PORTFOLIO (AVAILABLE MAY 2, 2011) -------------------------------------------------------------------------------------- December 31, 2011 9,116 $ 8.87815 to $ 8.96673 $ 81,124 0.00% 0.55% to 2.05% -11.20% to -10.33% AST BLACKROCK GLOBAL STRATEGIES PORTFOLIO (AVAILABLE APRIL 29, 2011) -------------------------------------------------------------------------------------- December 31, 2011 89,096 $ 9.06646 to $ 9.23573 $816,029 0.00% 0.55% to 3.25% -9.31% to -7.64% WELLS FARGO ADVANTAGE VT OPPORTUNITY FUND-CLASS 1 (AVAILABLE AUGUST 26, 2011) -------------------------------------------------------------------------------------- December 31, 2011 125 $10.69886 to $10.71531 $ 1,341 0.00% 1.40% to 1.85% 4.66% to 4.81% AST PRUDENTIAL CORE BOND PORTFOLIO (AVAILABLE OCTOBER 31, 2011) -------------------------------------------------------------------------------------- December 31, 2011 1,096 $10.05117 to $10.08473 $ 11,039 0.00% 0.85% to 2.75% 0.33% to 0.65% AST NEUBERGER BERMAN CORE BOND PORTFOLIO (AVAILABLE OCTOBER 31, 2011) -------------------------------------------------------------------------------------- December 31, 2011 428 $10.05125 to $10.08481 $ 4,306 0.00% 0.85% to 2.75% 0.24% to 0.55%
A70 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED) -------- * These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. This ratio is annualized and excludes those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest. ** These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded. ***These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Product designs within a subaccount with an effective date during a period were excluded from the range of total return for that period. Contract owners may experience different total returns based on their investment options. Investment options with a date notation indicate the effective date of that investment option in the Account. Total returns for periods less than one year are not annualized. The total return is calculated for each of the five years in the period ended December 31, 2011 or from the effective date of the subaccount through the end of the reporting period. A. MORTALITY RISK AND EXPENSE RISK CHARGES The mortality risk and expense risk charges are applied daily against the net assets of the separate account attributable to each of the contracts. Mortality risk is that annuitants may live longer than estimated and expense risk is that the cost of issuing and administering the contracts may exceed related charges by Pruco Life. The mortality risk and expense risk charges are assessed through the reduction in unit values. B. ADMINISTRATION CHARGE The administration charge is applied daily against the net assets held in each subaccount. Administration charges include costs associated with issuing the contract, establishing and maintaining records, and providing reports to contract owners. This charge is assessed through the reduction in unit values.
ASSET-BASED CHARGE LEVEL DESCRIPTION OF WHEN APPLICABLE ------------ ----------------------------------------------------------- 0.55% Premier Retirement Advisor - No Optional Benefits 0.85% Premier Retirement Variable Annuity - No Optional Benefits 0.95% Premier Bb Series - No Optional Benefits Premier Retirement Advisor - With HAV 1.15% Premier B Series - No Optional Benefits Premier Retirement Advisor - With HD GRO II OR GRO Plus II 1.30% Premier Bb Series - with HD GRO Premier Retirement B - No Optional Benefits 1.35% Discovery Choice Basic - No Optional Benefits Premier Retirement Advisor - With Combo 5% and HAV
A71 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
ASSET-BASED CHARGE LEVEL DESCRIPTION OF WHEN APPLICABLE ------------ --------------------------------------------------------------------------- 1.40% No Optional Benefits Discovery Select Variable Annuity (0.15% Admin and 1.25% M&E) Discovery Preferred Variable Annuity (0.15% Admin and 1.25% M&E) Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Advisor 1.45% Premier Bb Series 5% Roll Up and HAV or HDV 1.50% No Optional Benefits Strategic Partners Annuity One Enhanced - Bonus Version Strategic Partners Annuity One Enhanced III - Bonus Version Strategic Partners Plus Enhanced - Bonus Version Strategic Partners Plus Enhanced III - Bonus Version Premier L Series Premier B Series with HD GRO 1.52% Strategic Partners Select GMDB with Step Up and Roll Up 1.55% Premier X Series - No Optional Benefits Premier Bb Series with LT5 or HD5 Premier Bb Series - with HD GRO Premier Retirement Advisor - With HAV and HD GRO II OR HAV and GRO Plus II 1.60% Strategic Partners FlexElite - No Optional Benefits GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version 1.65% No Optional Benefit Discovery Choice Enhanced Strategic Partners Enhanced FlexElite GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Advisor with GMDB with Step Up and Roll Up Premier B Series with HDV Premier B Series with Roll-up & HAV 1.70% GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced - Bonus Version Strategic Partners Plus Enhanced - Bonus Version GMDB with-Greater of Roll Up and Step Up Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version Strategic Partners Plus Enhanced - Non Bonus Version GMDB with Step Up and Roll Up Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version Premier Bb Series with SLT5 Premier Retirement B - With HAV Premier Retirement L - No Optional Benefits 1.75% Premier B Series with LT5 or HD5 GMDB with-Greater of Roll Up or Step Up Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Annuity One Enhanced III - Non Bonus Version GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced III - Bonus Version Strategic Partners Plus Enhanced III - Bonus Version Premier B Series with HD GRO Premier Bb Series with GMDB Annual Step Up or 5% Roll Up with HAV Premier Retirement C - No Optional Benefits
A72 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
ASSET-BASED CHARGE LEVEL DESCRIPTION OF WHEN APPLICABLE ------------ ---------------------------------------------------------------------------------------------- 1.80% Strategic Partners FlexElite with GMDB Annual Step Up or 5% Roll Up Strategic Partners Plus Enhanced - Bonus Version with GMDB with Step Up and Roll Up Strategic Partners Annuity One Enhanced - Bonus Version with GMDB with Greater of Roll Up and Step Up Premier Bb Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 1.85% GMDB with-Greater of Roll Up or Step Up Strategic Partners Plus Enhanced III - Bonus Version Strategic Partners Annuity One Enhanced III - Bonus Version Premier L Series with HD GRO Premier Retirement X - No Optional Benefits 1.90% Premier B Series with SLT5 With HDV Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Enhanced FlexElite with GMDB Annual Step Up or 5% Roll Up Strategic Partners FlexElite with GMDB with Greater of Roll Up and Step Up Premier X Series with HD GRO Premier B Series with GMDB Annual Step Up or 5% Roll Up with HAV Premier Retirement B - With HD GRO II OR GRO Plus II 1.95% Premier Retirement Advisor - With Combo 5%/HAV and HD GRO II OR Combo 5%/HAV and GRO Plus II 2.00% Strategic Partners Enhanced FlexElite GMDB with-Greater of Roll Up or Step Up With HDV Strategic Partners Plus Enhanced III - Bonus Version Strategic Partners Annuity One Enhanced III - Bonus Version With LT5 or HD5 Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Advisor Premier L Series with HDV Premier L Series with Roll-up & HAV Premier B Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 2.05% Premier X Series with HDV Premier X Series with Roll-up & HAV Premier Bb Series with LT5 Premier Bb Series with LT5 and HDV Premier Bb Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV Premier B Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 2.10% Strategic Partners Enhanced FlexElite with HDV With LT5 or HD5 Strategic Partners Annuity One Enhanced - Bonus Version Strategic Partners Annuity One Enhanced III - Bonus Version Strategic Partners Plus Enhanced - Bonus Version Strategic Partners Plus Enhanced III - Bonus Version Premier L Series Premier L Series with HD GRO Premier Retirement B - With Combo 5% and HAV Premier Retirement L - With HAV 2.15% With SLT5 Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Premier X Series with LT5 or HD5 Premier X Series with HD GRO Premier Retirement C - With HAV
A73 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
ASSET-BASED CHARGE LEVEL DESCRIPTION OF WHEN APPLICABLE ------------ ------------------------------------------------------------------------------------------- 2.20% Strategic Partners FlexElite - No Optional Benefits With LT5 or HD5 and GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version 2.25% Strategic Partners Enhanced FlexElite with LT5 or HD5 With SLT5 Premier L Series Strategic Partners Annuity One Enhanced III - Bonus Version Strategic Partners Plus Enhanced III - Bonus Version With LT5 or HD5 and GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Strategic Partners Advisor with LT5 or HD5 and GMDB with Step Up and Roll Up Premier B Series with LT5 Premier B Series with LT5 and HDV Premier B Series with LT5 or HD5 and Roll-up & HAV Premier B Series with HD GRO and GMDB Annual Step Up or 5% Roll Up Premier Retirement X - With HAV 2.30% Premier X Series with SLT5 Strategic Partners Plus Enhanced - Non Bonus Version with LT5 or HD5 and GMDB with Step Up and Roll Up With LT5 or HD5 and GMDB with Step Up and Roll Up Strategic Partners Plus Strategic Partners Plus Enhanced - Non Bonus Version With LT5 or HD5 and GMDB with Greater of Roll Up and Step Up Strategic Partners Annuity One Strategic Partners Annuity One Enhanced - Non Bonus Version With LT5 or HD5 and GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced - Bonus Version Strategic Partners Plus Enhanced - Bonus Version Premier L Series with GMDB Annual Step Up or 5% Roll Up with HAV Premier Retirement B - With HAV and HD GRO II OR HAV and GRO Plus II Premier Retirement L - With HD GRO II OR GRO Plus II 2.35% Strategic Partners Annuity One Enhanced III - Non Bonus Version With LT5 or HD5 and GMDB Annual Step Up or 5% Roll Up Strategic Partners Annuity One Enhanced III - Bonus Version Strategic Partners Plus Enhanced III - Bonus Version Premier L Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV Premier X Series with GMDB Annual Step Up or 5% Roll Up with HAV Premier Bb Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV Premier Retirement C - With HD GRO II OR GRO Plus II 2.40% Strategic Partners Annuity One Enhanced - Bonus Version with LT5 or HD5 and GMDB with Greater of Roll Up and Step Up Strategic Partners Plus Enhanced - Bonus Version with LT5 or HD5 and GMDB with Step Up and Roll Up Strategic Partners FlexElite with LT5 or HD5 and GMDB with GMDB Annual Step Up or 5% Roll Up Strategic Partners Enhanced FlexElite with SLT5 Premier X Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 2.45% X - With HD GRO II OR GRO Plus II 2.50% Strategic Partners FlexElite with LT5 or HD5 and GMDB with-Greater of Roll Up or Step Up Strategic Partners Enhanced FlexElite with LT5 or HD5 and GMDB Annual Step Up or 5% Roll Up With LT5 or HD5 and with HDV Strategic Partners Annuity One Enhanced III - Non Bonus Version Strategic Partners Plus Enhanced III - Non Bonus Version Premier B Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV Premier Retirement L - With Combo 5% and HAV
A74 NOTE 7: FINANCIAL HIGHLIGHTS (CONTINUED)
ASSET-BASED CHARGE LEVEL DESCRIPTION OF WHEN APPLICABLE ------------ -------------------------------------------------------------------------------------------------- 2.55% Premier Retirement C - With Combo 5% and HAV 2.60% Strategic Partners Enhanced FlexElite with LT5 or HD5 and GMDB with-Greater of Roll Up or Step Up With LT5 or HD5 and with HDV Strategic Partners Plus Enhanced III - Bonus Version Strategic Partners Annuity One Enhanced III - Bonus Version Premier L Series with LT5 Premier L Series with LT5 and HDV Premier L Series with LT5 or HD5 and Roll-up & HAV Premier L Series with HD GRO and GMDB Annual Step Up or 5% Roll Up 2.65% Premier X Series with LT5 Premier X Series with LT5 and HDV Premier X Series with HD GRO and GMDB Annual Step Up or 5% Roll Up Premier X Series with LT5 or HD5 and Roll-up & HAV Premier Retirement X - With Combo 5% and HAV 2.70% Premier Retirement B - With Combo 5%/HAV and HD GRO II OR Combo 5%/HAV and GRO Plus II Premier Retirement L - With HAV and HD GRO II OR HAV and GRO Plus II 2.75% Strategic Partners Enhanced FlexElite with SLT5 with HDV Premier Retirement C - With HAV and HD GRO II OR HAV and GRO Plus II 2.85% Premier Retirement X - With HAV and HD GRO II OR HAV and GRO Plus II 2.90% Premier L Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 2.95% Premier X Series with HD GRO and GMDB Annual Step Up or 5% Roll Up with HAV 3.10% Premier Retirement L - With Combo 5%/HAV and HD GRO II OR Combo 5%/HAV and GRO Plus II 3.15% Premier Retirement C - With Combo 5%/HAV and HD GRO II OR Combo 5%/HAV and GRO Plus II 3.25% Premier Retirement X - With Combo 5%/HAV and HD GRO II OR Combo 5%/HAV and GRO Plus II
C. WITHDRAWAL CHARGES A deferred sales charge may be made upon full or partial contract owner redemptions. The charge compensates Pruco Life for paying the expenses of selling and distributing the contracts, including sales commissions, printing of prospectuses, sales administration, preparation of sales literature, and other promotional activities. No withdrawal charge is imposed whenever earnings are withdrawn. The range for withdrawal charges is 0%-9%. The charge is assessed through the redemption of units. D. OTHER RELATED CHARGES For Highest Daily Lifetime Seven, Highest Daily Lifetime Seven with Beneficiary Income Option, Highest Daily Lifetime Seven with Lifetime Income Accelerator, Spousal Highest Daily Lifetime Seven and Spousal Highest Daily Lifetime Seven with Beneficiary Income Option, the Optional Benefit Fee is a percentage of the Protected Withdrawal Value and is deducted pro rata from the Subaccounts on a quarterly basis. For Highest Daily Lifetime Income, Highest Daily Lifetime Income with Lifetime Income Accelerator, Spousal Highest Daily Lifetime Income, Highest Daily Lifetime Six Plus, Highest Daily Lifetime Six Plus with Lifetime Income Accelerator, Spousal Highest Daily Lifetime Six Plus, and Spousal Highest Daily Lifetime Six Plus with Beneficiary Income Option, Highest Daily Lifetime Seven Plus, Highest Daily Lifetime Seven Plus with Beneficiary Income Option, Highest Daily Lifetime Seven Plus with Lifetime Income Accelerator, and Spousal Highest Daily Lifetime Seven Plus, the Optional Benefit Fee is assessed against the greater of the unadjusted account value or the Protected Withdrawal Value and is deducted pro rata from the Subaccounts on a quarterly basis. An annual Maintenance Fee is charged if purchase payments or account is less than a stated amount (varies by product and may vary by State). A75 NOTE 8: OTHER Contract owner net payments--represent contract owner contributions under the Variable Annuity Policies reduced by applicable deductions, charges, and state premium taxes. Annuity payments--represent periodic payments distributed under the terms of the policy. Surrenders, withdrawals, and death benefits--are payments to contract owners and beneficiaries made under the terms of the Variable Annuity Policies, and amounts that contract owners have requested to be withdrawn or paid to them. Net transfers between other subaccounts or fixed rate options--are amounts that contract owners have directed to be moved among subaccounts, including permitted transfers to and from the Guaranteed Interest Account and Market Value Adjustment. Withdrawals and other charges--are various contract level charges as described in contract charges and features section located above. A76 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Contract Owners of Pruco Life Flexible Premium Variable Annuity Account and the Board of Directors of Pruco Life Insurance Company In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the subaccounts listed in Note 1 of the Pruco Life Flexible Premium Variable Annuity Account at December 31, 2011, and the results of each of their operations and the changes in each of their net assets for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of Pruco Life Insurance Company. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at December 31, 2011 by correspondence with the transfer agents of the investee mutual funds, provide a reasonable basis for our opinion. /s/ PricewaterhouseCoopers LLP New York, New York April 12, 2012 A77 PRUCO LIFE INSURANCE COMPANY Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm December 31, 2011 and 2010 PRUCO LIFE INSURANCE COMPANY INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Financial Statements Page # -------------------- ------ Management's Annual Report on Internal Control Over Financial Reporting B-2 Consolidated Financial Statements: Consolidated Statements of Financial Position--December 31, 2011 and 2010 B-3 Consolidated Statements of Operations and Comprehensive Income Years ended December 31, 2011, 2010 and 2009 B-4 Consolidated Statements of Stockholder's Equity Years ended December 31, 2011, 2010 and 2009 B-5 Consolidated Statements of Cash Flows Years ended December 31, 2011, 2010 and 2009 B-6 Notes to Consolidated Financial Statements B-8 Report of Independent Registered Public Accounting Firm B-83 B-1 Management's Annual Report on Internal Control Over Financial Reporting Management of Pruco Life Insurance Company ("the Company") is responsible for establishing and maintaining adequate internal control over financial reporting. Management conducted an assessment of the effectiveness, as of December 31, 2011, of the Company's internal control over financial reporting, based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on our assessment under that framework, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2011. Our internal control over financial reporting is a process designed by or under the supervision of our principal executive and principal financial officers 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. Our internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This Annual Report does not include an attestation report of the Company's registered public accounting firm, PricewaterhouseCoopers LLP, regarding internal control over financial reporting. Internal controls over Financial Reporting were not subject to attestation by the Company's registered public accounting firm pursuant to final rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Annual Report. In conjunction with the restatement of these financial statements discussed in Notes 1 and 2, Management has reassessed the Company's internal contracts over financial reporting and concluded that the Company's internal control over financial reporting was effective at December 31, 2011. March 9, 2012 except for the reassessment related to the restatement of these financial statements, as to which the date is July 20, 2012 B-2 Pruco Life Insurance Company Consolidated Statements of Financial Position As of December 31, 2011 and December 31, 2010 (in thousands, except share amounts) -------------------------------------------------------------------------------- --------------------------------------------------------------------------------
December 31, December 31, 2011 2010 ------------ ------------ ASSETS Fixed maturities, available for sale, at fair value (amortized cost: 2011 - $5,151,406; 2010 - $5,701,829) $ 5,544,124 $ 6,042,303 Equity securities, available for sale, at fair value (cost: 2011 - $9,627; 2010 - $17,964) 8,269 19,407 Trading account assets, at fair value 25,843 22,705 Policy loans 1,050,878 1,061,607 Short-term investments 283,281 246,904 Commercial mortgage and other loans 1,406,492 1,275,022 Other long-term investments 268,486 131,994 ----------- ----------- Total investments 8,587,373 8,799,942 Cash and cash equivalents 287,423 364,999 Deferred policy acquisition costs 2,545,600 2,693,689 Accrued investment income 86,020 92,806 Reinsurance recoverables 5,729,116 2,727,161 Receivables from parents and affiliates 195,543 249,339 Deferred sales inducements 542,742 537,943 Income taxes receivable 76,066 - Other assets 44,555 53,375 Separate account assets 58,156,771 43,269,091 ----------- ----------- Total Assets 76,251,209 58,788,345 =========== =========== LIABILITIES AND EQUITY LIABILITIES Policyholders' account balances 7,811,674 7,511,987 Future policy benefits and other policyholder liabilities 5,294,308 3,327,549 Cash collateral for loaned securities 153,651 76,574 Securities sold under agreements to repurchase 40,491 2,957 Income taxes payable - 307,778 Short-term debt to affiliates 129,000 - Long-term debt to affiliates 1,172,000 895,000 Payables to parent and affiliates 3,377 41,910 Other liabilities 694,497 475,489 Separate account liabilities 58,156,771 43,269,091 ----------- ----------- Total Liabilities 73,455,769 55,908,335 ----------- ----------- COMMITMENTS AND CONTINGENT LIABILITIES (See Note 12) EQUITY Common stock, ($10 par value; 1,000,000 shares, authorized; 250,000 shares, issued and outstanding) 2,500 2,500 Additional paid-in capital 836,021 792,226 Retained earnings 1,743,291 1,902,185 Accumulated other comprehensive income 213,628 183,099 ----------- ----------- Total Equity 2,795,440 2,880,010 ----------- ----------- TOTAL LIABILITIES AND EQUITY $76,251,209 $58,788,345 =========== ===========
See Notes to Consolidated Financial Statements B-3 Pruco Life Insurance Company Consolidated Statements of Operations and Comprehensive Income (Loss) Years Ended December 31, 2011, 2010 and 2009 (in thousands) --------------------------------------------------------------------------------
2011 2010 2009 ---------- ---------- --------- REVENUES Premiums $ 72,787 $ 66,392 $ 71,593 Policy charges and fee income 1,109,495 591,047 652,034 Net investment income 439,950 438,244 406,040 Asset administration fees 203,508 81,358 34,004 Other income 43,861 51,319 45,841 Realized investment gains (losses), net: Other-than-temporary impairments on fixed maturity securities (71,348) (120,637) (97,552) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income 62,379 108,826 65,656 Other realized investment gains (losses), net 271,052 122,445 (437,288) ---------- ---------- --------- Total realized investment gains (losses), net 262,083 110,634 (469,184) ---------- ---------- --------- Total Revenues 2,131,684 1,338,994 740,328 ---------- ---------- --------- BENEFITS AND EXPENSES Policyholders' benefits 312,211 (891) 160,333 Interest credited to policyholders' account balances 502,585 250,517 271,379 Amortization of deferred policy acquisition costs 973,203 66,428 230,208 General, administrative and other expenses 697,884 505,956 333,340 ---------- ---------- --------- Total Benefits and Expenses 2,485,883 822,010 995,260 ---------- ---------- --------- INCOME (LOSS) FROM OPERATIONS BEFORE INCOME TAXES (354,199) 516,984 (254,932) ---------- ---------- --------- Income taxes Current 42,474 157,318 93,658 Deferred (263,930) (29,219) (248,231) ---------- ---------- --------- Income tax expense (benefit) (221,456) 128,099 (154,573) ---------- ---------- --------- NET INCOME (LOSS) $ (132,743) $ 388,885 $(100,359) ========== ========== ========= Other comprehensive income (loss), before tax: Foreign currency translation adjustments (178) (195) 349 Unrealized investment gains (losses) for the period 122,946 97,392 357,688 Reclassification adjustment for (gains) losses included in net income (75,822) 46,532 34,650 ---------- ---------- --------- Net unrealized investment gains (losses) 47,124 143,924 392,338 ---------- ---------- --------- Other comprehensive income (loss), before tax: 46,946 143,729 392,687 Less: Income tax expense (benefit) related to items of other comprehensive income 16,417 50,137 135,293 Impact of adoption of new guidance for other-than-temporary impairments of debt securities, net of taxes - - 19,536 ---------- ---------- --------- Other comprehensive income (loss), net of tax: 30,529 93,592 276,930 ---------- ---------- --------- COMPREHENSIVE INCOME (LOSS) $ (102,214) $ 482,477 $ 176,571 ========== ========== =========
See Notes to Consolidated Financial Statements B-4 Pruco Life Insurance Company Consolidated Statements of Stockholder's Equity Years Ended December 31, 2011, 2010 and 2009 (in thousands) --------------------------------------------------------------------------------
Accumulated Additional Other Common Paid-in Retained Comprehensive Total Stock Capital Earnings Income (Loss) Equity ------ ---------- ---------- ------------- ---------- Balance, December 31, 2008 $2,500 $815,664 $2,046,712 $(137,135) $2,727,741 Cumulative effect of adoption of accounting principle (352,589) (30,752) (383,341) Contributed Capital - 13,194 - 13,194 Impact of adoption of new guidance for other-than- temporary impairments of debt securities, net of taxes - - 19,536 (19,536) - Comprehensive income: Net income (loss) - - (100,359) - (100,359) Other comprehensive income (loss), net of tax - - - 276,930 276,930 ---------- Total comprehensive income 176,571 ------ -------- ---------- --------- ---------- Balance, December 31, 2009 $2,500 $828,858 $1,613,300 $ 89,507 $2,534,165 Contributed Capital - 10 - - 10 Affiliated Asset Transfers - (36,642) - - (36,642) Dividend to Parent - - (100,000) - (100,000) Comprehensive income: Net income - - 388,885 388,885 Other comprehensive income (loss), net of tax - - - 93,592 93,592 ------ -------- ---------- --------- ---------- Total comprehensive income 482,477 ------ -------- ---------- --------- ---------- Balance, December 31, 2010 $2,500 $792,226 $1,902,185 $ 183,099 $2,880,010 Contributed Capital- Parent/Child Asset Transfers - 3,543 - - 3,543 Affiliated Asset Transfers - 40,252 (26,151) - 14,101 Comprehensive income: Net income (loss) - - (132,743) - (132,743) Other comprehensive income (loss), net of tax - - - 30,529 30,529 ---------- Total comprehensive income (102,214) ------ -------- ---------- --------- ---------- Balance, December 31, 2011 $2,500 $836,021 $1,743,291 $ 213,628 $2,795,440 ====== ======== ========== ========= ==========
See Notes to Consolidated Financial Statements B-5 Pruco Life Insurance Company Consolidated Statements of Cash Flows Years Ended December 31, 2011, 2010 and 2009 (in thousands) --------------------------------------------------------------------------------
2011 Restated 2010 ----------- ----------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: Net income (loss) $ (132,743) $ 388,885 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Policy charges and fee income (127,683) (204,264) Interest credited to policyholders' account balances 502,585 250,517 Realized investment (gains) losses, net (262,083) (110,634) Amortization and other non-cash items (68,098) (20,870) Change in: Future policy benefits and other insurance liabilities 870,582 728,898 Reinsurance recoverables (798,474) (819,599) Accrued investment income 6,785 (2,686) Receivables from parent and affiliates 46,595 (37,402) Payables to parent and affiliates (48,064) 7,754 Deferred policy acquisition costs (123,100) (839,806) Income taxes payable (412,217) (56,052) Deferred sales inducements (289,642) (246,006) Other, net 160,375 (34,532) ----------- ----------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES $ (675,182) $ (995,797) ----------- ----------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: Proceeds from the sale/maturity/prepayment of: Fixed maturities, available for sale $ 1,069,922 $ 1,843,933 Short-term investments 1,167,039 1,069,535 Policy loans 122,721 115,225 Commercial mortgage and other loans 82,098 64,520 Other long-term investments 10,612 24,443 Equity securities, available for sale 10,355 15,978 Trading account assets, at fair value 5,174 4,527 Payments for the purchase/origination of: - - Fixed maturities, available for sale (1,135,456) (1,846,086) Short-term investments (1,203,342) (1,143,338) Policy loans (102,230) (119,752) Commercial mortgage and other loans (204,951) (305,789) Other long-term investments (70,641) (62,979) Equity securities, available for sale (8,528) (6,777) Trading account assets, at fair value - - Notes receivable from parent and affiliates, net 6,842 55,863 Other 2,757 4,852 ----------- ----------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES $ (247,628) $ (285,845) ----------- ----------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: Policyholders' account deposits $ 3,044,607 $ 3,092,710 Ceded policyholders' account deposits (117,916) - Policyholders' account withdrawals (2,555,035) (2,328,806) Ceded policyholders' account withdrawals 8,824 - Net change in securities sold under agreement to repurchase and cash collateral for loaned securities 114,612 (128,177) Dividend to parent - (100,000) Contributed capital (including parent/child asset transfer) 3,543 10 Net change in financing arrangements (maturities 90 days or less) 69,599 72,793 Net change in long-term borrowing 277,000 895,000 ----------- ----------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES $ 845,234 $ 1,503,530 ----------- ----------- Net increase (decrease) in cash and cash equivalents (77,576) 221,888 Cash and cash equivalents, beginning of year 364,999 143,111 ----------- ----------- CASH AND CASH EQUIVALENTS, END OF YEAR $ 287,423 $ 364,999 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION Income taxes (refunded) paid $ 166,606 $ 185,220 Interest paid $ 33,104 $ 3,212
2009 ----------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES: Net income (loss) $ (100,359) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Policy charges and fee income (265,669) Interest credited to policyholders' account balances 271,379 Realized investment (gains) losses, net 469,184 Amortization and other non-cash items (10,451) Change in: Future policy benefits and other insurance liabilities 475,721 Reinsurance recoverables (533,781) Accrued investment income (10,959) Receivables from parent and affiliates 94,287 Payables to parent and affiliates (41,496) Deferred policy acquisition costs (199,050) Income taxes payable (86,464) Deferred sales inducements (94,526) Other, net (16,104) ----------- CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES $ (48,288) ----------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES: Proceeds from the sale/maturity/prepayment of: Fixed maturities, available for sale $ 1,673,613 Short-term investments 775,481 Policy loans 150,744 Commercial mortgage and other loans 46,286 Other long-term investments 1,761 Equity securities, available for sale 19,541 Trading account assets, at fair value 5 Payments for the purchase/origination of: - Fixed maturities, available for sale (2,443,789) Short-term investments (872,256) Policy loans (117,727) Commercial mortgage and other loans (230,550) Other long-term investments (7,253) Equity securities, available for sale (19,636) Trading account assets, at fair value (13,301) Notes receivable from parent and affiliates, net (143,419) Other 7,817 ----------- CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES $(1,172,683) ----------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES: Policyholders' account deposits $ 1,937,462 Ceded policyholders' account deposits - Policyholders' account withdrawals (1,223,565) Ceded policyholders' account withdrawals - Net change in securities sold under agreement to repurchase and cash collateral for loaned securities 53,994 Dividend to parent - Contributed capital (including parent/child asset transfer) - Net change in financing arrangements (maturities 90 days or less) 1,146 Net change in long-term borrowing - ----------- CASH FLOWS FROM (USED IN) FINANCING ACTIVITIES $ 769,037 ----------- Net increase (decrease) in cash and cash equivalents (451,934) Cash and cash equivalents, beginning of year 595,045 ----------- CASH AND CASH EQUIVALENTS, END OF YEAR $ 143,111 =========== SUPPLEMENTAL CASH FLOW INFORMATION Income taxes (refunded) paid $ (68,108) Interest paid $ 8
See Notes to Consolidated Financial Statements B-6 Significant Non Cash Transactions Cash Flows from Investing Activities in the 2011 Consolidated Statement of Cash Flows excludes $313 million of increases in fixed maturities, available for sale related to a non-cash transfer of assets to the Company. These assets were received as consideration of premium due to the Company for the recapture of policies issued prior to January 1, 2011 previously reinsured by UPARC, an affiliate (See Note 13). Cash Flows from Investing Activities in the 2011 Consolidated Statement of Cash Flows also excludes $1,054 million of decreases in fixed maturities available for sale related to the coinsurance transaction with PAR U, an affiliate (See Note 13). The assets transferred included $1,009 million of consideration for the initial premium due under the coinsurance agreement with this affiliate and $45 million to Prudential Insurance, the Company's parent company, to settle tax expenses arising from this coinsurance transaction. B-7 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 1. BUSINESS AND BASIS OF PRESENTATION Pruco Life Insurance Company, or the "Company," is a wholly owned subsidiary of The Prudential Insurance Company of America, or "Prudential Insurance," which in turn is an indirect wholly owned subsidiary of Prudential Financial, Inc., or "Prudential Financial." Pruco Life Insurance Company was organized in 1971 under the laws of the State of Arizona. It is licensed to sell life insurance and annuities in the District of Columbia, Guam, and in all States except New York. The Company has three subsidiaries, including one wholly owned life insurance subsidiary, Pruco Life Insurance Company of New Jersey, or "PLNJ," and two subsidiaries formed in 2009 for the purpose of holding certain commercial loan investments. Pruco Life Insurance Company and its subsidiaries are together referred to as the Company and all financial information is shown on a consolidated basis. Two additional subsidiaries formerly owned by the Company for the purpose of acquiring fixed income investments were liquidated in 2009. PLNJ is a stock life insurance company organized in 1982 under the laws of the state of New Jersey. It is licensed to sell life insurance and annuities only in New Jersey and New York. Beginning in March 2010, Prudential Annuities Life Assurance Corporation ("PALAC"), an affiliate of the Company, ceased offering its existing variable annuity products (and where offered, the companion market value adjustment option) to new investors upon the launch of a new product in the Company. In general, the new product line offers the same optional living benefits and optional death benefits as offered by PALAC's existing variable annuities. However, subject to applicable contractual provisions and administrative rules, PALAC will continue to accept subsequent purchase payments on in force contracts under existing annuity products. These initiatives were implemented to create operational and administrative efficiencies by offering a single product line of annuity products from a more limited group of legal entities. In addition, by limiting its variable annuity offerings to a single product line sold through one insurer (and its affiliate, for New York sales), the Prudential Annuities business unit of Prudential Financial expects to convey a more focused, cohesive image in the marketplace. Basis of Presentation The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or "U.S. GAAP." The Company has extensive transactions and relationships with Prudential Insurance and other affiliates, (as more fully described in Note 13. Due to these relationships, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The most significant estimates include those used in determining deferred policy acquisition costs and related amortization; amortization of deferred sales inducements; future policy benefits including guarantees; valuation of investments including derivatives and the recognition of other-than-temporary impairments; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters. B-8 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 1. BUSINESS AND BASIS OF PRESENTATION (continued) Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. Restatement of Consolidated Statement of Cash Flows The Company has restated the Consolidated Statement of Cash Flows for the year ended December 31, 2011 included in the Company's 2011 Annual Report on Form 10-K. While the restatement affects the subtotals of cash flows from operating, investing and financing activities, it has no impact on the net increase (decrease) in cash and cash equivalents for the previously reported period. The restatement also has no impact on the Company's Consolidated Statements of Financial Position, Consolidated Statements of Operations or Consolidated Statements of Stockholder's Equity as of the end of or for any previously reported period. The restatement primarily corrects the presentation of the settlements of certain reinsurance transactions between the Company and its affiliates that occurred during the quarter ended December 31, 2011. The settlements were made by transferring fixed maturity securities, however, the Consolidated Statement of Cash Flows for the year ended December 31, 2011 reflected these settlements as if they were made with cash. The correct presentation is to exclude these non-cash transactions from the Consolidated Statement of Cash Flows and disclose them in the Consolidated Financial Statements. Primarily as a result of the incorrect presentation of these non-cash transactions, Cash Flows used in Operating Activities was overstated by $768.2 million, Cash Flows from Investing Activities was overstated by $635.1 million and Cash Flows from Financing Activities was overstated by $133.1 million. These transactions are fully described in Note 13. For further detail on the 2011 Consolidated Statement of Cash Flows, as reported and as restated, refer to Note 2. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Investments and Investment Related Liabilities The Company's investments in debt and equity securities include fixed maturities; trading account assets; equity securities; and short-term investments. The accounting policies related to these, as well as commercial mortgage and other loans, are as follows: Fixed maturities are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as "available for sale" are carried at fair value. See Note 10 for additional information regarding the determination of fair value. Interest income, as well as the related amortization of premium and accretion of discount, is included in "Net investment income" under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of other-than-temporary impairments recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For asset-backed and mortgage-backed securities rated below AA, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Unrealized gains and losses on fixed maturities classified as "available for sale," net B-9 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) of tax, and the effect on deferred policy acquisition costs, deferred sales inducements and future policy benefits that would result from the realization of unrealized gains and losses, are included in "Accumulated other comprehensive income (loss)." Equity securities available for sale are comprised of common stock, and non-redeemable preferred stock and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on deferred policy acquisition costs, deferred sales inducements and future policy benefits that would result from the realization of unrealized gains and losses, are included in "Accumulated other comprehensive income (loss)." The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in "Net investment income" when declared. Trading account assets, at fair value, consist primarily of asset-backed securities, commercial mortgage-backed securities and perpetual preferred stock whose fair values are determined consistent with similar instruments described above under "Fixed Maturity Securities." Realized and unrealized gains and losses for these investments are reported in "Other income." Interest and dividend income from these investments is reported in "Net investment income." Commercial mortgage and other loans consist of commercial mortgage loans and agricultural loans. Commercial mortgage loans are broken down by class which is based on property type (industrial properties, retail, office, multi-family/apartment, hospitality, and other). Commercial mortgage and other loans originated and held for investment are generally carried at unpaid principal balance, net of unamortized deferred loan origination fees and expenses and net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances. Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, related to commercial mortgage and other loans, are included in "Net investment income." Impaired loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. The Company defines "past due" as principal or interest not collected at least 30 days past the scheduled contractual due date. Interest received on loans that are past due, including impaired and non-impaired loans as well as loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income based on the Company's assessment as to the collectability of the principal. See Note 3 for additional information about the Company's past due loans. The Company discontinues accruing interest on loans after the loans become 90 days delinquent as to principal or interest payments, or earlier when the Company has doubts about collectability. When the Company discontinues accruing interest on a loan, any accrued but uncollectible interest on the loan and other loans backed by the same collateral, if any, is charged to interest income in the same period. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, or the loan has been modified, a regular payment performance has been established. The Company reviews the performance and credit quality of the commercial mortgage loan and agricultural loan portfolios on an on-going basis. Loans are placed on watch list status based on a predefined set of criteria and are B-10 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) assigned one of three categories. Loans are placed on "early warning" status in cases where, based on the Company's analysis of the loan's collateral, the financial situation of the borrower or tenants or other market factors, it is believed a loss of principal or interest could occur. Loans are classified as "closely monitored" when it is determined that there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans "not in good standing" are those loans where the Company has concluded that there is a high probability of loss of principal, such as when the loan is delinquent or in the process of foreclosure. As described below, in determining the allowance for losses, the Company evaluates each loan on the watch list to determine if it is probable that amounts due according to the contractual terms of the loan agreement will not be collected. Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property's net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan's current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments. The values utilized in calculating these ratios are developed as part of the Company's periodic review of the commercial mortgage loan and agricultural loan portfolio, which includes an internal appraisal of the underlying collateral value. The Company's periodic review also includes a quality re-rating process, whereby the internal quality rating originally assigned at underwriting is updated based on current loan, property and market information using a proprietary quality rating system. The loan-to-value ratio is the most significant of several inputs used to establish the internal credit rating of a loan which in turn drives the allowance for losses. Other key factors considered in determining the internal credit rating include debt service coverage ratios, amortization, loan term, estimated market value growth rate and volatility for the property type and region. See Note 3 for additional information related to the loan-to-value ratios and debt service coverage ratios related to the Company's commercial mortgage and agricultural loan portfolios. The allowance for loan losses includes a loan specific reserve for each impaired loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. For impaired commercial mortgage loans and agricultural loans, the allowances for losses are determined based on the present value of expected future cash flows discounted at the loan's effective interest rate, or based upon the fair value of the collateral if the loan is collateral dependent. The portfolio reserves for probable incurred but not specifically identified losses in the commercial mortgage and agricultural loan portfolio segments considers the current credit composition of the portfolio based on an internal quality rating, (as described above). The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability and loss severity factors by property type. These factors are reviewed each quarter and updated as appropriate. The allowance for losses on commercial mortgage loans and agricultural loans can increase or decrease from period to period based on the factors noted above. "Realized investment gains (losses), net" includes changes in the allowance for losses. "Realized investment gains (losses), net" also includes gains and losses on sales, certain restructurings, and foreclosures. When a commercial mortgage or other loan is deemed to be uncollectible, any specific valuation allowance associated with the loan is reversed and a direct write down to the carrying amount of the loan is made. The carrying amount of the loan is not adjusted for subsequent recoveries in value. B-11 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in "Net investment income" at the contract interest rate when earned. Securities repurchase and resale agreements and securities loaned transactions are used to earn spread income, to borrow funds, or to facilitate trading activity. Securities repurchase and resale agreements are generally short term in nature, and therefore, the carrying amounts of these instruments approximate fair value. As part of securities repurchase agreements or securities loan transactions the Company transfers U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company transfers cash as collateral and receives U.S. government securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short term investments or fixed maturities. Securities repurchase and resale agreements that satisfy certain criteria are treated as collateralized financing arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective agreements. For securities purchased under agreements to resell, the Company's policy is to take possession or control of the securities and to value the securities daily. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. Securities to be repurchased are the same, or substantially the same as those sold. Income and expenses related to these transactions executed within the insurance subsidiary used to earn spread income are reported as "Net investment income," however, for transactions used to borrow funds, the associated borrowing cost is reported as interest expense (included in "General, administrative and other expenses"). Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company's securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are generally reported as "Net investment income;" however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in "General, administrative and other expenses"). Other long-term investments consist of the derivatives, the Company's investments in joint ventures and limited partnerships in which the Company does not exercise control, as well as investments in the Company's own separate accounts, which are carried at fair value, and investment real estate. Joint venture and partnership interests are generally accounted for using the equity method of accounting, except in instances in which the Company's interest is so minor that it exercises virtually no influence over operating and financial policies. In such instances, the Company applies the cost method of accounting. The Company's share of net income from investments in joint ventures and partnerships is generally included in "Net investment income." "Short-term investments" primarily consist of highly liquid debt instruments with a maturity of greater than three months and less than twelve months when purchased. These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments. Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity B-12 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net other-than-temporary impairments recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, allowance for losses 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. The Company's available-for-sale securities with unrealized losses are reviewed quarterly to identify other-than-temporary impairments in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings. Under the authoritative guidance for the recognition and presentation of other-than-temporary impairments for debt securities, an other-than-temporary impairment must be recognized in earnings for a debt security in an unrealized loss position when an entity either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the guidance requires that the Company analyze its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by discounting the Company's best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment, an other-than-temporary impairment is recognized. Under the authoritative guidance for the recognition and presentation of other-than-temporary impairments, when an other-than-temporary impairment of a debt security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the other-than-temporary impairment recognized in earnings is equal to the entire difference between the security's amortized cost basis and its fair value at the impairment measurement date. For other-than-temporary impairments of debt securities that do not meet these criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in "Other comprehensive income (loss)." Unrealized gains or losses on securities for which an other-than-temporary impairment has been recognized in earnings is tracked as a separate component of "Accumulated other comprehensive income (loss)." For debt securities, the split between the amount of an other-than-temporary impairment recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including prepayment assumptions, and are based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates include assumptions regarding the B-13 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) underlying collateral including default rates and recoveries, which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security's position within the capital structure of the issuer. The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an other-than-temporary impairment, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into net investment income in future periods, including increases in cash flow on a prospective basis. In certain cases where there are decreased cash flow expectations, the security is reviewed for further cash flow impairments. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments, and other debt issues with maturities of three months or less when purchased. The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates which are considered cash and cash equivalents. Deferred Policy Acquisition Costs Costs that are directly related to the production of new insurance and annuity products are deferred to the extent such costs are deemed recoverable from future profits. Such deferred policy acquisition costs ("DAC") include incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts. See below under "Adoption of New Accounting Pronouncements" for a discussion of the new authoritative guidance retrospectively adopted effective January 1, 2012, which is reflected in the Consolidated Financial Statements. In each reporting period, capitalized DAC is amortized to "Amortization of deferred policy acquisition costs," net of the accrual of imputed interest on DAC balances. DAC is subject to recoverability testing at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits or premiums less benefits and maintenance expenses, as applicable. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in "Accumulated other comprehensive income (loss)." Policy acquisition costs for interest sensitive and variable life products and fixed and variable deferred annuity products are deferred and amortized over the expected life of the contracts (approximately 25 - 99 years) in proportion to gross profits arising principally from investment results, mortality and expense margins, and surrender charges, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach to derive the blended future rate of return assumptions. However, if the projected future rate of return calculated using this approach is greater than the maximum future rate of return assumption, the maximum future rate of return is utilized in deriving the blended future rate of return assumption. In addition to the gross profit components previously mentioned, the impact of the embedded derivatives associated with certain optional living benefit features of the Company's variable annuity contracts B-14 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) and related hedging activities are also included in actual gross profits used as the basis for calculating current period amortization and, in certain instances, in management's estimate of total gross profits used for setting the amortization rate, regardless of which affiliated legal entity this activity occurs. In calculating gross profits, profits and losses related to contracts issued by the Company that are reported in affiliated legal entities other than the Company as a result of, for example, reinsurance agreements with those affiliated entities are also included. The Company is an indirect subsidiary of Prudential Financial (an SEC registrant) and has extensive transactions and relationships with other subsidiaries of Prudential Financial, including reinsurance agreements, as described in Note 13. Incorporating all product-related profits and losses in gross profits, including those that are reported in affiliated legal entities, produces a DAC amortization pattern representative of the total economics of the products. The effect of changes to estimated gross profits on unamortized deferred acquisition costs is reflected in "Amortization of deferred policy acquisition costs" in the period such estimated gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums. For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a non-integrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies. Reinsurance recoverables Reinsurance recoverables include corresponding payables and receivables associated with reinsurance arrangements with affiliates. For additional information about these arrangements see Note 13. Separate Account Assets and Liabilities Separate account assets are reported at fair value and represent segregated funds, which are invested for certain policyholders and other customers. The assets consist primarily of equity securities, fixed maturities, real estate related investments, real estate mortgage loans and short term investments and derivative instruments. The assets of each account are legally segregated and are generally not subject to claims that arise out of any other business of the Company. 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 primarily represent the contractholder's account balance in separate account assets and to a lesser extent borrowings of the separate account, and will be equal and offsetting to total separate account assets. See Note 7 to the Consolidated Financial Statements for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate accounts generally accrue to the policyholders and are not included in the Consolidated Statements of Operations. Mortality, policy administration and surrender charges assessed against the accounts are included in "Policy charges and fee income." Asset administration fees charged to the accounts are included in "Asset administration fees." B-15 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Deferred sales inducements The Company provides sales inducements to contractholders, which primarily reflect an up-front bonus added to the contractholder's initial deposit for certain annuity contracts. These costs are deferred and recognized in "Deferred sales inducements". They are amortized using the same methodology and assumptions used to amortize DAC. Sales inducements balances are subject to recoverability testing at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits. The Company records amortization of deferred sales inducements in "Interest credited to policyholders' account balances." Other Assets and Other Liabilities Other assets consist primarily of premiums due, certain restricted assets, and receivables resulting from sales of securities that had not yet settled at the balance sheet date. Other liabilities consist primarily of accrued expenses, technical overdrafts, derivatives, and payables resulting from purchases of securities that had not yet been settled at the balance sheet date. Future Policy Benefits The Company's liability for future policy benefits is primarily comprised of the present value of estimated future payments to or on behalf of policyholders, where the timing and amount of payment depends on policyholder mortality or morbidity, less the present value of future net premiums. For life insurance and annuity products, expected mortality and morbidity is generally based on the Company's historical experience or standard industry tables including a provision for the risk of adverse deviation on our term life products. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and morbidity and interest rate assumptions are "locked-in" upon the issuance of new insurance or annuity products with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves, if required, are determined based on assumptions at the time the premium deficiency reserve is established and do not include a provision for the risk of adverse deviation. The Company's liability for future policy benefits also includes net liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 7, and certain unearned revenues. Policyholders' Account Balances The Company's liability for policyholders' account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is generally equal to the accumulated account deposits, plus interest credited, less policyholders' withdrawals and other charges assessed against the account balance. These policyholders' account balances also include a provision for benefits under non-life contingent payout annuities and certain unearned revenues. Contingent Liabilities Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual. Insurance Revenue and Expense Recognition Premiums from individual life products, other than interest-sensitive life contracts, are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any B-16 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net premium method. Certain individual annuity contracts provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance contracts and are discussed in further detail in Note 7. The Company also provides contracts with certain living benefits which are accounted for as embedded derivatives. These contracts are discussed in further detail in Note 7. Amounts received as payment for interest-sensitive contracts, are reported as deposits to "Policyholders' account balances." Revenues from these contracts are reflected in "Policy charges and fee income" consisting primarily of fees assessed during the period against the policyholders' account balances for mortality charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of policyholders' deposits in the Company's general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders' account balances and amortization of DAC. Premiums, benefits and expenses are stated net of reinsurance ceded to other companies. Estimated reinsurance recoverables and the cost of reinsurance are recognized using assumptions consistent with those used to account for the underlying policies. Asset Administration Fees The Company receives asset administration fee income from policyholders' account balances invested in The Prudential Series Funds or, "PSF," which are a portfolio of mutual fund investments related to the Company's separate account products. Also, the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust Funds (see Note 13 to the Consolidated Financial Statements). In addition, the Company receives fees from policyholders' account balances invested in funds managed by companies other than affiliates of Prudential Insurance. Asset administration fees are recognized as income when earned. Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, financial indices, or the values of securities. Derivative financial instruments generally used by the Company include swaps, futures, forwards and options which are contracted in the over-the-counter market with an affiliate. Derivative positions are carried at fair value, generally by obtaining quoted market prices or through the use of valuation models. Values can be affected by changes in interest rates, financial indices, values of securities, credit spreads, market volatility, expected returns, non-performance risks and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and non-performance risk used in valuation models. Derivatives are used to manage the characteristics of the Company's asset/liability mix to manage the interest rate and currency characteristics of assets or liabilities. Additionally, derivatives may be used to seek to reduce exposure to interest rate, credit, foreign currency and equity risks associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. B-17 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Derivatives are recorded either as assets, within "Other long-term investments," or as liabilities, within "Other liabilities," except for embedded derivatives, which are recorded with the associated host contract. The Company nets the fair value of all derivative financial instruments with its affiliated counterparty for which a master netting arrangement has been executed. As discussed below and in Note 11, all realized and unrealized changes in fair value of derivatives, with the exception of the effective portion of cash flow hedges are recorded in current earnings. Cash flows from these derivatives are reported in the operating and investing activities sections in the Consolidated Statements of Cash Flows based on the nature and purpose of the derivative. The Company designates derivatives as either (1) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability ("cash flow" hedge), or (2) a derivative that does not qualify for hedge accounting. To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. Under such circumstances, the ineffective portion is recorded in "Realized investment gains (losses), net." The Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as cash flow hedges to specific assets and liabilities on the balance sheet or to forecasted transactions. When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded in "Accumulated other comprehensive income (loss)" until earnings are affected by the variability of cash flows being hedged (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). At that time, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in the income statement line item associated with the hedged item. If it is determined that a derivative no longer qualifies as an effective cash flow hedge, or management removes the hedge designation, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in "Realized investment gains (losses), net." In this scenario, the hedged asset or liability under a fair value hedge will no longer be adjusted for changes in fair value and the existing basis adjustment is amortized to the income statement line associated with the asset or liability. The component of "Accumulated other comprehensive income (loss)" related to discontinued cash flow hedges is reclassified to the income statement line associated with the hedged cash flows consistent with the earnings impact of the original hedged cash flows. When hedge accounting is discontinued because it is probable that the forecasted transaction will not occur by the end of the specified time period, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in "Realized investment gains (losses), net." Gains and losses that were in "Accumulated other comprehensive income (loss)" pursuant to the hedge of a forecasted transaction are recognized immediately in "Realized investment gains (losses), net." If a derivative does not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in "Realized investment gains (losses), net" without considering changes in the fair value of the economically associated assets or liabilities. B-18 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Company is a party to financial instruments that contain derivative instruments that are "embedded" in the financial instruments. At inception, the Company assesses whether the economic characteristics of the embedded instrument are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded instrument possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded instrument qualifies as an embedded derivative that is separated from the host contract, carried at fair value, and changes in its fair value are included in "Realized investment gains (losses), net." For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company may elect to classify the entire instrument as a trading account asset and report it within "Trading account assets, at fair value." The Company sells variable annuity contracts that include optional living benefit features that may be treated from an accounting perspective as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these embedded derivatives to an affiliate, Pruco Reinsurance Ltd. ("Pruco Re"). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value and included in "Future policy benefits and other policyholder liabilities" and "Reinsurance recoverables," respectively. Changes in the fair value are determined using valuation models as described in Note 10, and are recorded in "Realized investment gains (losses), net." The Company, excluding its subsidiaries, also sells certain universal life products that contain a no lapse guarantee provision that is reinsured with an affiliate, Universal Prudential Arizona Reinsurance Company ("UPARC"). The reinsurance of this no lapse guarantee results in an embedded derivative that incurs market risk primarily in the form of interest rate risk. Interest rate sensitivity can result in changes in the value of the underlying contractual guarantees that are carried at fair value and included in "Reinsurance recoverable," and changes in "Realized investment gains (losses), net." In the third quarter of 2011, the Company amended its reinsurance agreement resulting in a recapture of a portion of this business (See Note 13) effective July 1, 2011. Pursuant to the recapture amendment, the settlement of the recapture premium occurred subsequent to the effective date of the recapture. As a result, the recapture premium was treated as if settled on the effective date and adjusted for the time elapsed between this date and the settlement date. This adjustment was equal to the earned interest and changes in market values from the effective date through the settlement date related to fixed maturity securities from an asset portfolio within UPARC. This settlement feature was accounted for as a derivative. Concurrent with the recapture discussed above, the Company entered into a new coinsurance agreement with an affiliate, Prudential Arizona Reinsurance Universal Company, ("PAR U") effective July 1, 2011. The settlement of the initial coinsurance premium also occurred subsequent to the effective date of the coinsurance agreement and contains a settlement provision similar to the recapture premium, discussed above. The adjustment to the initial coinsurance premium was equal to the earned interest and changes in market values from the effective date through settlement date related to fixed maturity securities from both an asset portfolio within the Company, as well as an asset portfolio within UPARC. The settlement feature of this agreement was accounted for as a derivative (See Note 13 for additional information about this agreement). Income Taxes The Company is a member of the consolidated federal income tax return of Prudential Financial and primarily files separate company state and local tax returns. Pursuant to the tax allocation arrangement with Prudential B-19 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Financial, total federal income tax expense is determined on a separate company basis. Members with losses record tax benefits to the extent such losses are recognized in the consolidated federal tax provision. Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to reduce a deferred tax asset to the amount expected to be realized. The Company's liability for income taxes includes the liability for unrecognized tax benefits and interest and penalties which relate to tax years still subject to review by the Internal Revenue Service ("IRS") or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards ("tax attributes"), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. See Note 9 for additional information regarding income taxes. Adoption of New Accounting Pronouncements In January 2010, the FASB issued updated guidance that requires new fair value disclosures about significant transfers between Level 1 and 2 measurement categories and separate presentation of purchases, sales, issuances, and settlements within the roll forward of Level 3 activity. Also, this updated fair value guidance clarifies the disclosure requirements about level of disaggregation and valuation techniques and inputs. This new guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of Level 3 activity, which are effective for interim and annual reporting periods beginning after December 15, 2010. The Company adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2009 on January 1, 2010. The Company adopted the guidance effective for interim and annual reporting periods beginning after December 15, 2010 on January 1, 2011. The required disclosures are provided in Note 10 and Note 11. In April 2010, the FASB issued authoritative guidance clarifying that an insurance entity should not consider any separate account interests in an investment held for the benefit of policyholders to be the insurer's interests, and should not combine those interests with its general account interest in the same investment when assessing the investment for consolidation, unless the separate account interests are held for a related party policyholder, whereby consolidation of such interests must be considered under applicable variable interest guidance. This guidance is effective for interim and annual reporting periods beginning after December 15, 2010 and retrospectively to all prior periods upon the date of adoption, with early adoption permitted. The Company's adoption of this guidance effective January 1, 2011 did not have a material effect on the Company's consolidated financial position, results of operations, and financial statement disclosures. In July 2010, the FASB issued updated guidance that requires enhanced disclosures related to the allowance for credit losses and the credit quality of a company's financing receivable portfolio. The disclosures as of the end of a reporting period are effective for interim and annual reporting periods ending on or after December 15, 2010. The Company adopted this guidance effective December 31, 2010. The disclosures about activity that occurs during a reporting period are effective for interim and annual reporting periods beginning after December 15, 2010. The required disclosures are included above and in Note 3. In January 2011, the FASB deferred the disclosures required by this guidance related to troubled debt restructurings. These disclosures are effective for B-20 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) the first interim or annual reporting period beginning on or after June 15, 2011, concurrent with the effective date of guidance for determining what constitutes a troubled debt restructuring. The disclosures required by this guidance related to troubled debt restructurings were adopted in the third quarter of 2011 and are included above and in Note 3. In April 2011, the Financial Accounting Standards Board ("FASB") issued updated guidance clarifying which restructurings constitute troubled debt restructurings. It is intended to assist creditors in their evaluation of whether conditions exist that constitute a troubled debt restructuring. This new guidance is effective for the first interim or annual reporting period beginning on or after June 15, 2011 and should be applied retrospectively to the beginning of the annual reporting period of adoption. The Company's adoption of this guidance in the third quarter of 2011 did not have a material effect on the Company's consolidated financial position, results of operations, or financial statement disclosures. Effective January 1, 2012 the Company adopted, retrospectively, updated guidance regarding the presentation of comprehensive income. The updated guidance eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. Under the updated guidance, an entity has the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The updated guidance does not change the items that are reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The Company opted to present the total of comprehensive income, the components of net income, and the components of other comprehensive income in a single continuous statement of comprehensive income. The Consolidated Financial Statements included herein reflect the adoption of this updated guidance. Effective January 1, 2012, the Company adopted retrospectively new authoritative guidance to address diversity in practice regarding the interpretation of which costs relating to the acquisition of new or renewal insurance contracts qualify for deferral. Under the amended guidance acquisition costs are to include only those costs that are directly related to the acquisition or renewal of insurance contracts by applying a model similar to the accounting for loan origination costs. An entity may defer incremental direct costs of contract acquisition with independent third parties or employees that are essential to the contract transaction, as well as the portion of employee compensation, including payroll fringe benefits, and other costs directly related to underwriting, policy issuance and processing, medical inspection, and contract selling for successfully negotiated contracts. Prior period financial information presented in these financial statements has been adjusted to reflect the retrospective adoption of the amended guidance. The impact of the retrospective adoption of this guidance on previously reported December 31, 2011 and December 31, 2010 balances was a reduction in "Deferred policy acquisition costs" of $672 and $684 million, an increase in "Policyholders' Account Balances" of $3 and $3 million, and a reduction in "Total equity" of $469 and $446 million, respectively. As of December 31, 2011, "Other Liabilities" increased $48 million and "Reinsurance Recoverables" increased $2 million related to the impact of this guidance on the 2011 coinsurance agreement with PAR U (see Note 8), The impact of the retrospective adoption of this guidance on previously reported income from continuing operations before income taxes for the years ended December 31, 2011, 2010 and 2009 was a decrease of $34, $125 and $53 million, respectively. The lower level of costs now qualifying for deferral will be only partially offset by a lower level of amortization of "Deferred policy acquisition costs," and, as such, will initially result in lower earnings in future periods primarily reflecting lower deferrals of wholesaler costs. While the adoption of this amended guidance changes the timing of when certain costs are reflected in the Company's results of operations, it has no effect on the total acquisition costs to be recognized over time and has no impact on the Company's cash flows. B-21 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following tables present amounts as previously reported in 2011, the effect of the change due to the retrospective adoption of the amended guidance related to the deferral of acquisition costs as described above within the "Effect of Change" column. Also included within the Statement of Cash Flows table within the "Impact of Restatement" column is the impact of the restatement described in Note 1 for the year ended December 31, 2011. Consolidated Statements of Financial Position:
December 31, 2011 ---------------------------------- As As Previously Effect of Currently Reported Change Reported ----------- --------- ----------- (in thousands) Deferred policy acquisition costs $ 3,217,508 $(671,908) $ 2,545,600 Reinsurance recoverables 5,727,610 1,506 5,729,116 Income taxes receivable (1) - 76,066 76,066 Other assets 44,557 (2) 44,555 Total assets 76,845,547 (594,338) 76,251,209 Policyholders' account balances 7,808,840 2,834 7,811,674 Income taxes payable (1) 176,517 (176,517) - Other liabilities 646,569 47,928 694,497 Total liabilities 73,581,524 (125,755) 73,455,769 Retained earnings 2,233,698 (490,407) 1,743,291 Accumulated other comprehensive income 191,804 21,824 213,628 Total equity 3,264,023 (468,583) 2,795,440 Total liabilities and equity $76,845,547 $(594,338) $76,251,209
(1)Income taxes reported in December 31, 2011 was in a payable position. The effect of the change converted the balance to a receivable position and was moved into the asset section of the balance sheet.
December 31, 2010 ---------------------------------- As As Previously Effect of Currently Reported Change Reported ----------- --------- ----------- (in thousands) Deferred policy acquisition costs $ 3,377,557 $(683,868) $ 2,693,689 Total assets 59,472,213 (683,868) 58,788,345 Policyholders' account balances 7,509,169 2,818 7,511,987 Income taxes 548,280 (240,502) 307,778 Total liabilities 56,146,019 (237,684) 55,908,335 Retained earnings 2,370,525 (468,340) 1,902,185 Accumulated other comprehensive income 160,943 22,156 183,099 Total equity 3,326,194 (446,184) 2,880,010 Total liabilities and equity $59,472,213 $(683,868) $58,788,345
B-22 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Consolidated Statements of Operations:
Year Ended December 31, 2011 ------------------------------------ As Previously Effect of As Currently Reported Change Reported ------------- --------- ------------ (in thousands) Revenues Policy charges and fee income $1,109,123 $ 372 $1,109,495 Other income 42,598 1,263 43,861 Total revenues 2,130,049 1,635 2,131,684 Benefits and expenses Amortization of deferred policy acquisition costs 1,114,843 (141,640) 973,203 General, administrative and other expenses 520,665 177,219 697,884 Total benefits and expenses 2,450,304 35,579 2,485,883 Income (loss) from operations before income taxes (320,255) (33,944) (354,199) Income tax expense (benefit) (209,579) (11,877) (221,456) Net income (loss) $ (110,676) $ (22,067) $ (132,743) Year Ended December 31, 2010 ------------------------------------ As Previously Effect of As Currently Reported Change Reported ------------- --------- ------------ (in thousands) Revenues Policy charges and fee income $ 589,051 $ 1,996 $ 591,047 Total revenues 1,336,998 1,996 1,338,994 Benefits and expenses Amortization of deferred policy acquisition costs 93,125 (26,697) 66,428 General, administrative and other expenses 352,366 153,590 505,956 Total benefits and expenses 695,117 126,893 822,010 Income (loss) from operations before income taxes 641,881 (124,897) 516,984 Income tax expense (benefit) 171,813 (43,714) 128,099 Net income (loss) $ 470,068 $ (81,183) $ 388,885
Year Ended December 31, 2009 ----------------------------------- As Previously Effect of As Currently Reported Change Reported ------------- --------- ------------ (in thousands) Revenues Policy charges and fee income $ 653,134 $ (1,100) $ 652,034 Total revenues 741,428 (1,100) 740,328 Benefits and expenses Amortization of deferred policy acquisition costs 294,286 (64,078) 230,208 General, administrative and other expenses 217,181 116,159 333,340 Total benefits and expenses 943,179 52,081 995,260 Income (loss) from operations before income taxes (201,751) (53,181) (254,932) Income tax expense (benefit) (135,960) (18,613) (154,573) Net income (loss) $ (65,791) $(34,568) $(100,359)
B-23 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Consolidated Statements of Cash Flows:
Year Ended December 31, 2011 ---------------------------------------------- As Effect As Previously of Impact of Currently Reported Change Restatement Reported ----------- -------- ----------- ----------- (in thousands) Cash flows from (used in) operating activities Net income $ (110,676) $(22,067) $ - $ (132,743) Policy charges and fee income (213,804) (363) 86,484 (127,683) Change in: Reinsurance recoverables (1,951,987) (1,006) 1,154,519 (798,474) Payable to parent and affiliates (38,856) (9,208) (48,064) Deferred policy acquisition costs 170,673 (12,613) (281,160) (123,100) Income taxes payable (441,534) (11,877) 41,194 (412,217) Other, net 336,092 47,926 (223,643) 160,375 Cash flows from (used in) operating activities (1,443,368) - 768,186 (675,182) Cash flows from (used in) investing activities Proceeds from the sale/maturity/prepayment of: Fixed maturities available for sale 1,705,018 - (635,096) 1,069,922 Cash flows from (used in) investing activities 387,468 - (635,096) (247,628) Cash flows from (used in) financing activities Ceded policyholders' account deposits - - (117,916) (117,916) Policyholders' account withdrawals (2,531,037) - (23,998) (2,555,035) Ceded policyholders' account withdrawals - - 8,824 8,824 Cash flows from (used in) financing activities $ 973,324 $ - $ (133,090) $ 845,234
Year Ended December 31, 2010 ----------------------------------- As Previously Effect of As Currently Reported Change Reported ------------- --------- ------------ (in thousands) Cash flows from (used in) operating activities Net income (loss) $ 470,068 $(81,183) $ 388,885 Policy charges and fee income (202,268) (1,996) (204,264) Change in: Deferred policy acquisition costs (966,699) 126,893 (839,806) Income taxes payable (12,338) (43,714) (56,052) Cash flows from (used in) operating activities $(995,797) $ - $(995,797)
Year Ended December 31, 2009 ----------------------------------- As Previously Effect of As Currently Reported Change Reported ------------- --------- ------------ (in thousands) Cash flows from (used in) operating activities Net income (loss) $ (65,791) $(34,568) $(100,359) Policy charges and fee income (266,769) 1,100 (265,669) Change in: Deferred policy acquisition costs (251,131) 52,081 (199,050) Income taxes payable (67,851) (18,613) (86,464) Cash flows from (used in) operating activities $ (48,288) $ - $ (48,288)
B-24 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Future Adoption of New Accounting Pronouncements In December 2011, the FASB issued updated guidance regarding the disclosure of offsetting assets and liabilities. This new guidance requires an entity to disclose information on both a gross basis and net basis about instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. This new guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim reporting periods within those years, and should be applied retrospectively for all comparative periods presented. The Company is currently assessing the impact of the guidance on the Company's consolidated financial position, results of operations, and financial statement disclosures. In May 2011, the FASB issued updated guidance regarding the fair value measurements and disclosure requirements. The updated guidance clarifies existing guidance related to the application of fair value measurement methods and requires expanded disclosures. This new guidance is effective for the first interim or annual reporting period beginning after December 15, 2011 and should be applied prospectively. The Company expects this guidance to have an impact on its financial statement disclosures but limited, if any, impact on the Company's consolidated financial position or results of operations. In April 2011, the FASB issued updated guidance regarding the assessment of effective control for repurchase agreements. This new guidance is effective for the first interim or annual reporting period beginning on or after December 15, 2011 and should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The Company's adoption of this guidance effective January 1, 2012 is not expected to have a material effect on the Company's consolidated financial position, results of operations, and financial statement disclosures. 3. INVESTMENTS Fixed Maturities and Equity Securities The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:
December 31, 2011 ------------------------------------------------------ Other-than- Gross Gross temporary Amortized Unrealized Unrealized Fair impairments Cost Gains Losses Value in AOCI (4) ---------- ---------- ---------- ---------- ----------- (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 144,083 $ 14,321 $ 4 $ 158,400 $ - Obligations of U.S. states and their political subdivisions 43,830 5,808 - 49,638 - Foreign government bonds 47,910 6,615 4 54,521 - Public utilities 589,574 63,283 1,497 651,360 - All other corporate securities 3,145,363 252,186 6,956 3,390,593 (1,285) Asset-backed securities (1) 376,505 19,235 22,495 373,245 (27,122) Commercial mortgage-backed securities 505,310 37,015 2 542,323 - Residential mortgage-backed securities (2) 298,831 25,550 337 324,044 (1,296) ---------- -------- ------- ---------- -------- Total fixed maturities, available-for-sale $5,151,406 $424,013 $31,295 $5,544,124 $(29,703) ========== ======== ======= ========== ========
B-25 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued)
December 31, 2011 -------------------------------------------------- Other-than- Gross Gross temporary Amortized Unrealized Unrealized Fair impairments Cost Gains Losses Value in AOCI (4) --------- ---------- ---------- ------ ----------- (in thousands) Equity securities, available-for-sale Common Stocks: Public utilities $ 90 $ 5 $ 23 $ 71 Industrial, miscellaneous & other 7,100 597 1,742 5,956 Non-redeemable preferred stocks 2,437 6 201 2,242 ------ ---- ------ ------ Total equity securities, available-for-sale (3) $9,627 $608 $1,966 $8,269 ====== ==== ====== ======
(1)Includes credit tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. (2)Includes publicly traded agency pass-through securities and collateralized mortgage obligations. (3)During the third quarter of 2011, perpetual preferred stocks of $8.4 million were reclassified to "Trading Account Assets". Prior periods were not restated. (4)Represents the amount of other-than-temporary impairment losses in "Accumulated other comprehensive income (loss)," or "AOCI," which were not included in earnings. Amount excludes $11 million of net unrealized gains (losses) on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date.
December 31, 2010 ------------------------------------------------------ Other-than- Gross Gross temporary Amortized Unrealized Unrealized Fair impairments Cost Gains Losses Value in AOCI (3) ---------- ---------- ---------- ---------- ----------- (in thousands) Fixed maturities, available-for-sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 223,442 $ 4,563 $ 43 $ 227,962 $ - Obligations of U.S. states and their political subdivisions 25,126 66 1,063 24,129 - Foreign government bonds 48,725 5,984 - 54,709 - Public utilities 494,163 40,646 2,412 532,397 - All other corporate securities 3,596,805 252,050 11,055 3,837,800 (694) Asset-backed securities (1) 417,339 22,316 30,077 409,578 (37,817) Commercial mortgage-backed securities 546,056 34,711 247 580,520 - Residential mortgage-backed securities (2) 350,173 25,228 193 375,208 (1,437) ---------- -------- ------- ---------- -------- Total fixed maturities, available-for-sale $5,701,829 $385,564 $45,090 $6,042,303 $(39,948) ========== ======== ======= ========== ======== Equity securities available-for-sale Common Stocks: Public utilities $ 90 $ 14 $ - $ 104 Banks, trusts & insurance companies - - - - Industrial, miscellaneous & other 7,324 2,545 309 9,560 Non-redeemable preferred stocks 2,438 - 1,390 1,048 Perpetual preferred stocks 8,112 793 210 8,695 ---------- -------- ------- ---------- Total equity securities, available-for-sale $ 17,964 $ 3,352 $ 1,909 $ 19,407 ========== ======== ======= ==========
(1)Includes credit tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types. B-26 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) (2)Includes publicly traded agency pass-through securities and collateralized mortgage obligations. (3)Represents the amount of other-than-temporary impairment losses in "Accumulated other comprehensive income (loss)," or "AOCI" which were not included in earnings. Amount excludes $15 million of net unrealized gains (losses) on impaired securities relating to changes in the fair value of such securities subsequent to the impairment measurement date. The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2011, are as follows:
Available-for-Sale --------------------- Amortized Fair Cost Value ---------- ---------- (in thousands) Due in one year or less $ 321,169 $ 324,872 Due after one year through five years 1,556,554 1,663,138 Due after five years through ten years 1,371,340 1,503,916 Due after ten years 721,697 812,586 Asset-backed securities 376,505 373,245 Commercial mortgage-backed securities 505,310 542,323 Residential mortgage-backed securities 298,831 324,044 ---------- ---------- Total $5,151,406 $5,544,124 ========== ==========
Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date. The following table depicts the sources of fixed maturity proceeds, equity security proceeds, and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:
2011 2010 2009 -------- -------- ---------- (in thousands) Fixed maturities, available-for-sale Proceeds from sales $218,200 $788,657 $ 572,902 Proceeds from maturities/repayments 836,724 919,875 1,100,012 Gross investment gains from sales, prepayments and maturities 83,600 45,098 17,375 Gross investment losses from sales and maturities (411) (2,497) (19,291) Equity securities, available-for-sale Proceeds from sales $ 6,397 $ 6,978 $ 14,408 Proceeds from maturities/repayments 3,958 9,000 5,000 Gross investment gains from sales 3,857 348 1,785 Gross investment losses from sales - (367) (363) Fixed maturity and equity security impairments Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings (1) $ (8,969) $(11,811) $ (31,896) Writedowns for other-than-temporary impairment losses on equity securities (2,255) (147) (2,259)
(1)Excludes the portion of other-than-temporary impairments 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. B-27 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) As discussed in Note 2, a portion of certain other-than-temporary impairment ("OTTI") losses on fixed maturity securities are recognized in "Other comprehensive income (loss)" ("OCI"). The net amount recognized in earnings ("credit loss impairments") represents the difference between the amortized cost of the 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. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following tables set forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts. Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI
Year Ended Year Ended December 31, December 31, 2011 2010 -------------- -------------- (in thousands) (in thousands) Balance, beginning of period $36,820 $42,943 Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period (7,456) (7,144) Credit loss impairments previously recognized on securities impaired to fair value during the period (1) (4,055) (7,158) Credit loss impairment recognized in the current period on securities not previously impaired 403 26 Additional credit loss impairments recognized in the current period on securities previously impaired 5,630 8,950 Increases due to the passage of time on previously recorded credit losses 1,487 2,222 Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected (1,322) (3,019) ------- ------- Balance, end of period $31,507 $36,820 ======= =======
(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. Trading Account Assets The following table provides information relating to trading account assets, at fair value as of the dates indicated:
December 31, 2011 December 31, 2010 ----------------- ----------------- Amortized Fair Amortized Fair Cost Value Cost Value --------- ------- --------- ------- (in thousands) Fixed maturities: Asset-backed securities $16,597 $17,419 $16,074 $17,525 Commercial mortgage-backed securities 4,978 5,062 4,950 5,180 ------- ------- ------- ------- Total fixed maturities 21,575 22,481 21,024 22,705 Equity securities (1) 3,135 3,362 - - ------- ------- ------- ------- Total trading account assets $24,710 $25,843 $21,024 $22,705 ======= ======= ======= =======
(1)During 2011, perpetual preferred stocks of $8.4 million were reclassified from "Equity Securities, available-for-sale". Prior periods were not restated. B-28 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) The net change in unrealized gains (losses) from trading account assets still held at period end, recorded within "Other income" was ($0.5) million, ($0.2) million and $3.2 million during the years ended December 31, 2011 , 2010 and 2009, respectively. Commercial Mortgage and Other Loans The Company's commercial mortgage and other loans are comprised as follows as of the dates indicated:
December 31, 2011 December 31, 2010 -------------------- -------------------- Amount % of Amount % of (in thousands) Total (in thousands) Total Commercial mortgage and other loans by property type: Industrial buildings $ 261,699 18.4% $ 226,174 17.4% Retail 453,352 31.9 438,072 33.8 Apartments/Multi-Family 218,524 15.4 203,749 15.7 Office buildings 223,587 15.8 208,699 16.1 Hospitality 61,910 4.4 57,409 4.4 Other 97,383 6.9 85,133 6.6 ---------- ----- ---------- ----- Total commercial mortgage loans by property type 1,316,455 92.8 1,219,236 94.0 Agricultural property loans 102,850 7.2 77,214 6.0 ---------- ----- ---------- ----- Total commercial mortgage and agricultural loans by property type 1,419,305 100.0% 1,296,450 100.0% ===== ===== Valuation allowance (12,813) (21,428) ---------- ---------- Total net commercial and agricultural mortgage loans by property type $1,406,492 $1,275,022 ========== ==========
The commercial mortgage and agricultural loans are geographically dispersed throughout the United States with the largest concentrations in California (21%), New Jersey (13%), Texas (8%) and Virginia (8%) at December 31, 2011. Activity in the allowance for losses for all commercial mortgage and other loans, for the years ended December 31, 2011, 2010 and 2009, is as follows:
2011 (2) 2010 (2) 2009 (2) -------- -------- -------- (in thousands) Allowance for losses, beginning of year $21,428 $25,742 $ 8,173 Addition to / (release of) allowance of losses (8,615) (4,314) 17,569 ------- ------- ------- Allowance for losses, end of year (1) $12,813 $21,428 $25,742 ======= ======= =======
(1)Agricultural loans represent $0.4 million, $0.4 million and $0.0 million of the ending allowance at December 31, 2011, 2010 and 2009, respectively. (2)Valuation allowances for 2011 and 2010 are presented in a format consistent with new disclosure requirements under the updated guidance issued by FASB in 2011. Valuation allowances for 2009 are provided consistent with the prior presentation. B-29 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and agricultural loans for the years ended December 31, 2011 and 2010:
December 31, 2011 December 31, 2010 ----------------- ----------------- Total Loans (in thousands) Allowance for Credit Losses: Ending balance: individually evaluated for impairment (1) $ 5,743 $ 10,536 Ending balance: collectively evaluated for impairment (2) 7,070 10,892 ---------- ---------- Total ending balance $ 12,813 $ 21,428 Recorded Investment: (3) Ending balance: individually evaluated for impairment (1) $ 17,849 $ 38,061 Ending balance: collectively evaluated for impairment (2) 1,401,456 1,258,389 ---------- ---------- Total ending balance, gross of reserves $1,419,305 $1,296,450 ========== ==========
(1)There were no agricultural loans individually evaluated for impairments at December 31, 2011 and 2010. (2)Agricultural loans collectively evaluated for impairment had a recorded investment of $103 million and $77.2 million and related allowance of $0.4 million at December 31, 2011 and 2010, respectively. (3)Recorded investment reflects the balance sheet carrying value gross of related allowance. Impaired loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. Impaired commercial mortgage and other loans identified in management's specific review of probable loan losses and the related allowance for losses, as of December 31, 2011 and 2010 had a recorded investment and unpaid principal balance of $17.8 million and $38 million and related allowance of $5.7 million and $10.5 million, respectively, primarily related to the hospitality and other property types. At December 31, 2011 and 2010, the Company held no impaired agricultural loans. Net investment income recognized on these loans totaled $0.5 million for the year ended December 31, 2011 and $1 million for the year ended December 31, 2010. Impaired commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans' expected future cash flows equals or exceeds the recorded investment. As of December 31, 2011 and 2010, the Company held no such loans. See Note 2 for information regarding the Company's accounting policies for non-performing loans. As described in Note 2 Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage and other loans. As of December 31, 2011 and 2010, 93% of the $1.4 billion recorded investment and 88% of the $1.3 billion recorded investment, respectively, had a loan-to-value ratio of less than 80%. As of December 31, 2011 and 2010, 95% of the recorded investment had a debt service coverage ratio of 1.1X or greater. As of December 31, 2011, approximately $72 million or 5% of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X reflecting loans where the mortgage amount exceeds the collateral value or where current debt payments are greater than income from property operations; none of which related to agricultural loans. As of December 31, 2010, approximately $86 million or 7% of the recorded investment had a loan-to-value ratio greater than 100% or debt service coverage ratio less than 1.0X; none of which related to agricultural loans. As of December 31, 2011 and 2010, all commercial mortgage and other loans were in current status, with the exception of $1.6 million and $22.2 million, respectively, that were classified as past due, primarily related to B-30 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) other property types, As of December 31, 2011 and 2010, $22.6 million and $38.1 million, respectively, of commercial mortgage and other loans, were in non-accrual status based upon the recorded investment gross of allowance for credit losses, primarily related to hospitality and other property types. See Note 2 for further discussion regarding nonaccrual status loans. The Company defines current in its aging of past due commercial mortgage and agricultural loans as less than 30 days past due. For the year ended December 31, 2011, there were no commercial mortgage and other loans sold or acquired. Commercial mortgage and other loans are occasionally restructured in a troubled debt restructuring. These restructurings generally include one or more of the following: full or partial payoffs outside of the original contract terms: changes to interest rates; extensions of maturity; or additions or modifications to covenants. Additionally, the Company may accept assets in full or partial satisfaction of the debt as part of a troubled debt restructuring. When restructurings occur, they are evaluated individually to determine whether the restructuring or modification constitutes a "troubled debt restructuring" as defined by authoritative accounting guidance. The Company's outstanding investment related to commercial mortgage and other loans that have been restructured in a troubled debt restructuring is not material. Other Long term Investments "Other long-term investments" are comprised as follows at December 31:
2011 2010 -------- -------- (in thousands) Company's investment in Separate accounts $ 31,947 $ 29,827 Joint ventures and limited partnerships 113,445 86,972 Derivatives 123,094 15,195 -------- -------- Total other long- term investments $268,486 $131,994 ======== ========
Net Investment Income Net investment income for the years ended December 31, was from the following sources:
2011 2010 2009 -------- -------- -------- (in thousands) Fixed maturities, available for sale $300,850 $313,036 $306,535 Equity securities, available for sale 227 1,005 1,966 Trading account assets 1,582 1,156 1,086 Commercial mortgage and other loans 81,282 71,541 60,575 Policy loans 56,716 55,599 53,934 Short-term investments and cash equivalents 1,052 918 2,407 Other long-term investments 16,421 11,552 (6,700) -------- -------- -------- Gross investment income 458,130 454,807 419,803 Less: investment expenses (18,180) (16,563) (13,763) -------- -------- -------- Net investment income $439,950 $438,244 $406,040 ======== ======== ========
Carrying value for non-income producing assets included in fixed maturities totaled $9 million as of December 31, 2011. Non-income producing assets represent investments that have not produced income for the twelve months preceding December 31, 2011. B-31 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) Realized Investment Gains (Losses), Net Realized investment gains (losses), net, for the years ended December 31, were from the following sources:
2011 2010 2009 -------- -------- --------- (in thousands) Fixed maturities $ 74,220 $ 30,790 $ (33,813) Equity securities 1,602 (166) (837) Commercial mortgage and other loans 8,615 1,379 (17,568) Joint ventures and limited partnerships (265) - (731) Derivatives 177,855 78,577 (416,318) Other 56 54 83 -------- -------- --------- Realized investment gains (losses), net. $262,083 $110,634 $(469,184) ======== ======== =========
Net Unrealized Investment Gains (Losses) Net unrealized investment gains and losses on securities classified as "available for sale" and certain other long-term investments and other assets are included in the Consolidated Statements of Financial Position as a component of "Accumulated other comprehensive income (loss)," or "AOCI." Changes in these amounts include reclassification adjustments to exclude from "Other comprehensive income (loss)" those items that are included as part of "Net income" for a period that had been part of "Other comprehensive income (loss)" in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows: Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss) Deferred Related To Net Net Unrealized Deferred Policy Policy Holder Income Tax Unrealized Gains (Losses) on Acquisition Costs Account (Liability) Investment Gains Investments and Other Costs Balances Benefit (Losses) ----------------- ----------------- ------------- ----------- ----------------- (in thousands) Balance, December 31, 2008 $ - $ - $- $ - $ - Cumulative impact of the adoption of new authoritative guidance on January 1, 2009 (19,184) 1,446 - 6,208 (11,530) Net investment gains (losses) on investments arising during the period 26,718 - - (9,252) 17,466 Reclassification adjustment for OTTI losses included in net income 9,704 - - (3,360) 6,344 Reclassification adjustment for OTTI gains excluded from net income(1) (43,123) - - 14,932 (28,191) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs - 14,629 - (5,120) 9,509
B-32 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued)
Accumulated Other Comprehensive Income (Loss) Deferred Related To Net Net Unrealized Deferred Policy Policy Holder Income Tax Unrealized Gains (Losses) on Acquisition Costs Account (Liability) Investment Gains Investments and Other Costs Balances Benefit (Losses) ----------------- ----------------- ------------- ----------- ----------------- (in thousands) Impact of net unrealized investment (gains) losses on Policyholders' account balance - - (7,993) 2,798 (5,195) --------- -------- -------- ------- --------- Balance, December 31, 2009 $ $ (25,885) $ 16,075 $ (7,993) 6,206 $ (11,597) --------- -------- -------- ------- --------- Net investment gains (losses) on investments arising during the period (6,744) - - 2,359 (4,385) Reclassification adjustment for OTTI losses included in net income 7,954 - - (2,784) 5,170 Reclassification adjustment for OTTI gains excluded from net income(1) (29) - - 10 (19) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs - (2,262) - 792 (1,470) Impact of net unrealized investment (gains) losses on Policyholders' account balance - - 890 (312) 578 --------- -------- -------- ------- --------- Balance, December 31, 2010 $ (24,704) $ 13,813 $ (7,103) $ 6,271 $ (11,723) --------- -------- -------- ------- --------- Net investment gains (losses) on investments arising during the period (3,779) - - 1,322 (2,457) Reclassification adjustment for OTTI losses included in net income 9,623 - - (3,369) 6,254 Reclassification adjustment for OTTI gains excluded from net income(1) 212 - - (75) 137 Impact of net unrealized investment (gains) losses on deferred policy acquisition costs - (3,626) - 1,268 (2,358) Impact of net unrealized investment (gains) losses on Policyholders' account balance - - 4,167 (1,459) 2,708 --------- -------- -------- ------- --------- Balance, December 31, 2011 $ (18,648) $ 10,187 $ (2,936) $ 3,958 $ (7,439) ========= ======== ======== ======= =========
(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. B-33 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) All Other Net Unrealized Investment Gains and Losses in AOCI
Accumulated Other Comprehensive Income (Loss) Deferred Related To Net Net Unrealized Deferred Policy Policy Holder Income Tax Unrealized Gains/(Losses) on Acquisition Costs Account (Liability) Investment Gains Investments(1) and Other Costs Balances Benefit (Losses) ----------------- ----------------- ------------- ----------- ----------------- (in thousands) Balance, December 31, 2008 $(331,900) $ 191,666 $(115,086) $ 87,285 $(168,035) Cumulative impact of the adoption of new authoritative guidance on January 1, 2009 (12,856) 538 - 4,312 (8,006) Net investment gains (losses) on investments arising during the period 513,845 - - (177,932) 335,913 Reclassification adjustment for (gains) losses included in net income 24,946 - - (8,638) 16,308 Reclassification adjustment for OTTI losses excluded from net income(2) 43,123 - - (14,932) 28,191 Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs - (335,032) - 117,261 (217,771) Impact of net unrealized investment (gains) losses on policyholders' account balances - - 175,577 (61,452) 114,125 --------- --------- --------- --------- --------- Balance, December 31, 2009 $ 237,158 $(142,828) $ 60,491 $ (54,096) $ 100,725 Net investment gains (losses) on investments arising during the period 124,639 - - (43,618) 81,021 Reclassification adjustment for (gains) losses included in net income 38,578 - - (13,501) 25,077 Reclassification adjustment for OTTI losses excluded from net income(2) 29 - - (10) 19 Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and other costs - (51,330) - 18,128 (33,202) Impact of net unrealized investment (gains) losses on policyholders' account balances - - 32,199 (11,270) 20,929 --------- --------- --------- --------- --------- Balance, December 31, 2010 $ 400,404 $(194,158) $ 92,690 $(104,367) $ 194,569 Net investment gains (losses) on investments arising during the period 128,890 - - (45,090) 83,800 Reclassification adjustment for (gains) losses included in net income (85,445) - - 29,905 (55,540)
B-34 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued)
Accumulated Other Comprehensive Income (Loss) Deferred Related To Net Net Unrealized Deferred Policy Policy Holder Income Tax Unrealized Gains/(Losses) on Acquisition Costs Account (Liability) Investment Gains Investments(1) and Other Costs Balances Benefit (Losses) ----------------- ----------------- ------------- ----------- ----------------- (in thousands) Reclassification adjustment for OTTI losses excluded from net income(2) (212) - - 73 (139) Impact of net unrealized investment (gains) losses on deferred policy acquisition costs - 14,638 - (5,124) 9,514 Impact of net unrealized investment (gains) losses on policyholders' account balances - - (17,345) 6,070 (11,275) -------- --------- -------- --------- -------- Balance, December 31, 2011 $443,637 $(179,520) $ 75,345 $(118,533) $220,929 ======== ========= ======== ========= ========
(1)Includes cash flow hedges. See Note 5 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. The table below presents net unrealized gains (losses) on investments by asset at December 31:
December 31, December 31, December 31, 2011 2010 2009 ------------ ------------ ------------ (in thousands) Fixed maturity securities on which an OTTI loss has been recognized $(18,648) $(24,704) $(25,885) Fixed maturity securities, available for sale - all other 411,366 365,178 210,581 Equity securities, available for sale (1,359) 1,443 310 Derivatives designated as cash flow hedges (1) 2,523 808 (2,974) Other investments 31,107 32,975 29,241 -------- -------- -------- Net unrealized gains (losses) on investments $424,989 $375,700 $211,273 ======== ======== ========
(1)See Note 5 for more information on cash flow hedges. B-35 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTSX (continued) Duration of Gross Unrealized Loss Positions for Fixed Maturities The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, at December 31:
December 31, 2011 ------------------------------------------------------------------- Less than twelve months Twelve months or more Total ----------------------- --------------------- --------------------- Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses ---------- ---------- ---------- ---------- ---------- ---------- (in thousands) Fixed maturities, available for sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 4,696 $ 4 $ - $ - $ 4,696 $ 4 Obligations of U.S. states and their political subdivisions - - - - - - Foreign government bonds 96 4 - - 96 4 Corporate securities 196,766 6,060 13,355 2,393 210,121 8,453 Asset-backed securities 57,956 389 69,641 22,106 127,597 22,495 Commercial mortgage-backed securities 563 - 1,051 2 1,614 2 Residential mortgage-backed securities 4,706 213 4,022 124 8,728 337 -------- ------ ------- ------- -------- ------- Total $264,783 $6,670 $88,069 $24,625 $352,852 $31,295 ======== ====== ======= ======= ======== =======
December 31, 2010 ------------------------------------------------------------------- Less than twelve months Twelve months or more Total ----------------------- --------------------- --------------------- Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses ---------- ---------- ---------- ---------- ---------- ---------- (in thousands) Fixed maturities, available for sale U.S. Treasury securities and obligations of U.S. government authorities and agencies $ 9,075 43 - - $ 9,075 $ 43 Obligations of U.S. states and their political subdivisions 20,662 1,063 - - 20,662 1,063 Foreign government bonds 152 - - - 152 - Corporate securities 330,322 9,606 51,283 3,860 381,605 13,466 Asset-backed securities 23,625 189 95,622 29,888 119,247 30,077 Commercial mortgage-backed securities 14,375 247 - - 14,375 247 Residential mortgage-backed securities 3,406 57 5,934 137 9,340 194 -------- ------- -------- ------- -------- ------- Total $401,617 $11,205 $152,839 $33,885 $554,456 $45,090 ======== ======= ======== ======= ======== =======
The gross unrealized losses at December 31, 2011 and 2010 are composed of $10 million and $23 million, respectively, related to high or highest quality securities based on NAIC or equivalent rating and $21 million and $22 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. At December 31, 2011, $22 million of the gross unrealized losses represented declines in value of greater than 20%, $3 million of which had been in that position for less than six months, as compared to $27 million at B-36 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) December 31, 2010 that represented declines in value of greater than 20%, none of which had been in that position for less than six months. At December 31, 2011 and December 31, 2010, the $25 million and $34 million respectively, of gross unrealized losses of twelve months or more were concentrated in asset backed securities. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at December 31, 2011 and December 31, 2010. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At December 31, 2011, the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before the anticipated recovery of its remaining amortized cost basis. Duration of Gross Unrealized Loss Positions for Equity Securities The following table shows the fair value and gross unrealized losses aggregated by length of time that individual equity securities have been in a continuous unrealized loss position, at December 31:
December 31, 2011 -------------------------------------------------------------------- Less than twelve months Twelve months or more Total ------------------------ --------------------- --------------------- Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses ---------- ---------- ---------- ---------- ---------- ---------- (in thousands) Equity securities, available for sale $3,016 $1,966 $ - $ - $3,016 $1,966 ====== ====== ====== ==== ====== ====== December 31, 2010 -------------------------------------------------------------------- Less than twelve months Twelve months or more Total ------------------------ --------------------- --------------------- Gross Gross Gross Unrealized Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses ---------- ---------- ---------- ---------- ---------- ---------- (in thousands) Equity securities, available for sale $6,606 $1,750 $1,536 $159 $8,142 $1,909 ====== ====== ====== ==== ====== ======
At December 31, 2011, $2 million of the gross unrealized losses represented declines of greater than 20%, $1.4 million of which have been in that position for less than six months. At December 31, 2010, $2 million of the gross unrealized losses represented declines of greater than 20%, all of which had been in that position for less than six months. Included in the December 31, 2010 table above are perpetual preferred securities. Perpetual preferred securities have characteristics of both debt and equity securities. Since an impairment model similar to fixed maturity securities is applied to these securities, an other-than-temporary impairment has not been recognized on certain perpetual preferred securities that have been in a continuous unrealized loss position for twelve months or more as of December 31, 2011 and December 31, 2010. In accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at December 31, 2011 and December 31, 2010. B-37 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 3. INVESTMENTS (continued) Securities Pledged and Special Deposits The Company pledges as collateral investment securities it owns to unaffiliated parties through certain transactions, including securities lending, securities sold under agreements to repurchase and futures contracts. At December 31, the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial Position included the following:
2011 2010 -------- ------- (in thousands) Fixed maturity securities, available for sale - all other $189,143 $76,981 Trading account assets 232 - -------- ------- Total securities pledged $189,375 $76,981 ======== =======
As of December 31, 2011, the carrying amount of the associated liabilities supported by the pledged collateral was $194 million. Of this amount, $154 million was "Cash collateral for loaned securities" and $40 million was "Securities sold under agreements to repurchase." As of December 31, 2010, the carrying amount of the associated liabilities supported by the pledged collateral was $80 million. Of this amount, $3 million was "Securities sold under agreements to repurchase" and $77 million was "Cash collateral for loaned securities." Fixed maturities of $4 million at December 31, 2011 and December 31, 2010 were on deposit with governmental authorities or trustees as required by certain insurance laws. 4. DEFERRED POLICY ACQUISITION COSTS The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows:
2011 2010 2009 ---------- ---------- ---------- (in thousands) Balance, beginning of year $2,693,689 $1,913,804 $2,015,110 Capitalization of commissions, sales and issue expenses 1,096,301 906,235 429,258 Amortization- Impact of assumption and experience unlocking and true-ups (25,242) 75,579 (71,294) Amortization- All other (947,961) (142,007) (160,330) Change in unrealized investment gains/(losses) 9,973 (59,922) (298,940) Ceded DAC upon Coinsurance Treaty with PAR U (See Note 13) (281,160) - - ---------- ---------- ---------- Balance, end of year $2,545,600 $2,693,689 $1,913,804 ========== ========== ==========
Deferred acquisition costs include reductions in capitalization and amortization related to reinsurance expense allowances resulting from the coinsurance treaties with Prudential Arizona Reinsurance Captive Company, or "PARCC," Prudential Arizona Reinsurance Term Company, or "PAR TERM," Prudential Arizona Reinsurance III Company, or "PAR III" and Prudential Arizona Reinsurance Universal Company or "PAR U," as discussed in Note 13. Ceded capitalization amounted to $208 million, $220 million and $220 million in 2011, 2010 and 2009, respectively. Ceded amortization amounted to $70 million, $67 million and $53 million in 2011, 2010 and 2009, respectively. The ceded portion of the impact on deferred acquisition costs related to changes in unrealized gains/(losses) arising from the 2011 coinsurance agreement with PAR U increased the deferred acquisition cost asset $147 million. Deferred acquisition costs also include a $281 million reduction resulting from the coinsurance agreement with PAR U effective July 1, 2011 (see Note 13). B-38 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 5. POLICYHOLDERS' LIABILITIES Future Policy Benefits Future policy benefits at December 31, are as follows:
2011 2010 ---------- ----------- (in thousands) Life insurance - domestic $3,184,177 $$2,690,544 Life insurance - Taiwan 977,889 939,159 Individual and group annuities 68,612 57,313 Policy claims and other contract liabilities 1,063,630 (359,467) ---------- ----------- Total future policy benefits $5,294,308 $ 3,327,549 ========== ===========
Life insurance liabilities include reserves for death benefits and other policy benefits. Individual and Group annuity liabilities include reserves for annuities that are in payout status. Future policy benefits for domestic and Taiwan individual non-participating traditional life insurance policies are generally equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves. Assumptions as to mortality and persistency are based on the Company's experience, and in certain instances, industry experience, when the basis of the reserve is established. Interest rates range from 2.50% to 8.25% for setting domestic insurance reserves and 6.18% to 7.43% for setting Taiwan reserves. Future policy benefits for individual and group annuities and supplementary contracts are generally equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves. Assumptions as to mortality are based on the Company's experience, and in certain instances, industry experience, when the basis of the reserve is established. The interest rates used in the determination of present values range from 1.34% to 14.75%, with approximately 11.45% of the reserves based on an interest rate in excess of 8.00%. The interest rate used in the determination of group annuities reserves is 14.75%. Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company's experience. Other contract liabilities also includes liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts which are discussed in Note 7. The interest rates used in the determination of the present values range from 1.39% to 5.88%. Policyholders' Account Balances Policyholders' account balances at December 31, are as follows:
2011 2010 ---------- ---------- (in thousands) Interest-sensitive life contracts $4,645,659 $4,322,863 Individual annuities 1,826,854 1,869,965 Guaranteed interest accounts 776,731 841,268 Other 562,430 477,891 ---------- ---------- Total policyholders' account balances $7,811,674 $7,511,987 ========== ==========
B-39 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 5. POLICYHOLDERS' LIABILITIES (continued) Policyholders' account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable. Interest crediting rates range from 3.00% to 5.00% for interest-sensitive contracts. Interest crediting rates for individual annuities may range from 1.00 % to 9.00 % with less than 0.01 % of policyholders' account balances with interest crediting rates in excess of 8.00%. Interest crediting rates for guaranteed interest accounts range from 1.00 % to 6.00 %. Interest crediting rates range from 1.00 % to 8.00 % for other. 6. REINSURANCE The Company participates in reinsurance with its affiliates Prudential Insurance, Prudential of Taiwan, PARCC, UPARC, PAR U, Pruco Re, PAR III, and PAR TERM, in order to provide risk diversification, additional capacity for future growth and limit the maximum net loss potential. Life reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term and coinsurance. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. The Company believes a material reinsurance liability resulting from such inability of reinsurers to meet their obligations is unlikely. The Company has entered into various reinsurance agreements with an affiliate, Pruco Re, to reinsure its living benefit features sold on certain of its annuities as part of its risk management and capital management strategies. For additional details on these agreements, see Note 13. Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts are accounted for using assumptions consistent with those used to account for the underlying contracts. Amounts recoverable from reinsurers, for long duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. The affiliated reinsurance agreements are described further in Note 13. Reinsurance amounts included in the Company's Consolidated Statements of Operations and Comprehensive Income for the years December 31, as follows:
2011 2010 2009 ----------- ---------- ----------- (in thousands) Premiums $ 1,127,239 $1,061,881 $ 959,698 Reinsurance ceded (1,054,452) (995,489) (888,105) ----------- ---------- ----------- Premiums $ 72,787 $ 66,392 $ 71,593 =========== ========== =========== Direct policy charges and fees $ 1,445,303 $1,032,261 $ 935,885 Reinsurance ceded (335,808) (441,214) (283,851) ----------- ---------- ----------- Policy charges and fees $ 1,109,495 $ 591,047 $ 652,034 =========== ========== =========== Policyholders' benefits ceded $ 742,529 $ 678,782 $ 515,539 Realized capital gains/(losses) net, associated with derivatives $ 1,185,096 $ (497,195) $(1,183,687)
Reinsurance premiums ceded for interest-sensitive life products are accounted for as a reduction of policy charges and fee income. Reinsurance premiums ceded for term insurance products are accounted for as a reduction of premiums. B-40 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 6. REINSURANCE (continued) Realized investment gains and losses include the impact of reinsurance agreements that are accounted for as embedded derivatives. Changes in the fair value of the embedded derivatives are recognized through "Realized investment gains/(losses)." The Company has entered into reinsurance agreements to transfer the risk related to certain living benefit options on variable annuities to Pruco Re. The Company also entered into an agreement with UPARC (See Note 13) to reinsure a portion of the no-lapse guarantee provision on certain universal life products. These reinsurance agreements are derivatives and have been accounted for in the same manner as an embedded derivative. See Note 11 for additional information related to the accounting for embedded derivatives. Reinsurance recoverables included in the Company's Consolidated Statements of Financial Position at December 31, 2011 and 2010 were as follows:
December 31, December 31, 2011 2010 ------------ ------------ (in thousands) Domestic life insurance-affiliated $3,876,626 $2,153,734 Domestic individual annuities-affiliated 869,159 (372,823) Domestic life insurance-unaffiliated (658) 239 Taiwan life insurance-affiliated......... 983,989 946,011 ---------- ---------- $5,729,116 $2,727,161 ========== ==========
Substantially all reinsurance contracts are with affiliates as of December 31, 2011 and December 31, 2010. These contracts are described further in Note 13. The gross and net amounts of life insurance face amount in force as of December 31, 2011 and 2010 were as follows:
2011 2010 2009 ------------- ------------- ------------- (in thousands) Gross life insurance face amount in force $ 569,684,855 $ 546,708,450 $ 517,012,733 Reinsurance ceded (517,857,797) (492,314,245) (465,245,943) ------------- ------------- ------------- Net life insurance face amount in force $ 51,827,058 $ 54,394,205 $ 51,766,790 ============= ============= =============
7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS The Company issues traditional variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals ("return of net deposits"), (2) total deposits made to the contract less any partial withdrawals plus a minimum return ("minimum return"), or (3) the highest contract value on a specified date minus any withdrawals ("contract value"). These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods. The Company also issues annuity contracts with market value adjusted investment options ("MVAs"), which provide for a return of principal plus a fixed rate of return if held to maturity, or, alternatively, a "market adjusted B-41 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (continued) value" if surrendered prior to maturity or if funds are allocated to other investment options. The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable. In addition, the Company issues variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse ("no lapse guarantee"). Variable life and variable universal life contracts are offered with general and separate account options similar to variable annuities. The assets supporting the variable portion of both traditional variable annuities and certain variable contracts with guarantees are carried at fair value and reported as "Separate account assets" with an equivalent amount reported as "Separate account liabilities." Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in "Policy charges and fee income" and changes in liabilities for minimum guarantees are generally included in "Policyholders' benefits." In 2011, 2010 and 2009 there were no gains or losses on transfers of assets from the general account to a separate account. For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company's primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, contract lapses and contractholder mortality. For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company's primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, timing of annuitization, contract lapses and contractholder mortality. For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company's primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility or contractholder behavior used in the original pricing of these products. B-42 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (continued) The Company's contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed may not be mutually exclusive. The liabilities related to the net amount at risk are reflected within "Future policy benefits." As of December 31, 2011 and 2010, the Company had the following guarantees associated with these contracts, by product and guarantee type:
December 31, 2011 December 31, 2010 ---------------------------- ---------------------------- In the At In the At Event of Annuitization/ Event of Annuitization/ Death Accumulation (1) Death Accumulation (1) ----------- ---------------- ----------- ---------------- (in thousands) Variable Annuity Contracts Return of Net Deposits Account value $37,091,904 $ N/A $23,853,223 $ N/A Net amount at risk 947,037 N/A $ 112,961 N/A Average attained age of contractholders 60 N/A 60 years N/A Minimum return or contract value Account value $14,074,097 $43,987,117 $12,334,087 $29,079,105 Net amount at risk $ 2,571,505 $ 3,048,978 $ 1,725,293 $ 847,993 Average attained age of contractholders 66 60 66 years 60 years Average period remaining until earliest expected annuitization N/A 0.55 years N/A 1.24 years
(1)Includes income and withdrawal benefits as described herein
Unadjusted Value Adjusted Value Unadjusted Value Adjusted Value Market value adjusted annuities ---------------- -------------- ---------------- -------------- Account value $673,038 $676,087 $738,349 $744,269
December 31, December 31, 2011 2010 ------------ ------------ In the Event of Death ------------------------- (in thousands) Variable Life, Variable Universal Life and Universal Life Contracts No Lapse Guarantees Separate account value $ 2,418,679 $ 2,391,911 General account value $ 2,089,347 $ 1,789,570 Net amount at risk $54,917,077 $51,499,882 Average attained age of contractholders 52 years 51 years
Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows:
December 31, 2011 December 31, 2010 ----------------- ----------------- (in thousands) Equity funds $23,180,461 $20,486,317 Bond funds 23,125,115 11,185,349 Money market funds 2,493,553 2,035,929 ----------- ----------- Total $48,799,129 $33,707,595 =========== ===========
B-43 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (continued) In addition to the above mentioned amounts invested in separate account investment options, $2.367 billion and $2.480 billion of account balances of variable annuity contracts with guarantees, inclusive of contracts with MVA feature, were invested in general account investment options in 2011 and 2010, respectively. Liabilities for Guaranteed Benefits The table below summarizes the changes in general account liabilities for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits ("GMDB") and guaranteed minimum income benefits ("GMIB") are included in "Future policy benefits" and the related changes in the liabilities are included in "Policyholders' benefits." Guaranteed minimum income and withdrawal benefits ("GMIWB"), guaranteed minimum withdrawal benefits ("GMWB") and guaranteed minimum accumulation benefits ("GMAB") features are considered to be bifurcated embedded derivatives and are recorded at fair value. Changes in the fair value of these derivatives, including changes in the Company's own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in "Realized investment gains (losses), net." See Note 10 for additional information regarding the methodology used in determining the fair value of these embedded derivatives. The liabilities for GMAB, GMWB and GMIWB are included in "Future policy benefits."
GMWB-GMIWB- GMDB GMIB GMAB Total --------------------------- ---------------- ----------- ---------- Variable Life, Variable Universal Variable Life & Universal Annuity Life Variable Annuity (in thousands) Balance as of December 31, 2008 $162,569 $ 86,739 $ 41,017 $ 794,640 $1,084,965 Incurred guarantee benefits (1) (13,709) 63,694 (14,478) (812,179) (776,672) Paid guarantee benefits (68,937) (7,262) -- -- (76,199) -------- -------- -------- ---------- ---------- Balance as of December 31, 2009 $ 79,923 $143,171 $ 26,539 $ (17,539) $ 232,094 Incurred guarantee benefits (1) 5,522 18,496 361 (435,284) (410,905) Paid guarantee benefits (36,616) (560) (182) -- (37,358) -------- -------- -------- ---------- ---------- Balance as of December 31, 2010 $ 48,829 $161,107 $ 26,718 $ (452,823) $ (216,169) Incurred guarantee benefits (1) 87,111 66,082 7,120 1,365,810 1,526,123 Paid guarantee benefits (38,305) (2,280) (828) -- (41,413) -------- -------- -------- ---------- ---------- Balance as of December 31, 2011 $ 97,635 $224,909 $ 33,010 $ 912,987 $1,268,541 ======== ======== ======== ========== ==========
(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 embedded derivatives. The GMDB liability is determined each period end by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the death benefits in excess of the account balance. The GMIB liability is determined each period by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the projected income benefits in excess of the account balance. The portion of assessments used is chosen such that, at issue (or, in the case of acquired contracts, at the acquisition date), the present value of expected death benefits or expected income benefits in excess of the projected account balance and the portion of the present value of total expected assessments over the lifetime of the contracts are equal. The Company regularly evaluates the estimates used and adjusts the GMDB and GMIB liability balances, with an associated charge or credit to earnings, if actual experience or other evidence suggests that earlier assumptions should be revised. B-44 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (continued) The GMAB features provide the contractholder with a guaranteed return of initial account value or an enhanced value if applicable. The most significant of the Company's GMAB features are the guaranteed return option ("GRO") features, which includes an asset transfer feature that reduces the Company's exposure to these guarantees. The GMAB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. The GMWB features provide the contractholder with a guaranteed remaining balance if the account value is reduced to zero through a combination of market declines and withdrawals. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of the account value or cumulative deposits when withdrawals commence, less cumulative withdrawals. The contractholder also has the option, after a specified time period, to reset the guaranteed remaining balance to the then-current account value, if greater. The GMWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. The GMIWB features, taken collectively, provides a contractholder two optional methods to receive guaranteed minimum payments over time, a "withdrawal" option or an "income" option. The withdrawal option (which is available under only one of the Company's GMIWBs) guarantees that a contract holder can withdraw an amount each year until the cumulative withdrawals reach a total guaranteed balance. The income option (which varies among the Company's GMIWBs) in general guarantees the contract holder the ability to withdraw an amount each year for life (or for joint lives, in the case of any spousal version of the benefit) where such amount is equal to a percentage of a protected value under the benefit. The contractholder also has the potential to increase this annual amount, based on certain subsequent increases in account value that may occur. Certain GMIWB features include an asset transfer feature that reduces the Company's exposure to these guarantees. The GMIWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. As part of its risk management strategy, the Company limits its exposure to these risks through a combination of product design elements, such as an asset transfer feature, and affiliated reinsurance agreements. The asset transfer feature included in the design of certain optional living benefits transfers assets between certain variable investments selected by the annuity contractholder and, depending on the benefit feature, a fixed rate account in the general account or a bond portfolio within the separate accounts. The transfers are based on the static mathematical formula, used with the particular optional benefit, which considers a number of factors, including the impact of investment performance of the contractholder total account value. In general, negative investment performance may result in transfers to a fixed-rate account in the general account or a bond portfolio within the separate accounts, and positive investment performance may result in transfers back to contractholder-selected variable investments. Other product design elements utilized for certain products to manage these risks include asset allocation restrictions and minimum issuance age requirements. For risk management purposes the Company segregates the variable annuity living benefit features into those that include the asset transfer feature including certain GMIWB riders and certain GMAB riders that feature the GRO policyholder benefits; and those that do not include the asset transfer feature, including certain legacy GMIWB, GMWB, GMAB and GMIB riders. Living benefit riders that include the asset transfer feature also include GMDB riders, and as such the GMDB risk in these riders also benefits from the asset transfer feature. B-45 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 7. CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS (continued) Sales Inducements The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. These deferred sales inducements are included in "Deferred Sales Inducements" in the Company's Statements of Financial Position. The Company offers various types of sales inducements. These inducements include: (1) a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's initial deposit and (2) additional credits after a certain number of years a contract is held. Changes in deferred sales inducements, reported as "Interest credited to policyholders' account balances," are as follows:
2011 2010 2009 --------- -------- -------- (in thousands) Balance, beginning of year $ 537,943 $296,341 $269,310 Capitalization 289,642 246,006 94,526 Amortization- Impact of assumption and experience unlocking and true-ups (24,919) 15,638 11,070 Amortization- All other (260,964) (26,373) (58,634) Change in unrealized investment gains and (losses) 1,040 6,330 (19,930) --------- -------- -------- Balance, end of year $ 542,742 $537,943 $296,341 ========= ======== ========
8. STATUTORY NET INCOME AND SURPLUS AND DIVIDEND RESTRICTIONS The Company is required to prepare statutory financial statements in accordance with accounting practices prescribed or permitted by the Arizona Department of Insurance. Statutory accounting practices primarily differ from GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions and valuing investments, deferred taxes, and certain assets on a different basis. Statutory net income (loss) for the Company amounted to ($589) million, $277 million, and $167 million for the years ended December 31, 2011, 2010, and 2009, respectively. Statutory surplus of the Company amounted to $1,496 million and $1,218 million at December 31, 2011 and 2010, respectively. The Company prepares its statutory financial statements in accordance with accounting practices prescribed or permitted by the Arizona Department of Insurance. Prescribed statutory accounting practices include publications of the NAIC, state laws, regulations, and general administrative rules. Permitted statutory accounting practices encompass all accounting practices not so prescribed. The Company is subject to Arizona law, which limits the amount of dividends that insurance companies can pay to stockholders without approval of the Arizona Department of Insurance. The maximum dividend, which may be paid in any twelve-month period without notification or approval, is limited to the lesser of 10% of statutory surplus as of December 31 of the preceding year or the net gain from operations of the preceding calendar year. Cash dividends may only be paid out of surplus derived from realized net profits. Based on these limitations, the Company is restricted from paying dividends in 2012 without prior approval. In 2009 and 2011, there were no dividends nor any returns of capital paid by the Company to the parent company. The Company paid a dividend of $100 million in 2010, of which $90 million was considered an ordinary dividend and $10 million was considered an extraordinary dividend. B-46 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 9. INCOME TAXES The components of income tax expense (benefit) for the years ended December 31, were as follows:
2011 2010 2009 --------- -------- --------- (in thousands) Current tax expense (benefit): U.S. $ 42,474 $157,318 $ 93,658 --------- -------- --------- Total 42,474 157,318 93,658 --------- -------- --------- Deferred tax expense (benefit): U.S. (263,930) (29,219) (248,231) --------- -------- --------- Total (263,930) (29,219) (248,231) --------- -------- --------- Total income tax expense (benefit) on income from operations (221,456) 128,099 (154,573) Other comprehensive income 16,417 50,137 135,293 Cumulative effect of changes in accounting policy -- -- 10,637 --------- -------- --------- Total income tax expense (benefit) on continuing operations $(205,039) $178,236 $ (8,643) ========= ======== =========
The Company's income (loss) from continuing operations before income taxes includes income (loss) from domestic operations of ($354.2) million, $517.0 million and ($254.9) million, and no income from foreign operations for the years ended December 31, 2011, 2010 and 2009, respectively. The Company's actual income tax expense for the years ended December 31, differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from continuing operations before income taxes and cumulative effect of accounting change for the following reasons:
2011 2010 2009 --------- -------- --------- (in thousands) Expected federal income tax expense $(123,964) $180,944 $ (89,225) Non-taxable investment income (81,031) (46,161) (35,900) Tax credits (15,977) (5,553) (2,270) Expiration of statute of limitations and related interest - - (33,812) Other (484) (1,131) 6,634 --------- -------- --------- Total income tax expense (benefit) on continuing operations $(221,456) $128,099 $(154,573) ========= ======== =========
B-47 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 9. INCOME TAXES (continued) Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table:
2011 2010 -------- --------- (in thousands) Deferred tax assets Insurance reserves $995,018 $ 696,132 Investments -- 45,654 Other -- 1,821 -------- --------- Deferred tax assets $995,018 $ 743,607 -------- --------- Deferred tax liabilities Deferred acquisition costs $594,677 $ 679,685 Investments 55,073 0 Deferred Annuity Bonus 189,960 188,280 Net Unrealized gains on securities 147,787 131,136 Other 723 -- -------- --------- Deferred tax liabilities 988,220 999,101 -------- --------- Net deferred tax asset (liability) $ 6,798 $(255,494) ======== =========
The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not expected to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company considers many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized. The company had no valuation allowance as of December 31, 2011, 2010 and 2009. Management believes that based on its historical pattern of taxable income, the Company will produce sufficient income in the future to realize its deferred tax assets. Adjustments to the valuation allowance will be made if there is a change in management's assessment of the amount of deferred tax asset that is realizable. B-48 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 9. INCOME TAXES (continued) The Company's unrecognized tax benefits as of December 31, 2009, 2010 and 2011 are as follows:
Unrecognized Total Unrecognized tax benefits unrecognized tax benefits 2002 and tax benefits prior to 2002 forward all years ------------- ------------ ------------ (in thousands) Amounts as of December 31, 2008 $ 45,118 $ 6,079 $ 51,197 Increases in unrecognized tax benefits taken in prior period - - - (Decreases) in unrecognized tax benefits taken in prior period - (826) (826) Settlements with parent (17,197) - (17,197) Settlements with taxing authorities - - - (Decreases) in unrecognized tax benefits as a result of lapse of the applicable statute of limitations (26,431) - (26,431) -------- ------- -------- Amounts as of December 31, 2009 $ 1,490 $ 5,253 $ 6,743 Increases in unrecognized tax benefits taken in prior period - - - (Decreases) in unrecognized tax benefits taken in prior period - (5,123) (5,123) -------- ------- -------- Amounts as of December 31, 2010 $ 1,490 $ 130 $ 1,620 Increases in unrecognized tax benefits taken in prior period (Decreases) in unrecognized tax benefits taken in prior period (1,490) (17) (1,507) -------- ------- -------- Amounts as of December 31, 2011 $ 0 $ 113 $ 113 ======== ======= ======== Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2009 $ 1,490 $ - $ 1,490 ======== ======= ======== Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2010 $ 1,490 $ - $ 1,490 ======== ======= ======== Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2011 $ - $ - $ - ======== ======= ========
The Company classifies all interest and penalties related to tax uncertainties as income tax expense (benefit). The amounts recognized in the consolidated financial statements for tax-related interest and penalties for the years ended December 31, are as follows:
2011 2010 2009 ---- ------- ------- (in thousands) Interest and penalties recognized in the consolidated statements of operations $- $(1,100) $(4,900) Interest and penalties recognized in liabilities in the consolidated statements of financial position $- $ - $ 1,100
The Company's liability for income taxes includes the liability for unrecognized tax benefits and interest that relate to tax years still subject to review by the Internal Revenue Service ("IRS") or other taxing authorities. The completion of review or the expiration of the Federal statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The Federal statute of limitations for the 2002 tax year expired on April 30, 2009. The Federal statute of limitations for the 2003 tax year expired on July 31, 2009. The Federal statute of limitations for the 2004 through 2007 tax years will expire in June 2012, unless extended. Tax years 2008 through 2010 are still open for IRS examination. The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired. B-49 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 9. INCOME TAXES (continued) During the fourth quarter of 2011, the Company's parent, Prudential Financial, reached an agreement with the IRS on the resolution of the proposed foreign tax credits disallowance. The settlement of the foreign tax credit transactions for 2004 through 2006 marked the conclusion of the IRS audits for those years. As a result, all unrecognized tax positions plus interest relating to tax years prior to 2007 were recognized in 2011. The dividends received deduction ("DRD") reduces the amount of dividend income subject to U.S. tax and is the primary component of the non-taxable investment income shown in the table above, and, as such, is a significant component of the difference between the Company's effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2010, current year results, and was adjusted to take into account the current year's equity market performance. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company's taxable income before the DRD. In August 2007, the IRS released Revenue Ruling 2007-54, which included, among other items, guidance on the methodology to be followed in calculating the DRD related to variable life insurance and annuity contracts. In September 2007, the IRS released Revenue Ruling 2007-61. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 and informed taxpayers that the U.S. Treasury Department and the IRS intend to address through new guidance the issues considered in Revenue Ruling 2007-54, including the methodology to be followed in determining the DRD related to variable life insurance and annuity contracts. On February 13, 2012, the Obama Administration released the "General Explanations of the Administration's Revenue Proposals." One proposal would change the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company's consolidated net income. These activities had no impact on the Company's 2009, 2010 or 2011 results. In December 2006, the IRS completed all fieldwork with respect to its examination of the consolidated federal income tax returns for tax years 2002 and 2003. The final report was initially submitted to the Joint Committee on Taxation for their review in April 2007. The final report was resubmitted in March 2008 and again in April 2008. The Joint Committee returned the report to the IRS for additional review of an industry issue regarding the methodology for calculating the DRD related to variable life insurance and annuity contracts. The IRS completed its review of the issue and proposed an adjustment with respect to the calculation of the DRD. In order to expedite receipt of an income tax refund related to the 2002 and 2003 tax years, the Company agreed to such adjustment. The report, with the adjustment to the DRD, was submitted to the Joint Committee on Taxation in October 2008. The Company was advised on January 2, 2009 that the Joint Committee completed its consideration of the report and took no exception to the conclusions reached by the IRS. Accordingly, the final report was processed and a $157 million refund was received in February 2009. The Company believed that its return position with respect to the calculation of the DRD was technically correct. Therefore, the Company filed protective refund claims on October 1, 2009 to recover the taxes associated with the agreed upon adjustment. The IRS recently issued an Industry Director Directive ("IDD") stating that the methodology for calculating the DRD set forth in Revenue Ruling 2007-54 should not be followed. The IDD also confirmed that the IRS guidance issued before Revenue Ruling 2007-54, which guidance the Company relied upon in calculating its DRD, should be used to determine the DRD. The Company's parent, Prudential Financial, has received a refund of approximately $3 million pursuant to the protective refund claims. These activities had no impact on the Company's 2009, 2010 or 2011 results. B-50 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 9. INCOME TAXES (continued) For tax years 2007 through 2011, the Company is participating in the IRS's Compliance Assurance Program ("CAP"). Under CAP, the IRS assigns an examination team to review completed transactions contemporaneously during these tax years in order to reach agreement with the Company on how they should be reported in the tax returns. If disagreements arise, accelerated resolutions programs are available to resolve the disagreements in a timely manner before the tax returns are filed. It is management's expectation this program will shorten the time period between the filing of the Company's federal income tax returns and the IRS's completion of its examination of the returns. 10. FAIR VALUE OF ASSETS AND LIABILITIES Fair Value Measurement - Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance around fair value established a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1--Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following characteristics for the measured asset/liability: (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information publicly available. The Company's Level 1 assets and liabilities primarily include certain cash equivalents and certain short term investments, and equity securities. Prices are obtained from readily available sources for market transactions involving identical assets or liabilities. Level 2--Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company's Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value), and commercial mortgage loans, certain short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter derivatives. Valuations are generally obtained from third party pricing services for identical or comparable assets or liabilities or through the use of valuation methodologies using observable market inputs. Prices from services are validated through comparison to trade data and internal estimates of current fair value, generally developed using market observable inputs and economic indicators. Level 3--Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the Company's assumptions about the inputs market participants would use in pricing the asset or liability. The Company's Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured over-the-counter derivative contracts, certain commercial mortgage loans, certain consolidated real estate funds for which the Company is the general partner, and embedded derivatives resulting from certain products with guaranteed benefits. Prices are determined using valuation methodologies such as option pricing models, discounted cash flow models and other similar techniques. Non-binding broker quotes, which are utilized B-51 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) when pricing service information is not available, are reviewed for reasonableness based on the Company's understanding of the market, and are generally considered Level 3. Under certain conditions, based on its observations of transactions in active markets, the Company may conclude the prices received from independent third party pricing services or brokers are not reasonable or reflective of market activity. In those instances, the Company may choose to over-ride the third-party pricing information or quotes received and apply internally- developed values to the related assets or liabilities. To the extent the internally-developed valuations use significant unobservable inputs, they are classified as Level 3. As of December 31, 2011 and December 31, 2010, these over-rides on a net basis were not material. Assets and Liabilities by Hierarchy Level - The tables below present the balances of assets and liabilities measured at fair value on a recurring basis, as of the dates indicated.
As of December 31, 2011 --------------------------------------------------------- Level 1 Level 2 Level 3 Netting (2) Total ---------- ----------- ---------- ----------- ----------- (in thousands) Fixed maturities, available for sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ - $ 153,703 $ 4,696 $ - $ 158,399 Obligations of U.S. states and their political subdivisions - 49,638 - - 49,638 Foreign government bonds - 54,521 - - 54,521 Corporate securities - 4,018,234 23,720 - 4,041,954 Asset-backed securities - 310,816 62,429 - 373,245 Commercial mortgage-backed securities - 542,323 - - 542,323 Residential mortgage-backed securities - 324,044 - - 324,044 ---------- ----------- ---------- -------- ----------- Sub-total - 5,453,279 90,845 - 5,544,124 Trading account assets: Asset-backed securities - 17,419 - - 17,419 Commercial mortgage-backed securities - 5,062 - - 5,062 Equity securities - - 3,362 - 3,362 ---------- ----------- ---------- -------- ----------- Sub-total - 22,481 3,362 - 25,843 Equity securities, available for sale 5,617 - 2,652 - 8,269 Short-term investments 101,608 181,673 - - 283,281 Cash equivalents 42,158 191,920 - - 234,078 Other long-term investments - 180,603 686 (57,612) 123,677 Other assets - 70,519 991,129 - 1,061,648 ---------- ----------- ---------- -------- ----------- Sub-total excluding separate account assets 149,383 6,100,475 1,088,674 (57,612) 7,280,920 Separate account assets (1) 1,803,852 56,130,595 222,324 - 58,156,771 ---------- ----------- ---------- -------- ----------- Total assets $1,953,235 $62,231,070 $1,310,998 $(57,612) $65,437,691 ========== =========== ========== ======== =========== Future policy benefits $ - $ - $ 912,988 $ - $ 912,988 Other Liabilities - 57,612 - (57,612) - ---------- ----------- ---------- -------- ----------- Total liabilities $ - $ 57,612 $ 912,988 $(57,612) $ 912,988 ========== =========== ========== ======== ===========
B-52 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued)
As of December 31, 2010 ------------------------------------------------------- Level 1 Level 2 Level 3 Netting Total ---------- ----------- --------- -------- ----------- (in thousands) Fixed maturities, available for sale: U.S. Treasury securities and obligations of U.S. government authorities and agencies $ - $ 227,962 $ - $ - $ 227,962 Obligations of U.S. states and their political subdivisions - 24,129 - - 24,129 Foreign government bonds - 54,709 - - 54,709 Corporate securities - 4,321,147 49,050 - 4,370,197 Asset-backed securities - 349,808 59,770 - 409,578 Commercial mortgage-backed securities - 580,520 - - 580,520 Residential mortgage-backed securities - 375,208 - - 375,208 ---------- ----------- --------- -------- ----------- Sub-total - 5,933,483 108,820 - 6,042,303 Trading account assets: Asset-backed securities - 17,525 - - 17,525 Commercial mortgage-backed securities - 5,180 - - 5,180 ---------- ----------- --------- -------- ----------- Sub-total - 22,705 - - 22,705 Equity securities, available for sale 8,920 8,695 1,792 - 19,407 Short-term investments 50,989 195,915 - - 246,904 Cash equivalents 42,040 237,871 - - 279,911 Other long term investments - 26,752 - (11,557) 15,195 Other assets - 48,071 (222,491) - (174,420) ---------- ----------- --------- -------- ----------- Sub-total excluding separate account assets 101,949 6,473,492 (111,879) (11,557) 6,452,005 Separate account assets (1) 1,654,810 41,415,830 198,451 - 43,269,091 ---------- ----------- --------- -------- ----------- Total assets $1,756,759 $47,877,765 $ 86,572 $(11,557) $49,721,096 ========== =========== ========= ======== =========== Future policy benefits $ - $ - $(452,822) $ - $ (452,822) Other Liabilities - 11,557 - (11,557) - ---------- ----------- --------- -------- ----------- Total liabilities $ - $ 11,557 $(452,822) $(11,557) $ (452,822) ========== =========== ========= ======== ===========
(1)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 assets classified as Level 3 consist primarily of real estate and real estate investment funds. 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. (2)"Netting" amounts represent the impact of offsetting asset and liability positions held with the same counterparty. The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below. Information regarding separate account assets is excluded as the risk associated with these assets is primarily borne by the Company's customers and policyholders. Fixed Maturity Securities - The fair values of the Company's public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices from pricing services are sourced from multiple vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company generally receives prices from multiple pricing services for each security, but B-53 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. To validate reasonableness, prices are reviewed by internal asset managers through comparison with directly observed recent market trades and internal estimates of current fair value, developed using market observable inputs and economic indicators. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service. If the pricing service updates the price to be more consistent in comparison to the presented market observations, the security remains within Level 2. If the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity, non-binding broker quotes are used, if available. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information from the pricing service or broker with an internally-developed valuation. As of December 31, 2011 and December 31, 2010, over-rides on a net basis were not material. Internally-developed valuations or non-binding broker quotes are also used to determine fair value in circumstances where vendor pricing is not available. These estimates may use significant unobservable inputs, which reflect the Company's own assumptions about the inputs market participants would use in pricing the asset. Circumstances where observable market data are not available may include events such as market illiquidity and credit events related to the security. Pricing service over-rides, internally-developed valuations and non-binding broker quotes are generally included in Level 3 in the fair value hierarchy. The fair value of private fixed maturities, which are primarily comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. In certain cases these models primarily use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may also incorporate significant unobservable inputs, which reflect the Company's own assumptions about the inputs market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are not significant to the price of a security, a Level 2 classification is made. Otherwise, a Level 3 classification is used. Private fixed maturities also include debt investments in funds that, in addition to a stated coupon, pay a return based upon the results of the underlying portfolios. The fair values of these securities are determined by reference to the funds' net asset value ("NAV"). Since the NAV at which the funds trade can be observed by redemption and subscription transactions between third parties, the fair values of these investments have been reflected within Level 2 in the fair value hierarchy. Trading Account Assets - Trading account assets consist primarily of asset-backed securities, public corporate bonds, perpetual preferred stock and commercial mortgage-backed securities whose fair values are determined consistent with similar instruments described above under "Fixed Maturity Securities" and below under "Equity Securities." Fair values of perpetual preferred stock based on observable market inputs are classified within Level 2. However, when prices from independent pricing services are based on non-binding broker quotes as the directly observable market inputs become unavailable, the fair value of perpetual preferred stock are classified as Level 3. B-54 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Equity Securities - Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as common stock mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using valuation and discounted cash flow models that require a substantial level of judgment. In determining the fair value of certain privately traded equity securities the discounted cash flow model may also use unobservable inputs, which reflect the Company's assumptions about the inputs market participants would use in pricing the asset. Most privately traded equity securities are classified within Level 3. The fair values of common stock mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of preferred equity securities are based on prices obtained from independent pricing services. These prices are then validated for reasonableness against recently traded market prices. Accordingly, these securities are generally classified within Level 2 in the fair value hierarchy. Fair values of perpetual preferred stock based on observable market inputs are classified within Level 2. However, when prices from independent pricing services are based on non-binding broker quotes as the directly observable market inputs become unavailable, the fair value of perpetual preferred stock are classified as Level 3. Derivative Instruments - Derivatives are recorded at fair value either as assets, within "Other long-term investments," or as liabilities, within "Other liabilities," except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts are determined based on quoted prices in active exchanges or through the use of valuation models. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, credit spreads, market volatility, expected returns, non-performance risk, liquidity and other factors. Liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position. The majority of the Company's derivative positions are traded in the over-the-counter ("OTC") derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The fair values of most OTC derivatives, including interest rate and cross currency swaps, currency forward contracts, and single name credit default swaps are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models' key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, non-performance risk, volatility and other factors. To reflect the market's perception of its own and the counterparty's non-performance risk, the Company incorporates additional spreads over London Interbank Offered Rate ("LIBOR") into the discount rate used in determining the fair value of OTC derivative assets and liabilities. The additional credit spread over LIBOR rates is determined taking into consideration publicly available information relating to the financial strength of the Company. The Company adjusts these credit spreads to remove any illiquidity risk premium, which is subject to a floor based on a percentage of the credit spread. However, the non-performance risk adjustment is applied only to the uncollateralized portion of the OTC derivative assets and liabilities, after consideration of the impacts of two-way collateral posting. Most OTC derivative contract inputs have bid and ask prices that are actively quoted or can be readily obtained from external market data providers. The Company's policy is to use mid-market pricing in determining its best estimate of fair value. B-55 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Derivatives classified as Level 3 may include first-to-default credit basket swaps and other structured products. These derivatives are valued based upon models with some significant unobservable market inputs or inputs from less actively traded markets. The fair values of first to default credit basket swaps are derived from relevant observable inputs (e.g., individual credit default spreads, interest rates and recovery rates), and unobservable model-specific input values such as correlation between different credits within the same basket. Structured options and derivatives are valued using simulation models such as the Monte Carlo and other techniques. Level 3 methodologies are validated through periodic comparison of the Company's fair values to broker-dealer values. As of December 31, 2011, and December 31, 2010, there were derivatives with the fair value of $102 thousand and $0 classified within Level 3, and all other derivatives were classified within Level 2. See Note 11 for more details on the fair value of derivative instruments by primary underlying. Cash Equivalents and Short-Term Investments - Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Money market instruments are generally valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in the Cash Equivalents and Short-term Investments category are typically not traded in active markets; however, their fair values are based on market observable inputs and, accordingly, these investments have been classified within Level 2 in the fair value hierarchy. Other Assets - Other assets carried at fair value include reinsurance recoverables related to the reinsurance of our living benefit guarantees on certain of our variable annuities and an affiliated security issued by certain investment subsidiaries of Prudential Insurance. These guarantees are described further below in "Future Policy Benefits." Also included in other assets are certain universal life products that contain a no-lapse guarantee provision. The reinsurance agreements covering these guarantees are derivatives and are accounted for in the same manner as an embedded derivative. Future Policy Benefits - The liability for future policy benefits includes general account liabilities for guarantees on variable annuity contracts, including guaranteed minimum accumulation benefits ("GMAB"), guaranteed minimum withdrawal benefits ("GMWB") and guaranteed minimum income and withdrawal benefits ("GMIWB"), accounted for as embedded derivatives. The fair values of the GMAB, GMWB, and GMIWB liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or asset balance, given changing capital market conditions and various policyholder behavior assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management judgment. The Company is also required to incorporate the market-perceived risk of its own non-performance ("NPR") in the valuation of the embedded derivatives associated with its optional living benefit features and no-lapse feature on certain universal life products. Since insurance liabilities are senior to debt, the Company believes that reflecting the financial strength ratings of the Company in the valuation of the liability or contra-liability appropriately takes into consideration its NPR. To reflect NPR, the Company incorporates an additional credit spread over LIBOR rates into the discount rate used in the valuations of the embedded derivatives associated with its optional living benefit features. The additional credit spread over LIBOR rates is determined taking into consideration publicly available information relating to the financial strength of the Company. The Company adjusts these credit spreads to remove any illiquidity risk premium, which is subject to a floor based on a B-56 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) percentage of the credit spread. The additional credit spread over LIBOR rates incorporated into the discount rate as of December 31, 2011 generally ranged from 125 to 250 basis points for the portion of the interest rate curve most relevant to these liabilities. This additional spread is applied at an individual contract level and only to those individual living benefit contracts in a liability position and not to those in a contra-liability position. Other significant inputs to the valuation models for the embedded derivatives associated with the optional living benefit features of the Company's variable annuity products include capital market assumptions, such as interest rate and implied volatility assumptions, as well as various policyholder behavior assumptions that are actuarially determined, including lapse rates, benefit utilization rates, mortality rates and withdrawal rates. These assumptions are reviewed at least annually, and updated based upon historical experience and give consideration to any observable market data, including market transactions such as acquisitions and reinsurance transactions. Since many of the assumptions utilized in the valuation of the embedded derivatives associated with the Company's optional living benefit features are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy. As of December 31, 2011, the fair value of the embedded derivatives associated with the optional living benefit features before the adjustment for NPR, was a net liability of $4,015 million. This net liability was comprised of $4,203 million of individual living benefit contracts in a liability position, net of $188 million of individual living benefit contracts in a contra-liability position. At December 31, 2011, the adjustment for the NPR resulted in a $3,102 million cumulative decrease to the embedded derivative liability, reflecting the additional credit spread over LIBOR the Company incorporated into the discount rate used in the valuations of those embedded derivatives in a liability position. Significant declines in risk-free interest rates and the impact of account value performance in 2011 drove an increase in the embedded derivative liability associated with the optional living benefit features of the Company's variable annuity products as of December 31, 2011. These factors, as well as widening of the spreads used in valuing NPR, also drove offsetting increases in the NPR adjustment. As described in Note 6 the Company uses affiliated reinsurance as part of its risk management strategy for certain of the optional living benefit features. As a result, the increase in these embedded derivative liabilities are largely offset by corresponding increases in the reinsurance recoverable associated with the affiliated reinsurance. Transfers between Levels 1 and 2 - During the twelve months ended December 31, 2011, there were no material transfers between Level 1 and Level 2. B-57 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Changes in Level 3 assets and liabilities - The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2011, as well as the portion of gains or losses included in income for the year ended December 31, 2011 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2011.
Year Ended December 31, 2011 -------------------------------------------------------------------- Fixed Maturities Fixed Fixed Available Maturities Fixed Maturities For Sale - Available For Maturities Available For Commercial Equity Sale - U.S. Available For Sale -Asset- Mortgage- Securities, Treasury Sale - Corporate Backed Backed Available for Securities Securities Securities Securities Sale ------------- ---------------- ------------- ---------- ------------- (in thousands) Fair value, beginning of period $ -- $ 49,050 $59,770 $ -- $ 1,792 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net -- (3,311) 803 -- (3,315) Asset management fees and other income -- -- -- -- -- Included in other comprehensive income (loss) (4) (1,126) (694) -- 2,840 Net investment income -- 219 768 -- -- Purchases 4,700 7,534 23,001 5,019 1,696 Sales -- (678) (8,160) -- -- Issuances -- 883 -- -- -- Settlements -- (20,679) (9,094) -- (99) Foreign currency translation -- -- -- -- -- Transfers into Level 3 (2) -- 10,444 -- -- 8,695 Transfers out of Level 3 (2) -- (18,616) (3,965) (5,019) -- Other (4) -- -- -- -- (8,957) ------ -------- ------- ------- ------- Fair value, end of period $4,696 $ 23,720 $62,429 $ -- $ 2,652 ====== ======== ======= ======= ======= Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $ -- $ (4,319) $ (10) $ -- $(2,918) Asset management fees and other income $ -- $ -- $ -- $ -- $ -- Interest credited to policyholder account balances $ -- $ -- $ -- $ -- $ -- Included in other comprehensive income (loss) $ (4) $ (718) $ (514) $ -- $ 2,597
B-58 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued)
Year Ended December 31, 2011 ------------------------------------------------------------- Other Trading Account Assets Other Long- Separate - Equity Term Other Account Future Policy Securities Investments Assets Assets (1) Benefits -------------- ----------- --------- ---------- ------------- (in thousands) Fair value, beginning of period $ - $ - $(222,491) $198,451 $ 452,822 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net - 102 934,112 388 (1,091,846) Asset management fees and other income (595) (46) - - - Interest credited to policyholder account balances - - - 1,815 - Included in other comprehensive income (loss)............................. - - (3,980) - - Net investment income - - - - - Purchases - 630 308,142 86,744 (273,964) Sales - - - (65,074) - Issuances - - - - - Settlements (5,000) - (3) - - Foreign currency translation - - - - - Transfers into Level 3 (2) - - - - - Transfers out of Level 3 (2) - - (24,651) - - Other (4) 8,957 - - - - ------- ---- --------- -------- ----------- Fair value, end of period $ 3,362 $686 $ 991,129 $222,324 $ (912,988) ======= ==== ========= ======== =========== Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $ - $ 75 $ 973,717 $ - $(1,085,926) Asset management fees and other income $ (876) $(46) $ - $ - $ - Interest credited to policyholder account balances $ - $ - $ - $ 1,815 $ - Included in other comprehensive income (loss) $ - $ - $ (3,980) $ - $ -
(1)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. (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. (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)Other primarily represents reclasses of certain assets between reporting categories. B-59 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Transfers - The transfers out of Level 3 for $24.6 million for the year ended December 31, 2011 were primarily the result of the use of third party pricing for an affiliated security issued by an investment subsidiary of Prudential Insurance. Prior to the second quarter of 2011 these assets were valued internally using a pricing model. As a part of an ongoing monitoring assessment of pricing inputs to ensure appropriateness of the level classification in the fair value hierarchy the Company may reassign level classification from time to time. As a result of such a review, in the first quarter of 2011, it was determined that the pricing inputs for perpetual preferred stocks provided by third party pricing services were primarily based on non-binding broker quotes which could not always be verified against directly observable market information. Consequently, perpetual preferred stocks were transferred into Level 3 within the fair value hierarchy. This represents the majority of the transfers into Level 3 for Equity Securities Available-for-Sale. Other transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized. Transfers out of Level 3 were primarily due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate. Changes in Level 3 assets and liabilities - The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2010, as well as the portion of gains or losses included in income for the year ended December 31, 2010 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2010.
Year Ended December 31, 2010 ---------------------------------------------------------------------- Fixed Maturities Fixed Fixed Available For Maturities, Fixed Maturities Sale - Available For Maturities Available For Commercial Equity Sale -Foreign Available For Sale - Asset- Mortgage- Securities, Government Sale -Corporate Backed Backed Available for Bonds Securities Securities Securities Sale ------------- --------------- ------------- ------------- ------------- (in thousands) Fair value, beginning of period $ 1,082 $ 32,462 $135,466 $ - $ 3,833 Total gains (losses) (realized/ unrealized): Included in earnings: Realized investment gains (losses), net - (438) (1,438) - (90) Asset management fees and other income - - - - - Included in other comprehensive income (loss) (11) 1,958 (582) 82 (2,291) Net investment income (1) 328 735 (7) - Purchases, sales, issuances, and settlements - (14,534) 4,839 5,160 340 Foreign currency translation - - - - - Transfers into Level 3 (2) - 30,910 4,525 - - Transfers out of Level 3 (2) (1,070) (1,636) (83,775) (5,235) - ------- -------- -------- ------- ------- Fair value, end of period $ - $ 49,050 $ 59,770 $ - $ 1,792 ======= ======== ======== ======= =======
B-60 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued)
Year Ended December 31, 2010 ---------------------------------------------------------------------------- Fixed Fixed Fixed Maturities Maturities, Fixed Maturities Available For Available For Maturities Available For Sale - Equity Sale - Foreign Available For Sale - Asset- Commercial Securities, Government Sale - Corporate Backed Mortgage- Available for Bonds Securities Securities Backed Securities Sale -------------- ---------------- ------------- ----------------- ------------- (in thousands) Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $ - $(1,027) $ (868) $ - $ 90 Asset management fees and other income $ - $ - $ - $ - $ - Interest credited to policyholder account balances $ - $ - $ - $ - $ - Included in other comprehensive income (loss) $ (11) $ 2,786 $ (634) $ 126 $ (2,291) Year Ended December 31, 2010 ---------------------------------------------------------------------------- Trading Account Asset - Backed Other Other Separate Account Future Policy Securities Liabilities Assets Assets (1) Benefits -------------- ---------------- ------------- ----------------- ------------- (in thousands) Fair value, beginning of period $ 1,182 $ (960) $ 159,618 $152,675 $ 17,539 Total gains (losses) (realized/ unrealized): Included in earnings: Realized investment gains (losses), net - 960 (474,147) (799) 540,017 Asset management fees and other income - - - - - Interest credited to policyholder account balances - - - 9,119 - Included in other comprehensive income (loss) 18 - 2,465 - - Net investment income - - - - - Purchases, sales, issuances, and settlements (1,200) - 89,573 37,456 (104,733) Foreign currency translation - - - - - Transfers into Level 3 (2) - - - - - Transfers out of Level 3 (2) - - - - - ------- ------- --------- -------- --------- Fair value, end of period $ - $ - $(222,491) $198,451 $ 452,822 ======= ======= ========= ======== =========
B-61 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued)
Year Ended December 31, 2010 ---------------------------------------------------------------- Trading Account Asset - Backed Other Other Separate Account Future Policy Securities Liabilities Assets Assets (1) Benefits ---------- ----------- --------- ---------------- ------------- (in thousands) Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $- $- $(473,023) $ - $499,913 Asset management fees and other income $- $- $ - $ - $ - Interest credited to policyholder account balances $- $- $ - $9,119 $ - Included in other comprehensive income (loss) $- $- $ 2,465 $ - $ -
(1)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. (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. (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. Transfers - Transfers out of Level 3 for Other Assets totaled $79.5 million for the year ended December 31, 2010 resulting from the Company's conclusion that the market for asset-backed securities collateralized by sub-prime mortgages has been becoming increasingly active, as evidenced by orderly transactions. The pricing received from independent pricing services could be validated by the Company. The market for asset-backed securities was deemed inactive in 2009. Other transfers out of Level 3 were typically due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate. Transfers into Level 3 were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) was utilized. B-62 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) Changes in Level 3 assets and liabilities - The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2009, as well as the portion of gains or losses included in income for the year ended December 31, 2009 attributable to unrealized gains or losses related to those assets and liabilities held at December 31, 2009.
Year Ended December 31, 2009 --------------------------------------------------------------- Fixed Fixed Maturities, Fixed Fixed Maturities, Available Maturities, Maturities, Available For Sale - Available For Available For Residential Equity Sale -Foreign For Sale - Sale -Asset- Mortgage- Securities, Government Corporate Backed Backed Available for Bonds Securities Securities Securities Sale ------------- ----------- ------------ ----------- ------------- (in thousands) Fair value, beginning of period $ 867 $13,357 $ 43,642 $ 6,309 $ 968 Total gains (losses) (realized/unrealized): Included in earnings: Realized investment gains (losses), net - (2,344) (10,559) - (2) Asset management fees and other income - - - - - Included in other comprehensive income (loss) 217 3,991 42,357 43 2,864 Net investment income (2) 916 1,004 - - Purchases, sales, issuances, and settlements - (4,636) (20,381) (1,252) - Foreign currency translation - - - - - Transfers into Level 3 (2) - 28,257 89,358 - 49 Transfers out of Level 3 (2) (7,079) (9,955) (5,100) (46) ------ ------- -------- ------- ------ Fair value, end of period $1,082 $32,462 $135,466 $ - $3,833 ====== ======= ======== ======= ====== Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $ - $(2,904) $(10,020) $ - $ (2) Asset management fees and other income $ - $ - $ - $ - $ - Interest credited to policyholder account balances $ - $ - $ - $ - $ - Included in other comprehensive income (loss) $ 217 $ 3,986 $ 42,587 $ - $2,864
B-63 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued)
Year Ended December 31, 2009 ----------------------------------------------------------------------- Trading Account Asset - Backed Other Separate Account Future Policy Securities Assets Assets (1) Other Liabilities Benefits ---------- ----------- ---------------- ----------------- ------------- (in thousands) Fair value, beginning of period $1,089 $ 1,157,884 $154,316 $(17,167) $(794,640) Total gains (losses) (realized/ unrealized): Included in earnings: Realized investment gains (losses), net - (1,157,338) (3,608) 16,207 848,282 Asset management fees and other income 93 - - - - Interest credited to policyholder account balances - - (10,140) - - Included in other comprehensive income (loss) - 22,282 - - - Net investment income - - - - - Purchases, sales, issuances, and settlements - 136,790 17,545 - - Foreign currency translation - - - - (36,103) Transfers into Level 3 (2) - - - - - Transfers out of Level 3 (2) - - (5,438) - - ------ ----------- -------- -------- --------- Fair value, end of period $1,182 $ 159,618 $152,675 $ (960) $ 17,539 ====== =========== ======== ======== ========= Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period (3): Included in earnings: Realized investment gains (losses), net $ - $ (788,470) $ - $ 16,215 $ 830,739 Asset management fees and other income $ 93 $ - $ - $ - $ - Interest credited to policyholder account balances $ - $ - $(10,141) $ - $ - Included in other comprehensive income (loss) $ - $ - $ - $ - $ -
(1)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 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. (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. B-64 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) (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. Transfers - Transfers into Level 3 for Fixed Maturities Available for Sale totaled $117.6 million for the year ended December 31, 2009. Transfers into Level 3 for these investments were primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes (that could not be validated) when information from third party pricing services or models with observable inputs were utilized. Transfers out of Level 3 for Fixed Maturities Available for Sale were primarily due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate. Fair Value of Financial Instruments - The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. For the following financial instruments the carrying amount equals or approximates fair value: fixed maturities classified as available-for-sale, trading account assets, equity securities, securities purchased under agreements to resell, short-term investments, cash and cash equivalents, accrued investment income, separate account assets, securities sold under agreements to repurchase, and cash collateral for loaned securities, as well as certain items recorded within other assets and other liabilities such as broker-dealer related receivables and payables. See Note 11 for a discussion of derivative instruments. The following table discloses the Company's financial instruments where the carrying amounts and fair values differ:
December 31, 2011 December 31, 2010 -------------------------- -------------------------- Carrying Amount Fair value Carrying Amount Fair value --------------- ---------- --------------- ---------- (in thousands) Assets: Commercial mortgage and other loans $1,406,492 $1,543,968 $1,275,022 $1,352,761 Policy loans 1,050,878 1,401,354 1,061,607 1,258,411 Liabilities: Policyholder account balances - investment contracts 677,316 673,673 588,200 584,112 Short-term and long-term debt to affiliates 1,301,000 1,328,254 895,000 898,115
The fair values presented above for those financial instruments where the carrying amounts and fair values differ have been determined by using available market information and by applying market valuation methodologies, as described in more detail below. Commercial mortgage and other loans The fair value of commercial mortgage and other loans is primarily based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate adjusted for appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spread and a significant component of the pricing input, are based on internally developed methodology. The internally derived credit spreads take into account public corporate bond spreads of similar quality and maturity, public B-65 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 10. FAIR VALUE OF ASSETS AND LIABILITIES (continued) commercial mortgage-backed securities spreads, third-party mortgage loan survey spreads and other relevant market information such as pricing indications from market participants on new originations, and where applicable adjustments for property types and locations. Policy Loans The fair value of policy loans is calculated using a discounted cash flow model based upon current U.S. Treasury rates and historical loan repayment patterns. Investment Contracts - Policyholders' Account Balances Only the portion of policyholders' account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, payout annuities and other similar contracts without life contingencies, fair values are derived using discounted projected cash flows based on interest rates that are representative of the Company's claims paying ratings, and hence reflect the Company's own nonperformance risk. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. Short-term and long-term debt to affiliates The fair value of short-term and long-term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. These fair values consider the Company's own non-performance risk. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value. 11. DERIVATIVE INSTRUMENTS Types of Derivative Instruments and Derivative Strategies Interest Rate Contracts Interest rate swaps are used by the Company to manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it anticipates acquiring and other anticipated transactions and commitments. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date. Equity Contracts Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range. These hedges do not qualify for hedge accounting. B-66 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 11. DERIVATIVE INSTRUMENTS (continued) Foreign Exchange Contracts Currency derivatives, including currency swaps and forwards, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell. Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date. Credit Contracts Credit derivatives are used by the Company to enhance the return on the Company's investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company can sell credit protection on an identified name, or a basket of names in a first to default structure, and in return receive a quarterly premium. With first to default baskets, the premium generally corresponds to a high proportion of the sum of the credit spreads of the names in the basket. If there is an event of default by the referenced name or one of the referenced names in a basket, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security. See credit derivatives written section for discussion of guarantees related to credit derivatives written. In addition to selling credit protection, the Company may purchase credit protection using credit derivatives in order to hedge specific credit exposures in the Company's investment portfolio. Embedded Derivatives The Company sells variable annuity contracts that include certain optional living benefit features that are treated for accounting purposes as embedded derivatives. The Company has reinsurance agreements to transfer the risk related to certain of these embedded derivatives to an affiliate, Pruco Reinsurance Ltd. ("Pruco Re"). The embedded derivatives related to the living benefit features and the related reinsurance agreements are carried at fair value. Mark-to-market changes in the fair value of the underlying contractual guarantees are determined using valuation models as described in Note 7, and are recorded in "Realized investment gains (losses), net." The Company invests in fixed maturities that, in addition to a stated coupon, provide a return based upon the results of an underlying portfolio of fixed income investments and related investment activity. The Company accounts for these investments as available-for-sale fixed maturities containing embedded derivatives. Such embedded derivatives are marked to market through "Realized investment gains (losses), net," based upon the change in value of the underlying portfolio. The fair value of the living benefit feature embedded derivatives included in "Future policy benefits" was a liability of $913 million as of December 31, 2011 and a contra-liability of $453 million as of December 31, 2010. The fair value of the embedded derivatives related to the reinsurance of certain of these benefits to Pruco Re included in "Reinsurance recoverables" was an asset of $869 million as of December 31, 2011 and a contra-asset of $373 million as of December 31, 2010. B-67 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 11. DERIVATIVE INSTRUMENTS (continued) Some of the Company's universal life products contain a no-lapse guarantee provision that is reinsured with an affiliate, UPARC. The reinsurance agreement contains an embedded derivative related to the interest rate risk of the reinsurance contract. Interest sensitivity can result in mark-to-market changes in the value of the underlying contractual guarantees, as well as actual activity related to premium and benefits. In third quarter 2011, the Company amended this reinsurance agreement resulting in a recapture of a portion of the no-lapse guarantee provision effective July 1, 2011. The table below provides a summary of the gross notional amount and fair value of derivatives contracts, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings.
December 31, 2011 December 31, 2010 ------------------------------ --------------------------- Notional Fair Value Notional Fair Value ---------- ------------------- -------- ------------------ Primary Underlying Amount Assets Liabilities Amount Assets Liabilities ------------------ ---------- -------- ----------- -------- ------- ----------- (in thousands) Qualifying Hedges Currency/Interest Rate $ 60,507 $ 3,500 $ (865) $ 46,749 $ 2,193 $ (1,152) ---------- -------- -------- -------- ------- -------- Total Qualifying Hedges $ 60,507 $ 3,500 $ (865) $ 46,749 $ 2,193 $ (1,152) ========== ======== ======== ======== ======= ======== Non-Qualifying Hedges Interest Rate $ 766,900 $ 98,500 $ (2,110) $481,500 $19,170 $ (4,738) Currency 7,273 37 (108) 2,109 -- (43) Credit 73,000 203 (667) 16,900 1,206 (1,653) Currency/Interest Rate 52,236 2,522 (1,502) 51,943 1,434 (2,846) Equity 8,093,696 75,945 (52,360) 93,955 2,749 (1,125) ---------- -------- -------- -------- ------- -------- Total Non-Qualifying Hedges 8,993,105 177,207 (56,747) 646,407 24,559 (10,405) ========== ======== ======== ======== ======= ======== Total Derivatives (1) $9,053,612 $180,707 $(57,612) $693,156 $26,752 $(11,557) ========== ======== ======== ======== ======= ========
(1)Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $948 million as of December 31, 2011 and a conta-liability of $423 million as of December 31, 2010 included in "Future policy benefits" and "Fixed maturities available for sale." Cash Flow Hedges The Company uses currency swaps in its cash flow hedge accounting relationships. This instrument is only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, and equity or embedded derivatives in any of its cash flow hedge accounting relationships. B-68 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 11. DERIVATIVE INSTRUMENTS (continued) The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship:
Year Ended December 31, ---------------------------- 2011 2010 2009 -------- ------- --------- (in thousands) Qualifying Hedges Cash flow hedges Currency/Interest Rate Net investment income $ 233 $ 529 $ 170 Realized investment gains (losses) (337) Other income 49 89 (22) Accumulated Other Comprehensive Income (1) 1,715 2,646 (2,302) -------- ------- --------- Total cash flow hedges $ 1,660 $ 3,264 $ (2,154) -------- ------- --------- Non-qualifying hedges Realized investment gains (losses) Interest Rate $ 90,706 $25,842 $ (29,765) Currency 175 169 (91) Currency/Interest Rate 1,102 1,177 (6,537) Credit 733 (1,631) 9,885 Equity (3,264) 742 (76,567) Embedded Derivatives 88,740 52,278 (313,243) -------- ------- --------- Total non-qualifying hedges 178,192 78,577 (416,318) -------- ------- --------- Total Derivative Impact $179,852 $81,841 $(418,472) ======== ======= =========
(1)Amounts deferred in "Accumulated other comprehensive income (loss)." For the period ending December 31, 2011, the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company's results of operations and there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. Presented below is a roll forward of current period cash flow hedges in "Accumulated other comprehensive income (loss)" before taxes:
(in thousands) Balance, December 31, 2010 $ 808 Net deferred gains on cash flow hedges from January 1 to December 31, 2011 1,607 Amount reclassified into current period earnings 108 ------ Balance, December 31, 2011 $2,523 ======
B-69 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 11. DERIVATIVE INSTRUMENTS (continued) As of December 31, 2011 the Company did not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 15 years. Income amounts deferred in "Accumulated other comprehensive income (loss)" as a result of cash flow hedges are included in "Net unrealized investment gains (losses)" in the Consolidated Statements of Equity. Credit Derivatives Written The Company holds certain externally managed investments in the European market which contain embedded derivatives whose fair value are primarily driven by changes in credit spreads. These investments are medium term notes that are collateralized by investment portfolios primarily consisting of investment grade European fixed income securities, including corporate bonds and asset-backed securities, and derivatives, as well as varying degrees of leverage. The notes have a stated coupon and provide a return based on the performance of the underlying portfolios and the level of leverage. The Company invests in these notes to earn a coupon through maturity, consistent with its investment purpose for other debt securities. The notes are accounted for under U.S. GAAP as available for sale fixed maturity securities with bifurcated embedded derivatives (total return swaps). Changes in the value of the fixed maturity securities are reported in Equity under the heading "Accumulated Other Comprehensive Income" and changes in the market value of the embedded total return swaps are included in current period earnings in "Realized investment gains (losses), net." The Company's maximum exposure to loss from these interests was $85 million at December 31, 2011 and $91 million at December 31, 2010. The fair value of the embedded derivatives included in Fixed maturities, available for sale was a liability of $35 million at December 31, 2011 and $30 million at December 31, 2010. The Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security. The Company's maximum amount at risk under these credit derivatives, assuming the value of the underlying referenced securities become worthless, is $58 million and $0 million notional of credit default swap ("CDS") selling protection with an associated fair value of less than $1 million, at December 31, 2011 and December 31, 2010, respectively, These credit derivatives generally have maturities of five to ten years and consist of corporate securities within the finance industry. At December 31, 2011, the underlying credits have an NAIC designation rating of 1. In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company's investment portfolio. As of December 31, 2011 and December 31, 2010, the Company had $15 million and $17 million of outstanding notional amounts, respectively, reported at fair value as a liability of $1 million and a liability of less than a million, respectively. Credit Risk The Company is exposed to credit-related losses in the event of non-performance by our counterparty to financial derivative transactions. Generally, the credit exposure of the Company's over-the-counter (OTC) derivative transactions is represented by the contracts with a positive fair value (market value) at the reporting date after taking into consideration the existence of netting agreements. The Company has credit risk exposure to an affiliate, Prudential Global Funding, LLC related to its over-the-counter derivative transactions. Prudential Global Funding, LLC manages credit risk with external counterparties by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral where appropriate. B-70 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 11. DERIVATIVE INSTRUMENTS (continued) Under fair value measurements, the Company incorporates the market's perceptions of its own and the counterparty's non-performance risk in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company's own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company's counterparty's credit spread is applied to OTC derivative net asset positions. 12. COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS Commitments The Company has made commitments to fund $22 million of commercial loans as of December 31, 2011. The Company also made commitments to purchase or fund investments, mostly private fixed maturities, of $82 million as of December 31, 2011. Contingent Liabilities On an ongoing basis, the Company's internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the costs of such remediation, administrative costs and regulatory fines. The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see "Litigation and Regulatory Matters" below. It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company's financial position. Litigation and Regulatory Matters The Company is subject to legal and regulatory actions in the ordinary course of its business. Pending legal and regulatory actions include proceedings specific to the Company and proceedings generally applicable to business practices in the industry in which it operates. The Company is subject to class action lawsuits and other litigation involving a variety of issues and allegations involving sales practices, claims payments and procedures, premium charges, policy servicing and breach of fiduciary duty to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment, and could be exposed to claims or litigation concerning certain business or process patents. In some of the pending legal and regulatory actions, plaintiffs are B-71 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 12. COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS (continued) seeking large and/or indeterminate amounts, including punitive or exemplary damages. In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company's pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain. The following is a summary of certain pending proceedings. In December 2010, a purported state-wide class action complaint, Phillips v. Prudential Financial, Inc., was filed in the Circuit Court of the First Judicial Circuit, Williamson County, Illinois. The complaint makes claims of breach of contract, breaches of fiduciary duty, and violation of Illinois law on behalf of a class of Illinois residents whose death benefits were settled by retained assets accounts and seeks damages and disgorgement of profits. In January 2011, the case was removed to the United States District Court for the Southern District of Illinois. In March 2011, the complaint was amended to drop Prudential Financial as a defendant and add the Company as a defendant. The matter is now captioned Phillips v. Prudential Insurance and Pruco Life Insurance Company. In April 2011, a motion to dismiss the amended complaint was filed. In November 2011, the complaint was dismissed and the dismissal appealed in December 2011. In July 2010, the Company, along with other life insurance industry participants, received a formal request for information from the State of New York Attorney General's Office in connection with its investigation into industry practices relating to the use of retained asset accounts. In August 2010, the Company received a similar request for information from the State of Connecticut Attorney General's Office. The Company is cooperating with these investigations. The Company has also been contacted by state insurance regulators and other governmental entities, including the U.S. Department of Veterans Affairs and Congressional committees regarding retained asset accounts. These matters may result in additional investigations, information requests, claims, hearings, litigation, adverse publicity and potential changes to business practices. In January 2012, a qui tam action on behalf of the State of Illinois, Total Asset Recovery Services v. Met Life Inc, et al., Prudential Financial, Inc., The Prudential Insurance Company of America, and Prudential Holdings, LLC, filed in the Circuit Court of Cook County, Illinois, was served on the Company. The complaint alleges that the Company failed to escheat life insurance proceeds to the State of Illinois in violation of the Illinois False Claims Whistleblower Reward and Protection Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys' fees and costs. In March 2012, a qui tam action on behalf of the State of Minnesota, Total Asset Recovery v. MetLife Inc., et al., Prudential Financial Inc., The Prudential Insurance Company of America and Prudential Holdings, Inc., filed in the Fourth Judicial District, Hennepin County, in the State of Minnesota was served on the Company. The complaint alleges that the Company failed to escheat life insurance proceeds to the State of Minnesota in violation of the Minnesota False Claims Act and seeks injunctive relief, compensatory damages, civil penalties, treble damages, prejudgment interest, attorneys' fees and costs. In January 2012, a Global Resolution Agreement entered into by the Company and a third party auditor became effective upon its acceptance by the unclaimed property departments of 20 states and jurisdictions. Under the terms of the Global Resolution Agreement, the third party auditor acting on behalf of the signatory states will compare expanded matching criteria to the Social Security Master Death File ("SSMDF") to identify deceased insureds and contract holders where a valid claim has not been made. In February 2012, a Regulatory Settlement Agreement entered into by the Company to resolve a multi-state market conduct examination regarding its B-72 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 12. COMMITMENTS, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS (continued) adherence to state claim settlement practices became effective upon its acceptance by the insurance departments of 20 states and jurisdictions. The Regulatory Settlement Agreement applies prospectively and requires the Company to adopt and implement additional procedures comparing its records to the SSMDF to identify unclaimed death benefits and prescribes procedures for identifying and locating beneficiaries once deaths are identified. Other jurisdictions that are not signatories to the Regulatory Settlement Agreement are considering proposals that would apply prospectively and require life insurance companies to take additional steps to identify unreported deceased policy and contract holders. These prospective changes and any escheatable property identified as a result of the audits and inquiries could result in: (1) additional payments of previously unclaimed death benefits; (2) the payment of abandoned funds to U.S. jurisdictions; and (3) changes in the Company's practices and procedures for the identification of escheatable funds and beneficiaries, which would impact claim payments and reserves, among other consequences. The Company is one of several companies subpoenaed by the New York Attorney General regarding its unclaimed property procedures. Additionally, the New York Department of Insurance ("NYDOI") has requested that 172 life insurers (including the Company) provide data to the NYDOI regarding use of the SSMDF. The New York Office of Unclaimed Funds recently notified the Company that it intends to conduct an audit of the Company's compliance with New York's unclaimed property laws. The Minnesota Attorney General has also requested information regarding the Company's use of the SSMDF and its claim handling procedures and the Company is one of several companies subpoenaed by the Minnesota Department of Commerce, Insurance Division. In February 2012, the Massachusetts Office of the Attorney General requested information regarding the Company's unclaimed property procedures. The Company's litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company's results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company's litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company's financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company's financial position. 13. RELATED PARTY TRANSACTIONS The Company has extensive transactions and relationships with Prudential Insurance and other affiliates. Although we seek to ensure that these transactions and relationships are fair and reasonable, it is possible that the terms of these transactions are not the same as those that would result from transactions among unrelated parties. Expense Charges and Allocations Many of the Company's expenses are allocations or charges from Prudential Insurance or other affiliates. These expenses can be grouped into general and administrative expenses and agency distribution expenses. The Company's general and administrative expenses are charged to the Company using allocation methodologies based on business production processes. Management believes that the methodology is reasonable and reflects B-73 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) costs incurred by Prudential Insurance to process transactions on behalf of the Company. The Company operates under service and lease agreements whereby services of officers and employees, supplies, use of equipment and office space are provided by Prudential Insurance. The Company reviews its allocation methodology periodically which it may adjust accordingly. General and administrative expenses also include allocations of stock compensation expenses related to a stock option program and a deferred compensation program issued by Prudential Financial. The expense charged to the Company for the stock option program was less than $1 million for the twelve months ended December 31, 2011, 2010 and 2009. The expense charged to the Company for the deferred compensation program was $7 million, $4 million and $3 million for the twelve months ended December 31, 2011, 2010 and 2009, respectively. The Company is charged for its share of employee benefits expenses. These expenses include costs for funded and non-funded contributory and non-contributory defined benefit pension plans. Some of these benefits are based on final group earnings and length of service while others are based on an account balance, which takes into consideration age, service and earnings during career. The Company's share of net expense for the pension plans was $18 million, $13 million and $8 million in 2011, 2010 and 2009 respectively. Prudential Insurance sponsors voluntary savings plans for its employees (401(k) plans). The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The Company's expense for its share of the voluntary savings plan was $8.1 million, $6.2 million and $4.2 million in 2011, 2010 and 2009 respectively. The Company is charged distribution expenses from Prudential Insurance's agency network for both its domestic life and annuity products through a transfer pricing agreement, which is intended to reflect a market based pricing arrangement. Corporate Owned Life Insurance The Company has sold four Corporate Owned Life Insurance or, "COLI," policies to Prudential Insurance, and one to Prudential Financial. The cash surrender value included in separate accounts for these COLI policies was $2.134 billion at December 31, 2011 and $2.061 billion at December 31, 2010, respectively. Fees related to these COLI policies were $33 million, $41 million and $37 million for the years ending December 31, 2011, 2010 and 2009 respectively. The Company retains the majority of the mortality risk associated with these COLI policies. Reinsurance with Affiliates UPARC Through June 30, 2011 the Company, excluding its subsidiaries, reinsured its universal protector policies having no-lapse guarantees with an affiliated company, UPARC. UPARC reinsured an amount equal to 90% of the net amount at risk related to the first $1 million in face amount plus 100% of the net amount at risk related to the face amount in excess of $1 million as well as 100% of the risk of uncollectible policy charges and fees associated with the no-lapse guarantee provision of these policies. Effective July 1, 2011, the agreement between the Company and UPARC to reinsure its universal protector policies having no-lapse guarantees was amended for policies with effective dates prior to January 1, 2011. Under the amended agreement, UPARC reinsures an amount equal to 27% of the net amount at risk related to the first $1 million in face amount plus 30% of the net amount at risk related to the face amount in excess of $1 million as well as 30% of the risk of uncollectible policy charges and fees associated with the no-lapse guarantee B-74 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) provision of these policies. Policies with effective dates January 1, 2011 or later are reinsured with UPARC under the terms described in the previous paragraph. The settlement of the recapture premium occurred on October 31, 2011. As a result, the recapture premium was treated as if settled on the effective date and adjusted for the time elapsed between this date and the settlement date. This adjustment was equal to the earned interest and changes in market values from the effective date through settlement date related to fixed maturity securities from an asset portfolio within UPARC. The Company is not relieved of its primary obligation to the policyholder as a result of these reinsurance transactions. The portion of this reinsurance contract related to mortality is accounted for as reinsurance. Reinsurance recoverables related to this reinsurance agreement were $21 million and $50 million as of December 31, 2011 and December 31, 2010, respectively. Fees ceded to UPARC in 2011, 2010 and 2009 were $21 million, $102 million and $51 million, respectively. 2011 fees ceded include the recapture of $33 million unearned and supplemental premiums on yearly renewable term mortality risk previously ceded to UPARC. Benefits ceded to UPARC in 2011, 2010 and 2009 were $37 million, $52 million and $48 million respectively. The portion of this reinsurance contract related to the no lapse guarantee provision is accounted for as an embedded derivative. Realized gains (losses) on the no lapse guarantee embedded derivative were $298 million, ($18) million and ($370) million for the years ended December 31, 2011, 2010 and 2009, respectively. The adjustment related to the settlement of the recapture premium discussed above resulted in a realized gain of $37 million in 2011 and was accounted for as a derivative. PAR U Effective July 1, 2011, the Company, excluding its subsidiaries, entered into to an automatic coinsurance agreement with PAR U, an affiliated company, to reinsure an amount equal to 70% of the all risks associated with its universal protector policies having no lapse guarantees as well as its universal plus policies, with effective dates prior to January 1, 2011. The Company is not relieved of its primary obligation to the policyholder as a result of this agreement. Under this agreement, an initial reinsurance premium of $2,447 million less a ceding allowance of $1,439 million, was paid to PAR U. Consideration for the amount due to PAR U was transferred on October 31, 2011 but was treated as if settled on the effective date of the coinsurance agreement. The time elapsed between the effective date and the settlement date resulted in a derivative equal to the earned interest and changes in market values from the effective date through settlement date related to fixed maturity securities from both an asset portfolio within the Company, as well as an asset portfolio within UPARC. The realized loss associated with the settlement of this embedded derivative on October 31, 2011 was $61 million. Amounts included in the Company's Consolidated Statements of Financial Position at December 31, 2011 were as follows:
December 31, 2011 ----------------- ($ in thousands) Reinsurance recoverables....................... $1,356,705 Policy loans................................... $ (36,556) Deferred policy acquisition costs.............. $ (127,726) Other liabilities (reinsurance payables) /(1)/. $ 153,688
(1)Includes $135 million of a deferred gain arising from the coinsurance agreement with PAR U effective July 1, 2011. B-75 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) Reinsurance amounts included in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) in 2011 are as follows:
December 31, 2011 ----------------- ($ in thousands) Gross premium and policy charges and fee income $102,722 Interest credited to policy holder accounts ceded Policyholders' benefits ceded $ 49,337 Reinsurance expense allowances, net of capitalization and amortization $ 30,780 Realized capital losses, associated with derivatives $(61,398)
PARCC The Company reinsures 90% of the risk under its term life insurance policies, with effective dates prior to January 1, 2010, exclusive of My Term, ROP Term Life issued through its life insurance subsidiary, and those reinsured by PAR III (see below) through an automatic coinsurance agreement with PARCC. The Company is not relieved of its primary obligation to the policyholder as a result of this agreement. Reinsurance recoverables related to this agreement were $2,064 million, and $1,826 million as of December 31, 2011, and December 31, 2010, respectively. Premiums ceded to PARCC in 2011, 2010 and 2009, were $725 million, $785 million and $799 million, respectively. Benefits ceded to PARCC in 2011, 2010 and 2009 were $370 million, $328 million and $295 million, respectively. Reinsurance expense allowances, net of capitalization and amortization were $143 million, $167 million and $171 million for the years ended December 31, 2011, 2010 and 2009, respectively. PAR TERM The Company reinsures 95% of the risk under its term life insurance policies with effective dates on or after January 1, 2010, exclusive of My Term, through an automatic coinsurance agreement with PAR TERM. The Company is not relieved of its primary obligation to the policyholder as a result of this agreement. Reinsurance recoverables related to this agreement were $248 million and $91 million as of December 31, 2011 and December 31, 2010, respectively. Premiums ceded to PAR TERM were $239 million and $102 million, for the years ended December 31, 2011and December 31, 2010, respectively. Benefits ceded to PAR TERM were $34 million and $16 million, for the years ended December 31, 2011 and December 31, 2010, respectively. Reinsurance expense allowances, net of capitalization and amortization were $44 million and $24 million for the years ended December 31, 2011 and December 31, 2010, respectively. PAR III The Company, excluding its subsidiaries, reinsures 90% of the risk under its ROP term life insurance policies with effective dates in 2009 through an automatic coinsurance agreement with PAR III. The Company is not relieved of its primary obligation to the policyholder as a result of this agreement. Reinsurance recoverables related to this agreement were $8 million, and $5 million as of December 31, 2011, and December 31, 2010, respectively. Premiums ceded to PAR III were $3 million, $3 million and $2 million for the years ended December 31, 2011, December 31, 2010 and December 31, 2009, respectively. Benefits ceded to PAR III in were $1 million for the year ended December 31, 2011, and less than $1 million for the years ended December 31, 2010 and 2009. Reinsurance expense allowances, net of capitalization and amortization were $1 million for the years ended December 31, 2011, 2010 and 2009. B-76 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) Prudential Insurance The Company has a yearly renewable term reinsurance agreement with Prudential Insurance and reinsures the majority of all mortality risks not otherwise reinsured. Effective July 1, 2011, the Company recaptured a portion of this reinsurance agreement related to its universal plus policies having effective dates prior to January 1, 2011. The Company now reinsures these risks with PAR U discussed above. Reinsurance recoverables related to this agreement were $173 million, and $175 million as of December 31, 2011, and December 31, 2010, respectively. Premiums and fees ceded to Prudential Insurance in 2011, 2010 and 2009 were $223 million, $355 million and $240 million, respectively. Benefits ceded to Prudential in 2011, 2010 and 2009 were $231 million, $263 million and $218 million, respectively. The Company is not relieved of its primary obligation to the policyholder as a result of these agreements. The Company has reinsured a group annuity contract with Prudential Insurance, in consideration for a single premium payment by the Company, providing reinsurance equal to 100% of all payments due under the contract. The Company is not relieved of its primary obligation to the policyholders as a result of this agreement. Reinsurance recoverables related to this agreement were $7 million for both years ended December 31, 2011 and December 31, 2010, and $8 million for the year ended December 31, 2009. Benefits ceded were $2 million for the three years ended December 31, 2011, 2010 and 2009. In December 2010, the Company amended certain of its affiliated reinsurance treaties to change the settlement mode from monthly to annual. As a result of these treaty amendments, the Company was required to pay our reinsurers, Prudential Insurance and UPARC, the premium difference that resulted. Settlement of this premium difference was made by transfers of securities at fair value of $120 million to Prudential Insurance and $35 million to UPARC. Pruco Reinsurance The Company uses reinsurance as part of its risk management and capital management strategies for certain of its optional living benefit features. B-77 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) The following table provides information relating to fees ceded to Pruco Reinsurance ("Pruco Re") under these agreements which are included in "Realized investment (losses) gains, net" on the Unaudited Interim Consolidated Statement of Operations and Comprehensive Income for the dates indicated.
Year Ended -------------------------------------- December 31, December 31, December 31, 2011 2010 2009 ------------ ------------ ------------ (in thousands) Pruco Reinsurance Effective January 24, 2011 Highest Daily Lifetime Income ("HDI") (1) $ 31,639 $ -- $ -- Spousal Highest Daily Lifetime Income ("SHDI") (1) 11,940 -- -- Effective beginning August 24, 2009 Highest Daily Lifetime 6 Plus ("HD6 Plus") (1) 152,902 26,306 180 Spousal Highest Daily Lifetime 6 Plus ("SHD6 Plus") (1) 67,754 11,951 64 Effective June 30, 2009 Highest Daily Lifetime 7 Plus ("HD7 Plus") 17,014 14,516 4,488 Spousal Highest Daily Lifetime 7 Plus ("SHD7 Plus") 8,951 7,533 2,207 Effective January 28, 2008 Highest Daily Lifetime 7 ("HD7") 11,007 10,343 9,228 Spousal Highest Daily Lifetime 7 ("SHD7") 2,660 2,482 2,161 Effective March 15, 2010 Guaranteed Return Option Plus II ("GRO Plus II") 3,595 812 -- Effective January 28, 2008 Highest Daily Guaranteed Return Option ("HD GRO") 609 610 440 Highest Daily Guaranteed Return Option II ("HD GRO II") 2,885 820 -- Effective Since 2006 Highest Daily Lifetime Five ("HDLT5") 4,690 4,795 4,829 Spousal Lifetime Five ("SLT5") 2,398 2,298 2,053 Effective Since 2005 Lifetime Five ("LT5") 15,461 15,011 13,614 -------- ------- ------- Total Pruco Reinsurance $333,505 $97,477 $39,264 -------- ------- -------
(1)Effective October 1, 2011, PLNJ entered into a coinsurance agreement with Pruco Re providing for the 100% reinsurance of this rider. The Company's reinsurance recoverables related to the above product reinsurance agreements were $869 million and ($373) million as of December 31, 2011, and December 31, 2010, respectively. Realized gains (losses) ceded were $908 million, ($479) million and $814 million for the years ended December 31, of 2011, 2010 and 2009, respectively. Changes in realized gains (losses) for the 2011, 2010 and 2009 periods were primarily due to changes in market conditions in the period. The underlying asset as of December 31, 2011 and the contra-asset as of December 31, 2010 are reflected in "Reinsurance recoverables" in the Company's Consolidated Statements of Financial Position. Taiwan branch reinsurance agreement On January 31, 2001, the Company transferred all of its assets and liabilities associated with its Taiwan branch, including its Taiwan insurance book of business, to an affiliate, Prudential Life Insurance Company of Taiwan Inc. ("Prudential of Taiwan"). B-78 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) The mechanism used to transfer this block of business in Taiwan is referred to as a "full acquisition and assumption" transaction. Under this mechanism, the Company is jointly liable with Prudential of Taiwan for two years from the giving of notice to all obligees for all matured obligations and for two years after the maturity date of not-yet-matured obligations. Prudential of Taiwan is also contractually liable, under indemnification provisions of the transaction, for any liabilities that may be asserted against the Company. The transfer of the insurance related assets and liabilities was accounted for as a long-duration coinsurance transaction under accounting principles generally accepted in the United States. Under this accounting treatment, the insurance related liabilities remain on the books of the Company and an offsetting reinsurance recoverable is established. These assets and liabilities are denominated in Taiwan dollars. Affiliated premiums in 2011, 2010 and 2009 from the Taiwan coinsurance agreement were $74 million, $87 million and $77 million, respectively. Affiliated benefits ceded in 2011, 2010 and 2009 from the Taiwan coinsurance agreement were $22 million and $23 million and $21 million, respectively. Reinsurance recoverables related to the Taiwan coinsurance agreement were $984 million and $946 million at December 31, 2011and December 31, 2010, respectively. Deferred Policy Acquisition Costs Ceded to Term Reinsurance Affiliates In 2009 when implementing a revision to the reinsurance treaties with PARCC, PAR TERM and PAR III, modifications were made affecting premiums. The related impact on the deferral of ceded reinsurance expense allowance did not reflect this change resulting in the understatement of deferred reinsurance expense allowances. During second quarter 2011, the Company recorded the correction, charging $13 million to net DAC amortization which represented the cumulative impact of this change. These adjustments are not material to any previously reported quarterly or annual financial statements. Affiliated Asset Administration Fee Income Effective April 1, 2009, the Company amended an existing agreement to add AST Investment Services, Inc., formerly known as American Skandia Investment Services, Inc, as a party whereas the Company receives fee income calculated on contractholder separate account balances invested in the Advanced Series Trust, formerly known as American Skandia Trust. Income received from AST Investment Services, Inc. related to this agreement was $152.5 million, $51.3 million, and $14.9 million for the years ended December 31, 2011, 2010, and 2009 respectively. These revenues are recorded as "Asset administration fees" in the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company participates in a revenue sharing agreement with Prudential Investments LLC, whereby the Company receives fee income from policyholders' account balances invested in The Prudential Series Fund ("PSF"). Income received from Prudential Investments LLC, related to this agreement was $10.6 million, $10.3 million, and $10.0 for the years ended December 31, 2011, 2010, and 2009, respectively. These revenues are recorded as "Asset administration fees" in the Consolidated Statements of Operations and Comprehensive Income (Loss). Affiliated Asset Transfers The Company buys and sells assets to and from affiliated companies. B-79 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) In December 2010, the Company purchased fixed maturity securities from affiliated companies, Prudential Annuities Life Assurance Corporation ("PALAC") and Pruco Re. The securities were purchased from PALAC, at a fair market value of $292 million, and were recorded net of OCI at an amortized cost of $257 million. The securities were purchased from Pruco Re, at a fair market value of $81 million, and were recorded net of OCI at an amortized cost of $76 million. The difference between fair market value and book value of these transfers was accounted for as a net decrease of $40 million to additional paid-in capital in 2010. During first quarter 2011, the Company recorded an out of period adjustment that reclassified the $40 million difference between book value and fair market value from additional paid-in capital to retained earnings. As part of this adjustment, a $14 million reduction to the deferred tax liability was recorded with an offset also reflected in retained earnings to record the tax effect of this activity. These adjustments were not material to any previously reported quarterly or annual financial statements. In December 2010, the Company amended certain of its affiliated reinsurance treaties to change the settlement mode from monthly to annual. As a result of these treaty amendments, we were required to pay our reinsurers, Prudential Insurance and UPARC, the premium difference that resulted. Settlement of the premium difference with Prudential Insurance was made by transfer of securities that had an amortized cost of $117 million and a fair market value of $120 million. The difference between amortized cost and fair market value was accounted for as an increase of $3 million to additional paid-in capital. Settlement of the premium difference with UPARC was made by transfer of securities of $35 million in 2010, where fair market value approximated amortized cost. In October 2011, the Company received fixed maturity securities from UPARC, an affiliated company, as consideration for the recapture of previously ceded business. The fair market value of the assets transferred to the Company was $350 million. The time elapsed between the effective date and the settlement date of the coinsurance agreement with PAR U resulted in a derivative gain of $37 million reflecting changes in market values of the consideration from the effective date through settlement date. In October 2011, the Company transferred fixed maturity securities to PAR U, an affiliated company, as consideration for the coinsurance agreement with this affiliate. These securities had an amortized cost of $943 million and a fair market value of $1,006 million. The net difference between amortized cost and the fair value was $63 million and was recorded as a realized investment gain on the Company's financial statements. The time elapsed between the effective date and the settlement date of the coinsurance agreement with PAR U resulted in a derivative loss of $61 million reflecting changes in market values of the consideration from the effective date through settlement date. In October 2011, the Company sold fixed maturity securities to PAR U, an affiliated company. These securities had an amortized cost of $84 million and a fair market value of $92 million. The net difference between amortized cost and fair market value was $8 million and was accounted for as a realized investment gain on the Company's financial statements. In November 2011, the Company sold fixed maturity securities to its parent company, Prudential Insurance. These securities had an amortized cost of $41 million and a fair market value of $45 million. The difference between amortized cost and fair market was accounted for as an increase of $3 million to additional paid-in capital, net of taxes in 2011. In December 2011, the Company sold commercial loan securities to its parent company, Prudential Insurance. These securities had an amortized cost of $19 million and a fair market value of $21 million. The difference between amortized cost and fair market value was accounted for as an increase of $1 million to additional paid-in capital, net of taxes in 2011. B-80 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 13. RELATED PARTY TRANSACTIONS (continued) In December 2011, the Company sold fixed maturity securities to PARCC, an affiliated company. These securities had an amortized cost of $36 million and a fair market value of $38 million. The net difference between amortized cost and fair value was $2 million and was accounted for as a realized investment gain on the Company's financial statements. Debt Agreements The Company has an agreement with an affiliate, Prudential Funding, LLC, which allows the Company to borrow funds for working capital and liquidity needs. The borrowings under this agreement are limited to $900 million. The Company had $114 million in short term debt affiliated with Prudential Financial and $15 million affiliated with Prudential Funding, LLC. as of December 31, 2011, and no borrowings outstanding as of December 31, 2010. On December 20, 2010, the Company borrowed $650 million from Prudential Insurance. This loan has a fixed interest rate of 3.47% and matures on December 21, 2015. The total related interest expense to the Company was $22.5 million for the year ended December 31, 2011. On November 15, 2010, the Company borrowed $245 million from Prudential Financial. This loan has a fixed interest rate of 3.01% and matures on November 13, 2015. The total related interest expense to the Company was $7.1 million for the year ended December 31, 2011. On December 15, 2011, the Company repaid $179 million to Prudential Financial as a partial repayment for the $245 million borrowing. The outstanding principle related to this loan was $66 million at December 31, 2011. On June 20, 2011, the Company entered into a series of four $50 million borrowings with Prudential Financial, totaling $200 million. The loans have fixed interest rates ranging from 1.66% to 3.17% and maturity dates staggered one year apart, from June 19, 2013 to June 19, 2016. The total related interest expense was $2.6 million for the year ended December 31, 2011. On December 15, 2011, the Company entered into a series of four $53 million borrowings and on December 16, 2011 four $11 million borrowings with Prudential Financial, totaling $256 million. The loans have fixed interest rates ranging from 2.65% to 3.61% and maturity dates staggered one year apart, from December 16, 2013 to December 16, 2016. The total related interest expense was $0.35 million for the year ended December 31, 2011. Derivative Trades In the ordinary course of business, the Company enters into over-the-counter ("OTC") derivative contracts with an affiliate, Prudential Global Funding, LLC. For these OTC derivative contracts, Prudential Global Funding, LLC has a substantially equal and offsetting position with external counterparties. B-81 Pruco Life Insurance Company Notes to Consolidated Financial Statements -------------------------------------------------------------------------------- 14. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The unaudited quarterly results of operations for the years ended December 31, 2011 and 2010 are summarized in the table below:
Three Months Ended ------------------------------------------- March 31 June 30 September 30 December 31 -------- --------- ------------ ----------- (in thousands) 2011 Total revenues $478,756 $ 493,845 $ 639,641 $519,442 Total benefits and expenses 383,055 465,288 1,371,790 265,750 Income (loss) from operations before income taxes 95,701 28,557 (732,149) 253,692 Net income (loss) $ 76,041 $ 23,805 $ (434,310) $201,721 ======== ========= ========== ======== 2010 Total revenues $303,046 $ 417,543 $ 316,435 $301,970 Total benefits and expenses 249,047 636,017 (3,243) (59,811) Income (loss) from operations before income taxes 53,999 (218,474) 319,678 361,781 Net income (loss) (1) $ 49,112 $(139,086) $ 224,855 $254,004 ======== ========= ========== ========
(1)In addition to the impact from the retrospective adoption of which costs relating to acquisition of new or renewal insurance costs qualify for deferral included within the three months ended June 30, 2010 and September 30, 2010, are offsetting impacts of approximately $40 million to income tax benefit and expense, respectively, resulting from revised interim tax calculations. B-82 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholder of Pruco Life Insurance Company: In our opinion, the accompanying consolidated statements of financial position and the related statements of operations and comprehensive income, of stockholder's equity and of cash flows present fairly, in all material respects, the financial position of Pruco Life Insurance Company (a wholly owned subsidiary of The Prudential Insurance Company of America) and its subsidiaries at December 31, 2011 and December 31, 2010, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2011 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. As discussed in Notes 1 and 2, of the consolidated financial statements, the Company has restated its previously issued 2011 consolidated statements of cash flows to correct an error. As discussed in Note 2, the Company changed the manner in which it accounts for the cost related to the acquisition or renewal of insurance contracts and the presentation of comprehensive income. Additionally, the Company changed its method of determining and recording other-than-temporary impairment for debt securities on January 1, 2009. /s/ PRICEWATERHOUSECOOPERS LLP New York, New York March 9, 2012, except for the effects of the restatement discussed in Notes 1 and 2 and the effects of the adoption of the accounting standard relating to accounting for acquisition costs associated with acquiring or renewing insurance contracts, and the effects of the adoption of the accounting standard related to the presentation of comprehensive income discussed in Note 2, as to which the date is July 20, 2012. B-83 PART C ITEM 24.FINANCIAL STATEMENTS AND EXHIBITS (a) FINANCIAL STATEMENTS (1) Financial Statements of the Subaccounts of Pruco Life Flexible Premium Variable Annuity Account (Registrant) consisting of the Statement of Net Assets as of December 31, 2011; the Statement of Operations for the period ended December 31, 2011; the Statements of Changes in Net Assets for the periods ended December 31, 2011 and December 31, 2010; and the Notes relating thereto appear in the statement of additional information. (Part B of the Registration Statement). (2) Consolidated Statements of Pruco Life Insurance Company (Depositor) and its subsidiaries consisting of the Consolidated Statements of Financial Position as of December 31, 2011 and 2010; and the related Consolidated Statements of Operations, Changes in Stockholder's Equity and Cash Flows for the years ended December 31, 2011, 2010, and 2009; and the Notes to the Consolidated Financial Statements appear in the Statement of Additional Information (Part B of the Registration Statement). (b) Exhibits are attached as indicated (all previously filed exhibits, as noted below, are incorporated herein by reference). (1) Resolution of the Board of Directors of Pruco Life Insurance Company establishing the Pruco Life Flexible Premium Variable Annuity Account. (Note 2) (2) Agreements for custody of securities and similar investments--Not Applicable. (3) (a) Form of Selected Broker Agreement used by PIMS. (Note 3) (b) Form of Distribution and Principal Underwriting agreement between Pruco Life Insurance Company and Prudential Annuities Distributors, Inc. (Note 18) (4) (a) The Prudential Premier Variable Annuity B Series, L Series and X Series certificate issued under group annuity contract (including schedule pages for each Series). (Note 1) (b) The Prudential Premier Variable Annuity B Series, L Series and X Series individual annuity contract (including schedule pages for each Series). (Note 1) (c) Guaranteed Minimum Income Benefit Rider. (Note 1) (d) Guaranteed Minimum Income Benefit Schedule Supplement. (Note 1) (e) Periodic Value Death Benefit Rider. (Note 1) (f) Periodic Value Death Benefit Schedule Supplement. (Note 1) (g) Combination Roll-up Value and Periodic Value Death Benefit Rider. (Note 1) (h) Combination Roll-up Value Death Benefit Schedule Supplement. (Note 1) (i) Guaranteed Minimum Payments Benefit Rider. (Note 1) (j) Guaranteed Minimum Payments Benefit Schedule Supplement. (Note 1) (k) Enhanced Dollar Cost Averaging Rider. (Note 1) (l) Enhanced Dollar Cost Averaging Schedule Supplement. (Note 1) (m) Longevity Credit Rider. (Note 1) (n) Individual Retirement Annuity Endorsement. (Note 1) (o) Roth Individual Retirement Annuity Endorsement. (Note 1) (p) 403(b) Annuity Endorsement. (Note 1) (q) Medically Related Surrender Provision Endorsement. (Note 1) (r) Endorsement Rider: Joint and Survivor Guaranteed Minimum Payments Benefit (Spousal Lifetime Five) (Note 12) (s) Endorsement Supplement: Joint and Survivor Guaranteed Minimum Payments Benefit Schedule (Spousal Lifetime Five) (Note 12) (t) Highest Daily Lifetime Five Benefit Rider (Enhanced) (Note 14) (u) (Highest Daily Lifetime Five Schedule Supplement) (Note 15) (v) Schedule pages for the Premier Variable Annuity Bb Series. (Note 17) (w) Highest Daily Lifetime Guaranteed Return Option (Note 18) (x) Highest Daily Lifetime Seven Benefit Rider (Enhanced) (Note 18) (y) Rider for Highest Daily Lifetime Seven with Beneficiary Income Option (Note 20) (z) Rider for Highest Daily Lifetime Seven with Lifetime Income Accelerator (Note 20) (aa) Schedule Supplement for Highest Daily Lifetime Seven with Beneficiary Income Option (Note 20) (ab) Schedule supplement for Highest Daily Lifetime Seven with Lifetime Income Accelerator (Note 20) (ac) Highest Daily Lifetime Seven Benefit Schedule Supplement (P-SCH-HD7(1/09)) (Note 21) (ad) Highest Daily Lifetime Five Benefit Schedule Supplement (P-SCH-HDLT(1/09)) (Note 21) (ae) Beneficiary Annuity Endorsement (P-END-BENE(2/09)) (Note 21) (af) Beneficiary Individual Retirement Annuity Endorsement (P-END-IRABEN(2/09)) (Note 21) (ag) Beneficiary Roth Individual Retirement Annuity Endorsement (P-END-ROTHBEN(2/09)) (Note 21) (ah) Highest Daily Lifetime 7 Plus Benefit Rider (P-RID-HD7(2/09)) (Note 21) (ai) Highest Daily Lifetime 7 Plus Schedule Supplement (P-SCH-HD7(2/09)) (Note 21) (aj) Highest Daily Lifetime 7 Plus with Beneficiary Income Option Benefit Rider (P-RID-HD7-DB(2/09)) (Note 21) (ak) Highest Daily Lifetime 7 Plus with Beneficiary Income Option Schedule Supplement (P-SCH-HD7-DB(2/09)) (Note 21) (al) Highest Daily Lifetime 7 Plus with Lifetime Income Accelerator Benefit Rider (P-RID-HD7-LIA(2/09)) (Note 21) (am) Highest Daily Lifetime 7 Plus with Lifetime Income Accelerator Schedule Supplement (P-SCH-HD7-LIA(2/09)) (Note 21) (an) Highest Daily Lifetime 6 Plus Rider (P-RID-HD6-8/09) (Note 22) (ao) Highest Daily Lifetime 6 Plus schedule (P-SCH-HD6-8/09) (Note 22) (ap) Highest Daily Lifetime 6 Plus W/LIA Benefit Rider (P-RID-HD6-LIA-8/09) (Note 22) (aq) Highest Daily Lifetime 6 Plus W/LIA Benefit Schedule (P-SCH-HD6-LIA-8/09) (Note 22) (ar) Highest Daily GRO II Benefit rider (P-RID-HD GRO-1l/09) (Note 23) (as) Highest Daily GRO II Benefit SCHEDULE (P-SCH-HD GRO-ll/09) (Note 23) (at) Highest Daily GRO CAP Benefit SCHEDULE (P-SCH-HDGROCAP-l1/09) (Note 23) (au) Form of Highest Daily GRO II Benefit Schedule Supplement (P-SCH-HDGRO(11/09)((8/10)) (Note 26) (av) Form of Highest Daily GRO Benefit Schedule Supplement (P-SCH-HDGROCAP(11-09)(8/10)) (Note 26) (5) (a) Application form for the Contract. (Note 13) (6) (a) Articles of Incorporation of Pruco Life Insurance Company, as amended through October 19, 1993. (Note 4) (b) By-laws of Pruco Life Insurance Company, as amended through May 6, 1997. (Note 5) (7) Contract of reinsurance in connection with variable annuity contract: (a) Coinsurance Agreement for LT5WB. (Note 1) (b) Coinsurance Agreement for SLT5. (Note 13) (c) Coinsurance Agreement for HDLT5. (Note 15) (d) Amendment 1 to Coinsurance Agreement for LT5WB. (Note 24) (e) Amendment 1 to Coinsurance Agreement for HDLT5. (Note 24) (f) Amendment 2 to Coinsurance Agreement for HDLT5. (Note 24) (g) Coinsurance Agreement for HD6+. (Note 24) (h) Coinsurance Agreement for HD7+. (Note 24) (i) Coinsurance Agreement for HD7. (Note 24) (j) Coinsurance Agreement for HD GRO. (Note 24) (k) Amendment 1 to Coinsurance Agreement for HD GRO. (Note 24) (8) Other material contracts performed in whole or in part after the date the registration statement is filed: (a) Form of Fund Participation Agreement. (Note 6) (b) Sample Rule 22C-2 Agreement. (Note 16) C-1 (9) Opinion of Counsel. (Note 13) (10)Written Consent of Independent Registered Public Accounting Firm. Filed Herewith. (11)All financial statements omitted from Item 23, Financial Statements--Not Applicable. (12)Agreements in consideration for providing initial capital between or among Registrant, Depositor, Underwriter, or initial Contract owners--Not Applicable. (13)Powers of Attorney. (a) James J. Avery, Jr., Bernard J. Jacob (Note 17) (b) Thomas J. Diemer, Robert M. Falzon. (Note 25) (c) Yanela C. Frias (Note 26) (d) Robert F. O'Donnell (Note 27) (Note 1). Incorporated by reference to Form N-4, Registration No.333-130989, filed January 12, 2006 on behalf of the Prucolife Flexible Premium Variable Annuity Account. (Note 2). Incorporated by reference to Form N-4, Registration No. 033-61125, filed July 19, 1995 on behalf of the Pruco LifeFlexible Premium Variable Annuity Account. (Note 3). Incorporated by reference to Post-Effective Amendment No. 6 to Form N-4, Registration No.333-06701, filed April 5, 1999 on behalf of the Pruco Life Flexible Premium Variable Annuity Account. (Note 4). Incorporated by reference to the initial registration on Form S-6, Registration No. 333-07451, filed July 2, 1996, on behalf of the Pruco Life Variable Appreciable Account. (Note 5). Incorporated by reference to Form 10-Q as filed August 15, 1997, on behalf of Pruco Life Insurance Company. (Note 6). Incorporated by reference to Form N-4, Registration No. 333-06701, filed June 24, 1996 on behalf of the Pruco Life Flexible Premium Variable Annuity Account. (Note 7). Incorporated by reference to the initial registration on Form N-4, Registration No. 333-37728, filed May 24, 2000 on behalf of the Pruco Life Flexible Premium Variable Annuity Account. (Note 8). Incorporated by reference to Post-Effective Amendment No. 2 to Form S-6, Registration No. 333-07451, filed June 25, 1997 on behalf of the Pruco Life Variable Appreciable Account. (Note 9). Incorporated by reference to Form S-6, Registration No. 333-49332, filed November 3, 2000 on behalf of the Pruco Life Variable Universal Account. (Note 10). Incorporated by reference to Post-Effective Amendment No. 39, Form N-4 to Registration No. 333-37728, filed November 14, 2003 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 11). Incorporated by reference to Post-Effective Amendment No. 14, Form N-4, Registration No.: 333-37728, filed November 15, 2004 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 12). Incorporated by reference to Post-Effective Amendment No. 9, Form N-4, Registration No.: 333-75702, filed December 9, 2005 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 13). Incorporated by reference to Pre-Effective Amendment No. 1, Form N-4, Registration No. 333-130989, filed April 14, 2006 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 14). Incorporated by reference to Post-Effective Amendment No. 1, Form N-4, Registration No. 333-130989, filed October 6, 2006 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 15). Incorporated by reference to Post-Effective Amendment No. 18 to Form N-4, Registration No. 333-75702 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 16). Incorporated by reference to Post-Effective Amendment No. 3, Form N-4, Registration No. 333-130989, filed April 19, 2007 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 17). Incorporated by reference to the initial registration on Form N-4, Registration No. 333-144639, filed July 17, 2007 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 18). Incorporated by reference to Post-Effective Amendment No. 9, Form N-4, Registration No. 333-130989, filed December 18, 2007 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 19). Incorporated by reference to Post-Effective Amendment No. 14, Form N-4, Registration No. 333-130989, filed October 31, 2008 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 20). Incorporated by reference to Post-Effective Amendment No. 17, to Registration No. 333-130989, filed January 28 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 21). Incorporated by reference to Post-Effective Amendment No. 21 to Form N-4 Registration 333-130989, filed June 1, 2009 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 22). Incorporated by reference to Post-Effective No. 23 to Form N-4 Registration Statement No. 333-130989, filed August 27, 2009 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 23). Incorporated by reference to Post-Effective No. 25, Form N-4, Registration No. 333-130989, filed April 16, 2010 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 24). Incorporated by reference to Post-Effective No. 22, Form N-4, Registration No. 333-144639, filed April 16, 2010 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 25). Incorporated by reference to Post-Effective No. 23, Form N-4, Registration No. 333-144639, filed July 1, 2010 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 26). Incorporated by reference to Post-Effective No. 8, Form N-4, Registration No. 333-162673, filed December 8, 2011 on behalf of Pruco Life Flexible Premium Variable Annuity Account. (Note 27). Incorporated by reference to Post-Effective No. 29, Form N-4, Registration No. 333-144639, filed July 24, 2012 on behalf of Pruco Life Flexible Premium Variable Annuity Account.
C-2 ITEM 25.DIRECTORS AND OFFICERS OF THE DEPOSITOR (engaged directly or indirectly in Registrant's variable annuity business): The directors and major officers of Pruco Life are listed below:
Name and Principal Position and Offices Business Address with Depositor ------------------ -------------------- James J. Avery, Jr. Director 213 Washington Street Newark, New Jersey 07102-2992 Thomas J. Diemer Vice President, Director, 213 Washington Street Chief Accounting Officer, and Newark, New Jersey 07102-2992 Chief Financial Officer Joseph D. Emanuel Vice President, Chief Legal Officer, One Corporate Drive and Secretary Shelton, Connecticut 06484-6208 Robert M. Falzon Director and Treasurer 213 Washington Street Newark, New Jersey 07102-2992 Yanela C. Frias Director 213 Washington Street Newark, New Jersey 07102-2917 Bernard J. Jacob Director 213 Washington Street Newark, New Jersey 07102-2992 James M. O'Connor Senior Vice President and Actuary 200 Wood Avenue South Iselin, New Jersey 08830-2706 Robert F. O'Donnell Director, Chief Executive Officer, and One Corporate Drive President Shelton, Connecticut 06484-6208 Kent D. Sluyter Senior Vice President 213 Washington Street Newark, New Jersey 07102-2992 Candace J. Woods Senior Vice President, Chief Actuary, 751 Broad Street and Appointed Actuary Newark, New Jersey 07102-3714
ITEM 26.PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR REGISTRANT The Registrant separate account may be deemed to be under common control (or where indicated, identical to) the following separate accounts that are sponsored either by the depositor or an insurer that is an affiliate of the depositor: The Prudential Discovery Premier Group Variable Contract Account, The Prudential Variable Appreciable Account, The Prudential Individual Variable Contract Account, The Prudential Variable Contract Account GI-2, The Prudential Qualified Individual Variable Contract Account, The Prudential Variable Contract Account-24, The Prudential Discovery Select Group Variable Annuity Contract Account (separate accounts of Prudential); the Pruco Life Flexible Premium Variable Annuity Account; the Pruco Life PRUvider Variable Appreciable Account; the Pruco Life Variable Universal Account, the Pruco Life Variable Insurance Account, the Pruco Life Variable Appreciable Account, the Pruco Life Single Premium Variable Life Account, the Pruco Life Single Premium Variable Annuity Account (separate accounts of Pruco Life Insurance Company ("Pruco Life"); the Pruco Life of New Jersey Flexible Premium Variable Annuity Account; the Pruco Life of New Jersey Variable Insurance Account, the Pruco Life of New Jersey Variable Appreciable Account, the Pruco Life of New Jersey Single Premium Variable Life Account, and the Pruco Life of New Jersey Single Premium Variable Annuity Account (separate accounts of Pruco Life Insurance Company of New Jersey ("Pruco Life of New Jersey"). Pruco Life, a life insurance company organized under the laws of Arizona, is a direct wholly-owned subsidiary of The Prudential Insurance Company of America and an indirect wholly-owned subsidiary of Prudential Financial, Inc. Pruco Life of New Jersey, a life insurance company organized under the laws of New Jersey, is a direct wholly-owned subsidiary of Pruco Life, and an indirect wholly-owned subsidiary of Prudential Financial, Inc. The subsidiaries of Prudential Financial Inc. ("PFI") are listed in the Exhibits to the Annual Report on Form 10-K of PFI (Registration No. 001-16707), filed in February 2012, the text of which is hereby incorporated by reference. In addition to those subsidiaries, Prudential holds all of the voting securities of Prudential's Gibraltar Fund, Inc., a Maryland corporation, in three of its separate accounts. Prudential's Gibraltar Fund, Inc. is registered as an open-end, diversified, management investment company under the Investment Company Act of 1940 (the "Act"). The separate accounts listed above are registered as unit investment trusts under the Act. Registrant may also be deemed to be under common control with The Prudential Variable Contract Account-2, The Prudential Variable Contract Account-10, and The Prudential Variable Account Contract Account-11, (separate accounts of The Prudential Insurance Company of America which are registered as open-end, diversified management investment companies). C-3 ITEM 27.NUMBER OF CONTRACT OWNERS As of June 30, 2012 there were 1281 Qualified contract owners and 540 Non-Qualified contract owners. ITEM 28.INDEMNIFICATION The Registrant, in conjunction with certain of its affiliates, maintains insurance on behalf of any person who is or was a trustee, director, officer, employee, or agent of the Registrant, or who is or was serving at the request of the Registrant as a trustee, director, officer, employee or agent of such other affiliated trust or corporation, against any liability asserted against and incurred by him or her arising out of his or her position with such trust or corporation. Arizona, the state of organization of Pruco Life Insurance Company ("Pruco"), permits entities organized under its jurisdiction to indemnify directors and officers with certain limitations. The relevant provisions of Arizona law permitting indemnification can be found in Section 10-850 et. seq. of the Arizona Statutes Annotated. The text of Pruco's By-law, Article VIII, which relates to indemnification of officers and directors, is incorporated by reference to Exhibit 3(ii) to its form 10-Q filed August 15, 1997. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act") may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. ITEM 29.PRINCIPAL UNDERWRITERS (a) Prudential Annuities Distributors, Inc. (PAD) PAD serves as principal underwriter for variable annuities issued by each of Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and Prudential Annuities Life Assurance Corporation. Each of those insurers is part of Prudential Annuities, a business unit of Prudential Financial, that primarily issues individual variable annuity contracts. The separate accounts of those insurance companies through which the bulk of the variable annuities are issued are the Pruco Life Flexible Premium Variable Annuity Account, the Pruco Life of New Jersey Flexible Premium Variable Annuity Account, and Prudential Annuities Life Assurance Corporation Variable Account B. (b) Information concerning the Directors and Officers of PAD is set forth below:
POSITIONS AND OFFICES NAME WITH UNDERWRITER ---- ------------------------------------------ Timothy S. Cronin Senior Vice President One Corporate Drive Shelton, Connecticut 06484-6208 Thomas J. Diemer Senior Vice President and Director 213 Washington Street Newark, New Jersey 07102-2992 Robert Falzon Treasurer 751 Broad Street Newark, New Jersey 07102-3714 Bruce Ferris Executive Vice President and Director One Corporate Drive Shelton, Connecticut 06484-6208 George M. Gannon President, Chief Executive Officer, Chief 2101 Welsh Road Operations Officer and Director Dresher, Pennsylvania 19025-5001 Jacob M. Herschler Senior Vice President and Director One Corporate Drive Shelton, Connecticut 06484-6208 Patricia L. Kelley Senior Vice President, Chief Compliance One Corporate Drive Officer and Director Shelton, Connecticut 06484-6208 Steven P. Marenakos Senior Vice President and Director One Corporate Drive Shelton, Connecticut 06484-6208 Yvonne Rocco Senior Vice President 213 Washington Street Newark, New Jersey 07102-2992 Steven Weinreb Chief Financial Officer and Controller 213 Washington Street Newark, New Jersey 07102-2917 William D. Wilcox Vice President, Secretary and Chief Legal One Corporate Drive Officer Shelton, Connecticut 06484-6208
Net Underwriting Discounts and Compensation on Brokerage Name of Principal Underwriter Commissions Redemption Commissions Compensation ----------------------------- ---------------- --------------- ----------- ------------ Prudential Annuities Distributors, Inc.* $1,075,327,764 $-0- $-0- $-0-
* PAD did not retain any of these commissions. C-4 ITEM 30.LOCATION OF ACCOUNTS AND RECORDS All accounts, books or other documents required to be maintained by Section 31 (a) of the Investment Company Act of 1940 and the rules promulgated thereunder are maintained by the Registrant through The Prudential Insurance Company of America at its offices in Shelton, Connecticut and Fort Washington, Pennsylvania. ITEM 31.MANAGEMENT SERVICES Summary of any contract not discussed in Part A or Part B of the registration statement under which management-related services are provided to the Registrant--Not Applicable. ITEM 32.UNDERTAKINGS (a)Registrant undertakes to file a post-effective amendment to this Registrant Statement as frequently as is necessary to ensure that the audited financial statements in the Registration Statement are never more than 16 months old for so long as payments under the variable annuity contracts may be accepted. (b)Registrant undertakes to include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a statement of additional information, or (2) a postcard or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a statement of additional information. (c)Registrant undertakes to deliver any statement of additional information and any financial statements required to be made available under this Form promptly upon written or oral request. (d)Restrictions on withdrawal under Section 403(b) Contracts are imposed in reliance upon, and in compliance with, a no-action letter issued by the Chief of the Office of Insurance Products and Legal Compliance of the U.S. Securities and Exchange Commission to the American Council of Life Insurance on November 28, 1988. (e)Pruco Life hereby represents that the fees and charges deducted under the contracts described in this Registration Statement are in the aggregate reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Pruco Life. C-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Act Rule 485(b) for effectiveness of this Registration Statement and has duly caused this post-effective amendment to be signed on its behalf in the City of Newark and the State of New Jersey on this 16th day of August 2012. PRUCO LIFE FLEXIBLE PREMIUM VARIABLE ANNUITY ACCOUNT Registrant By: Pruco Life Insurance Company Depositor /s/ Robert F. O'Donnell ------------------------------------ Robert F. O'Donnell President and Chief Executive Officer PRUCO LIFE INSURANCE COMPANY Depositor By: /s/ Robert F. O'Donnell ------------------------------------ Robert F. O'Donnell President and Chief Executive Officer SIGNATURES As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the date indicated. Signature Title Date --------- ----- ---- Robert F. O'Donnell* Chief Executive Officer, President and --------------------- Director Robert F. O'Donnell August 16, 2012 Thomas J. Diemer* Chief Financial Officer, Chief --------------------- Accounting Officer, Vice President and August 16, 2012 Thomas J. Diemer Director James J. Avery, Jr.* --------------------- Director August 16, 2012 James J. Avery, Jr. Robert M. Falzon* --------------------- Director August 16, 2012 Robert M. Falzon Yanela C. Frias* --------------------- Director August 16, 2012 Yanela C. Frias Bernard J. Jacob* --------------------- Director August 16, 2012 Bernard J. Jacob By:/s/Lynn K. Stone --------------------- Lynn K. Stone * Executed by Lynn K. Stone on behalf of those indicated pursuant to Power of Attorney. EXHIBITS Exhibit (b)(10) Written Consent of Independent Registered Public Accounting Firm