LENDING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2012

LENDING ACTIVITIES

Composition of Mortgages and other loans receivable

(in millions)	June 30, 2012			December 31, 2011
Commercial mortgages*	$	13,723		$	13,554
Life insurance policy loans		2,979			3,049
Commercial loans, other loans and notes receivable		3,369			3,626
Total mortgage and other loans receivable		20,071			20,229
Allowance for losses		(684	)		(740	)
Mortgage and other loans receivable, net	$	19,387		$	19,489

*

Commercial mortgages primarily represent loans for office, retail and industrial properties, with exposures in California and New York representing the largest geographic concentrations (approximately 23 percent and 14 percent, respectively, at June 30, 2012 and December 31, 2011). Over 98 percent of the commercial mortgages were current as to payments of principal and interest at June 30, 2012 and December 31, 2011.

Schedule of credit quality indicators for the commercial mortgage loans

June 30, 2012 (dollars in millions)	Number of Loans		Class														Percent of Total $
			Apartments		Offices		Retail		Industrial		Hotel		Others		Total
Credit Quality Indicator:
In good standing		1,010	$	1,663	$	4,896	$	2,531	$	1,819	$	960	$	1,356	$	13,225		97	%
Restructured(a)		8		50		206		7		9		-		21		293		2
90 days or less delinquent		4		-		16		-		-		-		3		19		-
>90 days delinquent or in process of foreclosure		15		-		61		-		40		-		85		186		1
Total(b)		1,037	$	1,713	$	5,179	$	2,538	$	1,868	$	960	$	1,465	$	13,723		100	%
Valuation allowance			$	16	$	117	$	19	$	58	$	11	$	41	$	262		2	%

(a)

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

(b)

Does not reflect valuation allowances.

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

Six Months Ended June 30,	2012									2011
(in millions)	Commercial Mortgages			Other Loans			Total			Commercial Mortgages			Other Loans			Total
Allowance, beginning of year	$	305		$	435		$	740		$	470		$	408		$	878
Loans charged off		(5	)		(29	)		(34	)		(36	)		(31	)		(67	)
Recoveries of loans previously charged off		4			-			4			35			-			35
Net charge-offs		(1	)		(29	)		(30	)		(1	)		(31	)		(32	)
Provision for loan losses		(42	)		20			(22	)		(6	)		26			20
Other		-			(4	)		(4	)		(31	)		-			(31	)
Allowance, end of period	$	262	*	$	422		$	684		$	432	*	$	403		$	835

*

Of the total, $70 million and $112 million relates to individually assessed credit losses on $382 million and $610 million of commercial mortgage loans as of June 30, 2012 and 2011, respectively.