Investment Income and Gains and Losses

12 Months Ended

Dec. 31, 2013

Investment Income And Gains And Losses [Abstract]

Note 14— Investment Income and Gains and Losses

Net Investment Income

The components of pre-tax net investment income for the years ended December 31 were as follows:

(In millions)	2013		2012		2011
Fixed maturities	$	823	$	843	$	817
Equity securities		6		4		6
Commercial mortgage loans		174		192		218
Policy loans		74		74		86
Real estate		(1)		(2)		(2)
Other long-term investments		102		59		48
Short-term investments and cash		22		14		10
		1,200		1,184		1,183
Less investment expenses		36		40		37
Net investment income	$	1,164	$	1,144	$	1,146

Net investment income for separate accounts that is excluded from the Company's revenues was $232 million for 2013, $181 million for 2012, and $207 million for 2011.

B. Realized Investment Gains and Losses

The following realized gains and losses on investments for the years ended December 31 exclude amounts required to adjust future policy benefits for the run-off settlement annuity business.

(In millions)	2013		2012		2011
Fixed maturities	$	113	$	48	$	50
Equity securities		8		4		(1)
Commercial mortgage loans		(3)		(9)		(16)
Real estate		-		(1)		(6)
Other investments, including derivatives		95		2		35
Realized investment gains, before income taxes		213		44		62
Less income taxes		72		13		21
Net realized investment gains	$	141	$	31	$	41

Included in pre-tax realized investment gains (losses) were increases in valuation reserves related to commercial mortgage loans and other-than-temporary impairments on fixed maturities and partnership investments as follows:


(in millions)	2013		2012		2011
Credit related ⁽¹⁾	$	(8)	$	(20)	$	(28)
Other		(21)		(2)		(25)
Total	$	(29)	$	(22)	$	(53)

⁽¹⁾ There were no credit losses on fixed maturities for which a portion of the impairment was recognized in other comprehensive income.

The Company recognized pre-tax gains of $3 million in 2013, compared with pre-tax gains of $5 million in 2012 and pre-tax losses of $7 million in 2011 on hybrid securities.

Realized investment gains in other investments, including derivatives, in 2013 and 2011, primarily represented gains on sale of real estate properties held in joint ventures.

Realized investment gains that are excluded from the Company's revenues for the years ended December 31 were as follows:

(In millions)	2013		2012		2011
Separate accounts	$	417	$	206	$	210
Investment gains required to adjust future policy benefits for the run-off settlement annuity business	$	9	$	21	$	8

Sales information for available-for-sale fixed maturities and equity securities for the years ended December 31 were as follows:

(In millions)	2013		2012		2011
Proceeds from sales	$	1,775	$	591	$	876
Gross gains on sales	$	102	$	37	$	53
Gross losses on sales	$	4	$	2	$	7