At September 30, 2012, gross unrealized losses on general account fixed maturity investments of the Financial Services Businesses amounted to $2.385 billion, including $1.750 billion on high and highest quality securities based on NAIC or equivalent ratings. Gross unrealized losses include $520 million related to asset-backed securities collateralized by sub-prime mortgages. Gross unrealized losses on general account fixed maturity investments of the Financial Services Businesses at September 30, 2012 include $1.334 billion of declines in value of 20% or more of amortized cost. Gross unrealized losses on general account fixed maturity investments of the Financial Services Businesses amounted to $4.256 billion at December 31, 2011. Net unrealized gains on general account fixed maturity investments of the Financial Services Businesses amounted to $17.800 billion at September 30, 2012, compared to $10.493 billion at December 31, 2011.
The net loss for the current quarter also reflects pre-tax losses of $685 million from divested businesses, including a $698 million charge related to long term care insurance to reflect updates of actuarial assumptions based on our annual review.
In addition, the net loss for the current quarter reflects pre-tax increases of $264 million in recorded asset values and $254 million in recorded liabilities representing changes in value which are expected to ultimately accrue to contractholders. These changes primarily represent interest rate related mark-to-market adjustments.
Net income of the Financial Services Businesses for the year-ago quarter included $1.817 billion of pre-tax net realized investment gains and related charges and adjustments, and increases of $10 million in recorded assets and decreases of $68 million in recorded liabilities for which changes in value are expected to ultimately accrue to contractholders, in each case before income taxes. Net income for the year-ago quarter also included $43 million of pre-tax income from divested businesses.Closed Block Business Prudential’s Class B Stock, which is not traded on any exchange, reflects the performance of its Closed Block Business.
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