quarterly statement - TIAA-CREF

STATEMENT AS OF SEPTEMBER 30, 2011 OF THE TEACHERS INSURANCE and ANNUITY ASSOCIATION of AMERICA
NOTES TO FINANCIAL STATEMENTS
B. The Company writes (sells) credit default swaps providing default protection to the buyer as part of a
replication strategy. Additionally, the Company pays a premium to counterparties for default protection to
hedge the risk of a negative credit event on selective investments in the Company’s portfolio. These swap
contracts are entered into as fair value hedges.
C. The carrying value of credit default swaps represents the premium received for selling the default protection
amortized into investment income over the life of the swap. When the Company purchases credit default swap
protection, the premium payment to the counterparty is expensed. Credit default swaps for which hedge
accounting is not applied are carried at fair value. The changes in the carrying value of such credit default
swap contracts are recognized at the end of the period as unrealized gains or losses.
D. For the nine months ended September 30, 2011, the net unrealized gain from credit default swap contracts
that do not qualify for hedge accounting treatment was $59,688,793
9. Federal Income Tax
No Material Change.
10. Information Concerning Parent, Subsidiaries and Affiliates
D. As of September 30, 2011 and December 31, 2010, the net amount due from subsidiaries and affiliates was
$18,663,970 and $30,990,390, respectively. The net amounts due are generally settled on a daily basis
except for TIAA Realty, Inc., ND Properties, Inc., Teachers Advisors, Inc. (“Advisors”), TIAA-CREF Tuition
Financing, Inc. (“TFI”), Teachers Personal Investors Services, Inc. (“TPIS”), TIAA-CREF Individual and
Institutional Services, LLC (“Services”), and TIAA-CREF Enterprises, Inc. which are settled quarterly.
J. For the nine months ended September 30, 2011, the Company recognized $62,603,013 in OTTI for
investments in subsidiary, controlled and affiliated companies. These impairments relate to a decline in the
equity value and the impairment of the goodwill of subsidiaries for which the carrying value is not expected to
recover.
L. The Company holds investments in downstream non-insurance holding companies, which are valued by the
Company utilizing the look-through approach. The financial statements for the downstream non-insurance
holding companies listed in the table below are not audited and TIAA has limited the value of its investment in
these non-insurance holding companies to the value contained in the financial statements of the underlying
investments, which will be audited. All liabilities, commitments, contingencies, guarantees or obligations of
these subsidiaries, which are required to be recorded as liabilities, commitments, contingencies, guarantees or
obligations under applicable accounting guidance, are reflected in TIAA’s determination of the carrying value of
the investment in these subsidiaries, if not already recorded in the subsidiaries’ financial statements. The
following table summarizes the Company’s carrying value in each unaudited downstream non-insurance
holding company as of:
11. Debt
9/30/2011 12/31/2010
Subsidiary Carrying Value Carrying Value
Mansilla Participacoes LTDA.......................... $ 391,929,850 $ 433,135,952
Dionysus Properties, LLC .............................. 270,387,444 ---
T-C Montgomery Mall, LLC ............................ 229,305,908 ---
Infra Alpha, LLC .......................................... 208,778,157 ---
Occator Agricultural Properties, LLC ................ 142,672,057 37,546,867
T-C 685 Third Avenue Member, LLC................ 96,421,878 192,021,942
TIAA Global Ag HoldCo, LLC ......................... 78,090,908 ---
TIAA-CREF Enterprises, Inc........................... 48,743,004 37,422,940
TIAA European Funding Trust ........................ 39,260,725 40,555,438
T-C SMA II, LLC.......................................... 26,283,203 17,853,459
TIAA SynGas, LLC....................................... 23,765,000 ---
TIAA Union Place Phase I, LLC ...................... 19,286,038 19,867,763
Almond Processors, LLC............................... 16,184,001 ---
TIAA The Reserve II Member, LLC.................. 4,030,002 4,023,409
TIAA Stonepeak Fund II, LLC......................... 2,000,000 ---
730 Texas Forest Holdings, Inc....................... 866,833 865,532
TIAA Diamond Investor, LLC.......................... 499,861 ---
Demeter Agricultural Properties, LLC ............... 391,897 433,136
T-C SMA I, LLC........................................... 254,164 275,060
TIAA Stonepeak Fund I, LLC.......................... 188,949 ---
Total ..................................................... $ 1,599,339,879 $ 784,001,498
The Company has not issued any debt during 2011.
7.4