assets - TIAA-CREF

ANNUAL STATEMENT FOR THE YEAR 2011 OF THE TEACHERS INSURANCE and ANNUITY ASSOCIATION of AMERICANOTES TO FINANCIAL STATEMENTSThe obligations of TIAA under the SERP are unfunded, unsecured promises to make future payments. As such,the plan has no assets. Contributions for a given period are equal to the benefit payments for that period. Theexpected rate of return on plan assets is not applicable.Future benefits expected to be paid by the plan are as follows:2012 $ 3,940,0002013 $ 3,604,0002014 $ 3,600,0002015 $ 3,597,0002016 $ 3,594,0002017 to 2021 $ 16,370,00013. Capital and Surplus, Shareholders’ Dividend Restrictions and Quasi-Reorganization(1) The Company has 2,500 shares of $1,000 par value Class A common stock authorized, issued andoutstanding as of the balance sheet date.(2) The Company has no preferred stock.(3) Under New York Insurance Law, the Company is permitted, without prior insurance regulatory approval, topay dividends to shareholders as long as the aggregate amount of all such dividends in any calendar yeardoes not exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately precedingcalendar year, or (ii) its statutory net gain from operations (excluding realized capital gains) for theimmediately preceding calendar year.(4) and (5) The Company, by charter, operates without profit to the corporation or its sole shareholder, the TIAABoard of Overseers. As a result, all contingency reserves are held as special surplus funds solely to providebenefits in accordance with the Company’s charter purpose.(6) There are no restrictions placed on surplus.(7) There are no advances to surplus.(8) The Company does not hold any stock for special purposes.(9) Changes in the balance of special surplus funds for the year ended December 31, 2011 were as follows:Balance at December 31, 2010 .............................................$ 25,155,764,158Net Income ....................................................................... 2,358,892,933Change in unrealized capital gains......................................... 389,763,948Change in deferred income tax.............................................. (1,129,411,187)Change in non-admitted assets ............................................. 650,744,054Change in asset valuation reserve ......................................... (802,063,319)Change in incremental admitted deferred tax asset.................... 395,878,000Other, net ......................................................................... 111,327,765Balance at December 31, 2011 .............................................$ 27,130,896,352(10) The Company has no unassigned funds.(11) The following table provides information related to the Company’s outstanding surplus notes as of December31, 2011:DateIssuedInterestRatePar Value(Face Amountof Notes)Carrying Valueof NoteInterest PaidYear to DateTotal Principaland / or InterestPaidDate ofMaturity12/16/2009 6.85% $ 2,000,000,000 $ 2,000,000,000 $ 137,000,000 $ 274,000,000 12/16/2039The instruments listed in the above table, are unsecured debt obligations of the type generally referred to as“surplus notes” and are issued in accordance with Section 1307 of the New York Insurance Law. Thesurplus notes are subordinated in right of payment to all present and future indebtedness, policy claims andother creditor claims of the Company and rank pari passu with any future surplus notes of the Company andwith any other similarly subordinated obligations.The surplus notes have the following repayment conditions and restrictions on payment: Each payment ofinterest on or principal of, or any redemption payment with respect to the surplus notes may be made onlywith the prior approval of the Superintendent, and only out of surplus funds available for such paymentsunder the New York Insurance Law. In addition, pursuant to applicable New York Law, any payment ofprincipal or interest on the surplus notes may be only out of free and divisible surplus of the Company.(12) and (13) The Company has no restatement of surplus due to quasi-reorganizations.19.14