PRUDENTIAL FINANCIAL, INC.  Notes to Consolidated Financial Statements 8.
POLICYHOLDERS’ LIABILITIES (continued) Unpaid claims and claim adjustment expenses primarily reflect the Company’s estimate of future disability claim payments and expenses as well as estimates of claims incurred but not yet reported as of the balance sheet dates related to group disability products.
Unpaid claim liabilities are discounted using interest rates ranging from 0% to 6%.
Policyholders’ Account Balances Policyholders’ account balances at December 31, are as follows:
## Table 0 ##
Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable.
These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities.
Included in “Funding agreements” at December 31, 2007 and 2006, are $8,535 million and $6,537 million, respectively, of medium-term notes liabilities of consolidated variable interest entities secured by funding agreements purchased from the Company with the proceeds of such notes.
The interest rates associated with such notes range from 3.9% to 5.7%.
Interest crediting rates range from 0% to 11.8% for interest-sensitive life contracts and from 0% to 13.4% for contracts other than interest-sensitive life.
Less than 2% of policyholders’ account balances have interest crediting rates in excess of 8%.9.
CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS The Company issues traditional variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder.
The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals (“return of net deposits”), (2) total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”), or (3) the highest contract value on a specified date minus any withdrawals (“contract value”).
These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.
The Company also issues annuity contracts with market value adjusted investment options (“MVAs”), which provide for a return of principal plus a fixed rate of return if held to maturity, or, alternatively, a “market adjusted value” if surrendered prior to maturity or if funds are reallocated to other investment options.
The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable.
In addition, the Company issues variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (“no lapse guarantee”).
Variable life and variable universal life contracts are offered with general and separate account options.
The assets supporting the variable portion of both traditional variable annuities and certain variable contracts with guarantees are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.
” Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits.
” In 2007 and 2006, there were no gains or losses on transfers of assets from the general account to a separate account.
For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
For guarantees of benefits that are payable at annuitization or withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.
For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance.
The Company’s contracts with guarantees may offer more than one type of guarantee in each contract;
The following tables set forth the income yield and investment income, excluding realized investment gains (losses), for each major investment category of the Financial Services Business general account, excluding the Japanese operations’ portion of the general account which is presented separately below, for the periods indicated.
## Table 1 ##
(1) Yields are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity.
Yields for fixed maturities are based on amortized cost.
Yields for equity securities are based on cost.
Yields for securities lending activity are calculated net of corresponding liabilities and rebate expenses.
Yields exclude investment income on assets other than those included in invested assets of the Financial Services Businesses.
Prior periods yields are presented on a basis consistent with the current period presentation.
(2) Includes investment income of securities brokerage, securities trading, banking operations, real estate and relocation services, and asset management operations.
The net investment income yield attributable to the non-Japanese operations’ portion of the Financial Services Businesses portfolio was 6.04% for the year ended December 31, 2007, compared to 6.03% for the year ended December 31, 2006.
The increase was primarily due to an increase in fixed maturity yields as a result of reinvestment of proceeds from sales and maturities of fixed maturities at higher available interest rates, which occurred primarily in the first half of 2006, as discussed above under “—Realized Investment Gains”, and the impact of higher rates on floating rate investments.
The following tables set forth the income yield and investment income, excluding realized investment gains (losses), for each major investment category of our Japanese operations’ general account for the periods indicated.
## Table 2 ##
(1) Yields are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity.
Yields for fixed maturities are based on amortized cost.
Yields for equity securities are based on cost.
Yields for securities lending activity are calculated net of corresponding liabilities and rebate expenses.
Yields exclude investment income on assets other than those included in invested assets of the Financial Services Businesses.
Prior periods yields are presented on a basis consistent with the current period presentation.
The net investment income yield attributable to the Japanese insurance operations’ portfolios was 2.83% for the year ended December 31, 2007, compared to 2.64% for the year ended December 31, 2006.
The increase in yield on the Japanese insurance portfolio is primarily attributable to an increase in unhedged U. S.  dollar investments, the lengthening of the duration of the investment portfolio, and an increase in credit exposure.
The U. S.  dollar denominated fixed maturities that are not hedged to yen through third party derivative contracts provide a yield that is substantially higher than the yield on comparable Japanese fixed maturities.
The average value of U. S.  dollar denominated fixed maturities that are not hedged to yen through third party derivative contracts for the years ended December 31, 2007 and 2006 was approximately $7.6 billion and $6.3 billion, respectively, based on amortized cost.
For additional information regarding U. S.  dollar investments held in our Japanese insurance operations see, “—Results of Operations for Financial Services Businesses by Segment—International Insurance and Investments Division.
”
The Company monitors the financial health and stability of its lenders under the revolving credit and long term debt facilities, however during any period of significant instability in the credit markets lenders could be negatively impacted in their ability to perform under these facilities.
In July 2011, in connection with the Company’s acquisition of its corporate headquarters, the Company assumed a $38.6 million nonrecourse loan secured by a mortgage on the acquired property.
The acquisition of the Company’s corporate headquarters was accounted for as a business combination, and the carrying value of the loan secured by the acquired property approximates fair value.
The assumed loan had an original term of approximately ten years with a scheduled maturity date of March 1, 2013.
The loan includes a balloon payment of $37.3 million due at maturity, and may not be prepaid.
The assumed loan is nonrecourse with the lender’s remedies for non-performance limited to action against the acquired property and certain required reserves and a cash collateral account, except for nonrecourse carve outs related to fraud, breaches of certain representations, warranties or covenants, including those related to environmental matters, and other standard carve outs for a loan of this type.
The loan requires certain minimum cash flows and financial results from the property, and if those requirements are not met, additional reserves may be required.
The assumed loan requires prior approval of the lender for certain matters related to the property, including material leases, changes to property management, transfers of any part of the property and material alterations to the property.
The loan has an interest rate of 6.73%.
In connection with the assumed loan, the Company incurred and capitalized $0.8 million in deferred financing costs.
As of December 31, 2011, the outstanding balance on the loan was $38.2 million.
In addition, in connection with the assumed loan for the acquisition of its corporate headquarters, the Company was required to set aside amounts in reserve and cash collateral accounts.
As of December 31, 2011, $2.0 million of restricted cash was included in prepaid expenses and other current assets, and the remaining $3.0 million of restricted cash was included in other long term assets.
Interest expense was $3.9 million, $2.3 million and $2.4 million for the years ended December 31, 2011, 2010 and 2009, respectively.
Interest expense includes the amortization of deferred financing costs and interest expense under the credit and long term debt facilities, as well as the assumed loan discussed above.8.
Commitments and Contingencies Obligations Under Operating Leases The Company leases warehouse space, office facilities, space for its retail stores and certain equipment under non-cancelable operating leases.
The leases expire at various dates through 2023, excluding extensions at the Company’s option, and include provisions for rental adjustments.
The table below includes executed lease agreements for factory house stores that the Company did not yet occupy as of December 31, 2011 and does not include contingent rent the company may incur at its retail stores based on future sales above a specified limit.
The following is a schedule of future minimum lease payments for non-cancelable real property operating leases as of December 31, 2011:

<table><tr><td></td><td> 2007</td><td> 2006</td></tr><tr><td></td><td colspan="2"> (in millions)</td></tr><tr><td>Individual annuities</td><td>$15,420</td><td>$14,660</td></tr><tr><td>Group annuities</td><td>20,342</td><td>20,289</td></tr><tr><td>Guaranteed investment contracts and guaranteed interest accounts</td><td>13,274</td><td>13,670</td></tr><tr><td>Funding agreements</td><td>8,601</td><td>6,905</td></tr><tr><td>Interest-sensitive life contracts</td><td>12,271</td><td>11,226</td></tr><tr><td>Dividend accumulations and other</td><td>14,246</td><td>13,902</td></tr><tr><td>Policyholders’ account balances</td><td>$84,154</td><td>$80,652</td></tr></table>
<table><tr><td></td><td colspan="2">Year ended December 31, 2007</td><td colspan="2">Year ended December 31, 2006</td></tr><tr><td></td><td>Yield-1</td><td>Amount</td><td>Yield-1</td><td>Amount</td></tr><tr><td></td><td colspan="4">($ in millions)</td></tr><tr><td>Fixed maturities</td><td>6.47%</td><td>$4,642</td><td>6.33%</td><td>$4,360</td></tr><tr><td>Trading account assets supporting insurance liabilities</td><td>5.42</td><td>697</td><td>5.04</td><td>641</td></tr><tr><td>Equity securities</td><td>7.51</td><td>139</td><td>7.56</td><td>128</td></tr><tr><td>Commercial loans</td><td>6.49</td><td>959</td><td>6.58</td><td>889</td></tr><tr><td>Policy loans</td><td>5.76</td><td>148</td><td>5.66</td><td>122</td></tr><tr><td>Short-term investments and cash equivalents</td><td>4.68</td><td>346</td><td>5.65</td><td>322</td></tr><tr><td>Other investments</td><td>1.55</td><td>31</td><td>5.82</td><td>106</td></tr><tr><td>Gross investment income before investment expenses</td><td>6.17</td><td>6,962</td><td>6.17</td><td>6,568</td></tr><tr><td>Investment expenses</td><td>-0.13</td><td>-425</td><td>-0.14</td><td>-419</td></tr><tr><td>Investment income after investment expenses</td><td>6.04%</td><td>6,537</td><td>6.03%</td><td>6,149</td></tr><tr><td>Investment results of other entities and operations-2</td><td></td><td>352</td><td></td><td>307</td></tr><tr><td>Total investment income</td><td></td><td>$6,889</td><td></td><td>$6,456</td></tr></table>
<table><tr><td></td><td colspan="2">Year ended December 31, 2007</td><td colspan="2">Year ended December 31, 2006</td></tr><tr><td></td><td>Yield-1</td><td>Amount</td><td>Yield-1</td><td>Amount</td></tr><tr><td></td><td colspan="4">($ in millions)</td></tr><tr><td>Fixed maturities</td><td>2.72%</td><td>$1,058</td><td>2.54%</td><td>$955</td></tr><tr><td>Trading account assets supporting insurance liabilities</td><td>1.67</td><td>19</td><td>1.01</td><td>11</td></tr><tr><td>Equity securities</td><td>2.74</td><td>59</td><td>2.92</td><td>54</td></tr><tr><td>Commercial loans</td><td>4.45</td><td>122</td><td>3.81</td><td>93</td></tr><tr><td>Policy loans</td><td>3.91</td><td>40</td><td>3.66</td><td>36</td></tr><tr><td>Short-term investments and cash equivalents</td><td>3.96</td><td>32</td><td>3.56</td><td>20</td></tr><tr><td>Other investments</td><td>11.95</td><td>105</td><td>12.43</td><td>111</td></tr><tr><td>Gross investment income before investment expenses</td><td>3.01</td><td>1,435</td><td>2.82</td><td>1,280</td></tr><tr><td>Investment expenses</td><td>-0.18</td><td>-96</td><td>-0.18</td><td>-96</td></tr><tr><td>Total investment income</td><td>2.83%</td><td>$1,339</td><td>2.64%</td><td>$1,184</td></tr></table>

Question: The total amount of which section ranks first in 2007 for amount?
Answer: Gross investment income before investment expenses