the salary scale would increase 2004 pension benefits PBO and NPPC by approximately $5.8 million and $0.6 million, respectively. Post employment benefits are independent of compensation.
As a result of integration of operations between the Company and its parent, Manulife, the Company is in negotiations to sell its China operations. The Company will divest itself of its operations in China to accommodate Chinese law, which allows only one license per Company. Manulife had an operation in China prior to the merger with John Hancock.
portfolio. Mortgage loans are classified as delinquent when they are 60 days or more past due as to the payment of interest or principal. Mortgage loans are classified as restructured when they are in good standing, but the basic terms, such as interest rate or maturity date, have been modified as a result of a prior actual delinquency or an imminent delinquency. All foreclosure decisions are based on a thorough assessment of the property's quality and location and market conditions. The decision may also reflect a plan to invest additional capital in a property to make tenant improvements or renovations to secure a higher resale value at a later date. Following foreclosure, we rely on our real estate investment group's ability to manage foreclosed real estate for eventual return to investment real estate status or outright sale.
Net investment income decreased $376.1 million from comparable prior year period. The yield for the twelve months ended December 31, 2004, net of investment expenses, on the general account portfolio decreased to 5.12% from 5.95% for the prior year. Yield for the period subsequent to the merger with Manulife, April 29, 2004 through December 31, 2004, was 4.78%. In summary, the change in yields was driven by the following factors:
Under the first program, established in May 1998 for $2.5 billion, and expanded to $7.5 billion in 1999, an SPE issued medium-term notes in Europe, Asia and Australia. As of December 31, 2004 and 2003, there was $2.8 billion and $3.8 billion, respectively, outstanding under this program. This SPE is not consolidated in the Company's financial statements. The medium-term notes issued by this SPE are included in policyholder funds in the Company's Consolidated Balance Sheets.
In December, 2004, the Financial Accounting Standards Board (the FASB) issued SFAS No. 123 (revised 2004), "Share Based Payment" (SFAS 123R), which is a revision of SFAS No. 123, "Accounting for Stock-Based Compensation". SFAS No. 123(R) supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees", and amends SFAS No. 95, "Statement of Cash Flows". Generally, the approach in Statement 123(R) is similar to the approach described in Statement 123. However, Statement 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative.
Gross gains were realized on the sale of available-for-sale securities of $177.0 million from April 29 through December 31, 2004, $212.7 million from January 1 through April 28, 2004, $638.7 million in 2003 and $352.3 million in 2002, and gross losses were realized on the sale of available-for-sale securities of $62.4 million from April 29 through December 31, 2004, $13.0 million from January 1 through April 28, 2004, $243.6 million in 2003 and $185.7 million in 2002.
December 31 --------------------------- 2004 2003 --------------------------- (in millions) Impaired mortgage loans on real estate with provision for losses............................. $163.3 $ 127.6 Provision for losses............................... (45.3) (37.5) --------------------------- Net impaired mortgage loans on real estate......... $118.0 $ 90.1 ===========================
Total assets ................................... $3,775.9 $4,922.2 ======== ======== Total debt ..................................... 3,707.9 $4,158.2 Total other liabilities ........................ 9.0 712.0 -------- -------- Total liabilities .............................. 3,716.9 4,870.2 Total equity ................................... 59.0 52.0 -------- -------- Total liabilities and equity ................... $3,775.9 $4,922.2 ======== ========
Maximum exposure of the Company to losses from the Properties December 31, 2004 2003 ------------------- (in millions)
Years Ended December 31, 2004 2003 --------------------------- (in millions) Beginning of period.............................. $2,641.3 $2,728.9 End of period.................................... 2,576.4 2,641.3 --------------------------- Change during period............................. $ (64.9) $ (87.6) ===========================
Summarized financial data for these transfers are presented in the table below (in millions):
The following table summarizes selected financial information by segment for the periods and dates indicated. Included in the Protection Segment for all periods presented are the assets, liabilities, revenues and expenses of the closed block. For additional information on the closed block see Note 7 - Closed Block in the notes to the consolidated financial statements.