PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d386996dex991.htm
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d386996d8k.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

First Quarter 2017

Reference is made to Prudential Financial, Inc.’s (PFI) filings with the Securities and Exchange Commission for general information, and consolidated financial information. All financial information in this document is unaudited.

May 3, 2017

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

Combined Statements of Operations		5
Combining Statements of Operations		6
Consolidated Balance Sheets		7
Combining Balance Sheets by Division		8
Short-Term and Long-Term Debt - Unaffiliated		9

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION
Combined Statements of Operations		10
Combining Statements of Operations		11
Individual Annuities Sales Results and Account Values		12
Individual Annuities Account Value Activity		13
Individual Annuities Living Benefit Features		14
Individual Annuities Death Benefit Features		15
Retirement Segment Sales Results and Account Values		16
Supplementary Revenue and Assets Under Management Information for Asset Management Segment		17
Supplementary Assets Under Management Information for Asset Management Segment		18

U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION
Combined Statements of Operations		19
Combining Statements of Operations		20
Individual Life Annualized New Business Premiums, Account Value Activity, and Face Amount in Force		21
Supplementary Information for Group Insurance		22

DEFERRED POLICY ACQUISITION COSTS & DEFERRED SALES INDUCEMENTS - INDIVIDUAL ANNUITIES, INDIVIDUAL LIFE AND GROUP INSURANCE		23

INTERNATIONAL INSURANCE DIVISION
Combined Statements of Operations		24
Combining Statements of Operations		25
Sales Results and Supplementary Information		26-27

INVESTMENT PORTFOLIO
Investment Portfolio Composition		28
Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations		29
Investment Results		30
Investment Results - Japanese Insurance Operations		31
Investment Results - Excluding Japanese Insurance Operations		32

LINE ITEM IMPACT OF MARKET DRIVEN AND DISCRETE ITEMS - ADJUSTED OPERATING INCOME		33

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES		34-35

KEY DEFINITIONS AND FORMULAS		36-38

RATINGS AND INVESTOR INFORMATION		39

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date						%			2016												2017
2017			2016			Change			1Q			2Q			3Q			4Q			1Q

								Pre-tax adjusted operating income (loss) by division:
	1,061			712			49%	U.S. Retirement Solutions and Investment Management Division		712			870			1,018			964			1,061
	152			146			4%	U.S. Individual Life and Group Insurance Division		146			(201	)		173			181			152
	799			779			3%	International Insurance Division		779			803			780			755			799
	(352	)		(312	)		-13%	Corporate and other operations		(312	)		(415	)		(413	)		(441	)		(352	)

	1,660			1,325			25%	Total pre-tax adjusted operating income		1,325			1,057			1,558			1,459			1,660
	423			328			29%	Income taxes, applicable to adjusted operating income		328			228			367			369			423

	1,237			997			24%	After-tax adjusted operating income		997			829			1,191			1,090			1,237


								Reconciling items:
	38			338			-89%	Realized investment gains (losses), net, and related charges and adjustments		338			360			649			(824	)		38
	44			216			-80%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		216			108			37			(378	)		44
	(12	)		(130	)		91%	Change in experience-rated contractholder liabilities due to asset value changes		(130	)		(133	)		1			283			(12	)
								Divested businesses:
	34			(73	)		147%	Closed Block division		(73	)		(32	)		31			(58	)		34
	6			31			-81%	Other divested businesses		31			(11	)		56			(160	)		6
	(28	)		25			-212%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		25			(8	)		(17	)		(5	)		(28	)

	82			407			-80%	Total reconciling items, before income taxes		407			284			757			(1,142	)		82
	(28	)		40			-170%	Income taxes, not applicable to adjusted operating income		40			203			134			(334	)		(28	)

	110			367			-70%	Total reconciling items, after income taxes		367			81			623			(808	)		110

	1,347			1,364			-1%	Income (after-tax) before equity in earnings of operating joint ventures		1,364			910			1,814			282			1,347
	22			(28	)		179%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		(28	)		11			13			2			22

	1,369			1,336			2%	Income attributable to Prudential Financial, Inc.		1,336			921			1,827			284			1,369
	3			33			-91%	Earnings attributable to noncontrolling interests		33			4			5			9			3

	1,372			1,369			0%	Net income		1,369			925			1,832			293			1,372
	3			33			-91%	Less: Income attributable to noncontrolling interests		33			4			5			9			3

	1,369			1,336			2%	Net income attributable to Prudential Financial, Inc.		1,336			921			1,827			284			1,369

	14.2%			11.9%				Operating Return on Average Equity (based on adjusted operating income) (1)		11.9%			9.8%			13.8%			12.6%			14.2%

(1)

Operating Return on Average Equity (based on adjusted operating income) is a non-GAAP measure and represents adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement on page 3. The comparable GAAP measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on net income). Return on average equity (based on net income) represents income after-tax, attributable to consolidated Prudential Financial, Inc., as determined in accordance with U.S. GAAP, annualized for interim periods, divided by average total Prudential Financial, Inc. equity. Return on average equity (based on net income) is 11.8%, 2.2%, 13.1%, 7.1% and 11.7% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June, 30, 2016, and March 31, 2016, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						Earnings per share of Common Stock (diluted):
	2.79			2.18		After-tax adjusted operating income		2.18			1.84			2.66			2.46			2.79

						Reconciling items:
	0.09			0.75		Realized investment gains (losses), net, and related charges and adjustments		0.75			0.80			1.46			(1.87	)		0.09
	0.10			0.48		Investment gains (losses) on trading account assets supporting insurance liabilities, net		0.48			0.24			0.08			(0.86	)		0.10
	(0.03	)		(0.29	)	Change in experience-rated contractholder liabilities due to asset value changes		(0.29	)		(0.30	)		—			0.64			(0.03	)
						Divested businesses:
	0.08			(0.16	)	Closed Block division		(0.16	)		(0.07	)		0.07			(0.13	)		0.08
	0.01			0.07		Other divested businesses		0.07			(0.02	)		0.13			(0.36	)		0.01
	—			(0.01	)	Difference in earnings allocated to participating unvested share-based payment awards		(0.01	)		—			(0.01	)		0.02			—

	0.25			0.84		Total reconciling items, before income taxes		0.84			0.65			1.73			(2.56	)		0.25
	(0.05	)		0.09		Income taxes, not applicable to adjusted operating income		0.09			0.45			0.32			(0.75	)		(0.05	)

	0.30			0.75		Total reconciling items, after income taxes		0.75			0.20			1.41			(1.81	)		0.30

	3.09			2.93		Net income attributable to Prudential Financial, Inc.		2.93			2.04			4.07			0.65			3.09


	429.9			445.3		Weighted average number of outstanding Common shares (basic)		445.3			441.1			435.9			430.7			429.9
	439.1			453.2		Weighted average number of outstanding Common shares (diluted)		453.2			449.3			444.3			439.8			439.1

	4			4		Earnings related to interest, net of tax, on exchangeable surplus notes		4			5			4			4			4

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	15			11		After-tax adjusted operating income		11			9			15			12			15
	16			14		Net income		14			11			21			3			16

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date					2016												2017
2017		2016			1Q			2Q			3Q			4Q			1Q

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		969			676			907			1,133			1,415
				Long-term debt		13,795			13,172			12,942			12,224			12,074
				Junior Subordinated Long-Term Debt		5,813			5,814			5,816			5,817			5,819

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income		49,242			55,149			56,431			45,863			46,784
				Excluding accumulated other comprehensive income (2)		30,176			30,482			31,506			31,242			32,141
				Amount included above for foreign currency exchange rate remeasurement (3)		(3,628	)		(3,509	)		(3,327	)		(3,199	)		(3,060	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		33,804			33,991			34,833			34,441			35,201


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (4)		109.66			123.77			128.37			104.91			107.09
				Excluding accumulated other comprehensive income (2)		67.36			68.65			71.95			71.62			73.75
				Amount included above for foreign currency exchange rate remeasurement (3)		(8.10	)		(7.90	)		(7.60	)		(7.33	)		(7.02	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		75.46			76.55			79.55			78.95			80.77


				Number of diluted shares at end of period (5)		448.0			444.0			437.9			436.2			435.8

				*Common Stock Price Range (based on closing price):*
	113.82		79.84	High		79.84			79.71			81.65			107.10			113.82
	103.92		58.00	Low		58.00			66.93			68.74			81.43			103.92
	106.68		72.22	Close		72.22			71.34			81.65			104.06			106.68


				*Common Stock market capitalization (1)*		32,001			31,304			35,248			44,704			45,798

(1)	As of end of period.

(2)	Foreign currency translation adjustments and the cumulative impact of foreign currency exchange rate remeasurement, except for those items remeasured through net income (loss), are a component of accumulated other comprehensive income.

(3)	Represents cumulative impact of net gains and losses resulting from foreign currency exchange rate remeasurement and associated realized investment gains and losses included in net income (loss) and currency translation adjustments corresponding to realized investment gains and losses.

(4)

Book value per share of Common Stock, including accumulated other comprehensive income, for the first, second and third quarters of 2016, includes a $500 million increase in equity and a 5.6 million increase in diluted shares reflecting the dilutive impact of exchangeable surplus notes when book value per share is greater than $88.90. The fourth quarter of 2016 and first quarter of 2017 includes a $500 million increase in equity and a 5.75 million increase in diluted shares, reflecting the dilutive impact of exchangeable surplus notes when book value per share is greater than $86.92.

(5)	The number of diluted shares at end of period excludes the impact of exchangeable surplus notes due to the antidilutive impact of conversion.

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

OPERATIONS HIGHLIGHTS


Year-to-date					2016								2017
2017		2016			1Q		2Q		3Q		4Q		1Q

				*Assets Under Management and Administration ($ billions) (1) (2):*
				Assets Under Management :
				Managed by U.S. Retirement Solutions and Investment Management Division:
				Asset Management Segment - Investment Management & Advisory Services
				Institutional customers		403.6		418.8		445.9		431.5		445.2
				Retail customers		198.6		202.1		209.0		209.2		217.6
				General account		400.8		426.3		430.3		399.4		406.1

				Total Investment Management and Advisory Services		1,003.0		1,047.2		1,085.2		1,040.1		1,068.9
				Non-proprietary assets under management		167.0		169.8		176.4		172.6		178.3

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,170.0		1,217.0		1,261.6		1,212.7		1,247.2
				Managed by U.S. Individual Life and Group Insurance Division		25.1		25.7		24.8		24.9		25.1
				Managed by International Insurance Division		22.8		25.0		27.9		26.2		26.5

				Total assets under management		1,217.9		1,267.7		1,314.3		1,263.8		1,298.8
				Client assets under administration		170.5		171.7		177.0		177.3		185.2

				Total assets under management and administration		1,388.4		1,439.4		1,491.3		1,441.1		1,484.0


				Assets managed or administered for customers outside of the United States at end of period		297.5		324.6		335.4		311.1		326.6

				*Distribution Representatives (1):*
				Prudential Agents		2,969		2,987		3,031		2,937		2,922
				International Life Planners		7,608		7,551		7,667		7,680		7,819
				Gibraltar Life Consultants		8,781		8,734		8,790		8,884		8,752

	47		47	*Prudential Agent productivity ($ thousands)*		47		54		56		67		47

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS

(in millions)


Year-to-date						%			2016												2017
2017			2016			Change			1Q			2Q			3Q			4Q			1Q


								Revenues (1):
	5,774			5,577			4%	Premiums		5,577			6,146			8,934			7,296			5,774
	1,555			1,511			3%	Policy charges and fee income		1,511			1,288			1,559			1,529			1,555
	3,354			3,017			11%	Net investment income		3,017			3,087			3,292			3,299			3,354
	1,324			1,187			12%	Asset management fees, commissions and other income		1,187			1,291			1,265			1,296			1,324

	12,007			11,292			6%	Total revenues		11,292			11,812			15,050			13,420			12,007


								Benefits and Expenses (1):
	6,146			5,984			3%	Insurance and annuity benefits		5,984			6,813			9,254			7,658			6,146
	920			907			1%	Interest credited to policyholders’ account balances		907			914			932			945			920
	322			325			-1%	Interest expense		325			357			314			319			322
	(724	)		(685	)		-6%	Deferral of acquisition costs		(685	)		(718	)		(731	)		(711	)		(724	)
	481			479			0%	Amortization of acquisition costs		479			281			444			468			481
	3,202			2,957			8%	General and administrative expenses		2,957			3,108			3,279			3,282			3,202

	10,347			9,967			4%	Total benefits and expenses		9,967			10,755			13,492			11,961			10,347

	1,660			1,325			25%	Adjusted operating income before income taxes		1,325			1,057			1,558			1,459			1,660


								Reconciling items:
	(66	)		1,418			-105%	Realized investment gains (losses), net, and related adjustments		1,418			802			223			(1,454	)		(66	)
	104			(1,080	)		110%	Related charges		(1,080	)		(442	)		426			630			104

	38			338			-89%	Total realized investment gains (losses), net, and related charges and adjustments		338			360			649			(824	)		38

	44			216			-80%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		216			108			37			(378	)		44
	(12	)		(130	)		91%	Change in experience-rated contractholder liabilities due to asset value changes		(130	)		(133	)		1			283			(12	)
								Divested businesses:
	34			(73	)		147%	Closed Block division		(73	)		(32	)		31			(58	)		34
	6			31			-81%	Other divested businesses		31			(11	)		56			(160	)		6
	(28	)		25			-212%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		25			(8	)		(17	)		(5	)		(28	)

	82			407			-80%	Total reconciling items, before income taxes		407			284			757			(1,142	)		82


	1,742			1,732			1%	Income before income taxes and equity in earnings of operating joint ventures		1,732			1,341			2,315			317			1,742
	395			368			7%	Income tax expense		368			431			501			35			395

	1,347			1,364			-1%	Income before equity in earnings of operating joint ventures		1,364			910			1,814			282			1,347

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities; and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures other than those classified as divested businesses. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes; and benefits and expenses of divested businesses and include charges for income attributable to non controlling interests. See pages 34 and 35 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Three Months Ended March 31, 2017
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1) :
Premiums		5,774			551			1,268			3,962			(7	)
Policy charges and fee income		1,555			717			717			134			(13	)
Net investment income		3,354			1,370			647			1,205			132
Asset management fees, commissions and other income		1,324			1,270			196			108			(250	)

Total revenues		12,007			3,908			2,828			5,409			(138	)


Benefits and Expenses (1):
Insurance and annuity benefits		6,146			1,005			1,707			3,433			1
Interest credited to policyholders’ account balances		920			451			243			226			—
Interest expense		322			25			157			3			137
Deferral of acquisition costs		(724	)		(88	)		(183	)		(465	)		12
Amortization of acquisition costs		481			136			72			285			(12	)
General and administrative expenses		3,202			1,318			680			1,128			76

Total benefits and expenses		10,347			2,847			2,676			4,610			214

Adjusted operating income (loss) before income taxes		1,660			1,061			152			799			(352	)


	Three Months Ended March 31, 2016
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		5,577			671			1,219			3,696			(9	)
Policy charges and fee income		1,511			675			719			130			(13	)
Net investment income		3,017			1,198			582			1,120			117
Asset management fees, commissions and other income		1,187			1,164			166			98			(241	)

Total revenues		11,292			3,708			2,686			5,044			(146	)


Benefits and Expenses (1):
Insurance and annuity benefits		5,984			1,171			1,634			3,173			6
Interest credited to policyholders’ account balances		907			453			227			227			—
Interest expense		325			25			142			2			156
Deferral of acquisition costs		(685	)		(110	)		(162	)		(426	)		13
Amortization of acquisition costs		479			155			78			260			(14	)
General and administrative expenses		2,957			1,302			621			1,029			5

Total benefits and expenses		9,967			2,996			2,540			4,265			166

Adjusted operating income (loss) before income taxes		1,325			712			146			779			(312	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

CONSOLIDATED BALANCE SHEETS

(in millions)


	03/31/2016		06/30/2016		09/30/2016		12/31/2016		03/31/2017

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $278,000; $286,066; $297,745; $292,581; $300,437)		314,529		332,270		343,244		321,419		328,717
Fixed maturities, held to maturity, at amortized cost (fair value $2,841; $3,026; $2,956; $2,524; $2,552)		2,411		2,485		2,471		2,144		2,166
Trading account assets supporting insurance liabilities, at fair value		21,447		21,702		21,828		21,840		21,820
Other trading account assets, at fair value		8,052		7,268		7,559		5,764		5,863
Equity securities, available for sale, at fair value (cost $7,026; $7,088; $7,197; $7,149; $7,461)		9,400		9,496		9,765		9,748		10,143
Commercial mortgage and other loans		50,798		51,447		52,273		52,779		53,660
Policy loans		11,805		11,930		12,031		11,755		11,893
Other long-term investments		10,281		10,247		11,346		11,283		11,450
Short-term investments		3,697		5,035		5,254		7,508		5,175

Total investments		432,420		451,880		465,771		444,240		450,887
Cash and cash equivalents		22,492		24,142		24,728		14,127		13,308
Accrued investment income		3,180		3,211		3,279		3,204		3,231
Deferred policy acquisition costs		15,998		16,152		16,975		17,661		18,197
Value of business acquired		2,582		1,951		2,159		2,314		2,266
Other assets		14,822		14,322		15,403		14,780		15,671
Separate account assets		281,501		284,832		291,550		287,636		293,805

Total assets		772,995		796,490		819,865		783,962		797,365


Liabilities:
Future policy benefits		234,728		242,950		252,228		240,908		244,705
Policyholders’ account balances		139,745		142,716		146,577		145,205		147,026
Securities sold under agreements to repurchase		8,357		7,335		6,830		7,606		8,535
Cash collateral for loaned securities		4,052		4,643		5,037		4,333		4,175
Income taxes		12,128		15,140		15,326		10,412		10,598
Senior short-term debt		969		676		907		1,133		1,415
Senior long-term debt		13,795		13,172		12,942		12,224		12,074
Junior subordinated long-term debt		5,813		5,814		5,816		5,817		5,819
Notes issued by consolidated variable interest entities		2,946		2,094		2,722		2,150		2,179
Other liabilities		19,696		21,940		22,956		20,450		20,060
Separate account liabilities		281,501		284,832		291,550		287,636		293,805

Total liabilities		723,730		741,312		762,891		737,874		750,391


Equity:
Accumulated other comprehensive income		19,066		24,667		24,925		14,621		14,643
Other equity		30,176		30,482		31,506		31,242		32,141

Total Prudential Financial, Inc. equity		49,242		55,149		56,431		45,863		46,784

Noncontrolling Interest		23		29		543		225		190

Total Equity		49,265		55,178		56,974		46,088		46,974

Total liabilities and equity		772,995		796,490		819,865		783,962		797,365

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of March 31, 2017

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		450,887		60,726			390,161		133,751		56,523		181,626		18,261
Deferred policy acquisition costs		18,197		325			17,872		4,999		5,568		7,648		(343	)
Other assets		34,476		2,045			32,431		12,073		11,473		10,761		(1,876	)
Separate account assets		293,805		—			293,805		247,579		47,335		3,195		(4,304	)

Total assets		797,365		63,096			734,269		398,402		120,899		203,230		11,738


Liabilities:
Future policy benefits		244,705		49,091			195,614		64,767		17,390		108,620		4,837
Policyholders’ account balances		147,026		5,183			141,843		58,560		34,194		49,081		8
Debt		19,308		—			19,308		2,979		7,661		93		8,575
Other liabilities		45,547		10,204			35,343		6,962		7,508		17,747		3,126
Separate account liabilities		293,805		—			293,805		247,579		47,335		3,195		(4,304	)

Total liabilities		750,391		64,478			685,913		380,847		114,088		178,736		12,242


Equity:
Accumulated other comprehensive income (loss)		14,643		(2	)		14,645		1,523		801		13,823		(1,502	)
Other equity		32,141		(1,382	)		33,523		15,734		6,010		10,626		1,153

Total Prudential Financial, Inc. equity		46,784		(1,384	)		48,168		17,257		6,811		24,449		(349	)

Noncontrolling Interest		190		2			188		298		—		45		(155	)

Total Equity		46,974		(1,382	)		48,356		17,555		6,811		24,494		(504	)


Total liabilities and equity		797,365		63,096			734,269		398,402		120,899		203,230		11,738



	As of December 31, 2016

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		444,240		59,714			384,526		132,915		55,333		176,252		20,026
Deferred policy acquisition costs		17,661		336			17,325		5,003		5,454		7,208		(340	)
Other assets		34,425		2,001			32,424		12,908		11,235		10,842		(2,561	)
Separate account assets		287,636		—			287,636		242,799		46,144		2,817		(4,124	)

Total assets		783,962		62,051			721,911		393,625		118,166		197,119		13,001


Liabilities:
Future policy benefits		240,908		49,281			191,627		65,972		16,987		103,930		4,738
Policyholders’ account balances		145,205		5,204			140,001		58,371		33,872		47,747		11
Debt		19,174		—			19,174		3,147		7,282		87		8,658
Other liabilities		44,951		8,967			35,984		7,076		7,248		18,457		3,203
Separate account liabilities		287,636		—			287,636		242,799		46,144		2,817		(4,124	)

Total liabilities		737,874		63,452			674,422		377,365		111,533		173,038		12,486


Equity:
Accumulated other comprehensive income (loss)		14,621		(4	)		14,625		1,294		706		14,320		(1,695	)
Other equity		31,242		(1,399	)		32,641		14,692		5,927		9,716		2,306

Total Prudential Financial, Inc. equity		45,863		(1,403	)		47,266		15,986		6,633		24,036		611

Noncontrolling Interest		225		2			223		274		—		45		(96	)

Total Equity		46,088		(1,401	)		47,489		16,260		6,633		24,081		515


Total liabilities and equity		783,962		62,051			721,911		393,625		118,166		197,119		13,001

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of March 31, 2017								As of December 31, 2016
	Senior debt				Junior Subordinated Long-term Debt				Senior debt				Junior Subordinated Long-term Debt		Total Debt
	Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt		Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt
*Borrowings by use of proceeds:*
Capital Debt		—		5,822		5,819		11,641		—		5,822		5,817		11,639
Operating Debt - Investment related		769		4,861		—		5,630		477		4,901		—		5,378
Operating Debt - Specified businesses		573		805		—		1,378		584		914		—		1,498
Limited recourse and non-recourse borrowing		73		586		—		659		72		587		—		659

Total debt		1,415		12,074		5,819		19,308		1,133		12,224		5,817		19,174


	As of March 31, 2017								As of December 31, 2016
	Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total		Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total
*Borrowings by sources:*
Capital Debt		10,645		940		56		11,641		10,645		939		55		11,639
Operating Debt - Investment related		4,420		211		999		5,630		4,314		65		999		5,378
Operating Debt - Specified businesses		861		517		—		1,378		965		533		—		1,498
Limited recourse and non-recourse borrowing		—		659		—		659		—		659		—		659

Total debt		15,926		2,327		1,055		19,308		15,924		2,196		1,054		19,174

(1)	Includes Prudential Funding, LLC.

(2)	Capital debt at Prudential Insurance Co. of America includes $840M of surplus notes as of March 31, 2017 and $839M as of December 31, 2016, respectively.

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION

(in millions)


Year-to-date						%				2016												2017
2017			2016			Change				1Q			2Q			3Q			4Q			1Q

									Revenues (1):
	551			671			-18	%	Premiums		671			1,018			3,791			2,258			551
	717			675			6	%	Policy charges and fee income		675			687			723			712			717
	1,370			1,198			14	%	Net investment income		1,198			1,194			1,325			1,324			1,370
	1,270			1,164			9	%	Asset management fees, commissions and other income		1,164			1,217			1,266			1,280			1,270

	3,908			3,708			5	%	Total revenues		3,708			4,116			7,105			5,574			3,908


									Benefits and Expenses (1):
	1,005			1,171			-14	%	Insurance and annuity benefits		1,171			1,460			4,243			2,760			1,005
	451			453			0	%	Interest credited to policyholders’ account balances		453			451			458			473			451
	25			25			0	%	Interest expense		25			28			29			23			25
	(88	)		(110	)		20	%	Deferral of acquisition costs		(110	)		(128	)		(116	)		(95	)		(88	)
	136			155			-12	%	Amortization of acquisition costs		155			131			100			146			136
	1,318			1,302			1	%	General and administrative expenses		1,302			1,304			1,373			1,303			1,318

	2,847			2,996			-5	%	Total benefits and expenses		2,996			3,246			6,087			4,610			2,847

	1,061			712			49	%	Adjusted operating income before income taxes		712			870			1,018			964			1,061

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to non controlling interests.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION

(in millions)


	Three Months Ended March 31, 2017
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		551			39			512			—
Policy charges and fee income		717			659			58			—
Net investment income		1,370			190			1,148			32
Asset management fees, commissions and other income		1,270			327			219			724

Total revenues		3,908			1,215			1,937			756


Benefits and Expenses (1):
Insurance and annuity benefits		1,005			88			917			—
Interest credited to policyholders’ account balances		451			87			364			—
Interest expense		25			14			6			5
Deferral of acquisition costs		(88	)		(79	)		(7	)		(2	)
Amortization of acquisition costs		136			128			4			4
General and administrative expenses		1,318			509			256			553

Total benefits and expenses		2,847			747			1,540			560

Adjusted operating income before income taxes		1,061			468			397			196


	Three Months Ended March 31, 2016
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		671			32			639			—
Policy charges and fee income		675			620			55			—
Net investment income		1,198			161			1,019			18
Asset management fees, commissions and other income		1,164			296			180			688

Total revenues		3,708			1,109			1,893			706


Benefits and Expenses (1):
Insurance and annuity benefits		1,171			111			1,060			—
Interest credited to policyholders’ account balances		453			100			353			—
Interest expense		25			18			4			3
Deferral of acquisition costs		(110	)		(100	)		(7	)		(3	)
Amortization of acquisition costs		155			144			7			4
General and administrative expenses		1,302			508			257			537

Total benefits and expenses		2,996			781			1,674			541

Adjusted operating income before income taxes		712			328			219			165

(1)

Page 11

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - INDIVIDUAL ANNUITIES SALES RESULTS AND ACCOUNT VALUES

(in millions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	153,295			149,441		Beginning total account value		149,441			149,246			151,188			154,903			153,295
	782			683		Sales: Highest Daily Suite - risk retained by Prudential(1)		683			666			587			558			782
	14			374		Highest Daily Suite - externally reinsured living benefits		374			354			321			318			14
	632			944		Other variable annuities (2)		944			1,247			1,180			762			632

	1,428			2,001		Total sales		2,001			2,267			2,088			1,638			1,428
	(2,326	)		(1,748	)	Surrenders and withdrawals		(1,748	)		(1,914	)		(1,992	)		(2,122	)		(2,326	)

	(898	)		253		Net sales (redemptions)		253			353			96			(484	)		(898	)
	(413	)		(355	)	Benefit payments		(355	)		(399	)		(349	)		(347	)		(413	)

	(1,311	)		(102	)	Net flows		(102	)		(46	)		(253	)		(831	)		(1,311	)
	5,751			764		Change in market value, interest credited, and other		764			2,873			4,877			124			5,751
	(905	)		(857	)	Policy charges		(857	)		(885	)		(909	)		(901	)		(905	)

	156,830			149,246		Ending total account value		149,246			151,188			154,903			153,295			156,830


						Variable Annuities Account Value by Product:
	115,314			111,229		Highest Daily Suite - risk retained by Prudential (1)		111,229			111,820			113,902			112,543			115,314
	3,025			1,893		Highest Daily Suite - externally reinsured living benefits		1,893			2,259			2,629			2,932			3,025
	38,491			36,124		Other variable annuities (2)		36,124			37,109			38,372			37,820			38,491

	156,830			149,246		Ending total account value		149,246			151,188			154,903			153,295			156,830


						Fixed Annuities and other products (3):
	3,488			3,504		Beginning total account value		3,504			3,487			3,489			3,485			3,488
	12			16		Sales		16			14			12			18			12
	(27	)		(31	)	Surrenders and withdrawals		(31	)		(26	)		(21	)		(27	)		(27	)

	(15	)		(15	)	Net redemptions		(15	)		(12	)		(9	)		(9	)		(15	)
	(84	)		(88	)	Benefit payments		(88	)		(90	)		(91	)		(75	)		(84	)

	(99	)		(103	)	Net flows		(103	)		(102	)		(100	)		(84	)		(99	)
	100			86		Interest credited and other		86			105			96			87			100
	—			—		Policy charges		—			(1	)		—			—			—

	3,489			3,487		Ending total account value		3,487			3,489			3,485			3,488			3,489


						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	507			580		Insurance Agents		580			625			598			550			507
	236			385		Wirehouses		385			452			376			279			236
	573			783		Independent Financial Planners		783			897			841			659			573
	124			269		Bank Distribution		269			307			285			168			124

	1,440			2,017		Total		2,017			2,281			2,100			1,656			1,440

(1)	Includes variable annuities with “Highest Daily” optional living benefits retained by Prudential and predecessor “Lifetime Five” feature.

(2)	Includes Prudential Defined Income (PDI), and products without guaranteed minimum income and withdrawal benefits.

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - INDIVIDUAL ANNUITIES ACCOUNT VALUE ACTIVITY

(in millions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,942		Beginning balance		9,942			10,017			9,977			9,863			9,892
	185			238		Premiums and deposits		238			221			215			194			185
	(153	)		(141	)	Surrenders and withdrawals		(141	)		(140	)		(134	)		(148	)		(153	)

	32			97		Net sales		97			81			81			46			32
	(100	)		(105	)	Benefit payments		(105	)		(110	)		(107	)		(89	)		(100	)

	(68	)		(8	)	Net flows		(8	)		(29	)		(26	)		(43	)		(68	)
	58			64		Interest credited and other		64			62			58			57			58
	(72	)		19		Net transfers (to) from separate account		19			(72	)		(146	)		15			(72	)
	—			—		Policy charges		—			(1	)		—			—			—

	9,810			10,017		Ending balance		10,017			9,977			9,863			9,892			9,810


						Account Values in Separate Account (1):
	146,891			143,003		Beginning balance		143,003			142,716			144,700			148,525			146,891
	1,255			1,779		Premiums and deposits		1,779			2,060			1,885			1,462			1,255
	(2,200	)		(1,638	)	Surrenders and withdrawals		(1,638	)		(1,800	)		(1,879	)		(2,001	)		(2,200	)

	(945	)		141		Net sales (redemptions)		141			260			6			(539	)		(945	)
	(397	)		(338	)	Benefit payments		(338	)		(379	)		(333	)		(333	)		(397	)

	(1,342	)		(197	)	Net flows		(197	)		(119	)		(327	)		(872	)		(1,342	)
	5,793			786		Change in market value, interest credited and other		786			2,916			4,915			154			5,793
	72			(19	)	Net transfers (to) from general account		(19	)		72			146			(15	)		72
	(905	)		(857	)	Policy charges		(857	)		(885	)		(909	)		(901	)		(905	)

	150,509			142,716		Ending balance		142,716			144,700			148,525			146,891			150,509

(1)

Premiums and deposits, and surrenders and withdrawals, are classified within the general account and separate account for purposes of this presentation based on the allocation of customer funds. For example, premiums allocated by customers to separate account investments at the time of sale, while remitted through the company’s general account, are shown as separate account premium in this display, rather than as general account premium and transfers to the separate account.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - INDIVIDUAL ANNUITIES LIVING BENEFIT FEATURES

(in millions)


	2016								2017
	1Q		2Q		3Q		4Q		1Q

LIVING BENEFIT FEATURES ACCOUNT VALUE AND NET AMOUNT AT RISK (1):

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		4,658		4,524		4,403		4,104		3,879
Guaranteed minimum withdrawal benefits		552		537		532		514		509
Guaranteed minimum income benefits		2,780		2,749		2,780		2,730		2,761
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		116,818		118,666		121,747		120,468		123,609
Guaranteed minimum withdrawal & income benefits - externally reinsured		1,893		2,259		2,629		2,932		3,025

Total		126,701		128,735		132,091		130,748		133,783


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		106,699		107,253		109,175		107,752		110,286
Account Values with Auto-Rebalancing Feature - externally reinsured		1,893		2,259		2,629		2,932		3,025
Account Values without Auto-Rebalancing Feature		18,109		19,223		20,287		20,064		20,472

Total		126,701		128,735		132,091		130,748		133,783


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		4,395		4,366		3,928		4,494		3,872
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		1,225		1,179		1,049		1,082		939

Total		5,620		5,545		4,977		5,576		4,811

(1)	At end of period.

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - INDIVIDUAL ANNUITIES DEATH BENEFIT FEATURES

(in millions)


	2016								2017
	1Q		2Q		3Q		4Q		1Q

DEATH BENEFIT FEATURES ACCOUNT VALUE AND NET AMOUNT AT RISK (1):

Variable Annuity Account Values by Death Benefit Features
Return of net deposits:
Account value		114,662		116,599		119,755		118,620		121,507
Net amount at risk		648		544		399		487		385
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,188		31,127		31,534		30,980		31,460
Net amount at risk		4,367		4,147		3,533		3,714		3,215

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		108,592		109,512		111,804		110,684		113,311
Account Values without Auto-Rebalancing Feature		37,258		38,214		39,485		38,916		39,656

Total		145,850		147,726		151,289		149,600		152,967


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		2,025		1,852		1,392		1,597		1,265
Net Amount at Risk without Auto-Rebalancing Feature		2,990		2,839		2,540		2,604		2,335

Total		5,015		4,691		3,932		4,201		3,600

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - RETIREMENT SEGMENT SALES RESULTS AND ACCOUNT VALUES

(in millions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	202,802			188,961		Beginning total account value		188,961			190,953			194,007			200,476			202,802
	6,736			6,656		Deposits and sales		6,656			4,699			5,405			5,168			6,736
	(6,690	)		(5,286	)	Withdrawals and benefits		(5,286	)		(4,513	)		(5,013	)		(5,315	)		(6,690	)
	7,552			622		Change in market value, interest credited, interest income and other activity		622			2,868			6,077			2,473			7,552

	210,400			190,953		Ending total account value		190,953			194,007			200,476			202,802			210,400


	46			1,370		Net additions (withdrawals)		1,370			186			392			(147	)		46


						Stable value account values included above		46,865			47,581			48,352			48,725			48,737

						Institutional Investment Products:
	183,376			179,964		Beginning total account value		179,964			180,819			180,882			186,224			183,376
	4,042			2,061		Additions		2,061			3,421			6,907			3,751			4,042
	(4,241	)		(2,783	)	Withdrawals and benefits		(2,783	)		(3,119	)		(2,339	)		(3,920	)		(4,241	)
	1,229			2,198		Change in market value, interest credited and interest income		2,198			2,053			1,953			(905	)		1,229
	709			(621	)	Other (1)		(621	)		(2,292	)		(1,179	)		(1,774	)		709

	185,115			180,819		Ending total account value		180,819			180,882			186,224			183,376			185,115


	(199	)		(722	)	Net additions (withdrawals)		(722	)		302			4,568			(169	)		(199	)


						Amounts included in ending total account value above:
	70,576			68,624		Investment-only stable value wraps		68,624			69,567			71,482			70,196			70,576
	32,004			32,364		Longevity reinsurance (2)		32,364			31,438			31,280			29,959			32,004
	82,535			79,831		Group annuities and other products		79,831			79,877			83,462			83,221			82,535

	185,115			180,819		Ending total account value		180,819			180,882			186,224			183,376			185,115

(1)

“Other” activity includes the effect of foreign exchange rate changes associated with our United Kingdom longevity reinsurance business; net presentation of receipts and payments related to funding agreements backed commercial paper which typically have maturities of less than 90 days, and changes in asset balances for externally-managed accounts.

(2)	Represents notional amounts based on present value of future benefits under longevity reinsurance contracts which have not been significantly pre-funded.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT

INFORMATION FOR ASSET MANAGEMENT SEGMENT


						Supplementary Revenue Information (in millions):
Year-to-date				%			2016								2017
2017		2016		Change			1Q		2Q		3Q		4Q		1Q

						Analysis of revenues by type:
	575		524		10%	Asset management fees		524		547		577		579		575
	58		71		-18%	Other related revenues		71		67		52		65		58
	123		111		11%	Service, distribution and other revenues		111		118		121		129		123

	756		706		7%	Total Asset Management segment revenues		706		732		750		773		756


						Analysis of asset management fees by source:
	275		242		14%	Institutional customers		242		256		273		275		275
	185		169		9%	Retail customers		169		173		182		183		185
	115		113		2%	General account		113		118		122		121		115

	575		524		10%	Total asset management fees		524		547		577		579		575


Supplementary Assets Under Management Information (in billions):
	March 31, 2017
	Equity		Fixed Income		Real Estate		Total
Institutional customers		61.1		343.8		40.3		445.2
Retail customers		117.0		98.8		1.8		217.6
General account		6.6		397.8		1.7		406.1

Total		184.7		840.4		43.8		1,068.9


	March 31, 2016
	Equity		Fixed Income		Real Estate		Total
Institutional customers		59.2		304.1		40.3		403.6
Retail customers		116.0		80.5		2.1		198.6
General account		6.4		392.4		2.0		400.8

Total		181.6		777.0		44.4		1,003.0

Page 17

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION FOR ASSET MANAGEMENT SEGMENT

(in billions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	386.4			347.1		Beginning assets under management		347.1			359.3			373.4			398.9			386.4
	15.9			12.5		Additions		12.5			14.8			16.4			15.7			15.9
	(15.4	)		(15.1	)	Withdrawals		(15.1	)		(12.8	)		(13.0	)		(13.2	)		(15.4	)
	9.6			12.7		Change in market value		12.7			11.3			8.4			(10.6	)		9.6
	2.0			(1.0	)	Net money market flows		(1.0	)		0.4			13.5			(1.1	)		2.0
	0.6			3.1		Other (1)		3.1			0.4			0.2			(3.3	)		0.6

	399.1			359.3		Ending assets under management		359.3			373.4			398.9			386.4			399.1
	46.1			44.3		Affiliated institutional assets under management		44.3			45.4			47.0			45.1			46.1

	445.2			403.6		Total assets managed for institutional customers at end of period		403.6			418.8			445.9			431.5			445.2


	0.5			(2.6	)	Net institutional additions (withdrawals), excluding money market activity		(2.6	)		2.0			3.4			2.5			0.5


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	136.6			128.9		Beginning assets under management		128.9			127.8			131.3			137.7			136.6
	13.0			10.2		Additions		10.2			11.5			10.5			9.9			13.0
	(12.9	)		(10.7	)	Withdrawals		(10.7	)		(9.9	)		(9.6	)		(11.5	)		(12.9	)
	7.4			(1.2	)	Change in market value		(1.2	)		1.9			5.5			(1.7	)		7.4
	—			(0.1	)	Net money market flows		(0.1	)		—			—			—			—
	0.1			0.7		Other (1)		0.7			—			—			2.2			0.1

	144.2			127.8		Ending assets under management		127.8			131.3			137.7			136.6			144.2
	73.4			70.8		Affiliated retail assets under management		70.8			70.8			71.3			72.6			73.4

	217.6			198.6		Total assets managed for retail customers at end of period		198.6			202.1			209.0			209.2			217.6


	0.1			(0.5	)	Net retail additions (withdrawals), excluding money market activity		(0.5	)		1.6			0.9			(1.6	)		0.1

(1)

“Other” activity represents transfers from the Retirement Segment as a result of changes in the client contract form, a $2 billion reclassification of assets under management from institutional to retail in 4Q’16, impact of acquired business of $3.4 billion as of March 4, 2016 and FX related to International assets under management.

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION

(in millions)


Year-to-date						%			2016												2017
2017			2016			Change			1Q			2Q			3Q			4Q			1Q

								Revenues (1):
	1,268			1,219			4%	Premiums		1,219			1,234			1,210			1,231			1,268
	717			719			0%	Policy charges and fee income		719			505			713			699			717
	647			582			11%	Net investment income		582			593			625			630			647
	196			166			18%	Asset management fees, commissions and other income		166			187			195			190			196

	2,828			2,686			5%	Total revenues		2,686			2,519			2,743			2,750			2,828


								Benefits and Expenses (1):
	1,707			1,634			4%	Insurance and annuity benefits		1,634			1,950			1,622			1,611			1,707
	243			227			7%	Interest credited to policyholders’ account balances		227			233			237			246			243
	157			142			11%	Interest expense		142			146			147			153			157
	(183	)		(162	)		-13%	Deferral of acquisition costs		(162	)		(172	)		(169	)		(203	)		(183	)
	72			78			-8%	Amortization of acquisition costs		78			(111	)		83			71			72
	680			621			10%	General and administrative expenses		621			674			650			691			680

	2,676			2,540			5%	Total benefits and expenses		2,540			2,720			2,570			2,569			2,676


	152			146			4%	Adjusted operating income (loss) before income taxes		146			(201	)		173			181			152

(1)	Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses.

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION

(in millions)


	Three Months Ended March 31, 2017
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		1,268			216			1,052
Policy charges and fee income		717			573			144
Net investment income		647			482			165
Asset management fees, commissions and other income		196			174			22

Total revenues		2,828			1,445			1,383


Benefits and Expenses (1):
Insurance and annuity benefits		1,707			642			1,065
Interest credited to policyholders’ account balances		243			176			67
Interest expense		157			156			1
Deferral of acquisition costs		(183	)		(183	)		—
Amortization of acquisition costs		72			71			1
General and administrative expenses		680			465			215

Total benefits and expenses		2,676			1,327			1,349


Adjusted operating income before income taxes		152			118			34


	Three Months Ended March 31, 2016
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		1,219			210			1,009
Policy charges and fee income		719			570			149
Net investment income		582			436			146
Asset management fees, commissions and other income		166			150			16

Total revenues		2,686			1,366			1,320


Benefits and Expenses (1):
Insurance and annuity benefits		1,634			614			1,020
Interest credited to policyholders’ account balances		227			164			63
Interest expense		142			141			1
Deferral of acquisition costs		(162	)		(162	)		—
Amortization of acquisition costs		78			77			1
General and administrative expenses		621			412			209

Total benefits and expenses		2,540			1,246			1,294


Adjusted operating income before income taxes		146			120			26

(1)	Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses.

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION - INDIVIDUAL LIFE ANNUALIZED NEW BUSINESS PREMIUMS, ACCOUNT VALUE ACTIVITY, AND FACE AMOUNT IN FORCE

(in millions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1):

	49			48		Term life		48			50			52			50			49
	53			51		Guaranteed Universal life		51			61			54			77			53
	21			20		Other Universal life		20			23			21			31			21
	23			26		Variable life		26			25			16			25			23

	146			145		Total		145			159			143			183			146


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	27			29		Prudential Agents		29			30			28			29			27
	119			116		Third party distribution		116			129			115			154			119

	146			145		Total		145			159			143			183			146


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,041			24,487		Beginning balance		24,487			24,437			24,747			25,000			26,041
	804			809		Premiums and deposits		809			821			751			949			804
	(233	)		(251	)	Surrenders and withdrawals		(251	)		(257	)		(240	)		(240	)		(233	)

	571			558		Net sales		558			564			511			709			571
	(182	)		(125	)	Benefit payments		(125	)		(121	)		(138	)		(106	)		(182	)

	389			433		Net flows		433			443			373			603			389
	228			(224	)	Interest credited and other		(224	)		137			155			718			228
	106			99		Net transfers from separate account		99			93			102			102			106
	(406	)		(358	)	Policy charges		(358	)		(363	)		(377	)		(382	)		(406	)
	—			—		Acquisition		—			—			—			—			—

	26,358			24,437		Ending balance		24,437			24,747			25,000			26,041			26,358


						*Separate Account Liabilities:*
	28,455			27,027		Beginning balance		27,027			26,887			27,227			28,129			28,455
	442			456		Premiums and deposits		456			337			287			359			442
	(220	)		(217	)	Surrenders and withdrawals		(217	)		(222	)		(212	)		(201	)		(220	)

	222			239		Net sales		239			115			75			158			222
	(46	)		(51	)	Benefit payments		(51	)		(40	)		(39	)		(33	)		(46	)

	176			188		Net flows		188			75			36			125			176
	1,373			(5	)	Change in market value, interest credited and other		(5	)		585			1,196			532			1,373
	(106	)		(99	)	Net transfers to general account		(99	)		(93	)		(102	)		(102	)		(106	)
	(229	)		(224	)	Policy charges		(224	)		(227	)		(228	)		(229	)		(229	)
	—			—		Acquisition		—			—			—			—			—

	29,669			26,887		Ending balance		26,887			27,227			28,129			28,455			29,669


						FACE AMOUNT IN FORCE (3):

						Term life		697,687			706,636			714,733			721,602			727,736
						Guaranteed Universal life		124,061			127,453			130,400			134,973			137,801
						Other Universal life		44,203			44,505			44,781			45,350			45,704
						Variable life		162,960			162,416			163,184			162,574			162,611

						Total		1,028,910			1,041,010			1,053,098			1,064,500			1,073,851

(1)	Excludes corporate-owned life insurance.

(2)	Includes fixed rate funds, alliance deposits, supplementary contracts and deferred revenues on variable products.

(3)	At end of period; before reinsurance ceded.

Page 21

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION - SUPPLEMENTARY INFORMATION FOR GROUP INSURANCE

(dollar amounts in millions)


Year-to-date					2016												2017
2017		2016			1Q			2Q			3Q			4Q			1Q

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	186		232	Group life		232			24			29			31			186
	115		79	Group disability		79			21			13			6			115

	301		311	Total		311			45			42			37			301


				Future Policy Benefits (1) (2):
				Group life		2,103			2,124			2,065			2,238			2,166
				Group disability		29			21			11			3			28

				Total		2,132			2,145			2,076			2,241			2,194


				Policyholders’ Account Balances (1):
				Group life		8,271			8,367			8,497			8,634			8,614
				Group disability		216			240			208			224			237

				Total		8,487			8,607			8,705			8,858			8,851


				Separate Account Liabilities (1):
				Group life		24,339			23,816			24,839			23,594			23,812
				Group disability		—			—			—			—			—

				Total		24,339			23,816			24,839			23,594			23,812


				Group Life Insurance:
	1,038		1,009	Gross premiums, policy charges and fee income (3)		1,009			1,064			1,016			1,006			1,038
	985		955	Earned premiums, policy charges and fee income		955			998			953			939			985
	92.2%		89.4%	Benefits ratio (4)		89.4	%		88.6	%		88.6	%		87.3	%		92.2	%
	10.8%		10.8%	Administrative operating expense ratio		10.8	%		10.6	%		10.6	%		10.7	%		10.8	%
				Persistency ratio		96.1	%		95.8	%		95.3	%		95.2	%		94.9	%

				Group Disability Insurance:
	233		216	Gross premiums, policy charges and fee income (3)		216			222			219			223			233
	211		203	Earned premiums, policy charges and fee income		203			196			199			207			211
	74.3%		82.2%	Benefits ratio (5)		82.2	%		77.5	%		80.4	%		91.3	%		74.3	%
	29.4%		31.9%	Administrative operating expense ratio		31.9	%		31.1	%		31.4	%		31.0	%		29.4	%
				Persistency ratio		94.9	%		93.7	%		92.9	%		91.7	%		93.7	%

				Total Group Insurance (6):
	89.1%		88.1%	Benefits ratio		88.1	%		86.6	%		87.1	%		88.0	%		89.1	%

(1)	As of end of period.

(2)	The amounts shown exclude liabilities for unpaid claims and claim adjustment expenses.

(3)	Before returns of premiums to participating policyholders for favorable claims experience.

(4)

Group Life Insurance benefit ratios excluding market driven and discrete items. Benefit ratios including market driven and discrete items are 92.2%, 87.3%, 88.6%, 90.8%, and 89.4% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.

(5)

Group Disability Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 74.3%, 91.3% 80.4%, 47.9%, and 82.2% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 89.1%, 88.0%, 87.1%, 83.8%, and 88.1% for the three months ended March 31, 2017, December 31, 2016, September 30, 2016, June 30, 2016, and March 31, 2016, respectively.

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

DEFERRED POLICY ACQUISITION COSTS & DEFERRED SALES INDUCEMENTS - INDIVIDUAL ANNUITIES, INDIVIDUAL LIFE AND GROUP INSURANCE

(in millions)


Year-to-date							2016												2017
2017			2016				1Q			2Q			3Q			4Q			1Q

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,871			4,916		Beginning balance		4,916			4,130			4,119			4,515			4,871
	79			100		Capitalization		100			117			104			87			79
	(128	)		(144	)	Amortization - operating results		(144	)		(122	)		(84	)		(134	)		(128	)
	50			(717	)	Amortization - realized investment gains and losses		(717	)		17			374			347			50
	(7	)		(25	)	Impact of unrealized (gains) or losses on AFS securities		(25	)		(23	)		2			56			(7	)
	—			—		Other		—			—			—			—			—

	4,865			4,130		Ending balance		4,130			4,119			4,515			4,871			4,865


						INDIVIDUAL LIFE INSURANCE:
	5,278			4,883		Beginning balance		4,883			4,727			4,773			4,840			5,278
	183			162		Capitalization		162			172			169			203			183
	(71	)		(77	)	Amortization - operating results		(77	)		113			(82	)		(69	)		(71	)
	2			(26	)	Amortization - realized investment gains and losses		(26	)		(80	)		2			4			2
	1			(215	)	Impact of unrealized (gains) or losses on AFS securities		(215	)		(159	)		(22	)		300			1

	5,393			4,727		Ending balance		4,727			4,773			4,840			5,278			5,393


						GROUP INSURANCE:
	176			181		Beginning balance		181			180			179			178			176
	—			—		Capitalization		—			—			—			—			—
	(1	)		(1	)	Amortization - operating results		(1	)		(1	)		(1	)		(2	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	175			180		Ending balance		180			179			178			176			175


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,082			1,188		Beginning balance		1,188			916			893			1,012			1,082
	—			1		Capitalization		1			1			1			—			—
	(41	)		(51	)	Amortization - operating results		(51	)		(50	)		(23	)		(44	)		(41	)
	25			(216	)	Amortization - realized investment gains and losses		(216	)		29			140			103			25
	(2	)		(6	)	Impact of unrealized (gains) or losses on AFS securities		(6	)		(3	)		1			11			(2	)
	—			—		Other		—			—			—			—			—

	1,064			916		Ending balance		916			893			1,012			1,082			1,064

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


Year-to-date						% Change			2016												2017
2017			2016			% Change			1Q			2Q			3Q			4Q			1Q

								Revenues (1):
	3,962			3,696			7%	Premiums		3,696			3,899			3,939			3,814			3,962
	134			130			3%	Policy charges and fee income		130			106			134			129			134
	1,205			1,120			8%	Net investment income		1,120			1,204			1,229			1,206			1,205
	108			98			10%	Asset management fees, commissions and other income		98			134			82			89			108

	5,409			5,044			7%	Total revenues		5,044			5,343			5,384			5,238			5,409


								Benefits and Expenses (1):
	3,433			3,173			8%	Insurance and annuity benefits		3,173			3,397			3,382			3,280			3,433
	226			227			0%	Interest credited to policyholders’ account balances		227			230			237			226			226
	3			2			50%	Interest expense		2			1			2			3			3
	(465	)		(426	)		-9%	Deferral of acquisition costs		(426	)		(436	)		(462	)		(426	)		(465	)
	285			260			10%	Amortization of acquisition costs		260			273			271			264			285
	1,128			1,029			10%	General and administrative expenses		1,029			1,075			1,174			1,136			1,128

	4,610			4,265			8%	Total benefits and expenses		4,265			4,540			4,604			4,483			4,610


	799			779			3%	Adjusted operating income before income taxes		779			803			780			755			799

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to non controlling interests.

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Three Months Ended March 31, 2017
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		3,962			2,116			1,846
Policy charges and fee income		134			96			38
Net investment income		1,205			509			696
Asset management fees, commissions and other income		108			57			51

Total revenues		5,409			2,778			2,631


Benefits and Expenses (1):
Insurance and annuity benefits		3,433			1,866			1,567
Interest credited to policyholders’ account balances		226			62			164
Interest expense		3			2			1
Deferral of acquisition costs		(465	)		(265	)		(200	)
Amortization of acquisition costs		285			148			137
General and administrative expenses		1,128			557			571

Total benefits and expenses		4,610			2,370			2,240


Adjusted operating income before income taxes		799			408			391


	Three Months Ended March 31, 2016
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		3,696			1,940			1,756
Policy charges and fee income		130			92			38
Net investment income		1,120			464			656
Asset management fees, commissions and other income		98			63			35

Total revenues		5,044			2,559			2,485


Benefits and Expenses (1):
Insurance and annuity benefits		3,173			1,709			1,464
Interest credited to policyholders’ account balances		227			59			168
Interest expense		2			1			1
Deferral of acquisition costs		(426	)		(213	)		(213	)
Amortization of acquisition costs		260			131			129
General and administrative expenses		1,029			462			567

Total benefits and expenses		4,265			2,149			2,116


Adjusted operating income before income taxes		779			410			369

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities and include revenues representing equity in earnings of operating joint ventures. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to non controlling interests.

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


Year-to-date					2016								2017
2017		2016			1Q		2Q		3Q		4Q		1Q

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	1,691		1,583	Japan, excluding Gibraltar Life		1,583		1,434		1,472		1,386		1,691
	1,884		1,794	Gibraltar Life		1,794		2,120		2,094		2,022		1,884
	521		449	All other countries		449		451		507		535		521

	4,096		3,826	Total		3,826		4,005		4,073		3,943		4,096


				Annualized new business premiums:
	285		237	Japan, excluding Gibraltar Life		237		190		208		205		285
	358		409	Gibraltar Life		409		449		460		408		358
	109		98	All other countries		98		99		115		124		109

	752		744	Total		744		738		783		737		752


				Annualized new business premiums by distribution channel:
	394		335	Life Planner Operations		335		289		323		329		394
	167		161	Gibraltar Life Consultants		161		204		200		175		167
	132		194	Banks		194		176		188		158		132
	59		54	Independent Agency		54		69		72		75		59

	752		744	Total		744		738		783		737		752

				Constant exchange rate basis (2):
				Net premiums, policy charges and fee income:

	1,707		1,612	Japan, excluding Gibraltar Life		1,612		1,395		1,380		1,365		1,707
	1,912		1,854	Gibraltar Life		1,854		2,099		1,999		1,946		1,912
	512		471	All other countries		471		461		497		542		512

	4,131		3,937	Total		3,937		3,955		3,876		3,853		4,131


				Annualized new business premiums:
	339		240	Japan, excluding Gibraltar Life		240		185		197		202		339
	362		419	Gibraltar Life		419		448		450		389		362
	124		105	All other countries		105		101		111		122		124

	825		764	Total		764		734		758		713		825


				Annualized new business premiums by distribution channel:
	463		345	Life Planner Operations		345		286		308		324		463
	169		166	Gibraltar Life Consultants		166		203		194		170		169
	133		197	Banks		197		176		186		157		133
	60		56	Independent Agency		56		69		70		62		60

	825		764	Total		764		734		758		713		825

(1)	Translated based on applicable average exchange rates for the period shown.

(2)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 112 per U.S. dollar and Korean won 1,130 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 26

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2016												2017
	1Q			2Q			3Q			4Q			1Q

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		306			310			314			318			327
Gibraltar Life		319			320			324			327			330
All other countries		118			119			121			123			124

Total		743			749			759			768			781


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,341			3,384			3,436			3,488			3,581
Gibraltar Life		7,150			7,141			7,170			7,182			7,191
All other countries		2,007			2,024			2,048			2,076			2,105

Total		12,498			12,549			12,654			12,746			12,877


International life insurance policy persistency:

Life Planner Operations:
13 months		93.0	%		93.1	%		93.0	%		93.0	%		93.0	%
25 months		85.6	%		85.6	%		86.2	%		86.3	%		86.3	%

Gibraltar Life (3):
13 months		93.2	%		93.3	%		93.4	%		93.5	%		93.3	%
25 months		84.8	%		85.3	%		85.5	%		86.2	%		86.7	%

Number of Life Planners at end of period:
Japan		3,650			3,653			3,776			3,824			3,932
All other countries		3,958			3,898			3,891			3,856			3,887

Total Life Planners		7,608			7,551			7,667			7,680			7,819


Gibraltar Life Consultants		8,781			8,734			8,790			8,884			8,752

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 112 per U.S. dollar and Korean won 1,130 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

(2)	Direct business only; policy count includes annuities.

(3)	Reflects business sold by Life Consultants and Independent Agents.

Page 27

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	March 31, 2017									December 31, 2016
	Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division					Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division
	Total Portfolio		Closed Block Division		Amount		% of Total			Total Portfolio		Closed Block Division		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		273,203		25,877		247,326		64.2	%		268,118		24,917		243,201		64.2	%
Public, held-to-maturity, at amortized cost		1,808		—		1,808		0.5	%		1,772		—		1,772		0.5	%
Private, available-for-sale, at fair value		55,254		14,217		41,037		10.7	%		53,061		13,987		39,074		10.3	%
Private, held-to-maturity, at amortized cost		358		—		358		0.1	%		372		—		372		0.1	%
Trading account assets supporting insurance liabilities, at fair value		21,820		—		21,820		5.7	%		21,840		—		21,840		5.8	%
Other trading account assets, at fair value		1,998		307		1,691		0.4	%		1,805		284		1,521		0.4	%
Equity securities, available-for-sale, at fair value		10,130		2,565		7,565		2.0	%		9,735		2,572		7,163		1.9	%
Commercial mortgage and other loans, at book value		53,417		9,491		43,926		11.4	%		52,208		9,437		42,771		11.2	%
Policy loans, at outstanding balance		11,893		4,607		7,286		1.9	%		11,755		4,660		7,095		1.9	%
Other long-term investments (1)		10,254		3,083		7,171		1.9	%		10,251		3,020		7,231		1.9	%
Short-term investments		5,164		579		4,585		1.2	%		7,494		837		6,657		1.8	%

Subtotal (2)		445,299		60,726		384,573		100.0	%		438,411		59,714		378,697		100.0	%

Invested assets of other entities and operations (3)		5,588		—		5,588					5,829		—		5,829

Total investments		450,887		60,726		390,161					444,240		59,714		384,526

Fixed Maturities by Credit Quality (2):


	March 31, 2017											December 31, 2016
	PFI Excluding Closed Block Division											PFI Excluding Closed Block Division
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total
Public Fixed Maturities:
NAIC Rating (4)
1		190,099		25,176		2,290		212,985		85.4	%		184,831		26,239		2,261		208,809		85.1	%
2		26,753		2,484		382		28,855		11.5	%		26,922		2,479		454		28,947		11.8	%

Subtotal - High or Highest Quality Securities		216,852		27,660		2,672		241,840		96.9	%		211,753		28,718		2,715		237,756		96.9	%

3		4,878		332		75		5,135		2.1	%		4,837		323		90		5,070		2.1	%
4		1,977		149		51		2,075		0.8	%		1,951		178		52		2,077		0.8	%
5		228		52		4		276		0.1	%		230		43		6		267		0.1	%
6		163		4		2		165		0.1	%		152		4		1		155		0.1	%

Subtotal - Other Securities		7,246		537		132		7,651		3.1	%		7,170		548		149		7,569		3.1	%

Total		224,098		28,197		2,804		249,491		100.0	%		218,923		29,266		2,864		245,325		100.0	%


Private Fixed Maturities:

NAIC Rating (4)
1		11,174		665		106		11,733		28.3	%		10,448		647		164		10,931		27.7	%
2		23,327		1,286		509		24,104		58.2	%		22,364		1,249		627		22,986		58.2	%

Subtotal - High or Highest Quality Securities		34,501		1,951		615		35,837		86.5	%		32,812		1,896		791		33,917		85.9	%

3		3,561		127		72		3,616		8.7	%		3,709		131		92		3,748		9.5	%
4		1,044		20		22		1,042		2.5	%		927		22		30		919		2.3	%
5		656		29		29		656		1.6	%		649		30		22		657		1.7	%
6		233		52		12		273		0.7	%		194		49		10		233		0.6	%

Subtotal - Other Securities		5,494		228		135		5,587		13.5	%		5,479		232		154		5,557		14.1	%

Total		39,995		2,179		750		41,424		100.0	%		38,291		2,128		945		39,474		100.0	%

(1)	Other long-term investments consist of real estate and non-real estate related investments in joint ventures and partnerships, investment real estate held through direct ownership, and other miscellaneous investments.

(2)	Excludes (i) assets of our asset management operations, including assets managed for third parties, (ii) derivative operations and (iii) those assets classified as “Separate account assets” on our balance sheet.

(3)	Includes invested assets of our asset management and derivative operations. Excludes assets of our asset management operations managed for third parties and those assets classified as “Separate account assets” on our balance sheet.

(4)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of March 31, 2017 and December 31, 2016, 761 securities with amortized cost of $4,646 million (fair value $4,728 million) and 918 securities with amortized cost of $4,634 million (fair value $4,759 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION (1)

(in millions)


	March 31, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		125,405		77.3	%		123,285		77.9	%
Public, held-to-maturity, at amortized cost		1,808		1.1	%		1,772		1.1	%
Private, available-for-sale, at fair value		12,762		7.9	%		11,646		7.4	%
Private, held-to-maturity, at amortized cost		358		0.2	%		372		0.2	%
Trading account assets supporting insurance liabilities, at fair value		2,277		1.4	%		2,166		1.4	%
Other trading account assets, at fair value		433		0.3	%		434		0.3	%
Equity securities, available-for-sale, at fair value		2,757		1.7	%		2,654		1.7	%
Commercial mortgage and other loans, at book value		12,241		7.6	%		11,700		7.4	%
Policy loans, at outstanding balance		2,475		1.5	%		2,369		1.5	%
Other long-term investments (3)		1,386		0.9	%		1,186		0.8	%
Short-term investments		220		0.1	%		398		0.3	%

Total		162,122		100.0	%		157,982		100.0	%


	March 31, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		121,921		54.8	%		119,916		54.4	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		28,275		12.7	%		27,428		12.4	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,543		8.8	%		19,674		9.0	%
Other trading account assets, at fair value		1,258		0.6	%		1,087		0.5	%
Equity securities, available-for-sale, at fair value		4,808		2.1	%		4,509		2.0	%
Commercial mortgage and other loans, at book value		31,685		14.2	%		31,071		14.1	%
Policy loans, at outstanding balance		4,811		2.2	%		4,726		2.1	%
Other long-term investments (3)		5,785		2.6	%		6,045		2.7	%
Short-term investments		4,365		2.0	%		6,259		2.8	%

Total		222,451		100.0	%		220,715		100.0	%

(1)	Excludes Closed Block Division.

(2)	Excludes assets classified as “Separate account assets” on our balance sheet.

(3)	Other long-term investments consist of real estate and non-real estate related investments in joint ventures and partnerships, investment real estate held through direct ownership, derivatives and other miscellaneous investments.

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INVESTMENT RESULTS (1)

(in millions)


	Three Months Ended March 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.84	%		2,457			133			3.90	%		2,268			(37	)
Equity securities		5.24	%		72			26			5.02	%		64			(5	)
Commercial mortgage and other loans		3.97	%		375			—			4.30	%		378			14
Policy loans		4.79	%		86			—			4.85	%		84			—
Short-term investments and cash equivalents		1.18	%		35			—			0.59	%		27			—
Other investments		10.71	%		233			5			3.13	%		65			1,986

Gross investment income before investment expenses		3.99	%		3,258			164			3.78	%		2,886			1,958
Investment expenses		-0.14	%		(113	)		—			-0.14	%		(96	)		—

Subtotal		3.85	%		3,145			164			3.64	%		2,790			1,958

Investment results of other entities and operations (3)					271			(10	)					268			21
Less, investment income related to adjusted operating income reconciling items					(62	)								(41	)

Total					3,354			154						3,017			1,979

(1)	Excludes Closed Block Division.

(2)

Excludes commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders, derivative operations, assets of our asset management operations, including assets managed for third parties, and those assets classified as “Separate account assets” on our balance sheet. Realized gains / (losses) for Other investments includes changes in fair value of product-related and other derivatives and embedded derivatives.

(3)	Includes invested income of commercial loans, trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and our asset management and derivative operations.

(4)

Yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest related and other items, such as settlements of duration management swaps which are reported in realized investment gains and losses and included in adjusted operating income. Yields are annualized, for interim periods, and 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 fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income and assets related to commercial loans and trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and investment income on assets other than those included in invested assets.

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Three Months Ended March 31
	2017								2016
	Investment Income						Realized Gains / (Losses)		Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)		Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.02	%		876			190		3.10	%		815			185
Equity securities		3.80	%		15			13		3.59	%		14			5
Commercial mortgage and other loans		3.91	%		117			1		4.38	%		108			6
Policy loans		3.86	%		23			—		3.86	%		22			—
Short-term investments and cash equivalents		1.24	%		3			—		0.90	%		2			—
Other investments (2)		7.84	%		34			69		2.32	%		16			615

Gross investment income before investment expenses		3.17	%		1,068			273		3.19	%		977			811
Investment expenses		-0.12	%		(43	)		—		-0.12	%		(39	)		—

Total		3.05	%		1,025			273		3.07	%		938			811

(1)

(2)	Realized gains / (losses) for Other investments includes changes in fair value of product-related and other derivatives and embedded derivatives.

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Three Months Ended March 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.51	%		1,581			(57	)		4.55	%		1,453			(222	)
Equity securities		5.82	%		57			13			5.64	%		50			(10	)
Commercial mortgage and other loans		3.99	%		258			(1	)		4.26	%		270			8
Policy loans		5.26	%		63			—			5.33	%		62			—
Short-term investments and cash equivalents		1.18	%		32			—			0.58	%		25			—
Other investments		11.41	%		199			(64	)		3.51	%		49			1,371

Gross investment income before investment expenses		4.57	%		2,190			(109	)		4.16	%		1,909			1,147
Investment expenses		-0.16	%		(70	)		—			-0.15	%		(57	)		—

Total		4.41	%		2,120			(109	)		4.01	%		1,852			1,147

(1)	Excludes Closed Block Division.

(2)

Excludes assets of commercial loans, trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders, derivative operations, assets of our asset management operations, including assets managed for third parties, and those assets classified as “Separate account assets” on our balance sheet. Realized gains / (losses) for Other investments includes changes in fair value of product-related and other derivatives and embedded derivatives.

(3)

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

LINE ITEM IMPACT OF MARKET DRIVEN AND DISCRETE ITEMS - ADJUSTED OPERATING INCOME

(in millions)


	First Quarter 2017																First Quarter 2016
	Policy Charges and Fee Income		Asset Management Fees, Commissions and Other Income		Insurance and Annuity Benefits			Interest Credited to Policy- holders’ Account Balances		Amorti- zation of Acqui- sition Costs			General and Adminis- trative Expenses		Pre-Tax Adjusted Operating Income		Policy Charges and Fee Income		Insurance and Annuity Benefits		Interest Credited to Policy- holders’ Account Balances		Amorti- zation of Acqui- sition Costs		General and Adminis- trative Expenses		Pre-Tax Adjusted Operating Income
Individual Annuities:
Market performance and experience true-ups		—		7		(8	)		—		(4	)		—		19		—		18		10		23		2		(53	)
Total of above items		—		7		(8	)		—		(4	)		—		19		—		18		10		23		2		(53	)
Reported amount				327		88			—		128			—				—		111		100		144		508
Amount excluding impact of items indicated above		—		320		96			—		132			—				—		93		90		121		506

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES

(in millions)


	Three Months Ended March 31, 2017																				Three Months Ended March 31, 2016
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block division			Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		5,774			—			—		—		604		103		—			6,481			5,577			—			—		—		622			98		—			6,297
Policy charges and fee income		1,555			(22	)		—		—		—		—		—			1,533			1,511			88			—		—		—			—		—			1,599
Net investment income		3,354			(8	)		—		—		645		70		—			4,061			3,017			(7	)		—		—		612			48		—			3,670
Realized investment gains (losses), net		122			27			—		—		273		5		—			427			174			1,758			—		—		(98	)		47		—			1,881
Asset management fees, commissions and other income		1,202			(85	)		44		—		35		3		(31	)		1,168			1,013			(333	)		216		—		(7	)		1		(8	)		882

Total revenues		12,007			(88	)		44		—		1,557		181		(31	)		13,670			11,292			1,506			216		—		1,129			194		(8	)		14,329


Benefits and Expenses :

Insurance and annuity benefits		6,146			(39	)		—		—		1,380		153		—			7,640			5,984			119			—		—		1,054			140		—			7,297
Interest credited to policyholders’ account balances		920			(25	)		—		12		33		—		—			940			907			216			—		130		33			—		—			1,286
Interest expense		322			—			—		—		1		1		—			324			325			—			—		—		1			1		—			327
Deferral of acquisition costs		(724	)		—			—		—		—		—		—			(724	)		(685	)		—			—		—		—			—		—			(685	)
Amortization of acquisition costs		481			(53	)		—		—		11		—		—			439			479			712			—		—		11			—		—			1,202
General and administrative expenses		3,202			(9	)		—		—		98		21		(3	)		3,309			2,957			121			—		—		103			22		(33	)		3,170

Total benefits and expenses		10,347			(126	)		—		12		1,523		175		(3	)		11,928			9,967			1,168			—		130		1,202			163		(33	)		12,597

(1)	See page 36 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES

(in millions)


	Three Months Ended June 30, 2016																				Three Months Ended September 30, 2016
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		6,146			—			—		—		693		96		—			6,935			8,934			—			—		—			598		103			—			9,635
Policy charges and fee income		1,288			(12	)		—		—		—		—		—			1,276			1,559			(19	)		—		—			—		—			—			1,540
Net investment income		3,087			(8	)		—		—		639		71		—			3,789			3,292			(8	)		—		—			702		87			—			4,073
Realized investment gains (losses), net		138			1,059			—		—		205		31		—			1,433			115			529			—		—			153		16			—			813
Asset management fees, commissions and other income		1,153			(249	)		108		—		9		1		(16	)		1,006			1,150			(298	)		37		—			28		3			(20	)		900

Total revenues		11,812			790			108		—		1,546		199		(16	)		14,439			15,050			204			37		—			1,481		209			(20	)		16,961


Benefits and Expenses :

Insurance and annuity benefits		6,813			153			—		—		1,433		188		—			8,587			9,254			33			—		—			1,307		130			—			10,724
Interest credited to policyholders’ account balances		914			(23	)		—		133		34		—		—			1,058			932			(140	)		—		(1	)		34		(1	)		—			824
Interest expense		357			—			—		—		—		—		—			357			314			—			—		—			1		1			—			316
Deferral of acquisition costs		(718	)		—			—		—		—		—		—			(718	)		(731	)		—			—		—			—		—			—			(731	)
Amortization of acquisition costs		281			138			—		—		8		—		—			427			444			(339	)		—		—			10		—			—			115
General and administrative expenses		3,108			162			—		—		103		22		(8	)		3,387			3,279			1			—		—			98		23			(3	)		3,398

Total benefits and expenses		10,755			430			—		133		1,578		210		(8	)		13,098			13,492			(445	)		—		(1	)		1,450		153			(3	)		14,646


	Three Months Ended December 31, 2016
				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net			Change in experience- rated contractholder liabilities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		7,296			—			—			—			707		94			—			8,097
Policy charges and fee income		1,529			(38	)		—			—			—		—			—			1,491
Net investment income		3,299			(8	)		—			—			625		72			—			3,988
Realized investment gains (losses), net		150			(2,090	)		—			—			174		(167	)		—			(1,933	)
Asset management fees, commissions and other income		1,146			644			(378	)		—			7		1			(13	)		1,407

Total revenues		13,420			(1,492	)		(378	)		—			1,513		—			(13	)		13,050


Benefits and Expenses :

Insurance and annuity benefits		7,658			(174	)		—			—			1,429		136			—			9,049
Interest credited to policyholders’ account balances		945			(103	)		—			(283	)		33		1			—			593
Interest expense		319			—			—			—			—		1			—			320
Deferral of acquisition costs		(711	)		—			—			—			—		—			—			(711	)
Amortization of acquisition costs		468			(343	)		—			—			8		—			—			133
General and administrative expenses		3,282			(48	)		—			—			101		22			(8	)		3,349

Total benefits and expenses		11,961			(668	)		—			(283	)		1,571		160			(8	)		12,733

(1)	See page 36 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

Adjusted operating income is a non-GAAP measure of performance that excludes “Realized investment gains (losses), net,” as adjusted, and related charges and adjustments. A significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains and losses. Impairments and losses from sales of credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market opportunities as well as our tax and capital profile.

Realized investment gains (losses) within certain of our businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating income generally excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset-liability management program related to the risk of those products. However, the effectiveness of our hedging program will ultimately be reflected in adjusted operating income over time. Adjusted operating income also excludes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are classified as other trading account assets.

Adjusted operating income also excludes investment gains and losses on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes, because these recorded changes in asset and liability values are expected to ultimately accrue to contractholders. In addition, adjusted operating income excludes the results of divested businesses, which are not relevant to our ongoing operations. Earnings attributable to noncontrolling interests is presented as a separate component of net income under GAAP and excluded from adjusted operating income.

Adjusted operating income does not equate to “Net income” as determined in accordance with U.S. GAAP but is the measure of profit or loss we use to evaluate segment performance. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of the items described above.

2. After-tax adjusted operating income:

Adjusted operating income before taxes, as defined above, less the income tax effect applicable to adjusted operating income before taxes. The tax effect associated with pre-tax adjusted operating income is based on applicable IRS and foreign tax regulations inclusive of pertinent adjustments.

3. Annualized New Business Premiums:

Premiums from new sales that are expected to be collected over a one year period. Group insurance annualized new business premiums exclude new premiums resulting from rate changes on existing policies, from additional coverage issued under our Servicemembers’ Group Life Insurance contract, and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts. Group insurance annualized new business premiums include premiums from the takeover of claim liabilities. Excess (unscheduled) and single premium business for the company’s domestic individual life and international insurance operations are included in annualized new business premiums based on a 10% credit. Amounts ascribed to Gibraltar Life Consultants include production by captive agents associated with consolidated joint venture of Gibraltar Life and Other Operations.

4. Assets Under Management:

Fair market value or account value of assets which Prudential manages directly in proprietary products, such as mutual funds and variable annuities, in separate accounts, wrap-fee products and the general account, and assets invested in investment options included in the Company’s products that are managed by third party sub-managers (i.e., the non-proprietary investment options in the Company’s products).

5. Prudential Financial, Inc. Equity:

Amount of capital assigned to each of the Company’s segments for purposes of measuring segment adjusted operating income before income taxes, established at a level which management considers necessary to support the segment’s risks. Equity represents all of Prudential Financial, Inc. equity that is not attributable to noncontrolling interests.

6. Book value per share of Common Stock:

Equity attributed to Prudential Financial, Inc. divided by the number of Common shares outstanding at end of period, on a diluted basis. Book value per share excluding both accumulated other comprehensive income (loss) and adjusted to remove amount included for foreign currency exchange rate remeasurement is a non-GAAP measure. These items are excluded in order to highlight the book value attributable to our core business operations separate from the portion attributable to external and potentially volatile capital and currency market conditions. This non-GAAP measure augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations separate from the portion that is affected by capital and currency market conditions and by isolating the accounting impact associated with insurance liabilities that are generally not marked to market and the supporting investments that are marked to market through accumulated other comprehensive income under GAAP. However, book value per share excluding both accumulated other comprehensive income (loss) and adjusted to remove amount included for foreign currency exchange rate remeasurement is not a substitute for book value per share including accumulated other comprehensive income determined in accordance with GAAP, and the adjustments made to derive the measure are important to an understanding of our overall financial position.

7. Borrowings - Capital Debt:

Borrowings that are or will be used for capital requirements at Prudential Financial, Inc as well as borrowings invested in equity or debt securities of direct or indirect subsidiaries of Prudential Financial, Inc., and subsidiary borrowings, utilized for capital requirements.

8. Borrowings - Operating Debt - Investment Related:

Debt issued to finance specific investment assets or portfolios of investment assets, including institutional spread lending investment portfolios as well as institutional and insurance company portfolio cash flow timing differences.

9. Borrowings - Operating Debt - Specified Businesses:

Borrowings primarily associated with the asset management business.

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

KEY DEFINITIONS AND FORMULAS

10. Client Assets:

Fair market value of assets in client accounts of International brokerage operations, Prudential Bank and mortgage loan servicing business, that are not included in Assets Under Management. Prudential does not receive a management or administrative fee on these assets, but may receive a fee for executing trades, custody or recordkeeping services.

11. Divested Businesses:

Businesses that have been sold or exited, including businesses that have been placed in wind down, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP.

12. Earned Premiums:

The portion of a premium, net of any amount ceded, that represents coverage already provided or that belongs to the insurer based on the part of the policy period that has passed.

13. Full Service Retirement:

The Full Service Retirement line of business provides retirement plan products and services to public, private and not-for-profit organizations. This business provides recordkeeping, plan administration, actuarial advisory services, participant education and communication services, trustee services and institutional and retail investment funds. This business mainly services defined contribution and defined benefit plans; non-qualified plans are also serviced. For clients with both defined contribution and defined benefit plans, integrated recordkeeping services are available.

14. Full Service Stable Value:

Our Full Service Stable Value products represent fixed rate options on investment funds offered to Retirement customers. These products contain an obligation to pay interest at a specified rate for a specific period of time. Upon termination these products repay account balances at market value immediately or may be liquidated at book value over time. Substantially all of these products are either fully or partially participating, with annual or semi-annual resets giving effect to previous investment experience. These products are issued through the general account, separate accounts or client-owned trusts. Profits from partially participating general account products result from the spread between the rate of return on investment assets and the interest rates credited to the customer, less expenses. For fully participating products, generally subject to a minimum interest rate guarantee, we earn fee income.

15. General Account:

Invested assets and policyholder liabilities and reserves for which the Company bears the investment risk. Excludes assets recognized for statutory purposes that are specifically allocated to a separate account. General account assets also include assets of the parent company, Prudential Financial, Inc.

16. Gibraltar Life:

Includes results from consolidated joint venture operation of Gibraltar Life and Other Operations.

17. Gibraltar Life Consultants:

Captive insurance agents for Gibraltar Life. Count and policy persistency do not include captive agents associated with consolidated joint venture of Gibraltar Life and Other Operations.

18. Group Life Insurance and Group Disability Insurance Administrative Operating Expense Ratios:

Ratio of administrative operating expenses (excluding commissions) to gross premiums, policy charges and fee income.

19. Group Insurance Benefits Ratios:

Ratio of policyholder benefits to earned premiums, policy charges and fee income.

20. Individual Annuity Account Values in General Account and Separate Account:

Amounts represent the breakdown of invested customer funds in annuities either written or reinsured by the Company.

21. Individual Annuities - Net Amounts at Risk:

Living Benefit Features - For guarantees of benefits that are payable at annuitization, 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 benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal 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.

Death Benefit Features - 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.

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

KEY DEFINITIONS AND FORMULAS

22. Insurance and Annuity Benefits:

Total death benefits, annuity benefits, disability benefits, other policy benefits, and losses paid or incurred, under insurance and annuity contracts, plus the change in reserves for future policy benefits, losses and loss adjustment expenses.

23. International Life Planners:

Captive insurance agents in our Life Planner Operations.

24. Non-recourse and Limited-recourse Debt:

Limited and non-recourse borrowing is where the holder is entitled to collect only against the assets pledged to the debt as collateral or has only very limited rights to collect against other assets.

25. Policy Persistency - Group Insurance:

Percentage of the premiums in force at the end of the prior year that are still in force at the end of the period (excluding Servicemembers’ Group Life Insurance and Prudential Employee Benefit Plan).

26. Policy Persistency - International Insurance:

13 month persistency represents the percentage of policies issued that are still in force at the beginning of their second policy year. 25 month persistency represents the percentage of policies issued that are still in force at the beginning of their third policy year.

27. Prudential Agents:

Captive insurance agents in our insurance operations in the United States.

28. Prudential Agent productivity:

Commissions on new sales of all products by Prudential Agents under contract for the entire period, divided by the number of those Prudential Agents. Excludes commissions on new sales by Prudential Agents hired or departed during the period. For interim reporting periods, the productivity measures are annualized.

29. Separate Accounts:

Assets of our insurance companies allocated under certain policies and contracts that are segregated from the general account and other separate accounts. The policyholder or contractholder predominantly bears the risk of investments held in a separate account.

30. Wrap-Fee Products:

Investment products generating asset-based fees in which the funds of the customer are generally invested in other investment products such as mutual funds.

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2017

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of May 3, 2017


	A.M. Best	Standard & Poor’s	Moody’s	Fitch Ratings
The Prudential Insurance Company of America	A+	AA-	A1	AA-
PRUCO Life Insurance Company	A+	AA-	A1	AA-
PRUCO Life Insurance Company of New Jersey	A+	AA-	NR*	AA-
Prudential Annuities Life Assurance Corporation	A+	AA-	NR	AA-
Prudential Retirement Insurance and Annuity Company	A+	AA-	A1	AA-
The Prudential Life Insurance Co., Ltd. (Prudential of Japan)	NR	A+	NR	NR
Gibraltar Life Insurance Company, Ltd.	NR	A+	NR	NR
The Prudential Gibraltar Financial Life Insurance Co. Ltd.	NR	A+	NR	NR
Prudential Life Insurance Co. of Taiwan, Inc.	NR	twAA+	NR	NR

CREDIT RATINGS:
as of May 3, 2017

Prudential Financial, Inc.:
Short-Term Borrowings	AMB-1	A-1	P-2	F1
Long-Term Senior Debt	a-	A	Baa1	A-
Junior Subordinated Long-Term Debt	bbb	BBB+	Baa2	BBB

The Prudential Insurance Company of America :
Capital and surplus notes	a	A	A3	A

Prudential Funding, LLC:
Short-Term Debt	AMB-1	A-1+	P-1	F1+
Long-Term Senior Debt	a+	AA-	A2	A+

PRICOA Global Funding I
Long-Term Senior Debt	aa-	AA-	A1	AA-

*	NR indicates not rated.

(1)	Prudential Life Insurance Co. of Taiwan was assigned a financial strength rating by Taiwan Ratings Corporation, a partner of Standard and Poor’s.

INVESTOR INFORMATION:


Corporate Offices:		Investor Information Hotline:

Prudential Financial, Inc.		Dial 877-998-ROCK for additional printed information or inquiries.
751 Broad Street
Newark, New Jersey 07102		Web Site:
		www.prudential.com

Common Stock:

Common Stock of Prudential Financial, Inc. is traded on the New York Stock Exchange under the symbol PRU.

Page 39

PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - May 3, 2017

Attached files