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

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EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d430543dex991.htm
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d430543d8k.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Second 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.

August 2, 2017

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

Combined Statements of Operations		5
Combining Statements of Operations (Quarter)		6
Combining Statements of Operations		7
Consolidated Balance Sheets		8
Combining Balance Sheets by Division		9
Short-Term and Long-Term Debt - Unaffiliated		10

U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION
Combined Statements of Operations		11
Combining Statements of Operations		12
Individual Annuities Sales Results and Account Values		13
Individual Annuities Account Value Activity		14
Individual Annuities Living Benefit Features		15
Individual Annuities Death Benefit Features		16
Retirement Segment Sales Results and Account Values		17
Supplementary Revenue and Assets Under Management Information for Asset Management Segment		18
Supplementary Assets Under Management Information for Asset Management Segment		19

U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION
Combined Statements of Operations		20
Combining Statements of Operations		21
Individual Life Annualized New Business Premiums, Account Value Activity, and Face Amount in Force		22
Supplementary Information for Group Insurance		23

DEFERRED POLICY ACQUISITION COSTS & DEFERRED SALES INDUCEMENTS - INDIVIDUAL ANNUITIES, INDIVIDUAL LIFE AND GROUP INSURANCE		24

INTERNATIONAL INSURANCE DIVISION
Combined Statements of Operations		25
Combining Statements of Operations		26
Sales Results and Supplementary Information		27-28

INVESTMENT PORTFOLIO
Investment Portfolio Composition		29
Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations		30
Investment Results		31
Investment Results - Japanese Insurance Operations		32
Investment Results - Excluding Japanese Insurance Operations		33

LINE ITEM IMPACT OF MARKET DRIVEN AND DISCRETE ITEMS - ADJUSTED OPERATING INCOME		34

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES		35-36

KEY DEFINITIONS AND FORMULAS		37-39

RATINGS AND INVESTOR INFORMATION		40

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

								Pre-tax adjusted operating income (loss) by division:
	2,199			1,582			39%	U.S. Retirement Solutions and Investment Management Division		870			1,018			964			1,061			1,138
	(269	)		(55	)		-389%	U.S. Individual Life and Group Insurance Division		(201	)		173			181			152			(421	)
	1,622			1,582			3%	International Insurance Division		803			780			755			799			823
	(664	)		(727	)		9%	Corporate and other operations		(415	)		(413	)		(441	)		(352	)		(312	)

	2,888			2,382			21%	Total pre-tax adjusted operating income		1,057			1,558			1,459			1,660			1,228
	732			556			32%	Income taxes, applicable to adjusted operating income		228			367			369			423			309

	2,156			1,826			18%	After-tax adjusted operating income		829			1,191			1,090			1,237			919


								Reconciling items:
	(641	)		698			-192%	Realized investment gains (losses), net, and related charges and adjustments		360			649			(824	)		38			(679	)
	245			324			-24%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		108			37			(378	)		44			201
	(157	)		(263	)		40%	Change in experience-rated contractholder liabilities due to asset value changes		(133	)		1			283			(12	)		(145	)
								Divested businesses:
	16			(105	)		115%	Closed Block division		(32	)		31			(58	)		34			(18	)
	41			20			105%	Other divested businesses		(11	)		56			(160	)		6			35
	(42	)		17			-347%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(8	)		(17	)		(5	)		(28	)		(14	)

	(538	)		691			-178%	Total reconciling items, before income taxes		284			757			(1,142	)		82			(620	)
	(212	)		243			-187%	Income taxes, not applicable to adjusted operating income		203			134			(334	)		(28	)		(184	)

	(326	)		448			-173%	Total reconciling items, after income taxes		81			623			(808	)		110			(436	)

	1,830			2,274			-20%	Income (after-tax) before equity in earnings of operating joint ventures		910			1,814			282			1,347			483
	30			(17	)		276%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		11			13			2			22			8

	1,860			2,257			-18%	Income attributable to Prudential Financial, Inc.		921			1,827			284			1,369			491
	8			37			-78%	Earnings attributable to noncontrolling interests		4			5			9			3			5

	1,868			2,294			-19%	Net income		925			1,832			293			1,372			496
	8			37			-78%	Less: Income attributable to noncontrolling interests		4			5			9			3			5

	1,860			2,257			-18%	Net income attributable to Prudential Financial, Inc.		921			1,827			284			1,369			491

	12.4%			10.8%				Operating Return on Average Equity (based on adjusted operating income) (1)		9.8%			13.8%			12.6%			14.2%			10.5%

(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 4.1%, 11.8%, 2.2%, 13.1%, and 7.1% for the three months ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

						Earnings per share of Common Stock (diluted):
	4.88			4.02		After-tax adjusted operating income		1.84			2.66			2.46			2.79			2.09

						Reconciling items:
	(1.46	)		1.55		Realized investment gains (losses), net, and related charges and adjustments		0.80			1.46			(1.87	)		0.09			(1.55	)
	0.56			0.72		Investment gains (losses) on trading account assets supporting insurance liabilities, net		0.24			0.08			(0.86	)		0.10			0.46
	(0.36	)		(0.58	)	Change in experience-rated contractholder liabilities due to asset value changes		(0.30	)		—			0.64			(0.03	)		(0.33	)
						Divested businesses:
	0.04			(0.23	)	Closed Block division		(0.07	)		0.07			(0.13	)		0.08			(0.04	)
	0.09			0.04		Other divested businesses		(0.02	)		0.13			(0.36	)		0.01			0.08
	0.01			(0.01	)	Difference in earnings allocated to participating unvested share-based payment awards		—			(0.01	)		0.02			—			0.01

	(1.12	)		1.49		Total reconciling items, before income taxes		0.65			1.73			(2.56	)		0.25			(1.37	)
	(0.45	)		0.54		Income taxes, not applicable to adjusted operating income		0.45			0.32			(0.75	)		(0.05	)		(0.40	)

	(0.67	)		0.95		Total reconciling items, after income taxes		0.20			1.41			(1.81	)		0.30			(0.97	)

	4.21			4.97		Net income attributable to Prudential Financial, Inc.		2.04			4.07			0.65			3.09			1.12


	429.1			443.2		Weighted average number of outstanding Common shares (basic)		441.1			435.9			430.7			429.9			428.3
	438.1			451.3		Weighted average number of outstanding Common shares (diluted)		449.3			444.3			439.8			439.1			437.2

	9			9		Earnings related to interest, net of tax, on exchangeable surplus notes		5			4			4			4			5

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	26			20		After-tax adjusted operating income		9			15			12			15			11
	23			25		Net income		11			21			3			16			7

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		676			907			1,133			1,415			1,779
				Long-term debt		13,172			12,942			12,224			12,074			11,806
				Junior Subordinated Long-Term Debt		5,814			5,816			5,817			5,819			5,820

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income		55,149			56,431			45,863			46,784			48,444
				Excluding accumulated other comprehensive income (2)		30,482			31,506			31,242			32,141			32,082
				Amount included above for foreign currency exchange rate remeasurement (3)		(3,509	)		(3,327	)		(3,199	)		(3,060	)		(2,889	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		33,991			34,833			34,441			35,201			34,971


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (4)		123.77			128.37			104.91			107.09			111.35
				Excluding accumulated other comprehensive income (2)		68.65			71.95			71.62			73.75			73.96
				Amount included above for foreign currency exchange rate remeasurement (3)		(7.90	)		(7.60	)		(7.33	)		(7.02	)		(6.66	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		76.55			79.55			78.95			80.77			80.62


				Number of diluted shares at end of period (5)		444.0			437.9			436.2			435.8			433.8

				*Common Stock Price Range (based on closing price):*
	113.82		79.84	High		79.71			81.65			107.10			113.82			109.13
	102.92		58.00	Low		66.93			68.74			81.43			103.92			102.92
	108.14		71.34	Close		71.34			81.65			104.06			106.68			108.14

				*Common Stock market capitalization (1)*		31,304			35,248			44,704			45,798			46,176

(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 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 and second quarters of 2017 include 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

Second Quarter 2017

OPERATIONS HIGHLIGHTS


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

				*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		418.8		445.9		431.5		445.2		461.2
				Retail customers		202.1		209.0		209.2		217.6		231.2
				General account		426.3		430.3		399.4		406.1		412.3

				Total Investment Management and Advisory Services		1,047.2		1,085.2		1,040.1		1,068.9		1,104.7
				Non-proprietary assets under management		169.8		176.4		172.6		178.3		173.4

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,217.0		1,261.6		1,212.7		1,247.2		1,278.1
				Managed by U.S. Individual Life and Group Insurance Division		25.7		24.8		24.9		25.1		26.8
				Managed by International Insurance Division		25.0		27.9		26.2		26.5		28.7

				Total assets under management		1,267.7		1,314.3		1,263.8		1,298.8		1,333.6
				Client assets under administration		171.7		177.0		177.3		185.2		188.3

				Total assets under management and administration		1,439.4		1,491.3		1,441.1		1,484.0		1,521.9


				Assets managed or administered for customers outside of the United States at end of period		324.6		335.4		311.1		326.6		341.1

				*Distribution Representatives (1):*
				Prudential Agents		2,987		3,031		2,937		2,922		2,921
				International Life Planners		7,551		7,667		7,680		7,819		7,735
				Gibraltar Life Consultants		8,734		8,790		8,884		8,752		8,509

	49		25	*Prudential Agent productivity ($ thousands)*		54		56		67		47		51

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

COMBINED STATEMENTS OF OPERATIONS

(in millions)


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


								Revenues (1):
	13,331			11,723			14%	Premiums		6,146			8,934			7,296			5,774			7,557
	2,349			2,799			-16%	Policy charges and fee income		1,288			1,559			1,529			1,555			794
	6,689			6,104			10%	Net investment income		3,087			3,292			3,299			3,354			3,335
	2,666			2,478			8%	Asset management fees, commissions and other income		1,291			1,265			1,296			1,324			1,342

	25,035			23,104			8%	Total revenues		11,812			15,050			13,420			12,007			13,028


								Benefits and Expenses (1):
	13,532			12,797			6%	Insurance and annuity benefits		6,813			9,254			7,658			6,146			7,386
	1,873			1,821			3%	Interest credited to policyholders’ account balances		914			932			945			920			953
	648			682			-5%	Interest expense		357			314			319			322			326
	(1,479	)		(1,403	)		-5%	Deferral of acquisition costs		(718	)		(731	)		(711	)		(724	)		(755	)
	1,143			760			50%	Amortization of acquisition costs		281			444			468			481			662
	6,430			6,065			6%	General and administrative expenses		3,108			3,279			3,282			3,202			3,228

	22,147			20,722			7%	Total benefits and expenses		10,755			13,492			11,961			10,347			11,800

	2,888			2,382			21%	Adjusted operating income before income taxes		1,057			1,558			1,459			1,660			1,228


								Reconciling items:
	(1,443	)		2,220			-165%	Realized investment gains (losses), net, and related adjustments		802			223			(1,454	)		(66	)		(1,377	)
	802			(1,522	)		153%	Related charges		(442	)		426			630			104			698

	(641	)		698			-192%	Total realized investment gains (losses), net, and related charges and adjustments		360			649			(824	)		38			(679	)

	245			324			-24%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		108			37			(378	)		44			201
	(157	)		(263	)		40%	Change in experience-rated contractholder liabilities due to asset value changes		(133	)		1			283			(12	)		(145	)
								Divested businesses:
	16			(105	)		115%	Closed Block division		(32	)		31			(58	)		34			(18	)
	41			20			105%	Other divested businesses		(11	)		56			(160	)		6			35
	(42	)		17			-347%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(8	)		(17	)		(5	)		(28	)		(14	)

	(538	)		691			-178%	Total reconciling items, before income taxes		284			757			(1,142	)		82			(620	)


	2,350			3,073			-24%	Income before income taxes and equity in earnings of operating joint ventures		1,341			2,315			317			1,742			608
	520			799			-35%	Income tax expense		431			501			35			395			125

	1,830			2,274			-20%	Income before equity in earnings of operating joint ventures		910			1,814			282			1,347			483

(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 35 and 36 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended June 30, 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		7,557			2,274			1,256			4,032			(5	)
Policy charges and fee income		794			771			(76	)		112			(13	)
Net investment income		3,335			1,325			636			1,260			114
Asset management fees, commissions and other income		1,342			1,330			200			79			(267	)

Total revenues		13,028			5,700			2,016			5,483			(171	)


Benefits and Expenses (1):
Insurance and annuity benefits		7,386			2,720			1,241			3,422			3
Interest credited to policyholders’ account balances		953			486			245			222			—
Interest expense		326			30			164			3			129
Deferral of acquisition costs		(755	)		(90	)		(166	)		(507	)		8
Amortization of acquisition costs		662			108			260			304			(10	)
General and administrative expenses		3,228			1,308			693			1,216			11

Total benefits and expenses		11,800			4,562			2,437			4,660			141

Adjusted operating income (loss) before income taxes		1,228			1,138			(421	)		823			(312	)


	Quarter Ended June 30, 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		6,146			1,018			1,234			3,899			(5	)
Policy charges and fee income		1,288			687			505			106			(10	)
Net investment income		3,087			1,194			593			1,204			96
Asset management fees, commissions and other income		1,291			1,217			187			134			(247	)

Total revenues		11,812			4,116			2,519			5,343			(166	)


Benefits and Expenses (1):
Insurance and annuity benefits		6,813			1,460			1,950			3,397			6
Interest credited to policyholders’ account balances		914			451			233			230			—
Interest expense		357			28			146			1			182
Deferral of acquisition costs		(718	)		(128	)		(172	)		(436	)		18
Amortization of acquisition costs		281			131			(111	)		273			(12	)
General and administrative expenses		3,108			1,304			674			1,075			55

Total benefits and expenses		10,755			3,246			2,720			4,540			249

Adjusted operating income (loss) before income taxes		1,057			870			(201	)		803			(415	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Six Months Ended June 30, 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		13,331			2,825			2,524			7,994			(12	)
Policy charges and fee income		2,349			1,488			641			246			(26	)
Net investment income		6,689			2,695			1,283			2,465			246
Asset management fees, commissions and other income		2,666			2,600			396			187			(517	)

Total revenues		25,035			9,608			4,844			10,892			(309	)


Benefits and Expenses (1):
Insurance and annuity benefits		13,532			3,725			2,948			6,855			4
Interest credited to policyholders’ account balances		1,873			937			488			448			—
Interest expense		648			55			321			6			266
Deferral of acquisition costs		(1,479	)		(178	)		(349	)		(972	)		20
Amortization of acquisition costs		1,143			244			332			589			(22	)
General and administrative expenses		6,430			2,626			1,373			2,344			87

Total benefits and expenses		22,147			7,409			5,113			9,270			355

Adjusted operating income (loss) before income taxes		2,888			2,199			(269	)		1,622			(664	)


	Six Months Ended June 30, 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		11,723			1,689			2,453			7,595			(14	)
Policy charges and fee income		2,799			1,362			1,224			236			(23	)
Net investment income		6,104			2,392			1,175			2,324			213
Asset management fees, commissions and other income		2,478			2,381			353			232			(488	)

Total revenues		23,104			7,824			5,205			10,387			(312	)


Benefits and Expenses (1):
Insurance and annuity benefits		12,797			2,631			3,584			6,570			12
Interest credited to policyholders’ account balances		1,821			904			460			457			—
Interest expense		682			53			288			3			338
Deferral of acquisition costs		(1,403	)		(238	)		(334	)		(862	)		31
Amortization of acquisition costs		760			286			(33	)		533			(26	)
General and administrative expenses		6,065			2,606			1,295			2,104			60

Total benefits and expenses		20,722			6,242			5,260			8,805			415

Adjusted operating income (loss) before income taxes		2,382			1,582			(55	)		1,582			(727	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

CONSOLIDATED BALANCE SHEETS

(in millions)


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

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $286,066; $297,745; $292,581; $300,437; $303,287)		332,270		343,244		321,419		328,717		335,254
Fixed maturities, held to maturity, at amortized cost (fair value $3,026; $2,956; $2,524; $2,552; $2,516)		2,485		2,471		2,144		2,166		2,123
Trading account assets supporting insurance liabilities, at fair value		21,702		21,828		21,840		21,820		22,073
Other trading account assets, at fair value		7,268		7,559		5,764		5,863		6,773
Equity securities, available for sale, at fair value (cost $7,088; $7,197; $7,149; $7,461; $7,456)		9,496		9,765		9,748		10,143		10,151
Commercial mortgage and other loans		51,447		52,273		52,779		53,660		54,915
Policy loans		11,930		12,031		11,755		11,893		11,719
Other long-term investments		10,247		11,346		11,283		11,450		11,777
Short-term investments		5,035		5,254		7,508		5,175		3,616

Total investments		451,880		465,771		444,240		450,887		458,401
Cash and cash equivalents		24,142		24,728		14,127		13,308		16,605
Accrued investment income		3,211		3,279		3,204		3,231		3,228
Deferred policy acquisition costs		16,152		16,975		17,661		18,197		18,715
Value of business acquired		1,951		2,159		2,314		2,266		1,897
Other assets		14,322		15,403		14,780		15,671		16,311
Separate account assets		284,832		291,550		287,636		293,805		297,433

Total assets		796,490		819,865		783,962		797,365		812,590


Liabilities:
Future policy benefits		242,950		252,228		240,908		244,705		250,706
Policyholders’ account balances		142,716		146,577		145,205		147,026		147,554
Securities sold under agreements to repurchase		7,335		6,830		7,606		8,535		8,817
Cash collateral for loaned securities		4,643		5,037		4,333		4,175		4,036
Income taxes		15,140		15,326		10,412		10,598		11,631
Senior short-term debt		676		907		1,133		1,415		1,779
Senior long-term debt		13,172		12,942		12,224		12,074		11,806
Junior subordinated long-term debt		5,814		5,816		5,817		5,819		5,820
Notes issued by consolidated variable interest entities		2,094		2,722		2,150		2,179		2,176
Other liabilities		21,940		22,956		20,450		20,060		22,192
Separate account liabilities		284,832		291,550		287,636		293,805		297,433

Total liabilities		741,312		762,891		737,874		750,391		763,950


Equity:
Accumulated other comprehensive income		24,667		24,925		14,621		14,643		16,362
Other equity		30,482		31,506		31,242		32,141		32,082

Total Prudential Financial, Inc. equity		55,149		56,431		45,863		46,784		48,444

Noncontrolling Interest		29		543		225		190		196

Total Equity		55,178		56,974		46,088		46,974		48,640

Total liabilities and equity		796,490		819,865		783,962		797,365		812,590

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of June 30, 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		458,401		61,320			397,081		135,065		58,108		186,124		17,784
Deferred policy acquisition costs		18,715		316			18,399		5,452		5,503		7,813		(369	)
Other assets		38,041		2,189			35,852		14,556		11,703		10,977		(1,384	)
Separate account assets		297,433		—			297,433		250,394		48,079		3,333		(4,373	)

Total assets		812,590		63,825			748,765		405,467		123,393		208,247		11,658


Liabilities:
Future policy benefits		250,706		49,027			201,679		68,116		17,614		110,853		5,096
Policyholders’ account balances		147,554		5,166			142,388		58,733		34,125		49,523		7
Debt		19,405		—			19,405		3,441		7,637		109		8,218
Other liabilities		48,852		11,000			37,852		7,065		9,140		19,096		2,551
Separate account liabilities		297,433		—			297,433		250,394		48,079		3,333		(4,373	)

Total liabilities		763,950		65,193			698,757		387,749		116,595		182,914		11,499


Equity:
Accumulated other comprehensive income (loss)		16,362		1			16,361		2,389		1,126		14,185		(1,339	)
Other equity		32,082		(1,370	)		33,452		15,026		5,672		11,100		1,654

Total Prudential Financial, Inc. equity		48,444		(1,369	)		49,813		17,415		6,798		25,285		315

Noncontrolling Interest		196		1			195		303		—		48		(156	)

Total Equity		48,640		(1,368	)		50,008		17,718		6,798		25,333		159


Total liabilities and equity		812,590		63,825			748,765		405,467		123,393		208,247		11,658



	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 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of June 30, 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		—		5,821		5,820		11,641		—		5,822		5,817		11,639
Operating Debt - Investment related		1,033		4,221		—		5,254		477		4,901		—		5,378
Operating Debt - Specified businesses		746		1,045		—		1,791		584		914		—		1,498
Limited recourse and non-recourse borrowing		—		719		—		719		72		587		—		659

Total debt		1,779		11,806		5,820		19,405		1,133		12,224		5,817		19,174


	As of June 30, 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		4,068		187		999		5,254		4,314		65		999		5,378
Operating Debt - Specified businesses		1,088		703		—		1,791		965		533		—		1,498
Limited recourse and non-recourse borrowing		—		719		—		719		—		659		—		659

Total debt		15,801		2,549		1,055		19,405		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 June 30, 2017 and $839M as of December 31, 2016, respectively.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


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

									Revenues (1):
	2,825			1,689			67	%	Premiums		1,018			3,791			2,258			551			2,274
	1,488			1,362			9	%	Policy charges and fee income		687			723			712			717			771
	2,695			2,392			13	%	Net investment income		1,194			1,325			1,324			1,370			1,325
	2,600			2,381			9	%	Asset management fees, commissions and other income		1,217			1,266			1,280			1,270			1,330

	9,608			7,824			23	%	Total revenues		4,116			7,105			5,574			3,908			5,700


									Benefits and Expenses (1):
	3,725			2,631			42	%	Insurance and annuity benefits		1,460			4,243			2,760			1,005			2,720
	937			904			4	%	Interest credited to policyholders’ account balances		451			458			473			451			486
	55			53			4	%	Interest expense		28			29			23			25			30
	(178	)		(238	)		25	%	Deferral of acquisition costs		(128	)		(116	)		(95	)		(88	)		(90	)
	244			286			-15	%	Amortization of acquisition costs		131			100			146			136			108
	2,626			2,606			1	%	General and administrative expenses		1,304			1,373			1,303			1,318			1,308

	7,409			6,242			19	%	Total benefits and expenses		3,246			6,087			4,610			2,847			4,562

	2,199			1,582			39	%	Adjusted operating income before income taxes		870			1,018			964			1,061			1,138

(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 11

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


	Six Months Ended June 30, 2017												Quarter Ended June 30, 2017
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management			Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		2,825			80			2,745			—			2,274			41			2,233			—
Policy charges and fee income		1,488			1,371			117			—			771			712			59			—
Net investment income		2,695			374			2,252			69			1,325			184			1,104			37
Asset management fees, commissions and other income		2,600			696			430			1,474			1,330			369			211			750

Total revenues		9,608			2,521			5,544			1,543			5,700			1,306			3,607			787


Benefits and Expenses (1):
Insurance and annuity benefits		3,725			159			3,566			—			2,720			71			2,649			—
Interest credited to policyholders’ account balances		937			164			773			—			486			77			409			—
Interest expense		55			31			12			12			30			17			6			7
Deferral of acquisition costs		(178	)		(159	)		(16	)		(3	)		(90	)		(80	)		(9	)		(1	)
Amortization of acquisition costs		244			230			8			6			108			102			4			2
General and administrative expenses		2,626			1,016			496			1,114			1,308			507			240			561

Total benefits and expenses		7,409			1,441			4,839			1,129			4,562			694			3,299			569

Adjusted operating income before income taxes		2,199			1,080			705			414			1,138			612			308			218


	Six Months Ended June 30, 2016												Quarter Ended June 30, 2016
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management			Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		1,689			76			1,613			—			1,018			44			974			—
Policy charges and fee income		1,362			1,251			111			—			687			631			56			—
Net investment income		2,392			322			2,029			41			1,194			161			1,010			23
Asset management fees, commissions and other income		2,381			603			381			1,397			1,217			307			201			709

Total revenues		7,824			2,252			4,134			1,438			4,116			1,143			2,241			732


Benefits and Expenses (1):
Insurance and annuity benefits		2,631			168			2,463			—			1,460			57			1,403			—
Interest credited to policyholders’ account balances		904			198			706			—			451			98			353			—
Interest expense		53			37			9			7			28			19			5			4
Deferral of acquisition costs		(238	)		(217	)		(15	)		(6	)		(128	)		(117	)		(8	)		(3	)
Amortization of acquisition costs		286			266			12			8			131			122			5			4
General and administrative expenses		2,606			1,045			504			1,057			1,304			537			247			520

Total benefits and expenses		6,242			1,497			3,679			1,066			3,246			716			2,005			525

Adjusted operating income before income taxes		1,582			755			455			372			870			427			236			207

(1)

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q			3Q			4Q			1Q			2Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	153,295			149,441		Beginning total account value		149,246			151,188			154,903			153,295			156,830
	1,470			1,349		Sales: Highest Daily Suite - risk retained by Prudential (1)		666			587			558			782			688
	20			728		Highest Daily Suite - externally reinsured living benefits		354			321			318			14			6
	1,431			2,191		Other variable annuities (2)		1,247			1,180			762			632			799

	2,921			4,268		Total sales		2,267			2,088			1,638			1,428			1,493
	(4,708	)		(3,662	)	Surrenders and withdrawals		(1,914	)		(1,992	)		(2,122	)		(2,326	)		(2,382	)

	(1,787	)		606		Net sales (redemptions)		353			96			(484	)		(898	)		(889	)
	(804	)		(754	)	Benefit payments		(399	)		(349	)		(347	)		(413	)		(391	)

	(2,591	)		(148	)	Net flows		(46	)		(253	)		(831	)		(1,311	)		(1,280	)
	10,329			3,637		Change in market value, interest credited, and other		2,873			4,877			124			5,751			4,578
	(1,831	)		(1,742	)	Policy charges		(885	)		(909	)		(901	)		(905	)		(926	)

	159,202			151,188		Ending total account value		151,188			154,903			153,295			156,830			159,202


						Variable Annuities Account Value by Product:
	116,905			111,820		Highest Daily Suite - risk retained by Prudential (1)		111,820			113,902			112,543			115,314			116,905
	3,084			2,259		Highest Daily Suite - externally reinsured living benefits		2,259			2,629			2,932			3,025			3,084
	39,213			37,109		Other variable annuities (2)		37,109			38,372			37,820			38,491			39,213

	159,202			151,188		Ending total account value		151,188			154,903			153,295			156,830			159,202


						Fixed Annuities and other products (3):
	3,488			3,504		Beginning total account value		3,487			3,489			3,485			3,488			3,489
	26			30		Sales		14			12			18			12			14
	(52	)		(57	)	Surrenders and withdrawals		(26	)		(21	)		(27	)		(27	)		(25	)

	(26	)		(27	)	Net redemptions		(12	)		(9	)		(9	)		(15	)		(11	)
	(166	)		(178	)	Benefit payments		(90	)		(91	)		(75	)		(84	)		(82	)

	(192	)		(205	)	Net flows		(102	)		(100	)		(84	)		(99	)		(93	)
	196			191		Interest credited and other		105			96			87			100			96
	—			(1	)	Policy charges		(1	)		—			—			—			—

	3,492			3,489		Ending total account value		3,489			3,485			3,488			3,489			3,492

						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	997			1,205		Insurance Agents		625			598			550			507			490
	474			837		Wirehouses		452			376			279			236			238
	1,204			1,680		Independent Financial Planners		897			841			659			573			631
	272			576		Bank Distribution		307			285			168			124			148

	2,947			4,298		Total		2,281			2,100			1,656			1,440			1,507

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

(2)	Includes Prudential Defined Income (PDI), Legacy Protection Plus (LPP) death benefit and products without guaranteed minimum income and withdrawal benefits.

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


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

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,942		Beginning balance		10,017			9,977			9,863			9,892			9,810
	353			459		Premiums and deposits		221			215			194			185			168
	(298	)		(281	)	Surrenders and withdrawals		(140	)		(134	)		(148	)		(153	)		(145	)

	55			178		Net sales		81			81			46			32			23
	(201	)		(215	)	Benefit payments		(110	)		(107	)		(89	)		(100	)		(101	)

	(146	)		(37	)	Net flows		(29	)		(26	)		(43	)		(68	)		(78	)
	114			126		Interest credited and other		62			58			57			58			56
	(56	)		(53	)	Net transfers (to) from separate account		(72	)		(146	)		15			(72	)		16
	—			(1	)	Policy charges		(1	)		—			—			—			—

	9,804			9,977		Ending balance		9,977			9,863			9,892			9,810			9,804


						Account Values in Separate Account (1):
	146,891			143,003		Beginning balance		142,716			144,700			148,525			146,891			150,509
	2,594			3,839		Premiums and deposits		2,060			1,885			1,462			1,255			1,339
	(4,462	)		(3,438	)	Surrenders and withdrawals		(1,800	)		(1,879	)		(2,001	)		(2,200	)		(2,262	)

	(1,868	)		401		Net sales (redemptions)		260			6			(539	)		(945	)		(923	)
	(769	)		(717	)	Benefit payments		(379	)		(333	)		(333	)		(397	)		(372	)

	(2,637	)		(316	)	Net flows		(119	)		(327	)		(872	)		(1,342	)		(1,295	)
	10,411			3,702		Change in market value, interest credited and other		2,916			4,915			154			5,793			4,618
	56			53		Net transfers (to) from general account		72			146			(15	)		72			(16	)
	(1,831	)		(1,742	)	Policy charges		(885	)		(909	)		(901	)		(905	)		(926	)

	152,890			144,700		Ending balance		144,700			148,525			146,891			150,509			152,890

(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 14

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


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

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		4,524		4,403		4,104		3,879		3,661
Guaranteed minimum withdrawal benefits		537		532		514		509		494
Guaranteed minimum income benefits		2,749		2,780		2,730		2,761		2,755
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		118,666		121,747		120,468		123,609		125,869
Guaranteed minimum withdrawal & income benefits - externally reinsured		2,259		2,629		2,932		3,025		3,084

Total		128,735		132,091		130,748		133,783		135,863


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		107,253		109,175		107,752		110,286		111,750
Account Values with Auto-Rebalancing Feature - externally reinsured		2,259		2,629		2,932		3,025		3,084
Account Values without Auto-Rebalancing Feature		19,223		20,287		20,064		20,472		21,029

Total		128,735		132,091		130,748		133,783		135,863


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		4,366		3,928		4,494		3,872		3,594
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		1,179		1,049		1,082		939		846

Total		5,545		4,977		5,576		4,811		4,440

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


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

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		116,599		119,755		118,620		121,507		123,591
Net amount at risk		544		399		487		385		323
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,127		31,534		30,980		31,460		31,612
Net amount at risk		4,147		3,533		3,714		3,215		3,012

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		109,512		111,804		110,684		113,311		114,834
Account Values without Auto-Rebalancing Feature		38,214		39,485		38,916		39,656		40,369

Total		147,726		151,289		149,600		152,967		155,203


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,852		1,392		1,597		1,265		1,168
Net Amount at Risk without Auto-Rebalancing Feature		2,839		2,540		2,604		2,335		2,167

Total		4,691		3,932		4,201		3,600		3,335

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q			3Q			4Q			1Q			2Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	202,802			188,961		Beginning total account value		190,953			194,007			200,476			202,802			210,400
	11,507			11,355		Deposits and sales		4,699			5,405			5,168			6,736			4,771
	(12,476	)		(9,799	)	Withdrawals and benefits		(4,513	)		(5,013	)		(5,315	)		(6,690	)		(5,786	)
	12,898			3,490		Change in market value, interest credited, interest income and other activity		2,868			6,077			2,473			7,552			5,346

	214,731			194,007		Ending total account value		194,007			200,476			202,802			210,400			214,731


	(969	)		1,556		Net additions (withdrawals)		186			392			(147	)		46			(1,015	)


						Stable value account values included above		47,581			48,352			48,725			48,737			48,829

						Institutional Investment Products:
	183,376			179,964		Beginning total account value		180,819			180,882			186,224			183,376			185,115
	6,599			5,482		Additions		3,421			6,907			3,751			4,042			2,557
	(8,412	)		(5,902	)	Withdrawals and benefits		(3,119	)		(2,339	)		(3,920	)		(4,241	)		(4,171	)
	2,902			4,251		Change in market value, interest credited and interest income		2,053			1,953			(905	)		1,229			1,673
	2,145			(2,913	)	Other (1)		(2,292	)		(1,179	)		(1,774	)		709			1,436

	186,610			180,882		Ending total account value		180,882			186,224			183,376			185,115			186,610


	(1,813	)		(420	)	Net additions (withdrawals)		302			4,568			(169	)		(199	)		(1,614	)


						Amounts included in ending total account value above:
	69,808			69,567		Investment-only stable value wraps		69,567			71,482			70,196			70,576			69,808
	33,138			31,438		Longevity reinsurance (2)		31,438			31,280			29,959			32,004			33,138
	83,664			79,877		Group annuities and other products		79,877			83,462			83,221			82,535			83,664

	186,610			180,882		Ending total account value		180,882			186,224			183,376			185,115			186,610

(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 17

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q		3Q		4Q		1Q		2Q

							Analysis of revenues by type:
	1,167		1,071		9	%	Asset management fees		547		577		579		575		592
	127		138		-8	%	Other related revenues		67		52		65		58		69
	249		229		9	%	Service, distribution and other revenues		118		121		129		123		126

	1,543		1,438		7	%	Total Asset Management segment revenues		732		750		773		756		787


							Analysis of asset management fees by source:
	554		498		11	%	Institutional customers		256		273		275		275		279
	379		342		11	%	Retail customers		173		182		183		185		194
	234		231		1	%	General account		118		122		121		115		119

	1,167		1,071		9	%	Total asset management fees		547		577		579		575		592


Supplementary Assets Under Management Information (in billions):
	June 30, 2017
	Equity		Fixed Income		Real Estate		Total
Institutional customers		62.1		357.1		42.0		461.2
Retail customers		124.2		105.5		1.5		231.2
General account		6.5		404.0		1.8		412.3

Total		192.8		866.6		45.3		1,104.7


	June 30, 2016
	Equity		Fixed Income		Real Estate		Total
Institutional customers		58.1		319.6		41.1		418.8
Retail customers		113.8		86.2		2.1		202.1
General account		6.3		418.2		1.8		426.3

Total		178.2		824.0		45.0		1,047.2

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q			3Q			4Q			1Q			2Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	386.4			347.1		Beginning assets under management		359.3			373.4			398.9			386.4			399.1
	33.1			27.3		Additions		14.8			16.4			15.7			15.9			17.2
	(26.1	)		(27.9	)	Withdrawals		(12.8	)		(13.0	)		(13.2	)		(15.4	)		(10.7	)
	20.4			24.0		Change in market value		11.3			8.4			(10.6	)		9.6			10.8
	0.3			(0.6	)	Net money market flows		0.4			13.5			(1.1	)		2.0			(1.7	)
	0.5			3.5		Other (1)		0.4			0.2			(3.3	)		0.6			(0.1	)

	414.6			373.4		Ending assets under management		373.4			398.9			386.4			399.1			414.6
	46.6			45.4		Affiliated institutional assets under management		45.4			47.0			45.1			46.1			46.6

	461.2			418.8		Total assets managed for institutional customers at end of period		418.8			445.9			431.5			445.2			461.2


	7.0			(0.6	)	Net institutional additions (withdrawals), excluding money market activity		2.0			3.4			2.5			0.5			6.5


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	136.6			128.9		Beginning assets under management		127.8			131.3			137.7			136.6			144.2
	23.8			21.7		Additions		11.5			10.5			9.9			13.0			10.8
	(22.5	)		(20.6	)	Withdrawals		(9.9	)		(9.6	)		(11.5	)		(12.9	)		(9.6	)
	12.0			0.7		Change in market value		1.9			5.5			(1.7	)		7.4			4.6
	—			(0.1	)	Net money market flows		—			—			—			—			—
	0.1			0.7		Other (1)		—			—			2.2			0.1			—

	150.0			131.3		Ending assets under management		131.3			137.7			136.6			144.2			150.0
	81.2			70.8		Affiliated retail assets under management		70.8			71.3			72.6			73.4			81.2

	231.2			202.1		Total assets managed for retail customers at end of period		202.1			209.0			209.2			217.6			231.2


	1.3			1.1		Net retail additions (withdrawals), excluding money market activity		1.6			0.9			(1.6	)		0.1			1.2

(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 and FX related to International assets under management.

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


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

								Revenues (1):
	2,524			2,453			3%	Premiums		1,234			1,210			1,231			1,268			1,256
	641			1,224			-48%	Policy charges and fee income		505			713			699			717			(76	)
	1,283			1,175			9%	Net investment income		593			625			630			647			636
	396			353			12%	Asset management fees, commissions and other income		187			195			190			196			200

	4,844			5,205			-7%	Total revenues		2,519			2,743			2,750			2,828			2,016


								Benefits and Expenses (1):
	2,948			3,584			-18%	Insurance and annuity benefits		1,950			1,622			1,611			1,707			1,241
	488			460			6%	Interest credited to policyholders’ account balances		233			237			246			243			245
	321			288			11%	Interest expense		146			147			153			157			164
	(349	)		(334	)		-4%	Deferral of acquisition costs		(172	)		(169	)		(203	)		(183	)		(166	)
	332			(33	)		1106%	Amortization of acquisition costs		(111	)		83			71			72			260
	1,373			1,295			6%	General and administrative expenses		674			650			691			680			693

	5,113			5,260			-3%	Total benefits and expenses		2,720			2,570			2,569			2,676			2,437


	(269	)		(55	)		-389%	Adjusted operating income (loss) before income taxes		(201	)		173			181			152			(421	)

(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

Second Quarter 2017

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

(in millions)


	Six Months Ended June 30, 2017								Quarter Ended June 30, 2017
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance		Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		2,524			446			2,078		1,256			230			1,026
Policy charges and fee income		641			333			308		(76	)		(240	)		164
Net investment income		1,283			965			318		636			483			153
Asset management fees, commissions and other income		396			355			41		200			181			19

Total revenues		4,844			2,099			2,745		2,016			654			1,362


Benefits and Expenses (1):
Insurance and annuity benefits		2,948			931			2,017		1,241			289			952
Interest credited to policyholders’ account balances		488			354			134		245			178			67
Interest expense		321			318			3		164			162			2
Deferral of acquisition costs		(349	)		(349	)		—		(166	)		(166	)		—
Amortization of acquisition costs		332			329			3		260			258			2
General and administrative expenses		1,373			955			418		693			490			203

Total benefits and expenses		5,113			2,538			2,575		2,437			1,211			1,226


Adjusted operating income (loss) before income taxes		(269	)		(439	)		170		(421	)		(557	)		136


	Six Months Ended June 30, 2016								Quarter Ended June 30, 2016
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance		Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		2,453			426			2,027		1,234			216			1,018
Policy charges and fee income		1,224			899			325		505			329			176
Net investment income		1,175			881			294		593			445			148
Asset management fees, commissions and other income		353			315			38		187			165			22

Total revenues		5,205			2,521			2,684		2,519			1,155			1,364


Benefits and Expenses (1):
Insurance and annuity benefits		3,584			1,563			2,021		1,950			949			1,001
Interest credited to policyholders’ account balances		460			333			127		233			169			64
Interest expense		288			286			2		146			145			1
Deferral of acquisition costs		(334	)		(334	)		—		(172	)		(172	)		—
Amortization of acquisition costs		(33	)		(36	)		3		(111	)		(113	)		2
General and administrative expenses		1,295			879			416		674			467			207

Total benefits and expenses		5,260			2,691			2,569		2,720			1,445			1,275


Adjusted operating income (loss) before income taxes		(55	)		(170	)		115		(201	)		(290	)		89

(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 21

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q			3Q			4Q			1Q			2Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1):

	103			98		Term life		50			52			50			49			54
	93			112		Guaranteed Universal life		61			54			77			53			40
	54			43		Other Universal life		23			21			31			21			33
	49			51		Variable life		25			16			25			23			26

	299			304		Total		159			143			183			146			153


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	56			59		Prudential Agents		30			28			29			27			29
	243			245		Third party distribution		129			115			154			119			124

	299			304		Total		159			143			183			146			153


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,041			24,487		Beginning balance		24,437			24,747			25,000			26,041			26,358
	1,636			1,630		Premiums and deposits		821			751			949			804			832
	(522	)		(508	)	Surrenders and withdrawals		(257	)		(240	)		(240	)		(233	)		(289	)

	1,114			1,122		Net sales		564			511			709			571			543
	(305	)		(246	)	Benefit payments		(121	)		(138	)		(106	)		(182	)		(123	)

	809			876		Net flows		443			373			603			389			420
	143			(87	)	Interest credited and other		137			155			718			228			(85	)
	212			192		Net transfers from separate account		93			102			102			106			106
	(806	)		(721	)	Policy charges		(363	)		(377	)		(382	)		(406	)		(400	)
	—			—		Acquisition		—			—			—			—			—

	26,399			24,747		Ending balance		24,747			25,000			26,041			26,358			26,399


						*Separate Account Liabilities:*
	28,455			27,027		Beginning balance		26,887			27,227			28,129			28,455			29,669
	785			793		Premiums and deposits		337			287			359			442			343
	(447	)		(439	)	Surrenders and withdrawals		(222	)		(212	)		(201	)		(220	)		(227	)

	338			354		Net sales		115			75			158			222			116
	(90	)		(91	)	Benefit payments		(40	)		(39	)		(33	)		(46	)		(44	)

	248			263		Net flows		75			36			125			176			72
	2,224			580		Change in market value, interest credited and other		585			1,196			532			1,373			851
	(212	)		(192	)	Net transfers to general account		(93	)		(102	)		(102	)		(106	)		(106	)
	(456	)		(451	)	Policy charges		(227	)		(228	)		(229	)		(229	)		(227	)
	—			—		Acquisition		—			—			—			—			—

	30,259			27,227		Ending balance		27,227			28,129			28,455			29,669			30,259


						FACE AMOUNT IN FORCE (3):

						Term life		706,636			714,733			721,602			727,736			736,348
						Guaranteed Universal life		127,453			130,400			134,973			137,801			139,663
						Other Universal life		44,505			44,781			45,350			45,704			46,328
						Variable life		162,416			163,184			162,574			162,611			162,452

						Total		1,041,010			1,053,098			1,064,500			1,073,851			1,084,791

(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 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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			2Q		3Q		4Q		1Q		2Q

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	242		256	Group life		24		29		31		186		56
	129		100	Group disability		21		13		6		115		14

	371		356	Total		45		42		37		301		70


				Future Policy Benefits (1) (2):
				Group life		2,124		2,065		2,238		2,166		2,139
				Group disability		21		11		3		28		20

				Total		2,145		2,076		2,241		2,194		2,159


				Policyholders’ Account Balances (1):
				Group life		8,367		8,497		8,634		8,614		8,516
				Group disability		240		208		224		237		212

				Total		8,607		8,705		8,858		8,851		8,728


				Separate Account Liabilities (1):
				Group life		23,816		24,839		23,594		23,812		24,073
				Group disability		—		—		—		—		—

				Total		23,816		24,839		23,594		23,812		24,073


				Group Life Insurance:
	2,092		2,073	Gross premiums, policy charges and fee income (3)		1,064		1,016		1,006		1,038		1,054
	1,966		1,953	Earned premiums, policy charges and fee income		998		953		939		985		981
	89.3%		89.0%	Benefits ratio (4)		88.6%		88.6%		87.3%		92.2%		86.3%
	10.6%		10.7%	Administrative operating expense ratio		10.6%		10.6%		10.7%		10.8%		10.5%
				Persistency ratio		95.8%		95.3%		95.2%		94.9%		94.6%

				Group Disability Insurance:
	470		438	Gross premiums, policy charges and fee income (3)		222		219		223		233		237
	420		399	Earned premiums, policy charges and fee income		196		199		207		211		209
	75.5%		79.7%	Benefits ratio (5)		77.5%		80.4%		91.3%		74.3%		76.7%
	29.2%		31.6%	Administrative operating expense ratio		31.1%		31.4%		31.0%		29.4%		29.0%
				Persistency ratio		93.7%		92.9%		91.7%		93.7%		93.4%

				Total Group Insurance (6):
	86.8%		87.4%	Benefits ratio		86.6%		87.1%		88.0%		89.1%		84.5%

(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 86.9%, 92.2%, 87.3%, 88.6%, and 90.8% for the three months ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively, and 89.6% and 90.1% for year-to-date June 2017 and 2016, respectively.

(5)

Group Disability Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 47.5%, 74.3%, 91.3% 80.4%, and 47.9% for the three months ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively, and 61.0% and 65.2% for year-to-date June 2017 and 2016, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 80.0%, 89.1%, 88.0%, 87.1%, and 83.8% for the three months ended June 30, 2017, March 31, 2017, December 31, 2016, September 30, 2016, and June 30, 2016, respectively, and 84.5% and 85.9% for year-to-date June 2017 and 2016, respectively.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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				2Q			3Q			4Q			1Q			2Q

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,871			4,916		Beginning balance		4,130			4,119			4,515			4,871			4,865
	159			217		Capitalization		117			104			87			79			80
	(230	)		(266	)	Amortization - operating results		(122	)		(84	)		(134	)		(128	)		(102	)
	555			(700	)	Amortization - realized investment gains and losses		17			374			347			50			505
	(43	)		(48	)	Impact of unrealized (gains) or losses on AFS securities		(23	)		2			56			(7	)		(36	)
	—			—		Other		—			—			—			—			—

	5,312			4,119		Ending balance		4,119			4,515			4,871			4,865			5,312


						INDIVIDUAL LIFE INSURANCE:
	5,278			4,883		Beginning balance		4,727			4,773			4,840			5,278			5,393
	349			334		Capitalization		172			169			203			183			166
	(329	)		36		Amortization - operating results		113			(82	)		(69	)		(71	)		(258	)
	107			(106	)	Amortization - realized investment gains and losses		(80	)		2			4			2			105
	(75	)		(374	)	Impact of unrealized (gains) or losses on AFS securities		(159	)		(22	)		300			1			(76	)

	5,330			4,773		Ending balance		4,773			4,840			5,278			5,393			5,330


						GROUP INSURANCE:
	176			182		Beginning balance		181			179			178			176			175
	—			—		Capitalization		—			—			—			—			—
	(3	)		(3	)	Amortization - operating results		(2	)		(1	)		(2	)		(1	)		(2	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	173			179		Ending balance		179			178			176			175			173


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,082			1,188		Beginning balance		916			893			1,012			1,082			1,064
	1			2		Capitalization		1			1			—			—			1
	(71	)		(101	)	Amortization - operating results		(50	)		(23	)		(44	)		(41	)		(30	)
	209			(187	)	Amortization - realized investment gains and losses		29			140			103			25			184
	(10	)		(9	)	Impact of unrealized (gains) or losses on AFS securities		(3	)		1			11			(2	)		(8	)
	—			—		Other		—			—			—			—			—

	1,211			893		Ending balance		893			1,012			1,082			1,064			1,211

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

									Revenues (1):
	7,994			7,595			5	%	Premiums		3,899			3,939			3,814			3,962			4,032
	246			236			4	%	Policy charges and fee income		106			134			129			134			112
	2,465			2,324			6	%	Net investment income		1,204			1,229			1,206			1,205			1,260
	187			232			-19	%	Asset management fees, commissions and other income		134			82			89			108			79

	10,892			10,387			5	%	Total revenues		5,343			5,384			5,238			5,409			5,483


									Benefits and Expenses (1):
	6,855			6,570			4	%	Insurance and annuity benefits		3,397			3,382			3,280			3,433			3,422
	448			457			-2	%	Interest credited to policyholders’ account balances		230			237			226			226			222
	6			3			100	%	Interest expense		1			2			3			3			3
	(972	)		(862	)		-13	%	Deferral of acquisition costs		(436	)		(462	)		(426	)		(465	)		(507	)
	589			533			11	%	Amortization of acquisition costs		273			271			264			285			304
	2,344			2,104			11	%	General and administrative expenses		1,075			1,174			1,136			1,128			1,216

	9,270			8,805			5	%	Total benefits and expenses		4,540			4,604			4,483			4,610			4,660


	1,622			1,582			3	%	Adjusted operating income before income taxes		803			780			755			799			823

(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

Second Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Six Months Ended June 30, 2017									Quarter Ended June 30, 2017
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		7,994			4,049			3,945			4,032			1,933			2,099
Policy charges and fee income		246			173			73			112			77			35
Net investment income		2,465			1,025			1,440			1,260			516			744
Asset management fees, commissions and other income		187			108			79			79			51			28

Total revenues		10,892			5,355			5,537			5,483			2,577			2,906


Benefits and Expenses (1):
Insurance and annuity benefits		6,855			3,577			3,278			3,422			1,711			1,711
Interest credited to policyholders’ account balances		448			118			330			222			56			166
Interest expense		6			4			2			3			2			1
Deferral of acquisition costs		(972	)		(528	)		(444	)		(507	)		(263	)		(244	)
Amortization of acquisition costs		589			299			290			304			151			153
General and administrative expenses		2,344			1,148			1,196			1,216			591			625

Total benefits and expenses		9,270			4,618			4,652			4,660			2,248			2,412


Adjusted operating income before income taxes		1,622			737			885			823			329			494


	Six Months Ended June 30, 2016									Quarter Ended June 30, 2016
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		7,595			3,758			3,837			3,899			1,818			2,081
Policy charges and fee income		236			159			77			106			67			39
Net investment income		2,324			947			1,377			1,204			483			721
Asset management fees, commissions and other income		232			112			120			134			49			85

Total revenues		10,387			4,976			5,411			5,343			2,417			2,926


Benefits and Expenses (1):
Insurance and annuity benefits		6,570			3,341			3,229			3,397			1,632			1,765
Interest credited to policyholders’ account balances		457			115			342			230			56			174
Interest expense		3			2			1			1			1			—
Deferral of acquisition costs		(862	)		(410	)		(452	)		(436	)		(197	)		(239	)
Amortization of acquisition costs		533			258			275			273			127			146
General and administrative expenses		2,104			917			1,187			1,075			455			620

Total benefits and expenses		8,805			4,223			4,582			4,540			2,074			2,466


Adjusted operating income before income taxes		1,582			753			829			803			343			460

(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 26

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


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

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	3,158		3,017	Japan, excluding Gibraltar Life		1,434		1,472		1,386		1,691		1,467
	4,018		3,914	Gibraltar Life		2,120		2,094		2,022		1,884		2,134
	1,064		900	All other countries		451		507		535		521		543

	8,240		7,831	Total		4,005		4,073		3,943		4,096		4,144


				Annualized new business premiums:
	587		427	Japan, excluding Gibraltar Life (2)		190		208		205		336		251
	841		858	Gibraltar Life		449		460		408		358		483
	234		197	All other countries (2)		99		115		124		128		106

	1,662		1,482	Total (2)		738		783		737		822		840


				Annualized new business premiums by distribution channel:
	821		624	Life Planner Operations (2)		289		323		329		464		357
	397		365	Gibraltar Life Consultants		204		200		175		167		230
	293		370	Banks		176		188		158		132		161
	151		123	Independent Agency		69		72		75		59		92

	1,662		1,482	Total (2)		738		783		737		822		840

				Constant exchange rate basis (3):

				Net premiums, policy charges and fee income:
	3,164		3,007	Japan, excluding Gibraltar Life		1,395		1,380		1,365		1,707		1,457
	4,046		3,953	Gibraltar Life		2,099		1,999		1,946		1,912		2,134
	1,044		932	All other countries		461		497		542		512		532

	8,254		7,892	Total		3,955		3,876		3,853		4,131		4,123


				Annualized new business premiums:
	588		425	Japan, excluding Gibraltar Life		185		197		202		339		249
	845		867	Gibraltar Life		448		450		389		362		483
	227		206	All other countries		101		111		122		124		103

	1,660		1,498	Total		734		758		713		825		835


				Annualized new business premiums by distribution channel:
	815		631	Life Planner Operations		286		308		324		463		352
	399		369	Gibraltar Life Consultants		203		194		170		169		230
	295		373	Banks		176		186		157		133		162
	151		125	Independent Agency		69		70		62		60		91

	1,660		1,498	Total		734		758		713		825		835

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

(2)	The amounts for the first quarter of 2017 have been revised to correct the previously reported amounts.

(3)	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 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


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

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		310			314			318			327			332
Gibraltar Life		320			324			327			330			333
All other countries		119			121			123			124			126

Total		749			759			768			781			791


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,384			3,436			3,488			3,581			3,632
Gibraltar Life		7,141			7,170			7,182			7,191			7,207
All other countries		2,024			2,048			2,076			2,105			2,122

Total		12,549			12,654			12,746			12,877			12,961


International life insurance policy persistency:

Life Planner Operations:
13 months		93.1	%		93.0	%		93.0	%		93.0	%		93.0	%
25 months		85.6	%		86.2	%		86.3	%		86.3	%		86.5	%

Gibraltar Life (3):
13 months		93.3	%		93.4	%		93.5	%		93.3	%		93.4	%
25 months		85.3	%		85.5	%		86.2	%		86.7	%		86.9	%

Number of Life Planners at end of period:
Japan		3,653			3,776			3,824			3,932			3,861
All other countries		3,898			3,891			3,856			3,887			3,874

Total Life Planners		7,551			7,667			7,680			7,819			7,735


Gibraltar Life Consultants		8,734			8,790			8,884			8,752			8,509

(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 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	June 30, 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		278,819		26,787		252,032		64.7	%		268,118		24,917		243,201		64.2	%
Public, held-to-maturity, at amortized cost		1,786		—		1,786		0.5	%		1,772		—		1,772		0.5	%
Private, available-for-sale, at fair value		56,082		14,250		41,832		10.7	%		53,061		13,987		39,074		10.3	%
Private, held-to-maturity, at amortized cost		337		—		337		0.1	%		372		—		372		0.1	%
Trading account assets supporting insurance liabilities, at fair value		22,073		—		22,073		5.7	%		21,840		—		21,840		5.8	%
Other trading account assets, at fair value		2,053		310		1,743		0.4	%		1,805		284		1,521		0.4	%
Equity securities, available-for-sale, at fair value		10,138		2,442		7,696		2.0	%		9,735		2,572		7,163		1.9	%
Commercial mortgage and other loans, at book value		54,338		9,432		44,906		11.5	%		52,208		9,437		42,771		11.2	%
Policy loans, at outstanding balance		11,719		4,583		7,136		1.8	%		11,755		4,660		7,095		1.9	%
Other long-term investments (1)		10,334		3,121		7,213		1.8	%		10,251		3,020		7,231		1.9	%
Short-term investments		3,605		395		3,210		0.8	%		7,494		837		6,657		1.8	%

Subtotal (2)		451,284		61,320		389,964		100.0	%		438,411		59,714		378,697		100.0	%

Invested assets of other entities and operations (3)		7,117		—		7,117					5,829		—		5,829

Total investments		458,401		61,320		397,081					444,240		59,714		384,526

Fixed Maturities by Credit Quality (2):


	June 30, 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		192,290		26,495		1,467		217,318		85.5	%		184,831		26,239		2,261		208,809		85.1	%
2		26,526		2,790		229		29,087		11.4	%		26,922		2,479		454		28,947		11.8	%

Subtotal - High or Highest Quality Securities		218,816		29,285		1,696		246,405		96.9	%		211,753		28,718		2,715		237,756		96.9	%

3		4,935		308		67		5,176		2.0	%		4,837		323		90		5,070		2.1	%
4		2,164		158		45		2,277		0.9	%		1,951		178		52		2,077		0.8	%
5		136		28		3		161		0.1	%		230		43		6		267		0.1	%
6		163		5		2		166		0.1	%		152		4		1		155		0.1	%

Subtotal - Other Securities		7,398		499		117		7,780		3.1	%		7,170		548		149		7,569		3.1	%

Total		226,214		29,784		1,813		254,185		100.0	%		218,923		29,266		2,864		245,325		100.0	%


Private Fixed Maturities:

NAIC Rating (4)
1		11,655		749		61		12,343		29.3	%		10,448		647		164		10,931		27.7	%
2		23,437		1,422		334		24,525		58.1	%		22,364		1,249		627		22,986		58.2	%

Subtotal - High or Highest Quality Securities		35,092		2,171		395		36,868		87.4	%		32,812		1,896		791		33,917		85.9	%

3		3,452		158		50		3,560		8.4	%		3,709		131		92		3,748		9.5	%
4		1,048		33		19		1,062		2.5	%		927		22		30		919		2.3	%
5		557		23		25		555		1.3	%		649		30		22		657		1.7	%
6		126		28		4		150		0.4	%		194		49		10		233		0.6	%

Subtotal - Other Securities		5,183		242		98		5,327		12.6	%		5,479		232		154		5,557		14.1	%

Total		40,275		2,413		493		42,195		100.0	%		38,291		2,128		945		39,474		100.0	%

(1)	Other long-term investments consist of investments in joint ventures and limited 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 that are 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 June 30, 2017 and December 31, 2016, 702 securities with amortized cost of $4,225 million (fair value $4,315 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 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION - JAPANESE INSURANCE OPERATIONS AND EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	June 30, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		127,180		76.4	%		123,285		77.9	%
Public, held-to-maturity, at amortized cost		1,786		1.1	%		1,772		1.1	%
Private, available-for-sale, at fair value		13,585		8.2	%		11,646		7.4	%
Private, held-to-maturity, at amortized cost		337		0.2	%		372		0.2	%
Trading account assets supporting insurance liabilities, at fair value		2,381		1.4	%		2,166		1.4	%
Other trading account assets, at fair value		437		0.3	%		434		0.3	%
Equity securities, available-for-sale, at fair value		2,763		1.7	%		2,654		1.7	%
Commercial mortgage and other loans, at book value		13,001		7.8	%		11,700		7.4	%
Policy loans, at outstanding balance		2,482		1.5	%		2,369		1.5	%
Other long-term investments (3)		2,086		1.3	%		1,186		0.8	%
Short-term investments		130		0.1	%		398		0.3	%

Total		166,168		100.0	%		157,982		100.0	%


	June 30, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		124,852		55.8	%		119,916		54.4	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		28,247		12.6	%		27,428		12.4	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,692		8.8	%		19,674		9.0	%
Other trading account assets, at fair value		1,306		0.6	%		1,087		0.5	%
Equity securities, available-for-sale, at fair value		4,933		2.2	%		4,509		2.0	%
Commercial mortgage and other loans, at book value		31,905		14.3	%		31,071		14.1	%
Policy loans, at outstanding balance		4,654		2.1	%		4,726		2.1	%
Other long-term investments (3)		5,127		2.3	%		6,045		2.7	%
Short-term investments		3,080		1.3	%		6,259		2.8	%

Total		223,796		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 investments in joint ventures and limited partnerships, investment real estate held through direct ownership, derivatives and other miscellaneous investments.

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INVESTMENT RESULTS (1)

(in millions)


	Quarter Ended June 30
	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		3.85	%		2,511			182			3.88	%		2,353			379
Equity securities		6.76	%		95			48			7.11	%		93			(20	)
Commercial mortgage and other loans		4.13	%		400			(5	)		4.32	%		383			(6	)
Policy loans		4.87	%		87			—			4.88	%		86			—
Short-term investments and cash equivalents		1.27	%		39			—			0.55	%		27			1
Other investments		6.07	%		133			(1,407	)		2.66	%		57			867

Gross investment income before investment expenses		3.93	%		3,265			(1,182	)		3.78	%		2,999			1,221
Investment expenses		-0.14	%		(117	)		—			-0.15	%		(107	)		—

Subtotal		3.79	%		3,148			(1,182	)		3.63	%		2,892			1,221

Investment results of other entities and operations (3)					269			8						258			7
Less, investment income related to adjusted operating income reconciling items					(82	)								(63	)

Total					3,335			(1,174	)					3,087			1,228


	Six Months Ended June 30
	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		3.87	%		4,968			315			3.91	%		4,621			342
Equity securities		6.07	%		167			74			6.15	%		157			(25	)
Commercial mortgage and other loans		4.07	%		775			(5	)		4.33	%		761			8
Policy loans		4.88	%		173			—			4.90	%		170			—
Short-term investments and cash equivalents		1.20	%		74			—			0.56	%		54			1
Other investments		8.37	%		358			(1,402	)		2.92	%		122			2,853

Gross investment income before investment expenses		3.98	%		6,515			(1,018	)		3.79	%		5,885			3,179
Investment expenses		-0.14	%		(230	)		—			-0.14	%		(203	)		—

Subtotal		3.84	%		6,285			(1,018	)		3.65	%		5,682			3,179

Investment results of other entities and operations (3)					548			(2	)					526			28
Less, investment income related to adjusted operating income reconciling items					(144	)								(104	)

Total					6,689			(1,020	)					6,104			3,207

(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 that are 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 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended June 30
	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		3.05	%		910			183			3.09	%		863			283
Equity securities		5.53	%		21			21			5.17	%		20			2
Commercial mortgage and other loans		4.26	%		133			(1	)		4.11	%		106			1
Policy loans		3.95	%		25			—			3.89	%		23			—
Short-term investments and cash equivalents		1.44	%		4			—			0.82	%		2			—
Other investments (2)		7.19	%		39			117			8.07	%		58			276

Gross investment income before investment expenses		3.26	%		1,132			320			3.30	%		1,072			562
Investment expenses		-0.12	%		(44	)		—			-0.12	%		(40	)		—

Total		3.14	%		1,088			320			3.18	%		1,032			562


	Six Months Ended June 30
	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		3.05	%		1,786			373			3.11	%		1,678			468
Equity securities		4.70	%		36			34			4.44	%		34			7
Commercial mortgage and other loans		4.11	%		250			—			4.26	%		214			7
Policy loans		3.94	%		48			—			3.90	%		45			—
Short-term investments and cash equivalents		1.34	%		7			—			0.81	%		4			—
Other investments (2)		7.39	%		73			186			5.37	%		74			891

Gross investment income before investment expenses		3.23	%		2,200			593			3.26	%		2,049			1,373
Investment expenses		-0.12	%		(87	)		—			-0.12	%		(79	)		—

Total		3.11	%		2,113			593			3.14	%		1,970			1,373

(1)

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

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended June 30
	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		4.53	%		1,601			(1	)		4.56	%		1,490			96
Equity securities		7.24	%		74			27			7.97	%		73			(22	)
Commercial mortgage and other loans		4.06	%		267			(4	)		4.40	%		277			(7	)
Policy loans		5.35	%		62			—			5.40	%		63			—
Short-term investments and cash equivalents		1.26	%		35			—			0.54	%		25			1
Other investments		5.70	%		94			(1,524	)		-0.02	%		(1	)		591

Gross investment income before investment expenses		4.42	%		2,133			(1,502	)		4.11	%		1,927			659
Investment expenses		-0.15	%		(73	)		—			-0.16	%		(67	)		—

Total		4.27	%		2,060			(1,502	)		3.95	%		1,860			659


	Six Months Ended June 30
	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		4.55	%		3,182			(58	)		4.59	%		2,943			(126	)
Equity securities		6.61	%		131			40			6.89	%		123			(32	)
Commercial mortgage and other loans		4.05	%		525			(5	)		4.36	%		547			1
Policy loans		5.36	%		125			—			5.40	%		125			—
Short-term investments and cash equivalents		1.19	%		67			—			0.55	%		50			1
Other investments		8.66	%		285			(1,588	)		1.73	%		48			1,962

Gross investment income before investment expenses		4.51	%		4,315			(1,611	)		4.16	%		3,836			1,806
Investment expenses		-0.16	%		(143	)		—			-0.16	%		(124	)		—

Total		4.35	%		4,172			(1,611	)		4.00	%		3,712			1,806

(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 that are 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 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


	Second Quarter 2017																							Second Quarter 2016
	Premiums			Policy Charges and Fee Income			Asset Management Fees, Commissions and Other Income		Insurance and Annuity Benefits			Interest Credited to Policyholders’ Account Balances			Amortization of Acquisition Costs			General and Administrative Expenses			Pre-Tax Adjusted Operating Income			Premiums		Policy Charges and Fee Income			Insurance and Annuity Benefits			Interest Credited to Policyholders’ Account Balances		Interest Expense		Amortization of Acquisition Costs			General and Administrative Expenses			Pre-Tax Adjusted Operating Income
Individual Annuities:
Annual review of assumptions		—			—			12		(15	)		(5	)		(13	)		(1	)		46			—		—			(19	)		8		—		7			—			4
Market performance and experience true-ups		—			—			33		(7	)		(3	)		(11	)		—			54			—		—			(35	)		—		—		(12	)		(1	)		48
Total of above items		—			—			45		(22	)		(8	)		(24	)		(1	)		100			—		—			(54	)		8		—		(5	)		(1	)		52
Reported amount		—			—			369		71			77			102			507						—		—			57			98		—		122			537
Amount excluding impact of items indicated above		—			—			324		93			85			126			508						—		—			111			90		—		127			538
Retirement:
Annual review of assumptions		—			—			—		4			45			(7	)		(22	)		(20	)		362		—			363			—		—		(1	)		(6	)		6
Total of above items		—			—			—		4			45			(7	)		(22	)		(20	)		362		—			363			—		—		(1	)		(6	)		6
Reported amount		—			—			—		2,649			409			4			240						974		—			1,403			—		—		5			247
Amount excluding impact of items indicated above		—			—			—		2,645			364			11			262						612		—			1,040			—		—		6			253
Individual Life:
Annual review of assumptions		—			(763	)		—		(321	)		—			175			36			(653	)		—		(230	)		347			—		—		(193	)		36			(420	)
Total of above items		—			(763	)		—		(321	)		—			175			36			(653	)		—		(230	)		347			—		—		(193	)		36			(420	)
Reported amount		—			(240	)		—		289			—			258			490						—		329			949			—		—		(113	)		467
Amount excluding impact of items indicated above		—			523			—		610			—			83			454						—		559			602			—		—		80			431
Group Insurance:
Annual review of assumptions		(8	)		18			—		(45	)		—			—			—			55			14		33			6			—		—		—			—			41
Total of above items		(8	)		18			—		(45	)		—			—			—			55			14		33			6			—		—		—			—			41
Reported amount		1,026			164			—		952			—			—			—						1,018		176			1,001			—		—		—			—
Amount excluding impact of items indicated above		1,034			146			—		997			—			—			—						1,004		143			995			—		—		—			—
International Insurance - Life Planner operations:
Annual review of assumptions		—			(7	)		—		50			—			7			3			(67	)		—		(22	)		33			—		—		(7	)		(10	)		(38	)
Total of above items		—			(7	)		—		50			—			7			3			(67	)		—		(22	)		33			—		—		(7	)		(10	)		(38	)
Reported amount		—			77			—		1,711			—			151			591						—		67			1,632			—		—		127			455
Amount excluding impact of items indicated above		—			84			—		1,661			—			144			588						—		89			1,599			—		—		134			465
International Insurance - Gibraltar Life & Other operations:
Annual review of assumptions		13			—			—		(5	)		(1	)		(2	)		—			21			—		—			33			—		—		1			—			(34	)
Total of above items		13			—			—		(5	)		(1	)		(2	)		—			21			—		—			33			—		—		1			—			(34	)
Reported amount		2,099			—			—		1,711			166			153			—						—		—			1,765			—		—		146			—
Amount excluding impact of items indicated above		2,086			—			—		1,716			167			155			—						—		—			1,732			—		—		145			—
Corporate & Other:
Annual review of assumptions		—			—			—		4			—			—			—			(4	)		—		—			3			—		—		—			—			(3	)
Costs associated with debt tender offer		—			—			—		—			—			—			—			—			—		—			—			—		36		—			—			(36	)
Total of above items		—			—			—		4			—			—			—			(4	)		—		—			3			—		36		—			—			(39	)
Reported amount					—			—		3			—			—			—						—		—			6			—		182		—			—
Amount excluding impact of items indicated above		—			—			—		(1	)		—			—			—						—		—			3			—		146		—			—

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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, 2017																				Three Months Ended June 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		7,557			—			—		—		670		99		—			8,326			6,146			—			—		—		693		96		—			6,935
Policy charges and fee income		794			(69	)		—		—		—		—		—			725			1,288			(12	)		—		—		—		—		—			1,276
Net investment income		3,335			(9	)		—		—		672		91		—			4,089			3,087			(8	)		—		—		639		71		—			3,789
Realized investment gains (losses), net		161			(1,372	)		—		—		82		37		—			(1,092	)		138			1,059			—		—		205		31		—			1,433
Asset management fees, commissions and other income		1,181			4			201		—		25		1		(19	)		1,393			1,153			(249	)		108		—		9		1		(16	)		1,006

Total revenues		13,028			(1,446	)		201		—		1,449		228		(19	)		13,441			11,812			790			108		—		1,546		199		(16	)		14,439


Benefits and Expenses :

Insurance and annuity benefits		7,386			(69	)		—		—		1,328		174		—			8,819			6,813			153			—		—		1,433		188		—			8,587
Interest credited to policyholders’ account balances		953			(184	)		—		145		33		—		—			947			914			(23	)		—		133		34		—		—			1,058
Interest expense		326			—			—		—		—		1		—			327			357			—			—		—		—		—		—			357
Deferral of acquisition costs		(755	)		—			—		—		—		—		—			(755	)		(718	)		—			—		—		—		—		—			(718	)
Amortization of acquisition costs		662			(586	)		—		—		8		—		—			84			281			138			—		—		8		—		—			427
General and administrative expenses		3,228			72			—		—		98		18		(5	)		3,411			3,108			162			—		—		103		22		(8	)		3,387

Total benefits and expenses		11,800			(767	)		—		145		1,467		193		(5	)		12,833			10,755			430			—		133		1,578		210		(8	)		13,098



	Six Months Ended June 30, 2017																				Six Months Ended June 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		13,331			—			—		—		1,274		202		—			14,807			11,723			—			—		—		1,315		194		—			13,232
Policy charges and fee income		2,349			(91	)		—		—		—		—		—			2,258			2,799			76			—		—		—		—		—			2,875
Net investment income		6,689			(17	)		—		—		1,317		161		—			8,150			6,104			(15	)		—		—		1,251		119		—			7,459
Realized investment gains (losses), net		283			(1,345	)		—		—		355		42		—			(665	)		312			2,817			—		—		107		78		—			3,314
Asset management fees, commissions and other income		2,383			(81	)		245		—		60		4		(50	)		2,561			2,166			(582	)		324		—		2		2		(24	)		1,888

Total revenues		25,035			(1,534	)		245		—		3,006		409		(50	)		27,111			23,104			2,296			324		—		2,675		393		(24	)		28,768


Benefits and Expenses :

Insurance and annuity benefits		13,532			(108	)		—		—		2,708		327		—			16,459			12,797			272			—		—		2,487		328		—			15,884
Interest credited to policyholders’ account balances		1,873			(209	)		—		157		66		—		—			1,887			1,821			193			—		263		67		—		—			2,344
Interest expense		648			—			—		—		1		2		—			651			682			—			—		—		1		1		—			684
Deferral of acquisition costs		(1,479	)		—			—		—		—		—		—			(1,479	)		(1,403	)		—			—		—		—		—		—			(1,403	)
Amortization of acquisition costs		1,143			(639	)		—		—		19		—		—			523			760			850			—		—		19		—		—			1,629
General and administrative expenses		6,430			63			—		—		196		39		(8	)		6,720			6,065			283			—		—		206		44		(41	)		6,557

Total benefits and expenses		22,147			(893	)		—		157		2,990		368		(8	)		24,761			20,722			1,598			—		263		2,780		373		(41	)		25,695

(1)	See page 37 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

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

(in millions)


	Three Months Ended September 30, 2016																						Three Months Ended December 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		8,934			—			—		—			598		103			—			9,635			7,296			—			—			—			707		94			—			8,097
Policy charges and fee income		1,559			(19	)		—		—			—		—			—			1,540			1,529			(38	)		—			—			—		—			—			1,491
Net investment income		3,292			(8	)		—		—			702		87			—			4,073			3,299			(8	)		—			—			625		72			—			3,988
Realized investment gains (losses), net		115			529			—		—			153		16			—			813			150			(2,090	)		—			—			174		(167	)		—			(1,933	)
Asset management fees, commissions and other income		1,150			(298	)		37		—			28		3			(20	)		900			1,146			644			(378	)		—			7		1			(13	)		1,407

Total revenues		15,050			204			37		—			1,481		209			(20	)		16,961			13,420			(1,492	)		(378	)		—			1,513		—			(13	)		13,050


Benefits and Expenses :

Insurance and annuity benefits		9,254			33			—		—			1,307		130			—			10,724			7,658			(174	)		—			—			1,429		136			—			9,049
Interest credited to policyholders’ account balances		932			(140	)		—		(1	)		34		(1	)		—			824			945			(103	)		—			(283	)		33		1			—			593
Interest expense		314			—			—		—			1		1			—			316			319			—			—			—			—		1			—			320
Deferral of acquisition costs		(731	)		—			—		—			—		—			—			(731	)		(711	)		—			—			—			—		—			—			(711	)
Amortization of acquisition costs		444			(339	)		—		—			10		—			—			115			468			(343	)		—			—			8		—			—			133
General and administrative expenses		3,279			1			—		—			98		23			(3	)		3,398			3,282			(48	)		—			—			101		22			(8	)		3,349

Total benefits and expenses		13,492			(445	)		—		(1	)		1,450		153			(3	)		14,646			11,961			(668	)		—			(283	)		1,571		160			(8	)		12,733



	Three Months Ended March 31, 2017
				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		5,774			—			—		—		604		103		—			6,481
Policy charges and fee income		1,555			(22	)		—		—		—		—		—			1,533
Net investment income		3,354			(8	)		—		—		645		70		—			4,061
Realized investment gains (losses), net		122			27			—		—		273		5		—			427
Asset management fees, commissions and other income		1,202			(85	)		44		—		35		3		(31	)		1,168

Total revenues		12,007			(88	)		44		—		1,557		181		(31	)		13,670


Benefits and Expenses :

Insurance and annuity benefits		6,146			(39	)		—		—		1,380		153		—			7,640
Interest credited to policyholders’ account balances		920			(25	)		—		12		33		—		—			940
Interest expense		322			—			—		—		1		1		—			324
Deferral of acquisition costs		(724	)		—			—		—		—		—		—			(724	)
Amortization of acquisition costs		481			(53	)		—		—		11		—		—			439
General and administrative expenses		3,202			(9	)		—		—		98		21		(3	)		3,309

Total benefits and expenses		10,347			(126	)		—		12		1,523		175		(3	)		11,928

(1)	See page 37 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Second 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 39

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2017

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of August 2, 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 August 2, 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 40

PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - August 2, 2017

Attached files