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

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EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d482843dex991.htm
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d482843d8k.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Third 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.

November 1, 2017

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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

Third Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

								Pre-tax adjusted operating income (loss) by division:
	3,283			2,600			26%	U.S. Retirement Solutions and Investment Management Division		1,018			964			1,061			1,138			1,084
	(58	)		118			-149%	U.S. Individual Life and Group Insurance Division		173			181			152			(421	)		211
	2,421			2,362			2%	International Insurance Division		780			755			799			823			799
	(974	)		(1,140	)		15%	Corporate and other operations		(413	)		(441	)		(352	)		(312	)		(310	)

	4,672			3,940			19%	Total pre-tax adjusted operating income		1,558			1,459			1,660			1,228			1,784
	1,193			923			29%	Income taxes, applicable to adjusted operating income		367			369			423			309			461

	3,479			3,017			15%	After-tax adjusted operating income		1,191			1,090			1,237			919			1,323


								Reconciling items:
	523			1,347			-61%	Realized investment gains (losses), net, and related charges and adjustments		649			(824	)		38			(679	)		1,164
	330			361			-9%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		37			(378	)		44			201			85
	(188	)		(262	)		28%	Change in experience-rated contractholder liabilities due to asset value changes		1			283			(12	)		(145	)		(31	)
								Divested businesses:
	49			(74	)		166%	Closed Block division		31			(58	)		34			(18	)		33
	51			76			-33%	Other divested businesses		56			(160	)		6			35			10
	(66	)		—			—	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(17	)		(5	)		(28	)		(14	)		(24	)

	699			1,448			-52%	Total reconciling items, before income taxes		757			(1,142	)		82			(620	)		1,237
	127			377			-66%	Income taxes, not applicable to adjusted operating income		134			(334	)		(28	)		(184	)		339

	572			1,071			-47%	Total reconciling items, after income taxes		623			(808	)		110			(436	)		898

	4,051			4,088			-1%	Income (after-tax) before equity in earnings of operating joint ventures		1,814			282			1,347			483			2,221
	47			(4	)		1275%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		13			2			22			8			17

	4,098			4,084			0%	Income attributable to Prudential Financial, Inc.		1,827			284			1,369			491			2,238
	11			42			-74%	Earnings attributable to noncontrolling interests		5			9			3			5			3

	4,109			4,126			0%	Net income		1,832			293			1,372			496			2,241
	11			42			-74%	Less: Income attributable to noncontrolling interests		5			9			3			5			3

	4,098			4,084			0%	Net income attributable to Prudential Financial, Inc.		1,827			284			1,369			491			2,238

	13.1%			11.8%				Operating Return on Average Equity (based on adjusted operating income) (1)		13.8%			12.6%			14.2%			10.5%			14.8%

(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 18.1%, 4.1%, 11.8%, 2.2%, and 13.1% for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

						Earnings per share of Common Stock (diluted):
	7.89			6.67		After-tax adjusted operating income		2.66			2.46			2.79			2.09			3.01
						Reconciling items:
	1.20			3.00		Realized investment gains (losses), net, and related charges and adjustments		1.46			(1.87	)		0.09			(1.55	)		2.68
	0.75			0.80		Investment gains (losses) on trading account assets supporting insurance liabilities, net		0.08			(0.86	)		0.10			0.46			0.20
	(0.43	)		(0.58	)	Change in experience-rated contractholder liabilities due to asset value changes		—			0.64			(0.03	)		(0.33	)		(0.07	)
						Divested businesses:
	0.11			(0.16	)	Closed Block division		0.07			(0.13	)		0.08			(0.04	)		0.08
	0.12			0.17		Other divested businesses		0.13			(0.36	)		0.01			0.08			0.02
	(0.02	)		(0.02	)	Difference in earnings allocated to participating unvested share-based payment awards		(0.01	)		0.02			—			0.01			(0.03	)

	1.73			3.21		Total reconciling items, before income taxes		1.73			(2.56	)		0.25			(1.37	)		2.88
	0.33			0.86		Income taxes, not applicable to adjusted operating income		0.32			(0.75	)		(0.05	)		(0.40	)		0.80

	1.40			2.35		Total reconciling items, after income taxes		1.41			(1.81	)		0.30			(0.97	)		2.08

	9.29			9.02		Net income attributable to Prudential Financial, Inc.		4.07			0.65			3.09			1.12			5.09


	428.1			440.7		Weighted average number of outstanding Common shares (basic)		435.9			430.7			429.9			428.3			426.2
	437.1			448.9		Weighted average number of outstanding Common shares (diluted)		444.3			439.8			439.1			437.2			435.0

	13			13		Earnings related to interest, net of tax, on exchangeable surplus notes		4			4			4			5			4

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*

	42			35		After-tax adjusted operating income		15			12			15			11			16
	50			46		Net income		21			3			16			7			27

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		907			1,133			1,415			1,779			2,358
				Long-term debt		12,942			12,224			12,074			11,806			10,532
				Junior Subordinated Long-Term Debt		5,816			5,817			5,819			5,820			6,621

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income		56,431			45,863			46,784			48,444			50,373
				Excluding accumulated other comprehensive income (2)		31,506			31,242			32,141			32,082			33,775
				Amount included above for foreign currency exchange rate remeasurement (3)		(3,327	)		(3,199	)		(3,060	)		(2,889	)		(2,758	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		34,833			34,441			35,201			34,971			36,533


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (4)		128.37			104.91			107.09			111.35			116.32
				Excluding accumulated other comprehensive income (2)		71.95			71.62			73.75			73.96			78.26
				Amount included above for foreign currency exchange rate remeasurement (3)		(7.60	)		(7.33	)		(7.02	)		(6.66	)		(6.39	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		79.55			78.95			80.77			80.62			84.65


				Number of diluted shares at end of period (5)		437.9			436.2			435.8			433.8			431.6

				*Common Stock Price Range (based on closing price):*
	115.23		81.65	High		81.65			107.10			113.82			109.13			115.23
	98.65		58.00	Low		68.74			81.43			103.92			102.92			98.65
	106.32		81.65	Close		81.65			104.06			106.68			108.14			106.32

				*Common Stock market capitalization (1)*		35,248			44,704			45,798			46,176			45,154

(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 third quarter 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, second and third 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

Third Quarter 2017

OPERATIONS HIGHLIGHTS


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

				*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		445.9		431.5		445.2		461.2		478.3
				Retail customers		209.0		209.2		217.6		231.2		239.9
				General account		430.3		399.4		406.1		412.3		415.7

				Total Investment Management and Advisory Services		1,085.2		1,040.1		1,068.9		1,104.7		1,133.9
				Non-proprietary assets under management		176.4		172.6		178.3		173.4		176.8

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,261.6		1,212.7		1,247.2		1,278.1		1,310.7
				Managed by U.S. Individual Life and Group Insurance Division		24.8		24.9		25.1		26.8		26.8
				Managed by International Insurance Division		27.9		26.2		26.5		28.7		28.7

				Total assets under management		1,314.3		1,263.8		1,298.8		1,333.6		1,366.2
				Client assets under administration		177.0		177.3		185.2		188.3		202.4

				Total assets under management and administration		1,491.3		1,441.1		1,484.0		1,521.9		1,568.6


				Assets managed or administered for customers outside of the United States at end of period		335.4		311.1		326.6		341.1		350.5

				*Distribution Representatives (1):*
				Prudential Agents		3,031		2,937		2,922		2,921		2,937
				International Life Planners		7,667		7,680		7,819		7,735		7,831
				Gibraltar Life Consultants		8,790		8,884		8,752		8,509		8,327

	50		52	*Prudential Agent productivity ($ thousands)*		56		67		47		51		53

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

COMBINED STATEMENTS OF OPERATIONS

(in millions)


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


							Revenues (1):
	20,442		20,657			-1%	Premiums		8,934			7,296			5,774			7,557			7,111
	3,914		4,358			-10%	Policy charges and fee income		1,559			1,529			1,555			794			1,565
	10,034		9,396			7%	Net investment income		3,292			3,299			3,354			3,335			3,345
	4,006		3,743			7%	Asset management fees, commissions and other income		1,265			1,296			1,324			1,342			1,340

	38,396		38,154			1%	Total revenues		15,050			13,420			12,007			13,028			13,361


							Benefits and Expenses (1):
	20,908		22,051			-5%	Insurance and annuity benefits		9,254			7,658			6,146			7,386			7,376
	2,800		2,753			2%	Interest credited to policyholders’ account balances		932			945			920			953			927
	978		996			-2%	Interest expense		314			319			322			326			330
	(2,132)		(2,134	)		0%	Deferral of acquisition costs		(731	)		(711	)		(724	)		(755	)		(653	)
	1,613		1,204			34%	Amortization of acquisition costs		444			468			481			662			470
	9,557		9,344			2%	General and administrative expenses		3,279			3,282			3,202			3,228			3,127

	33,724		34,214			-1%	Total benefits and expenses		13,492			11,961			10,347			11,800			11,577

	4,672		3,940			19%	Adjusted operating income before income taxes		1,558			1,459			1,660			1,228			1,784

							Reconciling items:
	(48)		2,443			-102%	Realized investment gains (losses), net, and related adjustments		223			(1,454	)		(66	)		(1,377	)		1,395
	571		(1,096	)		152%	Related charges		426			630			104			698			(231	)

	523		1,347			-61%	Total realized investment gains (losses), net, and related charges and adjustments		649			(824	)		38			(679	)		1,164

	330		361			-9%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		37			(378	)		44			201			85
	(188)		(262	)		28%	Change in experience-rated contractholder liabilities due to asset value changes		1			283			(12	)		(145	)		(31	)
							Divested businesses:
	49		(74	)		166%	Closed Block division		31			(58	)		34			(18	)		33
	51		76			-33%	Other divested businesses		56			(160	)		6			35			10
	(66)		—			—	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(17	)		(5	)		(28	)		(14	)		(24	)

	699		1,448			-52%	Total reconciling items, before income taxes		757			(1,142	)		82			(620	)		1,237


	5,371		5,388			0%	Income before income taxes and equity in earnings of operating joint ventures		2,315			317			1,742			608			3,021
	1,320		1,300			2%	Income tax expense		501			35			395			125			800

	4,051		4,088			-1%	Income before equity in earnings of operating joint ventures		1,814			282			1,347			483			2,221

(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

Third Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended September 30, 2017
				U.S. Retirement Solutions & Investment			U.S. Individual Life & Group			International			Corporate
				Management			Insurance			Insurance			and Other
	Total			Division			Division			Division			Operations
Revenues (1) :
Premiums		7,111			1,961			1,265			3,891			(6	)
Policy charges and fee income		1,565			787			662			128			(12	)
Net investment income		3,345			1,308			639			1,278			120
Asset management fees, commissions and other income		1,340			1,334			208			79			(281	)

Total revenues		13,361			5,390			2,774			5,376			(179	)


Benefits and Expenses (1):
Insurance and annuity benefits		7,376			2,465			1,568			3,342			1
Interest credited to policyholders’ account balances		927			447			250			230			—
Interest expense		330			33			164			4			129
Deferral of acquisition costs		(653	)		(82	)		(161	)		(417	)		7
Amortization of acquisition costs		470			125			81			275			(11	)
General and administrative expenses		3,127			1,318			661			1,143			5

Total benefits and expenses		11,577			4,306			2,563			4,577			131

Adjusted operating income (loss) before income taxes		1,784			1,084			211			799			(310	)


	Quarter Ended September 30, 2016
				U.S. Retirement Solutions & Investment			U.S. Individual Life & Group			International			Corporate
				Management			Insurance			Insurance			and Other
	Total			Division			Division			Division			Operations
Revenues (1):
Premiums		8,934			3,791			1,210			3,939			(6	)
Policy charges and fee income		1,559			723			713			134			(11	)
Net investment income		3,292			1,325			625			1,229			113
Asset management fees, commissions and other income		1,265			1,266			195			82			(278	)

Total revenues		15,050			7,105			2,743			5,384			(182	)


Benefits and Expenses (1):
Insurance and annuity benefits		9,254			4,243			1,622			3,382			7
Interest credited to policyholders’ account balances		932			458			237			237			—
Interest expense		314			29			147			2			136
Deferral of acquisition costs		(731	)		(116	)		(169	)		(462	)		16
Amortization of acquisition costs		444			100			83			271			(10	)
General and administrative expenses		3,279			1,373			650			1,174			82

Total benefits and expenses		13,492			6,087			2,570			4,604			231

Adjusted operating income (loss) before income taxes		1,558			1,018			173			780			(413	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Nine Months Ended September 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		20,442			4,786			3,789			11,885			(18	)
Policy charges and fee income		3,914			2,275			1,303			374			(38	)
Net investment income		10,034			4,003			1,922			3,743			366
Asset management fees, commissions and other income		4,006			3,934			604			266			(798	)

Total revenues		38,396			14,998			7,618			16,268			(488	)


Benefits and Expenses (1):
Insurance and annuity benefits		20,908			6,190			4,516			10,197			5
Interest credited to policyholders’ account balances		2,800			1,384			738			678			—
Interest expense		978			88			485			10			395
Deferral of acquisition costs		(2,132	)		(260	)		(510	)		(1,389	)		27
Amortization of acquisition costs		1,613			369			413			864			(33	)
General and administrative expenses		9,557			3,944			2,034			3,487			92

Total benefits and expenses		33,724			11,715			7,676			13,847			486

Adjusted operating income (loss) before income taxes		4,672			3,283			(58	)		2,421			(974	)


	Nine Months Ended September 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		20,657			5,480			3,663			11,534			(20	)
Policy charges and fee income		4,358			2,085			1,937			370			(34	)
Net investment income		9,396			3,717			1,800			3,553			326
Asset management fees, commissions and other income		3,743			3,647			548			314			(766	)

Total revenues		38,154			14,929			7,948			15,771			(494	)


Benefits and Expenses (1):
Insurance and annuity benefits		22,051			6,874			5,206			9,952			19
Interest credited to policyholders’ account balances		2,753			1,362			697			694			—
Interest expense		996			82			435			5			474
Deferral of acquisition costs		(2,134	)		(354	)		(503	)		(1,324	)		47
Amortization of acquisition costs		1,204			386			50			804			(36	)
General and administrative expenses		9,344			3,979			1,945			3,278			142

Total benefits and expenses		34,214			12,329			7,830			13,409			646

Adjusted operating income (loss) before income taxes		3,940			2,600			118			2,362			(1,140	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

CONSOLIDATED BALANCE SHEETS

(in millions)


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

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $297,745; $292,581; $300,437; $303,287; $307,527)		343,244		321,419		328,717		335,254		340,100
Fixed maturities, held to maturity, at amortized cost (fair value $2,956; $2,524; $2,552; $2,516; $2,475)		2,471		2,144		2,166		2,123		2,084
Trading account assets supporting insurance liabilities, at fair value		21,828		21,840		21,820		22,073		22,126
Other trading account assets, at fair value		7,559		5,764		5,863		6,773		6,210
Equity securities, available for sale, at fair value (cost $7,197; $7,149; $7,461; $7,456; $7,145)		9,765		9,748		10,143		10,151		9,739
Commercial mortgage and other loans		52,273		52,779		53,660		54,915		55,373
Policy loans		12,031		11,755		11,893		11,719		11,765
Other long-term investments		11,346		11,283		11,450		11,777		11,986
Short-term investments		5,254		7,508		5,175		3,616		5,508

Total investments		465,771		444,240		450,887		458,401		464,891
Cash and cash equivalents		24,728		14,127		13,308		16,605		14,541
Accrued investment income		3,279		3,204		3,231		3,228		3,278
Deferred policy acquisition costs		16,975		17,661		18,197		18,715		18,724
Value of business acquired		2,159		2,314		2,266		1,897		1,817
Other assets		15,403		14,780		15,671		16,311		16,770
Separate account assets		291,550		287,636		293,805		297,433		301,110

Total assets		819,865		783,962		797,365		812,590		821,131


Liabilities:
Future policy benefits		252,228		240,908		244,705		250,706		252,339
Policyholders’ account balances		146,577		145,205		147,026		147,554		148,342
Securities sold under agreements to repurchase		6,830		7,606		8,535		8,817		8,145
Cash collateral for loaned securities		5,037		4,333		4,175		4,036		4,697
Income taxes		15,326		10,412		10,598		11,631		12,509
Senior short-term debt		907		1,133		1,415		1,779		2,358
Senior long-term debt		12,942		12,224		12,074		11,806		10,532
Junior subordinated long-term debt		5,816		5,817		5,819		5,820		6,621
Notes issued by consolidated variable interest entities		2,722		2,150		2,179		2,176		1,517
Other liabilities		22,956		20,450		20,060		22,192		22,396
Separate account liabilities		291,550		287,636		293,805		297,433		301,110

Total liabilities		762,891		737,874		750,391		763,950		770,566


Equity:
Accumulated other comprehensive income		24,925		14,621		14,643		16,362		16,598
Other equity		31,506		31,242		32,141		32,082		33,775

Total Prudential Financial, Inc. equity		56,431		45,863		46,784		48,444		50,373

Noncontrolling Interest		543		225		190		196		192

Total Equity		56,974		46,088		46,974		48,640		50,565

Total liabilities and equity		819,865		783,962		797,365		812,590		821,131

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of September 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		464,891		61,591			403,300		134,736		58,165		189,482		20,917
Deferred policy acquisition costs		18,724		308			18,416		5,232		5,518		8,024		(358	)
Other assets		36,406		1,549			34,857		13,847		11,992		10,782		(1,764	)
Separate account assets		301,110		—			301,110		253,547		48,620		3,409		(4,466	)

Total assets		821,131		63,448			757,683		407,362		124,295		211,697		14,329


Liabilities:
Future policy benefits		252,339		48,919			203,420		67,372		17,909		113,027		5,112
Policyholders’ account balances		148,342		5,155			143,187		58,102		34,445		50,635		5
Debt		19,511		—			19,511		3,416		7,058		116		8,921
Other liabilities		49,264		10,734			38,530		7,011		9,268		18,956		3,295
Separate account liabilities		301,110		—			301,110		253,547		48,620		3,409		(4,466	)

Total liabilities		770,566		64,808			705,758		389,448		117,300		186,143		12,867


Equity:
Accumulated other comprehensive income (loss)		16,598		(2	)		16,600		2,520		1,178		14,108		(1,206	)
Other equity		33,775		(1,360	)		35,135		15,092		5,817		11,398		2,828

Total Prudential Financial, Inc. equity		50,373		(1,362	)		51,735		17,612		6,995		25,506		1,622

Noncontrolling Interest		192		2			190		302		—		48		(160	)

Total Equity		50,565		(1,360	)		51,925		17,914		6,995		25,554		1,462


Total liabilities and equity		821,131		63,448			757,683		407,362		124,295		211,697		14,329



	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

Third Quarter 2017

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of September 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		362		5,403		6,621		12,386		—		5,822		5,817		11,639
Operating Debt - Investment related		1,367		3,410		—		4,777		477		4,901		—		5,378
Operating Debt - Specified businesses		629		939		—		1,568		584		914		—		1,498
Limited recourse and non-recourse borrowing		—		780		—		780		72		587		—		659

Total debt		2,358		10,532		6,621		19,511		1,133		12,224		5,817		19,174


	As of September 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		11,389		940		57		12,386		10,645		939		55		11,639
Operating Debt - Investment related		4,175		102		500		4,777		4,314		65		999		5,378
Operating Debt - Specified businesses		981		587		—		1,568		965		533		—		1,498
Limited recourse and non-recourse borrowing		—		780		—		780		—		659		—		659

Total debt		16,545		2,409		557		19,511		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 September 30, 2017 and $839M as of December 31, 2016.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

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

(in millions)


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

								Revenues (1):
	4,786		5,480			-13	%	Premiums		3,791			2,258			551			2,274			1,961
	2,275		2,085			9	%	Policy charges and fee income		723			712			717			771			787
	4,003		3,717			8	%	Net investment income		1,325			1,324			1,370			1,325			1,308
	3,934		3,647			8	%	Asset management fees, commissions and other income		1,266			1,280			1,270			1,330			1,334

	14,998		14,929			0	%	Total revenues		7,105			5,574			3,908			5,700			5,390


								Benefits and Expenses (1):
	6,190		6,874			-10	%	Insurance and annuity benefits		4,243			2,760			1,005			2,720			2,465
	1,384		1,362			2	%	Interest credited to policyholders’ account balances		458			473			451			486			447
	88		82			7	%	Interest expense		29			23			25			30			33
	(260)		(354	)		27	%	Deferral of acquisition costs		(116	)		(95	)		(88	)		(90	)		(82	)
	369		386			-4	%	Amortization of acquisition costs		100			146			136			108			125
	3,944		3,979			-1	%	General and administrative expenses		1,373			1,303			1,318			1,308			1,318

	11,715		12,329			-5	%	Total benefits and expenses		6,087			4,610			2,847			4,562			4,306

	3,283		2,600			26	%	Adjusted operating income before income taxes		1,018			964			1,061			1,138			1,084

(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

Third Quarter 2017

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

(in millions)


	Nine Months Ended September 30, 2017												Quarter Ended September 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		4,786			121			4,665			—			1,961			41			1,920			—
Policy charges and fee income		2,275			2,097			178			—			787			726			61			—
Net investment income		4,003			556			3,323			124			1,308			182			1,071			55
Asset management fees, commissions and other income		3,934			1,051			637			2,246			1,334			355			207			772

Total revenues		14,998			3,825			8,803			2,370			5,390			1,304			3,259			827


Benefits and Expenses (1):
Insurance and annuity benefits		6,190			246			5,944			—			2,465			87			2,378			—
Interest credited to policyholders’ account balances		1,384			245			1,139			—			447			81			366			—
Interest expense		88			51			18			19			33			20			6			7
Deferral of acquisition costs		(260	)		(230	)		(25	)		(5	)		(82	)		(71	)		(9	)		(2	)
Amortization of acquisition costs		369			346			15			8			125			116			7			2
General and administrative expenses		3,944			1,510			759			1,675			1,318			494			263			561

Total benefits and expenses		11,715			2,168			7,850			1,697			4,306			727			3,011			568

Adjusted operating income before income taxes		3,283			1,657			953			673			1,084			577			248			259


	Nine Months Ended September 30, 2016												Quarter Ended September 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		5,480			115			5,365			—			3,791			39			3,752			—
Policy charges and fee income		2,085			1,918			167			—			723			667			56			—
Net investment income		3,717			514			3,143			60			1,325			192			1,114			19
Asset management fees, commissions and other income		3,647			926			593			2,128			1,266			323			212			731

Total revenues		14,929			3,473			9,268			2,188			7,105			1,221			5,134			750


Benefits and Expenses (1):
Insurance and annuity benefits		6,874			206			6,668			—			4,243			38			4,205			—
Interest credited to policyholders’ account balances		1,362			270			1,092			—			458			72			386			—
Interest expense		82			57			14			11			29			20			5			4
Deferral of acquisition costs		(354	)		(321	)		(25	)		(8	)		(116	)		(104	)		(10	)		(2	)
Amortization of acquisition costs		386			350			25			11			100			84			13			3
General and administrative expenses		3,979			1,568			800			1,611			1,373			523			296			554

Total benefits and expenses		12,329			2,130			8,574			1,625			6,087			633			4,895			559

Adjusted operating income before income taxes		2,600			1,343			694			563			1,018			588			239			191

(1)

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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				3Q			4Q			1Q			2Q			3Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	153,295			149,441		Beginning total account value		151,188			154,903			153,295			156,830			159,202
	2,046			1,936		Sales: Highest Daily Suite - risk retained by Prudential (1)		587			558			782			688			576
	27			1,049		Highest Daily Suite - externally reinsured living benefits		321			318			14			6			7
	2,166			3,371		Other variable annuities (2)		1,180			762			632			799			735

	4,239			6,356		Total sales		2,088			1,638			1,428			1,493			1,318
	(6,996	)		(5,654	)	Surrenders and withdrawals		(1,992	)		(2,122	)		(2,326	)		(2,382	)		(2,288	)

	(2,757	)		702		Net sales (redemptions)		96			(484	)		(898	)		(889	)		(970	)
	(1,163	)		(1,103	)	Benefit payments		(349	)		(347	)		(413	)		(391	)		(359	)

	(3,920	)		(401	)	Net flows		(253	)		(831	)		(1,311	)		(1,280	)		(1,329	)
	15,499			8,514		Change in market value, interest credited, and other		4,877			124			5,751			4,578			5,170
	(2,767	)		(2,651	)	Policy charges		(909	)		(901	)		(905	)		(926	)		(936	)

	162,107			154,903		Ending total account value		154,903			153,295			156,830			159,202			162,107


						Variable Annuities Account Value by Product:
	119,001			113,902		Highest Daily Suite - risk retained by Prudential (1)		113,902			112,543			115,314			116,905			119,001
	3,153			2,629		Highest Daily Suite - externally reinsured living benefits		2,629			2,932			3,025			3,084			3,153
	39,953			38,372		Other variable annuities (2)		38,372			37,820			38,491			39,213			39,953

	162,107			154,903		Ending total account value		154,903			153,295			156,830			159,202			162,107


						Fixed Annuities and other products (3):
	3,488			3,504		Beginning total account value		3,489			3,485			3,488			3,489			3,492
	37			42		Sales		12			18			12			14			11
	(73	)		(78	)	Surrenders and withdrawals		(21	)		(27	)		(27	)		(25	)		(21	)

	(36	)		(36	)	Net redemptions		(9	)		(9	)		(15	)		(11	)		(10	)
	(238	)		(269	)	Benefit payments		(91	)		(75	)		(84	)		(82	)		(72	)

	(274	)		(305	)	Net flows		(100	)		(84	)		(99	)		(93	)		(82	)
	280			287		Interest credited and other		96			87			100			96			84
	(1	)		(1	)	Policy charges		—			—			—			—			(1	)

	3,493			3,485		Ending total account value		3,485			3,488			3,489			3,492			3,493

						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	1,415			1,803		Insurance Agents		598			550			507			490			418
	676			1,213		Wirehouses		376			279			236			238			202
	1,801			2,521		Independent Financial Planners		841			659			573			631			597
	384			861		Bank Distribution		285			168			124			148			112

	4,276			6,398		Total		2,100			1,656			1,440			1,507			1,329

(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

Third Quarter 2017

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

(in millions)


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

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,942		Beginning balance		9,977			9,863			9,892			9,810			9,804
	483			674		Premiums and deposits		215			194			185			168			130
	(431	)		(415	)	Surrenders and withdrawals		(134	)		(148	)		(153	)		(145	)		(133	)

	52			259		Net sales (redemptions)		81			46			32			23			(3	)
	(290	)		(322	)	Benefit payments		(107	)		(89	)		(100	)		(101	)		(89	)

	(238	)		(63	)	Net flows		(26	)		(43	)		(68	)		(78	)		(92	)
	177			184		Interest credited and other		58			57			58			56			63
	(14	)		(199	)	Net transfers (to) from separate account		(146	)		15			(72	)		16			42
	(1	)		(1	)	Policy charges		—			—			—			—			(1	)

	9,816			9,863		Ending balance		9,863			9,892			9,810			9,804			9,816


						Account Values in Separate Account (1):
	146,891			143,003		Beginning balance		144,700			148,525			146,891			150,509			152,890
	3,793			5,724		Premiums and deposits		1,885			1,462			1,255			1,339			1,199
	(6,638	)		(5,317	)	Surrenders and withdrawals		(1,879	)		(2,001	)		(2,200	)		(2,262	)		(2,176	)

	(2,845	)		407		Net sales (redemptions)		6			(539	)		(945	)		(923	)		(977	)
	(1,111	)		(1,050	)	Benefit payments		(333	)		(333	)		(397	)		(372	)		(342	)

	(3,956	)		(643	)	Net flows		(327	)		(872	)		(1,342	)		(1,295	)		(1,319	)
	15,602			8,617		Change in market value, interest credited and other		4,915			154			5,793			4,618			5,191
	14			199		Net transfers (to) from general account		146			(15	)		72			(16	)		(42	)
	(2,767	)		(2,651	)	Policy charges		(909	)		(901	)		(905	)		(926	)		(936	)

	155,784			148,525		Ending balance		148,525			146,891			150,509			152,890			155,784

(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

Third Quarter 2017

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

(in millions)


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

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		4,403		4,104		3,879		3,661		3,530
Guaranteed minimum withdrawal benefits		532		514		509		494		483
Guaranteed minimum income benefits		2,780		2,730		2,761		2,755		2,772
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		121,747		120,468		123,609		125,869		128,465
Guaranteed minimum withdrawal & income benefits - externally reinsured		2,629		2,932		3,025		3,084		3,153

Total		132,091		130,748		133,783		135,863		138,403


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		109,175		107,752		110,286		111,750		113,691
Account Values with Auto-Rebalancing Feature - externally reinsured		2,629		2,932		3,025		3,084		3,153
Account Values without Auto-Rebalancing Feature		20,287		20,064		20,472		21,029		21,559

Total		132,091		130,748		133,783		135,863		138,403


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		3,928		4,494		3,872		3,594		3,250
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		1,049		1,082		939		846		752

Total		4,977		5,576		4,811		4,440		4,002

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

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

(in millions)


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

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		119,755		118,620		121,507		123,591		126,009
Net amount at risk		399		487		385		323		297
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,534		30,980		31,460		31,612		31,952
Net amount at risk		3,533		3,714		3,215		3,012		2,785

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		111,804		110,684		113,311		114,834		116,844
Account Values without Auto-Rebalancing Feature		39,485		38,916		39,656		40,369		41,117

Total		151,289		149,600		152,967		155,203		157,961


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,392		1,597		1,265		1,168		1,060
Net Amount at Risk without Auto-Rebalancing Feature		2,540		2,604		2,335		2,167		2,022

Total		3,932		4,201		3,600		3,335		3,082

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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				3Q			4Q			1Q			2Q			3Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	202,802			188,961		Beginning total account value		194,007			200,476			202,802			210,400			214,731
	22,695			16,760		Deposits and sales		5,405			5,168			6,736			4,771			11,188
	(17,608	)		(14,812	)	Withdrawals and benefits		(5,013	)		(5,315	)		(6,690	)		(5,786	)		(5,132	)
	19,549			9,567		Change in market value, interest credited, interest income and other activity		6,077			2,473			7,552			5,346			6,651

	227,438			200,476		Ending total account value		200,476			202,802			210,400			214,731			227,438


	5,087			1,948		Net additions (withdrawals)		392			(147	)		46			(1,015	)		6,056


						Stable value account values included above		48,352			48,725			48,737			48,829			48,834

						Institutional Investment Products:
	183,376			179,964		Beginning total account value		180,882			186,224			183,376			185,115			186,610
	11,363			12,389		Additions		6,907			3,751			4,042			2,557			4,764
	(11,964	)		(8,241	)	Withdrawals and benefits		(2,339	)		(3,920	)		(4,241	)		(4,171	)		(3,552	)
	4,243			6,204		Change in market value, interest credited and interest income		1,953			(905	)		1,229			1,673			1,341
	1,381			(4,092	)	Other (1)		(1,179	)		(1,774	)		709			1,436			(764	)

	188,399			186,224		Ending total account value		186,224			183,376			185,115			186,610			188,399


	(601	)		4,148		Net additions (withdrawals)		4,568			(169	)		(199	)		(1,614	)		1,212


						Amounts included in ending total account value above:
	69,637			71,482		Investment-only stable value wraps		71,482			70,196			70,576			69,808			69,637
	36,053			31,280		Longevity reinsurance (2)		31,280			29,959			32,004			33,138			36,053
	82,709			83,462		Group annuities and other products		83,462			83,221			82,535			83,664			82,709

	188,399			186,224		Ending total account value		186,224			183,376			185,115			186,610			188,399

(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

Third 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				3Q		4Q		1Q		2Q		3Q

							Analysis of revenues by type:
	1,786		1,648		8	%	Asset management fees		577		579		575		592		619
	210		190		11	%	Other related revenues		52		65		58		69		83
	374		350		7	%	Service, distribution and other revenues		121		129		123		126		125

	2,370		2,188		8	%	Total Asset Management segment revenues		750		773		756		787		827


							Analysis of asset management fees by source:
	850		771		10	%	Institutional customers		273		275		275		279		296
	582		524		11	%	Retail customers		182		183		185		194		203
	354		353		0	%	General account		122		121		115		119		120

	1,786		1,648		8	%	Total asset management fees		577		579		575		592		619


Supplementary Assets Under Management Information (in billions):
	September 30, 2017
			Fixed		Real
	Equity		Income		Estate		Total
Institutional customers		65.1		370.1		43.1		478.3
Retail customers		127.9		110.3		1.7		239.9
General account		6.2		407.6		1.9		415.7

Total		199.2		888.0		46.7		1,133.9


	September 30, 2016
			Fixed		Real
	Equity		Income		Estate		Total
Institutional customers		59.6		345.7		40.6		445.9
Retail customers		116.2		90.6		2.2		209.0
General account		6.4		422.2		1.7		430.3

Total		182.2		858.5		44.5		1,085.2

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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				3Q			4Q			1Q			2Q			3Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	386.4			347.1		Beginning assets under management		373.4			398.9			386.4			399.1			414.6
	49.0			43.7		Additions		16.4			15.7			15.9			17.2			15.9
	(37.3)			(40.9	)	Withdrawals		(13.0	)		(13.2	)		(15.4	)		(10.7	)		(11.2	)
	29.5			32.4		Change in market value		8.4			(10.6	)		9.6			10.8			9.1
	2.9			12.9		Net money market flows		13.5			(1.1	)		2.0			(1.7	)		2.6
	0.5			3.7		Other (1)		0.2			(3.3	)		0.6			(0.1	)		—

	431.0			398.9		Ending assets under management		398.9			386.4			399.1			414.6			431.0
	47.3			47.0		Affiliated institutional assets under management		47.0			45.1			46.1			46.6			47.3

	478.3			445.9		Total assets managed for institutional customers at end of period		445.9			431.5			445.2			461.2			478.3


	11.7			2.8		Net institutional additions, excluding money market activity		3.4			2.5			0.5			6.5			4.7


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	136.6			128.9		Beginning assets under management		131.3			137.7			136.6			144.2			150.0
	35.7			32.2		Additions		10.5			9.9			13.0			10.8			11.9
	(33.1	)		(30.2	)	Withdrawals		(9.6	)		(11.5	)		(12.9	)		(9.6	)		(10.6	)
	18.2			6.2		Change in market value		5.5			(1.7	)		7.4			4.6			6.2
	—			(0.1	)	Net money market flows		—			—			—			—			—
	0.1			0.7		Other (1)		—			2.2			0.1			—			—

	157.5			137.7		Ending assets under management		137.7			136.6			144.2			150.0			157.5
	82.4			71.3		Affiliated retail assets under management		71.3			72.6			73.4			81.2			82.4

	239.9			209.0		Total assets managed for retail customers at end of period		209.0			209.2			217.6			231.2			239.9


	2.6			2.0		Net retail additions (withdrawals), excluding money market activity		0.9			(1.6	)		0.1			1.2			1.3

(1)	“Other” activity represents 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

Third Quarter 2017

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

(in millions)


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

							Revenues (1):
	3,789		3,663			3%	Premiums		1,210			1,231			1,268			1,256			1,265
	1,303		1,937			-33%	Policy charges and fee income		713			699			717			(76	)		662
	1,922		1,800			7%	Net investment income		625			630			647			636			639
	604		548			10%	Asset management fees, commissions and other income		195			190			196			200			208

	7,618		7,948			-4%	Total revenues		2,743			2,750			2,828			2,016			2,774


							Benefits and Expenses (1):
	4,516		5,206			-13%	Insurance and annuity benefits		1,622			1,611			1,707			1,241			1,568
	738		697			6%	Interest credited to policyholders’ account balances		237			246			243			245			250
	485		435			11%	Interest expense		147			153			157			164			164
	(510)		(503	)		-1%	Deferral of acquisition costs		(169	)		(203	)		(183	)		(166	)		(161	)
	413		50			726%	Amortization of acquisition costs		83			71			72			260			81
	2,034		1,945			5%	General and administrative expenses		650			691			680			693			661

	7,676		7,830			-2%	Total benefits and expenses		2,570			2,569			2,676			2,437			2,563


	(58)		118			-149%	Adjusted operating income (loss) before income taxes		173			181			152			(421	)		211

(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

Third Quarter 2017

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

(in millions)


	Nine Months Ended September 30, 2017								Quarter Ended September 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		3,789			669			3,120		1,265			223			1,042
Policy charges and fee income		1,303			852			451		662			519			143
Net investment income		1,922			1,449			473		639			484			155
Asset management fees, commissions and other income		604			540			64		208			185			23

Total revenues		7,618			3,510			4,108		2,774			1,411			1,363


Benefits and Expenses (1):
Insurance and annuity benefits		4,516			1,486			3,030		1,568			555			1,013
Interest credited to policyholders’ account balances		738			536			202		250			182			68
Interest expense		485			481			4		164			163			1
Deferral of acquisition costs		(510	)		(510	)		—		(161	)		(161	)		—
Amortization of acquisition costs		413			400			13		81			71			10
General and administrative expenses		2,034			1,406			628		661			451			210

Total benefits and expenses		7,676			3,799			3,877		2,563			1,261			1,302


Adjusted operating income (loss) before income taxes		(58	)		(289	)		231		211			150			61


	Nine Months Ended September 30, 2016								Quarter Ended September 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		3,663			642			3,021		1,210			216			994
Policy charges and fee income		1,937			1,454			483		713			555			158
Net investment income		1,800			1,350			450		625			469			156
Asset management fees, commissions and other income		548			485			63		195			170			25

Total revenues		7,948			3,931			4,017		2,743			1,410			1,333


Benefits and Expenses (1):
Insurance and annuity benefits		5,206			2,182			3,024		1,622			619			1,003
Interest credited to policyholders’ account balances		697			504			193		237			171			66
Interest expense		435			432			3		147			146			1
Deferral of acquisition costs		(503	)		(503	)		—		(169	)		(169	)		—
Amortization of acquisition costs		50			46			4		83			82			1
General and administrative expenses		1,945			1,329			616		650			450			200

Total benefits and expenses		7,830			3,990			3,840		2,570			1,299			1,271


Adjusted operating income (loss) before income taxes		118			(59	)		177		173			111			62

(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

Third 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				3Q			4Q			1Q			2Q			3Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1) :

	160			150		Term life		52			50			49			54			57
	124			166		Guaranteed Universal life		54			77			53			40			31
	82			64		Other Universal life		21			31			21			33			28
	75			67		Variable life		16			25			23			26			26

	441			447		Total		143			183			146			153			142

						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	85			87		Prudential Agents		28			29			27			29			29
	356			360		Third party distribution		115			154			119			124			113

	441			447		Total		143			183			146			153			142


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,041			24,487		Beginning balance		24,747			25,000			26,041			26,358			26,399
	2,374			2,381		Premiums and deposits		751			949			804			832			738
	(750	)		(748	)	Surrenders and withdrawals		(240	)		(240	)		(233	)		(289	)		(228	)

	1,624			1,633		Net sales		511			709			571			543			510
	(426	)		(384	)	Benefit payments		(138	)		(106	)		(182	)		(123	)		(121	)

	1,198			1,249		Net flows		373			603			389			420			389
	262			68		Interest credited and other		155			718			228			(85	)		119
	328			294		Net transfers from separate account		102			102			106			106			116
	(1,217	)		(1,098	)	Policy charges		(377	)		(382	)		(406	)		(400	)		(411	)
	—			—		Acquisition		—			—			—			—			—

	26,612			25,000		Ending balance		25,000			26,041			26,358			26,399			26,612


						*Separate Account Liabilities:*
	28,455			27,027		Beginning balance		27,227			28,129			28,455			29,669			30,259
	1,115			1,080		Premiums and deposits		287			359			442			343			330
	(785	)		(651	)	Surrenders and withdrawals		(212	)		(201	)		(220	)		(227	)		(338	)

	330			429		Net sales (redemptions)		75			158			222			116			(8	)
	(122	)		(130	)	Benefit payments		(39	)		(33	)		(46	)		(44	)		(32	)

	208			299		Net flows		36			125			176			72			(40	)
	3,451			1,776		Change in market value, interest credited and other		1,196			532			1,373			851			1,227
	(328	)		(294	)	Net transfers to general account		(102	)		(102	)		(106	)		(106	)		(116	)
	(686	)		(679	)	Policy charges		(228	)		(229	)		(229	)		(227	)		(230	)
	—			—		Acquisition		—			—			—			—			—

	31,100			28,129		Ending balance		28,129			28,455			29,669			30,259			31,100


						FACE AMOUNT IN FORCE (3):

						Term life		714,733			721,602			727,736			736,348			745,849
						Guaranteed Universal life		130,400			134,973			137,801			139,663			141,031
						Other Universal life		44,781			45,350			45,704			46,328			46,888
						Variable life		163,184			162,574			162,611			162,452			162,660

						Total		1,053,098			1,064,500			1,073,851			1,084,791			1,096,429

(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

Third 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				3Q			4Q			1Q			2Q			3Q

						GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	265			285		Group life		29			31			186			56			23
	141			113		Group disability		13			6			115			14			12
	406			398		Total		42			37			301			70			35


						Future Policy Benefits (1) (2):
						Group life		2,065			2,238			2,166			2,139			2,087
						Group disability		11			3			28			20			9

						Total		2,076			2,241			2,194			2,159			2,096


						Policyholders’ Account Balances (1):
						Group life		8,497			8,634			8,614			8,516			8,599
						Group disability		208			224			237			212			231

						Total		8,705			8,858			8,851			8,728			8,830


						Separate Account Liabilities (1):
						Group life		24,839			23,594			23,812			24,073			23,922
						Group disability		—			—			—			—			—

						Total		24,839			23,594			23,812			24,073			23,922


						Group Life Insurance:
	3,105			3,089		Gross premiums, policy charges and fee income (3)		1,016			1,006			1,038			1,054			1,013
	2,931			2,906		Earned premiums, policy charges and fee income		953			939			985			981			965
	88.5	%		88.9	%	Benefits ratio (4)		88.6	%		87.3	%		92.2	%		86.3	%		87.0	%
	10.8	%		10.6	%	Administrative operating expense ratio		10.6	%		10.7	%		10.8	%		10.5	%		11.2	%
						Persistency ratio		95.3	%		95.2	%		94.9	%		94.6	%		93.9	%

						Group Disability Insurance:
	709			657		Gross premiums, policy charges and fee income (3)		219			223			233			237			239
	640			598		Earned premiums, policy charges and fee income		199			207			211			209			220
	76.6	%		80.0	%	Benefits ratio (5)		80.4	%		91.3	%		74.3	%		76.7	%		78.7	%
	29.2	%		31.5	%	Administrative operating expense ratio		31.4	%		31.0	%		29.4	%		29.0	%		29.2	%
						Persistency ratio		92.9	%		91.7	%		93.7	%		93.4	%		91.7	%

						Total Group Insurance (6):
	86.4	%		87.3	%	Benefits ratio		87.1	%		88.0	%		89.1	%		84.5	%		85.5	%
	14.2	%		14.3	%	Administrative operating expense ratio		14.3	%		14.4	%		14.2	%		13.9	%		14.6	%

(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 87.0%, 86.9%, 92.2%, 87.3%, and 88.6% for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and 88.7% and 89.6% for year-to-date September 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 78.7%, 47.5%, 74.3%, 91.3%, and 80.4% for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and 67.1% and 70.3% for year-to-date September 2017 and 2016, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 85.5%, 80.0%, 89.1%, 88.0%, and 87.1%, for the three months ended September 30, 2017, June 30, 2017, March 31, 2017, December 31, 2016, and September 30, 2016, respectively, and 84.8% and 86.3% for year-to-date September 2017 and 2016, respectively.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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				3Q			4Q			1Q			2Q			3Q

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,871			4,916		Beginning balance		4,119			4,515			4,871			4,865			5,312
	230			321		Capitalization		104			87			79			80			71
	(346	)		(350	)	Amortization - operating results		(84	)		(134	)		(128	)		(102	)		(116	)
	382			(326	)	Amortization - realized investment gains and losses		374			347			50			505			(173	)
	(48	)		(46	)	Impact of unrealized (gains) or losses on AFS securities		2			56			(7	)		(36	)		(5	)
	—			—		Other		—			—			—			—			—

	5,089			4,515		Ending balance		4,515			4,871			4,865			5,312			5,089


						INDIVIDUAL LIFE INSURANCE:
	5,278			4,883		Beginning balance		4,773			4,840			5,278			5,393			5,330
	510			503		Capitalization		169			203			183			166			161
	(400	)		(46	)	Amortization - operating results		(82	)		(69	)		(71	)		(258	)		(71	)
	105			(104	)	Amortization - realized investment gains and losses		2			4			2			105			(2	)
	(138	)		(396	)	Impact of unrealized (gains) or losses on AFS securities		(22	)		300			1			(76	)		(63	)

	5,355			4,840		Ending balance		4,840			5,278			5,393			5,330			5,355


						GROUP INSURANCE:
	176			182		Beginning balance		179			178			176			175			173
	—			—		Capitalization		—			—			—			—			—
	(13	)		(4	)	Amortization - operating results		(1	)		(2	)		(1	)		(2	)		(10	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	163			178		Ending balance		178			176			175			173			163


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,082			1,188		Beginning balance		893			1,012			1,082			1,064			1,211
	2			3		Capitalization		1			—			—			1			1
	(105	)		(124	)	Amortization - operating results		(23	)		(44	)		(41	)		(30	)		(34	)
	166			(47	)	Amortization - realized investment gains and losses		140			103			25			184			(43	)
	(12	)		(8	)	Impact of unrealized (gains) or losses on AFS securities		1			11			(2	)		(8	)		(2	)
	—			—		Other		—			—			—			—			—

	1,133			1,012		Ending balance		1,012			1,082			1,064			1,211			1,133

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

									Revenues (1):
	11,885			11,534			3	%	Premiums		3,939			3,814			3,962			4,032			3,891
	374			370			1	%	Policy charges and fee income		134			129			134			112			128
	3,743			3,553			5	%	Net investment income		1,229			1,206			1,205			1,260			1,278
	266			314			-15	%	Asset management fees, commissions and other income		82			89			108			79			79

	16,268			15,771			3	%	Total revenues		5,384			5,238			5,409			5,483			5,376


									Benefits and Expenses (1):
	10,197			9,952			2	%	Insurance and annuity benefits		3,382			3,280			3,433			3,422			3,342
	678			694			-2	%	Interest credited to policyholders’ account balances		237			226			226			222			230
	10			5			100	%	Interest expense		2			3			3			3			4
	(1,389	)		(1,324	)		-5	%	Deferral of acquisition costs		(462	)		(426	)		(465	)		(507	)		(417	)
	864			804			7	%	Amortization of acquisition costs		271			264			285			304			275
	3,487			3,278			6	%	General and administrative expenses		1,174			1,136			1,128			1,216			1,143

	13,847			13,409			3	%	Total benefits and expenses		4,604			4,483			4,610			4,660			4,577


	2,421			2,362			2	%	Adjusted operating income before income taxes		780			755			799			823			799

(1)

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

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Nine Months Ended September 30, 2017									Quarter Ended September 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		11,885			5,987			5,898			3,891			1,938			1,953
Policy charges and fee income		374			265			109			128			92			36
Net investment income		3,743			1,565			2,178			1,278			540			738
Asset management fees, commissions and other income		266			165			101			79			57			22

Total revenues		16,268			7,982			8,286			5,376			2,627			2,749


Benefits and Expenses (1):
Insurance and annuity benefits		10,197			5,278			4,919			3,342			1,701			1,641
Interest credited to policyholders’ account balances		678			182			496			230			64			166
Interest expense		10			6			4			4			2			2
Deferral of acquisition costs		(1,389	)		(738	)		(651	)		(417	)		(210	)		(207	)
Amortization of acquisition costs		864			430			434			275			131			144
General and administrative expenses		3,487			1,714			1,773			1,143			566			577

Total benefits and expenses		13,847			6,872			6,975			4,577			2,254			2,323


Adjusted operating income before income taxes		2,421			1,110			1,311			799			373			426


	Nine Months Ended September 30, 2016									Quarter Ended September 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		11,534			5,640			5,894			3,939			1,882			2,057
Policy charges and fee income		370			256			114			134			97			37
Net investment income		3,553			1,460			2,093			1,229			513			716
Asset management fees, commissions and other income		314			153			161			82			41			41

Total revenues		15,771			7,509			8,262			5,384			2,533			2,851


Benefits and Expenses (1):
Insurance and annuity benefits		9,952			4,999			4,953			3,382			1,658			1,724
Interest credited to policyholders’ account balances		694			179			515			237			64			173
Interest expense		5			3			2			2			1			1
Deferral of acquisition costs		(1,324	)		(623	)		(701	)		(462	)		(213	)		(249	)
Amortization of acquisition costs		804			385			419			271			127			144
General and administrative expenses		3,278			1,422			1,856			1,174			505			669

Total benefits and expenses		13,409			6,365			7,044			4,604			2,142			2,462


Adjusted operating income before income taxes		2,362			1,144			1,218			780			391			389

(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

Third Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


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

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	4,617		4,489	Japan, excluding Gibraltar Life		1,472		1,386		1,691		1,467		1,459
	6,007		6,008	Gibraltar Life		2,094		2,022		1,884		2,134		1,989
	1,635		1,407	All other countries		507		535		521		543		571

	12,259		11,904	Total		4,073		3,943		4,096		4,144		4,019


				Annualized new business premiums:
	749		635	Japan, excluding Gibraltar Life (2)		208		205		336		251		162
	1,241		1,318	Gibraltar Life		460		408		358		483		400
	349		312	All other countries (2)		115		124		128		106		115

	2,339		2,265	Total (2)		783		737		822		840		677


				Annualized new business premiums by distribution channel:
	1,098		947	Life Planner Operations (2)		323		329		464		357		277
	577		565	Gibraltar Life Consultants		200		175		167		230		180
	464		558	Banks		188		158		132		161		171
	200		195	Independent Agency		72		75		59		92		49

	2,339		2,265	Total (2)		783		737		822		840		677


				Constant exchange rate basis (3):
				Net premiums, policy charges and fee income:
	4,613		4,387	Japan, excluding Gibraltar Life		1,380		1,365		1,707		1,457		1,449
	6,023		5,952	Gibraltar Life		1,999		1,946		1,912		2,134		1,977
	1,595		1,429	All other countries		497		542		512		532		551

	12,231		11,768	Total		3,876		3,853		4,131		4,123		3,977


				Annualized new business premiums:
	749		622	Japan, excluding Gibraltar Life		197		202		339		249		161
	1,244		1,317	Gibraltar Life		450		389		362		483		399
	338		317	All other countries		111		122		124		103		111

	2,331		2,256	Total		758		713		825		835		671


				Annualized new business premiums by distribution channel:
	1,087		939	Life Planner Operations		308		324		463		352		272
	578		563	Gibraltar Life Consultants		194		170		169		230		179
	466		559	Banks		186		157		133		162		171
	200		195	Independent Agency		70		62		60		91		49

	2,331		2,256	Total		758		713		825		835		671

(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

Third Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


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

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		314			318			327			332			334
Gibraltar Life		324			327			330			333			336
All other countries		121			123			124			126			129

Total		759			768			781			791			799


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,436			3,488			3,581			3,632			3,674
Gibraltar Life		7,170			7,182			7,191			7,207			7,222
All other countries		2,048			2,076			2,105			2,122			2,146

Total		12,654			12,746			12,877			12,961			13,042


International life insurance policy persistency:

Life Planner Operations:
13 months		93.0	%		93.0	%		93.0	%		93.0	%		92.9	%
25 months		86.2	%		86.3	%		86.3	%		86.5	%		86.1	%

Gibraltar Life (3):
13 months		93.4	%		93.5	%		93.3	%		93.4	%		93.4	%
25 months		85.5	%		86.2	%		86.7	%		86.9	%		87.2	%

Number of Life Planners at end of period:
Japan		3,776			3,824			3,932			3,861			3,951
All other countries		3,891			3,856			3,887			3,874			3,880

Total Life Planners		7,667			7,680			7,819			7,735			7,831


Gibraltar Life Consultants		8,790			8,884			8,752			8,509			8,327

(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

Third Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	September 30, 2017									December 31, 2016
	Total		Closed Block		PFI Excluding Closed Block Division					Total		Closed Block		PFI Excluding Closed Block Division
	Portfolio		Division		Amount		% of Total			Portfolio		Division		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		282,023		27,334		254,689		64.2	%		268,118		24,917		243,201		64.2	%
Public, held-to-maturity, at amortized cost		1,767		—		1,767		0.4	%		1,772		—		1,772		0.5	%
Private, available-for-sale, at fair value		57,647		14,065		43,582		11.0	%		53,061		13,987		39,074		10.3	%
Private, held-to-maturity, at amortized cost		317		—		317		0.1	%		372		—		372		0.1	%
Trading account assets supporting insurance liabilities, at fair value		22,126		—		22,126		5.6	%		21,840		—		21,840		5.8	%
Other trading account assets, at fair value		2,247		334		1,913		0.5	%		1,805		284		1,521		0.4	%
Equity securities, available-for-sale, at fair value		9,725		2,391		7,334		1.8	%		9,735		2,572		7,163		1.9	%
Commercial mortgage and other loans, at book value		54,993		9,332		45,661		11.5	%		52,208		9,437		42,771		11.2	%
Policy loans, at outstanding balance		11,765		4,570		7,195		1.8	%		11,755		4,660		7,095		1.9	%
Other long-term investments (1)		10,477		3,167		7,310		1.8	%		10,251		3,020		7,231		1.9	%
Short-term investments		5,486		398		5,088		1.3	%		7,494		837		6,657		1.8	%

Subtotal (2)		458,573		61,591		396,982		100.0	%		438,411		59,714		378,697		100.0	%

Invested assets of other entities and operations (3)		6,318		—		6,318					5,829		—		5,829

Total investments		464,891		61,591		403,300					444,240		59,714		384,526

Fixed Maturities by Credit Quality (2):


	September 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		194,142		26,467		1,342		219,267		85.3	%		184,831		26,239		2,261		208,809		85.1	%
2		26,831		2,898		179		29,550		11.5	%		26,922		2,479		454		28,947		11.8	%

Subtotal - High or Highest Quality Securities		220,973		29,365		1,521		248,817		96.8	%		211,753		28,718		2,715		237,756		96.9	%

3		4,999		348		51		5,296		2.1	%		4,837		323		90		5,070		2.1	%
4		2,265		171		48		2,388		0.9	%		1,951		178		52		2,077		0.8	%
5		132		27		5		154		0.1	%		230		43		6		267		0.1	%
6		164		5		1		168		0.1	%		152		4		1		155		0.1	%

Subtotal - Other Securities		7,560		551		105		8,006		3.2	%		7,170		548		149		7,569		3.1	%

Total		228,533		29,916		1,626		256,823		100.0	%		218,923		29,266		2,864		245,325		100.0	%


Private Fixed Maturities:

NAIC Rating (4)
1		11,849		742		66		12,525		28.5	%		10,448		647		164		10,931		27.7	%
2		24,122		1,494		249		25,367		57.7	%		22,364		1,249		627		22,986		58.2	%

Subtotal - High or Highest Quality Securities		35,971		2,236		315		37,892		86.2	%		32,812		1,896		791		33,917		85.9	%

3		3,910		175		52		4,033		9.2	%		3,709		131		92		3,748		9.5	%
4		1,145		37		16		1,166		2.7	%		927		22		30		919		2.3	%
5		744		25		29		740		1.7	%		649		30		22		657		1.7	%
6		63		35		6		92		0.2	%		194		49		10		233		0.6	%

Subtotal - Other Securities		5,862		272		103		6,031		13.8	%		5,479		232		154		5,557		14.1	%

Total		41,833		2,508		418		43,923		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 September 30, 2017 and December 31, 2016, 808 securities with amortized cost of $4,960 million (fair value $5,006 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

Third Quarter 2017

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

(in millions)


	September 30, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		128,944		76.2	%		123,285		77.9	%
Public, held-to-maturity, at amortized cost		1,767		1.0	%		1,772		1.1	%
Private, available-for-sale, at fair value		14,400		8.5	%		11,646		7.4	%
Private, held-to-maturity, at amortized cost		317		0.2	%		372		0.2	%
Trading account assets supporting insurance liabilities, at fair value		2,469		1.5	%		2,166		1.4	%
Other trading account assets, at fair value		460		0.3	%		434		0.3	%
Equity securities, available-for-sale, at fair value		2,324		1.4	%		2,654		1.7	%
Commercial mortgage and other loans, at book value		13,613		8.1	%		11,700		7.4	%
Policy loans, at outstanding balance		2,509		1.5	%		2,369		1.5	%
Other long-term investments (3)		2,101		1.2	%		1,186		0.8	%
Short-term investments		144		0.1	%		398		0.3	%

Total		169,048		100.0	%		157,982		100.0	%


	September 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		125,745		55.1	%		119,916		54.4	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		29,182		12.8	%		27,428		12.4	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,657		8.6	%		19,674		9.0	%
Other trading account assets, at fair value		1,453		0.6	%		1,087		0.5	%
Equity securities, available-for-sale, at fair value		5,010		2.2	%		4,509		2.0	%
Commercial mortgage and other loans, at book value		32,048		14.1	%		31,071		14.1	%
Policy loans, at outstanding balance		4,686		2.1	%		4,726		2.1	%
Other long-term investments (3)		5,209		2.3	%		6,045		2.7	%
Short-term investments		4,944		2.2	%		6,259		2.8	%

Total		227,934		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

Third Quarter 2017

INVESTMENT RESULTS (1)

(in millions)


	Quarter Ended September 30
	2017									2016
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (4)			Amount			(Losses)			Yield (4)			Amount			(Losses)
General Account (2)
Fixed maturities		3.82	%		2,526			150			3.86	%		2,437			304
Equity securities		6.27	%		87			235			6.10	%		82			44
Commercial mortgage and other loans		4.04	%		402			(1	)		4.19	%		378			(7	)
Policy loans		4.83	%		86			—			4.93	%		89			—
Short-term investments and cash equivalents		1.29	%		43			—			0.63	%		33			—
Other investments		4.61	%		105			1,118			8.65	%		185			315

Gross investment income before investment expenses		3.85	%		3,249			1,502			3.89	%		3,204			656
Investment expenses		-0.15	%		(131	)		—			-0.14	%		(106	)		—

Subtotal		3.70	%		3,118			1,502			3.75	%		3,098			656

Investment results of other entities and operations (3)					292			(1	)					273			4
Less, investment income related to adjusted operating income reconciling items					(65	)								(79	)

Total					3,345			1,501						3,292			660


	Nine Months Ended September 30
	2017									2016
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (4)			Amount			(Losses)			Yield (4)			Amount			(Losses)
General Account (2)
Fixed maturities		3.88	%		7,494			465			3.92	%		7,058			646
Equity securities		6.23	%		254			309			6.19	%		239			19
Commercial mortgage and other loans		4.09	%		1,177			(6	)		4.31	%		1,139			1
Policy loans		4.90	%		259			—			4.95	%		259			—
Short-term investments and cash equivalents		1.24	%		117			—			0.59	%		87			1
Other investments		7.15	%		463			(284	)		4.90	%		307			3,168

Gross investment income before investment expenses		3.96	%		9,764			484			3.86	%		9,089			3,835
Investment expenses		-0.14	%		(361	)		—			-0.14	%		(309	)		—

Subtotal		3.82	%		9,403			484			3.72	%		8,780			3,835

Investment results of other entities and operations (3)					840			(3	)					799			32
Less, investment income related to adjusted operating income reconciling items					(209	)								(183	)

Total					10,034			481						9,396			3,867

(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

Third Quarter 2017

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended September 30
	2017								2016
	Investment Income						Realized Gains /		Investment Income						Realized Gains /
	Yield (1)			Amount			(Losses)		Yield (1)			Amount			(Losses)
Japanese Insurance Operations:
Fixed maturities		3.01	%		918			132		3.04	%		898			244
Equity securities		6.22	%		23			232		5.19	%		22			53
Commercial mortgage and other loans		3.91	%		130			—		4.17	%		115			—
Policy loans		3.97	%		24			—		3.99	%		26			—
Short-term investments and cash equivalents		1.15	%		3			—		0.52	%		2			—
Other investments (2)		4.19	%		27			11		3.41	%		25			324

Gross investment income before investment expenses		3.16	%		1,125			375		3.17	%		1,088			621
Investment expenses		-0.12	%		(48	)		—		-0.12	%		(43	)		—

Total		3.04	%		1,077			375		3.05	%		1,045			621


	Nine Months Ended September 30
	2017								2016
	Investment Income						Realized Gains /		Investment Income						Realized Gains /
	Yield (1)			Amount			(Losses)		Yield (1)			Amount			(Losses)
Japanese Insurance Operations:
Fixed maturities		3.05	%		2,704			505		3.10	%		2,576			712
Equity securities		5.30	%		59			266		4.75	%		56			60
Commercial mortgage and other loans		4.07	%		380			—		4.25	%		329			7
Policy loans		3.98	%		72			—		3.96	%		71			—
Short-term investments and cash equivalents		1.33	%		10			—		0.64	%		6			—
Other investments (2)		6.31	%		100			197		4.65	%		99			1,215

Gross investment income before investment expenses		3.23	%		3,325			968		3.25	%		3,137			1,994
Investment expenses		-0.12	%		(135	)		—		-0.12	%		(122	)		—

Total		3.11	%		3,190			968		3.13	%		3,015			1,994

(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

Third Quarter 2017

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended September 30
	2017									2016
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (3)			Amount			(Losses)			Yield (3)			Amount			(Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.52	%		1,608			18			4.57	%		1,539			60
Equity securities		6.29	%		64			3			6.51	%		60			(9	)
Commercial mortgage and other loans		4.10	%		272			(1	)		4.20	%		263			(7	)
Policy loans		5.29	%		62			—			5.44	%		63			—
Short-term investments and cash equivalents		1.30	%		40			—			0.64	%		31			—
Other investments		4.78	%		78			1,107			11.33	%		160			(9	)

Gross investment income before investment expenses		4.35	%		2,124			1,127			4.41	%		2,116			35
Investment expenses		-0.17	%		(83	)		—			-0.15	%		(63	)		—

Total		4.18	%		2,041			1,127			4.26	%		2,053			35


	Nine Months Ended September 30
	2017									2016
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (3)			Amount			(Losses)			Yield (3)			Amount			(Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.57	%		4,790			(40	)		4.61	%		4,482			(66	)
Equity securities		6.58	%		195			43			6.83	%		183			(41	)
Commercial mortgage and other loans		4.10	%		797			(6	)		4.33	%		810			(6	)
Policy loans		5.38	%		187			—			5.46	%		188			—
Short-term investments and cash equivalents		1.23	%		107			—			0.58	%		81			1
Other investments		7.41	%		363			(481	)		5.02	%		208			1,953

Gross investment income before investment expenses		4.49	%		6,439			(484	)		4.28	%		5,952			1,841
Investment expenses		-0.16	%		(226	)		—			-0.16	%		(187	)		—

Total		4.33	%		6,213			(484	)		4.12	%		5,765			1,841

(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

Third Quarter 2017

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

(in millions)


	Third Quarter 2017													Third Quarter 2016
	Asset
	Management					Interest											Interest
	Fees,		Insurance			Credited to			Amortization			Pre-Tax		Insurance			Credited to			Amortization						Pre-Tax
	Commissions		and			Policyholders’			of			Adjusted		and			Policyholders’			of			General and			Adjusted
	and Other		Annuity			Account			Acquisition			Operating		Annuity			Account			Acquisition			Administrative			Operating
	Income		Benefits			Balances			Costs			Income		Benefits			Balances			Costs			Expenses			Income
Individual Annuities:
Market performance and experience true-ups		23		(9	)		(3	)		(13	)		48		(67	)		(20	)		(49	)		(3	)		139
Total of above items		23		(9	)		(3	)		(13	)		48		(67	)		(20	)		(49	)		(3	)		139
Reported amount		355		87			81			116					38			72			84			523
Amount excluding impact of items indicated above		332		96			84			129					105			92			133			526
Retirement:
Costs relating to legal matters		—		—			—			—			—		—			—			—			34			(34	)
Total of above items		—		—			—			—			—		—			—			—			34			(34	)
Reported amount		—		—			—			—					—			—			—			296
Amount excluding impact of items indicated above		—		—			—			—					—			—			—			262

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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, 2017																				Three Months Ended September 30, 2016
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		7,111			—			—		—		578		106		—			7,795			8,934			—			—		—			598		103			—			9,635
Policy charges and fee income		1,565			(63	)		—		—		—		—		—			1,502			1,559			(19	)		—		—			—		—			—			1,540
Net investment income		3,345			(9	)		—		—		666		74		—			4,076			3,292			(8	)		—		—			702		87			—			4,073
Realized investment gains (losses), net		121			1,377			—		—		107		3		—			1,608			115			529			—		—			153		16			—			813
Asset management fees, commissions and other income		1,219			27			85		—		25		2		(26	)		1,332			1,150			(298	)		37		—			28		3			(20	)		900

Total revenues		13,361			1,332			85		—		1,376		185		(26	)		16,313			15,050			204			37		—			1,481		209			(20	)		16,961


Benefits and Expenses :

Insurance and annuity benefits		7,376			(46	)		—		—		1,207		156		—			8,693			9,254			33			—		—			1,307		130			—			10,724
Interest credited to policyholders’ account balances		927			43			—		31		34		—		—			1,035			932			(140	)		—		(1	)		34		(1	)		—			824
Interest expense		330			—			—		—		—		—		—			330			314			—			—		—			1		1			—			316
Deferral of acquisition costs		(653	)		—			—		—		—		—		—			(653	)		(731	)		—			—		—			—		—			—			(731	)
Amortization of acquisition costs		470			165			—		—		8		—		—			643			444			(339	)		—		—			10		—			—			115
General and administrative expenses		3,127			6			—		—		94		19		(2	)		3,244			3,279			1			—		—			98		23			(3	)		3,398

Total benefits and expenses		11,577			168			—		31		1,343		175		(2	)		13,292			13,492			(445	)		—		(1	)		1,450		153			(3	)		14,646



	Nine Months Ended September 30, 2017																				Nine Months Ended September 30, 2016
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience - rated contractholder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		20,442			—			—		—		1,852		308		—			22,602			20,657			—			—		—			1,913		297			—			22,867
Policy charges and fee income		3,914			(154	)		—		—		—		—		—			3,760			4,358			57			—		—			—		—			—			4,415
Net investment income		10,034			(26	)		—		—		1,983		235		—			12,226			9,396			(23	)		—		—			1,953		206			—			11,532
Realized investment gains (losses), net		404			32			—		—		462		45		—			943			427			3,346			—		—			260		94			—			4,127
Asset management fees, commissions and other income		3,602			(54	)		330		—		85		6		(76	)		3,893			3,316			(880	)		361		—			30		5			(44	)		2,788

Total revenues		38,396			(202	)		330		—		4,382		594		(76	)		43,424			38,154			2,500			361		—			4,156		602			(44	)		45,729


Benefits and Expenses :

Insurance and annuity benefits		20,908			(154	)		—		—		3,915		483		—			25,152			22,051			305			—		—			3,794		458			—			26,608
Interest credited to policyholders’ account balances		2,800			(166	)		—		188		100		—		—			2,922			2,753			53			—		262			101		(1	)		—			3,168
Interest expense		978			—			—		—		1		2		—			981			996			—			—		—			2		2			—			1,000
Deferral of acquisition costs		(2,132	)		—			—		—		—		—		—			(2,132	)		(2,134	)		—			—		—			—		—			—			(2,134	)
Amortization of acquisition costs		1,613			(474	)		—		—		27		—		—			1,166			1,204			511			—		—			29		—			—			1,744
General and administrative expenses		9,557			69			—		—		290		58		(10	)		9,964			9,344			284			—		—			304		67			(44	)		9,955

Total benefits and expenses		33,724			(725	)		—		188		4,333		543		(10	)		38,053			34,214			1,153			—		262			4,230		526			(44	)		40,341

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

(2)	U.S. generally accepted accounting principles

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2017

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

(in millions)


	Three Months Ended December 31, 2016																							Three Months Ended March 31, 2017
				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		7,296			—			—			—			707		94			—			8,097			5,774			—			—		—		604		103		—			6,481
Policy charges and fee income		1,529			(38	)		—			—			—		—			—			1,491			1,555			(22	)		—		—		—		—		—			1,533
Net investment income		3,299			(8	)		—			—			625		72			—			3,988			3,354			(8	)		—		—		645		70		—			4,061
Realized investment gains (losses), net		150			(2,090	)		—			—			174		(167	)		—			(1,933	)		122			27			—		—		273		5		—			427
Asset management fees, commissions and other income		1,146			644			(378	)		—			7		1			(13	)		1,407			1,202			(85	)		44		—		35		3		(31	)		1,168

Total revenues		13,420			(1,492	)		(378	)		—			1,513		—			(13	)		13,050			12,007			(88	)		44		—		1,557		181		(31	)		13,670


Benefits and Expenses :

Insurance and annuity benefits		7,658			(174	)		—			—			1,429		136			—			9,049			6,146			(39	)		—		—		1,380		153		—			7,640
Interest credited to policyholders’ account balances		945			(103	)		—			(283	)		33		1			—			593			920			(25	)		—		12		33		—		—			940
Interest expense		319			—			—			—			—		1			—			320			322			—			—		—		1		1		—			324
Deferral of acquisition costs		(711	)		—			—			—			—		—			—			(711	)		(724	)		—			—		—		—		—		—			(724	)
Amortization of acquisition costs		468			(343	)		—			—			8		—			—			133			481			(53	)		—		—		11		—		—			439
General and administrative expenses		3,282			(48	)		—			—			101		22			(8	)		3,349			3,202			(9	)		—		—		98		21		(3	)		3,309

Total benefits and expenses		11,961			(668	)		—			(283	)		1,571		160			(8	)		12,733			10,347			(126	)		—		12		1,523		175		(3	)		11,928



	Three Months Ended June 30, 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		7,557			—			—		—		670		99		—			8,326
Policy charges and fee income		794			(69	)		—		—		—		—		—			725
Net investment income		3,335			(9	)		—		—		672		91		—			4,089
Realized investment gains (losses), net		161			(1,372	)		—		—		82		37		—			(1,092	)
Asset management fees, commissions and other income		1,181			4			201		—		25		1		(19	)		1,393

Total revenues		13,028			(1,446	)		201		—		1,449		228		(19	)		13,441


Benefits and Expenses :

Insurance and annuity benefits		7,386			(69	)		—		—		1,328		174		—			8,819
Interest credited to policyholders’ account balances		953			(184	)		—		145		33		—		—			947
Interest expense		326			—			—		—		—		1		—			327
Deferral of acquisition costs		(755	)		—			—		—		—		—		—			(755	)
Amortization of acquisition costs		662			(586	)		—		—		8		—		—			84
General and administrative expenses		3,228			72			—		—		98		18		(5	)		3,411

Total benefits and expenses		11,800			(767	)		—		145		1,467		193		(5	)		12,833

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

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Third 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

Third 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

Third 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

Third Quarter 2017

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of November 1, 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 November 1, 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 - November 1, 2017

Attached files