PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - EX99.2

Attached files

file	filename
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d853984d8k.htm
EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d853984dex991.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

FINANCIAL SERVICES BUSINESSES

Fourth Quarter 2014

Reference is made to Prudential Financial, Inc.’s filings with the Securities and Exchange Commission for general information, and consolidated financial information, regarding Prudential Financial, Inc., including its Closed Block Business. All financial information in this document is unaudited.

February 4, 2015

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

FINANCIAL SERVICES BUSINESSES
Combined Statements of Operations		5
Combined Balance Sheets		6
Combining Statements of Operations by Division (Quarter)		7
Combining Statements of Operations by Division		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 Individual Life Insurance		23
Supplementary Information for Group Insurance		24

DEFERRED POLICY ACQUISITION COSTS & DEFERRED SALES INDUCEMENTS - INDIVIDUAL ANNUITIES, INDIVIDUAL LIFE AND GROUP INSURANCE		25

INTERNATIONAL INSURANCE DIVISION
Combined Statements of Operations		26
Combining Statements of Operations		27
Sales Results and Supplementary Information		28-29

INVESTMENT PORTFOLIO
Investment Portfolio Composition		30
Financial Services Businesses Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations		31
Financial Services Businesses Investment Results		32
Financial Services Businesses Investment Results - Japanese Insurance Operations		33
Financial Services Businesses Investment Results - Excluding Japanese Insurance Operations		34

RECLASSIFIED SUPPLEMENTARY INFORMATION		35

KEY DEFINITIONS AND FORMULAS		36-38

RATINGS AND INVESTOR INFORMATION		39

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

From demutualization through the periods ended December 31, 2014, the businesses of Prudential Financial, Inc. were separated into the Financial Services Businesses (FSB) and the Closed Block Business (CBB). The CBB consists principally of the assets and related liabilities of the closed block established at the time of Prudential’s demutualization, representing certain individual life insurance policies and annuities issued by Prudential Insurance for which experience based policy dividends are being paid or expected to be paid, and certain related assets and liabilities known as the “Surplus and Related Assets.” The Surplus and Related Assets supported debt service of $1.75 billion of senior secured notes known as “IHC Debt” which were issued by a subsidiary of Prudential Financial, Inc. and accounted for as obligations of the CBB.

From demutualization through December 31, 2014, the Company has had two classes of common stock, the Common Stock, which is publicly traded and reflects the performance of the FSB, and the Class B Stock, which was issued through a private placement and reflects the performance of the CBB. On January 2, 2015, Prudential Financial, Inc. repurchased and cancelled the 2.0 million of outstanding shares of Class B Stock. In addition, on December 18, 2014, the Company redeemed all of the then outstanding IHC debt. As a result of the Class B stock repurchase, for reporting periods commencing after December 31, 2014, the Company will no longer organize its principal operations into the FSB and the CBB. The Company will report a Closed Block division, which will be accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations. Its results are excluded from adjusted operating income under the Company’s definition of “divested businesses” which includes businesses that have been sold or exited including businesses that have been placed in wind down and do not qualify for “discontinued operations” accounting treatment under U.S. GAAP.

iii

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date						% Change			2013			2014
2014			2013			% Change			4Q			1Q			2Q			3Q			4Q

								*Financial Services Businesses:*
								Pre-tax adjusted operating income (loss) by division:
	3,467			3,847			-10%	U.S. Retirement Solutions and Investment Management Division		996			945			876			823			823
	521			740			-30%	U.S. Individual Life and Group Insurance Division		215			131			204			24			162
	3,252			3,152			3%	International Insurance Division		647			837			884			845			686
	(1,348	)		(1,370	)		2%	Corporate and other operations		(397	)		(342	)		(341	)		(339	)		(326	)

	5,892			6,369			-7%	Total pre-tax adjusted operating income		1,461			1,571			1,623			1,353			1,345
	1,537			1,783			-14%	Income taxes, applicable to adjusted operating income		413			434			447			319			337

	4,355			4,586			-5%	Financial Services Businesses after-tax adjusted operating income		1,048			1,137			1,176			1,034			1,008


								Reconciling items:
	(4,130	)		(8,149	)		49%	Realized investment losses, net, and related charges and adjustments		(2,360	)		(8	)		(273	)		(1,132	)		(2,717	)
	339			(250	)		236%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		23			101			225			(131	)		144
	(294	)		227			-230%	Change in experience-rated contractholder liabilities due to asset value changes		(28	)		(43	)		(189	)		93			(155	)
	167			29			476%	Divested businesses		41			73			47			(7	)		54
	44			28			57%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		27			11			18			8			7

	(3,874	)		(8,115	)		52%	Total reconciling items, before income taxes		(2,297	)		134			(172	)		(1,169	)		(2,667	)
	(1,082	)		(2,857	)		62%	Income taxes, not applicable to adjusted operating income		(853	)		39			(58	)		(606	)		(457	)

	(2,792	)		(5,258	)		47%	Total reconciling items, after income taxes		(1,444	)		95			(114	)		(563	)		(2,210	)

	1,563			(672	)		333%	Income (loss) from continuing operations (after-tax) of Financial Services Businesses before equity in earnings of operating joint ventures		(396	)		1,232			1,062			471			(1,202	)
	(41	)		(48	)		15%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		(27	)		(11	)		(17	)		(6	)		(7	)

	1,522			(720	)		311%	Income (loss) from continuing operations attributable to Prudential Financial, Inc.		(423	)		1,221			1,045			465			(1,209	)
	57			107			-47%	Earnings attributable to noncontrolling interests		32			11			23			11			12

	1,579			(613	)		358%	Income (loss) from continuing operations (after-tax) of Financial Services Businesses		(391	)		1,232			1,068			476			(1,197	)
	11			7			57%	Income (loss) from discontinued operations, net of taxes		(4	)		4			4			—			3

	1,590			(606	)		362%	Net income (loss) of Financial Services Businesses		(395	)		1,236			1,072			476			(1,194	)
	57			107			-47%	Less: Income attributable to noncontrolling interests		32			11			23			11			12

	1,533			(713	)		315%	Net income (loss) of Financial Services Businesses attributable to Prudential Financial, Inc.		(427	)		1,225			1,049			465			(1,206	)

	16.6%			17.7%				Operating Return on Average Equity (based on adjusted operating income)		16.3%			17.7%			17.7%			15.4%			15.2%

								*Reconciliation to Consolidated Net Income (Loss) Attributable to Prudential Financial, Inc:*
	1,533			(713	)			Net income (loss) of Financial Services Businesses attributable to Prudential Financial, Inc. (above)		(427	)		1,225			1,049			465			(1,206	)
	(152	)		46				Net income (loss) of Closed Block Business attributable to Prudential Financial, Inc.		(33	)		13			41			47			(253	)

	1,381			(667	)			Consolidated net income (loss) attributable to Prudential Financial, Inc.		(460	)		1,238			1,090			512			(1,459	)

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						Earnings per share of Common Stock (diluted): (1)
	9.21			9.67		Financial Services Businesses after-tax adjusted operating income		2.20			2.40			2.49			2.20			2.12

						Reconciling items:
	(8.83	)		(17.28	)	Realized investment losses, net, and related charges and adjustments		(5.01	)		(0.02	)		(0.58	)		(2.42	)		(5.84	)
	0.72			(0.53	)	Investment gains (losses) on trading account assets supporting insurance liabilities, net		0.05			0.21			0.48			(0.28	)		0.31
	(0.63	)		0.48		Change in experience-rated contractholder liabilities due to asset value changes		(0.06	)		(0.09	)		(0.40	)		0.20			(0.33	)
	0.36			0.06		Divested businesses		0.09			0.16			0.10			(0.01	)		0.12
	0.05			0.07		Difference in earnings allocated to participating unvested share-based payment awards		0.01			—			—			0.01			0.01

	(8.33	)		(17.20	)	Total reconciling items, before income taxes		(4.92	)		0.26			(0.40	)		(2.50	)		(5.73	)
	(2.32	)		(5.96	)	Income taxes, not applicable to adjusted operating income		(1.79	)		0.08			(0.12	)		(1.29	)		(0.91	)

	(6.01	)		(11.24	)	Total reconciling items, after income taxes		(3.13	)		0.18			(0.28	)		(1.21	)		(4.82	)

	3.20			(1.57	)	Income (loss) from continuing operations (after-tax) of Financial Services Businesses attributable to Prudential Financial, Inc.		(0.93	)		2.58			2.21			0.99			(2.70	)
	0.03			0.02		Income (loss) from discontinued operations, net of taxes		(0.01	)		0.01			0.01			—			0.01

	3.23			(1.55	)	Net income (loss) of Financial Services Businesses attributable to Prudential Financial, Inc.		(0.94	)		2.59			2.22			0.99			(2.69	)


	458.5			463.1		Weighted average number of outstanding Common shares (basic)		461.5			460.9			459.4			458.0			455.9

	467.7			471.7		Weighted average number of outstanding Common shares (diluted)		471.2			470.3			468.5			467.2			465.0

	(27	)		2		Direct equity adjustments for earnings per share calculation (2)		(5	)		(2	)		(3	)		(3	)		(19	)

	17			17		Earnings related to interest, net of tax, on exchangeable surplus notes		4			4			5			4			4

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	39			43		Financial Services Businesses after-tax adjusted operating income		9			10			12			9			8
	14			8		Income from continuing operations (after-tax) of Financial Services Businesses		2			11			10			4			2

(1)

Diluted share count used in the diluted earnings per share calculation for GAAP measures is equal to weighted average basic common shares for the three months ended December 31, 2013 and 2014, respectively, as well as for the twelve months ended December 31, 2013, as all potential common shares are antidilutive due to the loss from continuing operations available to holders of Common Stock after direct equity adjustment.

(2)	The direct equity adjustments for the three and twelve months ended December 31, 2014 each include $(8) million of bank and legal fees, on an after-tax basis, related to the redemption of debt of the Closed Block Business in December 2014 and the repurchase of Class B Stock in January 2015.

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date					2013			2014
2014		2013			4Q			1Q			2Q			3Q			4Q

				*Financial Services Businesses Capitalization Data (1):*
				Senior Debt:
				Short-term debt		2,594			3,944			3,729			4,354			1,746
				Long-term debt		17,069			16,081			17,004			16,113			14,947
				Junior Subordinated Long-Term Debt		4,884			4,884			4,884			4,884			4,884

				Attributed Equity:
				Including accumulated other comprehensive income		33,885			36,770			39,663			40,203			40,981
				Excluding accumulated other comprehensive income (3)		25,299			26,117			26,771			26,875			25,099
				Amount included above for foreign currency exchange rate remeasurement (4)		(2,818	)		(2,668	)		(2,818	)		(3,193	)		(4,783	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (4)		28,117			28,785			29,589			30,068			29,882


				Book value per share of Common Stock:
				Including accumulated other comprehensive income		72.30			78.87			85.35			86.76			88.80
				Excluding accumulated other comprehensive income (3)		53.98			56.02			57.61			58.00			54.39
				Amount included above for foreign currency exchange rate remeasurement (4)		(6.01	)		(5.72	)		(6.06	)		(6.89	)		(10.36	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (4)		59.99			61.74			63.67			64.89			64.75


				Number of diluted shares at end of period (2)		468.7			466.2			464.7			463.4			461.5

				*Common Stock Price Range (based on closing price):*
	93.16		92.43	High		92.43			91.23			91.10			93.16			91.67
	77.61		54.64	Low		75.99			80.45			77.61			85.75			77.86
	90.46		92.22	Close		92.22			84.65			88.77			87.94			90.46

				*Common Stock market capitalization (1)*		42,523			38,973			40,692			40,197			41,141

(1)	As of end of period.

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

(3)	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.

(4)	Represents cumulative impact of gains and losses resulting from foreign currency exchange rate remeasurement included in net income (loss).

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

OPERATIONS HIGHLIGHTS


Year-to-date					2013		2014
2014		2013			4Q		1Q		2Q		3Q		4Q

				*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		341.7		352.2		367.0		363.7		370.0
				Retail customers		170.7		172.9		180.1		180.0		186.1
				General account		357.5		365.8		374.4		373.8		377.4

				Total Investment Management and Advisory Services		869.9		890.9		921.5		917.5		933.5
				Non-proprietary assets under management		195.9		197.8		200.6		197.4		197.5

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,065.8		1,088.7		1,122.1		1,114.9		1,131.0
				Managed by U.S. Individual Life and Group Insurance Division		22.3		23.1		23.4		22.3		23.0
				Managed by International Insurance Division		19.0		19.1		20.1		23.0		21.9

				Total assets under management		1,107.1		1,130.9		1,165.6		1,160.2		1,175.9
				Client assets under administration		116.6		120.5		125.4		152.6		154.5

				Total assets under management and administration		1,223.7		1,251.4		1,291.0		1,312.8		1,330.4


				Assets managed or administered for customers outside of the United States at end of period		242.9		251.7		262.2		261.0		248.3

				*Distribution Representatives (1):*
				Prudential Agents		2,722		2,759		2,795		2,822		2,784
				International Life Planners		7,248		7,194		7,074		7,213		7,352
				Gibraltar Life Consultants		9,327		8,806		8,670		8,601		8,707

	55		53	*Prudential Agent productivity ($ thousands)*		67		44		51		53		69

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

COMBINED STATEMENTS OF OPERATIONS - FINANCIAL SERVICES BUSINESSES

(in millions)


Year-to-date						% Change			2013			2014
2014			2013			% Change			4Q			1Q			2Q			3Q			4Q

								Revenues (1):
	26,204			23,115			13%	Premiums		5,257			5,130			5,261			5,923			9,890
	6,124			5,614			9%	Policy charges and fee income		1,445			1,509			1,523			1,512			1,580
	12,046			11,530			4%	Net investment income		2,935			3,017			2,968			3,040			3,021
	5,270			5,022			5%	Asset management fees, commissions and other income		1,341			1,280			1,361			1,291			1,338

	49,644			45,281			10%	Total revenues		10,978			10,936			11,113			11,766			15,829


								Benefits and Expenses (1):
	27,539			23,310			18%	Insurance and annuity benefits		5,387			5,417			5,419			6,423			10,280
	3,720			3,702			0%	Interest credited to policyholders’ account balances		921			925			934			942			919
	1,308			1,260			4%	Interest expense		306			321			319			340			328
	(2,694	)		(2,902	)		7%	Deferral of acquisition costs		(686	)		(668	)		(679	)		(675	)		(672	)
	1,853			1,394			33%	Amortization of acquisition costs		386			469			482			376			526
	12,026			12,148			-1%	General and administrative expenses		3,203			2,901			3,015			3,007			3,103

	43,752			38,912			12%	Total benefits and expenses		9,517			9,365			9,490			10,413			14,484

	5,892			6,369			-7%	Adjusted operating income before income taxes		1,461			1,571			1,623			1,353			1,345


								Reconciling items:
	(3,588	)		(9,956	)		64%	Realized investment gains (losses), net, and related adjustments		(2,634	)		49			(202	)		(1,161	)		(2,274	)
	(542	)		1,807			-130%	Related charges		274			(57	)		(71	)		29			(443	)

	(4,130	)		(8,149	)		49%	Total realized investment losses, net, and related charges and adjustments		(2,360	)		(8	)		(273	)		(1,132	)		(2,717	)

	339			(250	)		236%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		23			101			225			(131	)		144
	(294	)		227			-230%	Change in experience-rated contractholder liabilities due to asset value changes		(28	)		(43	)		(189	)		93			(155	)
	167			29			476%	Divested businesses		41			73			47			(7	)		54
	44			28			57%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		27			11			18			8			7

	(3,874	)		(8,115	)		52%	Total reconciling items, before income taxes		(2,297	)		134			(172	)		(1,169	)		(2,667	)


	2,018			(1,746	)		216%	Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures		(836	)		1,705			1,451			184			(1,322	)
	455			(1,074	)		142%	Income tax expense (benefit)		(440	)		473			389			(287	)		(120	)

	1,563			(672	)		333%	Income (loss) from continuing operations before equity in earnings of operating joint ventures		(396	)		1,232			1,062			471			(1,202	)

(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.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

COMBINED BALANCE SHEETS - FINANCIAL SERVICES BUSINESSES

(in millions)


	12/31/2013		03/31/2014		06/30/2014		09/30/2014		12/31/2014

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $228,099; $232,097; $236,069; $232,413; $225,342)		243,654		251,059		258,673		256,119		255,425
Fixed maturities, held to maturity, at amortized cost (fair value $3,553; $3,537; $3,464; $3,183; $2,902)		3,312		3,275		3,171		2,880		2,575
Trading account assets supporting insurance liabilities, at fair value		20,827		20,935		21,273		20,507		20,263
Other trading account assets, at fair value		6,111		7,692		8,351		9,003		10,524
Equity securities, available for sale, at fair value (cost $4,561; $4,785; $4,867; $4,815; $4,732)		6,026		6,249		6,433		6,377		6,339
Commercial mortgage and other loans		31,335		32,471		33,000		34,549		36,957
Policy loans		6,753		6,862		7,021		6,928		6,798
Other long-term investments		8,304		8,393		8,309		8,315		8,155
Short-term investments		5,837		4,625		4,278		4,789		6,221

Total investments		332,159		341,561		350,509		349,467		353,257
Cash and cash equivalents		10,797		11,294		11,335		15,447		13,718
Accrued investment income		2,505		2,532		2,583		2,605		2,579
Deferred policy acquisition costs		16,101		16,229		16,300		16,219		15,561
Value of business acquired		3,675		3,610		3,499		3,394		2,836
Other assets		13,082		13,412		13,224		13,788		11,378
Separate account assets		285,060		288,161		296,801		292,616		296,435

Total assets		663,379		676,799		694,251		693,536		695,764


Liabilities:
Future policy benefits		156,601		161,466		165,179		165,985		167,903
Policyholders’ account balances		131,298		131,899		133,217		133,814		130,840
Securities sold under agreements to repurchase		4,128		4,864		4,895		4,979		5,492
Cash collateral for loaned securities		4,230		4,035		3,596		3,270		3,064
Income taxes		6,010		7,328		8,929		9,078		10,536
Senior short-term debt		2,594		3,944		3,729		4,354		1,746
Senior long-term debt		17,069		16,081		17,004		16,113		14,947
Junior subordinated long-term debt		4,884		4,884		4,884		4,884		4,884
Notes issued by consolidated variable interest entities		3,302		4,101		4,573		5,397		6,058
Other liabilities		13,715		12,625		11,169		12,260		12,299
Separate account liabilities		285,060		288,161		296,801		292,616		296,435

Total liabilities		628,891		639,388		653,976		652,750		654,204


Attributed Equity:
Accumulated other comprehensive income		8,586		10,653		12,892		13,328		15,882
Other attributed equity		25,299		26,117		26,771		26,875		25,099

Total attributed equity		33,885		36,770		39,663		40,203		40,981

Noncontrolling Interest		603		641		612		583		579

Total Equity		34,488		37,411		40,275		40,786		41,560

Total liabilities and equity		663,379		676,799		694,251		693,536		695,764

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES COMBINING STATEMENTS OF OPERATIONS - BY DIVISION

(in millions)


	Quarter Ended December 31, 2014
	Total Financial Services Businesses			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		9,890			5,373			1,183			3,338			(4	)
Policy charges and fee income		1,580			727			704			164			(15	)
Net investment income		3,021			1,261			565			1,084			111
Asset management fees, commissions and other income		1,338			1,249			183			151			(245	)

Total revenues		15,829			8,610			2,635			4,737			(153	)


Benefits and Expenses (1):
Insurance and annuity benefits		10,280			5,869			1,492			2,903			16
Interest credited to policyholders’ account balances		919			476			219			224			—
Interest expense		328			35			140			1			152
Deferral of acquisition costs		(672	)		(142	)		(151	)		(394	)		15
Amortization of acquisition costs		526			170			125			246			(15	)
General and administrative expenses		3,103			1,379			648			1,071			5

Total benefits and expenses		14,484			7,787			2,473			4,051			173


Adjusted operating income (loss) before income taxes		1,345			823			162			686			(326	)


	Quarter Ended December 31, 2013
	Total Financial Services Businesses			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		5,257			331			1,269			3,664			(7	)
Policy charges and fee income		1,445			690			634			136			(15	)
Net investment income		2,935			1,255			517			1,060			103
Asset management fees, commissions and other income		1,341			1,253			167			131			(210	)

Total revenues		10,978			3,529			2,587			4,991			(129	)


Benefits and Expenses (1):
Insurance and annuity benefits		5,387			733			1,522			3,150			(18	)
Interest credited to policyholders’ account balances		921			476			206			239			—
Interest expense		306			33			112			2			159
Deferral of acquisition costs		(686	)		(137	)		(190	)		(372	)		13
Amortization of acquisition costs		386			107			57			232			(10	)
General and administrative expenses		3,203			1,321			665			1,093			124

Total benefits and expenses		9,517			2,533			2,372			4,344			268


Adjusted operating income (loss) before income taxes		1,461			996			215			647			(397	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES COMBINING STATEMENTS OF OPERATIONS - BY DIVISION

(in millions)


	Twelve Months Ended December 31, 2014
	Total Financial Services Businesses			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		26,204			6,901			4,907			14,424			(28	)
Policy charges and fee income		6,124			2,866			2,710			596			(48	)
Net investment income		12,046			4,959			2,233			4,434			420
Asset management fees, commissions and other income		5,270			4,901			733			612			(976	)

Total revenues		49,644			19,627			10,583			20,066			(632	)


Benefits and Expenses (1):
Insurance and annuity benefits		27,539			8,817			6,355			12,284			83
Interest credited to policyholders’ account balances		3,720			1,905			854			961			—
Interest expense		1,308			142			542			4			620
Deferral of acquisition costs		(2,694	)		(564	)		(549	)		(1,641	)		60
Amortization of acquisition costs		1,853			594			353			961			(55	)
General and administrative expenses		12,026			5,266			2,507			4,245			8

Total benefits and expenses		43,752			16,160			10,062			16,814			716


Adjusted operating income (loss) before income taxes		5,892			3,467			521			3,252			(1,348	)


	Twelve Months Ended December 31, 2013
	Total Financial Services Businesses			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		23,115			1,008			5,098			17,037			(28	)
Policy charges and fee income		5,614			2,628			2,432			599			(45	)
Net investment income		11,530			4,847			1,991			4,306			386
Asset management fees, commissions and other income		5,022			4,688			617			598			(881	)

Total revenues		45,281			13,171			10,138			22,540			(568	)


Benefits and Expenses (1):
Insurance and annuity benefits		23,310			2,538			6,201			14,606			(35	)
Interest credited to policyholders’ account balances		3,702			1,910			808			984			—
Interest expense		1,260			128			414			3			715
Deferral of acquisition costs		(2,902	)		(649	)		(773	)		(1,543	)		63
Amortization of acquisition costs		1,394			297			121			1,011			(35	)
General and administrative expenses		12,148			5,100			2,627			4,327			94

Total benefits and expenses		38,912			9,324			9,398			19,388			802


Adjusted operating income (loss) before income taxes		6,369			3,847			740			3,152			(1,370	)

(1)

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES COMBINING BALANCE SHEETS - BY DIVISION

(in millions)


	As of December 31, 2014
	Total Financial Services Businesses		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		353,257		132,397		50,134		156,414		14,312
Deferred policy acquisition costs		15,561		5,493		4,233		6,156		(321	)
Other assets		30,511		15,909		10,971		6,735		(3,104	)
Separate account assets		296,435		251,040		45,939		2,330		(2,874	)

Total assets		695,764		404,839		111,277		171,635		8,013


Liabilities:
Future policy benefits		167,903		61,305		14,350		88,287		3,961
Policyholders’ account balances		130,840		56,158		29,798		44,866		18
Debt		21,577		5,758		8,386		38		7,395
Other liabilities		37,449		13,631		6,444		14,741		2,633
Separate account liabilities		296,435		251,040		45,939		2,330		(2,874	)

Total liabilities		654,204		387,892		104,917		150,262		11,133


Attributed Equity:
Accumulated other comprehensive income (loss)		15,882		2,421		1,355		13,377		(1,271	)
Other attributed equity		25,099		13,965		5,005		7,942		(1,813	)

Total attributed equity		40,981		16,386		6,360		21,319		(3,084	)

Noncontrolling Interest		579		561		—		54		(36	)

Total Equity		41,560		16,947		6,360		21,373		(3,120	)


Total liabilities and equity		695,764		404,839		111,277		171,635		8,013


	As of December 31, 2013
	Total Financial Services Businesses		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		332,159		117,314		46,351		152,219		16,275
Deferred policy acquisition costs		16,101		5,715		4,295		6,407		(316	)
Other assets		30,059		11,207		10,088		8,102		662
Separate account assets		285,060		242,344		43,441		1,949		(2,674	)

Total assets		663,379		376,580		104,175		168,677		13,947


Liabilities:
Future policy benefits		156,601		49,521		12,520		91,145		3,415
Policyholders’ account balances		131,298		55,510		28,918		46,858		12
Debt		24,547		5,523		9,245		55		9,724
Other liabilities		31,385		9,800		5,629		11,821		4,135
Separate account liabilities		285,060		242,344		43,441		1,949		(2,674	)

Total liabilities		628,891		362,698		99,753		151,828		14,612


Attributed Equity:
Accumulated other comprehensive income (loss)		8,586		689		413		8,251		(767	)
Other attributed equity		25,299		12,590		4,009		8,588		112

Total attributed equity		33,885		13,279		4,422		16,839		(655	)

Noncontrolling Interest		603		603		—		10		(10	)

Total Equity		34,488		13,882		4,422		16,849		(665	)


Total liabilities and equity		663,379		376,580		104,175		168,677		13,947

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of December 31, 2014								As of December 31, 2013
	Senior debt				Junior Subordinated Long-term Debt		Total 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
Financial Services Businesses
*Borrowings by use of proceeds:*
Capital Debt		454		7,997		4,884		13,335		309		5,036		4,884		10,229
Operating Debt - Investment related		1,754		4,958		—		6,712		1,867		8,035		—		9,902
Operating Debt - Specified businesses		1,631		1,489		—		3,120		418		3,802		—		4,220
Limited recourse and non-recourse borrowing		—		503		—		503		—		196		—		196

Total debt - Financial Services Businesses		3,839		14,947		4,884		23,670		2,594		17,069		4,884		24,547

Closed Block Business
Investment related		—		—		—		—		—		—		—		—
Limited recourse and non-recourse borrowing		—		—		—		—		75		1,600		—		1,675

Total debt		—		—		—		—		75		1,600		—		1,675


	As of December 31, 2014								As of December 31, 2013
	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
Financial Services Businesses
*Borrowings by sources:*
Capital Debt		12,241		1,041		53		13,335		8,817		1,042		370		10,229
Operating Debt - Investment related		4,013		494		2,205		6,712		6,281		411		3,210		9,902
Operating Debt - Specified businesses		2,125		995		—		3,120		2,969		1,251		—		4,220
Limited recourse and non-recourse borrowing		—		503		—		503		—		196		—		196

Total debt - Financial Services Businesses		18,379		3,033		2,258		23,670		18,067		2,900		3,580		24,547

(1)	Includes Prudential Funding, LLC.

(2)	Capital debt at Prudential Insurance Co. of America includes $941 million of surplus notes at both December 31, 2014 and December 31, 2013.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


Year-to-date						% Change			2013			2014
2014			2013			% Change			4Q			1Q			2Q			3Q			4Q

								Revenues (1):
	6,901			1,008			585%	Premiums		331			197			201			1,130			5,373
	2,866			2,628			9%	Policy charges and fee income		690			695			715			729			727
	4,959			4,847			2%	Net investment income		1,255			1,276			1,193			1,229			1,261
	4,901			4,688			5%	Asset management fees, commissions and other income		1,253			1,187			1,244			1,221			1,249

	19,627			13,171			49%	Total revenues		3,529			3,355			3,353			4,309			8,610


								Benefits and Expenses (1):
	8,817			2,538			247%	Insurance and annuity benefits		733			660			651			1,637			5,869
	1,905			1,910			0%	Interest credited to policyholders’ account balances		476			476			481			472			476
	142			128			11%	Interest expense		33			36			35			36			35
	(564	)		(649	)		13%	Deferral of acquisition costs		(137	)		(128	)		(147	)		(147	)		(142	)
	594			297			100%	Amortization of acquisition costs		107			132			139			153			170
	5,266			5,100			3%	General and administrative expenses		1,321			1,234			1,318			1,335			1,379

	16,160			9,324			73%	Total benefits and expenses		2,533			2,410			2,477			3,486			7,787

	3,467			3,847			-10%	Adjusted operating income before income taxes		996			945			876			823			823

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on trading account assets supporting insurance liabilities. 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

Fourth Quarter 2014

LOGO

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

(in millions)


	Twelve Months Ended December 31, 2014												Quarter Ended December 31, 2014
	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		6,901			105			6,796			—			5,373			28			5,345			—
Policy charges and fee income		2,866			2,649			217			—			727			671			56			—
Net investment income		4,959			630			4,209			120			1,261			158			1,071			32
Asset management fees, commissions and other income		4,901			1,326			855			2,720			1,249			334			208			707

Total revenues		19,627			4,710			12,077			2,840			8,610			1,191			6,680			739


Benefits and Expenses (1):
Insurance and annuity benefits		8,817			481			8,336			—			5,869			144			5,725			—
Interest credited to policyholders’ account balances		1,905			429			1,476			—			476			110			366			—
Interest expense		142			107			25			10			35			27			6			2
Deferral of acquisition costs		(564	)		(498	)		(50	)		(16	)		(142	)		(123	)		(16	)		(3	)
Amortization of acquisition costs		594			543			31			20			170			151			14			5
General and administrative expenses		5,266			2,181			1,044			2,041			1,379			560			276			543

Total benefits and expenses		16,160			3,243			10,862			2,055			7,787			869			6,371			547

Adjusted operating income before income taxes		3,467			1,467			1,215			785			823			322			309			192


	Twelve Months Ended December 31, 2013												Quarter Ended December 31, 2013
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management			Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		1,008			108			900			—			331			29			302			—
Policy charges and fee income		2,628			2,421			207			—			690			637			53			—
Net investment income		4,847			693			4,067			87			1,255			167			1,061			27
Asset management fees, commissions and other income		4,688			1,243			854			2,591			1,253			325			230			698

Total revenues		13,171			4,465			6,028			2,678			3,529			1,158			1,646			725


Benefits and Expenses (1):
Insurance and annuity benefits		2,538			77			2,461			—			733			30			703			—
Interest credited to policyholders’ account balances		1,910			381			1,529			—			476			96			380			—
Interest expense		128			91			26			11			33			24			6			3
Deferral of acquisition costs		(649	)		(598	)		(29	)		(22	)		(137	)		(124	)		(9	)		(4	)
Amortization of acquisition costs		297			257			15			25			107			98			3			6
General and administrative expenses		5,100			2,172			987			1,941			1,321			542			268			511

Total benefits and expenses		9,324			2,380			4,989			1,955			2,533			666			1,351			516

Adjusted operating income before income taxes		3,847			2,085			1,039			723			996			492			295			209

(1)

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	150,467			131,608		Beginning total account value		143,697			150,467			151,620			155,890			153,172
	6,987			9,623		Sales: Highest Daily Suite (1)		1,714			1,606			1,865			1,828			1,688
	2,970			1,824		Other variable annuities (2)		698			698			786			733			753

	9,957			11,447		Total sales		2,412			2,304			2,651			2,561			2,441
	(8,714	)		(7,567	)	Surrenders and withdrawals		(2,069	)		(2,158	)		(2,187	)		(2,152	)		(2,217	)

	1,243			3,880		Net sales		343			146			464			409			224
	(1,459	)		(1,282	)	Benefit payments		(336	)		(340	)		(406	)		(345	)		(368	)

	(216	)		2,598		Net flows		7			(194	)		58			64			(144	)
	8,329			19,455		Change in market value, interest credited, and other		7,603			2,194			5,081			(1,891	)		2,945
	(3,497	)		(3,194	)	Policy charges		(840	)		(847	)		(869	)		(891	)		(890	)

	155,083			150,467		Ending total account value		150,467			151,620			155,890			153,172			155,083


						Variable Annuities Account Value by Product:
	117,627			112,454		Highest Daily suite (1)		112,454			113,804			117,596			115,853			117,627
	37,456			38,013		Other variable annuities (2)		38,013			37,816			38,294			37,319			37,456

	155,083			150,467		Ending total account value		150,467			151,620			155,890			153,172			155,083


						Fixed Annuities and other products (3):
	3,673			3,734		Beginning total account value		3,681			3,673			3,656			3,638			3,611
	51			66		Sales		20			17			13			13			8
	(138	)		(160	)	Surrenders and withdrawals		(41	)		(35	)		(34	)		(30	)		(39	)

	(87	)		(94	)	Net redemptions		(21	)		(18	)		(21	)		(17	)		(31	)
	(340	)		(335	)	Benefit payments		(85	)		(71	)		(75	)		(109	)		(85	)

	(427	)		(429	)	Net flows		(106	)		(89	)		(96	)		(126	)		(116	)
	337			371		Interest credited and other		98			73			78			100			86
	(2	)		(3	)	Policy charges		—			(1	)		—			(1	)		—

	3,581			3,673		Ending total account value		3,673			3,656			3,638			3,611			3,581



						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	2,509			2,425		Insurance Agents		600			604			648			624			633
	2,008			2,246		Wirehouses		426			440			525			561			482
	4,067			4,978		Independent Financial Planners		1,033			940			1,098			1,036			993
	1,424			1,864		Bank Distribution		373			337			393			353			341

	10,008			11,513		Total		2,432			2,321			2,664			2,574			2,449

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

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

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	10,054			11,564		Beginning balance		10,409			10,054			9,881			9,811			9,816
	1,331			1,198		Premiums and deposits		222			251			370			374			336
	(875	)		(963	)	Surrenders and withdrawals		(233	)		(220	)		(222	)		(215	)		(218	)

	456			235		Net sales (redemptions)		(11	)		31			148			159			118
	(415	)		(408	)	Benefit payments		(101	)		(91	)		(94	)		(127	)		(103	)

	41			(173	)	Net flows		(112	)		(60	)		54			32			15
	337			337		Interest credited and other		78			98			103			68			68
	(578	)		(1,671	)	Net transfers to separate account		(321	)		(210	)		(227	)		(94	)		(47	)
	(2	)		(3	)	Policy charges		—			(1	)		—			(1	)		—

	9,852			10,054		Ending balance		10,054			9,881			9,811			9,816			9,852


						Account Values in Separate Account (1):
	144,086			123,778		Beginning balance		136,969			144,086			145,395			149,717			146,967
	8,677			10,315		Premiums and deposits		2,210			2,070			2,294			2,200			2,113
	(7,977	)		(6,764	)	Surrenders and withdrawals		(1,877	)		(1,973	)		(1,999	)		(1,967	)		(2,038	)

	700			3,551		Net sales		333			97			295			233			75
	(1,384	)		(1,209	)	Benefit payments		(320	)		(320	)		(387	)		(327	)		(350	)

	(684	)		2,342		Net flows		13			(223	)		(92	)		(94	)		(275	)
	8,329			19,489		Change in market value, interest credited and other		7,623			2,169			5,056			(1,859	)		2,963
	578			1,671		Net transfers from general account		321			210			227			94			47
	(3,497	)		(3,194	)	Policy charges		(840	)		(847	)		(869	)		(891	)		(890	)

	148,812			144,086		Ending balance		144,086			145,395			149,717			146,967			148,812

(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

Fourth Quarter 2014

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

(in millions)


	2013		2014
	4Q		1Q		2Q		3Q		4Q

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		6,799		6,514		6,322		5,947		5,756
Guaranteed minimum withdrawal benefits		886		851		829		767		736
Guaranteed minimum income benefits		3,667		3,578		3,545		3,382		3,324
Guaranteed minimum withdrawal & income benefits		113,246		115,079		119,442		118,124		120,404

Total		124,598		126,022		130,138		128,220		130,220


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		107,910		109,139		112,695		111,033		112,724
Account Values without Auto-Rebalancing Feature		16,688		16,883		17,443		17,187		17,496

Total		124,598		126,022		130,138		128,220		130,220


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,735		1,761		1,504		2,017		2,034
Net Amount at Risk without Auto-Rebalancing Feature		910		895		781		911		871

Total		2,645		2,656		2,285		2,928		2,905

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


	2013		2014
	4Q		1Q		2Q		3Q		4Q

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		112,445		113,733		117,486		115,725		117,592
Net amount at risk		465		440		402		437		403
Minimum return, anniversary contract value, or maximum contract value:
Account value		34,846		34,750		35,230		34,299		34,298
Net amount at risk		2,817		2,806		2,572		2,987		2,855

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		107,910		109,139		112,695		111,033		112,724
Account Values without Auto-Rebalancing Feature		39,381		39,344		40,021		38,991		39,166

Total		147,291		148,483		152,716		150,024		151,890


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		613		624		546		823		765
Net Amount at Risk without Auto-Rebalancing Feature		2,669		2,622		2,428		2,601		2,493

Total		3,282		3,246		2,974		3,424		3,258

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	173,502			148,405		Beginning total account value		165,364			173,502			178,150			181,577			180,535
	23,934			20,677		Deposits and sales		5,846			8,587			4,528			5,190			5,629
	(22,601	)		(18,711	)	Withdrawals and benefits		(5,786	)		(6,003	)		(6,066	)		(4,221	)		(6,311	)
	9,361			23,131		Change in market value, interest credited, interest income and other activity		8,078			2,064			4,965			(2,011	)		4,343

	184,196			173,502		Ending total account value		173,502			178,150			181,577			180,535			184,196


	1,333			1,966		Net additions (withdrawals)		60			2,584			(1,538	)		969			(682	)


						Stable value account values included above		44,013			44,461			44,174			44,464			44,671

						Institutional Investment Products:
	149,402			141,435		Beginning total account value		147,100			149,402			149,661			148,971			175,526
	43,293			17,294		Additions		4,055			1,733			2,075			30,962			8,523
	(16,036	)		(9,951	)	Withdrawals and benefits		(2,683	)		(3,017	)		(4,602	)		(3,634	)		(4,783	)
	5,833			1,081		Change in market value, interest credited and interest income		968			1,441			1,753			940			1,699
	(2,851	)		(457	)	Other (1)		(38	)		102			84			(1,713	)		(1,324	)

	179,641			149,402		Ending total account value		149,402			149,661			148,971			175,526			179,641


	27,257			7,343		Net additions (withdrawals)		1,372			(1,284	)		(2,527	)		27,328			3,740


						Amounts included in ending total account value above:
	69,814			72,507		Investment-only stable value wraps		72,507			72,845			72,407			71,323			69,814
	30,839			2,358		Longevity reinsurance (2)		2,358			2,357			2,399			29,509			30,839
	78,988			74,537		Group annuities and other products		74,537			74,459			74,165			74,694			78,988

	179,641			149,402		Ending total account value		149,402			149,661			148,971			175,526			179,641

(1)	“Other” activity includes the effect of foreign exchange rate changes, as well as 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

Fourth Quarter 2014

LOGO

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				% Change			2013		2014
2014		2013		% Change			4Q		1Q		2Q		3Q		4Q

						Analysis of revenues by type:
	2,021		1,881		7%	Asset management fees		491		489		507		510		515
	262		254		3%	Other related revenues		94		66		67		62		67
	557		543		3%	Service, distribution and other revenues		140		112		139		149		157

	2,840		2,678		6%	Total Asset Management segment revenues		725		667		713		721		739


						Analysis of asset management fees by source:
	877		838		5%	Institutional customers		218		214		225		216		222
	720		631		14%	Retail customers		171		173		177		186		184
	424		412		3%	General account		102		102		105		108		109

	2,021		1,881		7%	Total asset management fees		491		489		507		510		515


Supplementary Assets Under Management Information (in billions):
	December 31, 2014
	Equity		Fixed Income		Real Estate		Total
Institutional customers		63.8		270.0		36.2		370.0
Retail customers		122.8		61.0		2.3		186.1
General account		7.7		368.1		1.6		377.4

Total		194.3		699.1		40.1		933.5


	December 31, 2013
	Equity		Fixed Income		Real Estate		Total
Institutional customers		63.4		243.8		34.5		341.7
Retail customers		117.0		51.5		2.2		170.7
General account		8.9		347.2		1.4		357.5

Total		189.3		642.5		38.1		869.9

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in billions)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	300.5			274.6		Beginning assets under management		290.0			300.5			310.4			323.5			320.7
	42.3			57.1		Additions		13.8			10.9			10.5			10.0			10.9
	(41.6	)		(37.7	)	Withdrawals		(8.5	)		(9.0	)		(7.8	)		(11.4	)		(13.4	)
	23.1			7.8		Change in market value		6.0			8.0			10.3			(1.0	)		5.8
	—			(0.5	)	Net money market flows		(0.5	)		(0.1	)		0.1			—			—
	(0.7	)		(0.8	)	Other (1)		(0.3	)		0.1			—			(0.4	)		(0.4	)

	323.6			300.5		Ending assets under management		300.5			310.4			323.5			320.7			323.6
	46.4			41.2		Affiliated institutional assets under management		41.2			41.8			43.5			43.0			46.4

	370.0			341.7		Total assets managed for institutional customers at end of period		341.7			352.2			367.0			363.7			370.0


	0.7			19.4		Net institutional additions (withdrawals), excluding money market activity		5.3			1.9			2.7			(1.4	)		(2.5	)


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	115.0			91.1		Beginning assets under management		106.5			115.0			117.0			122.5			122.7
	36.8			40.2		Additions		9.8			8.0			8.4			8.5			11.9
	(32.1	)		(35.8	)	Withdrawals		(8.3	)		(7.8	)		(7.7	)		(7.3	)		(9.3	)
	7.2			19.5		Change in market value		7.0			1.8			4.8			(1.0	)		1.6
	—			—		Net money market flows		—			—			—			—			—
	(0.1	)		—		Other		—			—			—			—			(0.1	)

	126.8			115.0		Ending assets under management		115.0			117.0			122.5			122.7			126.8
	59.3			55.7		Affiliated retail assets under management		55.7			55.9			57.6			57.3			59.3

	186.1			170.7		Total assets managed for retail customers at end of period		170.7			172.9			180.1			180.0			186.1


	4.7			4.4		Net retail additions, excluding money market activity		1.5			0.2			0.7			1.2			2.6

(1)	“Other” activity represents transfers from the Retirement Segment, as a result of changes in the client contract form; and FX related to International assets under management.

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(in millions)


Year-to-date						% Change			2013			2014
2014			2013			% Change			4Q			1Q			2Q			3Q			4Q

								Revenues (1):
	4,907			5,098			-4%	Premiums		1,269			1,240			1,241			1,243			1,183
	2,710			2,432			11%	Policy charges and fee income		634			688			681			637			704
	2,233			1,991			12%	Net investment income		517			558			540			570			565
	733			617			19%	Asset management fees, commissions and other income		167			172			198			180			183

	10,583			10,138			4%	Total revenues		2,587			2,658			2,660			2,630			2,635


								Benefits and Expenses (1):
	6,355			6,201			2%	Insurance and annuity benefits		1,522			1,621			1,550			1,692			1,492
	854			808			6%	Interest credited to policyholders’ account balances		206			210			211			214			219
	542			414			31%	Interest expense		112			124			129			149			140
	(549	)		(773	)		29%	Deferral of acquisition costs		(190	)		(143	)		(130	)		(125	)		(151	)
	353			121			192%	Amortization of acquisition costs		57			99			100			29			125
	2,507			2,627			-5%	General and administrative expenses		665			616			596			647			648

	10,062			9,398			7%	Total benefits and expenses		2,372			2,527			2,456			2,606			2,473


	521			740			-30%	Adjusted operating income before income taxes		215			131			204			24			162

(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

Fourth Quarter 2014

LOGO

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

(in millions)


	Twelve Months Ended December 31, 2014									Quarter Ended December 31, 2014
	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		4,907			848			4,059			1,183			205			978
Policy charges and fee income		2,710			2,143			567			704			562			142
Net investment income		2,233			1,620			613			565			411			154
Asset management fees, commissions and other income		733			615			118			183			153			30

Total revenues		10,583			5,226			5,357			2,635			1,331			1,304


Benefits and Expenses (1):
Insurance and annuity benefits		6,355			2,140			4,215			1,492			524			968
Interest credited to policyholders’ account balances		854			606			248			219			154			65
Interest expense		542			533			9			140			138			2
Deferral of acquisition costs		(549	)		(547	)		(2	)		(151	)		(149	)		(2	)
Amortization of acquisition costs		353			345			8			125			124			1
General and administrative expenses		2,507			1,651			856			648			422			226

Total benefits and expenses		10,062			4,728			5,334			2,473			1,213			1,260


Adjusted operating income before income taxes		521			498			23			162			118			44


	Twelve Months Ended December 31, 2013									Quarter Ended December 31, 2013
	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		5,098			810			4,288			1,269			215			1,054
Policy charges and fee income		2,432			1,906			526			634			494			140
Net investment income		1,991			1,406			585			517			369			148
Asset management fees, commissions and other income		617			498			119			167			134			33

Total revenues		10,138			4,620			5,518			2,587			1,212			1,375


Benefits and Expenses (1):
Insurance and annuity benefits		6,201			1,902			4,299			1,522			481			1,041
Interest credited to policyholders’ account balances		808			576			232			206			146			60
Interest expense		414			407			7			112			110			2
Deferral of acquisition costs		(773	)		(762	)		(11	)		(190	)		(181	)		(9	)
Amortization of acquisition costs		121			111			10			57			54			3
General and administrative expenses		2,627			1,803			824			665			445			220

Total benefits and expenses		9,398			4,037			5,361			2,372			1,055			1,317


Adjusted operating income before income taxes		740			583			157			215			157			58

(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

Fourth Quarter 2014

LOGO

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							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1) :

	52			38		Variable life		13			9			11			10			22
	219			497		Universal life		109			71			46			43			59
	181			196		Term life		44			42			46			44			49

	452			731		Total		166			122			103			97			130


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	98			95		Prudential Agents		23			22			25			24			27
	354			636		Third party distribution		143			100			78			73			103

	452			731		Total		166			122			103			97			130


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2)(3):*
	21,842			10,583		Beginning balance		21,367			21,842			22,119			22,239			22,570
	2,880			3,799		Premiums and deposits		834			769			681			696			734
	(1,130	)		(1,063	)	Surrenders and withdrawals		(252	)		(237	)		(311	)		(274	)		(308	)

	1,750			2,736		Net sales		582			532			370			422			426
	(430	)		(419	)	Benefit payments		(109	)		(105	)		(110	)		(111	)		(104	)

	1,320			2,317		Net flows		473			427			260			311			322
	225			1,170		Interest credited and other		235			65			66			231			(137	)
	432			368		Net transfers from separate account		98			105			110			110			107
	(1,293	)		(1,280	)	Policy charges		(331	)		(320	)		(316	)		(321	)		(336	)
	—			8,684		Acquisition		—			—			—			—			—

	22,526			21,842		Ending balance		21,842			22,119			22,239			22,570			22,526


						*Separate Account Liabilities (3):*
	26,916			17,817		Beginning balance		25,380			26,916			27,153			27,968			27,455
	1,350			1,277		Premiums and deposits		392			369			283			278			420
	(873	)		(902	)	Surrenders and withdrawals		(232	)		(239	)		(203	)		(219	)		(212	)

	477			375		Net sales		160			130			80			59			208
	(104	)		(121	)	Benefit payments		(29	)		(32	)		(28	)		(20	)		(24	)

	373			254		Net flows		131			98			52			39			184
	1,987			4,575		Change in market value, interest credited and other		1,744			484			1,110			(201	)		594
	(432	)		(368	)	Net transfers to general account		(98	)		(105	)		(110	)		(110	)		(107	)
	(956	)		(969	)	Policy charges		(241	)		(240	)		(237	)		(241	)		(238	)
	—			5,607		Acquisition		—			—			—			—			—

	27,888			26,916		Ending balance		26,916			27,153			27,968			27,455			27,888


						FACE AMOUNT IN FORCE (4):

						Variable life		172,870			173,382			171,043			169,493			168,852
						Universal life		144,533			147,519			149,274			150,697			152,706
						Term life		621,289			627,425			634,132			640,758			650,233

						Total		938,692			948,326			954,449			960,948			971,791

(1)	Excludes corporate-owned life insurance.

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

(3)	Includes reclassifications during the second quarter of 2013 to conform presentation of certain acquired liabilities.

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

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(dollar amounts in millions)


Year-to-date					2013		2014
2014		2013			4Q		1Q		2Q		3Q		4Q

				Individual Life Insurance:

				Policy Surrender Experience:
	1,127		1,173	Cash value of surrenders		291		286		278		289		274
	2.5%		2.8%	Cash value of surrenders as a percentage of mean future policy benefits, policyholders’ account balances, and separate account balances		2.7%		2.6%		2.5%		2.5%		2.4%

				Death benefits per $1,000 of in force (1):
	4.79		4.54	Variable and universal life		4.41		5.06		4.61		4.62		4.82
	1.23		1.29	Term life		1.55		1.31		1.20		1.19		1.27
	3.27		3.22	Total, Individual Life Insurance		3.25		3.51		3.13		3.16		3.28

(1)	Annualized, for interim reporting periods. Amounts are stated net of reinsurance.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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

(dollar amounts in millions)


Year-to-date					2013			2014
2014		2013			4Q			1Q			2Q			3Q			4Q

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	189		240	Group life		44			137			10			14			28
	67		73	Group disability		8			33			12			13			9

	256		313	Total		52			170			22			27			37


				Future Policy Benefits (1) (2):
				Group life		2,281			2,198			2,132			2,074			2,219
				Group disability		3			30			21			11			3

				Total		2,284			2,228			2,153			2,085			2,222


				Policyholders’ Account Balances (1):
				Group life		7,928			7,853			7,923			7,953			8,106
				Group disability		251			254			217			223			236

				Total		8,179			8,107			8,140			8,176			8,342


				Separate Account Liabilities (1):
				Group life		22,706			22,938			24,525			24,515			24,305
				Group disability		—			—			—			—			—

				Total		22,706			22,938			24,525			24,515			24,305


				Group Life Insurance:
	3,977		4,099	Gross premiums, policy charges and fee income (3)		1,013			1,004			1,002			953			1,018
	3,808		3,915	Earned premiums, policy charges and fee income		969			973			966			955			914
	89.3%		88.5%	Benefits ratio		86.2	%		89.6	%		89.3	%		89.9	%		88.1	%
	11.1%		10.1%	Administrative operating expense ratio		10.8	%		11.2	%		9.9	%		11.5	%		12.0	%
				Persistency ratio		93.7	%		94.9	%		94.2	%		93.5	%		93.2	%

				Group Disability Insurance:
	882		967	Gross premiums, policy charges and fee income (3)		242			221			221			220			220
	818		899	Earned premiums, policy charges and fee income		225			200			199			213			206
	99.8%		92.8%	Benefits ratio		91.6	%		100.5	%		83.9	%		133.8	%		79.1	%
	30.2%		26.6%	Administrative operating expense ratio		28.1	%		29.0	%		29.4	%		31.4	%		30.9	%
				Persistency ratio		87.0	%		87.0	%		85.6	%		84.6	%		83.9	%

(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.

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

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

(in millions)


Year-to-date							2013			2014
2014			2013				4Q			1Q			2Q			3Q			4Q

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	5,490			3,829		Beginning balance		5,314			5,490			5,513			5,521			5,554
	498			598		Capitalization		124			116			132			127			123
	(543	)		(257	)	Amortization - operating results		(98	)		(122	)		(129	)		(141	)		(151	)
	(60	)		1,214		Amortization - realized investment gains and losses		142			41			9			34			(144	)
	(9	)		106		Impact of unrealized (gains) or losses on AFS securities		8			(12	)		(4	)		13			(6	)
	—			—		Other		—			—			—			—			—

	5,376			5,490		Ending balance		5,490			5,513			5,521			5,554			5,376


						INDIVIDUAL LIFE INSURANCE:
	4,112			3,116		Beginning balance		3,952			4,112			4,089			4,057			4,185
	547			762		Capitalization		181			143			130			125			149
	(345	)		(111	)	Amortization - operating results		(54	)		(96	)		(98	)		(27	)		(124	)
	(23	)		15		Amortization - realized investment gains and losses		4			2			1			5			(31	)
	(235	)		330		Impact of unrealized (gains) or losses on AFS securities		29			(72	)		(65	)		25			(123	)

	4,056			4,112		Ending balance		4,112			4,089			4,057			4,185			4,056


						GROUP INSURANCE:
	183			182		Beginning balance		177			183			180			178			176
	2			11		Capitalization		9			—			—			—			2
	(8	)		(10	)	Amortization - operating results		(3	)		(3	)		(2	)		(2	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	177			183		Ending balance		183			180			178			176			177


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,813			1,357		Beginning balance		1,764			1,813			1,756			1,687			1,645
	21			53		Capitalization		9			7			7			4			3
	(215	)		(137	)	Amortization - operating results		(39	)		(50	)		(52	)		(56	)		(57	)
	(107	)		504		Amortization - realized investment gains and losses		76			(11	)		(21	)		3			(78	)
	1			36		Impact of unrealized (gains) or losses on AFS securities		3			(3	)		(3	)		7			—
	—			—		Other		—			—			—			—			—

	1,513			1,813		Ending balance		1,813			1,756			1,687			1,645			1,513

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


Year-to-date						%			2013			2014
2014			2013			Change			4Q			1Q			2Q			3Q			4Q

								Revenues (1):
	14,424			17,037			-15%	Premiums		3,664			3,696			3,822			3,568			3,338
	596			599			-1%	Policy charges and fee income		136			138			138			156			164
	4,434			4,306			3%	Net investment income		1,060			1,084			1,128			1,138			1,084
	612			598			2%	Asset management fees, commissions and other income		131			157			164			140			151

	20,066			22,540			-11%	Total revenues		4,991			5,075			5,252			5,002			4,737


								Benefits and Expenses (1):
	12,284			14,606			-16%	Insurance and annuity benefits		3,150			3,113			3,217			3,051			2,903
	961			984			-2%	Interest credited to policyholders’ account balances		239			239			242			256			224
	4			3			33%	Interest expense		2			—			2			1			1
	(1,641	)		(1,543	)		-6%	Deferral of acquisition costs		(372	)		(412	)		(420	)		(415	)		(394	)
	961			1,011			-5%	Amortization of acquisition costs		232			250			256			209			246
	4,245			4,327			-2%	General and administrative expenses		1,093			1,048			1,071			1,055			1,071

	16,814			19,388			-13%	Total benefits and expenses		4,344			4,238			4,368			4,157			4,051


	3,252			3,152			3%	Adjusted operating income before income taxes		647			837			884			845			686

(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

Fourth Quarter 2014

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Twelve Months Ended December 31, 2014									Quarter Ended December 31, 2014
	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		14,424			6,883			7,541			3,338			1,620			1,718
Policy charges and fee income		596			373			223			164			106			58
Net investment income		4,434			1,727			2,707			1,084			429			655
Asset management fees, commissions and other income		612			284			328			151			88			63

Total revenues		20,066			9,267			10,799			4,737			2,243			2,494


Benefits and Expenses (1):
Insurance and annuity benefits		12,284			6,014			6,270			2,903			1,434			1,469
Interest credited to policyholders’ account balances		961			221			740			224			49			175
Interest expense		4			2			2			1			—			1
Deferral of acquisition costs		(1,641	)		(774	)		(867	)		(394	)		(189	)		(205	)
Amortization of acquisition costs		961			453			508			246			116			130
General and administrative expenses		4,245			1,762			2,483			1,071			459			612

Total benefits and expenses		16,814			7,678			9,136			4,051			1,869			2,182


Adjusted operating income before income taxes		3,252			1,589			1,663			686			374			312


	Twelve Months Ended December 31, 2013									Quarter Ended December 31, 2013
	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		17,037			6,770			10,267			3,664			1,651			2,013
Policy charges and fee income		599			349			250			136			86			50
Net investment income		4,306			1,616			2,690			1,060			418			642
Asset management fees, commissions and other income		598			243			355			131			49			82

Total revenues		22,540			8,978			13,562			4,991			2,204			2,787


Benefits and Expenses (1):
Insurance and annuity benefits		14,606			5,814			8,792			3,150			1,478			1,672
Interest credited to policyholders’ account balances		984			244			740			239			57			182
Interest expense		3			2			1			2			1			1
Deferral of acquisition costs		(1,543	)		(702	)		(841	)		(372	)		(173	)		(199	)
Amortization of acquisition costs		1,011			443			568			232			110			122
General and administrative expenses		4,327			1,660			2,667			1,093			428			665

Total benefits and expenses		19,388			7,461			11,927			4,344			1,901			2,443


Adjusted operating income before income taxes		3,152			1,517			1,635			647			303			344

(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 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


Year-to-date					2013		2014
2014		2013			4Q		1Q		2Q		3Q		4Q

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	5,373		5,395	Japan, excluding Gibraltar Life		1,273		1,538		1,303		1,302		1,230
	7,764		10,517	Gibraltar Life		2,063		1,859		2,185		1,944		1,776
	1,883		1,724	All other countries		464		437		472		478		496

	15,020		17,636	Total		3,800		3,834		3,960		3,724		3,502


				Annualized new business premiums:
	706		763	Japan, excluding Gibraltar Life		183		227		157		161		161
	1,584		1,756	Gibraltar Life		392		361		437		409		377
	455		365	All other countries		108		104		115		113		123

	2,745		2,884	Total		683		692		709		683		661


				Annualized new business premiums by distribution channel:
	1,161		1,128	Life Planner Operations		291		331		272		274		284
	701		779	Gibraltar Life Consultants		167		158		210		174		159
	626		757	Banks		169		144		156		170		156
	257		220	Independent Agency		56		59		71		65		62

	2,745		2,884	Total		683		692		709		683		661


				Constant exchange rate basis (2):

				Net premiums, policy charges and fee income:
	5,982		5,664	Japan, excluding Gibraltar Life		1,368		1,680		1,411		1,437		1,454
	8,567		10,925	Gibraltar Life		2,193		2,036		2,384		2,111		2,036
	1,795		1,648	All other countries		438		418		436		446		495

	16,344		18,237	Total		3,999		4,134		4,231		3,994		3,985


				Annualized new business premiums:
	787		801	Japan, excluding Gibraltar Life		196		249		171		178		189
	1,681		1,789	Gibraltar Life		406		384		457		427		413
	431		346	All other countries		102		100		104		105		122

	2,899		2,936	Total		704		733		732		710		724


				Annualized new business premiums by distribution channel:
	1,218		1,147	Life Planner Operations		298		349		275		283		311
	756		796	Gibraltar Life Consultants		176		171		220		186		179
	650		769	Banks		173		150		161		173		166
	275		224	Independent Agency		57		63		76		68		68

	2,899		2,936	Total		704		733		732		710		724

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

(2)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 91 per U.S. dollar and Korean won 1120 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2013			2014
	4Q			1Q			2Q			3Q			4Q

Face amount of individual policies in force at end of period (in billions) (1)(2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		332			336			338			342			345
Gibraltar Life		371			373			372			373			374
All other countries		111			112			115			116			118

Total		814			821			825			831			837


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		2,969			3,015			3,043			3,077			3,111
Gibraltar Life		7,274			7,217			7,161			7,137			7,224
All other countries		1,742			1,766			1,794			1,821			1,855

Total		11,985			11,998			11,998			12,035			12,190


International life insurance policy persistency:

Life Planner Operations:
13 months		93.0	%		93.0	%		92.9	%		92.5	%		92.3	%
25 months		85.6	%		85.9	%		86.0	%		86.2	%		86.0	%

Gibraltar Life (3):
13 months		90.9	%		91.0	%		91.0	%		91.2	%		91.5	%
25 months		82.4	%		81.8	%		81.9	%		82.2	%		82.2	%

Number of Life Planners at end of period:
Japan		3,258			3,298			3,212			3,275			3,328
All other countries		3,990			3,896			3,862			3,938			4,024

Total Life Planners		7,248			7,194			7,074			7,213			7,352


Gibraltar Life Consultants		9,327			8,806			8,670			8,601			8,707

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 91 per U.S. dollar and Korean won 1120 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 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	December 31, 2014									December 31, 2013
	Consolidated Portfolio		Closed Block Business		Financial Services Businesses					Consolidated Portfolio		Closed Block Business		Financial Services Businesses
	Consolidated Portfolio		Closed Block Business		Amount		% of Total			Consolidated Portfolio		Closed Block Business		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		249,165		28,626		220,539		64.5	%		240,090		27,401		212,689		65.4	%
Public, held-to-maturity, at amortized cost		2,000		—		2,000		0.6	%		2,500		—		2,500		0.8	%
Private, available-for-sale, at fair value		49,777		15,039		34,738		10.1	%		46,461		15,811		30,650		9.4	%
Private, held-to-maturity, at amortized cost		575		—		575		0.2	%		812		—		812		0.2	%
Trading account assets supporting insurance liabilities, at fair value		20,263		—		20,263		5.9	%		20,827		—		20,827		6.4	%
Other trading account assets, at fair value		1,806		350		1,456		0.4	%		1,683		342		1,341		0.4	%
Equity securities, available-for-sale, at fair value		9,853		3,522		6,331		1.8	%		9,903		3,884		6,019		1.8	%
Commercial mortgage and other loans, at book value		46,013		9,475		36,538		10.7	%		40,806		9,673		31,133		9.6	%
Policy loans, at outstanding balance		11,712		4,914		6,798		2.0	%		11,766		5,013		6,753		2.1	%
Other long-term investments (1)		9,935		2,766		7,169		2.1	%		9,196		2,024		7,172		2.2	%
Short-term investments		7,911		2,037		5,874		1.7	%		7,311		1,866		5,445		1.7	%

Subtotal (2)		409,010		66,729		342,281		100.0	%		391,355		66,014		325,341		100.0	%

Invested assets of other entities and operations (3)		10,976		—		10,976					6,818		—		6,818

Total investments		419,986		66,729		353,257					398,173		66,014		332,159

Fixed Maturities by Credit Quality (2):


	December 31, 2014											December 31, 2013
	Financial Services Businesses											Financial Services Businesses
	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		167,392		24,613		549		191,456		85.9	%		171,777		14,808		2,719		183,866		85.4	%
2		22,321		3,054		279		25,096		11.3	%		24,281		2,029		781		25,529		11.8	%

Subtotal - High or Highest Quality Securities		189,713		27,667		828		216,552		97.2	%		196,058		16,837		3,500		209,395		97.2	%

3		3,661		359		32		3,988		1.8	%		4,078		256		136		4,198		1.9	%
4		1,684		188		32		1,840		0.8	%		1,391		162		33		1,520		0.7	%
5		171		73		6		238		0.1	%		125		22		9		138		0.1	%
6		196		11		1		206		0.1	%		116		20		3		133		0.1	%

Subtotal - Other Securities		5,712		631		71		6,272		2.8	%		5,710		460		181		5,989		2.8	%

Total		195,425		28,298		899		222,824		100.0	%		201,768		17,297		3,681		215,384		100.0	%


Private Fixed Maturities:
NAIC Rating (4)
1		8,730		1,102		15		9,817		27.8	%		7,766		712		92		8,386		26.6	%
2		19,790		1,880		123		21,547		60.9	%		18,378		1,534		157		19,755		62.7	%

Subtotal - High or Highest Quality Securities		28,520		2,982		138		31,364		88.7	%		26,144		2,246		249		28,141		89.3	%

3		2,958		178		26		3,110		8.8	%		2,243		156		16		2,383		7.6	%
4		544		16		18		542		1.5	%		667		29		18		678		2.2	%
5		270		10		18		262		0.8	%		197		9		7		199		0.6	%
6		68		11		2		77		0.2	%		97		11		1		107		0.3	%

Subtotal - Other Securities		3,840		215		64		3,991		11.3	%		3,204		205		42		3,367		10.7	%

Total		32,360		3,197		202		35,355		100.0	%		29,348		2,451		291		31,508		100.0	%

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

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

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

(4)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of December 31, 2014 and December 31, 2013, respectively, 825 securities with amortized cost of $3,993 million (fair value $4,291 million) and 306 securities with amortized cost of $806 million (fair value, $831 million) that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	December 31, 2014					December 31, 2013
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (1):
Fixed maturities:
Public, available-for-sale, at fair value		111,991		79.5	%		112,501		81.0	%
Public, held-to-maturity, at amortized cost		2,000		1.4	%		2,500		1.8	%
Private, available-for-sale, at fair value		8,835		6.3	%		6,762		4.9	%
Private, held-to-maturity, at amortized cost		575		0.4	%		812		0.6	%
Trading account assets supporting insurance liabilities, at fair value		1,910		1.4	%		1,925		1.4	%
Other trading account assets, at fair value		672		0.5	%		884		0.6	%
Equity securities, available-for-sale, at fair value		2,504		1.8	%		2,557		1.9	%
Commercial mortgage and other loans, at book value		8,215		5.8	%		6,581		4.7	%
Policy loans, at outstanding balance		2,146		1.5	%		2,280		1.6	%
Other long-term investments (2)		1,606		1.1	%		1,576		1.1	%
Short-term investments		406		0.3	%		541		0.4	%

Total		140,860		100.0	%		138,919		100.0	%


	December 31, 2014					December 31, 2013
	Amount		% of Total			Amount		% of Total
Financial Services Businesses excluding Japanese Insurance Operations (1):
Fixed maturities:
Public, available-for-sale, at fair value		108,548		53.9	%		100,188		53.8	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		25,903		12.9	%		23,888		12.8	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		18,353		9.1	%		18,902		10.1	%
Other trading account assets, at fair value		784		0.4	%		457		0.2	%
Equity securities, available-for-sale, at fair value		3,827		1.9	%		3,462		1.9	%
Commercial mortgage and other loans, at book value		28,323		14.0	%		24,552		13.2	%
Policy loans, at outstanding balance		4,652		2.3	%		4,473		2.4	%
Other long-term investments (2)		5,563		2.8	%		5,596		3.0	%
Short-term investments		5,468		2.7	%		4,904		2.6	%

Total		201,421		100.0	%		186,422		100.0	%

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

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

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS

(in millions)


	Quarter Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Financial Services Businesses (1):
Fixed maturities		3.88	%		2,184			308			3.80	%		2,159			(798	)
Equity securities		4.87	%		57			9			5.06	%		55			48
Commercial mortgage and other loans		4.93	%		374			(15	)		4.73	%		302			(9	)
Policy loans		4.98	%		85			—			4.78	%		81			—
Short-term investments and cash equivalents		0.20	%		7			—			0.26	%		7			—
Other investments		8.75	%		189			133			8.47	%		174			(600	)

Gross investment income before investment expenses		3.99	%		2,896			435			3.92	%		2,778			(1,359	)
Investment expenses		-0.15	%		(107	)		—			-0.13	%		(86	)		—

Subtotal		3.84	%		2,789			435			3.79	%		2,692			(1,359	)

Investment results of other entities and operations (2)					285			53						288			62
Less, investment income related to adjusted operating income reconciling items					(53	)								(45	)

Total					3,021			488						2,935			(1,297	)


	Twelve Months Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Financial Services Businesses (1):
Fixed maturities		3.90	%		8,762			753			3.79	%		8,575			(183	)
Equity securities		5.97	%		275			81			6.19	%		256			130
Commercial mortgage and other loans		4.79	%		1,338			32			4.98	%		1,169			(13	)
Policy loans		5.08	%		341			—			4.82	%		316			—
Short-term investments and cash equivalents		0.21	%		26			—			0.22	%		30			1
Other investments		9.10	%		753			(523	)		7.04	%		553			(5,546	)

Gross investment income before investment expenses		4.05	%		11,495			343			3.87	%		10,899			(5,611	)
Investment expenses		-0.15	%		(362	)		—			-0.13	%		(308	)		—

Subtotal		3.90	%		11,133			343			3.74	%		10,591			(5,611	)

Investment results of other entities and operations (2)					1,116			132						1,122			173
Less, investment income related to adjusted operating income reconciling items					(203	)								(183	)

Total					12,046			475						11,530			(5,438	)

(1)

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

(2)	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.

(3)

Yields are based on net investment income as reported under U.S. GAAP and do not include adjustments, such as settlements of duration management swaps that are 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. Prior period’s yields are presented on a basis consistent with the current presentation.

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)			Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.08	%		820			299			2.95	%		810			61
Equity securities		3.68	%		15			8			3.48	%		16			52
Commercial mortgage and other loans		3.97	%		76			3			4.11	%		66			1
Policy loans		3.92	%		21			—			3.86	%		23			—
Short-term investments and cash equivalents		0.21	%		1			—			0.27	%		1			—
Other investments (2)		4.83	%		30			(93	)		4.53	%		29			(165	)

Gross investment income before investment expenses		3.16	%		963			217			3.03	%		945			(51	)
Investment expenses		-0.14	%		(42	)		—			-0.12	%		(38	)		—

Total		3.02	%		921			217			2.91	%		907			(51	)


	Twelve Months Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)			Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.06	%		3,301			799			2.91	%		3,269			771
Equity securities		5.06	%		84			49			4.69	%		82			118
Commercial mortgage and other loans		4.20	%		294			12			4.21	%		258			6
Policy loans		3.93	%		88			—			3.70	%		88			—
Short-term investments and cash equivalents		0.24	%		4			—			0.19	%		4			—
Other investments (2)		6.67	%		155			201			6.12	%		170			(928	)

Gross investment income before investment expenses		3.20	%		3,926			1,061			3.04	%		3,871			(33	)
Investment expenses		-0.13	%		(164	)		—			-0.12	%		(156	)		—

Total		3.07	%		3,762			1,061			2.92	%		3,715			(33	)

(1)

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

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

FINANCIAL SERVICES BUSINESSES INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (2)			Amount			Realized Gains / (Losses)			Yield (2)			Amount			Realized Gains / (Losses)
Financial Services Businesses excluding Japanese Insurance Operations (1):
Fixed maturities		4.59	%		1,364			9			4.60	%		1,349			(859	)
Equity securities		5.48	%		42			1			6.16	%		39			(4	)
Commercial mortgage and other loans		5.26	%		298			(18	)		4.93	%		236			(10	)
Policy loans		5.48	%		64			—			5.27	%		58			—
Short-term investments and cash equivalents		0.20	%		6			—			0.26	%		6			—
Other investments		10.28	%		159			226			10.24	%		145			(435	)

Gross investment income before investment expenses		4.59	%		1,933			218			4.62	%		1,833			(1,308	)
Investment expenses		-0.16	%		(65	)		—			-0.14	%		(48	)		—

Total		4.43	%		1,868			218			4.48	%		1,785			(1,308	)


	Twelve Months Ended December 31
	2014									2013
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (2)			Amount			Realized Gains / (Losses)			Yield (2)			Amount			Realized Gains / (Losses)
Financial Services Businesses excluding Japanese Insurance Operations (1):
Fixed maturities		4.69	%		5,461			(46	)		4.65	%		5,306			(954	)
Equity securities		6.49	%		191			32			7.30	%		174			12
Commercial mortgage and other loans		4.98	%		1,044			20			5.25	%		911			(19	)
Policy loans		5.66	%		253			—			5.45	%		228			—
Short-term investments and cash equivalents		0.21	%		22			—			0.23	%		26			1
Other investments		10.03	%		598			(724	)		7.54	%		383			(4,618	)

Gross investment income before investment expenses		4.70	%		7,569			(718	)		4.56	%		7,028			(5,578	)
Investment expenses		-0.16	%		(198	)		—			-0.14	%		(152	)		—

Total		4.54	%		7,371			(718	)		4.42	%		6,876			(5,578	)

(1)

(2)

Page 34

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

RECLASSIFIED SUPPLEMENTARY INFORMATION - INTERNATIONAL INSURANCE SEGMENT

(dollar amounts in millions, unless otherwise noted)


Year ended December 31			2013								2014
2012			1Q		2Q		3Q		4Q		1Q		2Q		3Q

		Constant exchange rate basis (1):

		Net premiums, policy charges and fee income:
	5,218	Japan, excluding Gibraltar Life		1,581		1,363		1,352		1,368		1,680		1,411		1,437
	15,755	Gibraltar Life		3,052		3,198		2,482		2,193		2,036		2,384		2,111
	1,559	All other countries		395		406		409		438		418		436		446

	22,532	Total		5,028		4,967		4,243		3,999		4,134		4,231		3,994


		Annualized new business premiums:
	916	Japan, excluding Gibraltar Life		253		190		162		196		249		171		178
	2,456	Gibraltar Life		444		515		424		406		384		457		427
	345	All other countries		90		72		82		102		100		104		105

	3,717	Total		787		777		668		704		733		732		710


		Annualized new business premiums by distribution channel:
	1,261	Life Planners		343		262		244		298		349		275		283
	847	Gibraltar Life Consultants		197		240		183		176		171		220		186
	1,283	Banks		202		204		190		173		150		161		173
	326	Independent Agency		45		71		51		57		63		76		68

	3,717	Total		787		777		668		704		733		732		710


		Face amount of individual policies in force at end of period (in billions) (1)(2):
	320	Japan, excluding Gibraltar Life		325		328		330		332		336		338		342
	366	Gibraltar Life		369		369		371		371		373		372		373
	107	All other countries		108		108		109		111		112		115		116

	793	Total		802		805		810		814		821		825		831

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 91 per U.S. dollar and Korean won 1120 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.

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

Adjusted operating income is a non-GAAP measure of performance of our Financial Services Businesses that excludes “Realized investment gains (losses), net”, as adjusted, and related charges and adjustments; net investment gains and losses on trading account assets supporting insurance liabilities; change in experience-rated contractholder liabilities due to asset value changes; results of divested businesses and discontinued operations; earnings attributable to noncontrolling interests; and the related tax effects thereof. Adjusted operating income includes equity in earnings of operating joint ventures and the related tax effects thereof. Revenues and benefits and expenses shown as components of adjusted operating income, are presented on the same basis as pre-tax adjusted operating income and are adjusted for the items above as well.

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 excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of a hedging program related to the risk of those products. 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 does not equate to “Income from continuing operations” as determined in accordance with 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 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 factors of our businesses.

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.

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. Group disability amounts include dental products. 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. Attributed 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. Attributed equity for the Financial Services Businesses represents all of the Company’s equity that is not included in the Closed Block Business or attributable to noncontrolling interests.

6. Book value per share of Common Stock:

Equity attributed to Financial Services Businesses divided by the number of Common shares outstanding at end of period, on a diluted basis.

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 individual annuity and asset management businesses.

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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. 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.

12. Earnings Per Share of Common Stock:

Net income (loss) for the Financial Services Businesses and the Closed Block Business is determined in accordance with GAAP and includes general and administrative expenses charged to each of the businesses based on the Company’s methodology for the allocation of such expenses. Cash flows between the Financial Services Businesses and the Closed Block Business related to administrative expenses are determined by a policy servicing fee arrangement that is based upon insurance and policies in force and statutory cash premiums. To the extent reported administrative expenses vary from these cash flow amounts, the differences are recorded, on an after-tax basis, as direct equity adjustments to the equity balances of each business. The direct equity adjustments modify earnings available to holders of Common Stock and Class B Stock for earnings per share purposes. Earnings per share of Common Stock based on adjusted operating income (loss) of the Financial Services Businesses reflects these adjustments as well.

13. Full Service:

The Full Service 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 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 Life Insurance and Group Disability Insurance Benefits Ratios:

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

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

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

21. Individual Annuities - Net Amounts at Risk:

Living Benefit Features - For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance.

Death Benefit Features - Net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

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. Operating return on average equity (based on adjusted operating income):

Adjusted operating income after-tax (giving effect to the direct equity adjustment for earnings per share calculation), annualized for interim periods, divided by average attributed equity for the Financial Services Businesses excluding accumulated other comprehensive income.

An alternative measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on income from continuing operations). Return on average equity (based on income from continuing operations) represents income from continuing operations after-tax, for the Financial Services Businesses, attributable to Prudential Financial, Inc. as determined in accordance with GAAP (giving effect to the direct equity adjustment for earnings per share calculation), annualized for interim periods, divided by average total attributed equity for the Financial Services Businesses. Return on average equity (based on income from continuing operations) is (12.1)% for the three months ended December 31, 2014, 4.6% for the three months ended September 30, 2014, 10.9% for the three months ended June 30, 2014, 13.8% for the three months ended March 31, 2014, and (5.1)% for the three months ended December 31, 2013.

26. 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).

27. 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.

28. Prudential Agents:

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

29. 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.

30. 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.

31. Wrap-Fee Products:

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

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2014

LOGO

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of February 4, 2015


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

CREDIT RATINGS:
as of February 4, 2015

Prudential Financial, Inc.:
Short-Term Borrowings	AMB-1	A-1	P-2	F2
Long-Term Senior Debt	a-	A	Baa1	BBB+
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	A+

*	NR indicates not rated.

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

INVESTOR INFORMATION:


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

Common Stock:

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

Page 39

PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - EX99.2 - February 4, 2015

Attached files