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

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EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d222457dex991.htm
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d222457d8k.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Second Quarter 2016

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

August 3, 2016

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

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

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

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

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

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

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

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

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

KEY DEFINITIONS AND FORMULAS		37-39

RATINGS AND INVESTOR INFORMATION		40

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

This quarterly financial supplement reflects, for all periods presented, the retrospective adoption of a revised accounting standard related to the classification of certain debt issuance costs on Prudential Financial, Inc.’s consolidated balance sheet.

iii

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date						%			2015									2016
2016			2015			Change			2Q			3Q			4Q			1Q			2Q

								Pre-tax adjusted operating income (loss) by division:
	1,582			1,999			-21%	U.S. Retirement Solutions and Investment Management Division		981			732			776			712			870
	(55	)		458			-112%	U.S. Individual Life and Group Insurance Division		312			227			126			146			(201	)
	1,582			1,676			-6%	International Insurance Division		842			812			738			779			803
	(727	)		(547	)		-33%	Corporate and other operations		(294	)		(308	)		(458	)		(312	)		(415	)

	2,382			3,586			-34%	Total pre-tax adjusted operating income		1,841			1,463			1,182			1,325			1,057
	556			938			-41%	Income taxes, applicable to adjusted operating income		491			353			291			328			228

	1,826			2,648			-31%	After-tax adjusted operating income		1,350			1,110			891			997			829


								Reconciling items:
	698			1,337			-48%	Realized investment gains (losses), net, and related charges and adjustments		286			438			(196	)		338			360
	324			(137	)		336%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(220	)		(228	)		(159	)		216			108
	(263	)		37			-811%	Change in experience-rated contractholder liabilities due to asset value changes		234			258			138			(130	)		(133	)
								Divested businesses:
	(105	)		30			-450%	Closed Block division		52			108			(80	)		(73	)		(32	)
	20			(34	)		159%	Other divested businesses		(109	)		8			(40	)		31			(11	)
	17			58			-71%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		45			2			(2	)		25			(8	)

	691			1,291			-46%	Total reconciling items, before income taxes		288			586			(339	)		407			284
	243			440			-45%	Income taxes, not applicable to adjusted operating income		188			231			(181	)		40			203

	448			851			-47%	Total reconciling items, after income taxes		100			355			(158	)		367			81

	2,274			3,499			-35%	Income from continuing operations (after-tax) before equity in earnings of operating joint ventures		1,450			1,465			733			1,364			910
	(17	)		(57	)		70%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		(44	)		—			2			(28	)		11

	2,257			3,442			-34%	Income from continuing operations attributable to Prudential Financial, Inc.		1,406			1,465			735			1,336			921
	37			63			-41%	Earnings attributable to noncontrolling interests		53			2			5			33			4

	2,294			3,505			-35%	Income from continuing operations (after-tax)		1,459			1,467			740			1,369			925
	—			—			—	Income from discontinued operations, net of taxes		—			—			—			—			—

	2,294			3,505			-35%	Net income		1,459			1,467			740			1,369			925
	37			63			-41%	Less: Income attributable to noncontrolling interests		53			2			5			33			4

	2,257			3,442			-34%	Net income attributable to Prudential Financial, Inc.		1,406			1,465			735			1,336			921

	10.8%			16.9%				Operating Return on Average Equity (based on adjusted operating income) (1)		16.8%			13.5%			10.7%			11.9%			9.8%

(1)

Adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement on page 3. 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, attributable to consolidated Prudential Financial, Inc., as determined in accordance with U.S. GAAP, annualized for interim periods, divided by average total Prudential Financial, Inc. equity. Return on average equity (based on income from continuing operations) is 7.1%, 11.7%, 6.9%, 13.9%, and 13.0% for the three months ended June, 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						Earnings per share of Common Stock (diluted):
	4.02			5.69		After-tax adjusted operating income		2.91			2.40			1.94			2.18			1.84

						Reconciling items:
	1.55			2.89		Realized investment gains (losses), net, and related charges and adjustments		0.62			0.95			(0.43	)		0.75			0.80
	0.72			(0.30	)	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(0.48	)		(0.50	)		(0.35	)		0.48			0.24
	(0.58	)		0.08		Change in experience-rated contractholder liabilities due to asset value changes		0.51			0.56			0.30			(0.29	)		(0.30	)
						Divested businesses:
	(0.23)			0.06		Closed Block division		0.11			0.23			(0.17	)		(0.16	)		(0.07	)
	0.04			(0.07	)	Other divested businesses		(0.24	)		0.02			(0.09	)		0.07			(0.02	)
	(0.01	)		(0.02	)	Difference in earnings allocated to participating unvested share-based payment awards		—			(0.01	)		—			(0.01	)		—

	1.49			2.64		Total reconciling items, before income taxes		0.52			1.25			(0.74	)		0.84			0.65
	0.54			0.93		Income taxes, not applicable to adjusted operating income		0.40			0.49			(0.40	)		0.09			0.45

	0.95			1.71		Total reconciling items, after income taxes		0.12			0.76			(0.34	)		0.75			0.20

	4.97			7.40		Income from continuing operations (after-tax) attributable to Prudential Financial, Inc.		3.03			3.16			1.60			2.93			2.04
	—			—		Income from discontinued operations, net of taxes		—			—			—			—			—

	4.97			7.40		Net income attributable to Prudential Financial, Inc.		3.03			3.16			1.60			2.93			2.04


	443.2			453.4		Weighted average number of outstanding Common shares (basic)		452.6			451.0			448.7			445.3			441.1
	451.3			462.2		Weighted average number of outstanding Common shares (diluted)		461.4			459.7			457.5			453.2			449.3

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

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	20			25		After-tax adjusted operating income		13			12			8			11			9
	25			33		Income from continuing operations (after-tax)		14			15			6			14			11

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date					2015									2016
2016		2015			2Q			3Q			4Q			1Q			2Q

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		3,620			1,833			1,216			969			676
				Long-term debt		14,242			14,309			13,783			13,795			13,172
				Junior Subordinated Long-Term Debt		5,884			5,884			5,811			5,813			5,814

				Prudential Financial, Inc. Equity:
				Including accumulated other comprehensive income		41,723			42,720			41,890			49,242			55,149
				Excluding accumulated other comprehensive income (2)		28,319			29,257			29,605			30,176			30,482
				Amount included above for foreign currency exchange rate remeasurement (3)		(4,211	)		(4,034	)		(3,747	)		(3,628	)		(3,509	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		32,530			33,291			33,352			33,804			33,991


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (4)		91.17			93.87			92.39			109.66			123.77
				Excluding accumulated other comprehensive income (2)		61.89			64.32			65.32			67.36			68.65
				Amount included above for foreign currency exchange rate remeasurement (3)		(9.20	)		(8.87	)		(8.27	)		(8.10	)		(7.90	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		71.09			73.19			73.59			75.46			76.55


				Number of diluted shares at end of period (5)		457.6			454.9			453.2			448.0			444.0

				*Common Stock Price Range (based on closing price):*
	79.84		91.47	High		91.47			91.68			87.69			79.84			79.71
	58.00		75.32	Low		79.13			74.22			75.40			58.00			66.93
	71.34		87.52	Close		87.52			76.21			81.41			72.22			71.34


				*Common Stock market capitalization (1)*		39,550			34,249			36,398			32,001			31,304

(1)	As of end of period.

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

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

(4)

Book value per share of Common Stock including accumulated other comprehensive income as of June 30, and September 30, 2015 includes a $500 million increase in equity and a 5.5 million increase in diluted shares reflecting the dilutive impact of exchangeable surplus notes when book value per share is greater than $90.85, and as of December 31, 2015, March 31, and June 30, 2016 includes a $500 million increase in equity and a 5.6 million increase in diluted shares reflecting the dilutive impact of exchangeable surplus notes when book value per share is greater than $88.90.

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

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

OPERATIONS HIGHLIGHTS


Year-to-date					2015						2016
2016		2015			2Q		3Q		4Q		1Q		2Q

				*Assets Under Management and Administration ($ billions) (1) (2):*
				Assets Under Management :
				Managed by U.S. Retirement Solutions and Investment Management Division:
				Asset Management Segment - Investment Management & Advisory Services
				Institutional customers		380.6		380.9		389.1		403.6		418.8
				Retail customers		199.2		188.9		197.3		198.6		202.1
				General account		368.5		376.7		376.7		400.8		426.3

				Total Investment Management and Advisory Services		948.3		946.5		963.1		1,003.0		1,047.2
				Non-proprietary assets under management		191.5		178.2		175.5		167.0		169.8

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,139.8		1,124.7		1,138.6		1,170.0		1,217.0
				Managed by U.S. Individual Life and Group Insurance Division		24.1		24.2		24.1		25.1		25.7
				Managed by International Insurance Division		22.9		22.2		21.0		22.8		25.0

				Total assets under management		1,186.8		1,171.1		1,183.7		1,217.9		1,267.7
				Client assets under administration		165.7		163.1		163.2		170.5		171.7

				Total assets under management and administration		1,352.5		1,334.2		1,346.9		1,388.4		1,439.4


				Assets managed or administered for customers outside of the United States at end of period		263.1		263.4		270.5		297.5		324.6

				*Distribution Representatives (1):*
				Prudential Agents		2,866		2,922		2,903		2,969		2,987
				International Life Planners		7,415		7,509		7,592		7,608		7,551
				Gibraltar Life Consultants		8,565		8,593		8,805		8,781		8,734

	25		50	*Prudential Agent productivity ($ thousands)*		53		57		68		47		54

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINED STATEMENTS OF OPERATIONS

(in millions)


Year-to-date						%			2015									2016
2016			2015			Change			2Q			3Q			4Q			1Q			2Q

								Revenues (1):
	11,723			12,695			-8%	Premiums		6,782			5,273			7,495			5,577			6,146
	2,799			2,937			-5%	Policy charges and fee income		1,383			1,552			1,514			1,511			1,288
	6,104			5,979			2%	Net investment income		2,974			3,015			2,964			3,017			3,087
	2,478			2,696			-8%	Asset management fees, commissions and other income		1,361			1,238			1,272			1,187			1,291

	23,104			24,307			-5%	Total revenues		12,500			11,078			13,245			11,292			11,812


								Benefits and Expenses (1):
	12,797			13,141			-3%	Insurance and annuity benefits		6,925			5,640			7,917			5,984			6,813
	1,821			1,791			2%	Interest credited to policyholders’ account balances		907			915			879			907			914
	682			641			6%	Interest expense		324			339			322			325			357
	(1,403	)		(1,311	)		-7%	Deferral of acquisition costs		(664	)		(650	)		(691	)		(685	)		(718	)
	760			679			12%	Amortization of acquisition costs		251			509			443			479			281
	6,065			5,780			5%	General and administrative expenses		2,916			2,862			3,193			2,957			3,108

	20,722			20,721			0%	Total benefits and expenses		10,659			9,615			12,063			9,967			10,755

	2,382			3,586			-34%	Adjusted operating income before income taxes		1,841			1,463			1,182			1,325			1,057


								Reconciling items:
	2,220			1,602			39%	Realized investment gains (losses), net, and related adjustments		(60	)		1,117			(461	)		1,418			802
	(1,522	)		(265	)		-474%	Related charges		346			(679	)		265			(1,080	)		(442	)

	698			1,337			-48%	Total realized investment gains (losses), net, and related charges and adjustments		286			438			(196	)		338			360

	324			(137	)		336%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(220	)		(228	)		(159	)		216			108
	(263	)		37			-811%	Change in experience-rated contractholder liabilities due to asset value changes		234			258			138			(130	)		(133	)
								Divested businesses:
	(105	)		30			-450%	Closed Block division		52			108			(80	)		(73	)		(32	)
	20			(34	)		159%	Other divested businesses		(109	)		8			(40	)		31			(11	)
	17			58			-71%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		45			2			(2	)		25			(8	)

	691			1,291			-46%	Total reconciling items, before income taxes		288			586			(339	)		407			284


	3,073			4,877			-37%	Income from continuing operations before income taxes and equity in earnings of operating joint ventures		2,129			2,049			843			1,732			1,341
	799			1,378			-42%	Income tax expense		679			584			110			368			431

	2,274			3,499			-35%	Income from continuing operations before equity in earnings of operating joint ventures		1,450			1,465			733			1,364			910

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on trading account assets supporting insurance liabilities; and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures other than those classified as divested businesses. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes; and benefits and expenses of divested businesses and include charges for income attributable to non controlling interests. See pages 35 and 36 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended June 30, 2016
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1) :
Premiums		6,146			1,018			1,234			3,899			(5	)
Policy charges and fee income		1,288			687			505			106			(10	)
Net investment income		3,087			1,194			593			1,204			96
Asset management fees, commissions and other income		1,291			1,217			187			134			(247	)

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


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

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


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


	Quarter Ended June 30, 2015
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		6,782			1,939			1,200			3,633			10
Policy charges and fee income		1,383			740			516			139			(12	)
Net investment income		2,974			1,186			551			1,099			138
Asset management fees, commissions and other income		1,361			1,291			184			166			(280	)

Total revenues		12,500			5,156			2,451			5,037			(144	)


Benefits and Expenses (1):
Insurance and annuity benefits		6,925			2,330			1,471			3,133			(9	)
Interest credited to policyholders’ account balances		907			446			237			224			—
Interest expense		324			24			140			1			159
Deferral of acquisition costs		(664	)		(128	)		(157	)		(395	)		16
Amortization of acquisition costs		251			132			(127	)		255			(9	)
General and administrative expenses		2,916			1,371			575			977			(7	)

Total benefits and expenses		10,659			4,175			2,139			4,195			150


Adjusted operating income (loss) before income taxes		1,841			981			312			842			(294	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Six Months Ended June 30, 2016
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1) :
Premiums		11,723			1,689			2,453			7,595			(14	)
Policy charges and fee income		2,799			1,362			1,224			236			(23	)
Net investment income		6,104			2,392			1,175			2,324			213
Asset management fees, commissions and other income		2,478			2,381			353			232			(488	)

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


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

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


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


	Six Months Ended June 30, 2015
	Total			U.S. Retirement Solutions & Investment Management Division			U.S. Individual Life & Group Insurance Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		12,695			3,152			2,388			7,152			3
Policy charges and fee income		2,937			1,460			1,221			279			(23	)
Net investment income		5,979			2,403			1,100			2,198			278
Asset management fees, commissions and other income		2,696			2,539			370			314			(527	)

Total revenues		24,307			9,554			5,079			9,943			(269	)


Benefits and Expenses (1):
Insurance and annuity benefits		13,141			3,946			3,069			6,135			(9	)
Interest credited to policyholders’ account balances		1,791			896			447			448			—
Interest expense		641			58			276			2			305
Deferral of acquisition costs		(1,311	)		(248	)		(296	)		(796	)		29
Amortization of acquisition costs		679			231			(39	)		507			(20	)
General and administrative expenses		5,780			2,672			1,164			1,971			(27	)

Total benefits and expenses		20,721			7,555			4,621			8,267			278


Adjusted operating income (loss) before income taxes		3,586			1,999			458			1,676			(547	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

CONSOLIDATED BALANCE SHEETS

(in millions)


	06/30/2015		09/30/2015		12/31/2015		03/31/2016		06/30/2016

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $262,820; $263,281; $265,416; $278,000; $286,066)		290,063		290,778		290,323		314,529		332,270
Fixed maturities, held to maturity, at amortized cost (fair value $2,674; $2,669; $2,624; $2,841; $3,026)		2,396		2,380		2,308		2,411		2,485
Trading account assets supporting insurance liabilities, at fair value		20,267		20,408		20,522		21,447		21,702
Other trading account assets, at fair value		12,749		14,075		14,458		8,052		7,268
Equity securities, available for sale, at fair value (cost $6,870; $6,755; $6,847; $7,026; $7,088)		9,901		9,109		9,274		9,400		9,496
Commercial mortgage and other loans		48,569		50,048		50,559		50,798		51,447
Policy loans		11,652		11,624		11,657		11,805		11,930
Other long-term investments		10,678		10,591		9,986		10,281		10,247
Short-term investments		5,669		7,937		8,105		3,697		5,035

Total investments		411,944		416,950		417,192		432,420		451,880
Cash and cash equivalents		17,038		20,207		17,612		22,492		24,142
Accrued investment income		3,117		3,156		3,110		3,180		3,211
Deferred policy acquisition costs		16,569		16,206		16,718		15,998		16,152
Value of business acquired		2,994		2,847		2,828		2,582		1,951
Other assets		14,589		14,409		14,225		14,822		14,322
Separate account assets		296,341		280,616		285,570		281,501		284,832

Total assets		762,592		754,391		757,255		772,995		796,490


Liabilities:
Future policy benefits		216,555		222,220		224,384		234,728		242,950
Policyholders’ account balances		135,630		136,620		136,784		139,745		142,716
Securities sold under agreements to repurchase		7,863		8,107		7,882		8,357		7,335
Cash collateral for loaned securities		3,808		4,241		3,496		4,052		4,643
Income taxes		9,239		9,644		8,714		12,128		15,140
Senior short-term debt		3,620		1,833		1,216		969		676
Senior long-term debt		14,242		14,309		13,783		13,795		13,172
Junior subordinated long-term debt		5,884		5,884		5,811		5,813		5,814
Notes issued by consolidated variable interest entities		7,455		8,370		8,597		2,946		2,094
Other liabilities		19,663		19,777		19,095		19,696		21,940
Separate account liabilities		296,341		280,616		285,570		281,501		284,832

Total liabilities		720,300		711,621		715,332		723,730		741,312


Equity:
Accumulated other comprehensive income		13,404		13,463		12,285		19,066		24,667
Other equity		28,319		29,257		29,605		30,176		30,482

Total Prudential Financial, Inc. equity		41,723		42,720		41,890		49,242		55,149

Noncontrolling Interest		569		50		33		23		29

Total Equity		42,292		42,770		41,923		49,265		55,178

Total liabilities and equity		762,592		754,391		757,255		772,995		796,490

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of June 30, 2016

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		451,880		61,274			390,606		130,889		56,784		186,515		16,418
Deferred policy acquisition costs		16,152		354			15,798		4,248		4,952		6,896		(298	)
Other assets		43,626		2,080			41,546		21,088		10,781		10,163		(486	)
Separate account assets		284,832		—			284,832		240,637		45,276		2,778		(3,859	)

Total assets		796,490		63,708			732,782		396,862		117,793		206,352		11,775


Liabilities:
Future policy benefits		242,950		49,361			193,589		67,812		16,235		105,016		4,526
Policyholders’ account balances		142,716		5,221			137,495		57,513		32,308		47,680		(6	)
Debt		19,662		—			19,662		3,011		7,595		53		9,003
Other liabilities		51,152		10,537			40,615		7,394		7,767		20,298		5,156
Separate account liabilities		284,832		—			284,832		240,637		45,276		2,778		(3,859	)

Total liabilities		741,312		65,119			676,193		376,367		109,181		175,825		14,820


Equity:
Accumulated other comprehensive income (loss)		24,667		21			24,646		3,275		1,676		20,510		(815	)
Other equity		30,482		(1,433	)		31,915		17,186		6,936		9,969		(2,176	)

Total Prudential Financial, Inc. equity		55,149		(1,412	)		56,561		20,461		8,612		30,479		(2,991	)

Noncontrolling Interest		29		1			28		34		—		48		(54	)

Total Equity		55,178		(1,411	)		56,589		20,495		8,612		30,527		(3,045	)


Total liabilities and equity		796,490		63,708			732,782		396,862		117,793		206,352		11,775



	As of December 31, 2015

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		417,192		59,758			357,434		132,934		50,547		157,800		16,153
Deferred policy acquisition costs		16,718		373			16,345		5,048		5,064		6,554		(321	)
Other assets		37,775		1,996			35,779		15,081		11,143		8,246		1,309
Separate account assets		285,570		—			285,570		242,058		44,446		2,553		(3,487	)

Total assets		757,255		62,127			695,128		395,121		111,200		175,153		13,654


Liabilities:
Future policy benefits		224,384		49,539			174,845		63,585		15,053		91,931		4,276
Policyholders’ account balances		136,784		5,250			131,534		55,833		31,987		43,711		3
Debt		20,810		—			20,810		2,846		7,251		29		10,684
Other liabilities		47,784		8,747			39,037		15,524		6,633		14,865		2,015
Separate account liabilities		285,570		—			285,570		242,058		44,446		2,553		(3,487	)

Total liabilities		715,332		63,536			651,796		379,846		105,370		153,089		13,491


Equity:
Accumulated other comprehensive income (loss)		12,285		2			12,283		576		504		12,897		(1,694	)
Other equity		29,605		(1,411	)		31,016		14,686		5,326		9,119		1,885

Total Prudential Financial, Inc. equity		41,890		(1,409	)		43,299		15,262		5,830		22,016		191

Noncontrolling Interest		33		—			33		13		—		48		(28	)

Total Equity		41,923		(1,409	)		43,332		15,275		5,830		22,064		163


Total liabilities and equity		757,255		62,127			695,128		395,121		111,200		175,153		13,654

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of June 30, 2016								As of December 31, 2015
	Senior debt				Junior Subordinated Long-term Debt				Senior debt				Junior Subordinated Long-term Debt
	Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt		Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt
*Borrowings by use of proceeds:*
Capital Debt		—		5,822		5,814		11,636		194		5,875		5,811		11,880
Operating Debt - Investment related		379		5,643		—		6,022		438		6,573		—		7,011
Operating Debt - Specified businesses		224		1,132		—		1,356		584		770		—		1,354
Limited recourse and non-recourse borrowing		73		575		—		648		—		565		—		565

Total debt		676		13,172		5,814		19,662		1,216		13,783		5,811		20,810


	As of June 30, 2016								As of December 31, 2015
	Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total		Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total
*Borrowings by sources:*
Capital Debt		10,641		939		56		11,636		10,888		941		51		11,880
Operating Debt - Investment related		4,094		328		1,599		6,021		5,328		72		1,611		7,011
Operating Debt - Specified businesses		1,179		178		—		1,357		970		384		—		1,354
Limited recourse and non-recourse borrowing		—		648		—		648		—		565		—		565

Total debt		15,914		2,093		1,655		19,662		17,186		1,962		1,662		20,810

(1)	Includes Prudential Funding, LLC.

(2)	Capital debt at Prudential Insurance Co. of America includes $839 million and $841 million of surplus notes as of June 30, 2016 and December 31, 2015, respectively.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date						%			2015									2016
2016			2015			Change			2Q			3Q			4Q			1Q			2Q

								Revenues (1):
	1,689			3,152			-46%	Premiums		1,939			688			3,005			671			1,018
	1,362			1,460			-7%	Policy charges and fee income		740			718			707			675			687
	2,392			2,403			0%	Net investment income		1,186			1,205			1,188			1,198			1,194
	2,381			2,539			-6%	Asset management fees, commissions and other income		1,291			1,197			1,198			1,164			1,217

	7,824			9,554			-18%	Total revenues		5,156			3,808			6,098			3,708			4,116


								Benefits and Expenses (1):
	2,631			3,946			-33%	Insurance and annuity benefits		2,330			1,216			3,502			1,171			1,460
	904			896			1%	Interest credited to policyholders’ account balances		446			468			440			453			451
	53			58			-9%	Interest expense		24			25			21			25			28
	(238	)		(248	)		4%	Deferral of acquisition costs		(128	)		(117	)		(122	)		(110	)		(128	)
	286			231			24%	Amortization of acquisition costs		132			179			140			155			131
	2,606			2,672			-2%	General and administrative expenses		1,371			1,305			1,341			1,302			1,304

	6,242			7,555			-17%	Total benefits and expenses		4,175			3,076			5,322			2,996			3,246

	1,582			1,999			-21%	Adjusted operating income before income taxes		981			732			776			712			870

(1)

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

Page 11

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


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

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


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

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

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


	Six Months Ended June 30, 2015												Quarter Ended June 30, 2015
	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		3,152			60			3,092			—			1,939			31			1,908			—
Policy charges and fee income		1,460			1,351			109			—			740			682			58			—
Net investment income		2,403			294			2,048			61			1,186			143			1,007			36
Asset management fees, commissions and other income		2,539			682			409			1,448			1,291			344			207			740

Total revenues		9,554			2,387			5,658			1,509			5,156			1,200			3,180			776


Benefits and Expenses (1):
Insurance and annuity benefits		3,946			81			3,865			—			2,330			33			2,297			—
Interest credited to policyholders’ account balances		896			162			734			—			446			81			365			—
Interest expense		58			40			14			4			24			15			7			2
Deferral of acquisition costs		(248	)		(221	)		(21	)		(6	)		(128	)		(112	)		(13	)		(3	)
Amortization of acquisition costs		231			181			40			10			132			92			35			5
General and administrative expenses		2,672			1,067			505			1,100			1,371			543			252			576

Total benefits and expenses		7,555			1,310			5,137			1,108			4,175			652			2,943			580

Adjusted operating income before income taxes		1,999			1,077			521			401			981			548			237			196

(1)

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	149,441			155,083		Beginning total account value		157,552			155,424			146,685			149,441			149,246
	1,349			2,267		Sales: Highest Daily Suite - risk retained by Prudential (1)		846			735			680			683			666
	728			559		Highest Daily Suite - externally reinsured living benefits		559			500			486			374			354
	2,191			1,715		Other variable annuities (2)		921			880			910			944			1,247

	4,268			4,541		Total sales		2,326			2,115			2,076			2,001			2,267
	(3,662	)		(4,337	)	Surrenders and withdrawals		(2,170	)		(1,965	)		(1,989	)		(1,748	)		(1,914	)

	606			204		Net sales		156			150			87			253			353
	(754	)		(790	)	Benefit payments		(390	)		(400	)		(351	)		(355	)		(399	)

	(148	)		(586	)	Net flows		(234	)		(250	)		(264	)		(102	)		(46	)
	3,637			2,730		Change in market value, interest credited, and other		(983	)		(7,594	)		3,909			764			2,873
	(1,742	)		(1,803	)	Policy charges		(911	)		(895	)		(889	)		(857	)		(885	)

	151,188			155,424		Ending total account value		155,424			146,685			149,441			149,246			151,188


						Variable Annuities Account Value by Product:
	111,820			117,723		Highest Daily Suite - risk retained by Prudential (1)		117,723			110,390			112,060			111,229			111,820
	2,259			553		Highest Daily Suite - externally reinsured living benefits		553			1,011			1,513			1,893			2,259
	37,109			37,148		Other variable annuities (2)		37,148			35,284			35,868			36,124			37,109

	151,188			155,424		Ending total account value		155,424			146,685			149,441			149,246			151,188


						Fixed Annuities and other products (3):
	3,504			3,581		Beginning total account value		3,575			3,552			3,532			3,504			3,487
	30			27		Sales		15			8			13			16			14
	(57	)		(62	)	Surrenders and withdrawals		(33	)		(30	)		(32	)		(31	)		(26	)

	(27	)		(35	)	Net redemptions		(18	)		(22	)		(19	)		(15	)		(12	)
	(178	)		(187	)	Benefit payments		(99	)		(91	)		(91	)		(88	)		(90	)

	(205	)		(222	)	Net flows		(117	)		(113	)		(110	)		(103	)		(102	)
	191			193		Interest credited and other		94			94			83			86			105
	(1	)		—		Policy charges		—			(1	)		(1	)		—			(1	)

	3,489			3,552		Ending total account value		3,552			3,532			3,504			3,487			3,489


						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	1,205			1,311		Insurance Agents		673			611			627			580			625
	837			837		Wirehouses		443			429			415			385			452
	1,680			1,736		Independent Financial Planners		881			788			761			783			897
	576			684		Bank Distribution		344			295			286			269			307

	4,298			4,568		Total		2,341			2,123			2,089			2,017			2,281

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

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

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,942			9,852		Beginning balance		9,728			9,724			10,030			9,942			10,017
	459			610		Premiums and deposits		302			276			279			238			221
	(281	)		(382	)	Surrenders and withdrawals		(184	)		(176	)		(146	)		(141	)		(140	)

	178			228		Net sales		118			100			133			97			81
	(215	)		(228	)	Benefit payments		(123	)		(109	)		(109	)		(105	)		(110	)

	(37	)		—		Net flows		(5	)		(9	)		24			(8	)		(29	)
	126			127		Interest credited and other		63			66			70			64			62
	(53	)		(254	)	Net transfers (to) from separate account		(61	)		249			(181	)		19			(72	)
	(1	)		(1	)	Policy charges		(1	)		—			(1	)		—			(1	)

	9,977			9,724		Ending balance		9,724			10,030			9,942			10,017			9,977


						Account Values in Separate Account (1):
	143,003			148,812		Beginning balance		151,399			149,252			140,187			143,003			142,716
	3,839			3,958		Premiums and deposits		2,039			1,847			1,810			1,779			2,060
	(3,438	)		(4,017	)	Surrenders and withdrawals		(2,019	)		(1,819	)		(1,875	)		(1,638	)		(1,800	)

	401			(59	)	Net sales (redemptions)		20			28			(65	)		141			260
	(717	)		(749	)	Benefit payments		(366	)		(382	)		(333	)		(338	)		(379	)

	(316	)		(808	)	Net flows		(346	)		(354	)		(398	)		(197	)		(119	)
	3,702			2,796		Change in market value, interest credited and other		(952	)		(7,566	)		3,922			786			2,916
	53			254		Net transfers (to) from general account		61			(249	)		181			(19	)		72
	(1,742	)		(1,802	)	Policy charges		(910	)		(896	)		(889	)		(857	)		(885	)

	144,700			149,252		Ending balance		149,252			140,187			143,003			142,716			144,700

(1)

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

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


	2015						2016
	2Q		3Q		4Q		1Q		2Q

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		5,276		4,933		4,767		4,658		4,524
Guaranteed minimum withdrawal benefits		666		588		578		552		537
Guaranteed minimum income benefits		3,151		2,861		2,870		2,780		2,749
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		121,358		114,539		116,724		116,818		118,666
Guaranteed minimum withdrawal & income benefits - externally reinsured		553		1,011		1,513		1,893		2,259

Total		131,004		123,932		126,452		126,701		128,735


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		112,770		105,926		107,411		106,699		107,253
Account Values with Auto-Rebalancing Feature - externally reinsured		553		1,011		1,513		1,893		2,259
Account Values without Auto-Rebalancing Feature		17,681		16,995		17,528		18,109		19,223

Total		131,004		123,932		126,452		126,701		128,735


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		2,350		4,259		4,019		4,395		4,366
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		905		1,296		1,194		1,225		1,179

Total		3,255		5,555		5,213		5,620		5,545

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


	2015						2016
	2Q		3Q		4Q		1Q		2Q

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

Variable Annuity Account Values by Death Benefit Features
Return of net deposits:
Account value		118,425		112,070		114,402		114,662		116,599
Net amount at risk		470		894		737		648		544
Minimum return, anniversary contract value, or maximum contract value:
Account value		33,665		31,366		31,658		31,188		31,127
Net amount at risk		3,058		4,711		4,212		4,367		4,147

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		113,323		106,937		108,924		108,592		109,512
Account Values without Auto-Rebalancing Feature		38,767		36,499		37,136		37,258		38,214

Total		152,090		143,436		146,060		145,850		147,726


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		980		2,305		1,919		2,025		1,852
Net Amount at Risk without Auto-Rebalancing Feature		2,548		3,300		3,030		2,990		2,839

Total		3,528		5,605		4,949		5,015		4,691

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	188,961			184,196		Beginning total account value		188,145			188,807			184,515			188,961			190,953
	11,355			11,354		Deposits and sales		5,040			9,422			4,908			6,656			4,699
	(9,799	)		(10,912	)	Withdrawals and benefits		(4,683	)		(5,072	)		(5,575	)		(5,286	)		(4,513	)
	3,490			4,169		Change in market value, interest credited, interest income and other activity		305			(8,642	)		5,113			622			2,868

	194,007			188,807		Ending total account value		188,807			184,515			188,961			190,953			194,007


	1,556			442		Net additions (withdrawals)		357			4,350			(667	)		1,370			186


						Stable value account values included above		45,007			45,731			45,971			46,865			47,581

						Institutional Investment Products:
	179,964			179,641		Beginning total account value		177,120			183,798			181,662			179,964			180,819
	5,482			10,116		Additions		9,147			2,031			3,425			2,061			3,421
	(5,902	)		(7,303	)	Withdrawals and benefits		(3,808	)		(3,940	)		(4,145	)		(2,783	)		(3,119	)
	4,251			1,712		Change in market value, interest credited and interest income		83			1,106			658			2,198			2,053
	(2,913	)		(368	)	Other (1)		1,256			(1,333	)		(1,636	)		(621	)		(2,292	)

	180,882			183,798		Ending total account value		183,798			181,662			179,964			180,819			180,882


	(420	)		2,813		Net additions (withdrawals)		5,339			(1,909	)		(720	)		(722	)		302


						Amounts included in ending total account value above:
	69,567			67,958		Investment-only stable value wraps		67,958			68,097			66,827			68,624			69,567
	31,438			36,252		Longevity reinsurance (2)		36,252			34,628			33,453			32,364			31,438
	79,877			79,588		Group annuities and other products		79,588			78,937			79,684			79,831			79,877

	180,882			183,798		Ending total account value		183,798			181,662			179,964			180,819			180,882

(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

Second Quarter 2016

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				%			2015						2016
2016		2015		Change			2Q		3Q		4Q		1Q		2Q

						Analysis of revenues by type:
	1,071		1,070		0%	Asset management fees		540		536		529		524		547
	138		124		11%	Other related revenues		52		49		68		71		67
	229		315		-27%	Service, distribution and other revenues		184		119		134		111		118

	1,438		1,509		-5%	Total Asset Management segment revenues		776		704		731		706		732


						Analysis of asset management fees by source:
	498		458		9%	Institutional customers		230		234		231		242		256
	342		386		-11%	Retail customers		197		191		187		169		173
	231		226		2%	General account		113		111		111		113		118

	1,071		1,070		0%	Total asset management fees		540		536		529		524		547


Supplementary Assets Under Management Information (in billions):
	June 30, 2016
	Equity		Fixed Income		Real Estate		Total
Institutional customers		58.1		319.6		41.1		418.8
Retail customers		113.8		86.2		2.1		202.1
General account		6.3		418.2		1.8		426.3

Total		178.2		824.0		45.0		1,047.2


	June 30, 2015
	Equity		Fixed Income		Real Estate		Total
Institutional customers		65.7		277.4		37.5		380.6
Retail customers		128.5		68.4		2.3		199.2
General account		7.7		359.0		1.8		368.5

Total		201.9		704.8		41.6		948.3

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in billions)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	347.1			323.6		Beginning assets under management		334.1			335.9			338.6			347.1			359.3
	27.3			35.1		Additions		18.3			15.5			16.3			12.5			14.8
	(27.9	)		(24.6	)	Withdrawals		(11.5	)		(10.8	)		(10.3	)		(15.1	)		(12.8	)
	24.0			1.6		Change in market value		(5.0	)		(1.7	)		2.2			12.7			11.3
	(0.6	)		0.2		Net money market flows		—			(0.2	)		0.3			(1.0	)		0.4
	3.5			—		Other (1)		—			(0.1	)		—			3.1			0.4

	373.4			335.9		Ending assets under management		335.9			338.6			347.1			359.3			373.4
	45.4			44.7		Affiliated institutional assets under management		44.7			42.3			42.0			44.3			45.4

	418.8			380.6		Total assets managed for institutional customers at end of period		380.6			380.9			389.1			403.6			418.8


	(0.6	)		10.5		Net institutional additions (withdrawals), excluding money market activity		6.8			4.7			6.0			(2.6	)		2.0


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	128.9			126.8		Beginning assets under management		135.1			135.2			125.9			128.9			127.8
	21.7			23.4		Additions		10.3			8.2			9.3			10.2			11.5
	(20.6	)		(19.8	)	Withdrawals		(10.7	)		(9.8	)		(10.5	)		(10.7	)		(9.9	)
	0.7			4.8		Change in market value		0.5			(7.6	)		4.2			(1.2	)		1.9
	(0.1	)		—		Net money market flows		—			—			—			(0.1	)		—
	0.7			—		Other (1)		—			(0.1	)		—			0.7			—

	131.3			135.2		Ending assets under management		135.2			125.9			128.9			127.8			131.3
	70.8			64.0		Affiliated retail assets under management		64.0			63.0			68.4			70.8			70.8

	202.1			199.2		Total assets managed for retail customers at end of period		199.2			188.9			197.3			198.6			202.1


	1.1			3.6		Net retail additions (withdrawals), excluding money market activity		(0.4	)		(1.6	)		(1.2	)		(0.5	)		1.6

(1)	“Other” activity represents transfers from the Retirement Segment as a result of changes in the client contract form, impact of acquired business of $3.4B as of March 4, 2016 and FX related to International assets under management.

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date						%			2015									2016
2016			2015			Change			2Q			3Q			4Q			1Q			2Q

								Revenues (1):
	2,453			2,388			3%	Premiums		1,200			1,203			1,190			1,219			1,234
	1,224			1,221			0%	Policy charges and fee income		516			717			699			719			505
	1,175			1,100			7%	Net investment income		551			593			562			582			593
	353			370			-5%	Asset management fees, commissions and other income		184			156			177			166			187

	5,205			5,079			2%	Total revenues		2,451			2,669			2,628			2,686			2,519


								Benefits and Expenses (1):
	3,584			3,069			17%	Insurance and annuity benefits		1,471			1,507			1,570			1,634			1,950
	460			447			3%	Interest credited to policyholders’ account balances		237			228			226			227			233
	288			276			4%	Interest expense		140			142			140			142			146
	(334	)		(296	)		-13%	Deferral of acquisition costs		(157	)		(166	)		(198	)		(162	)		(172	)
	(33	)		(39	)		15%	Amortization of acquisition costs		(127	)		98			80			78			(111	)
	1,295			1,164			11%	General and administrative expenses		575			633			684			621			674

	5,260			4,621			14%	Total benefits and expenses		2,139			2,442			2,502			2,540			2,720


	(55	)		458			-112%	Adjusted operating income (loss) before income taxes		312			227			126			146			(201	)

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

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


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

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


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

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


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


	Six Months Ended June 30, 2015									Quarter Ended June 30, 2015
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance			Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		2,388			461			1,927			1,200			229			971
Policy charges and fee income		1,221			923			298			516			360			156
Net investment income		1,100			812			288			551			409			142
Asset management fees, commissions and other income		370			315			55			184			162			22

Total revenues		5,079			2,511			2,568			2,451			1,160			1,291


Benefits and Expenses (1):
Insurance and annuity benefits		3,069			1,155			1,914			1,471			540			931
Interest credited to policyholders’ account balances		447			315			132			237			160			77
Interest expense		276			271			5			140			137			3
Deferral of acquisition costs		(296	)		(287	)		(9	)		(157	)		(148	)		(9	)
Amortization of acquisition costs		(39	)		(42	)		3			(127	)		(128	)		1
General and administrative expenses		1,164			746			418			575			362			213

Total benefits and expenses		4,621			2,158			2,463			2,139			923			1,216


Adjusted operating income before income taxes		458			353			105			312			237			75

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

Page 21

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1) :

	98			101		Term life		52			51			52			48			50
	112			88		Guaranteed Universal life		48			59			73			51			61
	43			34		Other Universal life		17			23			32			20			23
	51			31		Variable life		13			25			22			26			25

	304			254		Total		130			158			179			145			159


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	59			52		Prudential Agents		27			30			31			29			30
	245			202		Third party distribution		103			128			148			116			129

	304			254		Total		130			158			179			145			159


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	24,487			22,526		Beginning balance		22,617			23,734			23,922			24,487			24,437
	1,630			1,567		Premiums and deposits		830			762			890			809			821
	(508	)		(544	)	Surrenders and withdrawals		(277	)		(246	)		(242	)		(251	)		(257	)

	1,122			1,023		Net sales		553			516			648			558			564
	(246	)		(265	)	Benefit payments		(128	)		(118	)		(109	)		(125	)		(121	)

	876			758		Net flows		425			398			539			433			443
	(87	)		866		Interest credited and other		895			31			296			(224	)		137
	192			239		Net transfers from separate account		124			106			87			99			93
	(721	)		(652	)	Policy charges		(324	)		(350	)		(357	)		(358	)		(363	)
	—			(3	)	Acquisition		(3	)		3			—			—			—

	24,747			23,734		Ending balance		23,734			23,922			24,487			24,437			24,747


						*Separate Account Liabilities:*
	27,027			27,888		Beginning balance		28,246			28,055			26,183			27,027			26,887
	793			698		Premiums and deposits		307			291			420			456			337
	(439	)		(439	)	Surrenders and withdrawals		(225	)		(204	)		(239	)		(217	)		(222	)

	354			259		Net sales		82			87			181			239			115
	(91	)		(76	)	Benefit payments		(42	)		(26	)		(42	)		(51	)		(40	)

	263			183		Net flows		40			61			139			188			75
	580			687		Change in market value, interest credited and other		124			(1,598	)		1,020			(5	)		585
	(192	)		(239	)	Net transfers to general account		(124	)		(106	)		(87	)		(99	)		(93	)
	(451	)		(464	)	Policy charges		(231	)		(229	)		(228	)		(224	)		(227	)
	—			—		Acquisition		—			—			—			—			—

	27,227			28,055		Ending balance		28,055			26,183			27,027			26,887			27,227


						FACE AMOUNT IN FORCE (3):

						Term life		670,043			679,979			689,527			697,687			706,636
						Guaranteed Universal life		114,212			117,360			121,290			124,061			127,453
						Other Universal life		43,213			43,469			44,051			44,203			44,505
						Variable life		166,490			164,363			164,020			162,960			162,416

						Total		993,958			1,005,171			1,018,889			1,028,910			1,041,010

(1)	Excludes corporate-owned life insurance.

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

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

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(dollar amounts in millions)


Year-to-date					2015									2016
2016		2015			2Q			3Q			4Q			1Q			2Q

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	256		141	Group life		10			38			25			232			24
	100		45	Group disability		14			19			5			79			21

	356		186	Total		24			57			30			311			45


				Future Policy Benefits (1) (2):
				Group life		2,083			1,994			2,185			2,103			2,124
				Group disability		21			11			3			29			21

				Total		2,104			2,005			2,188			2,132			2,145


				Policyholders’ Account Balances (1):
				Group life		8,120			8,234			8,359			8,271			8,367
				Group disability		264			200			210			216			240

				Total		8,384			8,434			8,569			8,487			8,607


				Separate Account Liabilities (1):
				Group life		24,550			23,646			23,292			24,339			23,816
				Group disability		—			—			—			—			—

				Total		24,550			23,646			23,292			24,339			23,816


				Group Life Insurance:
	2,073		1,984	Gross premiums, policy charges and fee income (3)		1,006			974			982			1,009			1,064
	1,953		1,873	Earned premiums, policy charges and fee income		955			926			932			955			998
	89.0%		90.5%	Benefits ratio (4)		88.3	%		88.6	%		87.1	%		89.4	%		88.6	%
	10.7%		10.6%	Administrative operating expense ratio		10.5	%		10.8	%		12.2	%		10.8	%		10.6	%
				Persistency ratio		92.6	%		92.0	%		91.3	%		96.1	%		95.8	%

				Group Disability Insurance:
	438		404	Gross premiums, policy charges and fee income (3)		205			213			196			216			222
	399		352	Earned premiums, policy charges and fee income		172			197			188			203			196
	79.7%		74.2%	Benefits ratio (5)		76.3	%		81.8	%		85.3	%		82.2	%		77.5	%
	31.6%		33.4%	Administrative operating expense ratio		34.1	%		32.7	%		36.9	%		31.9	%		31.1	%
				Persistency ratio		88.6	%		87.7	%		87.0	%		94.9	%		93.7	%

				Total Group Insurance (6):
	87.4%		87.9%	Benefits ratio		86.5	%		87.4	%		86.8	%		88.1	%		86.6	%

(1)	As of end of period.

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

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

(4)

Group Life Insurance benefit ratios excluding market driven and discrete items. Benefit ratios including market driven and discrete items are 90.8%, 89.4%, 87.1%, 88.6%, and 86.5% for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively, and 90.1%, and 89.6% for year-to-date June 2016 and 2015, respectively.

(5)

Group Disability Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 47.9%, 82.2%, 85.3%, 81.8%, and 61.6% for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively, and 65.2%, and 67.0% for year-to-date June 2016 and 2015, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 83.8%, 88.1%, 86.8%, 87.4%, and 82.7% for the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015, and June 30, 2015, respectively, and 85.9%, and 86.0% for year-to-date June 2016 and 2015, respectively.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


Year-to-date							2015									2016
2016			2015				2Q			3Q			4Q			1Q			2Q

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,916			5,376		Beginning balance		5,046			5,186			4,735			4,916			4,130
	217			221		Capitalization		112			104			105			100			117
	(266	)		(181	)	Amortization - operating results		(92	)		(163	)		(121	)		(144	)		(122	)
	(700	)		(254	)	Amortization - realized investment gains and losses		89			(399	)		178			(717	)		17
	(48	)		24		Impact of unrealized (gains) or losses on AFS securities		31			7			19			(25	)		(23	)
	—			—		Other		—			—			—			—			—

	4,119			5,186		Ending balance		5,186			4,735			4,916			4,130			4,119


						INDIVIDUAL LIFE INSURANCE:
	4,883			4,056		Beginning balance		3,985			4,652			4,683			4,883			4,727
	334			287		Capitalization		148			166			197			162			172
	36			42		Amortization - operating results		128			(97	)		(78	)		(77	)		113
	(106	)		14		Amortization - realized investment gains and losses		37			(22	)		9			(26	)		(80	)
	(374	)		253		Impact of unrealized (gains) or losses on AFS securities		354			(16	)		72			(215	)		(159	)

	4,773			4,652		Ending balance		4,652			4,683			4,883			4,727			4,773


						GROUP INSURANCE:
	182			177		Beginning balance		175			183			182			181			181
	—			9		Capitalization		9			—			1			—			—
	(3	)		(3	)	Amortization - operating results		(1	)		(1	)		(2	)		(1	)		(2	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	179			183		Ending balance		183			182			181			180			179


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,188			1,513		Beginning balance		1,367			1,377			1,176			1,188			916
	2			5		Capitalization		2			1			2			1			1
	(101	)		(61	)	Amortization - operating results		(30	)		(56	)		(45	)		(51	)		(50	)
	(187	)		(89	)	Amortization - realized investment gains and losses		29			(148	)		50			(216	)		29
	(9	)		9		Impact of unrealized (gains) or losses on AFS securities		9			2			5			(6	)		(3	)
	—			—		Other		—			—			—			—			—

	893			1,377		Ending balance		1,377			1,176			1,188			916			893

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


Year-to-date						% Change			2015									2016
2016			2015			% Change			2Q			3Q			4Q			1Q			2Q

								Revenues (1):
	7,595			7,152			6%	Premiums		3,633			3,385			3,307			3,696			3,899
	236			279			-15%	Policy charges and fee income		139			129			122			130			106
	2,324			2,198			6%	Net investment income		1,099			1,081			1,078			1,120			1,204
	232			314			-26%	Asset management fees, commissions and other income		166			155			164			98			134

	10,387			9,943			4%	Total revenues		5,037			4,750			4,671			5,044			5,343


								Benefits and Expenses (1):
	6,570			6,135			7%	Insurance and annuity benefits		3,133			2,904			2,833			3,173			3,397
	457			448			2%	Interest credited to policyholders’ account balances		224			219			213			227			230
	3			2			50%	Interest expense		1			2			1			2			1
	(862	)		(796	)		-8%	Deferral of acquisition costs		(395	)		(382	)		(387	)		(426	)		(436	)
	533			507			5%	Amortization of acquisition costs		255			249			233			260			273
	2,104			1,971			7%	General and administrative expenses		977			946			1,040			1,029			1,075

	8,805			8,267			7%	Total benefits and expenses		4,195			3,938			3,933			4,265			4,540


	1,582			1,676			-6%	Adjusted operating income before income taxes		842			812			738			779			803

(1)

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

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

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


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

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


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


	Six Months Ended June 30, 2015									Quarter Ended June 30, 2015
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		7,152			3,457			3,695			3,633			1,627			2,006
Policy charges and fee income		279			172			107			139			85			54
Net investment income		2,198			869			1,329			1,099			435			664
Asset management fees, commissions and other income		314			175			139			166			84			82

Total revenues		9,943			4,673			5,270			5,037			2,231			2,806


Benefits and Expenses (1):
Insurance and annuity benefits		6,135			3,041			3,094			3,133			1,450			1,683
Interest credited to policyholders’ account balances		448			103			345			224			48			176
Interest expense		2			1			1			1			—			1
Deferral of acquisition costs		(796	)		(388	)		(408	)		(395	)		(179	)		(216	)
Amortization of acquisition costs		507			241			266			255			113			142
General and administrative expenses		1,971			855			1,116			977			418			559

Total benefits and expenses		8,267			3,853			4,414			4,195			1,850			2,345


Adjusted operating income before income taxes		1,676			820			856			842			381			461

(1)

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

Page 26

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


Year-to-date					2015						2016
2016		2015			2Q		3Q		4Q		1Q		2Q

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	3,017		2,727	Japan, excluding Gibraltar Life		1,257		1,285		1,239		1,583		1,434
	3,914		3,802	Gibraltar Life		2,060		1,786		1,719		1,794		2,120
	900		902	All other countries		455		443		471		449		451

	7,831		7,431	Total		3,772		3,514		3,429		3,826		4,005


				Annualized new business premiums:
	427		345	Japan, excluding Gibraltar Life		146		160		164		237		190
	858		770	Gibraltar Life		413		408		370		409		449
	197		229	All other countries		112		103		116		98		99

	1,482		1,344	Total		671		671		650		744		738


				Annualized new business premiums by distribution channel:
	624		574	Life Planner Operations		258		263		280		335		289
	365		318	Gibraltar Life Consultants		172		162		150		161		204
	370		327	Banks		174		186		166		194		176
	123		125	Independent Agency		67		60		54		54		69

	1,482		1,344	Total		671		671		650		744		738

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

	3,128		2,983	Japan, excluding Gibraltar Life		1,380		1,425		1,364		1,677		1,451
	4,096		4,117	Gibraltar Life		2,239		1,969		1,870		1,921		2,175
	945		875	All other countries		441		461		492		480		465

	8,169		7,975	Total		4,060		3,855		3,726		4,078		4,091


				Annualized new business premiums:
	442		379	Japan, excluding Gibraltar Life		162		177		181		250		192
	878		797	Gibraltar Life		428		432		390		425		453
	208		216	All other countries		107		107		121		106		102

	1,528		1,392	Total		697		716		692		781		747


				Annualized new business premiums by distribution channel:
	650		595	Life Planner Operations		269		284		302		356		294
	375		332	Gibraltar Life Consultants		179		175		161		169		206
	376		335	Banks		178		194		172		199		177
	127		130	Independent Agency		71		63		57		57		70

	1,528		1,392	Total		697		716		692		781		747

(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 106 per U.S. dollar and Korean won 1,100 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2015									2016
	2Q			3Q			4Q			1Q			2Q

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		310			313			316			321			324
Gibraltar Life		328			330			331			334			335
All other countries		114			115			118			119			120

Total		752			758			765			774			779


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,194			3,234			3,278			3,341			3,384
Gibraltar Life		7,149			7,146			7,146			7,150			7,141
All other countries		1,911			1,944			1,980			2,007			2,024

Total		12,254			12,324			12,404			12,498			12,549


International life insurance policy persistency:

Life Planner Operations:
13 months		92.0	%		92.6	%		92.8	%		93.0	%		93.1	%
25 months		85.7	%		85.5	%		85.4	%		85.6	%		85.6	%

Gibraltar Life (3):
13 months		92.4	%		92.6	%		92.9	%		93.2	%		93.3	%
25 months		82.8	%		83.4	%		84.0	%		84.8	%		85.3	%

Number of Life Planners at end of period:
Japan		3,385			3,478			3,528			3,650			3,653
All other countries		4,030			4,031			4,064			3,958			3,898

Total Life Planners		7,415			7,509			7,592			7,608			7,551


Gibraltar Life Consultants		8,565			8,593			8,805			8,781			8,734

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 106 per U.S. dollar and Korean won 1,100 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

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

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

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	June 30, 2016									December 31, 2015
	Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division					Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division
	Total Portfolio		Closed Block Division		Amount		% of Total			Total Portfolio		Closed Block Division		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		279,665		25,647		254,018		66.2	%		240,133		23,505		216,628		63.1	%
Public, held-to-maturity, at amortized cost		2,007		—		2,007		0.5	%		1,834		—		1,834		0.5	%
Private, available-for-sale, at fair value		52,400		14,602		37,798		9.8	%		50,057		14,290		35,767		10.4	%
Private, held-to-maturity, at amortized cost		478		—		478		0.1	%		474		—		474		0.1	%
Trading account assets supporting insurance liabilities, at fair value		21,702		—		21,702		5.7	%		20,522		—		20,522		6.0	%
Other trading account assets, at fair value		1,892		289		1,603		0.4	%		1,849		288		1,561		0.5	%
Equity securities, available-for-sale, at fair value		9,484		2,464		7,020		1.8	%		9,263		2,726		6,537		1.9	%
Commercial mortgage and other loans, at book value		50,805		9,747		41,058		10.7	%		50,257		9,771		40,486		11.8	%
Policy loans, at outstanding balance		11,930		4,729		7,201		1.9	%		11,657		4,790		6,867		2.0	%
Other long-term investments (1)		9,819		2,980		6,839		1.8	%		9,470		2,921		6,549		1.9	%
Short-term investments		4,866		816		4,050		1.1	%		7,717		1,467		6,250		1.8	%

Subtotal (2)		445,048		61,274		383,774		100.0	%		403,233		59,758		343,475		100.0	%

Invested assets of other entities and operations (3)		6,832		—		6,832					13,959		—		13,959

Total investments		451,880		61,274		390,606					417,192		59,758		357,434

Fixed Maturities by Credit Quality (2):


	June 30, 2016											December 31, 2015
	PFI Excluding Closed Block Division											PFI Excluding Closed Block Division
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total
Public Fixed Maturities:

NAIC Rating (4)
1		181,138		38,520		246		219,412		85.5	%		166,400		21,997		1,271		187,126		85.6	%
2		26,909		3,072		300		29,681		11.6	%		24,238		2,260		1,044		25,454		11.6	%

Subtotal - High or Highest Quality Securities		208,047		41,592		546		249,093		97.1	%		190,638		24,257		2,315		212,580		97.2	%

3		4,941		274		143		5,072		2.0	%		3,870		320		149		4,041		1.8	%
4		1,916		145		76		1,985		0.7	%		1,591		142		59		1,674		0.8	%
5		119		21		11		129		0.1	%		176		67		3		240		0.1	%
6		227		18		1		244		0.1	%		199		11		1		209		0.1	%

Subtotal - Other Securities		7,203		458		231		7,430		2.9	%		5,836		540		212		6,164		2.8	%

Total		215,250		42,050		777		256,523		100.0	%		196,474		24,797		2,527		218,744		100.0	%


Private Fixed Maturities:
NAIC Rating (4)
1		10,912		897		84		11,725		30.6	%		10,950		786		174		11,562		31.9	%
2		20,107		1,537		348		21,296		55.6	%		19,493		1,438		501		20,430		56.3	%

Subtotal - High or Highest Quality Securities		31,019		2,434		432		33,021		86.2	%		30,443		2,224		675		31,992		88.2	%

3		3,592		129		129		3,592		9.4	%		3,215		88		143		3,160		8.7	%
4		856		33		41		848		2.1	%		741		8		41		708		2.0	%
5		571		17		21		567		1.5	%		239		11		9		241		0.7	%
6		269		37		15		291		0.8	%		168		9		3		174		0.4	%

Subtotal - Other Securities		5,288		216		206		5,298		13.8	%		4,363		116		196		4,283		11.8	%

Total		36,307		2,650		638		38,319		100.0	%		34,806		2,340		871		36,275		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 June 30, 2016 and December 31, 2015, 688 securities with amortized cost of $2,720 million (fair value $2,820 million) and 938 securities with amortized cost of $4,253 million (fair value $4,325 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INVESTMENT PORTFOLIO COMPOSITION (1)

(in millions)


	June 30, 2016					December 31, 2015
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		133,008		79.3	%		109,257		77.6	%
Public, held-to-maturity, at amortized cost		2,007		1.2	%		1,834		1.3	%
Private, available-for-sale, at fair value		10,670		6.4	%		9,747		6.9	%
Private, held-to-maturity, at amortized cost		478		0.3	%		474		0.3	%
Trading account assets supporting insurance liabilities, at fair value		2,202		1.3	%		2,020		1.4	%
Other trading account assets, at fair value		587		0.4	%		647		0.5	%
Equity securities, available-for-sale, at fair value		2,811		1.7	%		2,660		1.9	%
Commercial mortgage and other loans, at book value		10,708		6.4	%		9,756		6.9	%
Policy loans, at outstanding balance		2,498		1.5	%		2,208		1.6	%
Other long-term investments (3)		2,094		1.3	%		1,742		1.3	%
Short-term investments		364		0.2	%		417		0.3	%

Total		167,427		100.0	%		140,762		100.0	%


	June 30, 2016					December 31, 2015
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		121,010		56.0	%		107,371		53.0	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		27,128		12.5	%		26,020		12.8	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,500		9.0	%		18,502		9.1	%
Other trading account assets, at fair value		1,016		0.5	%		914		0.4	%
Equity securities, available-for-sale, at fair value		4,209		1.9	%		3,877		1.9	%
Commercial mortgage and other loans, at book value		30,350		14.0	%		30,730		15.2	%
Policy loans, at outstanding balance		4,703		2.2	%		4,659		2.3	%
Other long-term investments (3)		4,745		2.2	%		4,807		2.4	%
Short-term investments		3,686		1.7	%		5,833		2.9	%

Total		216,347		100.0	%		202,713		100.0	%

(1)	Excludes Closed Block Division.

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

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

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INVESTMENT RESULTS (1)

(in millions)


	Quarter Ended June 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.88	%		2,353			379			4.01	%		2,234			317
Equity securities		7.11	%		93			(20	)		6.31	%		75			33
Commercial mortgage and other loans		4.32	%		383			(6	)		4.43	%		364			6
Policy loans		4.88	%		86			—			4.92	%		83			—
Short-term investments and cash equivalents		0.55	%		27			1			0.20	%		8			1
Other investments		2.66	%		57			867			4.20	%		89			(412	)

Gross investment income before investment expenses		3.78	%		2,999			1,221			3.92	%		2,853			(55	)
Investment expenses		-0.15	%		(107	)		—			-0.15	%		(97	)		—

Subtotal		3.63	%		2,892			1,221			3.77	%		2,756			(55	)

Investment results of other entities and operations (3)					258			7						276			19
Less, investment income related to adjusted operating income reconciling items					(63	)								(58	)

Total					3,087			1,228						2,974			(36	)


	Six Months Ended June 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.91	%		4,621			342			4.00	%		4,434			663
Equity securities		6.15	%		157			(25	)		5.80	%		136			78
Commercial mortgage and other loans		4.33	%		761			8			4.44	%		716			11
Policy loans		4.90	%		170			—			4.93	%		166			—
Short-term investments and cash equivalents		0.56	%		54			1			0.22	%		17			1
Other investments		2.92	%		122			2,853			6.10	%		258			1,133

Gross investment income before investment expenses		3.79	%		5,885			3,179			3.97	%		5,727			1,886
Investment expenses		-0.14	%		(203	)		—			-0.15	%		(190	)		—

Subtotal		3.65	%		5,682			3,179			3.82	%		5,537			1,886

Investment results of other entities and operations (3)					526			28						555			66
Less, investment income related to adjusted operating income reconciling items					(104	)								(113	)

Total					6,104			3,207						5,979			1,952

(1)	Excludes Closed Block Division.

(2)

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

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

(4)

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

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended June 30
	2016								2015
	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		3.09	%		863			283		3.29	%		811			279
Equity securities		5.17	%		20			2		5.64	%		20			26
Commercial mortgage and other loans		4.11	%		106			1		4.54	%		99			5
Policy loans		3.89	%		23			—		3.87	%		20			—
Short-term investments and cash equivalents		0.82	%		2			—		0.26	%		1			—
Other investments (2)		8.07	%		58			276		5.19	%		33			(377	)

Gross investment income before investment expenses		3.30	%		1,072			562		3.44	%		984			(67	)
Investment expenses		-0.12	%		(40	)		—		-0.14	%		(41	)		—

Total		3.18	%		1,032			562		3.30	%		943			(67	)


	Six Months Ended June 30
	2016								2015
	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		3.11	%		1,678			468		3.23	%		1,600			597
Equity securities		4.44	%		34			7		4.67	%		34			33
Commercial mortgage and other loans		4.26	%		214			7		4.51	%		191			6
Policy loans		3.90	%		45			—		3.87	%		41			—
Short-term investments and cash equivalents		0.81	%		4			—		0.26	%		2			—
Other investments (2)		5.37	%		74			891		7.28	%		88			(220	)

Gross investment income before investment expenses		3.26	%		2,049			1,373		3.41	%		1,956			416
Investment expenses		-0.12	%		(79	)		—		-0.14	%		(81	)		—

Total		3.14	%		1,970			1,373		3.27	%		1,875			416

(1)

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

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended June 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.56	%		1,490			96			4.57	%		1,423			38
Equity securities		7.97	%		73			(22	)		6.60	%		55			7
Commercial mortgage and other loans		4.40	%		277			(7	)		4.39	%		265			1
Policy loans		5.40	%		63			—			5.40	%		63			—
Short-term investments and cash equivalents		0.54	%		25			1			0.20	%		7			1
Other investments		-0.02	%		(1	)		591			3.78	%		56			(35	)

Gross investment income before investment expenses		4.11	%		1,927			659			4.24	%		1,869			12
Investment expenses		-0.16	%		(67	)		—			-0.16	%		(56	)		—

Total		3.95	%		1,860			659			4.08	%		1,813			12


	Six Months Ended June 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.59	%		2,943			(126	)		4.62	%		2,834			66
Equity securities		6.89	%		123			(32	)		6.31	%		102			45
Commercial mortgage and other loans		4.36	%		547			1			4.42	%		525			5
Policy loans		5.40	%		125			—			5.42	%		125			—
Short-term investments and cash equivalents		0.55	%		50			1			0.21	%		15			1
Other investments		1.73	%		48			1,962			5.62	%		170			1,353

Gross investment income before investment expenses		4.16	%		3,836			1,806			4.33	%		3,771			1,470
Investment expenses		-0.16	%		(124	)		—			-0.16	%		(109	)		—

Total		4.00	%		3,712			1,806			4.17	%		3,662			1,470

(1)	Excludes Closed Block Division.

(2)

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

(3)

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


	Second Quarter 2016																					Second Quarter 2015
	Premiums		Policy Charges and Fee Income			Insurance and Annuity Benefits			Interest Credited to Policy- holders’ Account Balances		Interest Expense		Amorti- zation of Acqui- sition Costs			General and Adminis- trative Expenses			Pre-Tax Adjusted Operating Income			Premiums		Policy Charges and Fee Income			Insurance and Annuity Benefits			Interest Credited to Policy- holders’ Account Balances			Amorti- zation of Acqui- sition Costs			General and Adminis- trative Expenses			Pre-Tax Adjusted Operating Income
Individual Annuities:
Annual review of assumptions		—		—			(19	)		8		—		7			—			4								(2	)		(8	)		(21	)					31
Market performance and experience true-ups		—		—			(35	)		—		—		(12	)		(1	)		48			—		—			(60	)		(10	)		(23	)		(1	)		94
Total of above items		—		—			(54	)		8		—		(5	)		(1	)		52			—		—			(62	)		(18	)		(44	)		(1	)		125
Reported amount		—		—			57			98		—		122			537						—		—			33			81			92			543
Amount excluding impact of items indicated above		—		—			111			90		—		127			538						—		—			95			99			136			544

Retirement:
Annual review of assumptions		362		—			363			—		—		(1	)		(6	)		6			—		—			—			—			—			—			—
Total of above items		362		—			363			—		—		(1	)		(6	)		6			—		—			—			—			—			—			—
Reported amount		974		—			1,403			—		—		5			247						—		—			—			—			—			—
Amount excluding impact of items indicated above		612		—			1,040			—		—		6			253						—		—			—			—			—			—

Individual Life:
Annual review of assumptions		—		(230	)		347			—		—		(193	)		36			(420	)		—		(153	)		1			—			(178	)		(44	)		68
Business integration costs		—		—			—			—		—		—			—			—			—		—			—			—			—			8			(8	)
Total of above items		—		(230	)		347			—		—		(193	)		36			(420	)		—		(153	)		1			—			(178	)		(36	)		60
Reported amount		—		329			949			—		—		(113	)		467						—		360			540			—			(128	)		362
Amount excluding impact of items indicated above		—		559			602			—		—		80			431						—		513			539			—			50			398

Group Insurance:
Annual review of assumptions		14		33			6			—		—		—			—			41			—		5			(39	)		16			—			—			28
Total of above items		14		33			6			—		—		—			—			41			—		5			(39	)		16			—			—			28
Reported amount		1,018		176			1,001			—		—		—			—						—		156			931			77			—			—
Amount excluding impact of items indicated above		1,004		143			995			—		—		—			—						—		151			970			61			—			—

International Insurance - Life Planner operations:
Annual review of assumptions		—		(22	)		33			—		—		(7	)		(10	)		(38	)		—		(6	)		13			—			(8	)		—			(11	)
Total of above items		—		(22	)		33			—		—		(7	)		(10	)		(38	)		—		(6	)		13			—			(8	)		—			(11	)
Reported amount		—		67			1,632			—		—		127			455						—		85			1,450			—			113			—
Amount excluding impact of items indicated above		—		89			1,599			—		—		134			465						—		91			1,437			—			121			—

International Insurance - Gibraltar Life & Other operations:
Annual review of assumptions		—		—			33			—		—		1			—			(34	)		—		—			11			—			(1	)		—			(10	)
Total of above items		—		—			33			—		—		1			—			(34	)		—		—			11			—			(1	)		—			(10	)
Reported amount		—		—			1,765			—		—		146			—						—		—			1,684			—			142			—
Amount excluding impact of items indicated above		—		—			1,732			—		—		145			—						—		—			1,673			—			143			—

Corporate & Other:
Annual review of assumptions		—		—			3			—		—		—			—			(3	)		—		—			(11	)		—			—			—			11
Costs associated with debt tender offer		—		—			—			—		36		—			—			(36	)		—		—			—			—			—			—			—
Total of above items		—		—			3			—		36		—			—			(39	)		—		—			(11	)		—			—			—			11
Reported amount		—		—			6			—		182		—			—						—		—			(9	)		—			—			—
Amount excluding impact of items indicated above		—		—			3			—		146		—			—						—		—			2			—			—			—

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


	Three Months Ended June 30, 2016																				Three Months Ended June 30, 2015
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net		Change in experience- rated contract- holder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)			Adjusted Opera- ting Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabi- lities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)

Revenues:

Premiums		6,146			—			—		—		693		96		—			6,935			6,782			—			—			—			702		98			—			7,582
Policy charges and fee income		1,288			(12	)		—		—		—		—		—			1,276			1,383			(133	)		—			—			—		—			—			1,250
Net investment income		3,087			(8	)		—		—		639		71		—			3,789			2,974			—			—			—			639		58			—			3,671
Realized investment gains (losses), net		138			1,059			—		—		205		31		—			1,433			229			(217	)		—			—			165		(48	)		—			129
Asset management fees, commissions and other income		1,153			(249	)		108		—		9		1		(16	)		1,006			1,132			157			(220	)		—			19		1			(9	)		1,080

Total revenues		11,812			790			108		—		1,546		199		(16	)		14,439			12,500			(193	)		(220	)		—			1,525		109			(9	)		13,712


Benefits and Expenses:

Insurance and annuity benefits		6,813			153			—		—		1,433		188		—			8,587			6,925			(147	)		—			—			1,320		191			—			8,289
Interest credited to policyholders’ account balances		914			(23	)		—		133		34		—		—			1,058			907			(30	)		—			(234	)		34		(1	)		—			676
Interest expense		357			—			—		—		—		—		—			357			324			—			—			—			—		—			—			324
Deferral of acquisition costs		(718	)		—			—		—		—		—		—			(718	)		(664	)		—			—			—			—		—			—			(664	)
Amortization of acquisition costs		281			138			—		—		8		—		—			427			251			(125	)		—			—			9		—			—			135
General and administrative expenses		3,108			162			—		—		103		22		(8	)		3,387			2,916			(177	)		—			—			110		28			(54	)		2,823

Total benefits and expenses		10,755			430			—		133		1,578		210		(8	)		13,098			10,659			(479	)		—			(234	)		1,473		218			(54	)		11,583



	Six Months Ended June 30, 2016																				Six Months Ended June 30, 2015
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net		Change in experience- rated contract- holder liabilities due to asset value changes		Closed Block division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)			Adjusted Opera- ting Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabi- lities due to asset value changes			Closed Block division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)

Revenues:

Premiums		11,723			—			—		—		1,315		194		—			13,232			12,695			—			—			—			1,336		198			—			14,229
Policy charges and fee income		2,799			76			—		—		—		—		—			2,875			2,937			(79	)		—			—			—		—			—			2,858
Net investment income		6,104			(15	)		—		—		1,251		119		—			7,459			5,979			—			—			—			1,348		113			—			7,440
Realized investment gains (losses), net		312			2,817			—		—		107		78		—			3,314			458			1,475			—			—			538		19			—			2,490
Asset management fees, commissions and other income		2,166			(582	)		324		—		2		2		(24	)		1,888			2,238			127			(137	)		—			22		3			(6	)		2,247

Total revenues		23,104			2,296			324		—		2,675		393		(24	)		28,768			24,307			1,523			(137	)		—			3,244		333			(6	)		29,264


Benefits and Expenses:

Insurance and annuity benefits		12,797			272			—		—		2,487		328		—			15,884			13,141			(52	)		—			—			2,904		316			—			16,309
Interest credited to policyholders’ account balances		1,821			193			—		263		67		—		—			2,344			1,791			89			—			(37	)		67		(1	)		—			1,909
Interest expense		682			—			—		—		1		1		—			684			641			—			—			—			—		1			—			642
Deferral of acquisition costs		(1,403	)		—			—		—		—		—		—			(1,403	)		(1,311	)		—			—			—			—		—			—			(1,311	)
Amortization of acquisition costs		760			850			—		—		19		—		—			1,629			679			226			—			—			19		—			—			924
General and administrative expenses		6,065			283			—		—		206		44		(41	)		6,557			5,780			(77	)		—			—			224		51			(64	)		5,914

Total benefits and expenses		20,722			1,598			—		263		2,780		373		(41	)		25,695			20,721			186			—			(37	)		3,214		367			(64	)		24,387

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

(2)	U.S. generally accepted accounting principles

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

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

(in millions)


	Three Months Ended September 30, 2015																								Three Months Ended December 31, 2015
				Reconciling Items																								Reconciling Items
	Adjusted Operating Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabilities due to asset value changes			Closed Block division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)			Adjusted Opera- ting Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabi- lities due to asset value changes			Closed Block division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)

Revenues:

Premiums		5,273			—			—			—			609			103			—			5,985			7,495			—			—			—			724			88			—			8,307
Policy charges and fee income		1,552			72			—			—			—			—			—			1,624			1,514			(24	)		—			—			—			—			—			1,490
Net investment income		3,015			—			—			—			672			54			—			3,741			2,964			1			—			—			633			50			—			3,648
Realized investment gains (losses), net		244			1,326			—			—			95			35			—			1,700			185			(527	)		—			—			200			(23	)		—			(165	)
Asset management fees, commissions and other income		994			(209	)		(228	)		—			(8	)		(2	)		2			549			1,087			65			(159	)		—			(9	)		—			(8	)		976

Total revenues		11,078			1,189			(228	)		—			1,368			190			2			13,599			13,245			(485	)		(159	)		—			1,548			115			(8	)		14,256


Benefits and Expenses:

Insurance and annuity benefits		5,640			103			—			—			1,110			162			—			7,015			7,917			(12	)		—			—			1,481			129			—			9,515
Interest credited to policyholders’ account balances		915			149			—			(258	)		34			—			—			840			879			(47	)		—			(138	)		34			2			—			730
Interest expense		339			—			—			—			—			1			—			340			322			—			—			—			1			1			—			324
Deferral of acquisition costs		(650	)		—			—			—			—			—			—			(650	)		(691	)		—			—			—			—			—			—			(691	)
Amortization of acquisition costs		509			404			—			—			9			—			—			922			443			(178	)		—			—			9			—			—			274
General and administrative expenses		2,862			95			—			—			107			19			—			3,083			3,193			(52	)		—			—			103			23			(6	)		3,261

Total benefits and expenses		9,615			751			—			(258	)		1,260			182			—			11,550			12,063			(289	)		—			(138	)		1,628			155			(6	)		13,413



	Three Months Ended March 31, 2016
				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabilities due to asset value changes			Closed Block division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)

Revenues:

Premiums		5,577			—			—			—			622			98			—			6,297
Policy charges and fee income		1,511			88			—			—			—			—			—			1,599
Net investment income		3,017			(7	)		—			—			612			48			—			3,670
Realized investment gains (losses), net		174			1,758			—			—			(98	)		47			—			1,881
Asset management fees, commissions and other income		1,013			(333	)		216			—			(7	)		1			(8	)		882

Total revenues		11,292			1,506			216			—			1,129			194			(8	)		14,329


Benefits and Expenses:

Insurance and annuity benefits		5,984			119			—			—			1,054			140			—			7,297
Interest credited to policyholders’ account balances		907			216			—			130			33			—			—			1,286
Interest expense		325			—			—			—			1			1			—			327
Deferral of acquisition costs		(685	)		—			—			—			—			—			—			(685	)
Amortization of acquisition costs		479			712			—			—			11			—			—			1,202
General and administrative expenses		2,957			121			—			—			103			22			(33	)		3,170

Total benefits and expenses		9,967			1,168			—			130			1,202			163			(33	)		12,597

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

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

LOGO

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

Adjusted operating income is a non-GAAP measure of performance that excludes “Realized investment gains (losses), net”, as adjusted, and related charges and adjustments; 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 U.S. GAAP but is the measure of profit or loss we use to evaluate segment performance. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability 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. Excess (unscheduled) and single premium business for the company’s domestic individual life and international insurance operations are included in annualized new business premiums based on a 10% credit. Amounts ascribed to Gibraltar Life Consultants include production by captive agents associated with consolidated joint venture of Gibraltar Life and Other Operations.

4. Assets Under Management:

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

5. Prudential Financial, Inc. Equity:

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

6. Book value per share of Common Stock:

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

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 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

KEY DEFINITIONS AND FORMULAS

10. Client Assets:

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

11. Divested Businesses:

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

12. Earned Premiums:

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

13. Full Service Retirement:

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

14. Full Service Stable Value:

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

15. General Account:

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

16. Gibraltar Life:

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

17. Gibraltar Life Consultants:

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

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

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

19. Group Insurance Benefits Ratios:

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

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

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

21. Individual Annuities - Net Amounts at Risk:

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

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

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

KEY DEFINITIONS AND FORMULAS

22. Insurance and Annuity Benefits:

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

23. International Life Planners:

Captive insurance agents in our Life Planner Operations.

24. Non-recourse and Limited-recourse Debt:

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

25. Policy Persistency - Group Insurance:

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

26. Policy Persistency - International Insurance:

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

27. Prudential Agents:

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

28. Prudential Agent productivity:

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

29. Separate Accounts:

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

30. Wrap-Fee Products:

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

Page 39

Prudential Financial, Inc.

Quarterly Financial Supplement

Second Quarter 2016

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of August 3, 2016


	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	A+	NR	NR
Gibraltar Life Insurance Company, Ltd.	NR	A+	NR	NR
The Prudential Gibraltar Financial Life Insurance Co. Ltd.	NR	A+	NR	NR
Prudential Life Insurance Co. of Taiwan, Inc.	NR	twAA+	NR	NR

CREDIT RATINGS:
as of August 3, 2016

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.

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PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - August 3, 2016

Attached files