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

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EX-99.1 - EX-99.1 - PRUDENTIAL FINANCIAL INC	d533446dex991.htm
8-K - FORM 8-K - PRUDENTIAL FINANCIAL INC	d533446d8k.htm

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Fourth Quarter 2017

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

February 7, 2018

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

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

U.S. INDIVIDUAL SOLUTIONS 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
Supplementary Information for Individual Life		17

U.S. WORKPLACE SOLUTIONS DIVISION
Combined Statements of Operations		18
Combining Statements of Operations		19
Retirement Segment Sales Results and Account Values		20
Supplementary Information for Group Insurance		21

INVESTMENT MANAGEMENT DIVISION
Statements of Operations		22
Supplementary Revenue and Assets Under Management Information		23
Supplementary Assets Under Management Information		24

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

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

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

LINE ITEM IMPACT OF MARKET DRIVEN AND DISCRETE ITEMS - ADJUSTED OPERATING INCOME		35

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES		36-37

RECLASSIFIED OPERATIONS HIGHLIGHTS		38

RECLASSIFIED STATEMENTS OF OPERATIONS HIGHLIGHTS		39-40

KEY DEFINITIONS AND FORMULAS		41-43

RATINGS AND INVESTOR INFORMATION		44

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

Net income for the fourth quarter and full year 2017, and book value per share and adjusted book value per share as of December 31, 2017, include the estimated impact of the enactment of the Tax Cuts and Jobs Act (Tax Act), which was signed into law on December 22, 2017. The final impact of the Tax Act may differ from these estimates, due to, among other things, changes in interpretations and assumptions made by the Company, additional guidance that may be issued by the U.S. Department of Treasury and actions that the Company may take. Information herein regarding the impact of the Tax Act on Prudential Financial, Inc.’s results of operations and financial condition consists of estimates. These estimates are forward-looking statements based on current interpretations and expectations and may change, possibly materially.

Prudential Financial, Inc.

This quarterly financial supplement reflects, for all periods presented, the new organizational structure of our U.S. businesses. The structure better reflects our focus on leveraging our mix of businesses and our digital and customer engagement capabilities to expand our value proposition for the benefit of customers and stakeholders. Under the new structure, our principal operations are comprised of five divisions, which together encompass seven segments, and our Corporate and Other operations as illustrated below. There are no changes to our reporting segments nor to our measure of segment profitability as a result of the new organizational structure.

New Financial Reporting Structure

U.S. Individual Solutions Division

U.S. Workplace Solutions Division

Investment Management Division

International Insurance Division

Corporate and Other Operations

Closed Block Division

Individual Annuities Segment

Individual Life Segment

Retirement Segment

Group Insurance
Segment

Investment Management Segment

International Insurance Segment

Life Planner Operations

Gibraltar and Other Operations

Corporate

Non-Closed Block divested businesses

Closed Block Segment

Former Financial Reporting Structure

U.S. Retirement & Investment Management Division

U.S. Individual Life & Group Insurance Division

International Insurance Division

Corporate and Other Operations

Closed Block Division

Individual Annuities Segment

Retirement Segment

Asset Management Segment

Individual Life Segment

Group Insurance
Segment

International Insurance Segment

Life Planner Operations

Gibraltar and Other Operations

Corporate

Non-Closed Block divested businesses

Closed Block Segment

iii

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

								Pre-tax adjusted operating income (loss) by division:
	2,007			1,844			9%	U.S. Individual Solutions Division		560			586			55			727			639
	1,497			1,232			22%	U.S. Workplace Solutions Division		361			431			444			309			313
	979			787			24%	Investment Management Division		224			196			218			259			306
	3,198			3,117			3%	International Insurance Division		755			799			823			799			777
	(1,437	)		(1,581	)		9%	Corporate and other operations		(441	)		(352	)		(312	)		(310	)		(463	)

	6,244			5,399			16%	Total pre-tax adjusted operating income		1,459			1,660			1,228			1,784			1,572
	1,592			1,292			23%	Income taxes, applicable to adjusted operating income		369			423			309			461			399

	4,652			4,107			13%	After-tax adjusted operating income		1,090			1,237			919			1,323			1,173


								Reconciling items:
	(58	)		523			-111%	Realized investment gains (losses), net, and related charges and adjustments		(824	)		38			(679	)		1,164			(581	)
	336			(17	)		2076%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(378	)		44			201			85			6
	(151	)		21			-819%	Change in experience-rated contractholder liabilities due to asset value changes		283			(12	)		(145	)		(31	)		37
								Divested businesses:
	45			(132	)		134%	Closed Block Division		(58	)		34			(18	)		33			(4	)
	38			(84	)		145%	Other divested businesses		(160	)		6			35			10			(13	)
	33			(5	)		760%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(5	)		(28	)		(14	)		(24	)		99

	243			306			-21%	Total reconciling items, before income taxes		(1,142	)		82			(620	)		1,237			(456	)
	(3,030	)		43			-7147%	Income taxes, not applicable to adjusted operating income		(334	)		(28	)		(184	)		339			(3,157	)

	3,273			263			1144%	Total reconciling items, after income taxes		(808	)		110			(436	)		898			2,701

	7,925			4,370			81%	Income (after-tax) before equity in earnings of operating joint ventures		282			1,347			483			2,221			3,874
	(62	)		(2	)		-3000%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		2			22			8			17			(109	)

	7,863			4,368			80%	Income attributable to Prudential Financial, Inc.		284			1,369			491			2,238			3,765
	111			51			118%	Earnings attributable to noncontrolling interests		9			3			5			3			100

	7,974			4,419			80%	Net income		293			1,372			496			2,241			3,865
	111			51			118%	Less: Income attributable to noncontrolling interests		9			3			5			3			100

	7,863			4,368			80%	Net income attributable to Prudential Financial, Inc.		284			1,369			491			2,238			3,765

	13.0%			12.0%				Operating Return on Average Equity (based on adjusted operating income) (1)		12.6%			14.2%			10.5%			14.8%			12.6%

(1)

Operating Return on Average Equity (based on adjusted operating income) is a non-GAAP measure and represents adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income and adjusted to remove amounts included for foreign currency exchange rate remeasurement and certain deferred taxes as described on page 3. The comparable GAAP measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on net income). Return on average equity (based on net income) represents income after-tax, attributable to consolidated Prudential Financial, Inc., as determined in accordance with U.S. GAAP, annualized for interim periods, divided by average total Prudential Financial, Inc. equity. Return on average equity (based on net income) is 28.8 %, 18.1%, 4.1%, 11.8%, and 2.2% for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively, and 16.0% and 8.8% for years ended December 31, 2017, and December 31, 2016, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

						Earnings per share of Common Stock (diluted):
	10.58			9.13		After-tax adjusted operating income		2.46			2.79			2.09			3.01			2.69

						Reconciling items:
	(0.13)			1.17		Realized investment gains (losses), net, and related charges and adjustments		(1.87	)		0.09			(1.55	)		2.68			(1.34	)
	0.77			(0.04	)	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(0.86	)		0.10			0.46			0.20			0.01
	(0.35	)		0.05		Change in experience-rated contractholder liabilities due to asset value changes		0.64			(0.03	)		(0.33	)		(0.07	)		0.09
						Divested businesses:
	0.10			(0.30	)	Closed Block Division		(0.13	)		0.08			(0.04	)		0.08			(0.01	)
	0.09			(0.19	)	Other divested businesses		(0.36	)		0.01			0.08			0.02			(0.03	)
	(0.09	)		—		Difference in earnings allocated to participating unvested share-based payment awards		0.02			—			0.01			(0.03	)		(0.07	)

	0.39			0.69		Total reconciling items, before income taxes		(2.56	)		0.25			(1.37	)		2.88			(1.35	)
	(6.89	)		0.11		Income taxes, not applicable to adjusted operating income		(0.75	)		(0.05	)		(0.40	)		0.80			(7.27	)

	7.28			0.58		Total reconciling items, after income taxes		(1.81	)		0.30			(0.97	)		2.08			5.92

	17.86			9.71		Net income attributable to Prudential Financial, Inc.		0.65			3.09			1.12			5.09			8.61


	427.0			438.2		Weighted average number of outstanding Common shares (basic)		430.7			429.9			428.3			426.2			423.7
	436.0			446.6		Weighted average number of outstanding Common shares (diluted)		439.8			439.1			437.2			435.0			432.7

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

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	56			47		After-tax adjusted operating income		12			15			11			16			14
	94			49		Net income		3			16			7			27			44

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		1,133			1,415			1,779			2,358			1,380
				Long-term debt		12,224			12,074			11,806			10,532			10,550
				Junior Subordinated Long-Term Debt		5,817			5,819			5,820			6,621			6,622

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income		45,863			46,784			48,444			50,373			54,069
				Excluding accumulated other comprehensive income (2)		31,242			32,141			32,082			33,775			36,995
				Amount included above for remeasurement of foreign currency and certain deferred taxes (3)(4)		(3,199	)		(3,060	)		(2,889	)		(2,758	)		(969	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (3)(4)		34,441			35,201			34,971			36,533			37,964


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (5)		104.91			107.09			111.35			116.32			125.24
				Excluding accumulated other comprehensive income (2)(5)		71.62			73.75			73.96			78.26			86.06
				Amount included above for remeasurement of foreign currency and certain deferred taxes (3)(4)		(7.33	)		(7.02	)		(6.66	)		(6.39	)		(2.22	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (3)(4)(5)		78.95			80.77			80.62			84.65			88.28


				Number of diluted shares at end of period (5)		436.2			435.8			433.8			431.6			435.7

				*Common Stock Price Range (based on closing price):*
	117.15		107.10	High		107.10			113.82			109.13			115.23			117.15
	98.65		58.00	Low		81.43			103.92			102.92			98.65			107.28
	114.98		104.06	Close		104.06			106.68			108.14			106.32			114.98


				*Common Stock market capitalization (1)*		44,704			45,798			46,176			45,154			48,591

(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)	Includes the 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)	Includes $1,678 million impact reported in net income for the fourth quarter of 2017 from the remeasurement of deferred tax assets and liabilities originally established through accumulated other comprehensive income, related to enactment of the Tax Cuts and Jobs Act on December 22, 2017.

(5)

As of the fourth quarter of 2017, exchangeable surplus notes are dilutive when book value per share is greater than $85.00 (equivalent to an additional 5.88 million in diluted shares and an increase of $500 million in equity). As of the fourth quarter of 2016 and first, second and third quarters of 2017, exchangeable surplus notes are dilutive when book value per share is greater than $86.92 (equivalent to an additional 5.75 million in diluted shares and an increase of $500 million in equity). See page 41 for more information.

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

OPERATIONS HIGHLIGHTS


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

				*Assets Under Management and Administration ($ billions) (1) (2):*
				Assets Under Management :
				Investment Management Division:
				Institutional customers		431.5		445.2		461.2		478.3		489.5
				Retail customers		209.2		217.6		231.2		239.9		245.6
				General account		399.4		406.1		412.3		415.7		420.2

				Total Investment Management Division		1,040.1		1,068.9		1,104.7		1,133.9		1,155.3
				U.S. Individual Solutions Division		114.6		119.1		114.4		116.7		119.8
				U.S. Workplace Solutions Division		82.9		84.3		85.8		86.9		88.5
				International Insurance Division		26.2		26.5		28.7		28.7		30.0

				Total assets under management		1,263.8		1,298.8		1,333.6		1,366.2		1,393.6
				Client assets under administration		177.3		185.2		188.3		202.4		213.6

				Total assets under management and administration		1,441.1		1,484.0		1,521.9		1,568.6		1,607.2


				Assets managed or administered for customers outside of the United States at end of period		311.1		326.6		341.1		350.5		358.0

				*Distribution Representatives (1):*
				Prudential Advisors		2,937		2,922		2,921		2,937		2,882
				International Life Planners		7,680		7,819		7,735		7,831		7,831
				Gibraltar Life Consultants		8,884		8,752		8,509		8,327		8,326

	56		56	*Prudential Advisor productivity ($ thousands)*		67		47		51		53		72

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINED STATEMENTS OF OPERATIONS

(in millions)


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


								Revenues (1):
	29,162			27,953			4%	Premiums		7,296			5,774			7,557			7,111			8,720
	5,518			5,887			-6%	Policy charges and fee income		1,529			1,555			794			1,565			1,604
	13,499			12,695			6%	Net investment income		3,299			3,354			3,335			3,345			3,465
	5,467			5,039			8%	Asset management fees, commissions and other income		1,296			1,324			1,342			1,340			1,461

	53,646			51,574			4%	Total revenues		13,420			12,007			13,028			13,361			15,250


								Benefits and Expenses (1):
	30,071			29,709			1%	Insurance and annuity benefits		7,658			6,146			7,386			7,376			9,163
	3,729			3,698			1%	Interest credited to policyholders’ account balances		945			920			953			927			929
	1,322			1,315			1%	Interest expense		319			322			326			330			344
	(2,818	)		(2,845	)		1%	Deferral of acquisition costs		(711	)		(724	)		(755	)		(653	)		(686	)
	2,093			1,672			25%	Amortization of acquisition costs		468			481			662			470			480
	13,005			12,626			3%	General and administrative expenses		3,282			3,202			3,228			3,127			3,448

	47,402			46,175			3%	Total benefits and expenses		11,961			10,347			11,800			11,577			13,678

	6,244			5,399			16%	Adjusted operating income before income taxes		1,459			1,660			1,228			1,784			1,572


								Reconciling items:
	(602	)		989			-161%	Realized investment gains (losses), net, and related adjustments		(1,454	)		(66	)		(1,377	)		1,395			(554	)
	544			(466	)		217%	Related charges		630			104			698			(231	)		(27	)

	(58	)		523			-111%	Total realized investment gains (losses), net, and related charges and adjustments		(824	)		38			(679	)		1,164			(581	)

	336			(17	)		2076%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(378	)		44			201			85			6
	(151	)		21			-819%	Change in experience-rated contractholder liabilities due to asset value changes		283			(12	)		(145	)		(31	)		37
								Divested businesses:
	45			(132	)		134%	Closed Block Division		(58	)		34			(18	)		33			(4	)
	38			(84	)		145%	Other divested businesses		(160	)		6			35			10			(13	)
	33			(5	)		760%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(5	)		(28	)		(14	)		(24	)		99

	243			306			-21%	Total reconciling items, before income taxes		(1,142	)		82			(620	)		1,237			(456	)


	6,487			5,705			14%	Income before income taxes and equity in earnings of operating joint ventures		317			1,742			608			3,021			1,116
	(1,438	)		1,335			-208%	Income tax expense (benefit)		35			395			125			800			(2,758	)

	7,925			4,370			81%	Income before equity in earnings of operating joint ventures		282			1,347			483			2,221			3,874

(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 noncontrolling interests. See pages 36 and 37 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended December 31, 2017
	Total			U.S. Individual Solutions Division			U.S. Workplace Solutions Division			Investment Management Division			International Insurance Division			Corporate and Other Operations
Revenues (1) :
Premiums		8,720			253			4,651			—			3,822			(6	)
Policy charges and fee income		1,604			1,286			199			—			129			(10	)
Net investment income		3,465			685			1,323			46			1,284			127
Asset management fees, commissions and other income		1,461			525			230			939			57			(290	)

Total revenues		15,250			2,749			6,403			985			5,292			(179	)


Benefits and Expenses (1):
Insurance and annuity benefits		9,163			722			5,134			—			3,291			16
Interest credited to policyholders’ account balances		929			268			440			—			221			—
Interest expense		344			186			9			8			3			138
Deferral of acquisition costs		(686	)		(265	)		(11	)		(1	)		(418	)		9
Amortization of acquisition costs		480			201			12			3			274			(10	)
General and administrative expenses		3,448			998			506			669			1,144			131

Total benefits and expenses		13,678			2,110			6,090			679			4,515			284

Adjusted operating income (loss) before income taxes		1,572			639			313			306			777			(463	)


	Quarter Ended December 31, 2016
	Total			U.S. Individual Solutions Division			U.S. Workplace Solutions Division			Investment Management Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		7,296			262			3,227			—			3,814			(7	)
Policy charges and fee income		1,529			1,217			194			—			129			(11	)
Net investment income		3,299			656			1,278			20			1,206			139
Asset management fees, commissions and other income		1,296			482			235			753			89			(263	)

Total revenues		13,420			2,617			4,934			773			5,238			(142	)


Benefits and Expenses (1):
Insurance and annuity benefits		7,658			703			3,668			—			3,280			7
Interest credited to policyholders’ account balances		945			268			451			—			226			—
Interest expense		319			165			7			4			3			140
Deferral of acquisition costs		(711	)		(290	)		(6	)		(2	)		(426	)		13
Amortization of acquisition costs		468			203			10			4			264			(13	)
General and administrative expenses		3,282			1,008			443			543			1,136			152

Total benefits and expenses		11,961			2,057			4,573			549			4,483			299

Adjusted operating income (loss) before income taxes		1,459			560			361			224			755			(441	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Twelve Months Ended December 31, 2017
	Total			U.S. Individual Solutions Division			U.S. Workplace Solutions Division			Investment Management Division			International Insurance Division			Corporate and Other Operations
Revenues (1) :
Premiums		29,162			1,043			12,436			—			15,707			(24	)
Policy charges and fee income		5,518			4,235			828			—			503			(48	)
Net investment income		13,499			2,690			5,119			170			5,027			493
Asset management fees, commissions and other income		5,467			2,116			931			3,185			323			(1,088	)

Total revenues		53,646			10,084			19,314			3,355			21,560			(667	)


Benefits and Expenses (1):
Insurance and annuity benefits		30,071			2,454			14,108			—			13,488			21
Interest credited to policyholders’ account balances		3,729			1,049			1,781			—			899			—
Interest expense		1,322			718			31			27			13			533
Deferral of acquisition costs		(2,818	)		(1,005	)		(36	)		(6	)		(1,807	)		36
Amortization of acquisition costs		2,093			947			40			11			1,138			(43	)
General and administrative expenses		13,005			3,914			1,893			2,344			4,631			223

Total benefits and expenses		47,402			8,077			17,817			2,376			18,362			770

Adjusted operating income (loss) before income taxes		6,244			2,007			1,497			979			3,198			(1,437	)


	Twelve Months Ended December 31, 2016
	Total			U.S. Individual Solutions Division			U.S. Workplace Solutions Division			Investment Management Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		27,953			1,019			11,613			—			15,348			(27	)
Policy charges and fee income		5,887			4,589			844			—			499			(45	)
Net investment income		12,695			2,520			4,871			80			4,759			465
Asset management fees, commissions and other income		5,039			1,893			891			2,881			403			(1,029	)

Total revenues		51,574			10,021			18,219			2,961			21,009			(636	)


Benefits and Expenses (1):
Insurance and annuity benefits		29,709			3,091			13,360			—			13,232			26
Interest credited to policyholders’ account balances		3,698			1,042			1,736			—			920			—
Interest expense		1,315			654			24			15			8			614
Deferral of acquisition costs		(2,845	)		(1,114	)		(31	)		(10	)		(1,750	)		60
Amortization of acquisition costs		1,672			599			39			15			1,068			(49	)
General and administrative expenses		12,626			3,905			1,859			2,154			4,414			294

Total benefits and expenses		46,175			8,177			16,987			2,174			17,892			945

Adjusted operating income (loss) before income taxes		5,399			1,844			1,232			787			3,117			(1,581	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

CONSOLIDATED BALANCE SHEETS

(in millions)


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

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $292,581; $300,437; $303,287; $307,527; $312,385)		321,419		328,717		335,254		340,100		346,780
Fixed maturities, held to maturity, at amortized cost (fair value $2,524; $2,552; $2,516; $2,475; $2,430)		2,144		2,166		2,123		2,084		2,049
Trading account assets supporting insurance liabilities, at fair value		21,840		21,820		22,073		22,126		22,097
Other trading account assets, at fair value		5,764		5,863		6,773		6,210		5,752
Equity securities, available for sale, at fair value (cost $7,149; $7,461; $7,456; $7,145; $4,147)		9,748		10,143		10,151		9,739		6,174
Commercial mortgage and other loans		52,779		53,660		54,915		55,373		56,045
Policy loans		11,755		11,893		11,719		11,765		11,891
Other long-term investments		11,283		11,450		11,777		11,986		12,308
Short-term investments		7,508		5,175		3,616		5,508		6,775

Total investments		444,240		450,887		458,401		464,891		469,871
Cash and cash equivalents		14,127		13,308		16,605		14,541		14,490
Accrued investment income		3,204		3,231		3,228		3,278		3,325
Deferred policy acquisition costs		17,661		18,197		18,715		18,724		18,992
Value of business acquired		2,314		2,266		1,897		1,817		1,591
Other assets		14,780		15,671		16,311		16,770		17,035
Separate account assets		287,636		293,805		297,433		301,110		306,617

Total assets		783,962		797,365		812,590		821,131		831,921


Liabilities:
Future policy benefits		240,908		244,705		250,706		252,339		257,317
Policyholders’ account balances		145,205		147,026		147,554		148,342		148,189
Securities sold under agreements to repurchase		7,606		8,535		8,817		8,145		8,400
Cash collateral for loaned securities		4,333		4,175		4,036		4,697		4,354
Income taxes		10,412		10,598		11,631		12,509		9,600
Senior short-term debt		1,133		1,415		1,779		2,358		1,380
Senior long-term debt		12,224		12,074		11,806		10,532		10,550
Junior subordinated long-term debt		5,817		5,819		5,820		6,621		6,622
Notes issued by consolidated variable interest entities		2,150		2,179		2,176		1,517		1,518
Other liabilities		20,450		20,060		22,192		22,396		23,030
Separate account liabilities		287,636		293,805		297,433		301,110		306,617

Total liabilities		737,874		750,391		763,950		770,566		777,577


Equity:
Accumulated other comprehensive income		14,621		14,643		16,362		16,598		17,074
Other equity		31,242		32,141		32,082		33,775		36,995

Total Prudential Financial, Inc. equity		45,863		46,784		48,444		50,373		54,069

Noncontrolling Interest		225		190		196		192		275

Total Equity		46,088		46,974		48,640		50,565		54,344

Total liabilities and equity		783,962		797,365		812,590		821,131		831,921

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of December 31, 2017

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Individual Solutions Division		U.S. Workplace Solutions Division		Investment Management Division			International Insurance Division		Corporate and Other Operations
Assets:
Total investments		469,871		61,291			408,580		62,322		131,957		5,143			189,454		19,704
Deferred policy acquisition costs		18,992		299			18,693		10,535		308		—			8,214		(364	)
Other assets		36,441		1,543			34,898		14,473		7,820		2,823			10,029		(247	)
Separate account assets		306,617		—			306,617		180,321		85,120		41,978			3,735		(4,537	)

Total assets		831,921		63,133			768,788		267,651		225,205		49,944			211,432		14,556


Liabilities:
Future policy benefits		257,317		48,870			208,447		24,446		64,246		—			114,515		5,240
Policyholders’ account balances		148,189		5,147			143,042		34,429		58,252		—			50,353		8
Debt		18,552		—			18,552		7,970		845		1,936			120		7,681
Other liabilities		46,902		10,831			36,071		6,624		6,573		3,667			15,957		3,250
Separate account liabilities		306,617		—			306,617		180,321		85,120		41,978			3,735		(4,537	)

Total liabilities		777,577		64,848			712,729		253,790		215,036		47,581			184,680		11,642


Equity:
Accumulated other comprehensive income (loss)		17,074		(1	)		17,075		1,062		3,087		(102	)		13,891		(863	)
Other equity (1)		36,995		(1,716	)		38,711		12,798		7,075		2,030			12,812		3,996

Total Prudential Financial, Inc. equity		54,069		(1,717	)		55,786		13,860		10,162		1,928			26,703		3,133

Noncontrolling Interest		275		2			273		1		7		435			49		(219	)

Total Equity		54,344		(1,715	)		56,059		13,861		10,169		2,363			26,752		2,914


Total liabilities and equity		831,921		63,133			768,788		267,651		225,205		49,944			211,432		14,556



	As of December 31, 2016

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Individual Solutions Division		U.S. Workplace Solutions Division		Investment Management Division			International Insurance Division		Corporate and Other Operations
Assets:
Total investments		444,240		59,714			384,526		59,167		124,550		4,531			176,252		20,026
Deferred policy acquisition costs		17,661		336			17,325		10,149		308		—			7,208		(340	)
Other assets		34,425		2,001			32,424		13,494		7,703		2,946			10,842		(2,561	)
Separate account assets		287,636		—			287,636		165,574		81,590		41,779			2,817		(4,124	)

Total assets		783,962		62,051			721,911		248,384		214,151		49,256			197,119		13,001


Liabilities:
Future policy benefits		240,908		49,281			191,627		22,368		60,591		—			103,930		4,738
Policyholders’ account balances		145,205		5,204			140,001		33,615		58,628		—			47,747		11
Debt		19,174		—			19,174		8,153		795		1,481			87		8,658
Other liabilities		44,951		8,967			35,984		5,309		5,008		4,007			18,457		3,203
Separate account liabilities		287,636		—			287,636		165,574		81,590		41,779			2,817		(4,124	)

Total liabilities		737,874		63,452			674,422		235,019		206,612		47,267			173,038		12,486


Equity:
Accumulated other comprehensive income (loss)		14,621		(4	)		14,625		339		1,826		(165	)		14,320		(1,695	)
Other equity		31,242		(1,399	)		32,641		13,026		5,709		1,884			9,716		2,306

Total Prudential Financial, Inc. equity		45,863		(1,403	)		47,266		13,365		7,535		1,719			24,036		611

Noncontrolling Interest		225		2			223		—		4		270			45		(96	)

Total Equity		46,088		(1,401	)		47,489		13,365		7,539		1,989			24,081		515


Total liabilities and equity		783,962		62,051			721,911		248,384		214,151		49,256			197,119		13,001

(1)	Other equity includes estimated impacts of enactment of the Tax Act, including $1,678 million in Corporate and Other Operations related to the remeasurement of certain deferred tax assets and liabilities originally established through accumulated other comprehensive income.

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of December 31, 2017								As of December 31, 2016
	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		—		5,402		6,622		12,024		—		5,822		5,817		11,639
Operating Debt - Investment related		676		3,306		—		3,982		477		4,901		—		5,378
Operating Debt - Specified businesses		704		1,043		—		1,747		584		914		—		1,498
Limited recourse and non-recourse borrowing		—		799		—		799		72		587		—		659

Total debt		1,380		10,550		6,622		18,552		1,133		12,224		5,817		19,174


	As of December 31, 2017								As of December 31, 2016
	Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total		Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total
*Borrowings by sources:*
Capital Debt		11,028		940		56		12,024		10,645		939		55		11,639
Operating Debt - Investment related		3,917		65		—		3,982		4,314		65		999		5,378
Operating Debt - Specified businesses		1,239		508		—		1,747		965		533		—		1,498
Limited recourse and non-recourse borrowing		—		799		—		799		—		659		—		659

Total debt		16,184		2,312		56		18,552		15,924		2,196		1,054		19,174

(1)	Includes Prudential Funding, LLC.

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

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - U.S. INDIVIDUAL SOLUTIONS DIVISION

(in millions)


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

									Revenues (1):
	1,043			1,019			2	%	Premiums		262			255			271			264			253
	4,235			4,589			-8	%	Policy charges and fee income		1,217			1,232			472			1,245			1,286
	2,690			2,520			7	%	Net investment income		656			672			667			666			685
	2,116			1,893			12	%	Asset management fees, commissions and other income		482			501			550			540			525

	10,084			10,021			1	%	Total revenues		2,617			2,660			1,960			2,715			2,749


									Benefits and Expenses (1):
	2,454			3,091			-21	%	Insurance and annuity benefits		703			730			360			642			722
	1,049			1,042			1	%	Interest credited to policyholders’ account balances		268			263			255			263			268
	718			654			10	%	Interest expense		165			170			179			183			186
	(1,005	)		(1,114	)		10	%	Deferral of acquisition costs		(290	)		(262	)		(246	)		(232	)		(265	)
	947			599			58	%	Amortization of acquisition costs		203			199			360			187			201
	3,914			3,905			0	%	General and administrative expenses		1,008			974			997			945			998

	8,077			8,177			-1	%	Total benefits and expenses		2,057			2,074			1,905			1,988			2,110

	2,007			1,844			9	%	Adjusted operating income before income taxes		560			586			55			727			639

(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 11

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - U.S. INDIVIDUAL SOLUTIONS DIVISION

(in millions)


	Twelve Months Ended December 31, 2017									Quarter Ended December 31, 2017
	Total U.S. Individual Solutions Division			Individual Annuities			Individual Life			Total U.S. Individual Solutions Division			Individual Annuities			Individual Life
Revenues (1):
Premiums		1,043			148			895			253			27			226
Policy charges and fee income		4,235			2,833			1,402			1,286			736			550
Net investment income		2,690			742			1,948			685			186			499
Asset management fees, commissions and other income		2,116			1,387			729			525			336			189

Total revenues		10,084			5,110			4,974			2,749			1,285			1,464


Benefits and Expenses (1):
Insurance and annuity benefits		2,454			318			2,136			722			72			650
Interest credited to policyholders’ account balances		1,049			330			719			268			85			183
Interest expense		718			70			648			186			19			167
Deferral of acquisition costs		(1,005	)		(314	)		(691	)		(265	)		(84	)		(181	)
Amortization of acquisition costs		947			464			483			201			118			83
General and administrative expenses		3,914			2,044			1,870			998			534			464

Total benefits and expenses		8,077			2,912			5,165			2,110			744			1,366

Adjusted operating income (loss) before income taxes		2,007			2,198			(191	)		639			541			98


	Twelve Months Ended December 31, 2016									Quarter Ended December 31, 2016
	Total U.S. Individual Solutions Division			Individual Annuities			Individual Life			Total U.S. Individual Solutions Division			Individual Annuities			Individual Life
Revenues (1):
Premiums		1,019			159			860			262			44			218
Policy charges and fee income		4,589			2,569			2,020			1,217			651			566
Net investment income		2,520			698			1,822			656			184			472
Asset management fees, commissions and other income		1,893			1,240			653			482			314			168

Total revenues		10,021			4,666			5,355			2,617			1,193			1,424


Benefits and Expenses (1):
Insurance and annuity benefits		3,091			306			2,785			703			100			603
Interest credited to policyholders’ account balances		1,042			362			680			268			92			176
Interest expense		654			71			583			165			14			151
Deferral of acquisition costs		(1,114	)		(408	)		(706	)		(290	)		(87	)		(203	)
Amortization of acquisition costs		599			484			115			203			134			69
General and administrative expenses		3,905			2,086			1,819			1,008			518			490

Total benefits and expenses		8,177			2,901			5,276			2,057			771			1,286

Adjusted operating income before income taxes		1,844			1,765			79			560			422			138

(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 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


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

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	153,295			149,441		Beginning total account value		154,903			153,295			156,830			159,202			162,107
	2,863			2,494		Sales: Highest Daily Suite - risk retained by Prudential (1)		558			782			688			576			817
	27			1,367		Highest Daily Suite - externally reinsured living benefits		318			14			6			7			—
	2,962			4,133		Other variable annuities (2)		762			632			799			735			796

	5,852			7,994		Total sales		1,638			1,428			1,493			1,318			1,613
	(9,717	)		(7,776	)	Surrenders and withdrawals		(2,122	)		(2,326	)		(2,382	)		(2,288	)		(2,721	)

	(3,865	)		218		Net sales (redemptions)		(484	)		(898	)		(889	)		(970	)		(1,108	)
	(1,558	)		(1,450	)	Benefit payments		(347	)		(413	)		(391	)		(359	)		(395	)

	(5,423	)		(1,232	)	Net flows		(831	)		(1,311	)		(1,280	)		(1,329	)		(1,503	)
	20,993			8,638		Change in market value, interest credited, and other		124			5,751			4,578			5,170			5,494
	(3,712	)		(3,552	)	Policy charges		(901	)		(905	)		(926	)		(936	)		(945	)

	165,153			153,295		Ending total account value		153,295			156,830			159,202			162,107			165,153


						Variable Annuities Account Value by Product:
	121,150			112,543		Highest Daily Suite - risk retained by Prudential (1)		112,543			115,314			116,905			119,001			121,150
	3,227			2,932		Highest Daily Suite - externally reinsured living benefits		2,932			3,025			3,084			3,153			3,227
	40,776			37,820		Other variable annuities (2)		37,820			38,491			39,213			39,953			40,776

	165,153			153,295		Ending total account value		153,295			156,830			159,202			162,107			165,153


						Fixed Annuities and other products (3):
	3,488			3,504		Beginning total account value		3,485			3,488			3,489			3,492			3,493
	42			60		Sales		18			12			14			11			5
	(104	)		(105	)	Surrenders and withdrawals		(27	)		(27	)		(25	)		(21	)		(31	)

	(62	)		(45	)	Net redemptions		(9	)		(15	)		(11	)		(10	)		(26	)
	(315	)		(344	)	Benefit payments		(75	)		(84	)		(82	)		(72	)		(77	)

	(377	)		(389	)	Net flows		(84	)		(99	)		(93	)		(82	)		(103	)
	363			374		Interest credited and other		87			100			96			84			83
	(1	)		(1	)	Policy charges		—			—			—			(1	)		—

	3,473			3,488		Ending total account value		3,488			3,489			3,492			3,493			3,473


						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	1,904			2,353		Insurance Agents		550			507			490			418			489
	979			1,492		Wirehouses		279			236			238			202			303
	2,514			3,180		Independent Financial Planners		659			573			631			597			713
	497			1,029		Bank Distribution		168			124			148			112			113

	5,894			8,054		Total		1,656			1,440			1,507			1,329			1,618

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

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

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES ACCOUNT VALUE ACTIVITY

(in millions)


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

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,942		Beginning balance		9,863			9,892			9,810			9,804			9,816
	650			868		Premiums and deposits		194			185			168			130			167
	(597	)		(563	)	Surrenders and withdrawals		(148	)		(153	)		(145	)		(133	)		(166	)

	53			305		Net sales (redemptions)		46			32			23			(3	)		1
	(380	)		(411	)	Benefit payments		(89	)		(100	)		(101	)		(89	)		(90	)

	(327	)		(106	)	Net flows		(43	)		(68	)		(78	)		(92	)		(89	)
	248			241		Interest credited and other		57			58			56			63			71
	80			(184	)	Net transfers (to) from separate account		15			(72	)		16			42			94
	(1	)		(1	)	Policy charges		—			—			—			(1	)		—

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


						Account Values in Separate Account (1):
	146,891			143,003		Beginning balance		148,525			146,891			150,509			152,890			155,784
	5,244			7,186		Premiums and deposits		1,462			1,255			1,339			1,199			1,451
	(9,224	)		(7,318	)	Surrenders and withdrawals		(2,001	)		(2,200	)		(2,262	)		(2,176	)		(2,586	)

	(3,980	)		(132	)	Net redemptions		(539	)		(945	)		(923	)		(977	)		(1,135	)
	(1,493	)		(1,383	)	Benefit payments		(333	)		(397	)		(372	)		(342	)		(382	)

	(5,473	)		(1,515	)	Net flows		(872	)		(1,342	)		(1,295	)		(1,319	)		(1,517	)
	21,108			8,771		Change in market value, interest credited and other		154			5,793			4,618			5,191			5,506
	(80	)		184		Net transfers (to) from general account		(15	)		72			(16	)		(42	)		(94	)
	(3,712	)		(3,552	)	Policy charges		(901	)		(905	)		(926	)		(936	)		(945	)

	158,734			146,891		Ending balance		146,891			150,509			152,890			155,784			158,734

(1)

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

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES LIVING BENEFIT FEATURES

(in millions)


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

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		4,104		3,879		3,661		3,530		3,380
Guaranteed minimum withdrawal benefits		514		509		494		483		477
Guaranteed minimum income benefits		2,730		2,761		2,755		2,772		2,791
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		120,468		123,609		125,869		128,465		131,146
Guaranteed minimum withdrawal & income benefits - externally reinsured		2,932		3,025		3,084		3,153		3,227

Total		130,748		133,783		135,863		138,403		141,021


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		107,752		110,286		111,750		113,691		115,690
Account Values with Auto-Rebalancing Feature - externally reinsured		2,932		3,025		3,084		3,153		3,227
Account Values without Auto-Rebalancing Feature		20,064		20,472		21,029		21,559		22,104

Total		130,748		133,783		135,863		138,403		141,021


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		4,494		3,872		3,594		3,250		2,928
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		1,082		939		846		752		661

Total		5,576		4,811		4,440		4,002		3,589

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES DEATH BENEFIT FEATURES

(in millions)


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

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

Variable Annuity Account Values by Death Benefit Features
Return of net deposits:
Account value		118,620		121,507		123,591		126,009		128,545
Net amount at risk		487		385		323		297		285
Minimum return, anniversary contract value, or maximum contract value:
Account value		30,980		31,460		31,612		31,952		32,269
Net amount at risk		3,714		3,215		3,012		2,785		2,611

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		110,684		113,311		114,834		116,844		118,916
Account Values without Auto-Rebalancing Feature		38,916		39,656		40,369		41,117		41,898

Total		149,600		152,967		155,203		157,961		160,814


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,597		1,265		1,168		1,060		1,008
Net Amount at Risk without Auto-Rebalancing Feature		2,604		2,335		2,167		2,022		1,888

Total		4,201		3,600		3,335		3,082		2,896

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. INDIVIDUAL SOLUTIONS DIVISION - SUPPLEMENTARY INFORMATION FOR INDIVIDUAL LIFE

(in millions)


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

						ANNUALIZED NEW BUSINESS PREMIUMS (1) :

	213			200		Term life		50			49			54			57			53
	156			243		Guaranteed Universal life		77			53			40			31			32
	125			95		Other Universal life		31			21			33			28			43
	130			92		Variable life		25			23			26			26			55

	624			630		Total		183			146			153			142			183


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	118			116		Prudential Advisors		29			27			29			29			33
	506			514		Third party distribution		154			119			124			113			150

	624			630		Total		183			146			153			142			183


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,041			24,487		Beginning balance		25,000			26,041			26,358			26,399			26,612
	3,205			3,330		Premiums and deposits		949			804			832			738			831
	(1,031	)		(988	)	Surrenders and withdrawals		(240	)		(233	)		(289	)		(228	)		(281	)

	2,174			2,342		Net sales		709			571			543			510			550
	(566	)		(490	)	Benefit payments		(106	)		(182	)		(123	)		(121	)		(140	)

	1,608			1,852		Net flows		603			389			420			389			410
	393			786		Interest credited and other		718			228			(85	)		119			131
	438			396		Net transfers from separate account		102			106			106			116			110
	(1,619	)		(1,480	)	Policy charges		(382	)		(406	)		(400	)		(411	)		(402	)
	—			—		Acquisition		—			—			—			—			—

	26,861			26,041		Ending balance		26,041			26,358			26,399			26,612			26,861


						*Separate Account Liabilities:*
	28,455			27,027		Beginning balance		28,129			28,455			29,669			30,259			31,100
	1,606			1,439		Premiums and deposits		359			442			343			330			491
	(1,249	)		(852	)	Surrenders and withdrawals		(201	)		(220	)		(227	)		(338	)		(464	)

	357			587		Net sales (redemptions)		158			222			116			(8	)		27
	(169	)		(163	)	Benefit payments		(33	)		(46	)		(44	)		(32	)		(47	)

	188			424		Net flows		125			176			72			(40	)		(20	)
	4,798			2,308		Change in market value, interest credited and other		532			1,373			851			1,227			1,347
	(438	)		(396	)	Net transfers to general account		(102	)		(106	)		(106	)		(116	)		(110	)
	(918	)		(908	)	Policy charges		(229	)		(229	)		(227	)		(230	)		(232	)
	—			—		Acquisition		—			—			—			—			—

	32,085			28,455		Ending balance		28,455			29,669			30,259			31,100			32,085


						FACE AMOUNT IN FORCE (3):

						Term life		721,602			727,736			736,348			745,849			753,804
						Guaranteed Universal life		134,973			137,801			139,663			141,031			142,546
						Other Universal life		45,350			45,704			46,328			46,888			47,516
						Variable life		162,574			162,611			162,452			162,660			163,174

						Total		1,064,500			1,073,851			1,084,791			1,096,429			1,107,040

(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 17

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - U.S. WORKPLACE SOLUTIONS DIVISION

(in millions)


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

								Revenues (1):
	12,436			11,613			7%	Premiums		3,227			1,564			3,259			2,962			4,651
	828			844			-2%	Policy charges and fee income		194			202			223			204			199
	5,119			4,871			5%	Net investment income		1,278			1,313			1,257			1,226			1,323
	931			891			4%	Asset management fees, commissions and other income		235			241			230			230			230

	19,314			18,219			6%	Total revenues		4,934			3,320			4,969			4,622			6,403


								Benefits and Expenses (1):
	14,108			13,360			6%	Insurance and annuity benefits		3,668			1,982			3,601			3,391			5,134
	1,781			1,736			3%	Interest credited to policyholders’ account balances		451			431			476			434			440
	31			24			29%	Interest expense		7			7			8			7			9
	(36	)		(31	)		-16%	Deferral of acquisition costs		(6	)		(7	)		(9	)		(9	)		(11	)
	40			39			3%	Amortization of acquisition costs		10			5			6			17			12
	1,893			1,859			2%	General and administrative expenses		443			471			443			473			506

	17,817			16,987			5%	Total benefits and expenses		4,573			2,889			4,525			4,313			6,090


	1,497			1,232			22%	Adjusted operating income before income taxes		361			431			444			309			313

(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.

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - U.S. WORKPLACE SOLUTIONS DIVISION

(in millions)


	Twelve Months Ended December 31, 2017								Quarter Ended December 31, 2017
	Total U.S. Workplace Solutions Division			Retirement			Group Insurance		Total U.S. Workplace Solutions Division			Retirement			Group Insurance
Revenues (1):
Premiums		12,436			8,278			4,158		4,651			3,613			1,038
Policy charges and fee income		828			238			590		199			60			139
Net investment income		5,119			4,482			637		1,323			1,159			164
Asset management fees, commissions and other income		931			845			86		230			208			22

Total revenues		19,314			13,843			5,471		6,403			5,040			1,363


Benefits and Expenses (1):
Insurance and annuity benefits		14,108			10,035			4,073		5,134			4,091			1,043
Interest credited to policyholders’ account balances		1,781			1,507			274		440			368			72
Interest expense		31			26			5		9			8			1
Deferral of acquisition costs		(36	)		(36	)		—		(11	)		(11	)		—
Amortization of acquisition costs		40			26			14		12			11			1
General and administrative expenses		1,893			1,041			852		506			282			224

Total benefits and expenses		17,817			12,599			5,218		6,090			4,749			1,341

Adjusted operating income before income taxes		1,497			1,244			253		313			291			22


	Twelve Months Ended December 31, 2016								Quarter Ended December 31, 2016
	Total U.S. Workplace Solutions Division			Retirement			Group Insurance		Total U.S. Workplace Solutions Division			Retirement			Group Insurance
Revenues (1):
Premiums		11,613			7,579			4,034		3,227			2,214			1,013
Policy charges and fee income		844			228			616		194			61			133
Net investment income		4,871			4,263			608		1,278			1,120			158
Asset management fees, commissions and other income		891			806			85		235			213			22

Total revenues		18,219			12,876			5,343		4,934			3,608			1,326


Benefits and Expenses (1):
Insurance and annuity benefits		13,360			9,328			4,032		3,668			2,660			1,008
Interest credited to policyholders’ account balances		1,736			1,473			263		451			381			70
Interest expense		24			19			5		7			5			2
Deferral of acquisition costs		(31	)		(31	)		—		(6	)		(6	)		—
Amortization of acquisition costs		39			33			6		10			8			2
General and administrative expenses		1,859			1,042			817		443			242			201

Total benefits and expenses		16,987			11,864			5,123		4,573			3,290			1,283

Adjusted operating income before income taxes		1,232			1,012			220		361			318			43

(1)

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. WORKPLACE SOLUTIONS - RETIREMENT SEGMENT SALES RESULTS AND ACCOUNT VALUES

(in millions)


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

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	202,802			188,961		Beginning total account value		200,476			202,802			210,400			214,731			227,438
	29,527			21,928		Deposits and sales		5,168			6,736			4,771			11,188			6,832
	(24,811	)		(20,127	)	Withdrawals and benefits		(5,315	)		(6,690	)		(5,786	)		(5,132	)		(7,203	)
	27,098			12,040		Change in market value, interest credited, interest income and other activity		2,473			7,552			5,346			6,651			7,549

	234,616			202,802		Ending total account value		202,802			210,400			214,731			227,438			234,616


	4,716			1,801		Net additions (withdrawals)		(147	)		46			(1,015	)		6,056			(371	)


						Stable value account values included above		48,725			48,737			48,829			48,834			48,667

						Institutional Investment Products:
	183,376			179,964		Beginning total account value		186,224			183,376			185,115			186,610			188,399
	21,630			16,140		Additions		3,751			4,042			2,557			4,764			10,267
	(17,406	)		(12,161	)	Withdrawals and benefits		(3,920	)		(4,241	)		(4,171	)		(3,552	)		(5,442	)
	5,190			5,299		Change in market value, interest credited and interest income		(905	)		1,229			1,673			1,341			947
	1,702			(5,866	)	Other (1)		(1,774	)		709			1,436			(764	)		321

	194,492			183,376		Ending total account value		183,376			185,115			186,610			188,399			194,492


	4,224			3,979		Net additions (withdrawals)		(169	)		(199	)		(1,614	)		1,212			4,825


						Amounts included in ending total account value above:
	69,239			70,196		Investment-only stable value wraps		70,196			70,576			69,808			69,637			69,239
	40,072			29,959		Longevity reinsurance (2)		29,959			32,004			33,138			36,053			40,072
	85,181			83,221		Group annuities and other products		83,221			82,535			83,664			82,709			85,181

	194,492			183,376		Ending total account value		183,376			185,115			186,610			188,399			194,492

(1)

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

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

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

U.S. WORKPLACE SOLUTIONS DIVISION - SUPPLEMENTARY INFORMATION FOR GROUP INSURANCE

(dollar amounts in millions)


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

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	287		316	Group life		31		186		56		23		22
	153		119	Group disability		6		115		14		12		12

	440		435	Total		37		301		70		35		34


				Future Policy Benefits (1) (2):
				Group life		2,238		2,166		2,139		2,087		2,286
				Group disability		3		28		20		9		2

				Total		2,241		2,194		2,159		2,096		2,288


				Policyholders’ Account Balances (1):
				Group life		8,634		8,614		8,516		8,599		8,737
				Group disability		224		237		212		231		246

				Total		8,858		8,851		8,728		8,830		8,983


				Separate Account Liabilities (1):
				Group life		23,594		23,812		24,073		23,922		23,955
				Group disability		—		—		—		—		—

				Total		23,594		23,812		24,073		23,922		23,955


				Group Life Insurance:
	4,124		4,095	Gross premiums, policy charges and fee income (3)		1,006		1,038		1,054		1,013		1,019
	3,886		3,845	Earned premiums, policy charges and fee income		939		985		981		965		955
	88.7%		88.5%	Benefits ratio (4)		87.3%		92.2%		86.3%		87.0%		89.3%
	11.2%		10.6%	Administrative operating expense ratio		10.7%		10.8%		10.5%		11.2%		12.5%
				Persistency ratio		95.2%		94.9%		94.6%		93.9%		93.8%

				Group Disability Insurance:
	953		880	Gross premiums, policy charges and fee income (3)		223		233		237		239		244
	862		805	Earned premiums, policy charges and fee income		207		211		209		220		222
	78.9%		82.9%	Benefits ratio (5)		91.3%		74.3%		76.7%		78.7%		85.6%
	29.4%		31.4%	Administrative operating expense ratio		31.0%		29.4%		29.0%		29.2%		29.8%
				Persistency ratio		91.7%		93.7%		93.4%		91.7%		91.4%

				Total Group Insurance:
	86.9%		87.5%	Benefits ratio (6)		88.0%		89.1%		84.5%		85.5%		88.6%
	14.6%		14.3%	Administrative operating expense ratio		14.4%		14.2%		13.9%		14.6%		15.8%

(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 89.3%, 87.0%, 86.9%, 92.2%, and 87.3% for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively, and 88.9% and 89.1% for year-to-date December 2017 and 2016, respectively.

(5)

Group Disability Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 85.6 %, 78.7%, 47.5%, 74.3%, and 91.3% for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively, and 71.8% and 75.7% for year-to-date December 2017 and 2016, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 88.6%, 85.5%, 80.0%, 89.1%, and 88.0% for the three months ended December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively, and 85.8% and 86.7% for year-to-date December 2017 and 2016, respectively.

Page 21

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

STATEMENTS OF OPERATIONS - INVESTMENT MANAGEMENT DIVISION

(in millions)


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

								Revenues (1):
	—			—			—	Premiums		—			—			—			—			—
	—			—			—	Policy charges and fee income		—			—			—			—			—
	170			80			113%	Net investment income		20			32			37			55			46
	3,185			2,881			11%	Asset management fees, commissions and other income		753			724			750			772			939

	3,355			2,961			13%	Total revenues		773			756			787			827			985


								Benefits and Expenses (1):
	—			—			—	Insurance and annuity benefits		—			—			—			—			—
	—			—			—	Interest credited to policyholders’ account balances		—			—			—			—			—
	27			15			80%	Interest expense		4			5			7			7			8
	(6	)		(10	)		40%	Deferral of acquisition costs		(2	)		(2	)		(1	)		(2	)		(1	)
	11			15			-27%	Amortization of acquisition costs		4			4			2			2			3
	2,344			2,154			9%	General and administrative expenses		543			553			561			561			669

	2,376			2,174			9%	Total benefits and expenses		549			560			569			568			679


	979			787			24%	Adjusted operating income before income taxes		224			196			218			259			306

(1)	Revenues exclude realized investment gains, net of losses. Benefits and expenses include charges for income attributable to noncontrolling interests.

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT MANAGEMENT DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION


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

						Analysis of revenues by type:
	2,417		2,227		9%	Asset management fees		579		575		592		619		631
	439		255		72%	Other related revenues (1)		65		58		69		83		229
	499		479		4%	Service, distribution and other revenues		129		123		126		125		125

	3,355		2,961		13%	Total Investment Management revenues		773		756		787		827		985


						Analysis of asset management fees by source:
	1,147		1,046		10%	Institutional customers		275		275		279		296		297
	800		707		13%	Retail customers		183		185		194		203		218
	470		474		-1%	General account		121		115		119		120		116

	2,417		2,227		9%	Total asset management fees		579		575		592		619		631


Supplementary Assets Under Management Information (in billions):
	December 31, 2017
	Equity		Fixed Income		Real Estate		Total
Institutional customers		68.0		379.4		42.1		489.5
Retail customers		132.4		111.5		1.7		245.6
General account		5.8		412.5		1.9		420.2

Total		206.2		903.4		45.7		1,155.3


	December 31, 2016
	Equity		Fixed Income		Real Estate		Total
Institutional customers		59.3		332.2		40.0		431.5
Retail customers		112.4		94.5		2.3		209.2
General account		6.4		391.3		1.7		399.4

Total		178.1		818.0		44.0		1,040.1

(1)	Other related revenues for 4Q17 include $95 million of revenues associated with noncontrolling interests which are fully offset in general and administrative expenses.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT MANAGEMENT DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION

(in billions)


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

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	386.4			347.1		Beginning assets under management		398.9			386.4			399.1			414.6			431.0
	65.2			59.4		Additions		15.7			15.9			17.2			15.9			16.2
	(53.6	)		(54.1	)	Withdrawals		(13.2	)		(15.4	)		(10.7	)		(11.2	)		(16.3	)
	38.0			21.8		Change in market value		(10.6	)		9.6			10.8			9.1			8.5
	1.3			11.8		Net money market flows		(1.1	)		2.0			(1.7	)		2.6			(1.6	)
	0.6			0.4		Other (1)		(3.3	)		0.6			(0.1	)		—			0.1

	437.9			386.4		Ending assets under management		386.4			399.1			414.6			431.0			437.9
	51.6			45.1		Affiliated institutional assets under management		45.1			46.1			46.6			47.3			51.6

	489.5			431.5		Total assets managed for institutional customers at end of period		431.5			445.2			461.2			478.3			489.5


	11.6			5.3		Net institutional additions (withdrawals), excluding money market activity		2.5			0.5			6.5			4.7			(0.1	)


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	136.6			128.9		Beginning assets under management		137.7			136.6			144.2			150.0			157.5
	49.7			42.1		Additions		9.9			13.0			10.8			11.9			14.0
	(45.6	)		(41.7	)	Withdrawals		(11.5	)		(12.9	)		(9.6	)		(10.6	)		(12.5	)
	23.5			4.5		Change in market value		(1.7	)		7.4			4.6			6.2			5.3
	—			(0.1	)	Net money market flows		—			—			—			—			—
	0.1			2.9		Other (1)		2.2			0.1			—			—			—

	164.3			136.6		Ending assets under management		136.6			144.2			150.0			157.5			164.3
	81.3			72.6		Affiliated retail assets under management		72.6			73.4			81.2			82.4			81.3

	245.6			209.2		Total assets managed for retail customers at end of period		209.2			217.6			231.2			239.9			245.6


	4.1			0.4		Net retail additions (withdrawals), excluding money market activity		(1.6	)		0.1			1.2			1.3			1.5

(1)	“Other” activity represents a $2 billion reclassification of assets under management from institutional to retail in 4Q’16 and FX related to International assets under management.

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


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

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,871			4,916		Beginning balance		4,515			4,871			4,865			5,312			5,089
	314			408		Capitalization		87			79			80			71			84
	(464	)		(484	)	Amortization - operating results		(134	)		(128	)		(102	)		(116	)		(118	)
	464			21		Amortization - realized investment gains and losses		347			50			505			(173	)		82
	(55	)		10		Impact of unrealized (gains) or losses on AFS securities		56			(7	)		(36	)		(5	)		(7	)
	—			—		Other		—			—			—			—			—

	5,130			4,871		Ending balance		4,871			4,865			5,312			5,089			5,130


						INDIVIDUAL LIFE INSURANCE:
	5,278			4,883		Beginning balance		4,840			5,278			5,393			5,330			5,355
	691			706		Capitalization		203			183			166			161			181
	(483	)		(115	)	Amortization - operating results		(69	)		(71	)		(258	)		(71	)		(83	)
	101			(100	)	Amortization - realized investment gains and losses		4			2			105			(2	)		(4	)
	(182	)		(96	)	Impact of unrealized (gains) or losses on AFS securities		300			1			(76	)		(63	)		(44	)

	5,405			5,278		Ending balance		5,278			5,393			5,330			5,355			5,405


						GROUP INSURANCE:
	176			182		Beginning balance		178			176			175			173			163
	—			—		Capitalization		—			—			—			—			—
	(14	)		(6	)	Amortization - operating results		(2	)		(1	)		(2	)		(10	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	162			176		Ending balance		176			175			173			163			162


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,082			1,188		Beginning balance		1,012			1,082			1,064			1,211			1,133
	2			3		Capitalization		—			—			1			1			—
	(141	)		(168	)	Amortization - operating results		(44	)		(41	)		(30	)		(34	)		(36	)
	195			56		Amortization - realized investment gains and losses		103			25			184			(43	)		29
	(13	)		3		Impact of unrealized (gains) or losses on AFS securities		11			(2	)		(8	)		(2	)		(1	)
	—			—		Other		—			—			—			—			—

	1,125			1,082		Ending balance		1,082			1,064			1,211			1,133			1,125

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

								Revenues (1):
	15,707			15,348			2%	Premiums		3,814			3,962			4,032			3,891			3,822
	503			499			1%	Policy charges and fee income		129			134			112			128			129
	5,027			4,759			6%	Net investment income		1,206			1,205			1,260			1,278			1,284
	323			403			-20%	Asset management fees, commissions and other income		89			108			79			79			57

	21,560			21,009			3%	Total revenues		5,238			5,409			5,483			5,376			5,292


								Benefits and Expenses (1):
	13,488			13,232			2%	Insurance and annuity benefits		3,280			3,433			3,422			3,342			3,291
	899			920			-2%	Interest credited to policyholders’ account balances		226			226			222			230			221
	13			8			63%	Interest expense		3			3			3			4			3
	(1,807	)		(1,750	)		-3%	Deferral of acquisition costs		(426	)		(465	)		(507	)		(417	)		(418	)
	1,138			1,068			7%	Amortization of acquisition costs		264			285			304			275			274
	4,631			4,414			5%	General and administrative expenses		1,136			1,128			1,216			1,143			1,144

	18,362			17,892			3%	Total benefits and expenses		4,483			4,610			4,660			4,577			4,515


	3,198			3,117			3%	Adjusted operating income before income taxes		755			799			823			799			777

(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 noncontrolling interests.

Page 26

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Twelve Months Ended December 31, 2017									Quarter Ended December 31, 2017
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		15,707			7,953			7,754			3,822			1,966			1,856
Policy charges and fee income		503			357			146			129			92			37
Net investment income		5,027			2,119			2,908			1,284			554			730
Asset management fees, commissions and other income		323			215			108			57			50			7

Total revenues		21,560			10,644			10,916			5,292			2,662			2,630


Benefits and Expenses (1):
Insurance and annuity benefits		13,488			7,019			6,469			3,291			1,741			1,550
Interest credited to policyholders’ account balances		899			238			661			221			56			165
Interest expense		13			8			5			3			2			1
Deferral of acquisition costs		(1,807	)		(959	)		(848	)		(418	)		(221	)		(197	)
Amortization of acquisition costs		1,138			563			575			274			133			141
General and administrative expenses		4,631			2,282			2,349			1,144			568			576

Total benefits and expenses		18,362			9,151			9,211			4,515			2,279			2,236


Adjusted operating income before income taxes		3,198			1,493			1,705			777			383			394


	Twelve Months Ended December 31, 2016									Quarter Ended December 31, 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		15,348			7,471			7,877			3,814			1,831			1,983
Policy charges and fee income		499			346			153			129			90			39
Net investment income		4,759			1,952			2,807			1,206			492			714
Asset management fees, commissions and other income		403			217			186			89			64			25

Total revenues		21,009			9,986			11,023			5,238			2,477			2,761


Benefits and Expenses (1):
Insurance and annuity benefits		13,232			6,607			6,625			3,280			1,608			1,672
Interest credited to policyholders’ account balances		920			234			686			226			55			171
Interest expense		8			5			3			3			2			1
Deferral of acquisition costs		(1,750	)		(834	)		(916	)		(426	)		(211	)		(215	)
Amortization of acquisition costs		1,068			506			562			264			121			143
General and administrative expenses		4,414			1,929			2,485			1,136			507			629

Total benefits and expenses		17,892			8,447			9,445			4,483			2,082			2,401


Adjusted operating income before income taxes		3,117			1,539			1,578			755			395			360

(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 noncontrolling interests.

Page 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


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

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	6,056		5,875	Japan, excluding Gibraltar Life		1,386		1,691		1,467		1,459		1,439
	7,900		8,030	Gibraltar Life		2,022		1,884		2,134		1,989		1,893
	2,254		1,942	All other countries		535		521		543		571		619

	16,210		15,847	Total		3,943		4,096		4,144		4,019		3,951


				Annualized new business premiums:
	913		840	Japan, excluding Gibraltar Life (2)		205		336		251		162		164
	1,598		1,726	Gibraltar Life		408		358		483		400		357
	478		436	All other countries (2)		124		128		106		115		129

	2,989		3,002	Total (2)		737		822		840		677		650


				Annualized new business premiums by distribution channel:
	1,391		1,276	Life Planner Operations (2)		329		464		357		277		293
	740		740	Gibraltar Life Consultants		175		167		230		180		163
	612		716	Banks		158		132		161		171		148
	246		270	Independent Agency		75		59		92		49		46

	2,989		3,002	Total (2)		737		822		840		677		650

				Constant exchange rate basis (3):
				Net premiums, policy charges and fee income:

	6,061		5,752	Japan, excluding Gibraltar Life		1,365		1,707		1,457		1,449		1,448
	7,917		7,898	Gibraltar Life		1,946		1,912		2,134		1,977		1,894
	2,194		1,971	All other countries		542		512		532		551		599

	16,172		15,621	Total		3,853		4,131		4,123		3,977		3,941


				Annualized new business premiums:
	914		824	Japan, excluding Gibraltar Life		202		339		249		161		165
	1,601		1,706	Gibraltar Life		389		362		483		399		357
	460		439	All other countries		122		124		103		111		122

	2,975		2,969	Total		713		825		835		671		644


				Annualized new business premiums by distribution channel:
	1,374		1,263	Life Planner Operations		324		463		352		272		287
	741		733	Gibraltar Life Consultants		170		169		230		179		163
	614		716	Banks		157		133		162		171		148
	246		257	Independent Agency		62		60		91		49		46

	2,975		2,969	Total		713		825		835		671		644

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

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

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

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


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

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		318			327			332			334			337
Gibraltar Life		327			330			333			336			337
All other countries		123			124			126			129			130

Total		768			781			791			799			804


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,488			3,581			3,632			3,674			3,714
Gibraltar Life		7,182			7,191			7,207			7,222			7,220
All other countries		2,076			2,105			2,122			2,146			2,169

Total		12,746			12,877			12,961			13,042			13,103


International life insurance policy persistency:

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

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

Number of Life Planners at end of period:
Japan		3,824			3,932			3,861			3,951			3,941
All other countries		3,856			3,887			3,874			3,880			3,890

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


Gibraltar Life Consultants		8,884			8,752			8,509			8,327			8,326

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

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

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

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	December 31, 2017									December 31, 2016
	Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division					Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division
	Total Portfolio		Closed Block Division		Amount		% of Total			Total Portfolio		Closed Block Division		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		287,878		27,448		260,430		64.7	%		268,118		24,917		243,201		64.2	%
Public, held-to-maturity, at amortized cost		1,747		—		1,747		0.4	%		1,772		—		1,772		0.5	%
Private, available-for-sale, at fair value		58,293		13,814		44,479		11.1	%		53,061		13,987		39,074		10.3	%
Private, held-to-maturity, at amortized cost		302		—		302		0.1	%		372		—		372		0.1	%
Trading account assets supporting insurance liabilities, at fair value		22,097		—		22,097		5.5	%		21,840		—		21,840		5.8	%
Other trading account assets, at fair value		2,383		339		2,044		0.5	%		1,805		284		1,521		0.4	%
Equity securities, available-for-sale, at fair value		6,166		2,340		3,826		1.0	%		9,735		2,572		7,163		1.9	%
Commercial mortgage and other loans, at book value		55,411		9,017		46,394		11.5	%		52,208		9,437		42,771		11.2	%
Policy loans, at outstanding balance		11,891		4,543		7,348		1.8	%		11,755		4,660		7,095		1.9	%
Other long-term investments (1)		10,664		3,159		7,505		1.9	%		10,251		3,020		7,231		1.9	%
Short-term investments		6,734		631		6,103		1.5	%		7,494		837		6,657		1.8	%

Subtotal (2)		463,566		61,291		402,275		100.0	%		438,411		59,714		378,697		100.0	%

Invested assets of other entities and operations (3)		6,305		—		6,305					5,829		—		5,829

Total investments		469,871		61,291		408,580					444,240		59,714		384,526

Fixed Maturities by Credit Quality (2):


	December 31, 2017											December 31, 2016
	PFI Excluding Closed Block Division											PFI Excluding Closed Block Division
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total			Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		% of Total
Public Fixed Maturities:
NAIC Rating (4)
1		195,968		26,830		872		221,926		84.4	%		184,831		26,239		2,261		208,809		85.1	%
2		26,795		3,040		142		29,693		11.3	%		26,922		2,479		454		28,947		11.8	%

Subtotal - High or Highest Quality Securities		222,763		29,870		1,014		251,619		95.7	%		211,753		28,718		2,715		237,756		96.9	%

3		5,541		442		44		5,939		2.3	%		4,837		323		90		5,070		2.1	%
4		3,457		467		77		3,847		1.5	%		1,951		178		52		2,077		0.8	%
5		781		179		32		928		0.4	%		230		43		6		267		0.1	%
6		196		10		3		203		0.1	%		152		4		1		155		0.1	%

Subtotal - Other Securities		9,975		1,098		156		10,917		4.3	%		7,170		548		149		7,569		3.1	%

Total		232,738		30,968		1,170		262,536		100.0	%		218,923		29,266		2,864		245,325		100.0	%


Private Fixed Maturities:

NAIC Rating (4)
1		11,823		720		53		12,490		27.9	%		10,448		647		164		10,931		27.7	%
2		23,956		1,520		193		25,283		56.5	%		22,364		1,249		627		22,986		58.2	%

Subtotal - High or Highest Quality Securities		35,779		2,240		246		37,773		84.4	%		32,812		1,896		791		33,917		85.9	%

3		4,660		228		35		4,853		10.8	%		3,709		131		92		3,748		9.5	%
4		1,224		34		28		1,230		2.7	%		927		22		30		919		2.3	%
5		885		46		25		906		2.0	%		649		30		22		657		1.7	%
6		40		4		3		41		0.1	%		194		49		10		233		0.6	%

Subtotal - Other Securities		6,809		312		91		7,030		15.6	%		5,479		232		154		5,557		14.1	%

Total		42,588		2,552		337		44,803		100.0	%		38,291		2,128		945		39,474		100.0	%

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

(2)	Excludes (i) assets of our investment 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 investment management and derivative operations. Excludes assets of our investment management operations that are managed for third parties and those assets classified as “Separate account assets” on our balance sheet.

(4)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of December 31, 2017 and December 31, 2016, 982 securities with amortized cost of $6,022 million (fair value $6,217 million) and 918 securities with amortized cost of $4,634 million (fair value $4,759 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


	December 31, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		128,332		76.0	%		123,285		77.9	%
Public, held-to-maturity, at amortized cost		1,747		1.0	%		1,772		1.1	%
Private, available-for-sale, at fair value		14,538		8.6	%		11,646		7.4	%
Private, held-to-maturity, at amortized cost		302		0.2	%		372		0.2	%
Trading account assets supporting insurance liabilities, at fair value		2,586		1.5	%		2,166		1.4	%
Other trading account assets, at fair value		492		0.3	%		434		0.3	%
Equity securities, available-for-sale, at fair value		1,916		1.1	%		2,654		1.7	%
Commercial mortgage and other loans, at book value		14,268		8.5	%		11,700		7.4	%
Policy loans, at outstanding balance		2,545		1.5	%		2,369		1.5	%
Other long-term investments (3)		2,021		1.2	%		1,186		0.8	%
Short-term investments		244		0.1	%		398		0.3	%

Total		168,991		100.0	%		157,982		100.0	%


	December 31, 2017					December 31, 2016
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		132,098		56.6	%		119,916		54.4	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		29,941		12.8	%		27,428		12.4	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,511		8.3	%		19,674		9.0	%
Other trading account assets, at fair value		1,552		0.7	%		1,087		0.5	%
Equity securities, available-for-sale, at fair value		1,910		0.8	%		4,509		2.0	%
Commercial mortgage and other loans, at book value		32,126		13.8	%		31,071		14.1	%
Policy loans, at outstanding balance		4,803		2.1	%		4,726		2.1	%
Other long-term investments (3)		5,484		2.4	%		6,045		2.7	%
Short-term investments		5,859		2.5	%		6,259		2.8	%

Total		233,284		100.0	%		220,715		100.0	%

(1)	Excludes Closed Block Division.

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

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

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT RESULTS (1)

(in millions)


	Quarter Ended December 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.86	%		2,594			(53	)		3.84	%		2,457			(41	)
Equity securities		7.25	%		72			256			5.02	%		68			109
Commercial mortgage and other loans		4.09	%		413			3			4.22	%		389			1
Policy loans		4.86	%		88			—			4.89	%		88			—
Short-term investments and cash equivalents		1.54	%		55			(3	)		0.86	%		35			—
Other investments		7.15	%		167			(779	)		7.54	%		166			(2,198	)

Gross investment income before investment expenses		3.96	%		3,389			(576	)		3.89	%		3,203			(2,129	)
Investment expenses		-0.14	%		(129	)		—			-0.13	%		(104	)		—

Subtotal		3.82	%		3,260			(576	)		3.76	%		3,099			(2,129	)

Investment results of other entities and operations (3)					279			(7	)					264			22
Less, investment income related to adjusted operating income reconciling items					(74	)								(64	)

Total					3,465			(583	)					3,299			(2,107	)


	Twelve Months Ended December 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.90	%		10,088			412			3.95	%		9,515			605
Equity securities		6.80	%		326			565			5.97	%		307			128
Commercial mortgage and other loans		4.12	%		1,590			(3	)		4.32	%		1,528			2
Policy loans		4.92	%		347			—			5.00	%		347			—
Short-term investments and cash equivalents		1.31	%		172			(3	)		0.68	%		122			1
Other investments		7.24	%		630			(1,063	)		5.67	%		473			970

Gross investment income before investment expenses		3.99	%		13,153			(92	)		3.92	%		12,292			1,706
Investment expenses		-0.15	%		(490	)		—			-0.14	%		(413	)		—

Subtotal		3.84	%		12,663			(92	)		3.78	%		11,879			1,706

Investment results of other entities and operations (3)					1,119			(10	)					1,063			54
Less, investment income related to adjusted operating income reconciling items					(283	)								(247	)

Total					13,499			(102	)					12,695			1,760

(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 investment management operations, including assets that are managed for third parties, and those assets classified as “Separate account assets” on our balance sheet. Realized gains / (losses) for Other investments includes changes in fair value of product-related and other derivatives and embedded derivatives.

(3)	Includes invested income of commercial loans, trading account assets supporting insurance liabilities where the investment results generally accrue to contractholders and our investment 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 included 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 quarterly average amortized cost. Yields for equity securities are based on quarterly average cost. Yields for fixed maturities, 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 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended December 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)			Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.00	%		920			(39	)		3.06	%		896			85
Equity securities		6.55	%		20			245			4.57	%		19			54
Commercial mortgage and other loans		3.89	%		135			—			4.02	%		116			—
Policy loans		3.95	%		25			—			4.01	%		24			—
Short-term investments and cash equivalents		1.25	%		4			—			0.77	%		3			—
Other investments (2)		4.85	%		32			(82	)		5.02	%		30			(811	)

Gross investment income before investment expenses		3.15	%		1,136			124			3.19	%		1,088			(672	)
Investment expenses		-0.13	%		(49	)		—			-0.12	%		(43	)		—

Total		3.02	%		1,087			124			3.07	%		1,045			(672	)


	Twelve Months Ended December 31
	2017								2016
	Investment Income						Realized Gains / (Losses)		Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)		Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.06	%		3,624			466		3.14	%		3,472			797
Equity securities		5.66	%		79			511		4.80	%		75			114
Commercial mortgage and other loans		4.05	%		515			—		4.23	%		445			7
Policy loans		4.00	%		97			—		4.05	%		95			—
Short-term investments and cash equivalents		1.25	%		14			—		0.78	%		9			—
Other investments (2)		6.03	%		132			115		5.01	%		129			404

Gross investment income before investment expenses		3.23	%		4,461			1,092		3.29	%		4,225			1,322
Investment expenses		-0.12	%		(184	)		—		-0.13	%		(165	)		—

Total		3.11	%		4,277			1,092		3.16	%		4,060			1,322

(1)

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

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended December 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.59	%		1,674			(14	)		4.51	%		1,561			(126	)
Equity securities		7.55	%		52			11			5.21	%		49			55
Commercial mortgage and other loans		4.20	%		278			3			4.31	%		273			1
Policy loans		5.35	%		63			—			5.35	%		64			—
Short-term investments and cash equivalents		1.56	%		51			(3	)		0.86	%		32			—
Other investments		8.00	%		135			(697	)		8.49	%		136			(1,387	)

Gross investment income before investment expenses		4.55	%		2,253			(700	)		4.38	%		2,115			(1,457	)
Investment expenses		-0.15	%		(80	)		—			-0.14	%		(61	)		—

Total		4.40	%		2,173			(700	)		4.24	%		2,054			(1,457	)


	Twelve Months Ended December 31
	2017									2016
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.61	%		6,464			(54	)		4.63	%		6,043			(192	)
Equity securities		7.26	%		247			54			6.49	%		232			14
Commercial mortgage and other loans		4.16	%		1,075			(3	)		4.36	%		1,083			(5	)
Policy loans		5.41	%		250			—			5.49	%		252			—
Short-term investments and cash equivalents		1.31	%		158			(3	)		0.67	%		113			1
Other investments		7.64	%		498			(1,178	)		5.96	%		344			566

Gross investment income before investment expenses		4.54	%		8,692			(1,184	)		4.36	%		8,067			384
Investment expenses		-0.16	%		(306	)		—			-0.16	%		(248	)		—

Total		4.38	%		8,386			(1,184	)		4.20	%		7,819			384

(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 investment management operations, including assets that are managed for third parties, and those assets classified as “Separate account assets” on our balance sheet. Realized gains / (losses) for Other investments includes changes in fair value of product-related and other derivatives and embedded derivatives.

(3)

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


	Fourth Quarter 2017													Fourth Quarter 2016
	Asset Management Fees, Commissions and Other Income		Insurance and Annuity Benefits			Amortization of Acquisition Costs			General and Administrative Expenses		Pre-Tax Adjusted Operating Income			Asset Management Fees, Commissions and Other Income			Insurance and Annuity Benefits			Amortization of Acquisition Costs			General and Administrative Expenses			Pre-Tax Adjusted Operating Income
Individual Annuities:
Market performance and experience true-ups		5		(6	)		(5	)		—		16			(5	)		(3	)		(2	)		—			—
Total of above items		5		(6	)		(5	)		—		16			(5	)		(3	)		(2	)		—			—
Reported amount		336		72			118			—					314			100			134			—
Amount excluding impact of items indicated above		331		78			123			—					319			103			136			—

Retirement:
Settlement of legal matters		—		—			—			—		—			—			—			—			(20	)		20
Total of above items		—		—			—			—		—			—			—			—			(20	)		20
Reported amount		—		—			—			—														242
Amount excluding impact of items indicated above		—		—			—			—					—			—			—			262

Corporate & Other:
Debt exchange costs		—		—			—			12		(12	)		—			—			—			—			—
Total of above items		—		—			—			12		(12	)		—			—			—			—
Reported amount		—		—			—			131					—			—			—			—
Amount excluding impact of items indicated above		—		—			—			119					—			—			—			—

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


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

Revenues :

Premiums		8,720			—			—		—			674		95			—			9,489			7,296			—			—			—			707		94			—			8,097
Policy charges and fee income		1,604			(61	)		—		—			—		—			—			1,543			1,529			(38	)		—			—			—		—			—			1,491
Net investment income		3,465			(12	)		—		—			670		86			—			4,209			3,299			(8	)		—			—			625		72			—			3,988
Realized investment gains (losses), net		82			(663	)		—		—			72		(2	)		—			(511	)		150			(2,090	)		—			—			174		(167	)		—			(1,933	)
Asset management fees, commissions and other income		1,379			121			6		—			28		2			(1	)		1,535			1,146			644			(378	)		—			7		1			(13	)		1,407

Total revenues		15,250			(615	)		6		—			1,444		181			(1	)		16,265			13,420			(1,492	)		(378	)		—			1,513		—			(13	)		13,050


Benefits and Expenses :

Insurance and annuity benefits		9,163			85			—		—			1,311		174			—			10,733			7,658			(174	)		—			—			1,429		136			—			9,049
Interest credited to policyholders’ account balances		929			(25	)		—		(37	)		33		—			—			900			945			(103	)		—			(283	)		33		1			—			593
Interest expense		344			—			—		—			—		2			—			346			319			—			—			—			—		1			—			320
Deferral of acquisition costs		(686	)		—			—		—			—		—			—			(686	)		(711	)		—			—			—			—		—			—			(711	)
Amortization of acquisition costs		480			(76	)		—		—			10		—			—			414			468			(343	)		—			—			8		—			—			133
General and administrative expenses		3,448			(18	)		—		—			94		18			(100	)		3,442			3,282			(48	)		—			—			101		22			(8	)		3,349

Total benefits and expenses		13,678			(34	)		—		(37	)		1,448		194			(100	)		15,149			11,961			(668	)		—			(283	)		1,571		160			(8	)		12,733



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

Revenues :

Premiums		29,162			—			—		—			2,526		403			—			32,091			27,953			—			—			—			2,620		391			—			30,964
Policy charges and fee income		5,518			(215	)		—		—			—		—			—			5,303			5,887			19			—			—			—		—			—			5,906
Net investment income		13,499			(38	)		—		—			2,653		321			—			16,435			12,695			(31	)		—			—			2,578		278			—			15,520
Realized investment gains (losses), net		486			(631	)		—		—			534		43			—			432			577			1,256			—			—			434		(73	)		—			2,194
Asset management fees, commissions and other income		4,981			67			336		—			113		8			(77	)		5,428			4,462			(236	)		(17	)		—			37		6			(57	)		4,195

Total revenues		53,646			(817	)		336		—			5,826		775			(77	)		59,689			51,574			1,008			(17	)		—			5,669		602			(57	)		58,779


Benefits and Expenses :

Insurance and annuity benefits		30,071			(69	)		—		—			5,226		657			—			35,885			29,709			131			—			—			5,223		594			—			35,657
Interest credited to policyholders’ account balances		3,729			(191	)		—		151			133		—			—			3,822			3,698			(50	)		—			(21	)		134		—			—			3,761
Interest expense		1,322			—			—		—			1		4			—			1,327			1,315			—			—			—			2		3			—			1,320
Deferral of acquisition costs		(2,818	)		—			—		—			—		—			—			(2,818	)		(2,845	)		—			—			—			—		—			—			(2,845	)
Amortization of acquisition costs		2,093			(550	)		—		—			37		—			—			1,580			1,672			168			—			—			37		—			—			1,877
General and administrative expenses		13,005			51			—		—			384		76			(110	)		13,406			12,626			236			—			—			405		89			(52	)		13,304

Total benefits and expenses		47,402			(759	)		—		151			5,781		737			(110	)		53,202			46,175			485			—			(21	)		5,801		686			(52	)		53,074

(1)	See page 41 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

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

(in millions)


	Three Months Ended March 31, 2017																				Three Months Ended June 30, 2017
				Reconciling Items																				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block Division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on trading account assets supporting insurance liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block Division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues :

Premiums		5,774			—			—		—		604		103		—			6,481			7,557			—			—		—		670		99		—			8,326
Policy charges and fee income		1,555			(22	)		—		—		—		—		—			1,533			794			(69	)		—		—		—		—		—			725
Net investment income		3,354			(8	)		—		—		645		70		—			4,061			3,335			(9	)		—		—		672		91		—			4,089
Realized investment gains (losses), net		122			27			—		—		273		5		—			427			161			(1,372	)		—		—		82		37		—			(1,092	)
Asset management fees, commissions and other income		1,202			(85	)		44		—		35		3		(31	)		1,168			1,181			4			201		—		25		1		(19	)		1,393

Total revenues		12,007			(88	)		44		—		1,557		181		(31	)		13,670			13,028			(1,446	)		201		—		1,449		228		(19	)		13,441


Benefits and Expenses :

Insurance and annuity benefits		6,146			(39	)		—		—		1,380		153		—			7,640			7,386			(69	)		—		—		1,328		174		—			8,819
Interest credited to policyholders’ account balances		920			(25	)		—		12		33		—		—			940			953			(184	)		—		145		33		—		—			947
Interest expense		322			—			—		—		1		1		—			324			326			—			—		—		—		1		—			327
Deferral of acquisition costs		(724	)		—			—		—		—		—		—			(724	)		(755	)		—			—		—		—		—		—			(755	)
Amortization of acquisition costs		481			(53	)		—		—		11		—		—			439			662			(586	)		—		—		8		—		—			84
General and administrative expenses		3,202			(9	)		—		—		98		21		(3	)		3,309			3,228			72			—		—		98		18		(5	)		3,411

Total benefits and expenses		10,347			(126	)		—		12		1,523		175		(3	)		11,928			11,800			(767	)		—		145		1,467		193		(5	)		12,833


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

Revenues :

Premiums		7,111			—			—		—		578		106		—			7,795
Policy charges and fee income		1,565			(63	)		—		—		—		—		—			1,502
Net investment income		3,345			(9	)		—		—		666		74		—			4,076
Realized investment gains (losses), net		121			1,377			—		—		107		3		—			1,608
Asset management fees, commissions and other income		1,219			27			85		—		25		2		(26	)		1,332

Total revenues		13,361			1,332			85		—		1,376		185		(26	)		16,313


Benefits and Expenses :

Insurance and annuity benefits		7,376			(46	)		—		—		1,207		156		—			8,693
Interest credited to policyholders’ account balances		927			43			—		31		34		—		—			1,035
Interest expense		330			—			—		—		—		—		—			330
Deferral of acquisition costs		(653	)		—			—		—		—		—		—			(653	)
Amortization of acquisition costs		470			165			—		—		8		—		—			643
General and administrative expenses		3,127			6			—		—		94		19		(2	)		3,244

Total benefits and expenses		11,577			168			—		31		1,343		175		(2	)		13,292

(1)	See page 41 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

RECLASSIFIED OPERATIONS HIGHLIGHTS


Year Ended December 31					2016								2017
2015		2014			1Q		2Q		3Q		4Q		1Q		2Q		3Q

				*Assets Under Management and Administration ($ billions) (1) (2):*
				Assets Under Management :
				Investment Management Division:
	389.1		370.0	Institutional customers		403.6		418.8		445.9		431.5		445.2		461.2		478.3
	197.3		186.1	Retail customers		198.6		202.1		209.0		209.2		217.6		231.2		239.9
	376.7		377.4	General account		400.8		426.3		430.3		399.4		406.1		412.3		415.7

	963.1		933.5	Total Investment Management Division		1,003.0		1,047.2		1,085.2		1,040.1		1,068.9		1,104.7		1,133.9
	114.5		131.3	U.S. Individual Solutions Division		111.4		113.8		117.1		114.6		119.1		114.4		116.7
	85.1		89.2	U.S. Workplace Solutions Division		80.7		81.7		84.1		82.9		84.3		85.8		86.9
	21.0		21.9	International Insurance Division		22.8		25.0		27.9		26.2		26.5		28.7		28.7

	1,183.7		1,175.9	Total assets under management		1,217.9		1,267.7		1,314.3		1,263.8		1,298.8		1,333.6		1,366.2
	163.2		154.5	Client assets under administration		170.5		171.7		177.0		177.3		185.2		188.3		202.4

	1,346.9		1,330.4	Total assets under management and administration		1,388.4		1,439.4		1,491.3		1,441.1		1,484.0		1,521.9		1,568.6


	270.5		248.3	Assets managed or administered for customers outside of the United States at end of period		297.5		324.6		335.4		311.1		326.6		341.1		350.5

(1)	As of end of period.

(2)	At fair market value.

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - U.S. INDIVIDUAL SOLUTIONS DIVISION

(in millions)


Year Ended December 31						2016												2017
2015		2014				1Q			2Q			3Q			4Q			1Q			2Q			3Q
					Revenues (1):
	1,013		953		Premiums		242			260			255			262			255			271			264
	4,722		4,792		Policy charges and fee income		1,190			960			1,222			1,217			1,232			472			1,245
	2,272		2,250		Net investment income		597			606			661			656			672			667			666
	1,921		1,941		Asset management fees, commissions and other income		446			472			493			482			501			550			540

	9,928		9,936		Total revenues		2,475			2,298			2,631			2,617			2,660			1,960			2,715


					Benefits and Expenses (1):
	2,592		2,621		Insurance and annuity benefits		725			1,006			657			703			730			360			642
	1,007		1,035		Interest credited to policyholders’ account balances		264			267			243			268			263			255			263
	619		640		Interest expense		159			164			166			165			170			179			183
	(1,080)		(1,045	)	Deferral of acquisition costs		(262	)		(289	)		(273	)		(290	)		(262	)		(246	)		(232	)
	598		888		Amortization of acquisition costs		221			9			166			203			199			360			187
	3,760		3,832		General and administrative expenses		920			1,004			973			1,008			974			997			945

	7,496		7,971		Total benefits and expenses		2,027			2,161			1,932			2,057			2,074			1,905			1,988


	2,432		1,965		Adjusted operating income before income taxes		448			137			699			560			586			55			727

(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 39

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

RECLASSIFIED COMBINED STATEMENTS OF OPERATIONS - U.S. WORKPLACE SOLUTIONS DIVISION

(in millions)


Year Ended December 31						2016												2017
2015		2014				1Q			2Q			3Q			4Q			1Q			2Q			3Q
					Revenues (1):
	10,613		10,855		Premiums		1,648			1,992			4,746			3,227			1,564			3,259			2,962
	800		784		Policy charges and fee income		204			232			214			194			202			223			204
	4,668		4,822		Net investment income		1,165			1,158			1,270			1,278			1,313			1,257			1,226
	883		973		Asset management fees, commissions and other income		196			223			237			235			241			230			230

	16,964		17,434		Total revenues		3,213			3,605			6,467			4,934			3,320			4,969			4,622


					Benefits and Expenses (1):
	12,218		12,551		Insurance and annuity benefits		2,080			2,404			5,208			3,668			1,982			3,601			3,391
	1,698		1,724		Interest credited to policyholders’ account balances		416			417			452			451			431			476			434
	33		34		Interest expense		5			6			6			7			7			8			7
	(56)		(52	)	Deferral of acquisition costs		(7	)		(8	)		(10	)		(6	)		(7	)		(9	)		(9	)
	72		39		Amortization of acquisition costs		8			7			14			10			5			6			17
	1,892		1,900		General and administrative expenses		466			454			496			443			471			443			473

	15,857		16,196		Total benefits and expenses		2,968			3,280			6,166			4,573			2,889			4,525			4,313


	1,107		1,238		Adjusted operating income before income taxes		245			325			301			361			431			444			309

(1)

Page 40

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

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

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

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

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

2. After-tax adjusted operating income:

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

3. Annualized New Business Premiums:

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

4. Assets Under Management:

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

5. Prudential Financial, Inc. Equity:

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

6. Book value per share of Common Stock:

Equity attributed to Prudential Financial, Inc. divided by the number of Common shares outstanding at end of period, on a diluted basis. Book value per share excluding accumulated other comprehensive income (loss) (“AOCI”) and adjusted to remove amount included for remeasurement of foreign currency exchange rate and certain deferred taxes is a non-GAAP measure. These items are excluded in order to highlight the book value attributable to our core business operations. This non-GAAP measure augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations separate from the portion that is affected by capital and currency market conditions and by isolating the accounting impact associated with insurance liabilities that are generally not marked to market and the supporting investments that are marked to market through AOCI under GAAP as well as remeasurement of deferred tax assets and liabilities originally established through AOCI, related to enactment of the Tax Cuts and Jobs Act on December 22, 2017. However, book value per share excluding both AOCI and adjusted to remove amount included for foreign currency exchange rate remeasurement and certain deferred taxes is not a substitute for book value per share including AOCI determined in accordance with GAAP, and the adjustments made to derive the measure are important to an understanding of our overall financial position.

Book value per share of Common Stock - including AOCI: As of the fourth quarter of 2016 and first, second and third quarters of 2017, book value including AOCI per share of common stock includes a $500 million increase in equity and a 5.75 million increase in diluted shares, reflecting the dilutive impact of exchangeable surplus notes (“ESNs”) when book value per share of common stock is greater than $86.92. Reflecting the dilutive impact of ESNs when book value per share is greater than $85.00, to calculate book value including AOCI per share of common stock as of December 31, 2017, equity is increased by $500 million and diluted shares include 5.88 million shares.

Book value per share of Common Stock - excluding AOCI, and excluding AOCI and remeasurement of foreign currency and certain deferred taxes: The ESNs are subject to customary antidilution adjustments and the exchange rate is accordingly revalued in the fourth quarter of each year. As of the fourth quarter of 2016 and first, second and third quarters of 2017, the conversion of ESNs is antidilutive as book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock is less than $86.92. Reflecting the dilutive impact of ESNs when book value per share is greater than $85.00, to calculate book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock as of the fourth quarter of 2017, equity is increased by $500 million and diluted shares include 5.88 million shares.

Diluted shares as of the fourth quarter of 2016 and first, second and third quarters of 2017 do not include shares related to ESNs due to the antidilutive impact of conversion of ESNs when book value per share of common stock (i.e., book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock) is less than $86.92. Diluted shares as of December 31, 2017 include 5.88 million shares due to the dilutive impact of conversion of ESNs when book value per share of common stock (i.e., book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock) is greater than $85.00.

Page 41

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

KEY DEFINITIONS AND FORMULAS

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 investment management business.

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.

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Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

KEY DEFINITIONS AND FORMULAS

22. Insurance and Annuity Benefits:

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

23. International Life Planners:

Captive insurance Advisors 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 Advisors:

Captive financial professionals and field managers in our insurance operations in the United States.

28. Prudential Advisor productivity:

Commissions on new sales of all products by Prudential Advisors under contract for the entire period, divided by the number of those Prudential Advisors. Excludes commissions on new sales by Prudential Advisors 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.

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Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2017

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of February 7, 2018


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

CREDIT RATINGS:
as of February 7, 2018

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

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

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

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

*	NR indicates not rated.

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

INVESTOR INFORMATION:


Corporate Offices:		Investor Information Hotline:

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

Common Stock:

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

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PRUDENTIAL FINANCIAL INC - FORM 8-K - EX-99.2 - February 7, 2018

Attached files