Form 8-K PRUDENTIAL FINANCIAL For: Nov 02

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November 2, 2016 4:21 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 2, 2016

PRUDENTIAL FINANCIAL, INC.

(Exact name of registrant as specified in its charter)

New Jersey

001-16707

22-3703799

(State or other jurisdiction

of incorporation)

(Commission File

Number)

(I.R.S. Employer

Identification No.)

751 Broad Street

Newark, New Jersey 07102

(Address of principal executive offices and zip code)

(973) 802-6000

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

Prudential Financial, Inc. (the “Company”) furnishes herewith, as Exhibit 99.1, a news release announcing third quarter 2016 results.

Item 7.01 Regulation FD Disclosure.

A.	Quarterly Financial Supplement. The Company furnishes herewith, as Exhibit 99.2, the Quarterly Financial Supplement for third quarter 2016.

Conference Call and Related Materials. Members of the Company’s senior management will hold a conference call on Thursday, November 3, 2016 at 9:00 A.M. ET, to discuss the Company’s third quarter 2016 results. Related materials are available on the Company’s Investor Relations website at www.investor.prudential.com.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

99.1	News release of Prudential Financial, Inc., dated November 2, 2016, announcing third quarter 2016 results (furnished and not filed).

99.2	Quarterly Financial Supplement for Prudential Financial, Inc. for third quarter 2016 (furnished and not filed).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: November 2, 2016


PRUDENTIAL FINANCIAL, INC.

By:		/s/ Robert D. Axel
		Name: Robert D. Axel
		Title: Senior Vice President and Principal Accounting Officer

Exhibit Index


Exhibit No.		Description

99.1		News release of Prudential Financial, Inc., dated November 2, 2016, announcing third quarter 2016 results (furnished and not filed).

99.2		Quarterly Financial Supplement for Prudential Financial, Inc. for third quarter 2016 (furnished and not filed).

Exhibit 99.1

LOGO

November 2, 2016

Prudential Financial, Inc. Announces Third Quarter 2016 Results

●

Net income attributable to Prudential Financial of $1.827 billion or $4.07 per Common share versus $1.465 billion or $3.16 per share for year-ago quarter.

●

After-tax adjusted operating income of $1.191 billion or $2.66 per Common share versus $1.110 billion or $2.40 per share for year-ago quarter.

●

Significant items: In 3Q:16, net income and adjusted operating income include a net benefit of 15 cents per Common share, and in 3Q:15, net income and adjusted operating income include a net charge of 12 cents per Common share, from items discussed later in this release.

John Strangfeld, Chairman and CEO, commented on results for the quarter:

“We are pleased with our solid core results and continued business momentum, including the steady sales growth delivered by our international businesses and strong net flows in Retirement and Asset Management. The combination of our strong cash flows, capital position and recently completed structural changes in our Annuities business enabled us to return approximately $930 million to shareholders through repurchases and dividends in the quarter. And while we continue to face macro environment challenges in both our U.S. and international operations, we remain confident in our ability to deliver solid performance and differentiated returns.”

THIRD QUARTER BUSINESS HIGHLIGHTS

●

Individual Annuities gross sales of $2.1 billion include $1.5 billion without retained exposure to equity market related living benefit guarantees, reflecting our risk diversification strategies. Higher net fees and return on assets reflect benefit from refinement in risk management approach for product guarantees.

●

Retirement gross deposits and sales of $12.3 billion include several new pension risk transfer cases totaling $4.2 billion. Net additions of $5.0 billion reflect positive net flows in both Full Service and Institutional Investment Products. Record-high account values of $387 billion at September 30, up 6% from a year earlier.

●

Asset Management segment assets under management of $1.1 trillion include a record-high $537 billion of unaffiliated third party institutional and retail assets under management at September 30, up 16% from a year earlier. Unaffiliated third party net institutional and retail inflows, excluding money market, totaled $4.3 billion.

●

U.S. Individual Life sales, based on annualized new business premiums, of $143 million, down 9% from the year-ago quarter including impact of pricing actions.

●

Group Insurance total benefits ratio more favorable than the year-ago quarter and within the long term expected range.

●

International Insurance constant dollar basis sales of $771 million, up 8% from the year-ago quarter, reflecting a 63% increase in sales of U.S. dollar products in Japan.

-more-

Page 2

OTHER FINANCIAL HIGHLIGHTS

●

Returned approximately $930 million to shareholders through Common Stock repurchases and dividends.

●

During the third quarter of 2016, the Company acquired 8.1 million shares of its Common Stock at a total cost of $625 million, for an average price of $77.38 per share. From the commencement of repurchases in July 2011, through September 30, 2016, the Company has acquired 83.5 million shares of its Common Stock at a total cost of $5.8 billion, for an average price of $69.17 per share. Remaining authorization for repurchases at management’s discretion through December 31, 2016 was $625 million as of September 30, 2016.

●

Excluding net changes in value relating to foreign currency exchange rate remeasurement reflected in net income or loss and currency translation adjustments corresponding to realized investment gains and losses, book value per Common share excluding total accumulated other comprehensive income amounted to $79.55 at September 30, 2016, an increase of $5.96 from December 31, 2015, after payment of three quarterly Common Stock dividends totaling $2.10 per share.

●

Excluding holdings of the Closed Block division, net unrealized gains on general account fixed maturity investments of $42.4 billion at September 30, 2016 compared to $23.7 billion at December 31, 2015; gross unrealized losses of $1.4 billion at September 30, 2016, compared to $3.4 billion at December 31, 2015.

SIGNIFICANT ITEMS IN THE QUARTER

●

Net income and adjusted operating income each include a pre-tax benefit of $139 million in Individual Annuities to reflect the impact of market performance on deferred policy acquisition and other costs and reserves for guaranteed minimum benefits, and a pre-tax charge of $34 million in Retirement for costs relating to legal matters.

●

As a result of these items, net income and adjusted operating income for the current quarter each include a net favorable impact of approximately 15 cents per Common share. In the year-ago quarter, net income and adjusted operating income each included a net charge of 12 cents per Common share from significant items mainly reflecting the impact of market performance on Annuities results, and reserve refinements in Retirement related to systems enhancements.

NEWARK, N.J. – Prudential Financial, Inc. (NYSE: PRU) today reported third quarter results. Net income attributable to Prudential Financial, Inc. was $1.827 billion ($4.07 per Common share) for the third quarter of 2016, compared to $1.465 billion ($3.16 per Common share) for the year-ago quarter. After-tax adjusted operating income was $1.191 billion ($2.66 per Common share) for the third quarter of 2016, compared to $1.110 billion ($2.40 per Common share) for the year-ago quarter. Information regarding adjusted operating income, a non-GAAP measure, is provided below.

Page 3

For the first nine months of 2016, net income attributable to Prudential Financial, Inc. was $4.084 billion ($9.02 per Common share), compared to $4.907 billion ($10.56 per Common share) for the first nine months of 2015. After-tax adjusted operating income was $3.017 billion ($6.67 per Common share) for the first nine months of 2016, compared to $3.758 billion ($8.09 per Common share) for the first nine months of 2015.

Adjusted operating income does not equate to net income as determined in accordance with generally accepted accounting principles (GAAP), but is the measure used by the Company to evaluate segment performance and to allocate resources, and is the measure of segment performance presented below. Consolidated adjusted operating income is a non-GAAP measure and is discussed later in this press release under “Forward-Looking Statements and Non-GAAP Measure.” A reconciliation of adjusted operating income to the most comparable GAAP measure is provided in the tables that accompany this release.

RESULTS OF ONGOING OPERATIONS

The Company’s ongoing operations include the U.S. Retirement Solutions and Investment Management, U.S. Individual Life and Group Insurance, and International Insurance divisions, as well as Corporate and Other Operations. In the following business-level discussion, adjusted operating income refers to pre-tax results.

The U.S. Retirement Solutions and Investment Management division reported adjusted operating income of $1.018 billion for the third quarter of 2016, compared to $732 million in the year-ago quarter.


U.S RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION ($ millions)	3Q:16		3Q:15
Individual Annuities:
Adjusted operating income		$588		$310
Significant items included above:
Impact of updated estimates of profitability driven by market performance in relation to our assumptions		139		(76)
Charge for estimated costs related to potential contract cancellations		--		(28)

The Individual Annuities segment reported adjusted operating income of $588 million in the current quarter, compared to $310 million in the year-ago quarter. Current quarter results include a net benefit of $139 million from an updated estimate of profitability driven by market performance in relation to our assumptions. Results for the year-ago quarter included a net charge of $76 million to reflect an updated estimate of profitability from the impact of market performance in relation to our assumptions, and a $28 million charge for estimated costs related to potential contract cancellations. Excluding the effect of the foregoing items, results for the Individual Annuities segment increased $35 million from the year-ago quarter. This increase came primarily from a greater contribution from net investment results

Page 4

which included current quarter returns on non-coupon investments and prepayment fees approximately $10 million above our average expectations, and from higher policy fees, net of associated risk management and other related costs. The greater contribution from policy fees reflected efficiencies from recently implemented refinements in risk management strategies relative to contract guarantees and greater average variable annuity account values.


U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION ($ millions)	3Q:16		3Q:15
Retirement:
Adjusted operating income		$239		$242
Significant items included above:
Charge for costs relating to legal matters		(34)
Benefit from reserve refinements related to systems enhancements		--		20

The Retirement segment reported adjusted operating income of $239 million for the current quarter, compared to $242 million in the year-ago quarter. Current quarter results include a charge of $34 million for costs relating to legal matters, while results for the year-ago quarter included a benefit of $20 million from reserve refinements related to systems enhancements. Excluding the effect of the foregoing items, results for the Retirement segment increased $51 million from the year-ago quarter. This increase reflected $79 million greater earnings from net investment results, including current quarter returns on non-coupon investments and prepayment fees about $55 million above our average expectations, partly offset by a less favorable contribution from case experience. The current quarter contribution to results from case experience including reserve strengthening in a legacy case was approximately $20 million below our average quarterly expectations.


U.S. RETIREMENT SOLUTIONS AND INVESTMENT MANAGEMENT DIVISION ($ millions)	3Q:16		3Q:15
Asset Management:
Adjusted operating income		$191		$180

The Asset Management segment reported adjusted operating income of $191 million for the current quarter, compared to $180 million in the year-ago quarter. The increase was driven by higher asset management fees reflecting growth in fixed income assets under management and fee rate modifications within certain real estate funds, partly offset by higher net expenses. In addition, results reflected a $6 million lower contribution from the segment’s incentive, transaction, strategic investing and commercial mortgage activities, which amounted to $16 million for the current quarter.

Page 5

The U.S. Individual Life and Group Insurance division reported adjusted operating income of $173 million for the third quarter of 2016, compared to $227 million in the year-ago quarter.


U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION ($ millions)	3Q:16		3Q:15
Individual Life:
Adjusted operating income		$111		$183

The Individual Life segment reported adjusted operating income of $111 million for the current quarter, compared to $183 million in the year-ago quarter. The decrease reflected less favorable claims experience, higher expenses and a negative impact from reserve refinements in the current quarter, partly offset by a greater contribution from net investment results. The net contribution to current quarter results from claims experience, inclusive of reinsurance, associated reserve updates and amortization, was about $30 million less favorable than our average expectations. In comparison, the year-ago quarter contribution was about $25 million more favorable than average expectations. In addition, current quarter results include charges for reserve refinements and higher than typical legal costs which together amounted to about $20 million. The current quarter contribution to earnings from net investment results included returns on non-coupon investments and prepayment fees about $10 million more favorable than our average expectations.


U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION ($ millions)	3Q:16		3Q:15
Group Insurance:
Adjusted operating income		$62		$44

The Group Insurance segment reported adjusted operating income of $62 million in the current quarter, compared to $44 million in the year-ago quarter. The increase reflected a $13 million greater contribution from net investment results, including current quarter returns on non-coupon investments and prepayment fees approximately $10 million above our average expectations, as well as more favorable underwriting results.

The International Insurance segment reported adjusted operating income of $780 million for the third quarter of 2016, compared to $812 million in the year-ago quarter.


INTERNATIONAL INSURANCE SEGMENT ($ millions)	3Q:16		3Q:15
Life Planner Operations:
Adjusted operating income		$391		$398

Page 6

Adjusted operating income of the segment’s Life Planner operations was $391 million for the current quarter, compared to $398 million in the year-ago quarter. Foreign currency exchange rates, including the impact of the Company’s currency hedging programs, had an unfavorable impact of $23 million in comparison to the year-ago quarter. Excluding this impact, results increased $16 million from the year-ago quarter. The benefits to current quarter results from continued business growth, more favorable policy surrender experience, and a greater contribution from net investment results including returns on non-coupon investments and prepayment fees slightly above our average expectations were partly offset by less favorable claims experience. The contribution to current quarter earnings from claims experience was about $10 million greater than our average expectations, as compared to about $15 million greater than average expectations in the year-ago quarter.


INTERNATIONAL INSURANCE SEGMENT ($ millions)	3Q:16		3Q:15
Gibraltar Life and Other Operations:
Adjusted operating income		$389		$414

Adjusted operating income of the segment’s Gibraltar Life and Other operations was $389 million for the current quarter, compared to $414 million in the year-ago quarter. Foreign currency exchange rates, including the impact of the Company’s currency hedging programs, had an unfavorable impact of $30 million in comparison to the year-ago quarter. Excluding this impact, results increased $5 million from the year-ago quarter. The benefit to current quarter results from business growth, including a contribution from the Company’s indirect investment in AFP Habitat acquired on March 2, 2016, was largely offset by higher expenses including greater than typical current quarter costs associated with employee benefit plans and office relocations. More favorable claims experience, with a contribution to current quarter earnings about $10 million greater than our average expectations, was largely offset by a lower benefit from policy surrender experience. The current quarter contribution from net investment results was essentially unchanged from the year-ago quarter and slightly less favorable than our average expectations.

Corporate and Other operations resulted in a loss, on an adjusted operating income basis, of $413 million in the third quarter of 2016, compared to a loss of $308 million in the year-ago quarter.

CORPORATE AND OTHER

OPERATIONS

($ millions)

3Q:16

3Q:15

Adjusted operating income (loss)

$(413)

$(308)

The increased loss came primarily from higher net expenses in the current quarter including higher costs for employee benefit and compensation plans tied to equity market returns and a benefit to year-ago quarter results from a reinsurance recovery.

Page 7

ASSETS UNDER MANAGEMENT

Assets under management amounted to $1.314 trillion at September 30, 2016, compared to $1.184 trillion at December 31, 2015.

NET INCOME AND INVESTMENT PORTFOLIO

Net income attributable to Prudential Financial, Inc. amounted to $1.827 billion for the third quarter of 2016, compared to $1.465 billion for the year-ago quarter.

Current quarter net income includes $649 million of pre-tax net realized investment gains and related charges and adjustments. The foregoing net gains include net pre-tax gains of $553 million from products that contain embedded derivatives and associated derivative portfolios that are part of a hedging program related to the risks of these products, and $250 million from general portfolio and related activities. The foregoing gains were partially offset by pre-tax losses of $114 million related to derivatives used in risk management activities including asset and liability duration management and $40 million from impairments and sales of credit-impaired investments.

Net income for the current quarter reflects pre-tax increases of $37 million in recorded asset values and decreases of $1 million in recorded liabilities representing changes in value which are expected to ultimately accrue to contractholders. These changes primarily represent mark-to-market adjustments.

Net income for the current quarter also reflects pre-tax income of $87 million from divested businesses, primarily reflecting results from long term care and the Closed Block division.

Net income for the year-ago quarter included $438 million of pre-tax net realized investment gains and related charges and adjustments, including pre-tax gains of $304 million related to derivatives used in risk management activities including asset and liability duration management, $231 million from general portfolio and related activities, and $69 million from products that contain embedded derivatives and associated derivative portfolios that are part of a hedging program related to the risks of these products. The foregoing gains were partly offset by pre-tax losses of $166 million from impairments and sales of credit-impaired investments.

Excluding holdings of the Closed Block division, gross unrealized losses on general account fixed maturity investments at September 30, 2016 amounted to $1.424 billion, including $1.021 billion on high and highest quality securities based on NAIC or equivalent ratings, and amounted to $3.398 billion at December 31, 2015. Net unrealized gains on these investments amounted to $42.385 billion at September 30, 2016, compared to $23.739 billion at December 31, 2015.

Page 8

FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURE

Certain of the statements included in this release constitute forward-looking statements within the meaning of the U. S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall,” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. There can be no assurance that future developments affecting Prudential Financial, Inc. and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) general economic, market and political conditions, including the performance and fluctuations of fixed income, equity, real estate and other financial markets; (2) the availability and cost of additional debt or equity capital or external financing for our operations; (3) interest rate fluctuations or prolonged periods of low interest rates; (4) the degree to which we choose not to hedge risks, or the potential ineffectiveness or insufficiency of hedging or risk management strategies we do implement; (5) any inability to access our credit facilities; (6) reestimates of our reserves for future policy benefits and claims; (7) differences between actual experience regarding mortality, morbidity, persistency, utilization, interest rates or market returns and the assumptions we use in pricing our products, establishing liabilities and reserves or for other purposes; (8) changes in our assumptions related to deferred policy acquisition costs, value of business acquired or goodwill; (9) changes in assumptions for our pension and other postretirement benefit plans; (10) changes in our financial strength or credit ratings; (11) statutory reserve requirements associated with term and universal life insurance policies under Regulation XXX and Guideline AXXX; (12) investment losses, defaults and counterparty non-performance; (13) competition in our product lines and for personnel; (14) difficulties in marketing and distributing products through current or future distribution channels; (15) changes in tax law; (16) economic, political, currency and other risks relating to our international operations; (17) fluctuations in foreign currency exchange rates and foreign securities markets; (18) regulatory or legislative changes, including the Dodd-Frank Wall Street Reform and Consumer Protection Act and the U.S. Department of Labor’s fiduciary rules; (19) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (20) adverse determinations in litigation or regulatory matters, and our exposure to contingent liabilities, including related to the remediation of certain securities lending activities administered by the Company; (21) domestic or international military actions, natural or man-made disasters including terrorist activities or pandemic disease, or other events resulting in catastrophic loss of life; (22) ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; (23) possible difficulties in executing, integrating and realizing projected results of acquisitions, divestitures and restructurings; (24) interruption in telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive data on such systems; (25) changes in statutory or U.S. GAAP accounting principles, practices or policies; and (26) Prudential Financial, Inc.’s primary reliance, as a holding company, on dividends or distributions from its subsidiaries to meet debt payment obligations and the ability of the subsidiaries to pay such dividends or distributions in light of our ratings objectives and/or applicable regulatory restrictions.

Page 9

Prudential Financial, Inc. does not intend, and is under no obligation, to update any particular forward-looking statement included in this document.

Adjusted operating income is a non-GAAP measure of performance. Adjusted operating income 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 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. 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. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of these transactions. In addition, adjusted operating income excludes the results of divested businesses, which are not relevant to our ongoing operations. Discontinued operations and earnings attributable to noncontrolling interests, each of which is presented as a separate component of net income under GAAP, are also excluded from adjusted operating income.

We believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of the results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses. However, adjusted operating income is not a substitute for income determined in accordance with GAAP, and the adjustments made to derive adjusted operating income are important to an understanding of our overall results of operations. The schedules accompanying this release provide a reconciliation of adjusted operating income to income from continuing operations in accordance with GAAP.

The information referred to above, as well as the risks of our businesses described in our Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent Quarterly Reports on Form 10-Q, should be considered by readers when reviewing forward-looking statements contained in this release. Additional historic information relating to our financial performance is located on our Web site at www.investor.prudential.com.

Page 10

EARNINGS CONFERENCE CALL

Members of Prudential’s senior management will host a conference call on Thursday, November 3, 2016 at 9:00 a.m. ET, to discuss with the investment community the Company’s third quarter results. The conference call and an accompanying slide presentation will be broadcast live over the Company’s Investor Relations Web site at www.investor.prudential.com. Please log on fifteen minutes early in the event necessary software needs to be downloaded. The call will remain on the Investor Relations Web site for replay through November 18. Institutional investors, analysts, and other members of the professional financial community are invited to listen to the call and participate in Q&A by dialing (877) 777-1971 (domestic callers) or (612) 332-0819 (international callers). All others are encouraged to dial into the conference call in listen-only mode, using the same numbers. To listen to a replay of the conference call starting at 12:00 p.m. on November 3, through November 10, dial (800) 475-6701 (domestic callers) or (320) 365-3844 (international callers). The access code for the replay is 383125.

LOGO

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of September 30, 2016, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise and innovation for more than a century. For more information, please visit www.news.prudential.com.


		Media Contact:		Scot Hoffman
				(973) 802-2824 [email protected]

Financial Highlights

(in millions, unaudited)


	Three Months Ended September 30						Nine Months Ended September 30
	2016			2015			2016			2015
Income Statement Data:
Adjusted operating income before income taxes (1)		1,558			1,463			3,940			5,049
Income taxes, applicable to adjusted operating income		367			353			923			1,291

After-tax adjusted operating income (1)		1,191			1,110			3,017			3,758

Reconciling Items:
Realized investment gains, net, and related charges and adjustments		649			438			1,347			1,775
Investment gains (losses) on trading account assets supporting insurance liabilities, net		37			(228	)		361			(365	)
Change in experience-rated contractholder liabilities due to asset value changes		1			258			(262	)		295
Divested businesses:
Closed Block division		31			108			(74	)		138
Other divested businesses		56			8			76			(26	)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(17	)		2			—			60

Total reconciling items, before income taxes		757			586			1,448			1,877
Income taxes, not applicable to adjusted operating income		134			231			377			671

Total reconciling items, after income taxes		623			355			1,071			1,206

Income from continuing operations (after-tax) before equity in earnings of operating joint ventures		1,814			1,465			4,088			4,964
Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		13			—			(4	)		(57	)

Income from continuing operations attributable to Prudential Financial, Inc.		1,827			1,465			4,084			4,907
Earnings attributable to noncontrolling interests		5			2			42			65

Income from continuing operations (after-tax)		1,832			1,467			4,126			4,972
Income from discontinued operations, net of taxes		—			—			—			—

Net income		1,832			1,467			4,126			4,972
Less: Income attributable to noncontrolling interests		5			2			42			65

Net income attributable to Prudential Financial, Inc.	$	1,827		$	1,465		$	4,084		$	4,907

See footnotes on last page.

Page 1

Financial Highlights

(in millions, except per share data, unaudited)


	Three Months Ended September 30						Nine Months Ended September 30
	2016			2015			2016			2015
Earnings per share of Common Stock (diluted):

After-tax adjusted operating income	$	2.66		$	2.40		$	6.67		$	8.09
Reconciling Items:
Realized investment gains (losses), net, and related charges and adjustments		1.46			0.95			3.00			3.85
Investment gains (losses) on trading account assets supporting insurance liabilities, net		0.08			(0.50	)		0.80			(0.79	)
Change in experience-rated contractholder liabilities due to asset value changes		—			0.56			(0.58	)		0.64
Divested businesses:
Closed Block division		0.07			0.23			(0.16	)		0.30
Other divested businesses		0.13			0.02			0.17			(0.06	)
Difference in earnings allocated to participating unvested share-based payment awards		(0.01	)		(0.01	)		(0.02	)		(0.02	)

Total reconciling items, before income taxes		1.73			1.25			3.21			3.92
Income taxes, not applicable to adjusted operating income		0.32			0.49			0.86			1.45

Total reconciling items, after income taxes		1.41			0.76			2.35			2.47

Income from continuing operations (after-tax) attributable to Prudential Financial, Inc.		4.07			3.16			9.02			10.56
Income from discontinued operations, net of taxes		—			—			—			—

Net income attributable to Prudential Financial, Inc.	$	4.07		$	3.16		$	9.02		$	10.56

Weighted average number of outstanding Common shares (basic)		435.9			451.0			440.7			452.6

Weighted average number of outstanding Common shares (diluted)		444.3			459.7			448.9			461.4

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

Earnings allocated to participating unvested share-based payment awards for earnings per share calculation:
After-tax adjusted operating income	$	15		$	12		$	35		$	37
Income from continuing operations (after-tax)	$	21		$	15		$	46		$	48

Prudential Financial, Inc. Equity (as of end of period):

Total equity	$	56,431		$	42,720
Per share of Common Stock - diluted (2)		128.37			93.87
Equity excluding accumulated other comprehensive income	$	31,506		$	29,257
Per share of Common Stock - diluted		71.95			64.32
Number of diluted shares at end of period		437.9			454.9

Adjusted operating income before income taxes, by Segment (1):
Individual Annuities	$	588		$	310		$	1,343		$	1,387
Retirement		239			242			694			763
Asset Management		191			180			563			581

Total U.S. Retirement Solutions and Investment Management Division		1,018			732			2,600			2,731

Individual Life		111			183			(59	)		536
Group Insurance		62			44			177			149

Total U.S. Individual Life and Group Insurance Division		173			227			118			685

International Insurance		780			812			2,362			2,488

Total International Insurance Division		780			812			2,362			2,488

Corporate and Other operations		(413	)		(308	)		(1,140	)		(855	)

Adjusted operating income before income taxes		1,558			1,463			3,940			5,049

Reconciling Items:
Realized investment gains, net, and related charges and adjustments		649			438			1,347			1,775
Investment gains (losses) on trading account assets supporting insurance liabilities, net		37			(228	)		361			(365	)
Change in experience-rated contractholder liabilities due to asset value changes		1			258			(262	)		295
Divested businesses:
Closed Block division		31			108			(74	)		138
Other divested businesses		56			8			76			(26	)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(17	)		2			—			60

Total reconciling items, before income taxes		757			586			1,448			1,877

Income from continuing operations before income taxes and equity in earnings of operating joint ventures for Prudential Financial, Inc.	$	2,315		$	2,049		$	5,388		$	6,926

See footnotes on last page.

Page 2

Financial Highlights

(in millions, or as otherwise noted, unaudited)


	Three Months Ended September 30					Nine Months Ended September 30
	2016		2015			2016		2015
*U.S. Retirement Solutions and Investment Management Division:*

Fixed and Variable Annuity Sales and Account Values:
Gross sales	$	2,100	$	2,123		$	6,398	$	6,691

Net sales	$	87	$	128		$	666	$	297

Total account value at end of period	$	158,388	$	150,217

Retirement Segment:

Full Service:

Deposits and sales	$	5,405	$	9,422		$	16,760	$	20,776

Net additions	$	392	$	4,350		$	1,948	$	4,792

Total account value at end of period	$	200,476	$	184,515

Institutional Investment Products:

Gross additions	$	6,907	$	2,031		$	12,389	$	12,147

Net additions (withdrawals)	$	4,568	$	(1,909	)	$	4,148	$	904

Total account value at end of period	$	186,224	$	181,662

Asset Management Segment:
Assets managed by Investment Management and Advisory Services (in billions, as of end of period):
Institutional customers	$	445.9	$	380.9
Retail customers		209.0		188.9
General account		430.3		376.7

Total Investment Management and Advisory Services	$	1,085.2	$	946.5

Institutional Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	16.4	$	15.5		$	43.7	$	50.6

Net additions, other than money market	$	3.4	$	4.7		$	2.8	$	15.2

Retail Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	10.5	$	8.2		$	32.2	$	31.6

Net additions (withdrawals), other than money market	$	0.9	$	(1.6	)	$	2.0	$	2.0

*U.S. Individual Life and Group Insurance Division:*

Individual Life Insurance Annualized New Business Premiums (3):
Term life	$	52	$	51		$	150	$	152
Guaranteed Universal life		54		59			166		147
Other Universal life		21		23			64		57
Variable life		16		25			67		56

Total	$	143	$	158		$	447	$	412

Group Insurance Annualized New Business Premiums (3):
Group life	$	29	$	38		$	285	$	179
Group disability		13		19			113		64

Total	$	42	$	57		$	398	$	243

*International Insurance Division:*

International Insurance Annualized New Business Premiums (3) (4):
Actual exchange rate basis	$	783	$	671		$	2,265	$	2,015

Constant exchange rate basis	$	771	$	716		$	2,299	$	2,108

See footnotes on last page.

Page 3

Financial Highlights

(in billions, as of end of period, unaudited)


	Three Months Ended September 30
	2016		2015
Assets and Asset Management Information:

Total assets	$	819.9	$	754.4

Assets under management (at fair market value):
Managed by U.S. Retirement Solutions and Investment Management Division:
Asset Management Segment - Investment Management and Advisory Services	$	1,085.2	$	946.5
Non-proprietary assets under management		176.4		178.2

Total managed by U.S. Retirement Solutions and Investment Management Division		1,261.6		1,124.7
Managed by U.S. Individual Life and Group Insurance Division		24.8		24.2
Managed by International Insurance Division		27.9		22.2

Total assets under management		1,314.3		1,171.1
Client assets under administration		177.0		163.1

Total assets under management and administration	$	1,491.3	$	1,334.2

See footnotes on last page.

Page 4

(1)

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

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

Adjusted operating income does not equate to “Income from continuing operations” as determined in accordance with U.S. GAAP but is the measure of profit or loss we use to evaluate segment performance. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability factors of our businesses.

(2)

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

(3)

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.

(4)

Actual amounts reflect the impact of currency fluctuations. Constant amounts reflect foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 106 per U.S. dollar and Korean won 1100 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 5

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Third Quarter 2016

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

November 2, 2016

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1-3
Operations Highlights		4

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

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

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

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

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

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

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

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

KEY DEFINITIONS AND FORMULAS		37-39

RATINGS AND INVESTOR INFORMATION		40

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

iii

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

								Pre-tax adjusted operating income (loss) by division:
	2,600			2,731			-5%	U.S. Retirement Solutions and Investment Management Division		732			776			712			870			1,018
	118			685			-83%	U.S. Individual Life and Group Insurance Division		227			126			146			(201	)		173
	2,362			2,488			-5%	International Insurance Division		812			738			779			803			780
	(1,140	)		(855	)		-33%	Corporate and other operations		(308	)		(458	)		(312	)		(415	)		(413	)

	3,940			5,049			-22%	Total pre-tax adjusted operating income		1,463			1,182			1,325			1,057			1,558
	923			1,291			-29%	Income taxes, applicable to adjusted operating income		353			291			328			228			367

	3,017			3,758			-20%	After-tax adjusted operating income		1,110			891			997			829			1,191


								Reconciling items:
	1,347			1,775			-24%	Realized investment gains (losses), net, and related charges and adjustments		438			(196	)		338			360			649
	361			(365	)		199%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(228	)		(159	)		216			108			37
	(262	)		295			-189%	Change in experience-rated contractholder liabilities due to asset value changes		258			138			(130	)		(133	)		1
								Divested businesses:
	(74	)		138			-154%	Closed Block division		108			(80	)		(73	)		(32	)		31
	76			(26	)		392%	Other divested businesses		8			(40	)		31			(11	)		56
	—			60			-100%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		2			(2	)		25			(8	)		(17	)

	1,448			1,877			-23%	Total reconciling items, before income taxes		586			(339	)		407			284			757
	377			671			-44%	Income taxes, not applicable to adjusted operating income		231			(181	)		40			203			134

	1,071			1,206			-11%	Total reconciling items, after income taxes		355			(158	)		367			81			623

	4,088			4,964			-18%	Income from continuing operations (after-tax) before equity in earnings of operating joint ventures		1,465			733			1,364			910			1,814
	(4	)		(57	)		93%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		—			2			(28	)		11			13

	4,084			4,907			-17%	Income from continuing operations attributable to Prudential Financial, Inc.		1,465			735			1,336			921			1,827
	42			65			-35%	Earnings attributable to noncontrolling interests		2			5			33			4			5

	4,126			4,972			-17%	Income from continuing operations (after-tax)		1,467			740			1,369			925			1,832
	—			—			—	Income from discontinued operations, net of taxes		—			—			—			—			—

	4,126			4,972			-17%	Net income		1,467			740			1,369			925			1,832
	42			65			-35%	Less: Income attributable to noncontrolling interests		2			5			33			4			5

	4,084			4,907			-17%	Net income attributable to Prudential Financial, Inc.		1,465			735			1,336			921			1,827

	11.8%			15.7%				Operating Return on Average Equity (based on adjusted operating income) (1)		13.5%			10.7%			11.9%			9.8%			13.8%

(1)

Adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement on page 3. An alternative measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on income from continuing operations). Return on average equity (based on income from continuing operations) represents income from continuing operations after-tax, attributable to consolidated Prudential Financial, Inc., as determined in accordance with U.S. GAAP, annualized for interim periods, divided by average total Prudential Financial, Inc. equity. Return on average equity (based on income from continuing operations) is 13.1%, 7.1%, 11.7%, 6.9%, and 13.9% for the three months ended September 30, 2016, June, 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

						Earnings per share of Common Stock (diluted):
	6.67			8.09		After-tax adjusted operating income		2.40			1.94			2.18			1.84			2.66

						Reconciling items:
	3.00			3.85		Realized investment gains (losses), net, and related charges and adjustments		0.95			(0.43	)		0.75			0.80			1.46
	0.80			(0.79	)	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(0.50	)		(0.35	)		0.48			0.24			0.08
	(0.58	)		0.64		Change in experience-rated contractholder liabilities due to asset value changes		0.56			0.30			(0.29	)		(0.30	)		—
						Divested businesses:
	(0.16)			0.30		Closed Block division		0.23			(0.17	)		(0.16	)		(0.07	)		0.07
	0.17			(0.06	)	Other divested businesses		0.02			(0.09	)		0.07			(0.02	)		0.13
	(0.02	)		(0.02	)	Difference in earnings allocated to participating unvested share-based payment awards		(0.01	)		—			(0.01	)		—			(0.01	)

	3.21			3.92		Total reconciling items, before income taxes		1.25			(0.74	)		0.84			0.65			1.73
	0.86			1.45		Income taxes, not applicable to adjusted operating income		0.49			(0.40	)		0.09			0.45			0.32

	2.35			2.47		Total reconciling items, after income taxes		0.76			(0.34	)		0.75			0.20			1.41

	9.02			10.56		Income from continuing operations (after-tax) attributable to Prudential Financial, Inc.		3.16			1.60			2.93			2.04			4.07
	—			—		Income from discontinued operations, net of taxes		—			—			—			—			—

	9.02			10.56		Net income attributable to Prudential Financial, Inc.		3.16			1.60			2.93			2.04			4.07


	440.7			452.6		Weighted average number of outstanding Common shares (basic)		451.0			448.7			445.3			441.1			435.9
	448.9			461.4		Weighted average number of outstanding Common shares (diluted)		459.7			457.5			453.2			449.3			444.3

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

						*Earnings allocated to participating unvested share-based payment awards for earnings per share calculation*
	35			37		After-tax adjusted operating income		12			8			11			9			15
	46			48		Income from continuing operations (after-tax)		15			6			14			11			21

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		1,833			1,216			969			676			907
				Long-term debt		14,309			13,783			13,795			13,172			12,942
				Junior Subordinated Long-Term Debt		5,884			5,811			5,813			5,814			5,816

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income		42,720			41,890			49,242			55,149			56,431
				Excluding accumulated other comprehensive income (2)		29,257			29,605			30,176			30,482			31,506
				Amount included above for foreign currency exchange rate remeasurement (3)		(4,034	)		(3,747	)		(3,628	)		(3,509	)		(3,327	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		33,291			33,352			33,804			33,991			34,833


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (4)		93.87			92.39			109.66			123.77			128.37
				Excluding accumulated other comprehensive income (2)		64.32			65.32			67.36			68.65			71.95
				Amount included above for foreign currency exchange rate remeasurement (3)		(8.87	)		(8.27	)		(8.10	)		(7.90	)		(7.60	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for foreign currency exchange rate remeasurement (3)		73.19			73.59			75.46			76.55			79.55


				Number of diluted shares at end of period (5)		454.9			453.2			448.0			444.0			437.9

				*Common Stock Price Range (based on closing price):*
	81.65		91.68	High		91.68			87.69			79.84			79.71			81.65
	58.00		74.22	Low		74.22			75.40			58.00			66.93			68.74
	81.65		76.21	Close		76.21			81.41			72.22			71.34			81.65


				*Common Stock market capitalization (1)*		34,249			36,398			32,001			31,304			35,248

(1)	As of end of period.

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

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

(4)

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

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

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

OPERATIONS HIGHLIGHTS


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

				*Assets Under Management and Administration ($ billions) (1) (2):*
				Assets Under Management :
				Managed by U.S. Retirement Solutions and Investment Management Division:
				Asset Management Segment - Investment Management & Advisory Services
				Institutional customers		380.9		389.1		403.6		418.8		445.9
				Retail customers		188.9		197.3		198.6		202.1		209.0
				General account		376.7		376.7		400.8		426.3		430.3

				Total Investment Management and Advisory Services		946.5		963.1		1,003.0		1,047.2		1,085.2
				Non-proprietary assets under management		178.2		175.5		167.0		169.8		176.4

				Total managed by U.S. Retirement Solutions and Investment Management Division		1,124.7		1,138.6		1,170.0		1,217.0		1,261.6
				Managed by U.S. Individual Life and Group Insurance Division		24.2		24.1		25.1		25.7		24.8
				Managed by International Insurance Division		22.2		21.0		22.8		25.0		27.9

				Total assets under management		1,171.1		1,183.7		1,217.9		1,267.7		1,314.3
				Client assets under administration		163.1		163.2		170.5		171.7		177.0

				Total assets under management and administration		1,334.2		1,346.9		1,388.4		1,439.4		1,491.3


				Assets managed or administered for customers outside of the United States at end of period		263.4		270.5		297.5		324.6		335.4

				*Distribution Representatives (1):*
				Prudential Agents		2,922		2,903		2,969		2,987		3,031
				International Life Planners		7,509		7,592		7,608		7,551		7,667
				Gibraltar Life Consultants		8,593		8,805		8,781		8,734		8,790

	52		52	*Prudential Agent productivity ($ thousands)*		57		68		47		54		56

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINED STATEMENTS OF OPERATIONS

(in millions)


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

								Revenues (1):
	20,657			17,968			15%	Premiums		5,273			7,495			5,577			6,146			8,934
	4,358			4,489			-3%	Policy charges and fee income		1,552			1,514			1,511			1,288			1,559
	9,396			8,994			4%	Net investment income		3,015			2,964			3,017			3,087			3,292
	3,743			3,934			-5%	Asset management fees, commissions and other income		1,238			1,272			1,187			1,291			1,265
	38,154			35,385			8%	Total revenues		11,078			13,245			11,292			11,812			15,050

								Benefits and Expenses (1):
	22,051			18,781			17%	Insurance and annuity benefits		5,640			7,917			5,984			6,813			9,254
	2,753			2,706			2%	Interest credited to policyholders’ account balances		915			879			907			914			932
	996			980			2%	Interest expense		339			322			325			357			314
	(2,134	)		(1,961	)		-9%	Deferral of acquisition costs		(650	)		(691	)		(685	)		(718	)		(731	)
	1,204			1,188			1%	Amortization of acquisition costs		509			443			479			281			444
	9,344			8,642			8%	General and administrative expenses		2,862			3,193			2,957			3,108			3,279

	34,214			30,336			13%	Total benefits and expenses		9,615			12,063			9,967			10,755			13,492

	3,940			5,049			-22%	Adjusted operating income before income taxes		1,463			1,182			1,325			1,057			1,558


								Reconciling items:
	2,443			2,719			-10%	Realized investment gains (losses), net, and related adjustments		1,117			(461	)		1,418			802			223
	(1,096	)		(944	)		-16%	Related charges		(679	)		265			(1,080	)		(442	)		426

	1,347			1,775			-24%	Total realized investment gains (losses), net, and related charges and adjustments		438			(196	)		338			360			649

	361			(365	)		199%	Investment gains (losses) on trading account assets supporting insurance liabilities, net		(228	)		(159	)		216			108			37
	(262	)		295			-189%	Change in experience-rated contractholder liabilities due to asset value changes		258			138			(130	)		(133	)		1
								Divested businesses:
	(74	)		138			-154%	Closed Block division		108			(80	)		(73	)		(32	)		31
	76			(26	)		392%	Other divested businesses		8			(40	)		31			(11	)		56
	—			60			-100%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		2			(2	)		25			(8	)		(17	)

	1,448			1,877			-23%	Total reconciling items, before income taxes		586			(339	)		407			284			757


	5,388			6,926			-22%	Income from continuing operations before income taxes and equity in earnings of operating joint ventures		2,049			843			1,732			1,341			2,315
	1,300			1,962			-34%	Income tax expense		584			110			368			431			501

	4,088			4,964			-18%	Income from continuing operations before equity in earnings of operating joint ventures		1,465			733			1,364			910			1,814

(1)

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

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINING STATEMENTS OF OPERATIONS

(in millions)


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

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


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

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


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


	Quarter Ended September 30, 2015
				U.S. Retirement Solutions & Investment			U.S. Individual Life & Group			International			Corporate
				Management			Insurance			Insurance			and Other
	Total			Division			Division			Division			Operations
Revenues (1):
Premiums		5,273			688			1,203			3,385			(3	)
Policy charges and fee income		1,552			718			717			129			(12	)
Net investment income		3,015			1,205			593			1,081			136
Asset management fees, commissions and other income		1,238			1,197			156			155			(270	)

Total revenues		11,078			3,808			2,669			4,750			(149	)


Benefits and Expenses (1):
Insurance and annuity benefits		5,640			1,216			1,507			2,904			13
Interest credited to policyholders’ account balances		915			468			228			219			—
Interest expense		339			25			142			2			170
Deferral of acquisition costs		(650	)		(117	)		(166	)		(382	)		15
Amortization of acquisition costs		509			179			98			249			(17	)
General and administrative expenses		2,862			1,305			633			946			(22	)

Total benefits and expenses		9,615			3,076			2,442			3,938			159


Adjusted operating income (loss) before income taxes		1,463			732			227			812			(308	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Nine Months Ended September 30, 2016
				U.S. Retirement Solutions & Investment			U.S. Individual Life & Group			International			Corporate
				Management			Insurance			Insurance			and Other
	Total			Division			Division			Division			Operations
Revenues (1) :
Premiums		20,657			5,480			3,663			11,534			(20	)
Policy charges and fee income		4,358			2,085			1,937			370			(34	)
Net investment income		9,396			3,717			1,800			3,553			326
Asset management fees, commissions and other income		3,743			3,647			548			314			(766	)

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


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

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


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


	Nine Months Ended September 30, 2015
				U.S. Retirement Solutions & Investment			U.S. Individual Life & Group			International			Corporate
				Management			Insurance			Insurance			and Other
	Total			Division			Division			Division			Operations
Revenues (1):
Premiums		17,968			3,840			3,591			10,537			—
Policy charges and fee income		4,489			2,178			1,938			408			(35	)
Net investment income		8,994			3,608			1,693			3,279			414
Asset management fees, commissions and other income		3,934			3,736			526			469			(797	)

Total revenues		35,385			13,362			7,748			14,693			(418	)


Benefits and Expenses (1):
Insurance and annuity benefits		18,781			5,162			4,576			9,039			4
Interest credited to policyholders’ account balances		2,706			1,364			675			667			—
Interest expense		980			83			418			4			475
Deferral of acquisition costs		(1,961	)		(365	)		(462	)		(1,178	)		44
Amortization of acquisition costs		1,188			410			59			756			(37	)
General and administrative expenses		8,642			3,977			1,797			2,917			(49	)

Total benefits and expenses		30,336			10,631			7,063			12,205			437


Adjusted operating income (loss) before income taxes		5,049			2,731			685			2,488			(855	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

CONSOLIDATED BALANCE SHEETS

(in millions)


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

Assets:
Investments:
Fixed maturities, available for sale, at fair value (amortized cost $263,281; $265,416; $278,000; $286,066; $297,745)		290,778		290,323		314,529		332,270		343,244
Fixed maturities, held to maturity, at amortized cost (fair value $2,669; $2,624; $2,841; $3,026; $2,956)		2,380		2,308		2,411		2,485		2,471
Trading account assets supporting insurance liabilities, at fair value		20,408		20,522		21,447		21,702		21,828
Other trading account assets, at fair value		14,075		14,458		8,052		7,268		7,559
Equity securities, available for sale, at fair value (cost $6,755; $6,847; $7,026; $7,088; $7,197)		9,109		9,274		9,400		9,496		9,765
Commercial mortgage and other loans		50,048		50,559		50,798		51,447		52,273
Policy loans		11,624		11,657		11,805		11,930		12,031
Other long-term investments		10,591		9,986		10,281		10,247		11,346
Short-term investments		7,937		8,105		3,697		5,035		5,254

Total investments		416,950		417,192		432,420		451,880		465,771
Cash and cash equivalents		20,207		17,612		22,492		24,142		24,728
Accrued investment income		3,156		3,110		3,180		3,211		3,279
Deferred policy acquisition costs		16,206		16,718		15,998		16,152		16,975
Value of business acquired		2,847		2,828		2,582		1,951		2,159
Other assets		14,409		14,225		14,822		14,322		15,403
Separate account assets		280,616		285,570		281,501		284,832		291,550

Total assets		754,391		757,255		772,995		796,490		819,865


Liabilities:
Future policy benefits		222,220		224,384		234,728		242,950		252,228
Policyholders’ account balances		136,620		136,784		139,745		142,716		146,577
Securities sold under agreements to repurchase		8,107		7,882		8,357		7,335		6,830
Cash collateral for loaned securities		4,241		3,496		4,052		4,643		5,037
Income taxes		9,644		8,714		12,128		15,140		15,326
Senior short-term debt		1,833		1,216		969		676		907
Senior long-term debt		14,309		13,783		13,795		13,172		12,942
Junior subordinated long-term debt		5,884		5,811		5,813		5,814		5,816
Notes issued by consolidated variable interest entities		8,370		8,597		2,946		2,094		2,722
Other liabilities		19,777		19,095		19,696		21,940		22,956
Separate account liabilities		280,616		285,570		281,501		284,832		291,550

Total liabilities		711,621		715,332		723,730		741,312		762,891


Equity:
Accumulated other comprehensive income		13,463		12,285		19,066		24,667		24,925
Other equity		29,257		29,605		30,176		30,482		31,506

Total Prudential Financial, Inc. equity		42,720		41,890		49,242		55,149		56,431

Noncontrolling Interest		50		33		23		29		543

Total Equity		42,770		41,923		49,265		55,178		56,974

Total liabilities and equity		754,391		757,255		772,995		796,490		819,865

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of September 30, 2016

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		U.S. Retirement Solutions & Investment Management Division		U.S. Individual Life & Group Insurance Division		International Insurance Division		Corporate and Other Operations
Assets:
Total investments		465,771		61,147			404,624		135,591		57,573		193,160		18,300
Deferred policy acquisition costs		16,975		345			16,630		4,643		5,018		7,293		(324	)
Other assets		45,569		1,973			43,596		21,042		11,562		12,473		(1,481	)
Separate account assets		291,550		—			291,550		245,538		47,049		3,004		(4,041	)

Total assets		819,865		63,465			756,400		406,814		121,202		215,930		12,454


Liabilities:
Future policy benefits		252,228		49,282			202,946		70,243		16,972		111,108		4,623
Policyholders’ account balances		146,577		5,213			141,364		58,662		32,666		50,029		7
Debt		19,665		—			19,665		3,087		7,656		82		8,840
Other liabilities		52,871		10,376			42,495		9,823		8,236		20,815		3,621
Separate account liabilities		291,550		—			291,550		245,538		47,049		3,004		(4,041	)

Total liabilities		762,891		64,871			698,020		387,353		112,579		185,038		13,050


Equity:
Accumulated other comprehensive income (loss)		24,925		16			24,909		3,500		1,851		20,218		(660	)
Other equity		31,506		(1,423	)		32,929		15,381		6,772		10,624		152

Total Prudential Financial, Inc. equity		56,431		(1,407	)		57,838		18,881		8,623		30,842		(508	)

Noncontrolling Interest		543		1			542		580		—		50		(88	)

Total Equity		56,974		(1,406	)		58,380		19,461		8,623		30,892		(596	)


Total liabilities and equity		819,865		63,465			756,400		406,814		121,202		215,930		12,454



	As of December 31, 2015

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

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


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

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


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

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

Noncontrolling Interest		33		—			33		13		—		48		(28	)

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


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

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of September 30, 2016								As of December 31, 2015
	Senior debt				Junior Subordinated Long-term Debt				Senior debt				Junior Subordinated Long-term Debt
	Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt		Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt
*Borrowings by use of proceeds:*
Capital Debt		—		5,826		5,816		11,642		194		5,875		5,811		11,880
Operating Debt - Investment related		724		5,274		—		5,998		438		6,573		—		7,011
Operating Debt - Specified businesses		110		1,252		—		1,362		584		770		—		1,354
Limited recourse and non-recourse borrowing		73		590		—		663		—		565		—		565

Total debt		907		12,942		5,816		19,665		1,216		13,783		5,811		20,810


	As of September 30, 2016								As of December 31, 2015
	Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total		Prudential Financial, Inc.		The Prudential Insurance Co. of America (1)(2)		Other Affiliates		Total
*Borrowings by sources:*
Capital Debt		10,643		939		60		11,642		10,888		941		51		11,880
Operating Debt - Investment related		3,993		406		1,599		5,998		5,328		72		1,611		7,011
Operating Debt - Specified businesses		1,266		96		—		1,362		970		384		—		1,354
Limited recourse and non-recourse borrowing		—		663		—		663		—		565		—		565

Total debt		15,902		2,104		1,659		19,665		17,186		1,962		1,662		20,810

(1)	Includes Prudential Funding, LLC.

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

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

								Revenues (1):
	5,480			3,840			43%	Premiums		688			3,005			671			1,018			3,791
	2,085			2,178			-4%	Policy charges and fee income		718			707			675			687			723
	3,717			3,608			3%	Net investment income		1,205			1,188			1,198			1,194			1,325
	3,647			3,736			-2%	Asset management fees, commissions and other income		1,197			1,198			1,164			1,217			1,266

	14,929			13,362			12%	Total revenues		3,808			6,098			3,708			4,116			7,105


								Benefits and Expenses (1):
	6,874			5,162			33%	Insurance and annuity benefits		1,216			3,502			1,171			1,460			4,243
	1,362			1,364			0%	Interest credited to policyholders’ account balances		468			440			453			451			458
	82			83			-1%	Interest expense		25			21			25			28			29
	(354	)		(365	)		3%	Deferral of acquisition costs		(117	)		(122	)		(110	)		(128	)		(116	)
	386			410			-6%	Amortization of acquisition costs		179			140			155			131			100
	3,979			3,977			0%	General and administrative expenses		1,305			1,341			1,302			1,304			1,373

	12,329			10,631			16%	Total benefits and expenses		3,076			5,322			2,996			3,246			6,087

	2,600			2,731			-5%	Adjusted operating income before income taxes		732			776			712			870			1,018

(1)

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

Page 11

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


	Nine Months Ended September 30, 2016												Quarter Ended September 30, 2016
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management			Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		5,480			115			5,365			—			3,791			39			3,752			—
Policy charges and fee income		2,085			1,918			167			—			723			667			56			—
Net investment income		3,717			514			3,143			60			1,325			192			1,114			19
Asset management fees, commissions and other income		3,647			926			593			2,128			1,266			323			212			731

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


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

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

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


	Nine Months Ended September 30, 2015												Quarter Ended September 30, 2015
	Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management			Total U.S. Retirement Solutions & Investment Management Division			Individual Annuities			Retirement			Asset Management
Revenues (1):
Premiums		3,840			88			3,752			—			688			28			660			—
Policy charges and fee income		2,178			2,015			163			—			718			664			54			—
Net investment income		3,608			450			3,077			81			1,205			156			1,029			20
Asset management fees, commissions and other income		3,736			1,001			603			2,132			1,197			319			194			684

Total revenues		13,362			3,554			7,595			2,213			3,808			1,167			1,937			704


Benefits and Expenses (1):
Insurance and annuity benefits		5,162			235			4,927			—			1,216			154			1,062			—
Interest credited to policyholders’ account balances		1,364			268			1,096			—			468			106			362			—
Interest expense		83			55			21			7			25			15			7			3
Deferral of acquisition costs		(365	)		(325	)		(32	)		(8	)		(117	)		(104	)		(11	)		(2	)
Amortization of acquisition costs		410			344			52			14			179			163			12			4
General and administrative expenses		3,977			1,590			768			1,619			1,305			523			263			519

Total benefits and expenses		10,631			2,167			6,832			1,632			3,076			857			1,695			524

Adjusted operating income before income taxes		2,731			1,387			763			581			732			310			242			180

(1)

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	149,441			155,083		Beginning total account value		155,424			146,685			149,441			149,246			151,188
	1,936			3,002		Sales: Highest Daily Suite - risk retained by Prudential (1)		735			680			683			666			587
	1,049			1,059		Highest Daily Suite - externally reinsured living benefits		500			486			374			354			321
	3,371			2,595		Other variable annuities (2)		880			910			944			1,247			1,180

	6,356			6,656		Total sales		2,115			2,076			2,001			2,267			2,088
	(5,654	)		(6,302	)	Surrenders and withdrawals		(1,965	)		(1,989	)		(1,748	)		(1,914	)		(1,992	)

	702			354		Net sales		150			87			253			353			96
	(1,103	)		(1,190	)	Benefit payments		(400	)		(351	)		(355	)		(399	)		(349	)

	(401	)		(836	)	Net flows		(250	)		(264	)		(102	)		(46	)		(253	)
	8,514			(4,864	)	Change in market value, interest credited, and other		(7,594	)		3,909			764			2,873			4,877
	(2,651	)		(2,698	)	Policy charges		(895	)		(889	)		(857	)		(885	)		(909	)

	154,903			146,685		Ending total account value		146,685			149,441			149,246			151,188			154,903


						Variable Annuities Account Value by Product:
	113,902			110,390		Highest Daily Suite - risk retained by Prudential (1)		110,390			112,060			111,229			111,820			113,902
	2,629			1,011		Highest Daily Suite - externally reinsured living benefits		1,011			1,513			1,893			2,259			2,629
	38,372			35,284		Other variable annuities (2)		35,284			35,868			36,124			37,109			38,372

	154,903			146,685		Ending total account value		146,685			149,441			149,246			151,188			154,903


						Fixed Annuities and other products (3):
	3,504			3,581		Beginning total account value		3,552			3,532			3,504			3,487			3,489
	42			35		Sales		8			13			16			14			12
	(78	)		(92	)	Surrenders and withdrawals		(30	)		(32	)		(31	)		(26	)		(21	)

	(36	)		(57	)	Net redemptions		(22	)		(19	)		(15	)		(12	)		(9	)
	(269	)		(278	)	Benefit payments		(91	)		(91	)		(88	)		(90	)		(91	)

	(305	)		(335	)	Net flows		(113	)		(110	)		(103	)		(102	)		(100	)
	287			287		Interest credited and other		94			83			86			105			96
	(1	)		(1	)	Policy charges		(1	)		(1	)		—			(1	)		—

	3,485			3,532		Ending total account value		3,532			3,504			3,487			3,489			3,485


						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (4):
	1,803			1,922		Insurance Agents		611			627			580			625			598
	1,213			1,266		Wirehouses		429			415			385			452			376
	2,521			2,524		Independent Financial Planners		788			761			783			897			841
	861			979		Bank Distribution		295			286			269			307			285

	6,398			6,691		Total		2,123			2,089			2,017			2,281			2,100

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

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

(3)	Includes single premium immediate annuities.

(4)	Amounts represent gross sales.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

				INDIVIDUAL ANNUITIES:

				Account Values in General Account (1):
	9,942		9,852	Beginning balance		9,724		10,030		9,942		10,017		9,977
	674		886	Premiums and deposits		276		279		238		221		215
	(415)		(558)	Surrenders and withdrawals		(176)		(146)		(141)		(140)		(134)

	259		328	Net sales		100		133		97		81		81
	(322)		(337)	Benefit payments		(109)		(109)		(105)		(110)		(107)

	(63)		(9)	Net flows		(9)		24		(8)		(29)		(26)
	184		193	Interest credited and other		66		70		64		62		58
	(199)		(5)	Net transfers (to) from separate account		249		(181)		19		(72)		(146)
	(1)		(1)	Policy charges		—		(1)		—		(1)		—

	9,863		10,030	Ending balance		10,030		9,942		10,017		9,977		9,863


				Account Values in Separate Account (1):
	143,003		148,812	Beginning balance		149,252		140,187		143,003		142,716		144,700
	5,724		5,805	Premiums and deposits		1,847		1,810		1,779		2,060		1,885
	(5,317)		(5,836)	Surrenders and withdrawals		(1,819)		(1,875)		(1,638)		(1,800)		(1,879)

	407		(31)	Net sales (redemptions)		28		(65)		141		260		6
	(1,050)		(1,131)	Benefit payments		(382)		(333)		(338)		(379)		(333)

	(643)		(1,162)	Net flows		(354)		(398)		(197)		(119)		(327)
	8,617		(4,770)	Change in market value, interest credited and other		(7,566)		3,922		786		2,916		4,915
	199		5	Net transfers (to) from general account		(249)		181		(19)		72		146
	(2,651)		(2,698)	Policy charges		(896)		(889)		(857)		(885)		(909)

	148,525		140,187	Ending balance		140,187		143,003		142,716		144,700		148,525

(1)

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

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		4,933		4,767		4,658		4,524		4,403
Guaranteed minimum withdrawal benefits		588		578		552		537		532
Guaranteed minimum income benefits		2,861		2,870		2,780		2,749		2,780
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		114,539		116,724		116,818		118,666		121,747
Guaranteed minimum withdrawal & income benefits - externally reinsured		1,011		1,513		1,893		2,259		2,629

Total		123,932		126,452		126,701		128,735		132,091


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		105,926		107,411		106,699		107,253		109,175
Account Values with Auto-Rebalancing Feature - externally reinsured		1,011		1,513		1,893		2,259		2,629
Account Values without Auto-Rebalancing Feature		16,995		17,528		18,109		19,223		20,287

Total		123,932		126,452		126,701		128,735		132,091


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		4,259		4,019		4,395		4,366		3,928
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		1,296		1,194		1,225		1,179		1,049

Total		5,555		5,213		5,620		5,545		4,977

(1)	At end of period.

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

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

Variable Annuity Account Values by Death Benefit Features
Return of net deposits:
Account value		112,070		114,402		114,662		116,599		119,755
Net amount at risk		894		737		648		544		399
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,366		31,658		31,188		31,127		31,534
Net amount at risk		4,711		4,212		4,367		4,147		3,533

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		106,937		108,924		108,592		109,512		111,804
Account Values without Auto-Rebalancing Feature		36,499		37,136		37,258		38,214		39,485

Total		143,436		146,060		145,850		147,726		151,289


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		2,305		1,919		2,025		1,852		1,392
Net Amount at Risk without Auto-Rebalancing Feature		3,300		3,030		2,990		2,839		2,540

Total		5,605		4,949		5,015		4,691		3,932

(1)	At end of period.

Page 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	188,961			184,196		Beginning total account value		188,807			184,515			188,961			190,953			194,007
	16,760			20,776		Deposits and sales		9,422			4,908			6,656			4,699			5,405
	(14,812	)		(15,984	)	Withdrawals and benefits		(5,072	)		(5,575	)		(5,286	)		(4,513	)		(5,013	)
	9,567			(4,473	)	Change in market value, interest credited, interest income and other activity		(8,642	)		5,113			622			2,868			6,077

	200,476			184,515		Ending total account value		184,515			188,961			190,953			194,007			200,476


	1,948			4,792		Net additions (withdrawals)		4,350			(667	)		1,370			186			392


						Stable value account values included above		45,731			45,971			46,865			47,581			48,352

						Institutional Investment Products:
	179,964			179,641		Beginning total account value		183,798			181,662			179,964			180,819			180,882
	12,389			12,147		Additions		2,031			3,425			2,061			3,421			6,907
	(8,241	)		(11,243	)	Withdrawals and benefits		(3,940	)		(4,145	)		(2,783	)		(3,119	)		(2,339	)
	6,204			2,818		Change in market value, interest credited and interest income		1,106			658			2,198			2,053			1,953
	(4,092	)		(1,701	)	Other (1)		(1,333	)		(1,636	)		(621	)		(2,292	)		(1,179	)

	186,224			181,662		Ending total account value		181,662			179,964			180,819			180,882			186,224


	4,148			904		Net additions (withdrawals)		(1,909	)		(720	)		(722	)		302			4,568


						Amounts included in ending total account value above:
	71,482			68,097		Investment-only stable value wraps		68,097			66,827			68,624			69,567			71,482
	31,280			34,628		Longevity reinsurance (2)		34,628			33,453			32,364			31,438			31,280
	83,462			78,937		Group annuities and other products		78,937			79,684			79,831			79,877			83,462

	186,224			181,662		Ending total account value		181,662			179,964			180,819			180,882			186,224

(1)

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

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

Page 17

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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


						Supplementary Revenue Information (in millions):
Year-to-date				%			2015				2016
2016		2015		Change			3Q		4Q		1Q		2Q		3Q

						Analysis of revenues by type:
	1,648		1,606		3%	Asset management fees		536		529		524		547		577
	190		173		10%	Other related revenues		49		68		71		67		52
	350		434		-19%	Service, distribution and other revenues		119		134		111		118		121

	2,188		2,213		-1%	Total Asset Management segment revenues		704		731		706		732		750


						Analysis of asset management fees by source:
	771		692		11%	Institutional customers		234		231		242		256		273
	524		577		-9%	Retail customers		191		187		169		173		182
	353		337		5%	General account		111		111		113		118		122

	1,648		1,606		3%	Total asset management fees		536		529		524		547		577


Supplementary Assets Under Management Information (in billions):
	September 30, 2016
	Equity		Fixed Income		Real Estate		Total
Institutional customers		59.6		345.7		40.6		445.9
Retail customers		116.2		90.6		2.2		209.0
General account		6.4		422.2		1.7		430.3

Total		182.2		858.5		44.5		1,085.2


	September 30, 2015
	Equity		Fixed Income		Real Estate		Total
Institutional customers		57.4		285.1		38.4		380.9
Retail customers		115.0		71.8		2.1		188.9
General account		7.0		367.9		1.8		376.7

Total		179.4		724.8		42.3		946.5

Page 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in billions)


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

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	347.1			323.6		Beginning assets under management		335.9			338.6			347.1			359.3			373.4
	43.7			50.6		Additions		15.5			16.3			12.5			14.8			16.4
	(40.9	)		(35.4	)	Withdrawals		(10.8	)		(10.3	)		(15.1	)		(12.8	)		(13.0	)
	32.4			(0.1	)	Change in market value		(1.7	)		2.2			12.7			11.3			8.4
	12.9			—		Net money market flows		(0.2	)		0.3			(1.0	)		0.4			13.5
	3.7			(0.1	)	Other (1)		(0.1	)		—			3.1			0.4			0.2

	398.9			338.6		Ending assets under management		338.6			347.1			359.3			373.4			398.9
	47.0			42.3		Affiliated institutional assets under management		42.3			42.0			44.3			45.4			47.0

	445.9			380.9		Total assets managed for institutional customers at end of period		380.9			389.1			403.6			418.8			445.9


	2.8			15.2		Net institutional additions (withdrawals), excluding money market activity		4.7			6.0			(2.6	)		2.0			3.4


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	128.9			126.8		Beginning assets under management		135.2			125.9			128.9			127.8			131.3
	32.2			31.6		Additions		8.2			9.3			10.2			11.5			10.5
	(30.2	)		(29.6	)	Withdrawals		(9.8	)		(10.5	)		(10.7	)		(9.9	)		(9.6	)
	6.2			(2.8	)	Change in market value		(7.6	)		4.2			(1.2	)		1.9			5.5
	(0.1	)		—		Net money market flows		—			—			(0.1	)		—			—
	0.7			(0.1	)	Other (1)		(0.1	)		—			0.7			—			—

	137.7			125.9		Ending assets under management		125.9			128.9			127.8			131.3			137.7
	71.3			63.0		Affiliated retail assets under management		63.0			68.4			70.8			70.8			71.3

	209.0			188.9		Total assets managed for retail customers at end of period		188.9			197.3			198.6			202.1			209.0


	2.0			2.0		Net retail additions (withdrawals), excluding money market activity		(1.6	)		(1.2	)		(0.5	)		1.6			0.9

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

Page 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

								Revenues (1):
	3,663			3,591			2%	Premiums		1,203			1,190			1,219			1,234			1,210
	1,937			1,938			0%	Policy charges and fee income		717			699			719			505			713
	1,800			1,693			6%	Net investment income		593			562			582			593			625
	548			526			4%	Asset management fees, commissions and other income		156			177			166			187			195

	7,948			7,748			3%	Total revenues		2,669			2,628			2,686			2,519			2,743


								Benefits and Expenses (1):
	5,206			4,576			14%	Insurance and annuity benefits		1,507			1,570			1,634			1,950			1,622
	697			675			3%	Interest credited to policyholders’ account balances		228			226			227			233			237
	435			418			4%	Interest expense		142			140			142			146			147
	(503	)		(462	)		-9%	Deferral of acquisition costs		(166	)		(198	)		(162	)		(172	)		(169	)
	50			59			-15%	Amortization of acquisition costs		98			80			78			(111	)		83
	1,945			1,797			8%	General and administrative expenses		633			684			621			674			650

	7,830			7,063			11%	Total benefits and expenses		2,442			2,502			2,540			2,720			2,570


	118			685			-83%	Adjusted operating income (loss) before income taxes		227			126			146			(201	)		173

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

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


	Nine Months Ended September 30, 2016									Quarter Ended September 30, 2016
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance			Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		3,663			642			3,021			1,210			216			994
Policy charges and fee income		1,937			1,454			483			713			555			158
Net investment income		1,800			1,350			450			625			469			156
Asset management fees, commissions and other income		548			485			63			195			170			25

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


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

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


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


	Nine Months Ended September 30, 2015									Quarter Ended September 30, 2015
	Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance			Total U.S. Individual Life & Group Insurance Division			Individual Life			Group Insurance
Revenues (1):
Premiums		3,591			680			2,911			1,203			219			984
Policy charges and fee income		1,938			1,501			437			717			578			139
Net investment income		1,693			1,248			445			593			436			157
Asset management fees, commissions and other income		526			457			69			156			142			14

Total revenues		7,748			3,886			3,862			2,669			1,375			1,294


Benefits and Expenses (1):
Insurance and annuity benefits		4,576			1,680			2,896			1,507			525			982
Interest credited to policyholders’ account balances		675			480			195			228			165			63
Interest expense		418			411			7			142			140			2
Deferral of acquisition costs		(462	)		(453	)		(9	)		(166	)		(166	)		—
Amortization of acquisition costs		59			55			4			98			97			1
General and administrative expenses		1,797			1,177			620			633			431			202

Total benefits and expenses		7,063			3,350			3,713			2,442			1,192			1,250


Adjusted operating income before income taxes		685			536			149			227			183			44

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

Page 21

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

U.S. INDIVIDUAL LIFE AND GROUP INSURANCE DIVISION - INDIVIDUAL LIFE ANNUALIZED NEW BUSINESS PREMIUMS, ACCOUNT VALUE ACTIVITY, AND FACE AMOUNT IN FORCE

(in millions)


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

						ANNUALIZED NEW BUSINESS PREMIUMS (1) :

	150			152		Term life		51			52			48			50			52
	166			147		Guaranteed Universal life		59			73			51			61			54
	64			57		Other Universal life		23			32			20			23			21
	67			56		Variable life		25			22			26			25			16

	447			412		Total		158			179			145			159			143


						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	87			82		Prudential Agents		30			31			29			30			28
	360			330		Third party distribution		128			148			116			129			115

	447			412		Total		158			179			145			159			143


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	24,487			22,526		Beginning balance		23,734			23,922			24,487			24,437			24,747
	2,381			2,329		Premiums and deposits		762			890			809			821			751
	(748	)		(790	)	Surrenders and withdrawals		(246	)		(242	)		(251	)		(257	)		(240	)

	1,633			1,539		Net sales		516			648			558			564			511
	(384	)		(383	)	Benefit payments		(118	)		(109	)		(125	)		(121	)		(138	)

	1,249			1,156		Net flows		398			539			433			443			373
	68			897		Interest credited and other		31			296			(224	)		137			155
	294			345		Net transfers from separate account		106			87			99			93			102
	(1,098	)		(1,002	)	Policy charges		(350	)		(357	)		(358	)		(363	)		(377	)
	—			—		Acquisition		3			—			—			—			—

	25,000			23,922		Ending balance		23,922			24,487			24,437			24,747			25,000


						*Separate Account Liabilities:*
	27,027			27,888		Beginning balance		28,055			26,183			27,027			26,887			27,227
	1,080			989		Premiums and deposits		291			420			456			337			287
	(651	)		(643	)	Surrenders and withdrawals		(204	)		(239	)		(217	)		(222	)		(212	)

	429			346		Net sales		87			181			239			115			75
	(130	)		(102	)	Benefit payments		(26	)		(42	)		(51	)		(40	)		(39	)

	299			244		Net flows		61			139			188			75			36
	1,776			(911	)	Change in market value, interest credited and other		(1,598	)		1,020			(5	)		585			1,196
	(294	)		(345	)	Net transfers to general account		(106	)		(87	)		(99	)		(93	)		(102	)
	(679	)		(693	)	Policy charges		(229	)		(228	)		(224	)		(227	)		(228	)
	—			—		Acquisition		—			—			—			—			—

	28,129			26,183		Ending balance		26,183			27,027			26,887			27,227			28,129


						FACE AMOUNT IN FORCE (3):

						Term life		679,979			689,527			697,687			706,636			714,733
						Guaranteed Universal life		117,360			121,290			124,061			127,453			130,400
						Other Universal life		43,469			44,051			44,203			44,505			44,781
						Variable life		164,363			164,020			162,960			162,416			163,184

						Total		1,005,171			1,018,889			1,028,910			1,041,010			1,053,098

(1)	Excludes corporate-owned life insurance.

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

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

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(dollar amounts in millions)


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

				GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	285		179	Group life		38			25			232			24			29
	113		64	Group disability		19			5			79			21			13

	398		243	Total		57			30			311			45			42


				Future Policy Benefits (1) (2):
				Group life		1,994			2,185			2,103			2,124			2,065
				Group disability		11			3			29			21			11

				Total		2,005			2,188			2,132			2,145			2,076


				Policyholders’ Account Balances (1):
				Group life		8,234			8,359			8,271			8,367			8,497
				Group disability		200			210			216			240			208

				Total		8,434			8,569			8,487			8,607			8,705


				Separate Account Liabilities (1):
				Group life		23,646			23,292			24,339			23,816			24,839
				Group disability		—			—			—			—			—

				Total		23,646			23,292			24,339			23,816			24,839


				Group Life Insurance:
	3,089		2,958	Gross premiums, policy charges and fee income (3)		974			982			1,009			1,064			1,016
	2,906		2,799	Earned premiums, policy charges and fee income		926			932			955			998			953
	88.9%		89.9%	Benefits ratio (4)		88.6	%		87.1	%		89.4	%		88.6	%		88.6	%
	10.6%		10.7%	Administrative operating expense ratio		10.8	%		12.2	%		10.8	%		10.6	%		10.6	%
				Persistency ratio		92.0	%		91.3	%		96.1	%		95.8	%		95.3	%

				Group Disability Insurance:
	657		617	Gross premiums, policy charges and fee income (3)		213			196			216			222			219
	598		549	Earned premiums, policy charges and fee income		197			188			203			196			199
	80.0%		77.2%	Benefits ratio (5)		81.8	%		85.3	%		82.2	%		77.5	%		80.4	%
	31.5%		33.2%	Administrative operating expense ratio		32.7	%		36.9	%		31.9	%		31.1	%		31.4	%
				Persistency ratio		87.7	%		87.0	%		94.9	%		93.7	%		92.9	%

				Total Group Insurance (6):
	87.3%		87.8%	Benefits ratio		87.4	%		86.8	%		88.1	%		86.6	%		87.1	%

(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 88.6%, 90.8%, 89.4%, 87.1%, and 88.6% for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and 89.6% and 89.2% for year-to-date September 2016 and 2015, respectively.

(5)

Group Disability Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 80.4%, 47.9%, 82.2%, 85.3%, and 81.8% for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and 70.3.% and 72.5% for year-to-date September 2016 and 2015, respectively.

(6)

Group Insurance benefit ratios excluding market driven and discrete items. Benefits ratios including market driven and discrete items are 87.1%, 83.8%, 88.1%, 86.8%, and 87.4% for the three months ended September 30, 2016, June 30, 2016, March 31, 2016, December 31, 2015, and September 30, 2015, respectively, and 86.3% and 86.5% for year-to-date September 2016 and 2015, respectively.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

						DEFERRED POLICY ACQUISITION COSTS

						INDIVIDUAL ANNUITIES:
	4,916			5,376		Beginning balance		5,186			4,735			4,916			4,130			4,119
	321			325		Capitalization		104			105			100			117			104
	(350	)		(344	)	Amortization - operating results		(163	)		(121	)		(144	)		(122	)		(84	)
	(326	)		(653	)	Amortization - realized investment gains and losses		(399	)		178			(717	)		17			374
	(46	)		31		Impact of unrealized (gains) or losses on AFS securities		7			19			(25	)		(23	)		2
	—			—		Other		—			—			—			—			—

	4,515			4,735		Ending balance		4,735			4,916			4,130			4,119			4,515


						INDIVIDUAL LIFE INSURANCE:
	4,883			4,056		Beginning balance		4,652			4,683			4,883			4,727			4,773
	503			453		Capitalization		166			197			162			172			169
	(46	)		(55	)	Amortization - operating results		(97	)		(78	)		(77	)		113			(82	)
	(104	)		(8	)	Amortization - realized investment gains and losses		(22	)		9			(26	)		(80	)		2
	(396	)		237		Impact of unrealized (gains) or losses on AFS securities		(16	)		72			(215	)		(159	)		(22	)

	4,840			4,683		Ending balance		4,683			4,883			4,727			4,773			4,840


						GROUP INSURANCE:
	182			177		Beginning balance		183			182			181			181			179
	—			9		Capitalization		—			1			—			—			—
	(4	)		(4	)	Amortization - operating results		(1	)		(2	)		(1	)		(2	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	178			182		Ending balance		182			181			180			179			178


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,188			1,513		Beginning balance		1,377			1,176			1,188			916			893
	3			6		Capitalization		1			2			1			1			1
	(124	)		(117	)	Amortization - operating results		(56	)		(45	)		(51	)		(50	)		(23	)
	(47	)		(237	)	Amortization - realized investment gains and losses		(148	)		50			(216	)		29			140
	(8	)		11		Impact of unrealized (gains) or losses on AFS securities		2			5			(6	)		(3	)		1
	—			—		Other		—			—			—			—			—

	1,012			1,176		Ending balance		1,176			1,188			916			893			1,012

Page 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

								Revenues (1):
	11,534			10,537			9%	Premiums		3,385			3,307			3,696			3,899			3,939
	370			408			-9%	Policy charges and fee income		129			122			130			106			134
	3,553			3,279			8%	Net investment income		1,081			1,078			1,120			1,204			1,229
	314			469			-33%	Asset management fees, commissions and other income		155			164			98			134			82

	15,771			14,693			7%	Total revenues		4,750			4,671			5,044			5,343			5,384


								Benefits and Expenses (1):
	9,952			9,039			10%	Insurance and annuity benefits		2,904			2,833			3,173			3,397			3,382
	694			667			4%	Interest credited to policyholders’ account balances		219			213			227			230			237
	5			4			25%	Interest expense		2			1			2			1			2
	(1,324	)		(1,178	)		-12%	Deferral of acquisition costs		(382	)		(387	)		(426	)		(436	)		(462	)
	804			756			6%	Amortization of acquisition costs		249			233			260			273			271
	3,278			2,917			12%	General and administrative expenses		946			1,040			1,029			1,075			1,174

	13,409			12,205			10%	Total benefits and expenses		3,938			3,933			4,265			4,540			4,604


	2,362			2,488			-5%	Adjusted operating income before income taxes		812			738			779			803			780

(1)

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

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Nine Months Ended September 30, 2016									Quarter Ended September 30, 2016
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		11,534			5,640			5,894			3,939			1,882			2,057
Policy charges and fee income		370			256			114			134			97			37
Net investment income		3,553			1,460			2,093			1,229			513			716
Asset management fees, commissions and other income		314			153			161			82			41			41

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


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

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


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


	Nine Months Ended September 30, 2015									Quarter Ended September 30, 2015
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		10,537			5,100			5,437			3,385			1,643			1,742
Policy charges and fee income		408			257			151			129			85			44
Net investment income		3,279			1,303			1,976			1,081			434			647
Asset management fees, commissions and other income		469			263			206			155			88			67

Total revenues		14,693			6,923			7,770			4,750			2,250			2,500


Benefits and Expenses (1):
Insurance and annuity benefits		9,039			4,485			4,554			2,904			1,444			1,460
Interest credited to policyholders’ account balances		667			157			510			219			54			165
Interest expense		4			2			2			2			1			1
Deferral of acquisition costs		(1,178	)		(566	)		(612	)		(382	)		(178	)		(204	)
Amortization of acquisition costs		756			361			395			249			120			129
General and administrative expenses		2,917			1,266			1,651			946			411			535

Total benefits and expenses		12,205			5,705			6,500			3,938			1,852			2,086


Adjusted operating income before income taxes		2,488			1,218			1,270			812			398			414

(1)

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

Page 26

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


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

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	4,489		4,012	Japan, excluding Gibraltar Life		1,285		1,239		1,583		1,434		1,472
	6,008		5,588	Gibraltar Life		1,786		1,719		1,794		2,120		2,094
	1,407		1,345	All other countries		443		471		449		451		507

	11,904		10,945	Total		3,514		3,429		3,826		4,005		4,073


				Annualized new business premiums:
	635		505	Japan, excluding Gibraltar Life		160		164		237		190		208
	1,318		1,178	Gibraltar Life		408		370		409		449		460
	312		332	All other countries		103		116		98		99		115

	2,265		2,015	Total		671		650		744		738		783


				Annualized new business premiums by distribution channel:
	947		837	Life Planner Operations		263		280		335		289		323
	565		480	Gibraltar Life Consultants		162		150		161		204		200
	558		513	Banks		186		166		194		176		188
	195		185	Independent Agency		60		54		54		69		72

	2,265		2,015	Total		671		650		744		738		783

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

	4,564		4,408	Japan, excluding Gibraltar Life		1,425		1,364		1,677		1,451		1,436
	6,160		6,086	Gibraltar Life		1,969		1,870		1,921		2,175		2,064
	1,449		1,336	All other countries		461		492		480		465		504

	12,173		11,830	Total		3,855		3,726		4,078		4,091		4,004


				Annualized new business premiums:
	646		556	Japan, excluding Gibraltar Life		177		181		250		192		204
	1,334		1,229	Gibraltar Life		432		390		425		453		456
	319		323	All other countries		107		121		106		102		111

	2,299		2,108	Total		716		692		781		747		771


				Annualized new business premiums by distribution channel:
	965		879	Life Planner Operations		284		302		356		294		315
	573		507	Gibraltar Life Consultants		175		161		169		206		198
	562		529	Banks		194		172		199		177		186
	199		193	Independent Agency		63		57		57		70		72

	2,299		2,108	Total		716		692		781		747		771

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

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

Page 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


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

Face amount of individual policies in force at end of period (in billions) (1) (2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		313			316			321			324			329
Gibraltar Life		330			331			334			335			339
All other countries		115			118			119			120			121

Total		758			765			774			779			789


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,234			3,278			3,341			3,384			3,436
Gibraltar Life		7,146			7,146			7,150			7,141			7,170
All other countries		1,944			1,980			2,007			2,024			2,048

Total		12,324			12,404			12,498			12,549			12,654


International life insurance policy persistency:

Life Planner Operations:
13 months		92.6	%		92.8	%		93.0	%		93.1	%		93.0	%
25 months		85.5	%		85.4	%		85.6	%		85.6	%		86.2	%

Gibraltar Life (3):
13 months		92.6	%		92.9	%		93.2	%		93.3	%		93.4	%
25 months		83.4	%		84.0	%		84.8	%		85.3	%		85.5	%

Number of Life Planners at end of period:
Japan		3,478			3,528			3,650			3,653			3,776
All other countries		4,031			4,064			3,958			3,898			3,891

Total Life Planners		7,509			7,592			7,608			7,551			7,667


Gibraltar Life Consultants		8,593			8,805			8,781			8,734			8,790

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

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

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

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	September 30, 2016									December 31, 2015
	Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division					Total Portfolio		Closed Block Division		PFI Excluding Closed Block Division
	Total Portfolio		Closed Block Division		Amount		% of Total			Total Portfolio		Closed Block Division		Amount		% of Total
Fixed maturities:
Public, available-for-sale, at fair value		289,100		25,567		263,533		66.5	%		240,133		23,505		216,628		63.1	%
Public, held-to-maturity, at amortized cost		2,017		—		2,017		0.5	%		1,834		—		1,834		0.5	%
Private, available-for-sale, at fair value		53,937		14,763		39,174		9.9	%		50,057		14,290		35,767		10.4	%
Private, held-to-maturity, at amortized cost		454		—		454		0.1	%		474		—		474		0.1	%
Trading account assets supporting insurance liabilities, at fair value		21,828		—		21,828		5.5	%		20,522		—		20,522		6.0	%
Other trading account assets, at fair value		1,842		297		1,545		0.4	%		1,849		288		1,561		0.5	%
Equity securities, available-for-sale, at fair value		9,752		2,458		7,294		1.8	%		9,263		2,726		6,537		1.9	%
Commercial mortgage and other loans, at book value		51,652		9,650		42,002		10.6	%		50,257		9,771		40,486		11.8	%
Policy loans, at outstanding balance		12,031		4,696		7,335		1.8	%		11,657		4,790		6,867		2.0	%
Other long-term investments (1)		10,354		3,036		7,318		1.8	%		9,470		2,921		6,549		1.9	%
Short-term investments		5,221		680		4,541		1.1	%		7,717		1,467		6,250		1.8	%

Subtotal (2)		458,188		61,147		397,041		100.0	%		403,233		59,758		343,475		100.0	%

Invested assets of other entities and operations (3)		7,583		—		7,583					13,959		—		13,959

Total investments		465,771		61,147		404,624					417,192		59,758		357,434

Fixed Maturities by Credit Quality (2):


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

NAIC Rating (4)
1		189,748		37,312		386		226,674		85.2	%		166,400		21,997		1,271		187,126		85.6	%
2		28,715		3,255		234		31,736		11.9	%		24,238		2,260		1,044		25,454		11.6	%

Subtotal - High or Highest Quality Securities		218,463		40,567		620		258,410		97.1	%		190,638		24,257		2,315		212,580		97.2	%

3		5,125		279		139		5,265		2.0	%		3,870		320		149		4,041		1.8	%
4		1,851		129		85		1,895		0.7	%		1,591		142		59		1,674		0.8	%
5		123		26		4		145		0.1	%		176		67		3		240		0.1	%
6		254		28		1		281		0.1	%		199		11		1		209		0.1	%

Subtotal - Other Securities		7,353		462		229		7,586		2.9	%		5,836		540		212		6,164		2.8	%

Total		225,816		41,029		849		265,996		100.0	%		196,474		24,797		2,527		218,744		100.0	%


Private Fixed Maturities:
NAIC Rating (4)
1		11,119		922		66		11,975		30.2	%		10,950		786		174		11,562		31.9	%
2		21,126		1,612		335		22,403		56.5	%		19,493		1,438		501		20,430		56.3	%

Subtotal - High or Highest Quality Securities		32,245		2,534		401		34,378		86.7	%		30,443		2,224		675		31,992		88.2	%

3		3,464		148		76		3,536		8.9	%		3,215		88		143		3,160		8.7	%
4		962		32		37		957		2.4	%		741		8		41		708		2.0	%
5		544		20		50		514		1.3	%		239		11		9		241		0.7	%
6		247		46		11		282		0.7	%		168		9		3		174		0.4	%

Subtotal - Other Securities		5,217		246		174		5,289		13.3	%		4,363		116		196		4,283		11.8	%

Total		37,462		2,780		575		39,667		100.0	%		34,806		2,340		871		36,275		100.0	%

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

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

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

(4)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of September 30, 2016 and December 31, 2015, 718 securities with amortized cost of $3,205 million (fair value $3,342 million) and 938 securities with amortized cost of $4,253 million (fair value $4,325 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INVESTMENT PORTFOLIO COMPOSITION (1)

(in millions)


	September 30, 2016					December 31, 2015
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		136,017		78.8	%		109,257		77.6	%
Public, held-to-maturity, at amortized cost		2,017		1.2	%		1,834		1.3	%
Private, available-for-sale, at fair value		11,568		6.7	%		9,747		6.9	%
Private, held-to-maturity, at amortized cost		454		0.3	%		474		0.3	%
Trading account assets supporting insurance liabilities, at fair value		2,283		1.3	%		2,020		1.4	%
Other trading account assets, at fair value		470		0.3	%		647		0.5	%
Equity securities, available-for-sale, at fair value		2,816		1.6	%		2,660		1.9	%
Commercial mortgage and other loans, at book value		11,446		6.6	%		9,756		6.9	%
Policy loans, at outstanding balance		2,581		1.5	%		2,208		1.6	%
Other long-term investments (3)		2,677		1.5	%		1,742		1.3	%
Short-term investments		389		0.2	%		417		0.3	%

Total		172,718		100.0	%		140,762		100.0	%


	September 30, 2016					December 31, 2015
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		127,516		56.8	%		107,371		53.0	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		27,606		12.3	%		26,020		12.8	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Trading account assets supporting insurance liabilities, at fair value		19,545		8.7	%		18,502		9.1	%
Other trading account assets, at fair value		1,075		0.5	%		914		0.4	%
Equity securities, available-for-sale, at fair value		4,478		2.0	%		3,877		1.9	%
Commercial mortgage and other loans, at book value		30,556		13.6	%		30,730		15.2	%
Policy loans, at outstanding balance		4,754		2.1	%		4,659		2.3	%
Other long-term investments (3)		4,641		2.1	%		4,807		2.4	%
Short-term investments		4,152		1.9	%		5,833		2.9	%

Total		224,323		100.0	%		202,713		100.0	%

(1)	Excludes Closed Block Division.

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

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

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INVESTMENT RESULTS (1)

(in millions)


	Quarter Ended September 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.86	%		2,437			304			3.96	%		2,214			293
Equity securities		6.10	%		82			44			5.94	%		72			(36	)
Commercial mortgage and other loans		4.19	%		378			(7	)		4.47	%		378			(14	)
Policy loans		4.93	%		89			—			4.97	%		84			—
Short-term investments and cash equivalents		0.63	%		33			—			0.22	%		10			—
Other investments		8.65	%		185			315			7.10	%		150			1,313

Gross investment income before investment expenses		3.89	%		3,204			656			3.96	%		2,908			1,556
Investment expenses		-0.14	%		(106	)		—			-0.15	%		(98	)		—

Subtotal		3.75	%		3,098			656			3.81	%		2,810			1,556

Investment results of other entities and operations (3)					273			4						259			49
Less, investment income related to adjusted operating income reconciling items					(79	)								(54	)

Total					3,292			660						3,015			1,605


	Nine Months Ended September 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities		3.92	%		7,058			646			4.02	%		6,648			956
Equity securities		6.19	%		239			19			5.91	%		208			42
Commercial mortgage and other loans		4.31	%		1,139			1			4.48	%		1,094			(3	)
Policy loans		4.95	%		259			—			4.98	%		250			—
Short-term investments and cash equivalents		0.59	%		87			1			0.21	%		27			1
Other investments		4.90	%		307			3,168			6.47	%		408			2,446

Gross investment income before investment expenses		3.86	%		9,089			3,835			3.98	%		8,635			3,442
Investment expenses		-0.14	%		(309	)		—			-0.15	%		(288	)		—

Subtotal		3.72	%		8,780			3,835			3.83	%		8,347			3,442

Investment results of other entities and operations (3)					799			32						814			115
Less, investment income related to adjusted operating income reconciling items					(183	)								(167	)

Total					9,396			3,867						8,994			3,557

(1)	Excludes Closed Block Division.

(2)

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

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

(4)

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

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Quarter Ended September 30
	2016								2015
	Investment Income						Realized Gains / (Losses)		Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)		Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.04	%		898			244		3.22	%		797			257
Equity securities		5.19	%		22			53		5.33	%		19			13
Commercial mortgage and other loans		4.17	%		115			—		4.38	%		99			(3	)
Policy loans		3.99	%		26			—		3.89	%		21			—
Short-term investments and cash equivalents		0.52	%		2			—		0.28	%		1			—
Other investments (2)		3.41	%		25			324		3.56	%		24			249

Gross investment income before investment expenses		3.17	%		1,088			621		3.33	%		961			516
Investment expenses		-0.12	%		(43	)		—		-0.14	%		(40	)		—

Total		3.05	%		1,045			621		3.19	%		921			516


	Nine Months Ended September 30
	2016								2015
	Investment Income						Realized Gains / (Losses)		Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)		Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities		3.10	%		2,576			712		3.24	%		2,397			854
Equity securities		4.75	%		56			60		4.90	%		53			46
Commercial mortgage and other loans		4.25	%		329			7		4.49	%		290			3
Policy loans		3.96	%		71			—		3.89	%		62			—
Short-term investments and cash equivalents		0.64	%		6			—		0.25	%		3			—
Other investments (2)		4.65	%		99			1,215		5.87	%		112			29

Gross investment income before investment expenses		3.25	%		3,137			1,994		3.39	%		2,917			932
Investment expenses		-0.12	%		(122	)		—		-0.14	%		(121	)		—

Total		3.13	%		3,015			1,994		3.25	%		2,796			932

(1)

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

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended September 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.57	%		1,539			60			4.56	%		1,417			36
Equity securities		6.51	%		60			(9	)		6.21	%		53			(49	)
Commercial mortgage and other loans		4.20	%		263			(7	)		4.51	%		279			(11	)
Policy loans		5.44	%		63			—			5.48	%		63			—
Short-term investments and cash equivalents		0.64	%		31			—			0.22	%		9			—
Other investments		11.33	%		160			(9	)		8.74	%		126			1,064

Gross investment income before investment expenses		4.41	%		2,116			35			4.38	%		1,947			1,040
Investment expenses		-0.15	%		(63	)		—			-0.16	%		(58	)		—

Total		4.26	%		2,053			35			4.22	%		1,889			1,040


	Nine Months Ended September 30
	2016									2015
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (3)			Amount			Realized Gains / (Losses)			Yield (3)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities		4.61	%		4,482			(66	)		4.65	%		4,251			102
Equity securities		6.83	%		183			(41	)		6.36	%		155			(4	)
Commercial mortgage and other loans		4.33	%		810			(6	)		4.48	%		804			(6	)
Policy loans		5.46	%		188			—			5.50	%		188			—
Short-term investments and cash equivalents		0.58	%		81			1			0.21	%		24			1
Other investments		5.02	%		208			1,953			6.73	%		296			2,417

Gross investment income before investment expenses		4.28	%		5,952			1,841			4.37	%		5,718			2,510
Investment expenses		-0.16	%		(187	)		—			-0.16	%		(167	)		—

Total		4.12	%		5,765			1,841			4.21	%		5,551			2,510

(1)	Excludes Closed Block Division.

(2)

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

(3)

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


	Third Quarter 2016															Third Quarter 2015
	Insurance and Annuity Benefits			Interest Credited to Policyholders’ Account Balances			Amortization of Acquisition Costs			General and Administrative Expenses			Pre-Tax Adjusted Operating Income			Asset Management Fees, Commissions and Other Income			Insurance and Annuity Benefits			Interest Credited to Policyholders’ Account Balances		Amortization of Acquisition Costs		Pre-Tax Adjusted Operating Income
Individual Annuities:
Market performance and experience true-ups		(67	)		(20	)		(49	)		(3	)		139			—			43			11		22		(76	)
Charge for potential contract cancellations		—			—			—			—			—			(3	)		15			—		10		(28	)
Total of above items		(67	)		(20	)		(49	)		(3	)		139			(3	)		58			11		32		(104	)
Reported amount		38			72			84			523						319			154			106		163
Amount excluding impact of items indicated above		105			92			133			526						322			96			95		131

Retirement:
Costs relating to legal matters		—			—			—			34			(34	)		—			—			—		—		—
Reserve refinements		—			—			—			—			—			—			(20	)		—		—		20
Total of above items		—			—			—			34			(34	)		—			(20	)		—		—		—
Reported amount		—			—			—			296						—			1,062			—		—
Amount excluding impact of items indicated above		—			—			—			262						—			1,082			—		—

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


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

Revenues:

Premiums		8,934			—			—		—			598		103			—			9,635			5,273			—			—			—			609			103			—			5,985
Policy charges and fee income		1,559			(19	)		—		—			—		—			—			1,540			1,552			72			—			—			—			—			—			1,624
Net investment income		3,292			(8	)		—		—			702		87			—			4,073			3,015			—			—			—			672			54			—			3,741
Realized investment gains (losses), net		115			529			—		—			153		16			—			813			244			1,326			—			—			95			35			—			1,700
Asset management fees, commissions and other income		1,150			(298	)		37		—			28		3			(20	)		900			994			(209	)		(228	)		—			(8	)		(2	)		2			549

Total revenues		15,050			204			37		—			1,481		209			(20	)		16,961			11,078			1,189			(228	)		—			1,368			190			2			13,599


Benefits and Expenses:

Insurance and annuity benefits		9,254			33			—		—			1,307		130			—			10,724			5,640			103			—			—			1,110			162			—			7,015
Interest credited to policyholders’ account balances		932			(140	)		—		(1	)		34		(1	)		—			824			915			149			—			(258	)		34			—			—			840
Interest expense		314			—			—		—			1		1			—			316			339			—			—			—			—			1			—			340
Deferral of acquisition costs		(731	)		—			—		—			—		—			—			(731	)		(650	)		—			—			—			—			—			—			(650	)
Amortization of acquisition costs		444			(339	)		—		—			10		—			—			115			509			404			—			—			9			—			—			922
General and administrative expenses		3,279			1			—		—			98		23			(3	)		3,398			2,862			95			—			—			107			19			—			3,083

Total benefits and expenses		13,492			(445	)		—		(1	)		1,450		153			(3	)		14,646			9,615			751			—			(258	)		1,260			182			—			11,550



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

Revenues:

Premiums		20,657			—			—		—			1,913		297			—			22,867			17,968			—			—			—			1,945			301			—			20,214
Policy charges and fee income		4,358			57			—		—			—		—			—			4,415			4,489			(7	)		—			—			—			—			—			4,482
Net investment income		9,396			(23	)		—		—			1,953		206			—			11,532			8,994			—			—			—			2,020			167			—			11,181
Realized investment gains (losses), net		427			3,346			—		—			260		94			—			4,127			702			2,801			—			—			633			54			—			4,190
Asset management fees, commissions and other income		3,316			(880	)		361		—			30		5			(44	)		2,788			3,232			(82	)		(365	)		—			14			1			(4	)		2,796

Total revenues		38,154			2,500			361		—			4,156		602			(44	)		45,729			35,385			2,712			(365	)		—			4,612			523			(4	)		42,863


Benefits and Expenses:

Insurance and annuity benefits		22,051			305			—		—			3,794		458			—			26,608			18,781			51			—			—			4,014			478			—			23,324
Interest credited to policyholders’ account balances		2,753			53			—		262			101		(1	)		—			3,168			2,706			238			—			(295	)		101			(1	)		—			2,749
Interest expense		996			—			—		—			2		2			—			1,000			980			—			—			—			—			2			—			982
Deferral of acquisition costs		(2,134	)		—			—		—			—		—			—			(2,134	)		(1,961	)		—			—			—			—			—			—			(1,961	)
Amortization of acquisition costs		1,204			511			—		—			29		—			—			1,744			1,188			630			—			—			28			—			—			1,846
General and administrative expenses		9,344			284			—		—			304		67			(44	)		9,955			8,642			18			—			—			331			70			(64	)		8,997

Total benefits and expenses		34,214			1,153			—		262			4,230		526			(44	)		40,341			30,336			937			—			(295	)		4,474			549			(64	)		35,937

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

(2)	U.S. generally accepted accounting principles

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

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

(in millions)


	Three Months Ended December 31, 2015																								Three Months Ended March 31, 2016
				Reconciling Items																								Reconciling Items
	Adjusted Operating Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net			Change in experience- rated contract- holder liabilities due to asset value changes			Closed Block division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)			Adjusted Opera- ting Income basis (1)			Total realized invest- ment gains (losses), net, and related charges and adjust- ments			Invest- ment gains (losses) on trading account assets suppor- ting insu- rance liabi- lities, net		Change in experience- rated contract- holder liabi- lities due to asset value changes		Closed Block division			Other divested businesses		Equity in earnings of operating joint ventures and earnings attribu- table to non- controlling interests			U.S. GAAP (2)

Revenues:

Premiums		7,495			—			—			—			724			88			—			8,307			5,577			—			—		—		622			98		—			6,297
Policy charges and fee income		1,514			(24	)		—			—			—			—			—			1,490			1,511			88			—		—		—			—		—			1,599
Net investment income		2,964			1			—			—			633			50			—			3,648			3,017			(7	)		—		—		612			48		—			3,670
Realized investment gains (losses), net		185			(527	)		—			—			200			(23	)		—			(165	)		174			1,758			—		—		(98	)		47		—			1,881
Asset management fees, commissions and other income		1,087			65			(159	)		—			(9	)		—			(8	)		976			1,013			(333	)		216		—		(7	)		1		(8	)		882

Total revenues		13,245			(485	)		(159	)		—			1,548			115			(8	)		14,256			11,292			1,506			216		—		1,129			194		(8	)		14,329


Benefits and Expenses:

Insurance and annuity benefits		7,917			(12	)		—			—			1,481			129			—			9,515			5,984			119			—		—		1,054			140		—			7,297
Interest credited to policyholders’ account balances		879			(47	)		—			(138	)		34			2			—			730			907			216			—		130		33			—		—			1,286
Interest expense		322			—			—			—			1			1			—			324			325			—			—		—		1			1		—			327
Deferral of acquisition costs		(691	)		—			—			—			—			—			—			(691	)		(685	)		—			—		—		—			—		—			(685	)
Amortization of acquisition costs		443			(178	)		—			—			9			—			—			274			479			712			—		—		11			—		—			1,202
General and administrative expenses		3,193			(52	)		—			—			103			23			(6	)		3,261			2,957			121			—		—		103			22		(33	)		3,170

Total benefits and expenses		12,063			(289	)		—			(138	)		1,628			155			(6	)		13,413			9,967			1,168			—		130		1,202			163		(33	)		12,597



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

Revenues:

Premiums		6,146			—			—			—			693			96			—			6,935
Policy charges and fee income		1,288			(12	)		—			—			—			—			—			1,276
Net investment income		3,087			(8	)		—			—			639			71			—			3,789
Realized investment gains (losses), net		138			1,059			—			—			205			31			—			1,433
Asset management fees, commissions and other income		1,153			(249	)		108			—			9			1			(16	)		1,006

Total revenues		11,812			790			108			—			1,546			199			(16	)		14,439


Benefits and Expenses:

Insurance and annuity benefits		6,813			153			—			—			1,433			188			—			8,587
Interest credited to policyholders’ account balances		914			(23	)		—			133			34			—			—			1,058
Interest expense		357			—			—			—			—			—			—			357
Deferral of acquisition costs		(718	)		—			—			—			—			—			—			(718	)
Amortization of acquisition costs		281			138			—			—			8			—			—			427
General and administrative expenses		3,108			162			—			—			103			22			(8	)		3,387

Total benefits and expenses		10,755			430			—			133			1,578			210			(8	)		13,098

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

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

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

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

2. After-tax adjusted operating income:

Adjusted operating income before taxes, as defined above, less the income tax effect applicable to adjusted operating income before taxes.

3. Annualized New Business Premiums:

4. Assets Under Management:

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

5. Prudential Financial, Inc. Equity:

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

6. Book value per share of Common Stock:

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

7. Borrowings - Capital Debt:

Borrowings that are or will be used for capital requirements at Prudential Financial, Inc as well as borrowings invested in equity or debt securities of direct or indirect subsidiaries of Prudential Financial, Inc., and subsidiary borrowings, utilized for capital requirements.

8. Borrowings - Operating Debt - Investment Related:

Debt issued to finance specific investment assets or portfolios of investment assets, including institutional spread lending investment portfolios as well as institutional and insurance company portfolio cash flow timing differences.

9. Borrowings - Operating Debt - Specified Businesses:

Borrowings primarily associated with the individual annuity and asset management businesses.

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

KEY DEFINITIONS AND FORMULAS

10. Client Assets:

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

11. Divested Businesses:

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

12. Earned Premiums:

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

13. Full Service Retirement:

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

14. Full Service Stable Value:

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

15. General Account:

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

16. Gibraltar Life:

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

17. Gibraltar Life Consultants:

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

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

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

19. Group Insurance Benefits Ratios:

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

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

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

21. Individual Annuities - Net Amounts at Risk:

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

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

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

KEY DEFINITIONS AND FORMULAS

22. Insurance and Annuity Benefits:

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

23. International Life Planners:

Captive insurance agents in our Life Planner Operations.

24. Non-recourse and Limited-recourse Debt:

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

25. Policy Persistency - Group Insurance:

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

26. Policy Persistency - International Insurance:

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

27. Prudential Agents:

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

28. Prudential Agent productivity:

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

29. Separate Accounts:

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

30. Wrap-Fee Products:

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

Page 39

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2016

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of November 2, 2016


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

CREDIT RATINGS:
as of November 2, 2016

Prudential Financial, Inc.:
Short-Term Borrowings	AMB-1	A-1	P-2	F2
Long-Term Senior Debt	a-	A	Baa1	BBB+
Junior Subordinated Long-Term Debt	bbb	BBB+	Baa2	BBB-

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

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

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

*	NR indicates not rated.

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

INVESTOR INFORMATION:


Corporate Offices:		Investor Information Hotline:

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

Common Stock:

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

Page 40

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