Form 8-K PRUDENTIAL FINANCIAL For: Nov 07

November 7, 2018 4:22 PM

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 7, 2018

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:

☐

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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 2018 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 2018.

Conference Call and Related Materials. Members of the Company’s senior management will hold a conference call on Thursday, November 8, 2018 at 11:00 A.M. ET, to discuss the Company’s third quarter 2018 results. Related materials are available on the Company’s Investor Relations website at www.investor.prudential.com.

Investors and others should note that the Company routinely uses its Investor Relations website to post presentations to investors and other important information, including information that may be deemed material to investors. Accordingly, the Company encourages investors and others interested in the Company to review the information that it shares at www.investor.prudential.com. Interested parties may register to receive automatic email alerts when presentations and other information are posted to the Investor Relations website by clicking on “Subscribe to Email Alerts” at www.investor.prudential.com and following the instructions provided.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Description

99.1		News release of Prudential Financial, Inc., dated November 7, 2018, announcing third quarter 2018 results (furnished and not filed).

99.2		Quarterly Financial Supplement for Prudential Financial, Inc. for third quarter 2018 (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 7, 2018


PRUDENTIAL FINANCIAL, INC.

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

Exhibit 99.1

LOGO

November 7, 2018

Prudential Financial, Inc. Announces

Third Quarter 2018 Results

●

Net income attributable to Prudential Financial of $1.672 billion or $3.90 per Common share versus $2.238 billion or $5.09 per share for year-ago quarter.

●

After-tax adjusted operating income of $1.346 billion or $3.15 per Common share versus $1.323 billion or $3.01 per share for year-ago quarter.

●

Notable items resulted in a net charge to net income and after-tax adjusted operating income of $5 million or $0.01 per Common share, as discussed later in this release.

John Strangfeld, Chairman and CEO, commented on results:

“We generated an annualized adjusted operating return on equity that remained above our 12-13% target and produced positive growth metrics across our businesses. Our strong cash flows and capital position enabled us to return $755 million to shareholders in the third quarter through dividends and share repurchases.

During the quarter, we launched several additional cross-business initiatives using technology to unlock financial opportunity for more people. One example is the recent launch of LINK by Prudential, our online tool that allows individuals across a broader financial spectrum to set goals, receive personalized advice and take action. As we transition to the next generation of Prudential’s leadership, I remain confident in our ability to generate competitive financial performance and a positive social impact through these and other strategic efforts.”


OTHER FINANCIAL HIGHLIGHTS ($ millions, except per share)	3Q:18		3Q:17
Book value per share of Common Stock		$110.78		$116.70
Adjusted book value per share of Common Stock		$95.20		$85.03
Common Stock share repurchases		$375		$313
Common Stock dividends		$380		$324
Common Stock dividends per share		$0.90		$0.75
Parent company highly liquid assets		$5,161		$4,390

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 2


NOTABLE ITEMS ($ millions, pre-tax)	3Q:18		3Q:17
Notable Items included in Adjusted Operating Income:
Updated estimates of Individual Annuities profitability driven by market performance versus assumptions		$(36)		$48
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(35)		$15
Underwriting experience above / (below) average expectations		$65		$50
(Higher) / lower than typical expenses		$0		$(35)
Total Notable Items included in Adjusted Operating Income		$(6)		$78

NEWARK, N.J. – Prudential Financial, Inc. (NYSE: PRU) today reported third quarter results. Net income attributable to Prudential Financial, Inc., was $1.672 billion ($3.90 per Common share) for the third quarter of 2018, compared to $2.238 billion ($5.09 per Common share) for the third quarter of 2017. After-tax adjusted operating income was $1.346 billion ($3.15 per Common share) for the third quarter of 2018, compared to $1.323 billion ($3.01 per Common share) for the third quarter of 2017. The adjusted operating income effective tax rate in the third quarter was 19.3 percent compared to 25.8 percent in the year-ago quarter. The lower effective tax rate primarily reflects the reduction in the federal income tax rate and the company’s estimate of its full year 2018 adjusted operating income effective tax rate of approximately 21 percent.

Consolidated adjusted operating income, adjusted book value and adjusted operating return on equity are non-GAAP measures. These measures are discussed later in this press release under “Forward-Looking Statements and Non-GAAP Measures” and reconciliations to the most comparable GAAP measures are provided in the tables that accompany this release.

RESULTS OF ONGOING OPERATIONS

The Company’s ongoing operations include PGIM, U.S. Workplace Solutions, U.S. Individual Solutions, International Insurance, and Corporate & Other Operations. In the following business-level discussion, adjusted operating income refers to pre-tax results.

PGIM

PGIM, the Company’s global investment management businesses, reported adjusted operating income of $230 million for the current quarter, compared to $259 million in the year-ago quarter.

PGIM ($ millions)

3Q:18

3Q:17

Adjusted operating income

$230

$259

The decrease of $29 million from the year-ago quarter reflects a $34 million lower contribution from other related revenues, net of associated expenses, which amounted to $31 million for the current quarter, and higher expenses supporting business growth. This decrease was partially offset by higher asset management fees, reflecting an increase in assets under management from net inflows and equity market appreciation.

PGIM assets under management of $1.175 trillion includes a record-high $629 billion of unaffiliated third-party institutional and retail assets under management. Unaffiliated third-party net inflows, excluding money market, totaled $8.7 billion for the current quarter driven by new and existing institutional client mandates and retail fixed income flows.

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 3

U.S. Workplace Solutions

U.S. Workplace Solutions, consisting of the Retirement and Group Insurance segments, reported adjusted operating income of $298 million for the third quarter of 2018, compared to $309 million in the year-ago quarter.


RETIREMENT SEGMENT ($ millions)	3Q:18		3Q:17
Adjusted operating income		$239		$248
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(15)		$(5)
Underwriting experience above / (below) average expectations		$(15)		$0

The Retirement segment reported adjusted operating income of $239 million for the current quarter, compared to $248 million in the year-ago quarter. Excluding the notable items above, results increased $16 million from the year-ago quarter reflecting a higher contribution from net investment spread results and an increase in underwriting income driven by business growth.

Retirement account values were a record high $447 billion as of September 30, 2018, up 7% from a year earlier, reflecting positive net flows and market appreciation over the past four quarters. Net flows in the current quarter totaled $6 billion with $3 billion from Full Service and $3 billion from Institutional Investment Products, primarily from pension risk transfer transactions.


GROUP INSURANCE SEGMENT ($ millions)	3Q:18		3Q:17
Adjusted operating income		$59		$61
Notable items included above:
Underwriting experience above / (below) average expectations		$5		$10

The Group Insurance segment reported adjusted operating income of $59 million in the current quarter, compared to $61 million in the year-ago quarter. Excluding the notable items above, results increased $3 million from the year-ago quarter reflecting more favorable underwriting results, including business growth, partially offset by higher expenses.

Group Insurance earned premiums, policy charges and fees of $1.3 billion in the current quarter were up 6% from the year-ago quarter.

U.S. Individual Solutions

U.S. Individual Solutions, consisting of the Individual Annuities and Individual Life segments, reported adjusted operating income of $624 million for the third quarter of 2018, compared to $727 million in the year-ago quarter.

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 4


INDIVIDUAL ANNUITIES SEGMENT ($ millions)	3Q:18		3Q:17
Adjusted operating income		$454		$577
Notable items included above:
Impact from updated estimates of profitability driven by market performance versus assumptions		$(36)		$48
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$0		$5

The Individual Annuities segment reported adjusted operating income of $454 million in the current quarter, compared to $577 million in the year-ago quarter. Excluding the notable items above, results decreased $34 million from the year-ago quarter reflecting a higher cost of hedging, higher distribution expenses due to increased sales and lower fee income reflecting maturation of the block and the product diversification strategy.

Individual Annuities account values were $166 billion as of September 30, 2018, roughly flat from a year earlier, as market appreciation offset net outflows over the past four quarters. Individual Annuities gross sales were $2.2 billion in the current quarter, up 69% from the year-ago quarter, as customers have reacted favorably to pricing actions.


INDIVIDUAL LIFE SEGMENT ($ millions)	3Q:18		3Q:17
Adjusted operating income		$170		$150
Notable items included above:
Underwriting experience above / (below) average expectations		$65		$20
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(5)		$0
(Higher) / lower than typical expenses		$0		$5

The Individual Life segment reported adjusted operating income of $170 million for the current quarter, compared to $150 million in the year-ago quarter. Excluding the notable items above, results decreased $15 million from the year-ago quarter primarily reflecting the effects of the annual assumption review process on expected underwriting experience.

Individual Life sales of $163 million in the current quarter were up 15% from the year-ago quarter, reflecting higher variable life and other universal life sales partially offset by lower guaranteed universal life sales.

International Insurance

International Insurance, consisting of Life Planner Operations and Gibraltar Life & Other Operations, reported adjusted operating income of $890 million for the third quarter of 2018, compared to $799 million in the year-ago quarter.

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 5


LIFE PLANNER OPERATIONS ($ millions)	3Q:18		3Q:17
Adjusted operating income		$449		$373
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$5		$10
Underwriting experience above / (below) average expectations		$0		$10
(Higher) / lower than typical expenses		$0		$(40)

The Life Planner Operations reported adjusted operating income of $449 million for the current quarter, compared to $373 million in the year-ago quarter. Excluding the notable items above, results increased $51 million from the year-ago quarter reflecting business growth and the timing of expenses partially offset by lower net investment spread results driven by low interest rates in Japan.

Life Planner Operations constant dollar basis sales of $299 million in the current quarter were up 11% from the year-ago quarter, primarily reflecting higher sales of U.S. dollar-denominated products in our Japan operations.


GIBRALTAR LIFE & OTHER OPERATIONS ($ millions)	3Q:18		3Q:17
Adjusted operating income		$441		$426
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(20)		$5
Underwriting experience above / (below) average expectations		$10		$10

The Gibraltar Life & Other Operations reported adjusted operating income of $441 million for the current quarter, compared to $426 million in the year-ago quarter. Excluding the notable items above, results increased $40 million from the year-ago quarter reflecting business growth and a higher contribution from investment spread resulting from U.S. dollar denominated product sales.

Gibraltar Life & Other Operations constant dollar basis sales of $350 million in the current quarter were down 13% from the year-ago quarter reflecting competitive pressures in the Bank Channel.

Corporate & Other Operations

Corporate & Other Operations reported a loss, on an adjusted operating income basis, of $374 million in the third quarter of 2018, compared to a loss of $310 million in the year-ago quarter.

CORPORATE & OTHER OPERATIONS ($ millions)

3Q:18

3Q:17

Adjusted operating income

$(374)

$(310)

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 6

The increased loss of $64 million from the year-ago quarter reflects higher net expenses in the current quarter and lower net investment income partially offset by higher income from the qualified pension plan.

ASSETS UNDER MANAGEMENT

Assets under management amounted to $1.410 trillion at September 30, 2018, compared to $1.366 trillion a year earlier.

NET INCOME AND INVESTMENT PORTFOLIO

Net income attributable to Prudential Financial, Inc. amounted to $1.672 billion for the third quarter of 2018, compared to $2.238 billion for the year-ago quarter.

Current quarter net income includes $177 million of pre-tax net realized investment gains and related charges and adjustments. The foregoing net gains include net pre-tax gains of $230 million from general portfolio and related activities and net pre-tax gains of $182 million from products that contain embedded derivatives or guarantees and associated hedging activities. The foregoing gains were partially offset by pre-tax losses of $210 million primarily related to derivatives used for risk management including foreign currency and asset and liability duration management and other risk mitigation activities, and $25 million from impairments and sales of credit-impaired investments.

Net income for the current quarter reflects pre-tax increases of $10 million in recorded asset values and $21 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 $30 million from divested businesses.

Net income for the year-ago quarter included $1.164 billion of pre-tax net realized investment gains and related charges and adjustments. The foregoing net gains include net pre-tax gains of $1.049 billion from products that contain embedded derivatives or guarantees and associated derivative portfolios that are part of a hedging program related to the risks of these products, largely driven by the impact of widening credit spreads on our risk of non-performance and favorable equity markets. The year-ago quarter also included pre-tax gains of $445 million from general portfolio and related activities. The foregoing gains were partially offset by pre-tax losses of $307 million primarily related to derivatives used in risk management activities including foreign currency and asset and liability duration management and $23 million from impairments and sales of credit-impaired investments.

FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES

Certain of the statements included in this release, including the full year 2018 adjusted operating income effective tax rate, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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. Prudential Financial, Inc.’s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements can be found in the “Risk Factors” and “Forward-Looking Statements” sections included in Prudential Financial, Inc.’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Prudential Financial, Inc.’s actual full year 2018 adjusted operating income effective tax rate may be affected by a number of factors including its earnings and the tax liabilities and benefits it incurs. Prudential Financial, Inc. does not undertake to update any particular forward-looking statement included in this document.

Consolidated adjusted operating income, adjusted book value and adjusted operating return on equity are non-GAAP measures. Reconciliations to the most directly comparable GAAP measures are included in this release.

Adjusted operating income is the measure used by the Company to evaluate segment performance and to allocate resources. 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

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 7

credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market opportunities as well as our tax and capital profile.

Realized investment gains (losses) within certain of our businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating income generally excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset-liability management program related to the risk of those products. However, the effectiveness of our hedging program will ultimately be reflected in adjusted operating income over time. Adjusted operating income also excludes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are designated as trading. Additionally, adjusted operating income excludes the changes in fair value of equity securities that are recorded in net income beginning on January 1, 2018 as a result of the adoption of ASU 2016-01.

Adjusted operating income also excludes investment gains and losses on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes, because these recorded changes in asset and liability values are expected to ultimately accrue to contractholders. In addition, adjusted operating income excludes the results of divested businesses, which are not relevant to our ongoing operations. 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. The tax effect associated with pre-tax adjusted operating income is based on applicable IRS and foreign tax regulations inclusive of pertinent adjustments.

Adjusted book value is calculated as total equity (GAAP book value) excluding accumulated other comprehensive income (loss), the cumulative effect of foreign currency exchange rate remeasurements and currency translation adjustments corresponding to realized investment gains and losses, and as of December 31, 2017 certain deferred taxes resulting from the change in the U.S. tax rate enacted with the Tax Cuts and Jobs Act. These items are excluded in order to highlight the book value attributable to our core business operations separate from the portion attributable to external and potentially volatile capital and currency market conditions.

Adjusted operating return on equity is equal to the annualized year-to-date after-tax adjusted operating income divided by the average adjusted book value. Return on equity based on GAAP balances is calculated using after-tax net income and equity.

We believe that our use of these non-GAAP measures helps investors understand and evaluate the Company’s performance and financial position. 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. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of the items described above. Adjusted book value augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations separate from the portion that is affected by capital and currency market conditions, and by isolating the accounting impact associated with insurance liabilities that are generally not marked to market and the supporting investments that are marked to market through accumulated other comprehensive income under GAAP. Adjusted return on equity is a useful measure of the operating return the Company achieves in relation to the capital available to our businesses. However, these non-GAAP measures are not substitutes for income, equity and return on equity determined in accordance with GAAP, and the adjustments made to derive these measures are important to an understanding of our overall results of operations and financial position. The schedules accompanying this release provide reconciliations of non-GAAP measures with the corresponding measures calculated using 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, 2017, 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 website at www.investor.prudential.com.

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Prudential Financial, Inc. Third Quarter 2018 Earnings Release		Page 8

EARNINGS CONFERENCE CALL

Members of Prudential’s senior management will host a conference call on Thursday, November 8, 2018, at 11 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 website at www.investor.prudential.com. Please log on 15 minutes early in the event necessary software needs to be downloaded. The call will remain on the Investor Relations website for replay through November 23. 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) 332-0226 (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 2 p.m. on November 8, through November 15, dial (800) 475-6701 (domestic callers) or (320) 365-3844 (international callers). The access code for the replay is 439435.

LOGO

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of September 30, 2018, 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 news.prudential.com.

MEDIA CONTACT: Laura Burke, (973) 802-9489, [email protected]

Financial Highlights

(in millions, unaudited)


	Three Months Ended September 30						Nine Months Ended September 30
	2018			2017			2018			2017
Income Statement Data:
Net income attributable to Prudential Financial, Inc.	$	1,672		$	2,238		$	3,232		$	4,098
Income attributable to noncontrolling interests		3			3			7			11

Net income		1,675			2,241			3,239			4,109

Less: Earnings attributable to noncontrolling interests		3			3			7			11

Income attributable to Prudential Financial, Inc.		1,672			2,238			3,232			4,098

Less: Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		18			17			55			47

Income (after-tax) before equity in earnings of operating joint ventures		1,654			2,221			3,177			4,051

Less: Reconciling Items:
Realized investment gains, net, and related charges and adjustments		177			1,164			518			523
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		10			85			(586	)		330
Change in experience-rated contractholder liabilities due to asset value changes		(21	)		(31	)		482			(188	)
Divested businesses:
Closed Block Division		18			33			(22	)		49
Other divested businesses		12			10			(1,586	)		51
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(26	)		(24	)		(75	)		(66	)

Total reconciling items, before income taxes		170			1,237			(1,269	)		699

Less: Income taxes, not applicable to adjusted operating income		(138	)		339			(462	)		127

Total reconciling items, after income taxes		308			898			(807	)		572

After-tax adjusted operating income (1)		1,346			1,323			3,984			3,479

Income taxes, applicable to adjusted operating income		322			461			1,066			1,193

Adjusted operating income before income taxes (1)	$	1,668		$	1,784		$	5,050		$	4,672

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
	2018			2017			2018			2017
Earnings per share of Common Stock (diluted):

Net income attributable to Prudential Financial, Inc.	$	3.90		$	5.09		$	7.51		$	9.29
Less: Reconciling Items:
Realized investment gains, net, and related charges and adjustments		0.42			2.68			1.21			1.20
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		0.02			0.20			(1.37	)		0.75
Change in experience-rated contractholder liabilities due to asset value changes		(0.05	)		(0.07	)		1.13			(0.43	)
Divested businesses:
Closed Block Division		0.04			0.08			(0.05	)		0.11
Other divested businesses		0.03			0.02			(3.71	)		0.12
Difference in earnings allocated to participating unvested share-based payment awards		(0.01	)		(0.03	)		0.02			(0.02	)

Total reconciling items, before income taxes		0.45			2.88			(2.77	)		1.73
Less: Income taxes, not applicable to adjusted operating income		(0.30	)		0.80			(1.04	)		0.33

Total reconciling items, after income taxes		0.75			2.08			(1.73	)		1.40

After-tax adjusted operating income	$	3.15		$	3.01		$	9.24		$	7.89


Weighted average number of outstanding Common shares (basic)		416.2			426.2			419.2			428.1

Weighted average number of outstanding Common shares (diluted)		424.7			435.0			427.8			437.1

Earnings calculation, per share of Common Stock:

Net income attributable to Prudential Financial, Inc.	$	1,672		$	2,238		$	3,232		$	4,098
Earnings related to interest, net of tax, on exchangeable surplus notes		5			4			16			13
Less: Earnings allocated to participating unvested share-based payment awards		19			27			37			50

Net income attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation	$	1,658		$	2,215		$	3,211		$	4,061


After-tax adjusted operating income (1)	$	1,346		$	1,323		$	3,984		$	3,479
Earnings related to interest, net of tax, on exchangeable surplus notes		5			4			16			13
Less: Earnings allocated to participating unvested share-based payment awards		15			16			45			42

After-tax adjusted operating income for earnings per share of Common Stock calculation (1)	$	1,336		$	1,311		$	3,955		$	3,450


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

GAAP book value (total PFI equity) at end of period (7)	$	46,725		$	50,540
Less: Accumulated other comprehensive income (AOCI)		9,150			16,598

GAAP book value excluding AOCI (7)		37,575			33,942
Less: Cumulative effect of foreign exchange rate remeasurement and currency translation adjustments corresponding to realized gains/losses		(2,509	)		(2,758	)

Adjusted book value (7)		40,084			36,700

Number of diluted shares at end of period (2)		426.3			431.6


GAAP book value per Common share - diluted (3)(7)		110.78			116.70
GAAP book value excluding AOCI per share - diluted (4)(7)		89.32			78.64
Adjusted book value per Common share - diluted (4)(7)		95.20			85.03

Adjusted operating income before income taxes, by Segment (1):
PGIM	$	230		$	259		$	716		$	673

Total PGIM Division		230			259			716			673

Retirement		239			248			833			953
Group Insurance		59			61			196			231

Total U.S. Workplace Solutions Division		298			309			1,029			1,184

Individual Annuities		454			577			1,480			1,657
Individual Life		170			150			249			(289	)

Total U.S. Individual Solutions Division		624			727			1,729			1,368

International Insurance		890			799			2,530			2,421

Total International Insurance Division		890			799			2,530			2,421

Corporate and Other operations		(374	)		(310	)		(954	)		(974	)

Adjusted operating income before income taxes		1,668			1,784			5,050			4,672

Reconciling Items:
Realized investment gains, net, and related charges and adjustments		177			1,164			518			523
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		10			85			(586	)		330
Change in experience-rated contractholder liabilities due to asset value changes		(21	)		(31	)		482			(188	)
Divested businesses:
Closed Block Division		18			33			(22	)		49
Other divested businesses		12			10			(1,586	)		51
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(26	)		(24	)		(75	)		(66	)

Total reconciling items, before income taxes		170			1,237			(1,269	)		699

Income before income taxes and equity in earnings of operating joint ventures for Prudential Financial, Inc.	$	1,838		$	3,021		$	3,781		$	5,371

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
	2018			2017			2018			2017
*PGIM Division:*

PGIM Segment:
Assets managed by PGIM (in billions, as of end of period):
Institutional customers	$	505.7		$	478.3
Retail customers		258.3			239.9
General account		410.6			415.7

Total PGIM	$	1,174.6		$	1,133.9


Institutional Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	19.0		$	15.9		$	56.2		$	49.0

Net additions, other than money market	$	9.3		$	4.7		$	14.6		$	11.7


Retail Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	10.9		$	11.9		$	38.9		$	35.7

Net additions (withdrawals), other than money market	$	(0.6	)	$	1.3		$	2.2		$	2.6

*U.S. Workplace Solutions Division:*

Retirement Segment:

Full Service:

Deposits and sales	$	8,843		$	11,188		$	26,477		$	22,695

Net additions	$	2,979		$	6,056		$	5,989		$	5,087

Total account value at end of period	$	251,272		$	227,438

Institutional Investment Products:

Gross additions	$	6,318		$	4,764		$	12,467		$	11,363

Net additions (withdrawals)	$	2,973		$	1,212		$	382		$	(601	)

Total account value at end of period	$	195,237		$	188,399

Group Insurance Annualized New Business Premiums (5):
Group life	$	63		$	23		$	352		$	265
Group disability		16			12			170			141

Total	$	79		$	35		$	522		$	406

*U.S. Individual Solutions Division:*

Fixed and Variable Annuity Sales and Account Values:
Gross sales	$	2,241		$	1,329		$	6,032		$	4,276

Net redemptions	$	(682	)	$	(980	)	$	(2,743	)	$	(2,793	)

Total account value at end of period	$	165,962		$	165,600


Individual Life Insurance Annualized New Business Premiums (5):
Term life	$	55		$	57		$	158		$	160
Guaranteed universal life		23			31			68			124
Other universal life		44			28			99			82
Variable life		41			26			105			75

Total	$	163		$	142		$	430		$	441

*International Insurance Division:*

International Insurance Annualized New Business Premiums (5)(6):
Actual exchange rate basis	$	645		$	680		$	2,098		$	2,341

Constant exchange rate basis	$	649		$	673		$	2,085		$	2,333

See footnotes on last page.

Page 3

Financial Highlights

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


	Three Months Ended September 30
	2018		2017
Assets and Asset Under Management Information:

Total assets (7)	$	822.7	$	821.3

Assets under management (at fair market value):
PGIM Division		1,174.6		1,133.9
U.S. Workplace Solutions Division		88.7		86.9
U.S. Individual Solutions Division		117.4		116.7
International Insurance Division		29.3		28.7

Total assets under management		1,410.0		1,366.2
Client assets under administration		238.2		202.4

Total assets under management and administration	$	1,648.2	$	1,568.6

See footnotes on last page.

Page 4

(1)

Adjusted operating income is a non-GAAP measure of performance. See FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES within the earnings release for additional information. Adjusted operating income, when presented at the segment level, is also a segment performance measure. This segment performance measure, while not a traditional U.S. GAAP measure, is required to be disclosed by U.S. GAAP in accordance with FASB Accounting Standard Codification (ASC) 280 – Segment Reporting. When presented by segment, we have prepared the reconciliation of adjusted operating income to the corresponding consolidated U.S. GAAP total in accordance with the disclosure requirements as articulated in ASC 280.

(2)

Diluted shares as of September 30, 2018 include 5.88 million shares due to the dilutive impact of conversion of exchangeable surplus notes (“ESNs”) when book value per common share (i.e., book value per common share, book value excluding AOCI per share and adjusted book value per common share) is greater than $85.00. Diluted shares as of September 30, 2017 do not include shares related to ESNs due to the antidilutive impact of conversion of ESNs when book value per common share (i.e., book value excluding AOCI per share and adjusted book value per common share) is less than $86.92.

(3)

Reflecting the dilutive impact of ESNs when book value per common share is greater than $85.00, to calculate book value per common share as of September 30, 2018, equity is increased by $500 million and diluted shares include 5.88 million shares. As of September 30, 2017, book value per common share includes a $500 million increase in equity and a 5.75 million increase in diluted shares, reflecting the dilutive impact of ESNs when book value per common share is greater than $86.92.

(4)

The exchangeable surplus notes are subject to customary antidilution adjustments and the exchange rate is accordingly revalued in the fourth quarter of each year. Reflecting the dilutive impact of ESNs when book value per common share is greater than $85.00, to calculate book value excluding AOCI per share and adjusted book value per common share as of September 30, 2018, equity is increased by $500 million and diluted shares include 5.88 million shares. As of September 30, 2017, the conversion of ESNs is antidilutive as book value excluding AOCI per share and adjusted book value per common share is less than $86.92.

(5)

Premiums from new sales 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.

(6)

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 111 per U.S. dollar and Korean won 1,150 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

(7)

In the first quarter of 2018, the Company eliminated the one-month reporting lag for balance sheet and results of operations of Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”) consolidated operations. As a result, prior period amounts include an increase resulting from the elimination of Gibraltar Life’s one-month reporting lag.

Page 5

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

Third Quarter 2018

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.

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

TABLE OF CONTENTS


	Page
HIGHLIGHTS
Financial Highlights		1
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

PGIM DIVISION
Statements of Operations		11
Supplementary Revenue and Assets Under Management Information		12
Supplementary Assets Under Management Information		13

U.S. WORKPLACE SOLUTIONS DIVISION
Combined Statements of Operations		14
Combining Statements of Operations		15
Retirement Segment Sales Results and Account Values		16
Supplementary Information for Group Insurance		17

U.S. INDIVIDUAL SOLUTIONS DIVISION
Combined Statements of Operations		18
Combining Statements of Operations		19
Individual Annuities Sales Results and Account Values		20
Individual Annuities Account Value Activity		21
Individual Annuities Living Benefit Features		22
Individual Annuities Death Benefit Features		23
Supplementary Information for Individual Life		24

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

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

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

IMPACT OF INDIVIDUAL ANNUITIES MARKET PERFORMANCE AND EXPERIENCE TRUE-UPS		35

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

KEY DEFINITIONS AND FORMULAS		38

RATINGS AND INVESTOR INFORMATION		41

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date						%			2017						2018
2018			2017			Change			3Q			4Q			1Q			2Q			3Q
								Pre-tax adjusted operating income (loss) by division:
	716			673			6%	PGIM Division		259			306			232			254			230
	1,029			1,184			-13%	U.S. Workplace Solutions Division		309			313			372			359			298
	1,729			1,368			26%	U.S. Individual Solutions Division		727			639			555			550			624
	2,530			2,421			5%	International Insurance Division		799			777			856			784			890
	(954	)		(974	)		2%	Corporate and other operations		(310	)		(463	)		(294	)		(286	)		(374	)

	5,050			4,672			8%	Total pre-tax adjusted operating income		1,784			1,572			1,721			1,661			1,668
	1,066			1,193			-11%	Income taxes, applicable to adjusted operating income		461			399			381			363			322

	3,984			3,479			15%	After-tax adjusted operating income		1,323			1,173			1,340			1,298			1,346


								Reconciling items:
	518			523			-1%	Realized investment gains (losses), net, and related charges and adjustments		1,164			(581	)		64			277			177
	(586	)		330			-278%	Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		85			6			(403	)		(193	)		10
	482			(188	)		356%	Change in experience-rated contractholder liabilities due to asset value changes		(31	)		37			418			85			(21	)
								Divested businesses:
	(22	)		49			-145%	Closed Block Division		33			(4	)		(9	)		(31	)		18
	(1,586	)		51			-3210%	Other divested businesses		10			(13	)		(72	)		(1,526	)		12
	(75	)		(66	)		-14%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(24	)		99			(26	)		(23	)		(26	)

	(1,269	)		699			-282%	Total reconciling items, before income taxes		1,237			(456	)		(28	)		(1,411	)		170
	(462	)		127			-464%	Income taxes, not applicable to adjusted operating income		339			(3,157	)		(29	)		(295	)		(138	)

	(807	)		572			-241%	Total reconciling items, after income taxes		898			2,701			1			(1,116	)		308

	3,177			4,051			-22%	Income (after-tax) before equity in earnings of operating joint ventures		2,221			3,874			1,341			182			1,654
	55			47			17%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		17			(109	)		22			15			18

	3,232			4,098			-21%	Income attributable to Prudential Financial, Inc.		2,238			3,765			1,363			197			1,672
	7			11			-36%	Earnings attributable to noncontrolling interests		3			100			1			3			3

	3,239			4,109			-21%	Net income		2,241			3,865			1,364			200			1,675
	7			11			-36%	Less: Income attributable to noncontrolling interests		3			100			1			3			3

	3,232			4,098			-21%	Net income attributable to Prudential Financial, Inc.		2,238			3,765			1,363			197			1,672

	13.5%			13.1%				Operating Return on Average Equity (based on adjusted operating income) (1)(2)		14.7%			12.5%			13.7%			13.1%			13.6%

(1)

Operating Return on Average Equity (based on adjusted operating income) is a non-GAAP measure and represents adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income and adjusted to remove amounts included for foreign currency exchange rate remeasurement and certain deferred taxes as described on page 3. The comparable GAAP measure to operating return on average equity (based on adjusted operating income) is return on average equity (based on net income). Return on average equity (based on net income) represents income after-tax, attributable to consolidated Prudential Financial, Inc., as determined in accordance with U.S. GAAP, annualized for interim periods, divided by average total Prudential Financial, Inc. equity. Return on average equity (2) (based on net income) is 14.1%, 1.6%, 10.3%, 28.7%, and 18.1% for the three months ended September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017, and September 30, 2017, respectively.

(2)	2017 amounts have been revised resulting from the elimination of Gibraltar Life’s one-month reporting lag.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						Earnings per share of Common Stock (diluted):
	9.24			7.89		After-tax adjusted operating income		3.01			2.69			3.08			3.01			3.15
						Reconciling items:
	1.21			1.20		Realized investment gains (losses), net, and related charges and adjustments		2.68			(1.34	)		0.15			0.65			0.42
	(1.37	)		0.75		Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		0.20			0.01			(0.94	)		(0.45	)		0.02
	1.13			(0.43	)	Change in experience-rated contractholder liabilities due to asset value changes		(0.07	)		0.09			0.97			0.20			(0.05	)
						Divested businesses:
	(0.05	)		0.11		Closed Block Division		0.08			(0.01	)		(0.02	)		(0.07	)		0.04
	(3.71	)		0.12		Other divested businesses		0.02			(0.03	)		(0.17	)		(3.57	)		0.03
	0.02			(0.02	)	Difference in earnings allocated to participating unvested share-based payment awards		(0.03	)		(0.07	)		—			0.02			(0.01	)

	(2.77	)		1.73		Total reconciling items, before income taxes		2.88			(1.35	)		(0.01	)		(3.22	)		0.45
	(1.04	)		0.33		Income taxes, not applicable to adjusted operating income		0.80			(7.27	)		(0.07	)		(0.67	)		(0.30	)

	(1.73	)		1.40		Total reconciling items, after income taxes		2.08			5.92			0.06			(2.55	)		0.75

	7.51			9.29		Net income attributable to Prudential Financial, Inc.		5.09			8.61			3.14			0.46			3.90


	419.2			428.1		Weighted average number of outstanding Common shares (basic)		426.2			423.7			422.0			419.5			416.2
	427.8			437.1		Weighted average number of outstanding Common shares (diluted)		435.0			432.7			430.9			428.0			424.7

						Earnings calculation, per share of Common Stock:

	3,232			4,098		Net income attributable to Prudential Financial, Inc.		2,238			3,765			1,363			197			1,672
	16			13		Earnings related to interest, net of tax, on exchangeable surplus notes		4			4			5			6			5
	37			50		Less: Earnings allocated to participating unvested share-based payment awards		27			44			16			4			19

	3,211			4,061		Net income attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation		2,215			3,725			1,352			199			1,658


	3,984			3,479		After-tax adjusted operating income		1,323			1,173			1,340			1,298			1,346
	16			13		Earnings related to interest, net of tax, on exchangeable surplus notes		4			4			5			6			5
	45			42		Less: Earnings allocated to participating unvested share-based payment awards		16			14			16			14			15

	3,955			3,450		After-tax adjusted operating income for earnings per share of Common Stock calculation		1,311			1,163			1,329			1,290			1,336

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


Year-to-date					2017						2018
2018		2017			3Q			4Q			1Q			2Q			3Q

				*Capitalization Data (1):*
				Senior Debt:
				Short-term debt		2,358			1,380			1,383			2,056			2,393
				Long-term debt		10,532			10,550			11,516			10,706			9,857
				Junior Subordinated Long-Term Debt		6,621			6,622			6,627			6,026			7,564

				Prudential Financial Inc. Equity:
				Including accumulated other comprehensive income (2)		50,540			54,236			51,830			48,232			46,725
				Excluding accumulated other comprehensive income (2)(3)		33,942			37,162			37,069			36,577			37,575
				Amount included above for remeasurement of foreign currency and certain deferred taxes (4)(5)		(2,758	)		(969	)		(2,892	)		(2,650	)		(2,509	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (2)(4)(5)		36,700			38,131			39,961			39,227			40,084


				Book value per share of Common Stock:
				Including accumulated other comprehensive income (2)(6)		116.70			125.63			120.99			113.59			110.78
				Excluding accumulated other comprehensive income (2)(3)(6)		78.64			86.44			86.86			86.43			89.32
				Amount included above for remeasurement of foreign currency and certain deferred taxes (4)(5)		(6.39	)		(2.23	)		(6.69	)		(6.17	)		(5.88	)

				Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (2)(4)(5)(6)		85.03			88.67			93.55			92.60			95.20


				Number of diluted shares at end of period (6)		431.6			435.7			432.5			429.0			426.3

				*Common Stock Price Range (based on closing price):*
	126.02		115.23	High		115.23			117.15			126.02			107.62			104.68
	93.22		98.65	Low		98.65			107.28			100.64			93.22			93.99
	101.32		106.32	Close		106.32			114.98			103.55			93.51			101.32

				*Common Stock market capitalization (1)*		45,154			48,591			43,595			39,059			41,987

(1)	As of end of period.

(2)	2017 amounts have been revised resulting from the elimination of Gibraltar Life’s one-month reporting lag.

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

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

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

(6)

As of the first, second and third quarters of 2018 and the fourth quarter of 2017, exchangeable surplus notes are dilutive when book value per share is greater than $85.00 (equivalent to an additional 5.88 million in diluted shares and an increase of $500 million in equity). As of the third quarter of 2017, exchangeable surplus notes are dilutive when book value per share is greater than $86.92 (equivalent to an additional 5.75 million in diluted shares and an increase of $500 million in equity). See page 38 for more information.

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

OPERATIONS HIGHLIGHTS


Year-to-date					2017				2018
2018		2017			3Q		4Q		1Q		2Q		3Q

				*Assets Under Management and Administration ($ billions) (1)(2):*
				Assets Under Management:
				PGIM Division:
				Institutional customers		478.3		489.5		489.6		490.8		505.7
				Retail customers		239.9		245.6		246.2		252.0		258.3
				General account		415.7		420.2		420.0		413.3		410.6

				Total PGIM Division		1,133.9		1,155.3		1,155.8		1,156.1		1,174.6
				U.S. Workplace Solutions Division		86.9		88.5		86.2		87.6		88.7
				U.S. Individual Solutions Division		116.7		119.8		115.7		115.7		117.4
				International Insurance Division		28.7		30.0		30.8		28.8		29.3

				Total assets under management		1,366.2		1,393.6		1,388.5		1,388.2		1,410.0
				Client assets under administration		202.4		213.6		218.4		228.7		238.2

				Total assets under management and administration		1,568.6		1,607.2		1,606.9		1,616.9		1,648.2


				Assets managed or administered for customers outside of the United States at end of period		350.5		358.0		373.3		365.7		370.6

				*Distribution Representatives (1):*
				Prudential Advisors		2,937		2,882		2,958		3,052		3,071
				International Life Planners		7,831		7,831		7,771		7,638		7,798
				Gibraltar Life Consultants		8,327		8,326		8,137		7,938		8,030

	59		50	*Prudential Advisor productivity ($ thousands)*		53		72		52		60		63

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINED STATEMENTS OF OPERATIONS

(in millions)


Year-to-date					%			2017						2018
2018		2017			Change			3Q			4Q			1Q			2Q			3Q


							Revenues (1):
	21,491		20,442			5%	Premiums		7,111			8,720			6,638			6,710			8,143
	4,702		3,914			20%	Policy charges and fee income		1,565			1,604			1,575			1,570			1,557
	10,108		10,034			1%	Net investment income		3,345			3,465			3,337			3,404			3,367
	4,049		4,006			1%	Asset management fees, commissions and other income		1,340			1,461			1,325			1,359			1,365

	40,350		38,396			5%	Total revenues		13,361			15,250			12,875			13,043			14,432


							Benefits and Expenses (1):
	22,477		20,908			8%	Insurance and annuity benefits		7,376			9,163			6,853			7,160			8,464
	2,783		2,800			-1%	Interest credited to policyholders’ account balances		927			929			911			932			940
	1,042		978			7%	Interest expense		330			344			340			347			355
	(2,110)		(2,132	)		1%	Deferral of acquisition costs		(653	)		(686	)		(718	)		(684	)		(708	)
	1,581		1,613			-2%	Amortization of acquisition costs		470			480			530			555			496
	9,527		9,557			0%	General and administrative expenses		3,127			3,448			3,238			3,072			3,217

	35,300		33,724			5%	Total benefits and expenses		11,577			13,678			11,154			11,382			12,764

	5,050		4,672			8%	Adjusted operating income before income taxes		1,784			1,572			1,721			1,661			1,668

							Reconciling items:
	751		(48	)		1665%	Realized investment gains (losses), net, and related adjustments		1,395			(554	)		87			393			271
	(233)		571			-141%	Related charges		(231	)		(27	)		(23	)		(116	)		(94	)

	518		523			-1%	Total realized investment gains (losses), net, and related charges and adjustments		1,164			(581	)		64			277			177

	(586)		330			-278%	Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		85			6			(403	)		(193	)		10
	482		(188	)		356%	Change in experience-rated contractholder liabilities due to asset value changes		(31	)		37			418			85			(21	)
							Divested businesses:
	(22)		49			-145%	Closed Block Division		33			(4	)		(9	)		(31	)		18
	(1,586)		51			-3210%	Other divested businesses		10			(13	)		(72	)		(1,526	)		12
	(75)		(66	)		-14%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(24	)		99			(26	)		(23	)		(26	)

	(1,269)		699			-282%	Total reconciling items, before income taxes		1,237			(456	)		(28	)		(1,411	)		170


	3,781		5,371			-30%	Income before income taxes and equity in earnings of operating joint ventures		3,021			1,116			1,693			250			1,838
	604		1,320			-54%	Income tax expense (benefit)		800			(2,758	)		352			68			184

	3,177		4,051			-22%	Income before equity in earnings of operating joint ventures		2,221			3,874			1,341			182			1,654

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on assets supporting experience-rated contractholder liabilities; and revenues of divested businesses, and include revenues representing equity in earnings of operating joint ventures other than those classified as divested businesses. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes; and benefits and expenses of divested businesses and include charges for income attributable to noncontrolling interests. See pages 36 and 37 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended September 30, 2018
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations

Revenues (1):
Premiums		8,143			—			3,928			271			3,950			(6	)
Policy charges and fee income		1,557			—			211			1,230			129			(13	)
Net investment income		3,367			28			1,241			684			1,313			101
Asset management fees, commissions and other income		1,365			789			253			493			98			(268	)

Total revenues		14,432			817			5,633			2,678			5,490			(186	)


Benefits and Expenses (1):
Insurance and annuity benefits		8,464			—			4,388			635			3,435			6
Interest credited to policyholders’ account balances		940			—			435			278			227			—
Interest expense		355			9			8			199			6			133
Deferral of acquisition costs		(708	)		(2	)		(9	)		(294	)		(415	)		12
Amortization of acquisition costs		496			2			9			210			286			(11	)
General and administrative expenses		3,217			578			504			1,026			1,061			48

Total benefits and expenses		12,764			587			5,335			2,054			4,600			188

Adjusted operating income (loss) before income taxes		1,668			230			298			624			890			(374	)


		Quarter Ended September 30, 2017
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		7,111			—			2,962			264			3,891			(6	)
Policy charges and fee income		1,565			—			204			1,245			128			(12	)
Net investment income		3,345			55			1,226			666			1,278			120
Asset management fees, commissions and other income		1,340			772			230			540			79			(281	)

Total revenues		13,361			827			4,622			2,715			5,376			(179	)


Benefits and Expenses (1):
Insurance and annuity benefits		7,376			—			3,391			642			3,342			1
Interest credited to policyholders’ account balances		927			—			434			263			230			—
Interest expense		330			7			7			183			4			129
Deferral of acquisition costs		(653	)		(2	)		(9	)		(232	)		(417	)		7
Amortization of acquisition costs		470			2			17			187			275			(11	)
General and administrative expenses		3,127			561			473			945			1,143			5

Total benefits and expenses		11,577			568			4,313			1,988			4,577			131

Adjusted operating income (loss) before income taxes		1,784			259			309			727			799			(310	)

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Nine Months Ended September 30, 2018
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations

Revenues (1):
Premiums		21,491			—			8,455			800			12,258			(22	)
Policy charges and fee income		4,702			—			628			3,711			401			(38	)
Net investment income		10,108			76			3,750			2,027			3,934			321
Asset management fees, commissions and other income		4,049			2,383			717			1,534			225			(810	)

Total revenues		40,350			2,459			13,550			8,072			16,818			(549	)


Benefits and Expenses (1):
Insurance and annuity benefits		22,477			—			9,725			2,107			10,650			(5	)
Interest credited to policyholders’ account balances		2,783			—			1,278			818			687			—
Interest expense		1,042			29			25			580			15			393
Deferral of acquisition costs		(2,110	)		(5	)		(26	)		(813	)		(1,303	)		37
Amortization of acquisition costs		1,581			6			23			663			923			(34	)
General and administrative expenses		9,527			1,713			1,496			2,988			3,316			14

Total benefits and expenses		35,300			1,743			12,521			6,343			14,288			405

Adjusted operating income (loss) before income taxes		5,050			716			1,029			1,729			2,530			(954	)


		Nine Months Ended September 30, 2017
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations
Revenues (1):
Premiums		20,442			—			7,785			790			11,885			(18	)
Policy charges and fee income		3,914			—			629			2,949			374			(38	)
Net investment income		10,034			124			3,796			2,005			3,743			366
Asset management fees, commissions and other income		4,006			2,246			701			1,591			266			(798	)

Total revenues		38,396			2,370			12,911			7,335			16,268			(488	)


Benefits and Expenses (1):
Insurance and annuity benefits		20,908			—			8,974			1,732			10,197			5
Interest credited to policyholders’ account balances		2,800			—			1,341			781			678			—
Interest expense		978			19			22			532			10			395
Deferral of acquisition costs		(2,132	)		(5	)		(25	)		(740	)		(1,389	)		27
Amortization of acquisition costs		1,613			8			28			746			864			(33	)
General and administrative expenses		9,557			1,675			1,387			2,916			3,487			92

Total benefits and expenses		33,724			1,697			11,727			5,967			13,847			486

Adjusted operating income (loss) before income taxes		4,672			673			1,184			1,368			2,421			(974	)

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

CONSOLIDATED BALANCE SHEETS

(in millions)


	09/30/2017		12/31/2017		03/31/2018		06/30/2018		09/30/2018

Assets:
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $307,527; $312,385; $319,180; $317,548; $321,168)		340,100		346,780		347,630		341,151		340,970
Fixed maturities, held-to-maturity, at amortized cost (fair value $2,475; $2,430; $2,511; $2,388; $2,287)		2,084		2,049		2,120		2,020		1,957
Fixed maturities, trading, at fair value (amortized cost $3,379; $3,509; $2,852; $2,980; $3,162) (1)		3,340		3,507		2,885		2,916		3,083
Assets supporting experience-rated contractholder liabilities, at fair value		22,126		22,097		21,637		21,497		21,083
Equity securities, at fair value (cost $8,116; $5,154; $5,382; $5,374; $5,149) (1)		10,854		7,329		7,289		7,191		7,058
Commercial mortgage and other loans		55,373		56,045		58,098		58,622		59,336
Policy loans		11,765		11,891		12,036		11,935		11,928
Other invested assets (1)		13,714		13,373		14,044		13,459		13,790
Short-term investments (1)		5,535		6,800		5,752		5,728		5,767

Total investments		464,891		469,871		471,491		464,519		464,972
Cash and cash equivalents		14,541		14,490		15,676		14,918		12,466
Accrued investment income		3,278		3,325		3,169		3,235		3,180
Deferred policy acquisition costs		18,724		18,992		19,649		19,643		19,789
Value of business acquired		1,817		1,591		1,995		2,027		1,962
Other assets (3)		16,985		17,250		17,112		16,860		16,938
Separate account assets		301,110		306,617		300,585		298,658		303,441

Total assets		821,346		832,136		829,677		819,860		822,748


Liabilities:
Future policy benefits		252,339		257,317		261,144		260,435		260,797
Policyholders’ account balances		148,342		148,189		149,917		149,359		149,130
Securities sold under agreements to repurchase		8,145		8,400		8,633		9,540		9,176
Cash collateral for loaned securities		4,697		4,354		4,312		4,307		4,656
Income taxes (3)		12,557		9,648		9,296		7,888		7,014
Senior short-term debt		2,358		1,380		1,383		2,056		2,393
Senior long-term debt		10,532		10,550		11,516		10,706		9,857
Junior subordinated long-term debt		6,621		6,622		6,627		6,026		7,564
Notes issued by consolidated variable interest entities		1,517		1,518		954		937		930
Other liabilities		22,396		23,030		23,135		21,356		20,708
Separate account liabilities		301,110		306,617		300,585		298,658		303,441

Total liabilities		770,614		777,625		777,502		771,268		775,666

Equity:
Accumulated other comprehensive income (2)		16,598		17,074		14,761		11,655		9,150
Other equity (2)(3)		33,942		37,162		37,069		36,577		37,575

Total Prudential Financial, Inc. equity		50,540		54,236		51,830		48,232		46,725

Noncontrolling Interest		192		275		345		360		357

Total Equity		50,732		54,511		52,175		48,592		47,082

Total liabilities and equity		821,346		832,136		829,677		819,860		822,748

(1)	2017 amounts have been reclassified to conform to current period presentation.

(2)	Total equity for March 31, 2018 includes the cumulative effect of adoption of ASU 2016-01, effective January 1, 2018, which includes an increase in “Other equity” of $904 million and a decrease in Accumulated other comprehensive income of $847 million.

(3)	2017 amounts include an increase resulting from the elimination of Gibraltar Life’s one-month reporting lag.

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of September 30, 2018

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		PGIM Division			U.S. Workplace Solutions Division		U.S. Individual Solutions Division			International Insurance Division		Corporate and Other Operations
Assets:
Total investments		464,972		58,358			406,614		4,104			127,549		59,922			192,071		22,968
Deferred policy acquisition costs		19,789		273			19,516		—			310		10,929			8,552		(275	)
Other assets		34,546		1,324			33,222		2,995			8,133		13,890			9,725		(1,521	)
Separate account assets		303,441		—			303,441		41,076			84,420		179,069			3,849		(4,973	)

Total assets		822,748		59,955			762,793		48,175			220,412		263,810			214,197		16,199

Liabilities:
Future policy benefits		260,797		48,349			212,448		—			64,651		21,372			118,576		7,849
Policyholders’ account balances		149,130		5,078			144,052		—			56,746		36,035			50,411		860
Debt		19,814		—			19,814		1,716			811		7,486			127		9,674
Other liabilities		42,484		8,221			34,263		2,921			5,326		6,400			16,458		3,158
Separate account liabilities		303,441		—			303,441		41,076			84,420		179,069			3,849		(4,973	)

Total liabilities		775,666		61,648			714,018		45,713			211,954		250,362			189,421		16,568

Equity:
Accumulated other comprehensive income (loss) (1)		9,150		(26	)		9,176		(70	)		782		(467	)		10,898		(1,967	)
Other equity (1)		37,575		(1,677	)		39,252		2,014			7,625		13,900			13,815		1,898

Total Prudential Financial, Inc. equity		46,725		(1,703	)		48,428		1,944			8,407		13,433			24,713		(69	)

Noncontrolling Interest		357		10			347		518			51		15			63		(300	)

Total Equity		47,082		(1,693	)		48,775		2,462			8,458		13,448			24,776		(369	)

Total liabilities and equity		822,748		59,955			762,793		48,175			220,412		263,810			214,197		16,199



	As of December 31, 2017

	Consolidated PFI		Closed Block Division			PFI Excluding Closed Block Division		PGIM Division			U.S. Workplace Solutions Division		U.S. Individual Solutions Division			International Insurance Division		Corporate and Other Operations
Assets:
Total investments		469,871		61,291			408,580		5,143			131,957		62,322			189,454		19,704
Deferred policy acquisition costs		18,992		299			18,693		—			308		10,535			8,214		(364	)
Other assets (2)		36,656		1,543			35,113		2,823			7,820		14,473			10,244		(247	)
Separate account assets		306,617		—			306,617		41,978			85,120		180,321			3,735		(4,537	)

Total assets		832,136		63,133			769,003		49,944			225,205		267,651			211,647		14,556

Liabilities:
Future policy benefits		257,317		48,870			208,447		—			64,246		24,446			114,515		5,240
Policyholders’ account balances		148,189		5,147			143,042		—			58,252		34,429			50,353		8
Debt		18,552		—			18,552		1,936			845		7,970			120		7,681
Other liabilities (2)		46,950		10,831			36,119		3,667			6,573		6,624			16,005		3,250
Separate account liabilities		306,617		—			306,617		41,978			85,120		180,321			3,735		(4,537	)

Total liabilities		777,625		64,848			712,777		47,581			215,036		253,790			184,728		11,642


Equity:
Accumulated other comprehensive income (loss)		17,074		(1	)		17,075		(102	)		3,087		1,062			13,891		(863	)
Other equity (2)(3)		37,162		(1,716	)		38,878		2,030			7,075		12,798			12,979		3,996

Total Prudential Financial, Inc. equity		54,236		(1,717	)		55,953		1,928			10,162		13,860			26,870		3,133

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

Total Equity		54,511		(1,715	)		56,226		2,363			10,169		13,861			26,919		2,914


Total liabilities and equity		832,136		63,133			769,003		49,944			225,205		267,651			211,647		14,556

(1)	Total equity for September 30, 2018 includes the cumulative effect of adoption of ASU 2016-01, effective January 1, 2018, which includes an increase in “Other equity” of $904 million and a decrease in Accumulated other comprehensive income of $847 million.

(2)	Prior period amounts include an increase resulting from the elimination of Gibraltar Life’s one-month reporting lag.

(3)	“Other equity” for December 31, 2017 includes estimated impacts of enactment of the Tax Act, including $1,678 million in Corporate and Other Operations related to the remeasurement of certain deferred tax assets and liabilities originally established through accumulated other comprehensive income.

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of September 30, 2018								As of December 31, 2017
	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		1,249		4,548		7,564		13,361		—		5,402		6,622		12,024
Operating Debt - Investment related		295		3,709		—		4,004		676		3,306		—		3,982
Operating Debt - Specified businesses		800		890		—		1,690		704		1,043		—		1,747
Limited recourse and non-recourse borrowing		49		710		—		759		—		799		—		799

Total debt		2,393		9,857		7,564		19,814		1,380		10,550		6,622		18,552


	As of September 30, 2018								As of December 31, 2017
			The Prudential								The Prudential
	Prudential Financial, Inc.		Insurance Co. of America (1)(2)		Other Affiliates		Total		Prudential Financial, Inc.		Insurance Co. of America (1)(2)		Other Affiliates		Total
*Borrowings by sources:*
Capital Debt		12,366		941		55		13,362		11,028		940		56		12,024
Operating Debt - Investment related		3,877		128		—		4,005		3,917		65		—		3,982
Operating Debt - Specified businesses		1,024		664		—		1,688		1,239		508		—		1,747
Limited recourse and non-recourse borrowing		—		759		—		759		—		799		—		799

Total debt		17,267		2,492		55		19,814		16,184		2,312		56		18,552

(1)	Includes Prudential Funding, LLC.

(2)	Capital debt at Prudential Insurance Co. of America includes $841 million of surplus notes as of September 30, 2018 and $840 million as of December 31, 2017.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

STATEMENTS OF OPERATIONS - PGIM DIVISION

(in millions)


Year-to-date					%				2017						2018
2018		2017			Change				3Q			4Q			1Q			2Q			3Q

								Revenues (1):
	—		—			—		Premiums		—			—			—			—			—
	—		—			—		Policy charges and fee income		—			—			—			—			—
	76		124			-39	%	Net investment income		55			46			17			31			28
	2,383		2,246			6	%	Asset management fees, commissions and other income		772			939			809			785			789

	2,459		2,370			4	%	Total revenues		827			985			826			816			817



								Benefits and Expenses (1):
	—		—			—		Insurance and annuity benefits		—			—			—			—			—
	—		—			—		Interest credited to policyholders’ account balances		—			—			—			—			—
	29		19			53	%	Interest expense		7			8			9			11			9
	(5)		(5	)		0	%	Deferral of acquisition costs		(2	)		(1	)		(2	)		(1	)		(2	)
	6		8			-25	%	Amortization of acquisition costs		2			3			2			2			2
	1,713		1,675			2	%	General and administrative expenses		561			669			585			550			578

	1,743		1,697			3	%	Total benefits and expenses		568			679			594			562			587


	716		673			6	%	Adjusted operating income before income taxes		259			306			232			254			230

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

Page 11

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

PGIM DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION


							Supplementary Revenue Information (in millions):
Year-to-date				%				2017				2018
2018		2017		Change				3Q		4Q		1Q		2Q		3Q

							Analysis of revenues by type:
	1,903		1,786		7	%	Asset management fees		619		631		633		629		641
	186		210		-11	%	Other related revenues (1)		83		229		73		65		48
	370		374		-1	%	Service, distribution and other revenues		125		125		120		122		128

	2,459		2,370		4	%	Total PGIM revenues		827		985		826		816		817


							Analysis of asset management fees by source:
	893		850		5	%	Institutional customers		296		297		296		295		302
	657		582		13	%	Retail customers		203		218		217		219		221
	353		354		0	%	General account		120		116		120		115		118

	1,903		1,786		7	%	Total asset management fees		619		631		633		629		641


Supplementary Assets Under Management Information (in billions):
	September 30, 2018
	Equity		Fixed Income		Real Estate		Total
Institutional customers		64.0		398.3		43.4		505.7
Retail customers		137.3		119.4		1.6		258.3
General account		5.6		403.1		1.9		410.6

Total		206.9		920.8		46.9		1,174.6


	September 30, 2017
	Equity		Fixed Income		Real Estate		Total
Institutional customers		65.1		370.1		43.1		478.3
Retail customers		127.9		110.3		1.7		239.9
General account		6.2		407.6		1.9		415.7

Total		199.2		888.0		46.7		1,133.9

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

Page 12

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

PGIM DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION

(in billions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	437.9			386.4		Beginning assets under management		414.6			431.0			437.9			438.6			439.5
	56.2			49.0		Additions		15.9			16.2			19.4			17.8			19.0
	(41.6)			(37.3	)	Withdrawals		(11.2	)		(16.3	)		(19.6	)		(12.3	)		(9.7	)
	(1.2)			29.5		Change in market value		9.1			8.5			(0.8	)		(4.3	)		3.9
	2.9			2.9		Net money market flows		2.6			(1.6	)		1.8			0.3			0.8
	(0.9)			0.5		Other		—			0.1			(0.1	)		(0.6	)		(0.2	)

	453.3			431.0		Ending assets under management		431.0			437.9			438.6			439.5			453.3
	52.4			47.3		Affiliated institutional assets under management		47.3			51.6			51.0			51.3			52.4

	505.7			478.3		Total assets managed for institutional customers at end of period		478.3			489.5			489.6			490.8			505.7


	14.6			11.7		Net institutional additions (withdrawals), excluding money market activity		4.7			(0.1	)		(0.2	)		5.5			9.3


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	164.3			136.6		Beginning assets under management		150.0			157.5			164.3			166.2			171.6
	38.9			35.7		Additions		11.9			14.0			14.6			13.4			10.9
	(36.7	)		(33.1	)	Withdrawals		(10.6	)		(12.5	)		(13.6	)		(11.6	)		(11.5	)
	9.7			18.2		Change in market value		6.2			5.3			0.9			3.7			5.1
	0.1			—		Net money market flows		—			—			—			—			0.1
	(0.2	)		0.1		Other		—			—			—			(0.1	)		(0.1	)

	176.1			157.5		Ending assets under management		157.5			164.3			166.2			171.6			176.1
	82.2			82.4		Affiliated retail assets under management		82.4			81.3			80.0			80.4			82.2

	258.3			239.9		Total assets managed for retail customers at end of period		239.9			245.6			246.2			252.0			258.3


	2.2			2.6		Net retail additions (withdrawals), excluding money market activity		1.3			1.5			1.0			1.8			(0.6	)

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date						%				2017						2018
2018			2017			Change				3Q			4Q			1Q			2Q			3Q

									Revenues (1):
	8,455			7,785			9	%	Premiums		2,962			4,651			1,838			2,689			3,928
	628			629			0	%	Policy charges and fee income		204			199			200			217			211
	3,750			3,796			-1	%	Net investment income		1,226			1,323			1,238			1,271			1,241
	717			701			2	%	Asset management fees, commissions and other income		230			230			229			235			253

	13,550			12,911			5	%	Total revenues		4,622			6,403			3,505			4,412			5,633

									Benefits and Expenses (1):
	9,725			8,974			8	%	Insurance and annuity benefits		3,391			5,134			2,212			3,125			4,388
	1,278			1,341			-5	%	Interest credited to policyholders’ account balances		434			440			408			435			435
	25			22			14	%	Interest expense		7			9			8			9			8
	(26	)		(25	)		-4	%	Deferral of acquisition costs		(9	)		(11	)		(5	)		(12	)		(9	)
	23			28			-18	%	Amortization of acquisition costs		17			12			5			9			9
	1,496			1,387			8	%	General and administrative expenses		473			506			505			487			504

	12,521			11,727			7	%	Total benefits and expenses		4,313			6,090			3,133			4,053			5,335


	1,029			1,184			-13	%	Adjusted operating income before income taxes		309			313			372			359			298

(1)

Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on assets supporting experience-rated contractholder liabilities. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes.

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	Nine Months Ended September 30, 2018									Quarter Ended September 30, 2018
	Total U.S. Workplace Solutions Division			Retirement			Group Insurance			Total U.S. Workplace Solutions Division			Retirement			Group Insurance
Revenues (1):
Premiums		8,455			5,157			3,298			3,928			2,825			1,103
Policy charges and fee income		628			183			445			211			60			151
Net investment income		3,750			3,282			468			1,241			1,087			154
Asset management fees, commissions and other income		717			658			59			253			231			22

Total revenues		13,550			9,280			4,270			5,633			4,203			1,430


Benefits and Expenses (1):
Insurance and annuity benefits		9,725			6,555			3,170			4,388			3,313			1,075
Interest credited to policyholders’ account balances		1,278			1,067			211			435			366			69
Interest expense		25			24			1			8			8			—
Deferral of acquisition costs		(26	)		(25	)		(1	)		(9	)		(9	)		—
Amortization of acquisition costs		23			19			4			9			8			1
General and administrative expenses		1,496			807			689			504			278			226

Total benefits and expenses		12,521			8,447			4,074			5,335			3,964			1,371

Adjusted operating income before income taxes		1,029			833			196			298			239			59


	Nine Months Ended September 30, 2017									Quarter Ended September 30, 2017
	Total U.S. Workplace Solutions Division			Retirement			Group Insurance			Total U.S. Workplace Solutions Division			Retirement			Group Insurance
Revenues (1):
Premiums		7,785			4,665			3,120			2,962			1,920			1,042
Policy charges and fee income		629			178			451			204			61			143
Net investment income		3,796			3,323			473			1,226			1,071			155
Asset management fees, commissions and other income		701			637			64			230			207			23

Total revenues		12,911			8,803			4,108			4,622			3,259			1,363


Benefits and Expenses (1):
Insurance and annuity benefits		8,974			5,944			3,030			3,391			2,378			1,013
Interest credited to policyholders’ account balances		1,341			1,139			202			434			366			68
Interest expense		22			18			4			7			6			1
Deferral of acquisition costs		(25	)		(25	)		—			(9	)		(9	)		—
Amortization of acquisition costs		28			15			13			17			7			10
General and administrative expenses		1,387			759			628			473			263			210

Total benefits and expenses		11,727			7,850			3,877			4,313			3,011			1,302

Adjusted operating income before income taxes		1,184			953			231			309			248			61

(1)

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	234,616			202,802		Beginning total account value		214,731			227,438			234,616			236,120			240,922
	26,477			22,695		Deposits and sales		11,188			6,832			9,922			7,712			8,843
	(20,488	)		(17,608	)	Withdrawals and benefits		(5,132	)		(7,203	)		(8,154	)		(6,470)			(5,864	)
	10,667			19,549		Change in market value, interest credited, interest income and other activity		6,651			7,549			(264	)		3,560			7,371

	251,272			227,438		Ending total account value		227,438			234,616			236,120			240,922			251,272


	5,989			5,087		Net additions (withdrawals)		6,056			(371	)		1,768			1,242			2,979


						Stable value account values included above		48,834			48,667			48,692			48,882			49,132

						Institutional Investment Products:
	194,492			183,376		Beginning total account value		186,610			188,399			194,492			191,518			191,722
	12,467			11,363		Additions		4,764			10,267			688			5,461			6,318
	(12,085	)		(11,964	)	Withdrawals and benefits		(3,552	)		(5,442	)		(4,889	)		(3,851	)		(3,345	)
	2,130			4,243		Change in market value, interest credited and interest income		1,341			947			(214	)		1,198			1,146
	(1,767	)		1,381		Other (1)		(764	)		321			1,441			(2,604	)		(604	)

	195,237			188,399		Ending total account value		188,399			194,492			191,518			191,722			195,237


	382			(601	)	Net additions (withdrawals)		1,212			4,825			(4,201	)		1,610			2,973


						Amounts included in ending total account value above:
	67,598			69,637		Investment-only stable value wraps		69,637			69,239			66,518			67,406			67,598
	43,455			36,053		Longevity reinsurance (2)		36,053			40,072			41,173			41,325			43,455
	84,184			82,709		Group annuities and other products		82,709			85,181			83,827			82,991			84,184

	195,237			188,399		Ending total account value		188,399			194,492			191,518			191,722			195,237

(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 16

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(dollar amounts in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	352			265		Group life		23			22			243			46			63
	170			141		Group disability		12			12			140			14			16

	522			406		Total		35			34			383			60			79


						Future Policy Benefits (1)(2):
						Group life		2,087			2,286			2,216			2,180			2,111
						Group disability		9			2			26			19			9

						Total		2,096			2,288			2,242			2,199			2,120


						Policyholders’ Account Balances (1):
						Group life		8,599			8,737			8,675			8,769			8,840
						Group disability		231			246			174			181			187

						Total		8,830			8,983			8,849			8,950			9,027


						Separate Account Liabilities (1):
						Group life		23,922			23,955			24,353			23,758			23,881
						Group disability		—			—			—			—			—

						Total		23,922			23,955			24,353			23,758			23,881


						Group Life Insurance:
	3,203			3,105		Gross premiums, policy charges and fee income (3)		1,013			1,019			1,046			1,075			1,082
	3,005			2,931		Earned premiums, policy charges and fee income		965			955			1,000			996			1,009

	87.7	%		88.5	%	Benefits ratio (4)		87.0	%		89.3	%		87.2	%		88.6	%		87.3	%
	11.9	%		10.8	%	Administrative operating expense ratio		11.2	%		12.5	%		11.6	%		12.6	%		11.5	%
						Persistency ratio		93.9	%		93.8	%		95.7	%		95.3	%		94.6	%

						Group Disability Insurance:
	771			709		Gross premiums, policy charges and fee income (3)		239			244			251			261			259
	738			640		Earned premiums, policy charges and fee income		220			222			243			250			245

	76.5	%		76.6	%	Benefits ratio (4)		78.7	%		85.6	%		79.0	%		71.6	%		78.9	%
	26.8	%		29.2	%	Administrative operating expense ratio		29.2	%		29.8	%		27.1	%		26.4	%		26.8	%
						Persistency ratio		91.7	%		91.4	%		94.9	%		94.7	%		94.2	%

						Total Group Insurance:
	85.5	%		86.4	%	Benefits ratio (4)		85.5	%		88.6	%		85.6	%		85.3	%		85.7	%
	14.8	%		14.2	%	Administrative operating expense ratio		14.6	%		15.8	%		14.6	%		15.3	%		14.5	%

(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)

Benefit ratios excluding the impact of the annual assumption updates and other refinements in the second quarter. Benefit ratios including these impacts for Group Life, Group Disability, and Total Group Insurance are 87.5%, 64.0%, and 82.8% for the three months ended June 30, 2018, respectively. Benefit ratios including these impacts for Group Life, Group Disability, and Total Group Insurance are 87.3%, 73.9%, and 84.7% and 88.7%, 67.1%, and 84.8% for the nine months ended September 30, 2018 and September 30, 2017, respectively.

Page 17

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date						%				2017						2018
2018			2017			Change				3Q			4Q			1Q			2Q			3Q

									Revenues (1):
	800			790			1	%	Premiums		264			253			267			262			271
	3,711			2,949			26	%	Policy charges and fee income		1,245			1,286			1,245			1,236			1,230
	2,027			2,005			1	%	Net investment income		666			685			657			686			684
	1,534			1,591			-4	%	Asset management fees, commissions and other income		540			525			508			533			493

	8,072			7,335			10	%	Total revenues		2,715			2,749			2,677			2,717			2,678


									Benefits and Expenses (1):
	2,107			1,732			22	%	Insurance and annuity benefits		642			722			735			737			635
	818			781			5	%	Interest credited to policyholders’ account balances		263			268			265			275			278
	580			532			9	%	Interest expense		183			186			186			195			199
	(813	)		(740	)		-10	%	Deferral of acquisition costs		(232	)		(265	)		(249	)		(270	)		(294	)
	663			746			-11	%	Amortization of acquisition costs		187			201			202			251			210
	2,988			2,916			2	%	General and administrative expenses		945			998			983			979			1,026

	6,343			5,967			6	%	Total benefits and expenses		1,988			2,110			2,122			2,167			2,054

	1,729			1,368			26	%	Adjusted operating income before income taxes		727			639			555			550			624

(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 18

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	Nine Months Ended September 30, 2018									Quarter Ended September 30, 2018
	Total U.S. Individual Solutions Division			Individual Annuities			Individual Life			Total U.S. Individual Solutions Division			Individual Annuities			Individual Life
Revenues (1):
Premiums		800			108			692			271			37			234
Policy charges and fee income		3,711			2,167			1,544			1,230			719			511
Net investment income		2,027			517			1,510			684			174			510
Asset management fees, commissions and other income		1,534			950			584			493			294			199

Total revenues		8,072			3,742			4,330			2,678			1,224			1,454


Benefits and Expenses (1):
Insurance and annuity benefits		2,107			242			1,865			635			85			550
Interest credited to policyholders’ account balances		818			251			567			278			85			193
Interest expense		580			51			529			199			17			182
Deferral of acquisition costs		(813	)		(307	)		(506	)		(294	)		(110	)		(184	)
Amortization of acquisition costs		663			396			267			210			139			71
General and administrative expenses		2,988			1,629			1,359			1,026			554			472

Total benefits and expenses		6,343			2,262			4,081			2,054			770			1,284

Adjusted operating income before income taxes		1,729			1,480			249			624			454			170


	Nine Months Ended September 30, 2017									Quarter Ended September 30, 2017
	Total U.S. Individual Solutions Division			Individual Annuities			Individual Life			Total U.S. Individual Solutions Division			Individual Annuities			Individual Life
Revenues (1):
Premiums		790			121			669			264			41			223
Policy charges and fee income		2,949			2,097			852			1,245			726			519
Net investment income		2,005			556			1,449			666			182			484
Asset management fees, commissions and other income		1,591			1,051			540			540			355			185

Total revenues		7,335			3,825			3,510			2,715			1,304			1,411


Benefits and Expenses (1):
Insurance and annuity benefits		1,732			246			1,486			642			87			555
Interest credited to policyholders’ account balances		781			245			536			263			81			182
Interest expense		532			51			481			183			20			163
Deferral of acquisition costs		(740	)		(230	)		(510	)		(232	)		(71	)		(161	)
Amortization of acquisition costs		746			346			400			187			116			71
General and administrative expenses		2,916			1,510			1,406			945			494			451

Total benefits and expenses		5,967			2,168			3,799			1,988			727			1,261

Adjusted operating income (loss) before income taxes		1,368			1,657			(289	)		727			577			150

(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 19

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	165,153			153,295		Beginning total account value		159,202			162,107			165,153			161,171			160,143
	3,252			2,046		Sales: Highest Daily Suite - risk retained by Prudential (1)		576			817			1,010			1,126			1,116
	1			27		Highest Daily Suite - externally reinsured living benefits		7			—			1			—			—
	2,561			2,166		Other variable annuities (2)		735			796			683			881			997

	5,814			4,239		Total sales		1,318			1,613			1,694			2,007			2,113
	(8,694	)		(6,996	)	Surrenders and withdrawals		(2,288	)		(2,721	)		(2,867	)		(2,929	)		(2,898	)

	(2,880	)		(2,757	)	Net redemptions		(970	)		(1,108	)		(1,173	)		(922	)		(785	)
	(1,332	)		(1,163	)	Benefit payments		(359	)		(395	)		(453	)		(469	)		(410	)

	(4,212	)		(3,920	)	Net flows		(1,329	)		(1,503	)		(1,626	)		(1,391	)		(1,195	)
	4,234			15,499		Change in market value, interest credited, and other		5,170			5,494			(1,418	)		1,292			4,360
	(2,806	)		(2,767	)	Policy charges		(936	)		(945	)		(938	)		(929	)		(939	)

	162,369			162,107		Ending total account value		162,107			165,153			161,171			160,143			162,369


						Variable Annuities Account Value by Product:
	118,618			119,001		Highest Daily Suite - risk retained by Prudential (1)		119,001			121,150			118,249			117,348			118,618
	3,184			3,153		Highest Daily Suite - externally reinsured living benefits		3,153			3,227			3,165			3,146			3,184
	40,567			39,953		Other variable annuities (2)		39,953			40,776			39,757			39,649			40,567

	162,369			162,107		Ending total account value		162,107			165,153			161,171			160,143			162,369


						Fixed Annuities and other products:
	3,473			3,488		Beginning total account value		3,492			3,493			3,473			3,480			3,502
	218			37		Sales		11			5			30			60			128
	(81	)		(73	)	Surrenders and withdrawals		(21	)		(31	)		(28	)		(28	)		(25	)

	137			(36	)	Net sales (redemptions)		(10	)		(26	)		2			32			103
	(254	)		(238	)	Benefit payments		(72	)		(77	)		(84	)		(87	)		(83	)

	(117	)		(274	)	Net flows		(82	)		(103	)		(82	)		(55	)		20
	237			280		Interest credited and other		84			83			89			77			71
	—			(1	)	Policy charges		(1	)		—			—			—			—

	3,593			3,493		Ending total account value		3,493			3,473			3,480			3,502			3,593

						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (3):
	1,784			1,415		Insurance Agents		418			489			525			619			640
	1,111			676		Wirehouses		202			303			323			355			433
	2,708			1,801		Independent Financial Planners		597			713			758			951			999
	429			384		Bank Distribution		112			113			118			142			169

	6,032			4,276		Total		1,329			1,618			1,724			2,067			2,241

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

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

(3)	Amounts represent gross sales.

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,892		Beginning balance		9,804			9,816			9,892			9,932			9,932
	785			483		Premiums and deposits		130			167			211			256			318
	(457	)		(431	)	Surrenders and withdrawals		(133	)		(166	)		(163	)		(155	)		(139	)

	328			52		Net sales (redemptions)		(3	)		1			48			101			179
	(303	)		(290	)	Benefit payments		(89	)		(90	)		(100	)		(106	)		(97	)

	25			(238	)	Net flows		(92	)		(89	)		(52	)		(5	)		82
	199			177		Interest credited and other		63			71			61			69			69
	(109	)		(14	)	Net transfers (to) from separate account		42			94			31			(64	)		(76	)
	(1	)		(1	)	Policy charges		(1	)		—			—			—			(1	)

	10,006			9,816		Ending balance		9,816			9,892			9,932			9,932			10,006


						Account Values in Separate Account (1):
	158,734			146,891		Beginning balance		152,890			155,784			158,734			154,719			153,713
	5,247			3,793		Premiums and deposits		1,199			1,451			1,513			1,811			1,923
	(8,318	)		(6,638	)	Surrenders and withdrawals		(2,176	)		(2,586	)		(2,732	)		(2,802	)		(2,784	)

	(3,071	)		(2,845	)	Net redemptions		(977	)		(1,135	)		(1,219	)		(991	)		(861	)
	(1,283	)		(1,111	)	Benefit payments		(342	)		(382	)		(437	)		(450	)		(396	)

	(4,354	)		(3,956	)	Net flows		(1,319	)		(1,517	)		(1,656	)		(1,441	)		(1,257	)
	4,272			15,602		Change in market value, interest credited and other		5,191			5,506			(1,390	)		1,300			4,362
	109			14		Net transfers (to) from general account		(42	)		(94	)		(31	)		64			76
	(2,805	)		(2,767	)	Policy charges		(936	)		(945	)		(938	)		(929	)		(938	)

	155,956			155,784		Ending balance		155,784			158,734			154,719			153,713			155,956

(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 21

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	2017				2018
	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		3,530		3,380		3,134		2,950		2,818
Guaranteed minimum withdrawal benefits		483		477		450		433		428
Guaranteed minimum income benefits		2,772		2,791		2,690		2,651		2,661
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		128,465		131,146		128,176		127,490		129,431
Guaranteed minimum withdrawal & income benefits - externally reinsured		3,153		3,227		3,165		3,146		3,184

Total		138,403		141,021		137,615		136,670		138,522


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		113,691		115,690		112,913		112,055		113,257
Account Values with Auto-Rebalancing Feature - externally reinsured		3,153		3,227		3,165		3,146		3,184
Account Values without Auto-Rebalancing Feature		21,559		22,104		21,537		21,469		22,081

Total		138,403		141,021		137,615		136,670		138,522


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		3,250		2,928		3,506		3,775		3,634
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		752		661		742		797		757

Total		4,002		3,589		4,248		4,572		4,391

(1)	At end of period.

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	2017				2018
	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		126,009		128,545		125,515		124,777		126,693
Net amount at risk		297		285		356		456		404
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,952		32,269		31,322		30,925		31,057
Net amount at risk		2,785		2,611		3,078		3,179		2,916

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		116,844		118,916		116,078		115,201		116,441
Account Values without Auto-Rebalancing Feature		41,117		41,898		40,759		40,501		41,309

Total		157,961		160,814		156,837		155,702		157,750


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,060		1,008		1,403		1,545		1,379
Net Amount at Risk without Auto-Rebalancing Feature		2,022		1,888		2,031		2,090		1,941

Total		3,082		2,896		3,434		3,635		3,320

(1)	At end of period.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						ANNUALIZED NEW BUSINESS PREMIUMS (1):

	158			160		Term life		57			53			49			54			55
	68			124		Guaranteed Universal life		31			32			21			24			23
	99			82		Other Universal life		28			43			26			29			44
	105			75		Variable life		26			55			29			35			41

	430			441		Total		142			183			125			142			163

						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	98			85		Prudential Advisors		29			33			30			33			35
	332			356		Third party distribution		113			150			95			109			128

	430			441		Total		142			183			125			142			163


						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,861			26,041		Beginning balance		26,399			26,612			26,861			27,420			27,942
	2,262			2,374		Premiums and deposits		738			831			734			738			790
	(822	)		(750	)	Surrenders and withdrawals		(228	)		(281	)		(249	)		(293	)		(280	)

	1,440			1,624		Net sales		510			550			485			445			510
	(432	)		(426	)	Benefit payments		(121	)		(140	)		(145	)		(155	)		(132	)

	1,008			1,198		Net flows		389			410			340			290			378
	1,355			262		Interest credited and other		119			131			524			527			304
	374			328		Net transfers from separate account		116			110			119			119			136
	(1,251	)		(1,217	)	Policy charges		(411	)		(402	)		(424	)		(414	)		(413	)
	—			—		Acquisition		—			—			—			—			—

	28,347			26,612		Ending balance		26,612			26,861			27,420			27,942			28,347


						*Separate Account Liabilities:*
	32,085			28,455		Beginning balance		30,259			31,100			32,085			31,897			32,430
	1,163			1,115		Premiums and deposits		330			491			419			379			365
	(837	)		(785	)	Surrenders and withdrawals		(338	)		(464	)		(253	)		(312	)		(272	)

	326			330		Net sales (redemptions)		(8	)		27			166			67			93
	(142	)		(122	)	Benefit payments		(32	)		(47	)		(55	)		(46	)		(41	)

	184			208		Net flows		(40	)		(20	)		111			21			52
	2,362			3,451		Change in market value, interest credited and other		1,227			1,347			51			861			1,450
	(374	)		(328	)	Net transfers to general account		(116	)		(110	)		(119	)		(119	)		(136	)
	(695	)		(686	)	Policy charges		(230	)		(232	)		(231	)		(230	)		(234	)
	—			—		Acquisition		—			—			—			—			—

	33,562			31,100		Ending balance		31,100			32,085			31,897			32,430			33,562


						FACE AMOUNT IN FORCE (3):

						Term life		745,849			753,804			761,014			770,208			779,181
						Guaranteed Universal life		141,031			142,546			143,449			144,110			144,831
						Other Universal life		46,888			47,516			47,842			48,598			49,552
						Variable life		162,660			163,174			162,514			162,762			162,881

						Total		1,096,429			1,107,040			1,114,820			1,125,678			1,136,445

(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 24

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


Year-to-date							2017						2018
2018			2017				3Q			4Q			1Q			2Q			3Q

						DEFERRED POLICY ACQUISITION COSTS

						GROUP INSURANCE:
	162			176		Beginning balance		173			163			162			161			160
	1			—		Capitalization		—			—			—			1			—
	(4	)		(13	)	Amortization - operating results		(10	)		(1	)		(1	)		(2	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	159			163		Ending balance		163			162			161			160			159


						INDIVIDUAL ANNUITIES:
	5,130			4,871		Beginning balance		5,312			5,089			5,130			5,083			5,047
	307			230		Capitalization		71			84			90			107			110
	(396	)		(346	)	Amortization - operating results		(116	)		(118	)		(111	)		(146	)		(139	)
	(174	)		382		Amortization - realized investment gains and losses		(173	)		82			(62	)		(39	)		(73	)
	103			(48	)	Impact of unrealized (gains) or losses on AFS securities		(5	)		(7	)		36			42			25
	—			—		Other		—			—			—			—			—

	4,970			5,089		Ending balance		5,089			5,130			5,083			5,047			4,970


						INDIVIDUAL LIFE INSURANCE:
	5,405			5,278		Beginning balance		5,330			5,355			5,405			5,637			5,818
	506			510		Capitalization		161			181			159			163			184
	(267	)		(400	)	Amortization - operating results		(71	)		(83	)		(91	)		(105	)		(71	)
	13			105		Amortization - realized investment gains and losses		(2	)		(4	)		9			2			2
	302			(138	)	Impact of unrealized (gains) or losses on AFS securities		(63	)		(44	)		155			121			26

	5,959			5,355		Ending balance		5,355			5,405			5,637			5,818			5,959


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,125			1,082		Beginning balance		1,211			1,133			1,125			1,083			1,051
	2			2		Capitalization		1			—			1			—			1
	(109	)		(105	)	Amortization - operating results		(34	)		(36	)		(31	)		(40	)		(38	)
	(49	)		166		Amortization - realized investment gains and losses		(43	)		29			(20	)		(4	)		(25	)
	33			(12	)	Impact of unrealized (gains) or losses on AFS securities		(2	)		(1	)		8			12			13
	—			—		Other		—			—			—			—			—

	1,002			1,133		Ending balance		1,133			1,125			1,083			1,051			1,002

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


Year-to-date						%				2017						2018
2018			2017			Change				3Q			4Q			1Q			2Q			3Q

									Revenues (1):
	12,258			11,885			3	%	Premiums		3,891			3,822			4,541			3,767			3,950
	401			374			7	%	Policy charges and fee income		128			129			143			129			129
	3,934			3,743			5	%	Net investment income		1,278			1,284			1,301			1,320			1,313
	225			266			-15	%	Asset management fees, commissions and other income		79			57			55			72			98

	16,818			16,268			3	%	Total revenues		5,376			5,292			6,040			5,288			5,490

									Benefits and Expenses (1):
	10,650			10,197			4	%	Insurance and annuity benefits		3,342			3,291			3,915			3,300			3,435
	687			678			1	%	Interest credited to policyholders’ account balances		230			221			238			222			227
	15			10			50	%	Interest expense		4			3			4			5			6
	(1,303	)		(1,389	)		6	%	Deferral of acquisition costs		(417	)		(418	)		(475	)		(413	)		(415	)
	923			864			7	%	Amortization of acquisition costs		275			274			331			306			286
	3,316			3,487			-5	%	General and administrative expenses		1,143			1,144			1,171			1,084			1,061

	14,288			13,847			3	%	Total benefits and expenses		4,577			4,515			5,184			4,504			4,600


	2,530			2,421			5	%	Adjusted operating income before income taxes		799			777			856			784			890

(1)

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

Page 26

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Nine Months Ended September 30, 2018									Quarter Ended September 30, 2018
	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		12,258			6,329			5,929			3,950			1,975			1,975
Policy charges and fee income		401			295			106			129			95			34
Net investment income		3,934			1,695			2,239			1,313			571			742
Asset management fees, commissions and other income		225			142			83			98			55			43

Total revenues		16,818			8,461			8,357			5,490			2,696			2,794


Benefits and Expenses (1):
Insurance and annuity benefits		10,650			5,668			4,982			3,435			1,770			1,665
Interest credited to policyholders’ account balances		687			188			499			227			62			165
Interest expense		15			8			7			6			3			3
Deferral of acquisition costs		(1,303	)		(666	)		(637	)		(415	)		(209	)		(206	)
Amortization of acquisition costs		923			472			451			286			135			151
General and administrative expenses		3,316			1,550			1,766			1,061			486			575

Total benefits and expenses		14,288			7,220			7,068			4,600			2,247			2,353


Adjusted operating income before income taxes		2,530			1,241			1,289			890			449			441


	Nine Months Ended September 30, 2017									Quarter Ended September 30, 2017
	Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations			Total International Insurance Division			International Insurance - Life Planner Operations			International Insurance - Gibraltar Life & Other Operations
Revenues (1):
Premiums		11,885			5,987			5,898			3,891			1,938			1,953
Policy charges and fee income		374			265			109			128			92			36
Net investment income		3,743			1,565			2,178			1,278			540			738
Asset management fees, commissions and other income		266			165			101			79			57			22

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


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

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


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

(1)

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

Page 27

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


Year-to-date					2017				2018
2018		2017			3Q		4Q		1Q		2Q		3Q

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	4,954		4,617	Japan, excluding Gibraltar Life		1,459		1,439		1,880		1,537		1,537
	6,035		6,007	Gibraltar Life		1,989		1,893		2,206		1,820		2,009
	1,670		1,635	All other countries		571		619		598		539		533

	12,659		12,259	Total		4,019		3,951		4,684		3,896		4,079


				Annualized new business premiums:
	613		749	Japan, excluding Gibraltar Life		162		164		234		190		189
	1,157		1,243	Gibraltar Life (2)		403		352		407		399		351
	328		349	All other countries		115		129		117		106		105

	2,098		2,341	Total (2)		680		645		758		695		645


				Annualized new business premiums by distribution channel:
	941		1,098	Life Planner Operations		277		293		351		296		294
	608		574	Gibraltar Life Consultants (2)		178		167		196		234		178
	385		479	Banks (2)		178		136		158		104		123
	164		190	Independent Agency (2)		47		49		53		61		50

	2,098		2,341	Total (2)		680		645		758		695		645

				Constant exchange rate basis (3):
				Net premiums, policy charges and fee income:
	4,904		4,643	Japan, excluding Gibraltar Life		1,458		1,456		1,842		1,520		1,542
	5,983		6,054	Gibraltar Life		1,988		1,903		2,168		1,802		2,013
	1,636		1,584	All other countries		547		594		562		532		542

	12,523		12,281	Total		3,993		3,953		4,572		3,854		4,097


				Annualized new business premiums:
	609		754	Japan, excluding Gibraltar Life		162		165		232		188		189
	1,154		1,246	Gibraltar Life (2)		403		353		405		399		350
	322		333	All other countries		108		121		108		104		110

	2,085		2,333	Total (2)		673		639		745		691		649


				Annualized new business premiums by distribution channel:
	931		1,087	Life Planner Operations		270		286		340		292		299
	606		576	Gibraltar Life Consultants (2)		178		167		195		234		177
	384		479	Banks (2)		178		136		158		104		122
	164		191	Independent Agency (2)		47		50		52		61		51

	2,085		2,333	Total (2)		673		639		745		691		649

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

(2)	2017 sales amounts have been revised from the elimination of Gibraltar Life’s one-month reporting lag.

(3)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 111 per U.S. dollar and Korean won 1,150 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 28

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2017						2018
	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		337			339			343			347			351
Gibraltar Life		338			340			341			342			345
All other countries		127			130			132			125			127

Total		802			809			816			814			823


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,674			3,714			3,773			3,814			3,860
Gibraltar Life		7,222			7,220			7,219			7,217			7,224
All other countries		2,146			2,169			2,134			2,096			2,116

Total		13,042			13,103			13,126			13,127			13,200


International life insurance policy persistency:

Life Planner Operations:
13 months		92.9	%		92.9	%		92.9	%		93.3	%		93.1	%
25 months		86.1	%		86.2	%		86.6	%		86.9	%		86.9	%

Gibraltar Life (3):
13 months		93.4	%		93.4	%		93.5	%		93.6	%		93.7	%
25 months		87.2	%		87.2	%		87.2	%		87.1	%		87.1	%

Number of Life Planners at end of period:
Japan		3,951			3,941			4,076			3,964			4,130
All other countries		3,880			3,890			3,695			3,674			3,668

Total Life Planners		7,831			7,831			7,771			7,638			7,798


Gibraltar Life Consultants		8,327			8,326			8,137			7,938			8,030

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 111 per U.S. dollar and Korean won 1,150 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

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

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

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	September 30, 2018									December 31, 2017
	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		283,555		26,377		257,178		64.1	%		287,878		27,448		260,430		64.7	%
Public, held-to-maturity, at amortized cost		1,699		—		1,699		0.4	%		1,747		—		1,747		0.4	%
Private, available-for-sale, at fair value		56,959		12,828		44,131		11.0	%		58,293		13,814		44,479		11.1	%
Private, held-to-maturity, at amortized cost		258		—		258		0.1	%		302		—		302		0.1	%
Fixed maturities, trading, at fair value (1)		1,932		201		1,731		0.4	%		1,789		200		1,589		0.4	%
Assets supporting experience-rated contractholder liabilities, at fair value		21,083		—		21,083		5.2	%		22,097		—		22,097		5.5	%
Equity securities, at fair value (1)		6,447		2,146		4,301		1.1	%		6,755		2,479		4,276		1.1	%
Commercial mortgage and other loans, at book value		58,895		8,915		49,980		12.4	%		55,411		9,017		46,394		11.5	%
Policy loans, at outstanding balance		11,928		4,438		7,490		1.9	%		11,891		4,543		7,348		1.8	%
Other invested assets (1)(2)		11,517		3,345		8,172		2.0	%		10,669		3,159		7,510		1.9	%
Short-term investments		5,741		108		5,633		1.4	%		6,734		631		6,103		1.5	%

Subtotal (3)		460,014		58,358		401,656		100.0	%		463,566		61,291		402,275		100.0	%

Invested assets of other entities and operations (4)		4,958		—		4,958					6,305		—		6,305

Total investments		464,972		58,358		406,614					469,871		61,291		408,580


Fixed Maturities by Credit Quality (3)(5):	September 30, 2018											December 31, 2017
	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 (6)
1		202,456		20,797		3,163		220,090		84.9	%		195,968		26,830		872		221,926		84.4	%
2		27,166		1,699		732		28,133		10.9	%		26,795		3,040		142		29,693		11.3	%

Subtotal - High or Highest Quality Securities		229,622		22,496		3,895		248,223		95.8	%		222,763		29,870		1,014		251,619		95.7	%

3		5,599		247		116		5,730		2.2	%		5,541		442		44		5,939		2.3	%
4		3,880		367		74		4,173		1.6	%		3,457		467		77		3,847		1.5	%
5		780		118		15		883		0.3	%		781		179		32		928		0.4	%
6		172		14		3		183		0.1	%		196		10		3		203		0.1	%

Subtotal - Other Securities		10,431		746		208		10,969		4.2	%		9,975		1,098		156		10,917		4.3	%

Total		240,053		23,242		4,103		259,192		100.0	%		232,738		30,968		1,170		262,536		100.0	%


Private Fixed Maturities:


NAIC Rating (6)
1		12,203		374		302		12,275		27.6	%		11,823		720		53		12,490		27.9	%
2		26,118		921		674		26,365		59.4	%		23,956		1,520		193		25,283		56.5	%

Subtotal - High or Highest Quality Securities		38,321		1,295		976		38,640		87.0	%		35,779		2,240		246		37,773		84.4	%

3		3,976		83		81		3,978		9.0	%		4,660		228		35		4,853		10.8	%
4		1,181		30		27		1,184		2.6	%		1,224		34		28		1,230		2.7	%
5		580		24		25		579		1.3	%		885		46		25		906		2.0	%
6		21		3		1		23		0.1	%		40		4		3		41		0.1	%

Subtotal - Other Securities		5,758		140		134		5,764		13.0	%		6,809		312		91		7,030		15.6	%

Total		44,079		1,435		1,110		44,404		100.0	%		42,588		2,552		337		44,803		100.0	%

(1)	Prior period amounts have been reclassified to conform to current period presentation.

(2)	Other invested assets consist of investments in limited partnerships and limited liability companies (“LPs/LLCs”), investment real estate held through direct ownership, derivative instruments and other miscellaneous investments.

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

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

(5)	Excludes fixed maturity securities classified as trading.

(6)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of September 30, 2018 and December 31, 2017, 1,052 securities with amortized cost of $4,806 million (fair value $4,777 million) and 982 securities with amortized cost of $6,022 million (fair value $6,217 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 30

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	September 30, 2018					December 31, 2017
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		127,189		74.3	%		128,332		76.0	%
Public, held-to-maturity, at amortized cost		1,699		1.0	%		1,747		1.0	%
Private, available-for-sale, at fair value		15,547		9.1	%		14,538		8.6	%
Private, held-to-maturity, at amortized cost		258		0.1	%		302		0.2	%
Fixed maturities, trading, at fair value (3)		296		0.2	%		257		0.1	%
Assets supporting experience-rated contractholder liabilities, at fair value		2,575		1.5	%		2,586		1.5	%
Equity securities, at fair value (3)		2,155		1.3	%		2,151		1.3	%
Commercial mortgage and other loans, at book value		16,823		9.8	%		14,268		8.5	%
Policy loans, at outstanding balance		2,604		1.5	%		2,545		1.5	%
Other invested assets (3)(4)		1,830		1.1	%		2,021		1.2	%
Short-term investments		226		0.1	%		244		0.1	%

Total		171,202		100.0	%		168,991		100.0	%


	September 30, 2018					December 31, 2017
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		129,989		56.4	%		132,098		56.6	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		28,584		12.4	%		29,941		12.8	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Fixed maturities, trading, at fair value (3)		1,435		0.6	%		1,332		0.6	%
Assets supporting experience-rated contractholder liabilities, at fair value		18,508		8.0	%		19,511		8.3	%
Equity securities, at fair value (3)		2,146		0.9	%		2,125		0.9	%
Commercial mortgage and other loans, at book value		33,157		14.4	%		32,126		13.8	%
Policy loans, at outstanding balance		4,886		2.1	%		4,803		2.1	%
Other invested assets (3)(4)		6,342		2.8	%		5,489		2.4	%
Short-term investments		5,407		2.4	%		5,859		2.5	%

Total		230,454		100.0	%		233,284		100.0	%

(1)	Excludes Closed Block Division.

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

(3)	Prior period amounts have been reclassified to conform to current period presentation.

(4)	Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments and other miscellaneous investments.

Page 31

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INVESTMENT RESULTS (1)

(in millions)



	Quarter Ended September 30
	2018									2017
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (5)			Amount			Realized Gains / (Losses)			Yield (5)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities (3)		3.83	%		2,671			89			3.82	%		2,526			150
Equity securities		3.09	%		33			—			4.38	%		87			235
Commercial mortgage and other loans		3.92	%		429			(1	)		4.04	%		402			(1	)
Policy loans		4.84	%		89			—			4.83	%		86			—
Short-term investments and cash equivalents		2.56	%		77			(3	)		1.29	%		43			—

Gross investment income before investment expenses		3.81	%		3,299			85			3.82	%		3,144			384
Investment expenses		-0.15	%		(161	)		—			-0.15	%		(131	)		—

Subtotal		3.66	%		3,138			85			3.67	%		3,013			384

Other investments (3)					86			63						105			1,118
Investment results of other entities and operations (4)					262			7						292			(1	)
Less, investment income related to adjusted operating income reconciling items					(119	)								(65	)

Total					3,367			155						3,345			1,501


	Nine Months Ended September 30
	2018									2017
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (5)			Amount			Realized Gains / (Losses)			Yield (5)			Amount			Realized Gains / (Losses)
General Account (2)
Fixed maturities (3)		3.87	%		7,965			336			3.88	%		7,494			465
Equity securities		2.79	%		90			—			4.35	%		254			309
Commercial mortgage and other loans		4.01	%		1,272			(4	)		4.09	%		1,177			(6	)
Policy loans		4.86	%		267			—			4.90	%		259			—
Short-term investments and cash equivalents		2.06	%		209			(1	)		1.24	%		117			—

Gross investment income before investment expenses		3.83	%		9,803			331			3.87	%		9,301			768
Investment expenses		-0.15	%		(459	)		—			-0.14	%		(361	)		—

Subtotal		3.68	%		9,344			331			3.73	%		8,940			768

Other investments (3)					266			762						463			(284	)
Investment results of other entities and operations (4)					786			64						840			(3	)
Less, investment income related to adjusted operating income reconciling items					(288	)								(209	)

Total					10,108			1,157						10,034			481

(1)	Excludes Closed Block Division.

(2)

Excludes commercial loans and assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and assets of our investment management operations, including assets that are managed for third parties, and those assets classified as “Separate account assets” on our balance sheet.

(3)

Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in “Other investments.” Realized gains / (losses) for “Other investments” includes changes in fair value of product-related and other derivatives and embedded derivatives.

(4)	Includes invested income of commercial loans, assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and our investment management operations.

(5)

Yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest-related items, such as settlements of duration management swaps which are included in realized investment gains and losses and included in adjusted operating income. Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities and securities lending activity. Yields for fixed maturities are based on quarterly average amortized cost. Yields for fixed maturities, short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. A yield is not presented for other investments as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to commercial loans and assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and investment income and assets related to other investments. Prior period yields have been revised to conform with current period presentation.

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)



	Quarter Ended September 30
	2018									2017
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (1)			Amount			(Losses)			Yield (1)			Amount			(Losses)
Japanese Insurance Operations:
Fixed maturities (2)		2.90	%		925			123			3.01	%		918			132
Equity securities		2.13	%		12			—			3.22	%		23			232
Commercial mortgage and other loans		3.84	%		158			1			3.91	%		130			—
Policy loans		3.92	%		25			—			3.97	%		24			—
Short-term investments and cash equivalents		3.47	%		9			—			1.15	%		3			—

Gross investment income before investment expenses		3.01	%		1,129			124			3.12	%		1,098			364
Investment expenses		-0.13	%		(61	)		—			-0.12	%		(48	)		—

Subtotal		2.88	%		1,068			124			3.00	%		1,050			364

Other investments (2)					26			(95	)					27			11

Total					1,094			29						1,077			375


	Nine Months Ended September 30
	2018									2017
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (1)			Amount			(Losses)			Yield (1)			Amount			(Losses)
Japanese Insurance Operations:
Fixed maturities (2)		2.93	%		2,770			471			3.05	%		2,704			505
Equity securities		3.09	%		50			—			2.75	%		59			266
Commercial mortgage and other loans		3.92	%		457			(1	)		4.07	%		380			—
Policy loans		3.91	%		75			—			3.98	%		72			—
Short-term investments and cash equivalents		2.41	%		26			—			1.33	%		10			—

Gross investment income before investment expenses		3.05	%		3,378			470			3.16	%		3,225			771
Investment expenses		-0.13	%		(174	)		—			-0.12	%		(135	)		—

Subtotal		2.92	%		3,204			470			3.04	%		3,090			771

Other investments (2)					86			(89	)					100			197

Total					3,290			381						3,190			968

(1)

(2)

Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in “Other investments”. Realized gains / (losses) for “Other investments” includes changes in fair value of product-related and other derivatives and embedded derivatives.

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Quarter Ended September 30
	2018									2017
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (4)			Amount			(Losses)			Yield (4)			Amount			(Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities (3)		4.63	%		1,746			(34	)		4.52	%		1,608			18
Equity securities		4.05	%		21			—			5.01	%		64			3
Commercial mortgage and other loans		3.96	%		271			(2	)		4.10	%		272			(1	)
Policy loans		5.33	%		64			—			5.29	%		62			—
Short-term investments and cash equivalents		2.50	%		68			(3	)		1.30	%		40			—

Gross investment income before investment expenses		4.43	%		2,170			(39	)		4.35	%		2,046			20
Investment expenses		-0.16	%		(100	)		—			-0.17	%		(83	)		—

Subtotal		4.27	%		2,070			(39	)		4.18	%		1,963			20

Other investments (3)					60			158						78			1,107

Total					2,130			119						2,041			1,127


	Nine Months Ended September 30
	2018									2017
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (4)			Amount			(Losses)			Yield (4)			Amount			(Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities (3)		4.67	%		5,195			(135	)		4.57	%		4,790			(40	)
Equity securities		2.49	%		40			—			5.28	%		195			43
Commercial mortgage and other loans		4.05	%		815			(3	)		4.10	%		797			(6	)
Policy loans		5.38	%		192			—			5.38	%		187			—
Short-term investments and cash equivalents		2.03	%		183			(1	)		1.23	%		107			—

Gross investment income before investment expenses		4.43	%		6,425			(139	)		4.39	%		6,076			(3	)
Investment expenses		-0.17	%		(285	)		—			-0.16	%		(226	)		—

Subtotal		4.26	%		6,140			(139	)		4.23	%		5,850			(3	)

Other investments (3)					180			851						363			(481	)

Total					6,320			712						6,213			(484	)

(1)	Excludes Closed Block Division.

(2)

(3)

Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading, which are included in “Other investments.” Realized gains / (losses) for “Other investments” includes changes in fair value of product-related and other derivatives and embedded derivatives.

(4)

Page 34

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

IMPACT OF INDIVIDUAL ANNUITIES MARKET PERFORMANCE AND EXPERIENCE TRUE-UPS

(in millions)


	Third Quarter 2018												Third Quarter 2017
	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			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		(23	)		1		4		8		(36	)		23		(9	)		(3	)		(13	)		48
Total of above items		(23	)		1		4		8		(36	)		23		(9	)		(3	)		(13	)		48
Reported amount		294			85		85		139					355		87			81			116
Amount excluding impact of items indicated above		317			84		81		131					332		96			84			129

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	Three Months Ended September 30, 2018																								Three Months Ended September 30, 2017
				Reconciling Items																								Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net			Change in experience-rated contractholder liabilities due to asset value changes			Closed Block Division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block Division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		8,143			—			—			—			529			138			—			8,810			7,111			—			—		—		578		106		—			7,795
Policy charges and fee income		1,557			(60	)		—			—			—			1			—			1,498			1,565			(63	)		—		—		—		—		—			1,502
Net investment income		3,367			(10	)		—			—			560			129			—			4,046			3,345			(9	)		—		—		666		74		—			4,076
Realized investment gains (losses), net		63			120			—			—			(4	)		(28	)		—			151			121			1,377			—		—		107		3		—			1,608
Asset management fees, commissions and other income		1,302			161			10			—			164			36			(30	)		1,643			1,219			27			85		—		25		2		(26	)		1,332

Total revenues		14,432			211			10			—			1,249			276			(30	)		16,148			13,361			1,332			85		—		1,376		185		(26	)		16,313


Benefits and Expenses:

Insurance and annuity benefits		8,464			(31	)		—			—			1,099			225			—			9,757			7,376			(46	)		—		—		1,207		156		—			8,693
Interest credited to policyholders’ account balances		940			31			—			21			33			5			—			1,030			927			43			—		31		34		—		—			1,035
Interest expense		355			—			—			—			1			1			—			357			330			—			—		—		—		—		—			330
Deferral of acquisition costs		(708	)		—			—			—			—			(2	)		—			(710	)		(653	)		—			—		—		—		—		—			(653	)
Amortization of acquisition costs		496			57			—			—			8			2			—			563			470			165			—		—		8		—		—			643
General and administrative expenses		3,217			(23	)		—			—			90			33			(4	)		3,313			3,127			6			—		—		94		19		(2	)		3,244

Total benefits and expenses		12,764			34			—			21			1,231			264			(4	)		14,310			11,577			168			—		31		1,343		175		(2	)		13,292



	Nine Months Ended September 30, 2018																								Nine Months Ended September 30, 2017
				Reconciling Items																								Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net			Change in experience-rated contractholder liabilities due to asset value changes			Closed Block Division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		Change in experience- rated contractholder liabilities due to asset value changes		Closed Block Division		Other divested businesses		Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		21,491			—			—			—			1,680			388			—			23,559			20,442			—			—		—		1,852		308		—			22,602
Policy charges and fee income		4,702			(223	)		—			—			—			3			—			4,482			3,914			(154	)		—		—		—		—		—			3,760
Net investment income		10,108			(30	)		—			—			1,744			318			—			12,140			10,034			(26	)		—		—		1,983		235		—			12,226
Realized investment gains (losses), net		277			987			—			—			104			(107	)		—			1,261			404			32			—		—		462		45		—			943
Asset management fees, commissions and other income		3,772			(206	)		(586	)		—			272			(51	)		(83	)		3,118			3,602			(54	)		330		—		85		6		(76	)		3,893

Total revenues		40,350			528			(586	)		—			3,800			551			(83	)		44,560			38,396			(202	)		330		—		4,382		594		(76	)		43,424


Benefits and Expenses:

Insurance and annuity benefits		22,477			(117	)		—			—			3,422			2,030			—			27,812			20,908			(154	)		—		—		3,915		483		—			25,152
Interest credited to policyholders’ account balances		2,783			65			—			(482	)		99			9			—			2,474			2,800			(166	)		—		188		100		—		—			2,922
Interest expense		1,042			—			—			—			1			3			—			1,046			978			—			—		—		1		2		—			981
Deferral of acquisition costs		(2,110	)		—			—			—			—			(5	)		—			(2,115	)		(2,132	)		—			—		—		—		—		—			(2,132	)
Amortization of acquisition costs		1,581			152			—			—			26			5			—			1,764			1,613			(474	)		—		—		27		—		—			1,166
General and administrative expenses		9,527			(90	)		—			—			274			95			(8	)		9,798			9,557			69			—		—		290		58		(10	)		9,964

Total benefits and expenses		35,300			10			—			(482	)		3,822			2,137			(8	)		40,779			33,724			(725	)		—		188		4,333		543		(10	)		38,053

(1)	See page 38 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

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

(in millions)


	Three Months Ended December 31, 2017																						Three Months Ended March 31, 2018
				Reconciling Items																						Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		Change in experience-rated contractholder liabilities due to asset value changes			Closed Block Division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)			Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net			Change in experience- rated contractholder liabilities due to asset value changes			Closed Block Division			Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		8,720			—			—		—			674		95			—			9,489			6,638			—			—			—			551			122			—			7,311
Policy charges and fee income		1,604			(61	)		—		—			—		—			—			1,543			1,575			(71	)		—			—			—			—			—			1,504
Net investment income		3,465			(12	)		—		—			670		86			—			4,209			3,337			(10	)		—			—			593			78			—			3,998
Realized investment gains (losses), net		82			(663	)		—		—			72		(2	)		—			(511	)		63			433			—			—			(2	)		(69	)		—			425
Asset management fees, commissions and other income		1,379			121			6		—			28		2			(1	)		1,535			1,262			(336	)		(403	)		—			21			1			(26	)		519

Total revenues		15,250			(615	)		6		—			1,444		181			(1	)		16,265			12,875			16			(403	)		—			1,163			132			(26	)		13,757


Benefits and Expenses:

Insurance and annuity benefits		9,163			85			—		—			1,311		174			—			10,733			6,853			(62	)		—			—			1,035			177			—			8,003
Interest credited to policyholders’ account balances		929			(25	)		—		(37	)		33		—			—			900			911			25			—			(418	)		33			(1	)		—			550
Interest expense		344			—			—		—			—		2			—			346			340			—			—			—			—			1			—			341
Deferral of acquisition costs		(686	)		—			—		—			—		—			—			(686	)		(718	)		—			—			—			—			(1	)		—			(719	)
Amortization of acquisition costs		480			(76	)		—		—			10		—			—			414			530			47			—			—			10			1			—			588
General and administrative expenses		3,448			(18	)		—		—			94		18			(100	)		3,442			3,238			(58	)		—			—			94			27			—			3,301

Total benefits and expenses		13,678			(34	)		—		(37	)		1,448		194			(100	)		15,149			11,154			(48	)		—			(418	)		1,172			204			—			12,064



	Three Months Ended June 30, 2018
				Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net			Change in experience-rated contractholder liabilities due to asset value changes			Closed Block Division		Other divested businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		6,710			—			—			—			600		128			—			7,438
Policy charges and fee income		1,570			(92	)		—			—			—		2			—			1,480
Net investment income		3,404			(10	)		—			—			591		111			—			4,096
Realized investment gains (losses), net		151			434			—			—			110		(10	)		—			685
Asset management fees, commissions and other income		1,208			(31	)		(193	)		—			87		(88	)		(27	)		956

Total revenues		13,043			301			(193	)		—			1,388		143			(27	)		14,655


Benefits and Expenses:

Insurance and annuity benefits		7,160			(24	)		—			—			1,288		1,628			—			10,052
Interest credited to policyholders’ account balances		932			9			—			(85	)		33		5			—			894
Interest expense		347			—			—			—			—		1			—			348
Deferral of acquisition costs		(684	)		—			—			—			—		(2	)		—			(686	)
Amortization of acquisition costs		555			48			—			—			8		2			—			613
General and administrative expenses		3,072			(9	)		—			—			90		35			(4	)		3,184

Total benefits and expenses		11,382			24			—			(85	)		1,419		1,669			(4	)		14,405

(1)	See page 38 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

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

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

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

2. After-tax adjusted operating income:

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

3. Annualized New Business Premiums:

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

4. Assets Under Management:

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

5. Prudential Financial, Inc. Equity:

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

6. Book value per share of Common Stock:

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

Book value per share of Common Stock - including AOCI: As of the third quarter of 2017, book value including AOCI per share of common stock includes a $500 million increase in equity and a 5.75 million increase in diluted shares, reflecting the dilutive impact of exchangeable surplus notes (“ESNs”) when book value per share of common stock is greater than $86.92. Reflecting the dilutive impact of ESNs when book value per share is greater than $85.00, to calculate book value including AOCI per share of common stock as of December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018, equity is increased by $500 million and diluted shares include 5.88 million shares.

Book value per share of Common Stock - excluding AOCI, and excluding AOCI and remeasurement of foreign currency and certain deferred taxes: The ESNs are subject to customary antidilution adjustments and the exchange rate is accordingly revalued in the fourth quarter of each year. As of third quarter of 2017, the conversion of ESNs is antidilutive as book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock is less than $86.92. Reflecting the dilutive impact of ESNs when book value per share is greater than $85.00, for the fourth quarter of 2017 and the first, second and third quarters of 2018, to calculate book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock equity is increased by $500 million and diluted shares include 5.88 million shares.

Diluted shares as of the third quarter of 2017 do not include shares related to ESNs due to the antidilutive impact of conversion of ESNs when book value per share of common stock (i.e., book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock) is less than $86.92. Diluted shares as of December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018 include 5.88 million shares due to the dilutive impact of conversion of ESNs when book value per share of common stock (i.e., book value excluding AOCI per share of common stock and book value excluding AOCI and remeasurement of foreign currency and certain deferred taxes per share of common stock) is greater than $85.00.

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

KEY DEFINITIONS AND FORMULAS

7. Borrowings - Capital Debt:

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

8. Borrowings - Operating Debt - Investment Related:

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

9. Borrowings - Operating Debt - Specified Businesses:

Borrowings primarily associated with the investment management business.

10. Client Assets:

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

11. Divested Businesses:

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

12. Earned Premiums:

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

13. Full Service Retirement:

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

14. Full Service Stable Value:

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

15. General Account:

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

16. Gibraltar Life:

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

17. Gibraltar Life Consultants:

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

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

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

19. Group Insurance Benefits Ratios:

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

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

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

21. Individual Annuities - Net Amounts at Risk:

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

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

Page 39

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

KEY DEFINITIONS AND FORMULAS

22. Insurance and Annuity Benefits:

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

23. International Life Planners:

Captive insurance Advisors in our Life Planner Operations.

24. Non-recourse and Limited-recourse Debt:

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

25. Policy Persistency - Group Insurance:

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

26. Policy Persistency - International Insurance:

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

27. Prudential Advisors:

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

28. Prudential Advisor productivity:

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

29. Separate Accounts:

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

30. Wrap-Fee Products:

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

Page 40

Prudential Financial, Inc.

Quarterly Financial Supplement

Third Quarter 2018

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of November 7, 2018


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

CREDIT RATINGS:
as of November 7, 2018

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

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

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

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

*	NR indicates not rated.

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

INVESTOR INFORMATION:


Corporate Offices:		Investor Information Hotline:

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

Common Stock:


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

Page 41

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