Form 8-K PRUDENTIAL FINANCIAL For: Feb 06

February 6, 2019 4:19 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): February 6, 2019

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 full year and fourth 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 fourth quarter 2018.

Conference Call and Related Materials. Members of the Company’s senior management will hold a conference call on Thursday, February 7, 2019 at 11:00 A.M. ET, to discuss the Company’s fourth quarter 2018 results. Related materials are available on the Company’s Investor Relations website at www.investor.prudential.com.

C.	Dividend Declaration. Today the Company announced the declaration of a quarterly dividend of $1.00 per share of Common Stock, payable on March 14, 2019, to shareholders of record as of February 20, 2019.

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 February 6, 2019, announcing full year and fourth quarter 2018 results (furnished and not filed).

99.2		Quarterly Financial Supplement for Prudential Financial, Inc. for fourth 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: February 6, 2019


PRUDENTIAL FINANCIAL, INC.

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

Exhibit 99.1

LOGO

February 6, 2019

Prudential Financial, Inc. Announces 2018 Results

●

Net income attributable to Prudential Financial for 2018 of $4.074 billion or $9.50 per Common share versus $7.863 billion or $17.86 per share for 2017.

●

After-tax adjusted operating income of $5.019 billion or $11.69 per Common share for 2018 versus $4.652 billion or $10.58 per share for 2017.

●

Fourth quarter 2018 net income attributable to Prudential Financial of $842 million or $1.99 per Common share versus $3.765 billion or $8.61 per share for the year-ago quarter. Fourth quarter 2017 net income included a benefit of $2.871 billion or $6.64 per Common share as a result of the Tax Cuts and Jobs Act.

●

Fourth quarter 2018 after-tax adjusted operating income of $1.035 billion or $2.44 per Common share versus $1.173 billion or $2.69 per share for the year-ago quarter.

●

Notable items for the current quarter resulted in a net charge to net income and after-tax adjusted operating income of $228 million or $0.54 per Common share, as discussed later in this release.

●

Today, the Company declared a quarterly dividend of $1.00 per share of Common stock, payable on March 14, 2019, to shareholders of record as of February 20, 2019, representing an increase of 11% over the prior year dividend level.

Charles Lowrey, CEO, commented on results:

“We continued to generate meaningful value for our customers and grow our business. For the year, we increased adjusted earnings per share by 11% and adjusted book value per share by 8%. Our adjusted operating return on equity remained at the top end of our 12-13% target, and the fundamentals across our U.S. Financial Wellness, PGIM, and International businesses remained solid.

We maintained a strong capital position demonstrating resilience to equity market fluctuations, in particular during the fourth quarter. Our high level of cash flow generation enabled us to continue to invest in our businesses and return more than $3 billion to shareholders through dividends and share repurchases throughout the year.”


OTHER FINANCIAL HIGHLIGHTS ($ millions, except per share)	4Q:18		4Q:17
Book value per share of Common Stock		$116.34		$125.63
Adjusted book value per share of Common Stock		$96.06		$88.67
Common Stock share repurchases		$375		$313
Common Stock dividends		$377		$322
Common Stock dividends per share		$0.90		$0.75
Parent company highly liquid assets		$5,548		$4,376

-more-


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


NOTABLE ITEMS ($ millions, pre-tax)	4Q:18		4Q:17
Notable Items included in Adjusted Operating Income:
Updated estimates of profitability driven by market performance versus assumptions		$(109)		$16
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(140)		$90
Underwriting experience above / (below) average expected gains		$(10)		$(45)
(Higher) / lower than typical expenses		$(30)		$(12)
Total Notable Items included in Adjusted Operating Income		$(289)		$49

NEWARK, N.J. – Prudential Financial, Inc. (NYSE: PRU) today reported year-end and fourth quarter 2018 results. Net income attributable to Prudential Financial, Inc., was $4.074 billion ($9.50 per Common share) for the year ended December 31, 2018, compared to $7.863 billion ($17.86 per Common share) for the year ended December 31, 2017. After-tax adjusted operating income was $5.019 billion ($11.69 per Common share) for 2018, compared to $4.652 billion ($10.58 per Common share) for 2017.

For the fourth quarter of 2018, net income attributable to Prudential Financial, Inc., was $842 million ($1.99 per Common share), compared to $3.765 billion ($8.61 per Common share) for the fourth quarter of 2017. After-tax adjusted operating income was $1.035 billion ($2.44 per Common share) for the fourth quarter of 2018, compared to $1.173 billion ($2.69 per Common share) for the fourth quarter of 2017.

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 segment-level discussion, adjusted operating income refers to pre-tax results.

PGIM

PGIM, the Company’s global investment management businesses, reported adjusted operating income of $243 million for the current quarter, compared to $306 million in the year-ago quarter.

PGIM ($ millions)

4Q:18

4Q:17

Adjusted operating income

$243

$306

-more-


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

The decrease of $63 million from the year-ago quarter reflects a $67 million lower contribution from other related revenues, net of associated expenses, which amounted to $57 million for the current quarter. This decrease was partially offset by higher asset management fees, reflecting an increase in average assets under management.

PGIM assets under management of $1.161 trillion were $6 billion higher than the year-ago quarter driven by fixed income inflows partially offset by equity outflows and market depreciation. Unaffiliated third-party net outflows in the current quarter of $3.1 billion included a single institutional fixed income client outflow of $9 billion. Total PGIM net inflows in the current quarter were $9 billion.

U.S. Workplace Solutions

U.S. Workplace Solutions, consisting of the Retirement and Group Insurance segments, reported adjusted operating income of $249 million for the fourth quarter of 2018, compared to $313 million in the year-ago quarter.


RETIREMENT SEGMENT ($ millions)	4Q:18		4Q:17
Adjusted operating income		$216		$291
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(65)		$50
Underwriting experience above / (below) average expected gains		$5		$(10)

The Retirement segment reported adjusted operating income of $216 million for the current quarter, compared to $291 million in the year-ago quarter. Excluding the notable items above, results increased $25 million from the year-ago quarter reflecting a higher contribution from net investment spread results and an increase in underwriting gains from growth within our pension risk transfer business.

Retirement account values were $432 billion as of December 31, 2018, up 1% from a year earlier, reflecting positive net flows partially offset by market depreciation. Net flows in the current quarter of $6.2 billion included several pension risk transfer sales totaling $7.5 billion.


GROUP INSURANCE SEGMENT ($ millions)	4Q:18		4Q:17
Adjusted operating income		$33		$22
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(10)		$10
Underwriting experience above / (below) average expected gains		$5		$(10)

The Group Insurance segment reported adjusted operating income of $33 million in the current quarter, compared to $22 million in the year-ago quarter. Excluding the notable items above, results increased $16 million from the year-ago quarter reflecting more favorable underwriting results from business growth, partially offset by higher expenses.

-more-


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

Group Insurance reported earned premiums, policy charges and fees of $1.3 billion in the current quarter, an increase of 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 $419 million for the fourth quarter of 2018, compared to $639 million in the year-ago quarter.


INDIVIDUAL ANNUITIES SEGMENT ($ millions)	4Q:18		4Q:17
Adjusted operating income		$445		$541
Notable items included above:
Impact from updated estimates of profitability driven by market performance versus assumptions		$(22)		$16
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(10)		$10

The Individual Annuities segment reported adjusted operating income of $445 million in the current quarter, compared to $541 million in the year-ago quarter. Excluding the notable items above, results decreased $38 million from the year-ago quarter reflecting lower policy fees, net of associated risk management and other related costs, driven by a decrease in average variable annuity account values. These decreases were partially offset by favorable hedging results and a greater contribution from net investment spread results.

Individual Annuities account values were $151 billion as of December 31, 2018, down 10% from a year earlier, driven by market depreciation and net outflows over the year. Individual Annuities gross sales were $2.2 billion in the current quarter, up 38% from the year-ago quarter, reflecting favorable customer reaction to pricing actions and sales of our fixed index annuity product which launched in the first quarter of 2018.


INDIVIDUAL LIFE SEGMENT ($ millions)	4Q:18		4Q:17
Adjusted operating income		$(26)		$98
Notable items included above:
Impact from updated estimates of profitability driven by market performance versus assumptions		$(62)		$0
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(10)		$5
Underwriting experience above / (below) average expected gains		$(25)		$(25)
(Higher) / lower than typical expenses		$(30)		$0

The Individual Life segment reported a loss, on an adjusted operating income basis, of $26 million for the current quarter, compared to income of $98 million in the year-ago quarter. Excluding the notable items above, results decreased $17 million from the year-ago quarter primarily reflecting a lower contribution from net investment spread results and the effects of the annual assumption review process on expected underwriting experience.

-more-


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

Individual Life sales of $193 million in the current quarter were up 5% from the year-ago quarter, reflecting our product diversification strategy, resulting in higher other universal life and variable 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 $736 million for the fourth quarter of 2018, compared to $777 million in the year-ago quarter.


LIFE PLANNER OPERATIONS ($ millions)	4Q:18		4Q:17
Adjusted operating income		$349		$383
Notable items included above:
Impact from updated estimates of profitability driven by market performance versus assumptions		$(25)		$0
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(20)		$15
Underwriting experience above / (below) average expected gains		$(5)		$0

The Life Planner Operations reported adjusted operating income of $349 million for the current quarter, compared to $383 million in the year-ago quarter. Excluding the notable items above, results increased $31 million from the year-ago quarter reflecting business growth partially offset by lower net investment spread results driven by low interest rates in Japan.

Life Planner Operations constant dollar basis sales of $319 million in the current quarter were up 12% from the year-ago quarter, driven by our Japanese operations reflecting a 6% growth in Life Planner count and higher sales of U.S. dollar-denominated products.


GIBRALTAR LIFE & OTHER OPERATIONS ($ millions)	4Q:18		4Q:17
Adjusted operating income		$387		$394
Notable items included above:
Returns on non-coupon investments and prepayment fees above / (below) average expectations		$(25)		$0
Underwriting experience above / (below) average expected gains		$10		$0

The Gibraltar Life & Other Operations reported adjusted operating income of $387 million for the current quarter, compared to $394 million in the year-ago quarter. Excluding the notable items above, results increased $8 million from the year-ago quarter reflecting business growth and a higher contribution from investment spread results driven by U.S. dollar-denominated product sales, partially offset by higher net expenses.

Gibraltar Life & Other Operations constant dollar basis sales of $327 million in the current quarter were down 7% from the year-ago quarter as competitive pressures in the bank channel offset growth in other channels.

-more-


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

Corporate & Other Operations

Corporate & Other Operations reported a loss, on an adjusted operating income basis, of $329 million in the fourth quarter of 2018, compared to a loss of $463 million in the year-ago quarter.


CORPORATE & OTHER OPERATIONS ($ millions)	4Q:18		4Q:17
Adjusted operating income		$(329)		$(463)
Notable items included above:
(Higher) / lower than typical expenses		$0		$(12)

Excluding the notable items above, the $122 million lower loss from the year-ago quarter reflects lower net expenses in the current quarter, driven primarily by lower costs for employee benefit and compensation plans tied to Company stock and equity market returns.

ASSETS UNDER MANAGEMENT

Assets under management amounted to $1.377 trillion at December 31, 2018, compared to $1.394 trillion a year earlier.

NET INCOME AND INVESTMENT PORTFOLIO

Net income attributable to Prudential Financial, Inc. amounted to $842 million for the fourth quarter of 2018, compared to $3.765 billion for the year-ago quarter.

Current quarter net income includes $215 million of pre-tax net realized investment losses and related charges and adjustments. The foregoing net losses include net pre-tax losses of $465 million from products that contain embedded derivatives or guarantees and associated hedging activities, largely driven by the impact of widening credit spreads net of interest rate declines, net pre-tax losses of $310 million from general portfolio and related activities, and net pre-tax losses of $119 million from impairments and sales of credit-impaired investments. The foregoing losses were partially offset by pre-tax gains of $679 million primarily related to derivatives used in our capital hedge program and other risk management activities, including foreign currency and asset and liability duration management.

Net income for the current quarter reflects a pre-tax decrease of $277 million in recorded asset values and $228 million in recorded liabilities representing changes in value which are generally 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 $11 million from Divested and Run-off Businesses.

Net income for the year-ago quarter included a tax benefit of $2.871 billion related to the enactment of the Tax Cuts and Jobs Act driven by the remeasurement of net deferred tax liabilities arising from a lower U.S. corporate tax rate and the adoption of a territorial tax system, partially offset by the deemed repatriation of unremitted earnings of foreign subsidiaries. The year-ago quarter net income also included $581 million of pre-tax net realized investment losses and related charges and adjustments. The foregoing net losses include net pre-tax losses of $500 million primarily related to derivatives used for risk management including foreign currency and asset and liability duration management and other risk mitigation activities, net pre-tax losses of $332 million from products that contain embedded derivatives or guarantees and associated hedging activities, largely driven by the impact of tightening credit spreads on our risk of non-performance, and

-more-


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

$87 million from impairments and sales of credit-impaired investments. The foregoing losses were partially offset by net pre-tax gains of $338 million from general portfolio and related activities.

FORWARD-LOOKING STATEMENTS AND NON-GAAP MEASURES

Certain of the statements included in this release constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. 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. 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 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.

-more-


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

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. Additional historic information relating to our financial performance is located on our website at www.investor.prudential.com.

-more-


Prudential Financial, Inc. Fourth Quarter 2018 Earnings Release		Page 9

EARNINGS CONFERENCE CALL

Members of Prudential’s senior management will host a conference call on Thursday, February 7, 2019, at 11 a.m. ET, to discuss with the investment community the Company’s fourth 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 February 22. 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 February 7, through February 14, dial (800) 475-6701 (domestic callers) or (320) 365-3844 (international callers). The access code for the replay is 458812.

LOGO

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with more than $1 trillion of assets under management as of December 31, 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: Bill Launder, (973) 802-8760, [email protected]

Financial Highlights

(in millions, unaudited)


	Three Months Ended December 31						Year Ended December 31
	2018			2017			2018			2017
Income Statement Data:
Net income attributable to Prudential Financial, Inc.	$	842		$	3,765		$	4,074		$	7,863
Income attributable to noncontrolling interests		7			100			14			111

Net income		849			3,865			4,088			7,974

Less: Earnings attributable to noncontrolling interests		7			100			14			111

Income attributable to Prudential Financial, Inc.		842			3,765			4,074			7,863

Less: Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		7			(109	)		62			(62	)

Income (after-tax) before equity in earnings of operating joint ventures		835			3,874			4,012			7,925

Less: Reconciling Items:
Realized investment gains (losses), net, and related charges and adjustments		(215	)		(581	)		303			(58	)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		(277	)		6			(863	)		336
Change in experience-rated contractholder liabilities due to asset value changes		228			37			710			(151	)
Divested and Run-off Businesses:
Closed Block Division		(40	)		(4	)		(62	)		45
Other Divested and Run-off Businesses		51			(13	)		(1,535	)		38
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(12	)		99			(87	)		33

Total reconciling items, before income taxes		(265	)		(456	)		(1,534	)		243

Less: Income taxes, not applicable to adjusted operating income		(65	)		(3,157	)		(527	)		(3,030	)

Total reconciling items, after income taxes		(200	)		2,701			(1,007	)		3,273

After-tax adjusted operating income (1)		1,035			1,173			5,019			4,652

Income taxes, applicable to adjusted operating income		283			399			1,349			1,592

Adjusted operating income before income taxes (1)	$	1,318		$	1,572		$	6,368		$	6,244

See footnotes on last page.

Page 1

Financial Highlights

(in millions, except per share data, unaudited)


	Three Months Ended December 31						Year Ended December 31
	2018			2017			2018			2017
Earnings per share of Common Stock (diluted):

Net income attributable to Prudential Financial, Inc.	$	1.99		$	8.61		$	9.50		$	17.86
Less: Reconciling Items:
Realized investment gains (losses), net, and related charges and adjustments		(0.51	)		(1.34	)		0.71			(0.13	)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		(0.66	)		0.01			(2.02	)		0.77
Change in experience-rated contractholder liabilities due to asset value changes		0.54			0.09			1.67			(0.35	)
Divested and Run-off Businesses:
Closed Block Division		(0.09	)		(0.01	)		(0.15	)		0.10
Other Divested and Run-off Businesses		0.12			(0.03	)		(3.60	)		0.09
Difference in earnings allocated to participating unvested share-based payment awards		0.01			(0.07	)		0.03			(0.09	)

Total reconciling items, before income taxes		(0.59	)		(1.35	)		(3.36	)		0.39
Less: Income taxes, not applicable to adjusted operating income		(0.14	)		(7.27	)		(1.17	)		(6.89	)

Total reconciling items, after income taxes		(0.45	)		5.92			(2.19	)		7.28

After-tax adjusted operating income	$	2.44		$	2.69		$	11.69		$	10.58


Weighted average number of outstanding Common shares (basic)		412.7			423.7			417.6			427.0

Weighted average number of outstanding Common shares (diluted)		421.2			432.7			426.2			436.0

Earnings calculation, per share of Common Stock:

Net income attributable to Prudential Financial, Inc.	$	842		$	3,765		$	4,074		$	7,863
Earnings related to interest, net of tax, on exchangeable surplus notes		5			4			21			17
Less: Earnings allocated to participating unvested share-based payment awards		10			44			47			94

Net income attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation	$	837		$	3,725		$	4,048		$	7,786


After-tax adjusted operating income (1)	$	1,035		$	1,173		$	5,019		$	4,652
Earnings related to interest, net of tax, on exchangeable surplus notes		5			4			21			17
Less: Earnings allocated to participating unvested share-based payment awards		13			14			58			56

After-tax adjusted operating income for earnings per share of Common Stock calculation (1)	$	1,027		$	1,163		$	4,982		$	4,613


Prudential Financial, Inc. Equity (as of end of period):
GAAP book value (total PFI equity) at end of period (6)	$	48,617		$	54,236
Less: Accumulated other comprehensive income (AOCI)		10,906			17,074

GAAP book value excluding AOCI (6)		37,711			37,162
Less: Cumulative effect of foreign exchange rate remeasurement and currency translation adjustments corresponding to realized gains/losses		(2,344	)		(969	)

Adjusted book value (6)		40,055			38,131
Number of diluted shares at end of period (2)		422.2			435.7


GAAP book value per Common share - diluted (3)(6)		116.34			125.63
GAAP book value excluding AOCI per share - diluted (3)(6)		90.50			86.44
Adjusted book value per Common share - diluted (3)(6)		96.06			88.67

Adjusted operating income before income taxes, by Segment (1):
PGIM	$	243		$	306		$	959		$	979

Total PGIM Division		243			306			959			979

Retirement		216			291			1,049			1,244
Group Insurance		33			22			229			253

Total U.S. Workplace Solutions Division		249			313			1,278			1,497

Individual Annuities		445			541			1,925			2,198
Individual Life		(26	)		98			223			(191	)

Total U.S. Individual Solutions Division		419			639			2,148			2,007

International Insurance		736			777			3,266			3,198

Total International Insurance Division		736			777			3,266			3,198

Corporate and Other operations		(329	)		(463	)		(1,283	)		(1,437	)

Adjusted operating income before income taxes		1,318			1,572			6,368			6,244

Reconciling Items:
Realized investment gains (losses), net, and related charges and adjustments		(215	)		(581	)		303			(58	)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		(277	)		6			(863	)		336
Change in experience-rated contractholder liabilities due to asset value changes		228			37			710			(151	)
Divested and Run-off Businesses:
Closed Block Division		(40	)		(4	)		(62	)		45
Other Divested and Run-off Businesses		51			(13	)		(1,535	)		38
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(12	)		99			(87	)		33

Total reconciling items, before income taxes		(265	)		(456	)		(1,534	)		243

Income before income taxes and equity in earnings of operating joint ventures for Prudential Financial, Inc.	$	1,053		$	1,116		$	4,834		$	6,487

See footnotes on last page.

Page 2

Financial Highlights

(in millions, or as otherwise noted, unaudited)


	Three Months Ended December 31						Year Ended December 31
	2018			2017			2018			2017
*PGIM Division:*

PGIM Segment:
Assets managed by PGIM (in billions, as of end of period):
Institutional customers	$	493.5		$	489.5
Retail customers		240.1			245.6
General account		427.8			420.2

Total PGIM	$	1,161.4		$	1,155.3


Institutional Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	18.9		$	16.2		$	75.1		$	65.2

Net additions (withdrawals), other than money market	$	(0.5	)	$	(0.1	)	$	14.1		$	11.6


Retail Customers - Assets Under Management (in billions):
Gross additions, other than money market	$	14.1		$	14.0		$	53.0		$	49.7

Net additions (withdrawals), other than money market	$	(2.6	)	$	1.5		$	(0.4	)	$	4.1

*U.S. Workplace Solutions Division:*

Retirement Segment:

Full Service:

Deposits and sales	$	6,639		$	6,832		$	33,116		$	29,527

Net additions (withdrawals)	$	697		$	(371	)	$	6,686		$	4,716

Total account value at end of period	$	231,669		$	234,616

Institutional Investment Products:

Gross additions	$	8,843		$	10,267		$	21,310		$	21,630

Net additions	$	5,519		$	4,825		$	5,901		$	4,224

Total account value at end of period	$	200,759		$	194,492

Group Insurance Annualized New Business Premiums (4):
Group life	$	24		$	22		$	376		$	287
Group disability		13			12			183			153

Total	$	37		$	34		$	559		$	440

*U.S. Individual Solutions Division:*

Fixed and Variable Annuity Sales and Account Values:
Gross sales	$	2,238		$	1,618		$	8,270		$	5,894

Net redemptions	$	(675	)	$	(1,134	)	$	(3,418	)	$	(3,927	)

Total account value at end of period	$	151,080		$	168,626


Individual Life Insurance Annualized New Business Premiums (4):
Term life	$	55		$	53		$	213		$	213
Guaranteed universal life		29			32			97			156
Other universal life		51			43			150			125
Variable life		58			55			163			130

Total	$	193		$	183		$	623		$	624

*International Insurance Division:*

International Insurance Annualized New Business Premiums (4)(5):
Actual exchange rate basis	$	642		$	645		$	2,740		$	2,986

Constant exchange rate basis	$	646		$	639		$	2,731		$	2,972

See footnotes on last page.

Page 3

Financial Highlights

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


	Three Months Ended December 31
	2018		2017
Assets and Asset Under Management Information:

Total assets (6)	$	815.1	$	832.1

Assets under management (at fair market value):
PGIM Division		1,161.4		1,155.3
U.S. Workplace Solutions Division		86.1		88.5
U.S. Individual Solutions Division		100.4		119.8
International Insurance Division		29.4		30.0

Total assets under management		1,377.3		1,393.6
Client assets under administration		233.3		213.6

Total assets under management and administration	$	1,610.6	$	1,607.2

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 December 31, 2018 and 2017 include 6.09 million shares and 5.88 million shares, respectively, 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 $82.16 and $85.00, respectively.

(3)

The exchangeable surplus notes are subject to customary antidilution adjustments and the exchange rate is accordingly revalued in the fourth quarter of each year. In order to calculate book value per common share as of December 31, 2018 and 2017, equity is increased by $500 million and diluted shares include 6.09 million shares and 5.88 million shares, respectively, reflecting the dilutive impact of ESNs when book value per common share is greater than $82.16 and $85.00, respectively.

(4)

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.

(5)

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.

(6)

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

Fourth 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.

February 6, 2019

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth 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

INCOME STATEMENT IMPACT FROM UPDATED ESTIMATES OF PROFITABILITY DRIVEN BY MARKET PERFORMANCE VERSUS ASSUMPTIONS		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

Fourth Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

								Pre-tax adjusted operating income (loss) by division:
	959			979			-2%	PGIM Division		306			232			254			230			243
	1,278			1,497			-15%	U.S. Workplace Solutions Division		313			372			359			298			249
	2,148			2,007			7%	U.S. Individual Solutions Division		639			555			550			624			419
	3,266			3,198			2%	International Insurance Division		777			856			784			890			736
	(1,283	)		(1,437	)		11%	Corporate and other operations		(463	)		(294	)		(286	)		(374	)		(329	)

	6,368			6,244			2%	Total pre-tax adjusted operating income		1,572			1,721			1,661			1,668			1,318
	1,349			1,592			-15%	Income taxes, applicable to adjusted operating income		399			381			363			322			283

	5,019			4,652			8%	After-tax adjusted operating income		1,173			1,340			1,298			1,346			1,035


								Reconciling items:
	303			(58	)		622%	Realized investment gains (losses), net, and related charges and adjustments		(581	)		64			277			177			(215	)
	(863	)		336			-357%	Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		6			(403	)		(193	)		10			(277	)
	710			(151	)		570%	Change in experience-rated contractholder liabilities due to asset value changes		37			418			85			(21	)		228
								Divested and Run-off Businesses:
	(62	)		45			-238%	Closed Block Division		(4	)		(9	)		(31	)		18			(40	)
	(1,535	)		38			-4139%	Other Divested and Run-off Businesses		(13	)		(72	)		(1,526	)		12			51
	(87	)		33			-364%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		99			(26	)		(23	)		(26	)		(12	)

	(1,534	)		243			-731%	Total reconciling items, before income taxes		(456	)		(28	)		(1,411	)		170			(265	)
	(527	)		(3,030	)		83%	Income taxes, not applicable to adjusted operating income		(3,157	)		(29	)		(295	)		(138	)		(65	)

	(1,007	)		3,273			-131%	Total reconciling items, after income taxes		2,701			1			(1,116	)		308			(200	)

	4,012			7,925			-49%	Income (after-tax) before equity in earnings of operating joint ventures		3,874			1,341			182			1,654			835
	62			(62	)		200%	Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		(109	)		22			15			18			7

	4,074			7,863			-48%	Income attributable to Prudential Financial, Inc.		3,765			1,363			197			1,672			842
	14			111			-87%	Earnings attributable to noncontrolling interests		100			1			3			3			7

	4,088			7,974			-49%	Net income		3,865			1,364			200			1,675			849
	14			111			-87%	Less: Income attributable to noncontrolling interests		100			1			3			3			7

	4,074			7,863			-48%	Net income attributable to Prudential Financial, Inc.		3,765			1,363			197			1,672			842

	12.7%			12.9%				Operating Return on Average Equity (based on adjusted operating income) (1)(2)		12.5%			13.7%			13.1%			13.6%			10.3%

(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 7.1%, 14.1%, 1.6%, 10.3%, and 28.7% for the three months ended December 31, 2018, September 30, 2018, June 30, 2018, March 31, 2018, and December 31, 2017, respectively and 8.2% and 16.0% for years ended December 31, 2018, and December 31, 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

Fourth Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

						Earnings per share of Common Stock (diluted):
	11.69			10.58		After-tax adjusted operating income		2.69			3.08			3.01			3.15			2.44
						Reconciling items:
	0.71			(0.13	)	Realized investment gains (losses), net, and related charges and adjustments		(1.34	)		0.15			0.65			0.42			(0.51	)
	(2.02	)		0.77		Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		0.01			(0.94	)		(0.45	)		0.02			(0.66	)
	1.67			(0.35	)	Change in experience-rated contractholder liabilities due to asset value changes		0.09			0.97			0.20			(0.05	)		0.54
						Divested and Run-off Businesses:
	(0.15	)		0.10		Closed Block Division		(0.01	)		(0.02	)		(0.07	)		0.04			(0.09	)
	(3.60	)		0.09		Other Divested and Run-off Businesses		(0.03	)		(0.17	)		(3.57	)		0.03			0.12
	0.03			(0.09	)	Difference in earnings allocated to participating unvested share-based payment awards		(0.07	)		—			0.02			(0.01	)		0.01

	(3.36	)		0.39		Total reconciling items, before income taxes		(1.35	)		(0.01	)		(3.22	)		0.45			(0.59	)
	(1.17	)		(6.89	)	Income taxes, not applicable to adjusted operating income		(7.27	)		(0.07	)		(0.67	)		(0.30	)		(0.14	)

	(2.19	)		7.28		Total reconciling items, after income taxes		5.92			0.06			(2.55	)		0.75			(0.45	)

	9.50			17.86		Net income attributable to Prudential Financial, Inc.		8.61			3.14			0.46			3.90			1.99


	417.6			427.0		Weighted average number of outstanding Common shares (basic)		423.7			422.0			419.5			416.2			412.7
	426.2			436.0		Weighted average number of outstanding Common shares (diluted)		432.7			430.9			428.0			424.7			421.2

						Earnings calculation, per share of Common Stock:

	4,074			7,863		Net income attributable to Prudential Financial, Inc.		3,765			1,363			197			1,672			842
	21			17		Earnings related to interest, net of tax, on exchangeable surplus notes		4			5			6			5			5
	47			94		Less: Earnings allocated to participating unvested share-based payment awards		44			16			4			19			10

	4,048			7,786		Net income attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation		3,725			1,352			199			1,658			837


	5,019			4,652		After-tax adjusted operating income		1,173			1,340			1,298			1,346			1,035
	21			17		Earnings related to interest, net of tax, on exchangeable surplus notes		4			5			6			5			5
	58			56		Less: Earnings allocated to participating unvested share-based payment awards		14			16			14			15			13

	4,982			4,613		After-tax adjusted operating income for earnings per share of Common Stock calculation		1,163			1,329			1,290			1,336			1,027

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


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

			*Capitalization Data (1):*
			Senior Debt:
			Short-term debt		1,380			1,383			2,056			2,393			2,451
			Long-term debt		10,550			11,516			10,706			9,857			9,810
			Junior Subordinated Long-Term Debt		6,622			6,627			6,026			7,564			7,568

			Prudential Financial Inc. Equity:
			Including accumulated other comprehensive income (2)		54,236			51,830			48,232			46,725			48,617
			Excluding accumulated other comprehensive income (2)(3)		37,162			37,069			36,577			37,575			37,711
			Amount included above for remeasurement of foreign currency and certain deferred taxes (4)(5)		(969	)		(2,892	)		(2,650	)		(2,509	)		(2,344	)

			Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (2)(4)(5)		38,131			39,961			39,227			40,084			40,055


			Book value per share of Common Stock:
			Including accumulated other comprehensive income (2)(6)		125.63			120.99			113.59			110.78			116.34
			Excluding accumulated other comprehensive income (2)(3)(6)		86.44			86.86			86.43			89.32			90.50
			Amount included above for remeasurement of foreign currency and certain deferred taxes (4)(5)		(2.23	)		(6.69	)		(6.17	)		(5.88	)		(5.56	)

			Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency and certain deferred taxes (2)(4)(5)(6)		88.67			93.55			92.60			95.20			96.06


			Number of diluted shares at end of period (6)		435.7			432.5			429.0			426.3			422.2

			*Common Stock Price Range (based on closing price):*
	126.02	117.15	High		117.15			126.02			107.62			104.68			105.99
	76.83	98.65	Low		107.28			100.64			93.22			93.99			76.83
	81.55	114.98	Close		114.98			103.55			93.51			101.32			81.55

			*Common Stock market capitalization (1)*		48,591			43,595			39,059			41,987			33,493

(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 fourth quarter of 2017 and first, second and third quarters of 2018, exchangeable surplus notes are dilutive when book value per share is greater than $85.00 (equivalent to an additional 5.88 million in diluted shares and an increase of $500 million in equity). As of the fourth quarter of 2018, exchangeable surplus notes are dilutive when book value per share is greater than $82.16 (equivalent to an additional 6.09 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

Fourth Quarter 2018

OPERATIONS HIGHLIGHTS


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

				*Assets Under Management and Administration ($ billions) (1)(2):*
				Assets Under Management:
				PGIM Division:
				Institutional customers		489.5		489.6		490.8		505.7		493.5
				Retail customers		245.6		246.2		252.0		258.3		240.1
				General account		420.2		420.0		413.3		410.6		427.8

				Total PGIM Division		1,155.3		1,155.8		1,156.1		1,174.6		1,161.4
				U.S. Workplace Solutions Division		88.5		86.2		87.6		88.7		86.1
				U.S. Individual Solutions Division		119.8		115.7		115.7		117.4		100.4
				International Insurance Division		30.0		30.8		28.8		29.3		29.4

				Total assets under management		1,393.6		1,388.5		1,388.2		1,410.0		1,377.3
				Client assets under administration		213.6		218.4		228.7		238.2		233.3

				Total assets under management and administration		1,607.2		1,606.9		1,616.9		1,648.2		1,610.6


				Assets managed or administered for customers outside of the United States at end of period		358.0		373.3		365.7		370.6		373.8

				*Distribution Representatives (1):*
				Prudential Advisors		2,882		2,958		3,052		3,071		3,005
				International Life Planners		7,831		7,771		7,638		7,798		7,969
				Gibraltar Life Consultants		8,326		8,137		7,938		8,030		7,964

	63		56	*Prudential Advisor productivity ($ thousands)*		72		52		60		63		78

(1)	As of end of period.

(2)	At fair market value.

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

COMBINED STATEMENTS OF OPERATIONS

(in millions)


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


							Revenues (1):
	32,978		29,162			13%	Premiums		8,720			6,638			6,710			8,143			11,487
	6,272		5,518			14%	Policy charges and fee income		1,604			1,575			1,570			1,557			1,570
	13,490		13,499			0%	Net investment income		3,465			3,337			3,404			3,367			3,382
	5,390		5,467			-1%	Asset management fees, commissions and other income		1,461			1,325			1,359			1,365			1,341

	58,130		53,646			8%	Total revenues		15,250			12,875			13,043			14,432			17,780


							Benefits and Expenses (1):
	34,411		30,071			14%	Insurance and annuity benefits		9,163			6,853			7,160			8,464			11,934
	3,720		3,729			0%	Interest credited to policyholders’ account balances		929			911			932			940			937
	1,414		1,322			7%	Interest expense		344			340			347			355			372
	(2,864)		(2,818	)		-2%	Deferral of acquisition costs		(686	)		(718	)		(684	)		(708	)		(754	)
	2,114		2,093			1%	Amortization of acquisition costs		480			530			555			496			533
	12,967		13,005			0%	General and administrative expenses		3,448			3,238			3,072			3,217			3,440

	51,762		47,402			9%	Total benefits and expenses		13,678			11,154			11,382			12,764			16,462

	6,368		6,244			2%	Adjusted operating income before income taxes		1,572			1,721			1,661			1,668			1,318

							Reconciling items:
	619		(602	)		203%	Realized investment gains (losses), net, and related adjustments		(554	)		87			393			271			(132	)
	(316)		544			-158%	Related charges		(27	)		(23	)		(116	)		(94	)		(83	)

	303		(58	)		622%	Total realized investment gains (losses), net, and related charges and adjustments		(581	)		64			277			177			(215	)

	(863)		336			-357%	Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		6			(403	)		(193	)		10			(277	)
	710		(151	)		570%	Change in experience-rated contractholder liabilities due to asset value changes		37			418			85			(21	)		228
							Divested and Run-off Businesses:
	(62)		45			-238%	Closed Block Division		(4	)		(9	)		(31	)		18			(40	)
	(1,535)		38			-4139%	Other Divested and Run-off Businesses		(13	)		(72	)		(1,526	)		12			51
	(87)		33			-364%	Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		99			(26	)		(23	)		(26	)		(12	)

	(1,534)		243			-731%	Total reconciling items, before income taxes		(456	)		(28	)		(1,411	)		170			(265	)


	4,834		6,487			-25%	Income before income taxes and equity in earnings of operating joint ventures		1,116			1,693			250			1,838			1,053
	822		(1,438	)		157%	Income tax expense (benefit)		(2,758	)		352			68			184			218

	4,012		7,925			-49%	Income before equity in earnings of operating joint ventures		3,874			1,341			182			1,654			835

(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 and Run-off Businesses, and include revenues representing equity in earnings of operating joint ventures other than those classified as Divested and Run-off 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 and Run-off Businesses and include charges for income attributable to noncontrolling interests. See pages 36 and 37 for reconciliation.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Quarter Ended December 31, 2018
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations

Revenues (1):
Premiums		11,487			—			7,273			306			3,913			(5	)
Policy charges and fee income		1,570			—			219			1,231			133			(13	)
Net investment income		3,382			(3	)		1,243			700			1,311			131
Asset management fees, commissions and other income		1,341			838			225			488			59			(269	)

Total revenues		17,780			835			8,960			2,725			5,416			(156	)


Benefits and Expenses (1):
Insurance and annuity benefits		11,934			—			7,731			789			3,421			(7	)
Interest credited to policyholders’ account balances		937			—			434			283			220			—
Interest expense		372			11			12			201			6			142
Deferral of acquisition costs		(754	)		(1	)		(18	)		(333	)		(414	)		12
Amortization of acquisition costs		533			2			15			216			310			(10	)
General and administrative expenses		3,440			580			537			1,150			1,137			36

Total benefits and expenses		16,462			592			8,711			2,306			4,680			173

Adjusted operating income (loss) before income taxes		1,318			243			249			419			736			(329	)


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

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


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

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

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

(1)

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

COMBINING STATEMENTS OF OPERATIONS

(in millions)


	Twelve Months Ended December 31, 2018
	Total			PGIM Division			U.S. Workplace Solutions Division			U.S. Individual Solutions Division			International Insurance Division			Corporate and Other Operations

Revenues (1):
Premiums		32,978			—			15,728			1,106			16,171			(27	)
Policy charges and fee income		6,272			—			847			4,942			534			(51	)
Net investment income		13,490			73			4,993			2,727			5,245			452
Asset management fees, commissions and other income		5,390			3,221			942			2,022			284			(1,079	)

Total revenues		58,130			3,294			22,510			10,797			22,234			(705	)


Benefits and Expenses (1):
Insurance and annuity benefits		34,411			—			17,456			2,896			14,071			(12	)
Interest credited to policyholders’ account balances		3,720			—			1,712			1,101			907			—
Interest expense		1,414			40			37			781			21			535
Deferral of acquisition costs		(2,864	)		(6	)		(44	)		(1,146	)		(1,717	)		49
Amortization of acquisition costs		2,114			8			38			879			1,233			(44	)
General and administrative expenses		12,967			2,293			2,033			4,138			4,453			50

Total benefits and expenses		51,762			2,335			21,232			8,649			18,968			578

Adjusted operating income (loss) before income taxes		6,368			959			1,278			2,148			3,266			(1,283	)


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

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


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

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

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

(1)

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

CONSOLIDATED BALANCE SHEETS

(in millions)


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

Assets:
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $312,385; $319,180; $317,548; $321,168; $331,745)		346,780		347,630		341,151		340,970		353,656
Fixed maturities, held-to-maturity, at amortized cost (fair value $2,430; $2,511; $2,388; $2,287; $2,372)		2,049		2,120		2,020		1,957		2,013
Fixed maturities, trading, at fair value (amortized cost $3,509; $2,852; $2,980; $3,162; $3,392) (1)		3,507		2,885		2,916		3,083		3,243
Assets supporting experience-rated contractholder liabilities, at fair value		22,097		21,637		21,497		21,083		21,254
Equity securities, at fair value (cost $5,154; $5,382; $5,374; $5,149; $5,219) (1)		7,329		7,289		7,191		7,058		6,238
Commercial mortgage and other loans		56,045		58,098		58,622		59,336		59,830
Policy loans		11,891		12,036		11,935		11,928		12,016
Other invested assets (1)		13,373		14,044		13,459		13,790		14,526
Short-term investments (1)		6,800		5,752		5,728		5,767		6,469

Total investments		469,871		471,491		464,519		464,972		479,245
Cash and cash equivalents		14,490		15,676		14,918		12,466		15,353
Accrued investment income		3,325		3,169		3,235		3,180		3,318
Deferred policy acquisition costs		18,992		19,649		19,643		19,789		20,058
Value of business acquired		1,591		1,995		2,027		1,962		1,850
Other assets (3)		17,250		17,112		16,860		16,938		16,118
Separate account assets		306,617		300,585		298,658		303,441		279,136

Total assets		832,136		829,677		819,860		822,748		815,078


Liabilities:
Future policy benefits		257,317		261,144		260,435		260,797		273,846
Policyholders’ account balances		148,189		149,917		149,359		149,130		150,338
Securities sold under agreements to repurchase		8,400		8,633		9,540		9,176		9,950
Cash collateral for loaned securities		4,354		4,312		4,307		4,656		3,929
Income taxes (3)		9,648		9,296		7,888		7,014		7,936
Senior short-term debt		1,380		1,383		2,056		2,393		2,451
Senior long-term debt		10,550		11,516		10,706		9,857		9,810
Junior subordinated long-term debt		6,622		6,627		6,026		7,564		7,568
Notes issued by consolidated variable interest entities		1,518		954		937		930		955
Other liabilities		23,030		23,135		21,356		20,708		20,128
Separate account liabilities		306,617		300,585		298,658		303,441		279,136

Total liabilities		777,625		777,502		771,268		775,666		766,047

Equity:
Accumulated other comprehensive income (2)		17,074		14,761		11,655		9,150		10,906
Other equity (2)(3)		37,162		37,069		36,577		37,575		37,711

Total Prudential Financial, Inc. equity		54,236		51,830		48,232		46,725		48,617

Noncontrolling Interest		275		345		360		357		414

Total Equity		54,511		52,175		48,592		47,082		49,031

Total liabilities and equity		832,136		829,677		819,860		822,748		815,078

(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

Fourth Quarter 2018

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of December 31, 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		479,245		57,710			421,535		4,542			131,746		61,626			200,313		23,308
Deferred policy acquisition costs		20,058		264			19,794		—			311		11,087			8,715		(319	)
Other assets		36,639		1,065			35,574		2,908			6,979		17,280			9,850		(1,443	)
Separate account assets		279,136		—			279,136		40,240			78,216		161,645			3,755		(4,720	)

Total assets		815,078		59,039			756,039		47,690			217,252		251,638			222,633		16,826

Liabilities:
Future policy benefits		273,846		48,282			225,564		—			69,677		25,377			122,894		7,616
Policyholders’ account balances		150,338		5,061			145,277		—			56,855		36,671			50,895		856
Debt		19,829		—			19,829		1,810			810		7,335			141		9,733
Other liabilities		42,898		7,414			35,484		3,030			5,272		7,046			17,328		2,808
Separate account liabilities		279,136		—			279,136		40,240			78,216		161,645			3,755		(4,720	)

Total liabilities		766,047		60,757			705,290		45,080			210,830		238,074			195,013		16,293

Equity:
Accumulated other comprehensive income (loss) (1)		10,906		(23	)		10,929		(83	)		628		(418	)		13,040		(2,238	)
Other equity (1)		37,711		(1,705	)		39,416		2,067			5,744		13,967			14,518		3,120

Total Prudential Financial, Inc. equity		48,617		(1,728	)		50,345		1,984			6,372		13,549			27,558		882

Noncontrolling Interest		414		10			404		626			50		15			62		(349	)

Total Equity		49,031		(1,718	)		50,749		2,610			6,422		13,564			27,620		533

Total liabilities and equity		815,078		59,039			756,039		47,690			217,252		251,638			222,633		16,826



	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 December 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.

(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

Fourth Quarter 2018

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of December 31, 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		1,250		4,543		7,568		13,361		—		5,402		6,622		12,024
Operating Debt - Investment related		352		3,569		—		3,921		676		3,306		—		3,982
Operating Debt - Specified businesses		739		1,032		—		1,771		704		1,043		—		1,747
Limited recourse and non-recourse borrowing		110		666		—		776		—		799		—		799

Total debt		2,451		9,810		7,568		19,829		1,380		10,550		6,622		18,552


	As of December 31, 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		12,363		941		57		13,361		11,028		940		56		12,024
Operating Debt - Investment related		3,856		65		—		3,921		3,917		65		—		3,982
Operating Debt - Specified businesses		1,037		734		—		1,771		1,239		508		—		1,747
Limited recourse and non-recourse borrowing		—		776		—		776		—		799		—		799

Total debt		17,256		2,516		57		19,829		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 December 31, 2018 and $840 million as of December 31, 2017.

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

STATEMENTS OF OPERATIONS - PGIM DIVISION

(in millions)


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

								Revenues (1):
	—		—			—		Premiums		—			—			—			—			—
	—		—			—		Policy charges and fee income		—			—			—			—			—
	73		170			-57	%	Net investment income		46			17			31			28			(3	)
	3,221		3,185			1	%	Asset management fees, commissions and other income		939			809			785			789			838

	3,294		3,355			-2	%	Total revenues		985			826			816			817			835



								Benefits and Expenses (1):
	—		—			—		Insurance and annuity benefits		—			—			—			—			—
	—		—			—		Interest credited to policyholders’ account balances		—			—			—			—			—
	40		27			48	%	Interest expense		8			9			11			9			11
	(6)		(6	)		0	%	Deferral of acquisition costs		(1	)		(2	)		(1	)		(2	)		(1	)
	8		11			-27	%	Amortization of acquisition costs		3			2			2			2			2
	2,293		2,344			-2	%	General and administrative expenses		669			585			550			578			580

	2,335		2,376			-2	%	Total benefits and expenses		679			594			562			587			592


	959		979			-2	%	Adjusted operating income before income taxes		306			232			254			230			243

(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

Fourth Quarter 2018

PGIM DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION


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

							Analysis of revenues by type:
	2,542		2,417		5	%	Asset management fees		631		633		629		641		639
	270		439		-38	%	Other related revenues (1)		229		73		65		48		84
	482		499		-3	%	Service, distribution and other revenues		125		120		122		128		112

	3,294		3,355		-2	%	Total PGIM revenues		985		826		816		817		835


							Analysis of asset management fees by source:
	1,204		1,147		5	%	Institutional customers		297		296		295		302		311
	867		800		8	%	Retail customers		218		217		219		221		210
	471		470		0	%	General account		116		120		115		118		118

	2,542		2,417		5	%	Total asset management fees		631		633		629		641		639


Supplementary Assets Under Management Information (in billions):
	December 31, 2018
	Equity		Fixed Income		Real Estate		Total
Institutional customers		54.7		395.1		43.7		493.5
Retail customers		112.9		125.2		2.0		240.1
General account		5.1		420.8		1.9		427.8

Total		172.7		941.1		47.6		1,161.4


	December 31, 2017
	Equity		Fixed Income		Real Estate		Total
Institutional customers		68.0		379.4		42.1		489.5
Retail customers		132.4		111.5		1.7		245.6
General account		5.8		412.5		1.9		420.2

Total		206.2		903.4		45.7		1,155.3

(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

Fourth Quarter 2018

PGIM DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION

(in billions)


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

						Institutional Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force:
	437.9			386.4		Beginning assets under management		431.0			437.9			438.6			439.5			453.3
	75.1			65.2		Additions		16.2			19.4			17.8			19.0			18.9
	(61.0)			(53.6	)	Withdrawals		(16.3	)		(19.6	)		(12.3	)		(9.7	)		(19.4	)
	(9.3)			38.0		Change in market value		8.5			(0.8	)		(4.3	)		3.9			(8.1	)
	1.5			1.3		Net money market flows		(1.6	)		1.8			0.3			0.8			(1.4	)
	(0.6)			0.6		Other		0.1			(0.1	)		(0.6	)		(0.2	)		0.3

	443.6			437.9		Ending assets under management		437.9			438.6			439.5			453.3			443.6
	49.9			51.6		Affiliated institutional assets under management		51.6			51.0			51.3			52.4			49.9

	493.5			489.5		Total assets managed for institutional customers at end of period		489.5			489.6			490.8			505.7			493.5


	14.1			11.6		Net institutional additions (withdrawals), excluding money market activity		(0.1	)		(0.2	)		5.5			9.3			(0.5	)


						Retail Customers - Assets Under Management:

						Assets gathered by Investment Management & Advisory Services sales force (1):
	157.3			129.7		Beginning assets under management		150.5			157.3			159.4			164.7			169.2
	53.0			49.7		Additions		14.0			14.6			13.4			10.9			14.1
	(53.4	)		(45.6	)	Withdrawals		(12.5	)		(13.6	)		(11.6	)		(11.5	)		(16.7	)
	(3.7	)		23.5		Change in market value		5.3			0.9			3.7			5.1			(13.4	)
	0.1			—		Net money market flows		—			—			—			0.1			—
	0.9			—		Other		—			0.2			(0.2	)		(0.1	)		1.0

	154.2			157.3		Ending assets under management		157.3			159.4			164.7			169.2			154.2
	85.9			88.3		Affiliated retail assets under management		88.3			86.8			87.3			89.1			85.9

	240.1			245.6		Total assets managed for retail customers at end of period		245.6			246.2			252.0			258.3			240.1


	(0.4)			4.1		Net retail additions (withdrawals), excluding money market activity		1.5			1.0			1.8			(0.6	)		(2.6	)

(1)	The amounts for all prior periods have been revised to correct the previously reported amounts for a reclass between Assets gathered by Investment Management & Advisory Services sales force and Affiliated retail assets under management.

Page 13

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


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

									Revenues (1):
	15,728			12,436			26	%	Premiums		4,651			1,838			2,689			3,928			7,273
	847			828			2	%	Policy charges and fee income		199			200			217			211			219
	4,993			5,119			-2	%	Net investment income		1,323			1,238			1,271			1,241			1,243
	942			931			1	%	Asset management fees, commissions and other income		230			229			235			253			225

	22,510			19,314			17	%	Total revenues		6,403			3,505			4,412			5,633			8,960

									Benefits and Expenses (1):
	17,456			14,108			24	%	Insurance and annuity benefits		5,134			2,212			3,125			4,388			7,731
	1,712			1,781			-4	%	Interest credited to policyholders’ account balances		440			408			435			435			434
	37			31			19	%	Interest expense		9			8			9			8			12
	(44	)		(36	)		-22	%	Deferral of acquisition costs		(11	)		(5	)		(12	)		(9	)		(18	)
	38			40			-5	%	Amortization of acquisition costs		12			5			9			9			15
	2,033			1,893			7	%	General and administrative expenses		506			505			487			504			537

	21,232			17,817			19	%	Total benefits and expenses		6,090			3,133			4,053			5,335			8,711


	1,278			1,497			-15	%	Adjusted operating income before income taxes		313			372			359			298			249

(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

Fourth Quarter 2018

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

(in millions)


	Twelve Months Ended December 31, 2018									Quarter Ended December 31, 2018
	Total U.S. Workplace Solutions Division			Retirement			Group Insurance			Total U.S. Workplace Solutions Division			Retirement			Group Insurance
Revenues (1):
Premiums		15,728			11,331			4,397			7,273			6,174			1,099
Policy charges and fee income		847			250			597			219			67			152
Net investment income		4,993			4,377			616			1,243			1,095			148
Asset management fees, commissions and other income		942			867			75			225			209			16

Total revenues		22,510			16,825			5,685			8,960			7,545			1,415


Benefits and Expenses (1):
Insurance and annuity benefits		17,456			13,215			4,241			7,731			6,660			1,071
Interest credited to policyholders’ account balances		1,712			1,430			282			434			363			71
Interest expense		37			35			2			12			11			1
Deferral of acquisition costs		(44	)		(43	)		(1	)		(18	)		(18	)		—
Amortization of acquisition costs		38			33			5			15			14			1
General and administrative expenses		2,033			1,106			927			537			299			238

Total benefits and expenses		21,232			15,776			5,456			8,711			7,329			1,382

Adjusted operating income before income taxes		1,278			1,049			229			249			216			33


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

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


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

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

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

(1)

Page 15

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


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

						RETIREMENT SEGMENT SALES AND ACCOUNT VALUES

						Full Service:
	234,616			202,802		Beginning total account value		227,438			234,616			236,120			240,922			251,272
	33,116			29,527		Deposits and sales		6,832			9,922			7,712			8,843			6,639
	(26,429	)		(24,811	)	Withdrawals and benefits		(7,203	)		(8,154	)		(6,470	)		(5,864)			(5,941	)
	(9,634	)		27,098		Change in market value, interest credited, interest income and other activity		7,549			(264	)		3,560			7,371			(20,301	)

	231,669			234,616		Ending total account value		234,616			236,120			240,922			251,272			231,669


	6,686			4,716		Net additions (withdrawals)		(371	)		1,768			1,242			2,979			697


						Stable value account values included above		48,667			48,692			48,882			49,132			49,544

						Institutional Investment Products:
	194,492			183,376		Beginning total account value		188,399			194,492			191,518			191,722			195,237
	21,310			21,630		Additions		10,267			688			5,461			6,318			8,843
	(15,409	)		(17,406	)	Withdrawals and benefits		(5,442	)		(4,889	)		(3,851	)		(3,345	)		(3,324	)
	3,303			5,190		Change in market value, interest credited and interest income		947			(214	)		1,198			1,146			1,173
	(2,937	)		1,702		Other (1)		321			1,441			(2,604	)		(604	)		(1,170	)

	200,759			194,492		Ending total account value		194,492			191,518			191,722			195,237			200,759


	5,901			4,224		Net additions (withdrawals)		4,825			(4,201	)		1,610			2,973			5,519


						Amounts included in ending total account value above:
	67,934			69,239		Investment-only stable value wraps		69,239			66,518			67,406			67,598			67,934
	44,249			40,072		Longevity reinsurance (2)		40,072			41,173			41,325			43,455			44,249
	88,576			85,181		Group annuities and other products		85,181			83,827			82,991			84,184			88,576

	200,759			194,492		Ending total account value		194,492			191,518			191,722			195,237			200,759

(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

Fourth Quarter 2018

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

(dollar amounts in millions)


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

						GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
	376			287		Group life		22			243			46			63			24
	183			153		Group disability		12			140			14			16			13

	559			440		Total		34			383			60			79			37


						Future Policy Benefits (1)(2):
						Group life		2,286			2,216			2,180			2,111			2,293
						Group disability		2			26			19			9			2

						Total		2,288			2,242			2,199			2,120			2,295


						Policyholders’ Account Balances (1):
						Group life		8,737			8,675			8,769			8,840			8,889
						Group disability		246			174			181			187			200

						Total		8,983			8,849			8,950			9,027			9,089


						Separate Account Liabilities (1):
						Group life		23,955			24,353			23,758			23,881			24,044
						Group disability		—			—			—			—			—

						Total		23,955			24,353			23,758			23,881			24,044


						Group Life Insurance:
	4,280			4,124		Gross premiums, policy charges and fee income (3)		1,019			1,046			1,075			1,082			1,077
	4,011			3,886		Earned premiums, policy charges and fee income		955			1,000			996			1,009			1,006

	87.4	%		88.7	%	Benefits ratio (4)		89.3	%		87.2	%		88.6	%		87.3	%		86.7	%
	12.2	%		11.2	%	Administrative operating expense ratio		12.5	%		11.6	%		12.6	%		11.5	%		13.0	%
						Persistency ratio		93.8	%		95.7	%		95.3	%		94.6	%		94.5	%

						Group Disability Insurance:
	1,030			953		Gross premiums, policy charges and fee income (3)		244			251			261			259			259
	983			862		Earned premiums, policy charges and fee income		222			243			250			245			245

	77.8	%		78.9	%	Benefits ratio (4)		85.6	%		79.0	%		71.6	%		78.9	%		81.5	%
	27.1	%		29.4	%	Administrative operating expense ratio		29.8	%		27.1	%		26.4	%		26.8	%		28.0	%
						Persistency ratio		91.4	%		94.9	%		94.7	%		94.2	%		93.9	%

						Total Group Insurance:
	85.5	%		86.9	%	Benefits ratio (4)		88.6	%		85.6	%		85.3	%		85.7	%		85.7	%
	15.1	%		14.6	%	Administrative operating expense ratio		15.8	%		14.6	%		15.3	%		14.5	%		15.9	%

(1)	As of end of period.

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

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

(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 87.2%, 75.8%, 84.9% and 88.9%, 71.8%, 85.8% for year-to-date December 31, 2018 and December 31, 2017, respectively.

Page 17

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


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

									Revenues (1):
	1,106			1,043			6	%	Premiums		253			267			262			271			306
	4,942			4,235			17	%	Policy charges and fee income		1,286			1,245			1,236			1,230			1,231
	2,727			2,690			1	%	Net investment income		685			657			686			684			700
	2,022			2,116			-4	%	Asset management fees, commissions and other income		525			508			533			493			488

	10,797			10,084			7	%	Total revenues		2,749			2,677			2,717			2,678			2,725


									Benefits and Expenses (1):
	2,896			2,454			18	%	Insurance and annuity benefits		722			735			737			635			789
	1,101			1,049			5	%	Interest credited to policyholders’ account balances		268			265			275			278			283
	781			718			9	%	Interest expense		186			186			195			199			201
	(1,146	)		(1,005	)		-14	%	Deferral of acquisition costs		(265	)		(249	)		(270	)		(294	)		(333	)
	879			947			-7	%	Amortization of acquisition costs		201			202			251			210			216
	4,138			3,914			6	%	General and administrative expenses		998			983			979			1,026			1,150

	8,649			8,077			7	%	Total benefits and expenses		2,110			2,122			2,167			2,054			2,306

	2,148			2,007			7	%	Adjusted operating income before income taxes		639			555			550			624			419

(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

Fourth Quarter 2018

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

(in millions)


	Twelve Months Ended December 31, 2018									Quarter Ended December 31, 2018
	Total U.S. Individual Solutions Division			Individual Annuities			Individual Life			Total U.S. Individual Solutions Division			Individual Annuities			Individual Life
Revenues (1):
Premiums		1,106			179			927			306			71			235
Policy charges and fee income		4,942			2,846			2,096			1,231			679			552
Net investment income		2,727			694			2,033			700			177			523
Asset management fees, commissions and other income		2,022			1,247			775			488			297			191

Total revenues		10,797			4,966			5,831			2,725			1,224			1,501


Benefits and Expenses (1):
Insurance and annuity benefits		2,896			370			2,526			789			128			661
Interest credited to policyholders’ account balances		1,101			335			766			283			84			199
Interest expense		781			67			714			201			16			185
Deferral of acquisition costs		(1,146	)		(420	)		(726	)		(333	)		(113	)		(220	)
Amortization of acquisition costs		879			511			368			216			115			101
General and administrative expenses		4,138			2,178			1,960			1,150			549			601

Total benefits and expenses		8,649			3,041			5,608			2,306			779			1,527

Adjusted operating income (loss) before income taxes		2,148			1,925			223			419			445			(26	)


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

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


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

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

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

(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

Fourth Quarter 2018

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

(in millions)


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

						SALES AND ACCOUNT VALUES:

						Variable Annuities:
	165,153			153,295		Beginning total account value		162,107			165,153			161,171			160,143			162,369
	4,296			2,863		Sales: Highest Daily Suite - risk retained by Prudential (1)		817			1,010			1,126			1,116			1,044
	5			27		Highest Daily Suite - externally reinsured living benefits		—			1			—			—			4
	3,562			2,962		Other variable annuities (2)		796			683			881			997			1,001

	7,863			5,852		Total sales		1,613			1,694			2,007			2,113			2,049
	(11,577	)		(9,717	)	Surrenders and withdrawals		(2,721	)		(2,867	)		(2,929	)		(2,898	)		(2,883	)

	(3,714	)		(3,865	)	Net redemptions		(1,108	)		(1,173	)		(922	)		(785	)		(834	)
	(1,747	)		(1,558	)	Benefit payments		(395	)		(453	)		(469	)		(410	)		(415	)

	(5,461	)		(5,423	)	Net flows		(1,503	)		(1,626	)		(1,391	)		(1,195	)		(1,249	)
	(8,650	)		20,993		Change in market value, interest credited, and other		5,494			(1,418	)		1,292			4,360			(12,884	)
	(3,703	)		(3,712	)	Policy charges		(945	)		(938	)		(929	)		(939	)		(897	)

	147,339			165,153		Ending total account value		165,153			161,171			160,143			162,369			147,339


						Variable Annuities Account Value by Product:
	121,504			121,150		Highest Daily Suite - risk retained by Prudential (1)		121,150			118,249			117,348			118,618			121,504
	2,873			3,227		Highest Daily Suite - externally reinsured living benefits		3,227			3,165			3,146			3,184			2,873
	22,962			40,776		Other variable annuities (2)		40,776			39,757			39,649			40,567			22,962

	147,339			165,153		Ending total account value		165,153			161,171			160,143			162,369			147,339


						Fixed Annuities and other products:
	3,473			3,488		Beginning total account value		3,493			3,473			3,480			3,502			3,593
	407			42		Sales		5			30			60			128			189
	(111	)		(104	)	Surrenders and withdrawals		(31	)		(28	)		(28	)		(25	)		(30	)

	296			(62	)	Net sales (redemptions)		(26	)		2			32			103			159
	(337	)		(315	)	Benefit payments		(77	)		(84	)		(87	)		(83	)		(83	)

	(41	)		(377	)	Net flows		(103	)		(82	)		(55	)		20			76
	309			363		Interest credited and other		83			89			77			71			72
	—			(1	)	Policy charges		—			—			—			—			—

	3,741			3,473		Ending total account value		3,473			3,480			3,502			3,593			3,741

						SALES BY DISTRIBUTION CHANNEL:

						Variable and Fixed Annuities (3):
	2,468			1,904		Insurance Agents		489			525			619			640			684
	1,541			979		Wirehouses		303			323			355			433			430
	3,682			2,514		Independent Financial Planners		713			758			951			999			974
	579			497		Bank Distribution		113			118			142			169			150

	8,270			5,894		Total		1,618			1,724			2,067			2,241			2,238

(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

Fourth Quarter 2018

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

(in millions)


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

						INDIVIDUAL ANNUITIES:

						Account Values in General Account (1):
	9,892			9,892		Beginning balance		9,816			9,892			9,932			9,932			10,006
	1,158			650		Premiums and deposits		167			211			256			318			373
	(622	)		(597	)	Surrenders and withdrawals		(166	)		(163	)		(155	)		(139	)		(165	)

	536			53		Net sales		1			48			101			179			208
	(405	)		(380	)	Benefit payments		(90	)		(100	)		(106	)		(97	)		(102	)

	131			(327	)	Net flows		(89	)		(52	)		(5	)		82			106
	268			248		Interest credited and other		71			61			69			69			69
	8			80		Net transfers (to) from separate account		94			31			(64	)		(76	)		117
	(1	)		(1	)	Policy charges		—			—			—			(1	)		—

	10,298			9,892		Ending balance		9,892			9,932			9,932			10,006			10,298


						Account Values in Separate Account (1):
	158,734			146,891		Beginning balance		155,784			158,734			154,719			153,713			155,956
	7,112			5,244		Premiums and deposits		1,451			1,513			1,811			1,923			1,865
	(11,066	)		(9,224	)	Surrenders and withdrawals		(2,586	)		(2,732	)		(2,802	)		(2,784	)		(2,748	)

	(3,954	)		(3,980	)	Net redemptions		(1,135	)		(1,219	)		(991	)		(861	)		(883	)
	(1,679	)		(1,493	)	Benefit payments		(382	)		(437	)		(450	)		(396	)		(396	)

	(5,633	)		(5,473	)	Net flows		(1,517	)		(1,656	)		(1,441	)		(1,257	)		(1,279	)
	(8,609	)		21,108		Change in market value, interest credited and other		5,506			(1,390	)		1,300			4,362			(12,881	)
	(8	)		(80	)	Net transfers (to) from general account		(94	)		(31	)		64			76			(117	)
	(3,702	)		(3,712	)	Policy charges		(945	)		(938	)		(929	)		(938	)		(897	)

	140,782			158,734		Ending balance		158,734			154,719			153,713			155,956			140,782

(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

Fourth Quarter 2018

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

(in millions)


	2017		2018
	4Q		1Q		2Q		3Q		4Q

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		3,380		3,134		2,950		2,818		2,578
Guaranteed minimum withdrawal benefits		477		450		433		428		364
Guaranteed minimum income benefits		2,791		2,690		2,651		2,661		2,306
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		131,146		128,176		127,490		129,431		118,115
Guaranteed minimum withdrawal & income benefits - externally reinsured		3,227		3,165		3,146		3,184		2,873

Total		141,021		137,615		136,670		138,522		126,236


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		115,690		112,913		112,055		113,257		102,300
Account Values with Auto-Rebalancing Feature - externally reinsured		3,227		3,165		3,146		3,184		2,873
Account Values without Auto-Rebalancing Feature		22,104		21,537		21,469		22,081		21,063

Total		141,021		137,615		136,670		138,522		126,236


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		2,928		3,506		3,775		3,634		6,714
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		661		742		797		757		1,226

Total		3,589		4,248		4,572		4,391		7,940

(1)	At end of period.

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


	2017		2018
	4Q		1Q		2Q		3Q		4Q

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

Variable Annuity Account Values by Death Benefit Features
Return of net deposits:
Account value		128,545		125,515		124,777		126,693		115,489
Net amount at risk		285		356		456		404		917
Minimum return, anniversary contract value, or maximum contract value:
Account value		32,269		31,322		30,925		31,057		27,673
Net amount at risk		2,611		3,078		3,179		2,916		5,071

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		118,916		116,078		115,201		116,441		105,172
Account Values without Auto-Rebalancing Feature		41,898		40,759		40,501		41,309		37,990

Total		160,814		156,837		155,702		157,750		143,162


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,008		1,403		1,545		1,379		3,115
Net Amount at Risk without Auto-Rebalancing Feature		1,888		2,031		2,090		1,941		2,873

Total		2,896		3,434		3,635		3,320		5,988

(1)	At end of period.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


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

						ANNUALIZED NEW BUSINESS PREMIUMS (1):

	213			213		Term life		53			49			54			55			55
	97			156		Guaranteed Universal life		32			21			24			23			29
	150			125		Other Universal life		43			26			29			44			51
	163			130		Variable life		55			29			35			41			58

	623			624		Total		183			125			142			163			193

						ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

	135			118		Prudential Advisors		33			30			33			35			37
	488			506		Third party distribution		150			95			109			128			156

	623			624		Total		183			125			142			163			193

						ACCOUNT VALUE ACTIVITY:

						*Policyholders’ Account Balances (2):*
	26,861			26,041		Beginning balance		26,612			26,861			27,420			27,942			28,347
	3,334			3,205		Premiums and deposits		831			734			738			790			1,072
	(1,281	)		(1,031	)	Surrenders and withdrawals		(281	)		(249	)		(293	)		(280	)		(459	)

	2,053			2,174		Net sales		550			485			445			510			613
	(371	)		(566	)	Benefit payments		(140	)		(145	)		(155	)		(132	)		61

	1,682			1,608		Net flows		410			340			290			378			674
	1,584			393		Interest credited and other		131			524			527			304			229
	294			438		Net transfers (to) from separate account		110			119			119			136			(80	)
	(1,693	)		(1,619	)	Policy charges		(402	)		(424	)		(414	)		(413	)		(442	)
	—			—		Acquisition		—			—			—			—			—

	28,728			26,861		Ending balance		26,861			27,420			27,942			28,347			28,728


						*Separate Account Liabilities:*
	32,085			28,455		Beginning balance		31,100			32,085			31,897			32,430			33,562
	1,601			1,606		Premiums and deposits		491			419			379			365			438
	(1,099	)		(1,249	)	Surrenders and withdrawals		(464	)		(253	)		(312	)		(272	)		(262	)

	502			357		Net sales		27			166			67			93			176
	(388	)		(169	)	Benefit payments		(47	)		(55	)		(46	)		(41	)		(246	)

	114			188		Net flows		(20	)		111			21			52			(70	)
	(1,173	)		4,798		Change in market value, interest credited and other		1,347			51			861			1,450			(3,535	)
	(294	)		(438	)	Net transfers (to) from general account		(110	)		(119	)		(119	)		(136	)		80
	(936	)		(918	)	Policy charges		(232	)		(231	)		(230	)		(234	)		(241	)
	—			—		Acquisition		—			—			—			—			—

	29,796			32,085		Ending balance		32,085			31,897			32,430			33,562			29,796


						FACE AMOUNT IN FORCE (3):

						Term life		753,804			761,014			770,208			779,181			788,013
						Guaranteed Universal life		142,546			143,449			144,110			144,831			145,861
						Other Universal life		47,516			47,842			48,598			49,552			50,650
						Variable life		163,174			162,514			162,762			162,881			160,747

						Total		1,107,040			1,114,820			1,125,678			1,136,445			1,145,272

(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

Fourth 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				4Q			1Q			2Q			3Q			4Q

						DEFERRED POLICY ACQUISITION COSTS

						GROUP INSURANCE:
	162			176		Beginning balance		163			162			161			160			159
	1			—		Capitalization		—			—			1			—			—
	(5	)		(14	)	Amortization - operating results		(1	)		(1	)		(2	)		(1	)		(1	)
	—			—		Amortization - realized investment gains and losses		—			—			—			—			—
	—			—		Impact of unrealized losses on AFS securities		—			—			—			—			—

	158			162		Ending balance		162			161			160			159			158


						INDIVIDUAL ANNUITIES:
	5,130			4,871		Beginning balance		5,089			5,130			5,083			5,047			4,970
	420			314		Capitalization		84			90			107			110			113
	(511	)		(464	)	Amortization - operating results		(118	)		(111	)		(146	)		(139	)		(115	)
	(147	)		464		Amortization - realized investment gains and losses		82			(62	)		(39	)		(73	)		27
	92			(55	)	Impact of unrealized (gains) or losses on AFS securities		(7	)		36			42			25			(11	)
	—			—		Other		—			—			—			—			—

	4,984			5,130		Ending balance		5,130			5,083			5,047			4,970			4,984


						INDIVIDUAL LIFE INSURANCE:
	5,405			5,278		Beginning balance		5,355			5,405			5,637			5,818			5,959
	726			691		Capitalization		181			159			163			184			220
	(368	)		(483	)	Amortization - operating results		(83	)		(91	)		(105	)		(71	)		(101	)
	15			101		Amortization - realized investment gains and losses		(4	)		9			2			2			2
	325			(182	)	Impact of unrealized (gains) or losses on AFS securities		(44	)		155			121			26			23

	6,103			5,405		Ending balance		5,405			5,637			5,818			5,959			6,103


						DEFERRED SALES INDUCEMENTS
						INDIVIDUAL ANNUITIES:
	1,125			1,082		Beginning balance		1,133			1,125			1,083			1,051			1,002
	3			2		Capitalization		—			1			—			1			1
	(140	)		(141	)	Amortization - operating results		(36	)		(31	)		(40	)		(38	)		(31	)
	(30	)		195		Amortization - realized investment gains and losses		29			(20	)		(4	)		(25	)		19
	25			(13	)	Impact of unrealized (gains) or losses on AFS securities		(1	)		8			12			13			(8	)
	—			—		Other		—			—			—			—			—

	983			1,125		Ending balance		1,125			1,083			1,051			1,002			983

Page 25

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


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

									Revenues (1):
	16,171			15,707			3	%	Premiums		3,822			4,541			3,767			3,950			3,913
	534			503			6	%	Policy charges and fee income		129			143			129			129			133
	5,245			5,027			4	%	Net investment income		1,284			1,301			1,320			1,313			1,311
	284			323			-12	%	Asset management fees, commissions and other income		57			55			72			98			59

	22,234			21,560			3	%	Total revenues		5,292			6,040			5,288			5,490			5,416

									Benefits and Expenses (1):
	14,071			13,488			4	%	Insurance and annuity benefits		3,291			3,915			3,300			3,435			3,421
	907			899			1	%	Interest credited to policyholders’ account balances		221			238			222			227			220
	21			13			62	%	Interest expense		3			4			5			6			6
	(1,717	)		(1,807	)		5	%	Deferral of acquisition costs		(418	)		(475	)		(413	)		(415	)		(414	)
	1,233			1,138			8	%	Amortization of acquisition costs		274			331			306			286			310
	4,453			4,631			-4	%	General and administrative expenses		1,144			1,171			1,084			1,061			1,137

	18,968			18,362			3	%	Total benefits and expenses		4,515			5,184			4,504			4,600			4,680


	3,266			3,198			2	%	Adjusted operating income before income taxes		777			856			784			890			736

(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

Fourth Quarter 2018

COMBINING STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	Twelve Months Ended December 31, 2018									Quarter Ended December 31, 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		16,171			8,364			7,807			3,913			2,035			1,878
Policy charges and fee income		534			394			140			133			99			34
Net investment income		5,245			2,243			3,002			1,311			548			763
Asset management fees, commissions and other income		284			175			109			59			33			26

Total revenues		22,234			11,176			11,058			5,416			2,715			2,701


Benefits and Expenses (1):
Insurance and annuity benefits		14,071			7,499			6,572			3,421			1,831			1,590
Interest credited to policyholders’ account balances		907			243			664			220			55			165
Interest expense		21			11			10			6			3			3
Deferral of acquisition costs		(1,717	)		(886	)		(831	)		(414	)		(220	)		(194	)
Amortization of acquisition costs		1,233			633			600			310			161			149
General and administrative expenses		4,453			2,086			2,367			1,137			536			601

Total benefits and expenses		18,968			9,586			9,382			4,680			2,366			2,314


Adjusted operating income before income taxes		3,266			1,590			1,676			736			349			387


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

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


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

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


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

(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

Fourth Quarter 2018

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


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

				INTERNATIONAL INSURANCE OPERATING DATA:

				Actual exchange rate basis (1):

				Net premiums, policy charges and fee income:
	6,496		6,056	Japan, excluding Gibraltar Life		1,439		1,880		1,537		1,537		1,542
	7,947		7,900	Gibraltar Life		1,893		2,206		1,820		2,009		1,912
	2,262		2,254	All other countries		619		598		539		533		592

	16,705		16,210	Total		3,951		4,684		3,896		4,079		4,046


				Annualized new business premiums:
	819		913	Japan, excluding Gibraltar Life		164		234		190		189		206
	1,483		1,595	Gibraltar Life (2)		352		407		399		351		326
	438		478	All other countries		129		117		106		105		110

	2,740		2,986	Total (2)		645		758		695		645		642


				Annualized new business premiums by distribution channel:
	1,257		1,391	Life Planner Operations		293		351		296		294		316
	783		741	Gibraltar Life Consultants (2)		167		196		234		178		175
	480		615	Banks (2)		136		158		104		123		95
	220		239	Independent Agency (2)		49		53		61		50		56

	2,740		2,986	Total (2)		645		758		695		645		642

				Constant exchange rate basis (3):
				Net premiums, policy charges and fee income:
	6,469		6,099	Japan, excluding Gibraltar Life		1,456		1,842		1,520		1,542		1,565
	7,910		7,957	Gibraltar Life		1,903		2,168		1,802		2,013		1,927
	2,239		2,178	All other countries		594		562		532		542		603

	16,618		16,234	Total		3,953		4,572		3,854		4,097		4,095


				Annualized new business premiums:
	816		919	Japan, excluding Gibraltar Life		165		232		188		189		207
	1,481		1,599	Gibraltar Life (2)		353		405		399		350		327
	434		454	All other countries		121		108		104		110		112

	2,731		2,972	Total (2)		639		745		691		649		646


				Annualized new business premiums by distribution channel:
	1,250		1,373	Life Planner Operations		286		340		292		299		319
	782		743	Gibraltar Life Consultants (2)		167		195		234		177		176
	480		615	Banks (2)		136		158		104		122		96
	219		241	Independent Agency (2)		50		52		61		51		55

	2,731		2,972	Total (2)		639		745		691		649		646

(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

Fourth Quarter 2018

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2017						2018
	4Q			1Q			2Q			3Q			4Q

Face amount of individual policies in force at end of period (in billions) (1)(2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		339			343			347			351			355
Gibraltar Life		340			341			342			345			345
All other countries		130			132			125			127			130

Total		809			816			814			823			830


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,714			3,773			3,814			3,860			3,907
Gibraltar Life		7,220			7,219			7,217			7,224			7,218
All other countries		2,169			2,134			2,096			2,116			2,134

Total		13,103			13,126			13,127			13,200			13,259


International life insurance policy persistency:

Life Planner Operations:
13 months		92.9	%		92.9	%		93.3	%		93.1	%		92.7	%
25 months		86.2	%		86.6	%		86.9	%		86.9	%		86.6	%

Gibraltar Life (3):
13 months		93.4	%		93.5	%		93.6	%		93.7	%		93.9	%
25 months		87.2	%		87.2	%		87.1	%		87.1	%		87.1	%

Number of Life Planners at end of period:
Japan		3,941			4,076			3,964			4,130			4,183
All other countries		3,890			3,695			3,674			3,668			3,786

Total Life Planners		7,831			7,771			7,638			7,798			7,969


Gibraltar Life Consultants		8,326			8,137			7,938			8,030			7,964

(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

Fourth Quarter 2018

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	December 31, 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		295,312		26,203		269,109		64.8	%		287,878		27,448		260,430		64.7	%
Public, held-to-maturity, at amortized cost		1,745		—		1,745		0.4	%		1,747		—		1,747		0.4	%
Private, available-for-sale, at fair value		57,870		12,542		45,328		10.9	%		58,293		13,814		44,479		11.1	%
Private, held-to-maturity, at amortized cost		268		—		268		0.1	%		302		—		302		0.1	%
Fixed maturities, trading, at fair value (1)		2,088		195		1,893		0.5	%		1,789		200		1,589		0.4	%
Assets supporting experience-rated contractholder liabilities, at fair value		21,254		—		21,254		5.1	%		22,097		—		22,097		5.5	%
Equity securities, at fair value (1)		5,633		1,784		3,849		0.9	%		6,755		2,479		4,276		1.1	%
Commercial mortgage and other loans, at book value		59,033		8,782		50,251		12.1	%		55,411		9,017		46,394		11.5	%
Policy loans, at outstanding balance		12,016		4,410		7,606		1.8	%		11,891		4,543		7,348		1.8	%
Other invested assets (1)(2)		11,723		3,316		8,407		2.0	%		10,669		3,159		7,510		1.9	%
Short-term investments		6,426		478		5,948		1.4	%		6,734		631		6,103		1.5	%

Subtotal (3)		473,368		57,710		415,658		100.0	%		463,566		61,291		402,275		100.0	%

Invested assets of other entities and operations (4)		5,877		—		5,877					6,305		—		6,305

Total investments		479,245		57,710		421,535					469,871		61,291		408,580


Fixed Maturities by Credit Quality (3)(5):	December 31, 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		210,578		23,776		2,307		232,047		85.5	%		195,968		26,830		872		221,926		84.4	%
2		28,246		1,453		1,195		28,504		10.5	%		26,795		3,040		142		29,693		11.3	%

Subtotal - High or Highest Quality Securities		238,824		25,229		3,502		260,551		96.0	%		222,763		29,870		1,014		251,619		95.7	%

3		5,973		280		240		6,013		2.2	%		5,541		442		44		5,939		2.3	%
4		3,709		275		287		3,697		1.4	%		3,457		467		77		3,847		1.5	%
5		725		85		57		753		0.3	%		781		179		32		928		0.4	%
6		181		8		7		182		0.1	%		196		10		3		203		0.1	%

Subtotal - Other Securities		10,588		648		591		10,645		4.0	%		9,975		1,098		156		10,917		4.3	%

Total		249,412		25,877		4,093		271,196		100.0	%		232,738		30,968		1,170		262,536		100.0	%


Private Fixed Maturities:


NAIC Rating (6)
1		11,712		362		261		11,813		25.9	%		11,823		720		53		12,490		27.9	%
2		27,522		814		804		27,532		60.4	%		23,956		1,520		193		25,283		56.5	%

Subtotal - High or Highest Quality Securities		39,234		1,176		1,065		39,345		86.3	%		35,779		2,240		246		37,773		84.4	%

3		4,176		50		168		4,058		8.9	%		4,660		228		35		4,853		10.8	%
4		1,545		16		81		1,480		3.2	%		1,224		34		28		1,230		2.7	%
5		670		14		20		664		1.5	%		885		46		25		906		2.0	%
6		72		5		11		66		0.1	%		40		4		3		41		0.1	%

Subtotal - Other Securities		6,463		85		280		6,268		13.7	%		6,809		312		91		7,030		15.6	%

Total		45,697		1,261		1,345		45,613		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 December 31, 2018 and December 31, 2017, 1,744 securities with amortized cost of $9,079 million (fair value $9,135 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

Fourth Quarter 2018

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

(in millions)


	December 31, 2018					December 31, 2017
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		133,084		74.6	%		128,332		76.0	%
Public, held-to-maturity, at amortized cost		1,745		1.0	%		1,747		1.0	%
Private, available-for-sale, at fair value		16,222		9.1	%		14,538		8.6	%
Private, held-to-maturity, at amortized cost		268		0.1	%		302		0.2	%
Fixed maturities, trading, at fair value (3)		328		0.2	%		257		0.1	%
Assets supporting experience-rated contractholder liabilities, at fair value		2,441		1.4	%		2,586		1.5	%
Equity securities, at fair value (3)		1,972		1.1	%		2,151		1.3	%
Commercial mortgage and other loans, at book value		17,228		9.6	%		14,268		8.5	%
Policy loans, at outstanding balance		2,715		1.5	%		2,545		1.5	%
Other invested assets (3)(4)		1,957		1.1	%		2,021		1.2	%
Short-term investments		451		0.3	%		244		0.1	%

Total		178,411		100.0	%		168,991		100.0	%


	December 31, 2018					December 31, 2017
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		136,025		57.3	%		132,098		56.6	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		29,106		12.3	%		29,941		12.8	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Fixed maturities, trading, at fair value (3)		1,565		0.7	%		1,332		0.6	%
Assets supporting experience-rated contractholder liabilities, at fair value		18,813		7.9	%		19,511		8.3	%
Equity securities, at fair value (3)		1,877		0.8	%		2,125		0.9	%
Commercial mortgage and other loans, at book value		33,023		13.9	%		32,126		13.8	%
Policy loans, at outstanding balance		4,891		2.1	%		4,803		2.1	%
Other invested assets (3)(4)		6,450		2.7	%		5,489		2.4	%
Short-term investments		5,497		2.3	%		5,859		2.5	%

Total		237,247		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

Fourth Quarter 2018

INVESTMENT RESULTS (1)

(in millions)



	Quarter Ended December 31
	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	%		2,746			(51	)		3.86	%		2,594			(53	)
Equity securities		2.94	%		30			—			4.85	%		72			256
Commercial mortgage and other loans		3.99	%		442			(3	)		4.09	%		413			3
Policy loans		4.87	%		92			—			4.86	%		88			—
Short-term investments and cash equivalents		3.02	%		89			1			1.54	%		55			(3	)

Gross investment income before investment expenses		3.82	%		3,399			(53	)		3.87	%		3,222			203
Investment expenses		-0.15	%		(175	)		—			-0.14	%		(129	)		—

Subtotal		3.67	%		3,224			(53	)		3.73	%		3,093			203

Other investments (3)					48			590						167			(779	)
Investment results of other entities and operations (4)					220			153						279			(7	)
Less, investment income related to adjusted operating income reconciling items					(110	)								(74	)

Total					3,382			690						3,465			(583	)


	Twelve Months Ended December 31
	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	%		10,711			285			3.90	%		10,088			412
Equity securities		2.86	%		120			—			4.65	%		326			565
Commercial mortgage and other loans		4.03	%		1,714			(7	)		4.12	%		1,590			(3	)
Policy loans		4.91	%		359			—			4.92	%		347			—
Short-term investments and cash equivalents		2.25	%		298			—			1.31	%		172			(3	)

Gross investment income before investment expenses		3.85	%		13,202			278			3.90	%		12,523			971
Investment expenses		-0.15	%		(634	)		—			-0.15	%		(490	)		—

Subtotal		3.70	%		12,568			278			3.75	%		12,033			971

Other investments (3)					314			1,352						630			(1,063	)
Investment results of other entities and operations (4)					1,006			217						1,119			(10	)
Less, investment income related to adjusted operating income reconciling items					(398	)								(283	)

Total					13,490			1,847						13,499			(102	)

(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

Fourth Quarter 2018

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)



	Quarter Ended December 31
	2018									2017
	Investment Income						Realized Gains /			Investment Income						Realized Gains /
	Yield (1)			Amount			(Losses)			Yield (1)			Amount			(Losses)
Japanese Insurance Operations:
Fixed maturities (2)		2.88	%		937			195			3.00	%		920			(39	)
Equity securities		4.38	%		22			—			3.36	%		20			245
Commercial mortgage and other loans		3.92	%		166			(2	)		3.89	%		135			—
Policy loans		3.91	%		26			—			3.95	%		25			—
Short-term investments and cash equivalents		5.63	%		7			—			1.25	%		4			—

Gross investment income before investment expenses		3.04	%		1,158			193			3.11	%		1,104			206
Investment expenses		-0.13	%		(63	)		—			-0.13	%		(49	)		—

Subtotal		2.91	%		1,095			193			2.98	%		1,055			206

Other investments (2)					7			185						32			(82	)

Total					1,102			378						1,087			124


	Twelve Months Ended December 31
	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	%		3,707			666			3.06	%		3,624			466
Equity securities		3.45	%		72			—			2.91	%		79			511
Commercial mortgage and other loans		3.96	%		623			(3	)		4.05	%		515			—
Policy loans		3.92	%		101			—			4.00	%		97			—
Short-term investments and cash equivalents		2.83	%		33			—			1.25	%		14			—

Gross investment income before investment expenses		3.06	%		4,536			663			3.17	%		4,329			977
Investment expenses		-0.13	%		(237	)		—			-0.12	%		(184	)		—

Subtotal		2.93	%		4,299			663			3.05	%		4,145			977

Other investments (2)					93			96						132			115

Total					4,392			759						4,277			1,092

(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

Fourth Quarter 2018

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)



	Quarter Ended December 31
	2018									2017
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities (3)		4.62	%		1,809			(246	)		4.59	%		1,674			(14	)
Equity securities		1.47	%		8			—			5.82	%		52			11
Commercial mortgage and other loans		4.02	%		276			(1	)		4.20	%		278			3
Policy loans		5.39	%		66			—			5.35	%		63			—
Short-term investments and cash equivalents		2.89	%		82			1			1.56	%		51			(3	)

Gross investment income before investment expenses		4.41	%		2,241			(246	)		4.44	%		2,118			(3	)
Investment expenses		-0.16	%		(112	)		—			-0.15	%		(80	)		—

Subtotal		4.25	%		2,129			(246	)		4.29	%		2,038			(3	)

Other investments (3)					41			405						135			(697	)

Total					2,170			159						2,173			(700	)


	Twelve Months Ended December 31
	2018									2017
	Investment Income						Realized Gains / (Losses)			Investment Income						Realized Gains / (Losses)
	Yield (4)			Amount			Realized Gains / (Losses)			Yield (4)			Amount			Realized Gains / (Losses)
Excluding Japanese Insurance Operations (2):
Fixed maturities (3)		4.68	%		7,004			(381	)		4.61	%		6,464			(54	)
Equity securities		2.28	%		48			—			5.75	%		247			54
Commercial mortgage and other loans		4.08	%		1,091			(4	)		4.16	%		1,075			(3	)
Policy loans		5.44	%		258			—			5.41	%		250			—
Short-term investments and cash equivalents		2.20	%		265			—			1.31	%		158			(3	)

Gross investment income before investment expenses		4.45	%		8,666			(385	)		4.44	%		8,194			(6	)
Investment expenses		-0.17	%		(397	)		—			-0.16	%		(306	)		—

Subtotal		4.28	%		8,269			(385	)		4.28	%		7,888			(6	)

Other investments (3)					221			1,256						498			(1,178	)

Total					8,490			871						8,386			(1,184	)

(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

Fourth Quarter 2018

INCOME STATEMENT IMPACT FROM UPDATED ESTIMATES OF PROFITABILITY DRIVEN BY MARKET PERFORMANCE VERSUS ASSUMPTIONS

(in millions)


	Fourth Quarter 2018																		Fourth Quarter 2017
	Policy Charges and Fee Income			Asset Management Fees, Commissions and Other Income			Insurance and Annuity Benefits		Interest Credited to Policyholders’ Account Balances		Amortization of Acquisition Costs			General and Administrative Expenses		Pre-Tax Adjusted Operating Income			Asset Management Fees, Commissions and Other Income		Insurance and Annuity Benefits			Amortization of Acquisition Costs			Pre-Tax Adjusted Operating Income
Individual Annuities:
Market performance and experience true-ups		—			(10	)		12		3		(3	)		—		(22	)		5		(6	)		(5	)		16
Individual Life:
Market performance and experience true-ups		(1	)		—			2		—		7			52		(62	)		—		—			—			—
International Insurance - Life Planner operations:
Market performance and experience true-ups		—			—			16		—		9			—		(25	)		—		—			—			—

Page 35

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth 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, 2018																								Three Months Ended December 31, 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 and Run-off 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 and Run-off Businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		11,487			—			—			—			621			112			—			12,220			8,720			—			—		—			674		95			—			9,489
Policy charges and fee income		1,570			(51	)		—			—			—			1			—			1,520			1,604			(61	)		—		—			—		—			—			1,543
Net investment income		3,382			(11	)		—			—			544			121			—			4,036			3,465			(12	)		—		—			670		86			—			4,209
Realized investment gains (losses), net		249			379			—			—			26			62			—			716			82			(663	)		—		—			72		(2	)		—			(511	)
Asset management fees, commissions and other income		1,092			(500	)		(277	)		—			(313	)		(42	)		(20	)		(60	)		1,379			121			6		—			28		2			(1	)		1,535

Total revenues		17,780			(183	)		(277	)		—			878			254			(20	)		18,432			15,250			(615	)		6		—			1,444		181			(1	)		16,265


Benefits and Expenses:

Insurance and annuity benefits		11,934			42			—			—			786			166			—			12,928			9,163			85			—		—			1,311		174			—			10,733
Interest credited to policyholders’ account balances		937			(25	)		—			(228	)		33			5			—			722			929			(25	)		—		(37	)		33		—			—			900
Interest expense		372			—			—			—			1			1			—			374			344			—			—		—			—		2			—			346
Deferral of acquisition costs		(754	)		—			—			—			—			(2	)		—			(756	)		(686	)		—			—		—			—		—			—			(686	)
Amortization of acquisition costs		533			(34	)		—			—			9			1			—			509			480			(76	)		—		—			10		—			—			414
General and administrative expenses		3,440			49			—			—			89			32			(8	)		3,602			3,448			(18	)		—		—			94		18			(100	)		3,442

Total benefits and expenses		16,462			32			—			(228	)		918			203			(8	)		17,379			13,678			(34	)		—		(37	)		1,448		194			(100	)		15,149



	Twelve Months Ended December 31, 2018																								Twelve Months Ended December 31, 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 and Run-off 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 and Run- off Businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		32,978			—			—			—			2,301			500			—			35,779			29,162			—			—		—			2,526		403			—			32,091
Policy charges and fee income		6,272			(274	)		—			—			—			4			—			6,002			5,518			(215	)		—		—			—		—			—			5,303
Net investment income		13,490			(41	)		—			—			2,288			439			—			16,176			13,499			(38	)		—		—			2,653		321			—			16,435
Realized investment gains (losses), net		526			1,366			—			—			130			(45	)		—			1,977			486			(631	)		—		—			534		43			—			432
Asset management fees, commissions and other income		4,864			(706	)		(863	)		—			(41	)		(93	)		(103	)		3,058			4,981			67			336		—			113		8			(77	)		5,428

Total revenues		58,130			345			(863	)		—			4,678			805			(103	)		62,992			53,646			(817	)		336		—			5,826		775			(77	)		59,689


Benefits and Expenses:

Insurance and annuity benefits		34,411			(75	)		—			—			4,208			2,196			—			40,740			30,071			(69	)		—		—			5,226		657			—			35,885
Interest credited to policyholders’ account balances		3,720			40			—			(710	)		132			14			—			3,196			3,729			(191	)		—		151			133		—			—			3,822
Interest expense		1,414			—			—			—			2			4			—			1,420			1,322			—			—		—			1		4			—			1,327
Deferral of acquisition costs		(2,864	)		—			—			—			—			(7	)		—			(2,871	)		(2,818	)		—			—		—			—		—			—			(2,818	)
Amortization of acquisition costs		2,114			118			—			—			35			6			—			2,273			2,093			(550	)		—		—			37		—			—			1,580
General and administrative expenses		12,967			(41	)		—			—			363			127			(16	)		13,400			13,005			51			—		—			384		76			(110	)		13,406

Total benefits and expenses		51,762			42			—			(710	)		4,740			2,340			(16	)		58,158			47,402			(759	)		—		151			5,781		737			(110	)		53,202

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

(2)	U.S. generally accepted accounting principles

Page 36

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth Quarter 2018

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

(in millions)


	Three Months Ended March 31, 2018																								Three Months Ended June 30, 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 and Run-off 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 and Run-off Businesses			Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			U.S. GAAP (2)

Revenues:

Premiums		6,638			—			—			—			551			122			—			7,311			6,710			—			—			—			600		128			—			7,438
Policy charges and fee income		1,575			(71	)		—			—			—			—			—			1,504			1,570			(92	)		—			—			—		2			—			1,480
Net investment income		3,337			(10	)		—			—			593			78			—			3,998			3,404			(10	)		—			—			591		111			—			4,096
Realized investment gains (losses), net		63			433			—			—			(2	)		(69	)		—			425			151			434			—			—			110		(10	)		—			685
Asset management fees, commissions and other income		1,262			(336	)		(403	)		—			21			1			(26	)		519			1,208			(31	)		(193	)		—			87		(88	)		(27	)		956

Total revenues		12,875			16			(403	)		—			1,163			132			(26	)		13,757			13,043			301			(193	)		—			1,388		143			(27	)		14,655


Benefits and Expenses:

Insurance and annuity benefits		6,853			(62	)		—			—			1,035			177			—			8,003			7,160			(24	)		—			—			1,288		1,628			—			10,052
Interest credited to policyholders’ account balances		911			25			—			(418	)		33			(1	)		—			550			932			9			—			(85	)		33		5			—			894
Interest expense		340			—			—			—			—			1			—			341			347			—			—			—			—		1			—			348
Deferral of acquisition costs		(718	)		—			—			—			—			(1	)		—			(719	)		(684	)		—			—			—			—		(2	)		—			(686	)
Amortization of acquisition costs		530			47			—			—			10			1			—			588			555			48			—			—			8		2			—			613
General and administrative expenses		3,238			(58	)		—			—			94			27			—			3,301			3,072			(9	)		—			—			90		35			(4	)		3,184

Total benefits and expenses		11,154			(48	)		—			(418	)		1,172			204			—			12,064			11,382			24			—			(85	)		1,419		1,669			(4	)		14,405



	Three Months Ended September 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 and Run- off 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
Policy charges and fee income		1,557		(60)	—		—		—		1	—		1,498
Net investment income		3,367		(10)	—		—		560		129	—		4,046
Realized investment gains (losses), net		63		120	—		—		(4	)	(28)	—		151
Asset management fees, commissions and other income		1,302		161	10		—		164		36	(30)		1,643

Total revenues		14,432		211	10		—		1,249		276	(30)		16,148


Benefits and Expenses:

Insurance and annuity benefits		8,464		(31)	—		—		1,099		225	—		9,757
Interest credited to policyholders’ account balances		940		31	—		21		33		5	—		1,030
Interest expense		355		—	—		—		1		1	—		357
Deferral of acquisition costs		(708	)	—	—		—		—		(2)	—		(710	)
Amortization of acquisition costs		496		57	—		—		8		2	—		563
General and administrative expenses		3,217		(23)	—		—		90		33	(4)		3,313

Total benefits and expenses		12,764		34	—		21		1,231		264	(4)		14,310

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

(2)	U.S. generally accepted accounting principles

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth 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 and Run-off 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.

As of the fourth quarter of 2017 and first, second and third quarter of 2018, book value per share of Common Stock (including AOCI, excluding AOCI, and excluding AOCI and remeasurement of foreign currency and certain deferred taxes) includes a $500 million increase in equity and a 5.88 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 $85.00. Reflecting the dilutive impact of ESNs when book value per share is greater than $82.16, to calculate book value per share of Common Stock (including AOCI, excluding AOCI and excluding AOCI and remeasurement of foreign currency and certain deferred taxes) as of the fourth quarter of 2018, equity is increased by $500 million and diluted shares include 6.09 million shares.

Diluted shares as of the fourth quarter of 2017 and first, second and third quarters of 2018 include 5.88 million shares due to the dilutive impact of conversion of ESNs when book value per share of Common Stock (including AOCI, excluding AOCI, and excluding AOCI and remeasurement of foreign currency and certain deferred taxes) is greater than $85.00. Diluted shares as of the fourth quarter of 2018, include 6.09 million shares due to the dilutive impact of conversion of ESNs when book value per share of Common Stock (including AOCI, excluding AOCI, and excluding AOCI and remeasurement of foreign currency and certain deferred taxes) is greater than $82.16.

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

Fourth 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 and Run-off Businesses:

Businesses that have been or will be sold or exited, including businesses that have been placed in wind down status that do 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

Fourth 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

Fourth Quarter 2018

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of February 6, 2019


	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. (1)	NR	twAAA	NR	NR

CREDIT RATINGS:
as of February 6, 2019

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, an S&P Global Company.

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

StreetInsider

Log in to your account:

Form 8-K PRUDENTIAL FINANCIAL For: Feb 06

Categories