May 1, 2019 - EX-99.2 - 8-K: Current report | Prudential Financial, Inc. (PRU)

Exhibit 99.2

Prudential Financial, Inc. (PRU)

LOGO

Quarterly Financial Supplement

First Quarter 2019

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.

May 1, 2019

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

TABLE OF CONTENTS


	Page
HIGHLIGHTS
Financial Metrics Summary		1
Financial Highlights		2
Adjusted Operating Income Notable Items		3
Other Financial Highlights		4
Operations Highlights		5

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

PGIM DIVISION
Statements of Operations		10
Supplementary Revenue and Assets Under Management Information		11
Supplementary Assets Under Management Information		12

U.S. WORKPLACE SOLUTIONS DIVISION
Combined Statements of Operations		13
Statements of Operations - Retirement		14
Retirement Sales Results and Account Values		15
Statements of Operations - Group Insurance		16
Group Insurance Supplementary Information		17

U.S. INDIVIDUAL SOLUTIONS DIVISION
Combined Statements of Operations		18
Statements of Operations - Individual Annuities		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
Statements of Operations - Individual Life		24
Individual Life Supplementary Information		25

INTERNATIONAL INSURANCE DIVISION
Combined Statements of Operations		26
Statements of Operations - Life Planner Operations		27
Statements of Operations - Gibraltar Life and Other Operations		28
Sales Results and Supplementary Information		29

CORPORATE AND OTHER OPERATIONS
Statements of Operations		31

INVESTMENT PORTFOLIO
Investment Portfolio Composition		32
Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations		33
Investment Results		34
Investment Results - Japanese Insurance Operations		35
Investment Results - Excluding Japanese Insurance Operations		36

INCOME STATEMENT IMPACT FROM UPDATED ESTIMATES OF PROFITABILITY DRIVEN BY MARKET PERFORMANCE VERSUS ASSUMPTIONS		37

COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES		38

KEY DEFINITIONS AND FORMULAS		40

RATINGS AND INVESTOR INFORMATION		43

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

FINANCIAL METRICS SUMMARY

(in millions, except per share data)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Earnings
Adjusted operating income (loss) (pre-tax):
PGIM Division		232			254			230			243			214			232			214			-8	%
U.S. Workplace Solutions Division		372			359			298			249			304			372			304			-18	%
U.S. Individual Solutions Division		555			550			624			419			577			555			577			4	%
International Insurance Division		856			784			890			736			922			856			922			8	%
Corporate and Other Operations		(294	)		(286	)		(374	)		(329	)		(412	)		(294	)		(412	)		-40	%

Total Adjusted Operating Income (pre-tax)		1,721			1,661			1,668			1,318			1,605			1,721			1,605			-7	%
Income taxes, applicable to adjusted operating income		381			363			322			283			346			381			346			-9	%

After-tax adjusted operating income		1,340			1,298			1,346			1,035			1,259			1,340			1,259			-6	%


Income attributable to Prudential Financial, Inc.		1,363			197			1,672			842			932			1,363			932			-32	%

Return on Equity
Operating Return on Average Equity (based on adjusted operating income) (1)		13.7	%		13.1	%		13.6	%		10.3	%		12.6	%		13.7	%		12.6	%
Return on Average Equity (based on net income)		10.3	%		1.6	%		14.1	%		7.1	%		7.2	%		10.3	%		7.2	%

Distributions to Shareholders
Dividends Paid		387			382			380			377			415			387			415			7	%
Share Repurchases		375			375			375			375			500			375			500			33	%

Total Capital Returned		762			757			755			752			915			762			915			20	%

Per Share Data
Net Income (diluted)		3.14			0.46			3.90			1.99			2.22			3.14			2.22			-29	%
Adjusted Operating Income (diluted)		3.08			3.01			3.15			2.44			3.00			3.08			3.00			-3	%
Shareholder Dividends		0.90			0.90			0.90			0.90			1.00			0.90			1.00			11	%
Book Value		120.99			113.59			110.78			116.34			132.83
Book Value excluding AOCI and FX (2)		93.55			92.60			95.20			96.06			96.76

Shares Outstanding
Weighted average number of Common shares (basic)		422.0			419.5			416.2			412.7			409.2			422.0			409.2			-3	%
Weighted average number of Common shares (diluted)		430.9			428.0			424.7			421.2			417.6			430.9			417.6			-3	%
End of period Common shares (basic)		421.0			417.7			414.4			410.7			407.3
End of period Common shares (diluted)		432.5			429.0			426.3			422.2			417.9

(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 as described on page 4.

(2)	AOCI represents accumulated other comprehensive income and FX represents the remeasurement of foreign currency. See Page 4 for further details.

Page 1

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

FINANCIAL HIGHLIGHTS

(in millions, except per share data)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

Earnings per share of Common Stock (diluted):
After-tax adjusted operating income		3.08			3.01			3.15			2.44			3.00			3.08			3.00
Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments		0.15			0.65			0.42			(0.51	)		(1.53	)		0.15			(1.53	)
Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		(0.94	)		(0.45	)		0.02			(0.66	)		1.09			(0.94	)		1.09
Change in experience-rated contractholder liabilities due to asset value changes		0.97			0.20			(0.05	)		0.54			(0.97	)		0.97			(0.97	)
Divested and Run-off Businesses:
Closed Block Division		(0.02	)		(0.07	)		0.04			(0.09	)		(0.05	)		(0.02	)		(0.05	)
Other Divested and Run-off Businesses		(0.17	)		(3.57	)		0.03			0.12			0.42			(0.17	)		0.42
Difference in earnings allocated to participating unvested share-based payment awards		—			0.02			(0.01	)		0.01			0.01			—			0.01

Total reconciling items, before income taxes		(0.01	)		(3.22	)		0.45			(0.59	)		(1.03	)		(0.01	)		(1.03	)
Income taxes, not applicable to adjusted operating income		(0.07	)		(0.67	)		(0.30	)		(0.14	)		(0.25	)		(0.07	)		(0.25	)

Total reconciling items, after income taxes		0.06			(2.55	)		0.75			(0.45	)		(0.78	)		0.06			(0.78	)

Net income attributable to Prudential Financial, Inc.		3.14			0.46			3.90			1.99			2.22			3.14			2.22


Weighted average number of outstanding Common shares (basic)		422.0			419.5			416.2			412.7			409.2			422.0			409.2
Weighted average number of outstanding Common shares (diluted)		430.9			428.0			424.7			421.2			417.6			430.9			417.6

Earnings calculation, per share of Common Stock:

Net income attributable to Prudential Financial, Inc.		1,363			197			1,672			842			932			1,363			932
Earnings related to interest, net of tax, on exchangeable surplus notes		5			6			5			5			5			5			5
Less: Earnings allocated to participating unvested share-based payment awards		16			4			19			10			10			16			10

Net income attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation		1,352			199			1,658			837			927			1,352			927


After-tax adjusted operating income		1,340			1,298			1,346			1,035			1,259			1,340			1,259
Earnings related to interest, net of tax, on exchangeable surplus notes		5			6			5			5			5			5			5
Less: Earnings allocated to participating unvested share-based payment awards		16			14			15			13			13			16			13

After-tax adjusted operating income for earnings per share of Common Stock calculation		1,329			1,290			1,336			1,027			1,251			1,329			1,251

Page 2

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

ADJUSTED OPERATING INCOME NOTABLE ITEMS

(in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

Notable items by type (1):
Annual review and update of actuarial assumptions and other refinements		—			(160	)		—			—			—			—			—
Updated estimates of profitability driven by market performance versus assumptions		16			(2	)		(36	)		(109	)		70			16			70
Variable investment income above / (below) long-term expectations		(50	)		(10	)		(35	)		(140	)		(100	)		(50	)		(100	)
Underwriting experience above / (below) average expected gains		(25	)		85			65			(10	)		20			(25	)		20
(Higher) / lower than typical expenses		—			(15	)		—			(30	)		—			—			—

Total notable items included in pre-tax adjusted operating income		(59	)		(102	)		(6	)		(289	)		(10	)		(59	)		(10	)


Notable items by segment (1):
PGIM		—			—			—			—			—			—			—
Retirement		35			(13	)		(30	)		(60	)		—			35			—
Group Insurance		—			26			5			(5	)		(5	)		—			(5	)
Individual Annuities		11			3			(36	)		(32	)		9			11			9
Individual Life Insurance		(75	)		(70	)		60			(127	)		(1	)		(75	)		(1	)
International Insurance - Life Planner Operations		(20	)		(44	)		5			(50	)		7			(20	)		7
International Insurance - Gibraltar Life & Other Operations		(10	)		(7	)		(10	)		(15	)		(20	)		(10	)		(20	)
Corporate and Other Operations		—			3			—			—			—			—			—

Total notable items included in pre-tax adjusted operating income		(59	)		(102	)		(6	)		(289	)		(10	)		(59	)		(10	)

(1)

The Company chooses to highlight the impact of these notable items because it believes their contribution to results in a given period may not be indicative of future performance. These notable items do not include seasonality impacts on quarterly revenue or expense patterns and may not encompass all items that could affect earnings trends. Average expectations used for comparison herein are those in effect for the respective periods shown at the time of original reporting and are not adjusted for subsequent changes in the Company’s expectations. These items, where significant, individually identified for the respective periods in the Company’s earnings releases, available at www.investor.prudential.com and in the appendix.

Page 3

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

OTHER FINANCIAL HIGHLIGHTS

(in millions, except per share data)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018		2019

Capitalization Data (1):
Senior Debt:
Short-term debt		1,383			2,056			2,393			2,451			2,549
Long-term debt		11,516			10,706			9,857			9,810			10,741
Junior Subordinated Long-Term Debt		6,627			6,026			7,564			7,568			7,568

Prudential Financial Inc. Equity:
Including accumulated other comprehensive income		51,830			48,232			46,725			48,617			55,010
Excluding accumulated other comprehensive income (2)		37,069			36,577			37,575			37,711			37,792
Amount included above for remeasurement of foreign currency (3)		(2,892	)		(2,650	)		(2,509	)		(2,344	)		(2,142	)

Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency (3)		39,961			39,227			40,084			40,055			39,934


Book value per share of Common Stock:
Including accumulated other comprehensive income (4)		120.99			113.59			110.78			116.34			132.83
Excluding accumulated other comprehensive income (2)(4)		86.86			86.43			89.32			90.50			91.63
Amount included above for remeasurement of foreign currency (3)		(6.69	)		(6.17	)		(5.88	)		(5.56	)		(5.13	)

Excluding accumulated other comprehensive income and adjusted to remove amount included for remeasurement of foreign currency (3)(4)		93.55			92.60			95.20			96.06			96.76


End of period diluted common shares (5)		432.5			429.0			426.3			422.2			417.9

Common Stock Price Range (based on closing price):
High		126.02			107.62			104.68			105.99			97.25			126.02		97.25
Low		100.64			93.22			93.99			76.83			81.27			100.64		81.27
Close		103.55			93.51			101.32			81.55			91.88			103.55		91.88

Common Stock market capitalization (1)		43,595			39,059			41,987			33,493			37,423

(1)	As of end of period.

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

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

(4)

Book value per share of Common Stock (including AOCI, excluding AOCI, and excluding AOCI and remeasurement of foreign currency) as of the first quarter of 2019 and the fourth quarter of 2018 includes a $500 million increase in equity and a 6.09 million increase in diluted shares reflecting the dilutive impact of exchangeable surplus notes when book value per share of Common Stock is greater than $82.16. As of the third, second and first quarter of 2018, book value per share of Common Stock includes a $500 million increase in equity and a 5.88 million increase in diluted shares, reflecting the dilutive impact of exchangeable surplus notes when book value per share is greater than $85.00.

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

Page 4

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

OPERATIONS HIGHLIGHTS


	2018								2019		Year-to-date
	1Q		2Q		3Q		4Q		1Q		2018		2019

*Assets Under Management and Administration ($ billions) (1)(2):*
Assets Under Management:
PGIM Division:
Institutional customers		489.6		490.8		505.7		493.5		524.0
Retail customers		246.2		252.0		258.3		240.1		256.4
General account		420.0		413.3		410.6		427.8		441.0

Total PGIM Division		1,155.8		1,156.1		1,174.6		1,161.4		1,221.4
U.S. Workplace Solutions Division		86.2		87.6		88.7		86.1		89.4
U.S. Individual Solutions Division		115.7		115.7		117.4		100.4		113.3
International Insurance Division		30.8		28.8		29.3		29.4		31.4

Total assets under management		1,388.5		1,388.2		1,410.0		1,377.3		1,455.5
Client assets under administration		218.4		228.7		238.2		233.3		250.8

Total assets under management and administration		1,606.9		1,616.9		1,648.2		1,610.6		1,706.3


Assets managed or administered for customers outside of the United States at end of period		373.3		365.7		370.6		373.8		389.4

*Distribution Representatives (1):*
Prudential Advisors		2,958		3,052		3,071		3,005		3,075
International Life Planners		7,771		7,638		7,798		7,969		8,094
Gibraltar Life Consultants		8,137		7,938		8,030		7,964		7,997

*Prudential Advisor productivity ($ thousands)*		52		60		63		78		53		52		53

(1)	As of end of period.

(2)	At fair market value.

Page 5

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

COMBINED STATEMENTS OF OPERATIONS

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change


Revenues (1):
Premiums		6,638			6,710			8,143			11,487			7,256			6,638			7,256			9	%
Policy charges and fee income		1,575			1,570			1,557			1,570			1,542			1,575			1,542			-2	%
Net investment income		3,337			3,404			3,367			3,382			3,546			3,337			3,546			6	%
Asset management fees, commissions and other income		1,325			1,359			1,365			1,341			1,304			1,325			1,304			-2	%

Total revenues		12,875			13,043			14,432			17,780			13,648			12,875			13,648			6	%


Benefits and Expenses (1):
Insurance and annuity benefits		6,853			7,160			8,464			11,934			7,520			6,853			7,520			10	%
Interest credited to policyholders’ account balances		911			932			940			937			948			911			948			4	%
Interest expense		340			347			355			372			386			340			386			14	%
Deferral of acquisition costs		(718	)		(684	)		(708	)		(754	)		(759	)		(718	)		(759	)		-6	%
Amortization of acquisition costs		530			555			496			533			540			530			540			2	%
General and administrative expenses		3,238			3,072			3,217			3,440			3,408			3,238			3,408			5	%

Total benefits and expenses		11,154			11,382			12,764			16,462			12,043			11,154			12,043			8	%

Adjusted operating income before income taxes		1,721			1,661			1,668			1,318			1,605			1,721			1,605			-7	%

Income taxes, applicable to adjusted operating income		381			363			322			283			346			381			346			-9	%
After-tax adjusted operating income		1,340			1,298			1,346			1,035			1,259			1,340			1,259			-6	%
Reconciling items:
Realized investment gains (losses), net, and related adjustments		87			393			271			(132	)		(663	)		87			(663	)		-862	%
Related charges		(23	)		(116	)		(94	)		(83	)		25			(23	)		25			209	%

Total realized investment gains (losses), net, and related charges and adjustments		64			277			177			(215	)		(638	)		64			(638	)		-1097	%

Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		(403	)		(193	)		10			(277	)		454			(403	)		454			213	%
Change in experience-rated contractholder liabilities due to asset value changes		418			85			(21	)		228			(403	)		418			(403	)		-196	%
Divested and Run-off Businesses:
Closed Block Division		(9	)		(31	)		18			(40	)		(19	)		(9	)		(19	)		-111	%
Other Divested and Run-off Businesses		(72	)		(1,526	)		12			51			174			(72	)		174			342	%
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests		(26	)		(23	)		(26	)		(12	)		(33	)		(26	)		(33	)		-27	%

Total reconciling items, before income taxes		(28	)		(1,411	)		170			(265	)		(465	)		(28	)		(465	)		-1561	%

Income taxes, not applicable to adjusted operating income		(29	)		(295	)		(138	)		(65	)		(114	)		(29	)		(114	)		-293	%

Total reconciling items, after income taxes		1			(1,116	)		308			(200	)		(351	)		1			(351	)		-35200	%
Income before income taxes and equity in earnings of operating joint ventures		1,693			250			1,838			1,053			1,140			1,693			1,140			-33	%
Income tax expense		352			68			184			218			232			352			232			-34	%


Income before equity in earnings of operating joint ventures		1,341			182			1,654			835			908			1,341			908			-32	%
Equity in earnings of operating joint ventures, net of taxes and earnings attributable to noncontrolling interests		22			15			18			7			24			22			24			9	%

Income attributable to Prudential Financial, Inc.		1,363			197			1,672			842			932			1,363			932			-32	%
Earnings attributable to noncontrolling interests		1			3			3			7			5			1			5			400	%

Net income		1,364			200			1,675			849			937			1,364			937			-31	%
Less: Income attributable to noncontrolling interests		1			3			3			7			5			1			5			400	%

Net income attributable to Prudential Financial, Inc.		1,363			197			1,672			842			932			1,363			932			-32	%

(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 38 and 39 for reconciliation.

Page 6

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

CONSOLIDATED BALANCE SHEETS

(in millions)


	03/31/2018		06/30/2018		09/30/2018		12/31/2018		03/31/2019

Assets:
Investments:
Fixed maturities, available-for-sale, at fair value (amortized cost $319,180; $317,548; $321,168; $331,745; $333,648)		347,630		341,151		340,970		353,656		365,928
Fixed maturities, held-to-maturity, at amortized cost (fair value $2,511; $2,388; $2,287; $2,372; $2,365)		2,120		2,020		1,957		2,013		1,982
Fixed maturities, trading, at fair value (amortized cost $2,852; $2,980; $3,162; $3,392; $3,512)		2,885		2,916		3,083		3,243		3,435
Assets supporting experience-rated contractholder liabilities, at fair value		21,637		21,497		21,083		21,254		21,668
Equity securities, at fair value (cost $5,382; $5,374; $5,149; $5,219; $5,230)		7,289		7,191		7,058		6,238		6,778
Commercial mortgage and other loans		58,098		58,622		59,336		59,830		60,875
Policy loans		12,036		11,935		11,928		12,016		11,986
Other invested assets		14,044		13,459		13,790		14,526		14,840
Short-term investments		5,752		5,728		5,767		6,469		6,911

Total investments		471,491		464,519		464,972		479,245		494,403
Cash and cash equivalents		15,676		14,918		12,466		15,353		14,699
Accrued investment income		3,169		3,235		3,180		3,318		3,233
Deferred policy acquisition costs		19,649		19,643		19,789		20,058		19,978
Value of business acquired		1,995		2,027		1,962		1,850		1,575
Other assets		17,112		16,860		16,938		16,118		18,192
Separate account assets		300,585		298,658		303,441		279,136		297,244

Total assets		829,677		819,860		822,748		815,078		849,324


Liabilities:
Future policy benefits		261,144		260,435		260,797		273,846		277,085
Policyholders’ account balances		149,917		149,359		149,130		150,338		151,224
Securities sold under agreements to repurchase		8,633		9,540		9,176		9,950		9,873
Cash collateral for loaned securities		4,312		4,307		4,656		3,929		4,093
Income taxes		9,296		7,888		7,014		7,936		10,031
Senior short-term debt		1,383		2,056		2,393		2,451		2,549
Senior long-term debt		11,516		10,706		9,857		9,810		10,741
Junior subordinated long-term debt		6,627		6,026		7,564		7,568		7,568
Notes issued by consolidated variable interest entities		954		937		930		955		1,225
Other liabilities		23,135		21,356		20,708		20,128		22,241
Separate account liabilities		300,585		298,658		303,441		279,136		297,244

Total liabilities		777,502		771,268		775,666		766,047		793,874

Equity:
Accumulated other comprehensive income		14,761		11,655		9,150		10,906		17,218
Other equity		37,069		36,577		37,575		37,711		37,792

Total Prudential Financial, Inc. equity		51,830		48,232		46,725		48,617		55,010

Noncontrolling interests		345		360		357		414		440

Total equity		52,175		48,592		47,082		49,031		55,450

Total liabilities and equity		829,677		819,860		822,748		815,078		849,324

Page 7

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

COMBINING BALANCE SHEETS BY DIVISION

(in millions)


	As of March 31, 2019

	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		494,403		58,734			435,669		4,592			134,345		65,790			205,820		25,122
Deferred policy acquisition costs		19,978		255			19,723		—			310		11,074			8,669		(330	)
Other assets		37,699		1,223			36,476		2,880			7,709		15,214			11,693		(1,020	)
Separate account assets		297,244		—			297,244		40,515			83,453		174,493			3,908		(5,125	)

Total assets		849,324		60,212			789,112		47,987			225,817		266,571			230,090		18,647

Liabilities:
Future policy benefits		277,085		48,044			229,041		—			69,392		27,154			124,414		8,081
Policyholders’ account balances		151,224		5,036			146,188		—			57,447		36,765			51,123		853
Debt		20,858		—			20,858		1,868			810		7,271			143		10,766
Other liabilities		47,463		8,853			38,610		2,767			6,125		6,989			18,799		3,930
Separate account liabilities		297,244		—			297,244		40,515			83,453		174,493			3,908		(5,125	)

Total liabilities		793,874		61,933			731,941		45,150			217,227		252,672			198,387		18,505

Equity:
Accumulated other comprehensive income (loss)		17,218		(17	)		17,235		(64	)		2,610		748			16,044		(2,103	)
Other equity		37,792		(1,714	)		39,506		2,178			5,931		13,136			15,596		2,665

Total Prudential Financial, Inc. equity		55,010		(1,731	)		56,741		2,114			8,541		13,884			31,640		562

Noncontrolling interests		440		10			430		723			49		15			63		(420	)

Total equity		55,450		(1,721	)		57,171		2,837			8,590		13,899			31,703		142

Total liabilities and equity		849,324		60,212			789,112		47,987			225,817		266,571			230,090		18,647



	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)		10,906		(23	)		10,929		(83	)		628		(418	)		13,040		(2,238	)
Other equity		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 interests		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

Page 8

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED

(in millions)


	As of March 31, 2019								As of December 31, 2018
	Senior debt				Junior Subordinated Long-term Debt				Senior debt				Junior Subordinated Long-term Debt
	Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt		Short-term Debt		Long-term Debt		Junior Subordinated Long-term Debt		Total Debt
*Borrowings by use of proceeds:*
Capital Debt		1,249		5,528		7,568		14,345		1,250		4,543		7,568		13,361
Operating Debt - Investment related		376		3,502		—		3,878		352		3,569		—		3,921
Operating Debt - Specified businesses		713		1,101		—		1,814		739		1,032		—		1,771
Limited recourse and non-recourse borrowing		211		610		—		821		110		666		—		776

Total debt		2,549		10,741		7,568		20,858		2,451		9,810		7,568		19,829


	As of March 31, 2019								As of December 31, 2018
			The Prudential								The Prudential
	Prudential		Insurance Co.		Other				Prudential		Insurance Co.		Other
	Financial, Inc.		of America (1)(2)		Affiliates		Total		Financial, Inc.		of America (1)(2)		Affiliates		Total
*Borrowings by sources:*
Capital Debt		13,348		941		56		14,345		12,363		941		57		13,361
Operating Debt - Investment related		3,789		88		—		3,877		3,856		65		—		3,921
Operating Debt - Specified businesses		1,116		699		—		1,815		1,037		734		—		1,771
Limited recourse and non-recourse borrowing		—		804		17		821		—		776		—		776

Total debt		18,253		2,532		73		20,858		17,256		2,516		57		19,829

(1)	Includes Prudential Funding, LLC.

(2)	Capital debt at Prudential Insurance Co. of America includes $841 million of surplus notes as of March 31, 2019 and December 31, 2018.

Page 9

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

STATEMENTS OF OPERATIONS - PGIM DIVISION

(in millions)


	2018												2019			Year-to-date						% Change
	1Q			2Q			3Q			4Q			1Q			2018			2019			% Change

Revenues (1):
Premiums		—			—			—			—			—			—			—			—
Policy charges and fee income		—			—			—			—			—			—			—			—
Net investment income		17			31			28			(3	)		63			17			63			271	%
Asset management fees, commissions and other income		809			785			789			838			807			809			807			0	%

Total revenues		826			816			817			835			870			826			870			5	%


Benefits and Expenses (1):
Insurance and annuity benefits		—			—			—			—			—			—			—			—
Interest credited to policyholders’ account balances		—			—			—			—			—			—			—			—
Interest expense		9			11			9			11			12			9			12			33	%
Deferral of acquisition costs		(2	)		(1	)		(2	)		(1	)		(1	)		(2	)		(1	)		50	%
Amortization of acquisition costs		2			2			2			2			2			2			2			0	%
General and administrative expenses		585			550			578			580			643			585			643			10	%

Total benefits and expenses		594			562			587			592			656			594			656			10	%


Adjusted operating income before income taxes		232			254			230			243			214			232			214			-8	%

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

Page 10

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

PGIM DIVISION - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION


	2018								2019		Year-to-date				% Change
	1Q		2Q		3Q		4Q		1Q		2018		2019		% Change
Supplementary Revenue Information (in millions):
Analysis of revenues by type:
Asset management fees		633		629		641		639		644		633		644		2	%
Other related revenues (1)		73		65		48		84		100		73		100		37	%
Service, distribution and other revenues		120		122		128		112		126		120		126		5	%

Total PGIM revenues		826		816		817		835		870		826		870		5	%


Analysis of asset management fees by source:
Institutional customers		296		295		302		311		312		296		312		5	%
Retail customers		217		219		221		210		209		217		209		-4	%
General account		120		115		118		118		123		120		123		3	%

Total asset management fees		633		629		641		639		644		633		644		2	%


Supplementary Assets Under Management Information (in billions):
	March 31, 2019
	Equity		Fixed Income		Real Estate		Total
Institutional customers		60.3		420.1		43.6		524.0
Retail customers		130.1		124.4		1.9		256.4
General account		5.4		433.6		2.0		441.0

Total		195.8		978.1		47.5		1,221.4


	March 31, 2018
	Equity		Fixed Income		Real Estate		Total
Institutional customers		61.2		385.4		43.0		489.6
Retail customers		129.8		114.8		1.6		246.2
General account		5.7		412.3		2.0		420.0

Total		196.7		912.5		46.6		1,155.8

(1)

Other related revenues, net of related expenses and charges associated with a joint venture in first quarter 2019 are $63 million, $57 million, $31 million, $52 million, and $64 million for the three months ended March 31, 2019, December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, respectively.

Page 11

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

PGIM DIVISION - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION

(in billions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

Institutional Customers - Assets Under Management:

Assets gathered by Investment Management & Advisory Services sales force:
Beginning assets under management		437.9			438.6			439.5			453.3			443.6			437.9			443.6
Additions		19.4			17.8			19.0			18.9			15.1			19.4			15.1
Withdrawals		(19.6	)		(12.3	)		(9.7	)		(19.4	)		(14.1	)		(19.6	)		(14.1	)
Change in market value		(0.8	)		(4.3	)		3.9			(8.1	)		21.0			(0.8	)		21.0
Net money market flows		1.8			0.3			0.8			(1.4	)		4.3			1.8			4.3
Other		(0.1	)		(0.6	)		(0.2	)		0.3			1.1			(0.1	)		1.1

Ending assets under management		438.6			439.5			453.3			443.6			471.0			438.6			471.0
Affiliated institutional assets under management		51.0			51.3			52.4			49.9			53.0			51.0			53.0

Total assets managed for institutional customers at end of period		489.6			490.8			505.7			493.5			524.0			489.6			524.0


Net institutional additions (withdrawals), excluding money market activity		(0.2	)		5.5			9.3			(0.5	)		1.0			(0.2	)		1.0


Retail Customers - Assets Under Management:

Assets gathered by Investment Management & Advisory Services sales force (1):
Beginning assets under management		157.3			159.4			164.7			169.2			154.2			157.3			154.2
Additions		14.6			13.4			10.9			14.1			14.1			14.6			14.1
Withdrawals		(13.6	)		(11.6	)		(11.5	)		(16.7	)		(13.7	)		(13.6	)		(13.7	)
Change in market value		0.9			3.7			5.1			(13.4	)		14.4			0.9			14.4
Net money market flows		—			—			0.1			—			—			—			—
Other		0.2			(0.2	)		(0.1	)		1.0			—			0.2			—

Ending assets under management		159.4			164.7			169.2			154.2			169.0			159.4			169.0
Affiliated retail assets under management		86.8			87.3			89.1			85.9			87.4			86.8			87.4

Total assets managed for retail customers at end of period		246.2			252.0			258.3			240.1			256.4			246.2			256.4


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

(1)	The amounts for first, second and third quarters of 2018 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 12

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

COMBINED STATEMENTS OF OPERATIONS - U.S. FINANCIAL WELLNESS BUSINESSES - U.S. WORKPLACE SOLUTIONS DIVISION

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		1,838			2,689			3,928			7,273			2,345			1,838			2,345			28	%
Policy charges and fee income		200			217			211			219			229			200			229			15	%
Net investment income		1,238			1,271			1,241			1,243			1,292			1,238			1,292			4	%
Asset management fees, commissions and other income		229			235			253			225			214			229			214			-7	%

Total revenues		3,505			4,412			5,633			8,960			4,080			3,505			4,080			16	%


Benefits and Expenses (1):
Insurance and annuity benefits		2,212			3,125			4,388			7,731			2,791			2,212			2,791			26	%
Interest credited to policyholders’ account balances		408			435			435			434			447			408			447			10	%
Interest expense		8			9			8			12			14			8			14			75	%
Deferral of acquisition costs		(5	)		(12	)		(9	)		(18	)		(13	)		(5	)		(13	)		-160	%
Amortization of acquisition costs		5			9			9			15			9			5			9			80	%
General and administrative expenses		505			487			504			537			528			505			528			5	%

Total benefits and expenses		3,133			4,053			5,335			8,711			3,776			3,133			3,776			21	%


Adjusted operating income before income taxes		372			359			298			249			304			372			304			-18	%

(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 13

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

STATEMENTS OF OPERATIONS - U.S. FINANCIAL WELLNESS BUSINESSES - U.S. WORKPLACE SOLUTIONS DIVISION - RETIREMENT

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		735			1,597			2,825			6,174			1,243			735			1,243			69	%
Policy charges and fee income		60			63			60			67			66			60			66			10	%
Net investment income		1,083			1,112			1,087			1,095			1,141			1,083			1,141			5	%
Asset management fees, commissions and other income		211			216			231			209			189			211			189			-10	%

Total revenues		2,089			2,988			4,203			7,545			2,639			2,089			2,639			26	%


Benefits and Expenses (1):
Insurance and annuity benefits		1,149			2,093			3,313			6,660			1,704			1,149			1,704			48	%
Interest credited to policyholders’ account balances		339			362			366			363			377			339			377			11	%
Interest expense		8			8			8			11			13			8			13			63	%
Deferral of acquisition costs		(5	)		(11	)		(9	)		(18	)		(9	)		(5	)		(9	)		-80	%
Amortization of acquisition costs		4			7			8			14			8			4			8			100	%
General and administrative expenses		277			252			278			299			295			277			295			6	%

Total benefits and expenses		1,772			2,711			3,964			7,329			2,388			1,772			2,388			35	%


Adjusted operating income before income taxes		317			277			239			216			251			317			251			-21	%

(1)

Page 14

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. WORKPLACE SOLUTIONS DIVISION - RETIREMENT SALES RESULTS AND ACCOUNT VALUES

(in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

SALES AND ACCOUNT VALUES

Full Service:
Beginning total account value		234,616			236,120			240,922			251,272			231,669			234,616			231,669
Deposits and sales		9,922			7,712			8,843			6,639			9,567			9,922			9,567
Withdrawals and benefits		(8,154	)		(6,470	)		(5,864	)		(5,941	)		(9,105	)		(8,154	)		(9,105	)
Change in market value, interest credited, interest income and other activity		(264	)		3,560			7,371			(20,301	)		18,940			(264	)		18,940

Ending total account value		236,120			240,922			251,272			231,669			251,071			236,120			251,071


Net additions		1,768			1,242			2,979			697			462			1,768			462


Stable value account values included above		48,692			48,882			49,132			49,544			50,202

Institutional Investment Products:
Beginning total account value		194,492			191,518			191,722			195,237			200,759			194,492			200,759
Additions		688			5,461			6,318			8,843			2,247			688			2,247
Withdrawals and benefits		(4,889	)		(3,851	)		(3,345	)		(3,324	)		(3,649	)		(4,889	)		(3,649	)
Change in market value, interest credited and interest income		(214	)		1,198			1,146			1,173			2,644			(214	)		2,644
Other (1)		1,441			(2,604	)		(604	)		(1,170	)		1,100			1,441			1,100

Ending total account value		191,518			191,722			195,237			200,759			203,101			191,518			203,101


Net additions (withdrawals)		(4,201	)		1,610			2,973			5,519			(1,402	)		(4,201	)		(1,402	)


Amounts included in ending total account value above:
Investment-only stable value wraps		66,518			67,406			67,598			67,934			68,922			66,518			68,922
Longevity reinsurance (2)		41,173			41,325			43,455			44,249			45,500			41,173			45,500
Group annuities and other products		83,827			82,991			84,184			88,576			88,679			83,827			88,679

Ending total account value		191,518			191,722			195,237			200,759			203,101			191,518			203,101

(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 15

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

STATEMENTS OF OPERATIONS - U.S. FINANCIAL WELLNESS BUSINESSES - U.S. WORKPLACE SOLUTIONS DIVISION - GROUP INSURANCE

(in millions)


	2018									2019			Year-to-date					%
	1Q		2Q			3Q		4Q		1Q			2018		2019			Change

Revenues (1):
Premiums		1,103		1,092			1,103		1,099		1,102			1,103		1,102			0	%
Policy charges and fee income		140		154			151		152		163			140		163			16	%
Net investment income		155		159			154		148		151			155		151			-3	%
Asset management fees, commissions and other income		18		19			22		16		25			18		25			39	%

Total revenues		1,416		1,424			1,430		1,415		1,441			1,416		1,441			2	%


Benefits and Expenses (1):
Insurance and annuity benefits		1,063		1,032			1,075		1,071		1,087			1,063		1,087			2	%
Interest credited to policyholders’ account balances		69		73			69		71		70			69		70			1	%
Interest expense		—		1			—		1		1			—		1			0	%
Deferral of acquisition costs		—		(1	)		—		—		(4	)		—		(4	)		0	%
Amortization of acquisition costs		1		2			1		1		1			1		1			0	%
General and administrative expenses		228		235			226		238		233			228		233			2	%

Total benefits and expenses		1,361		1,342			1,371		1,382		1,388			1,361		1,388			2	%


Adjusted operating income before income taxes		55		82			59		33		53			55		53			-4	%

(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 16

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. WORKPLACE SOLUTIONS DIVISION - GROUP INSURANCE SUPPLEMENTARY INFORMATION

(dollar amounts in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

GROUP INSURANCE ANNUALIZED NEW BUSINESS PREMIUMS:
Group life		243			46			63			24			174			243			174
Group disability		140			14			16			13			119			140			119

Total		383			60			79			37			293			383			293


Future Policy Benefits (1)(2):
Group life		2,216			2,180			2,111			2,293			2,212
Group disability		26			19			9			2			29

Total		2,242			2,199			2,120			2,295			2,241


Policyholders’ Account Balances (1):
Group life		8,675			8,769			8,840			8,889			8,798
Group disability		174			181			187			200			198

Total		8,849			8,950			9,027			9,089			8,996


Separate Account Liabilities (1):
Group life		24,353			23,758			23,881			24,044			24,809
Group disability		—			—			—			—			—

Total		24,353			23,758			23,881			24,044			24,809


Group Life Insurance:
Gross premiums, policy charges and fee income (3)(4)		1,072			1,092			1,101			1,094			1,068			1,072			1,068
Earned premiums		872			854			870			866			847			872			847
Earned policy charges and fee income		128			142			139			140			149			128			149

Benefits ratio (5)		87.2	%		88.6	%		87.3	%		86.7	%		89.0	%		87.2	%		89.0	%
Administrative operating expense ratio		11.6	%		12.6	%		11.5	%		13.0	%		11.7	%		11.6	%		11.7	%
Persistency ratio		95.7	%		95.3	%		94.6	%		94.5	%		93.5	%

Group Disability Insurance:
Gross premiums, policy charges and fee income (3)		251			261			259			259			285			251			285
Earned premiums		231			238			233			233			255			231			255
Earned policy charges and fee income		12			12			12			12			14			12			14

Benefits ratio (5)		79.0	%		71.6	%		78.9	%		81.5	%		74.6	%		79.0	%		74.6	%
Administrative operating expense ratio		27.1	%		26.4	%		26.8	%		28.0	%		26.9	%		27.1	%		26.9	%
Persistency ratio		94.9	%		94.7	%		94.2	%		93.9	%		94.5	%

Total Group Insurance:
Benefits ratio (5)		85.6	%		85.3	%		85.7	%		85.7	%		85.9	%		85.6	%		85.9	%
Administrative operating expense ratio		14.6	%		15.3	%		14.5	%		15.9	%		14.9	%		14.6	%		14.9	%

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

(5)	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.

Page 17

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

COMBINED STATEMENTS OF OPERATIONS - U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		267			262			271			306			332			267			332			24	%
Policy charges and fee income		1,245			1,236			1,230			1,231			1,200			1,245			1,200			-4	%
Net investment income		657			686			684			700			726			657			726			11	%
Asset management fees, commissions and other income		508			533			493			488			459			508			459			-10	%

Total revenues		2,677			2,717			2,678			2,725			2,717			2,677			2,717			1	%


Benefits and Expenses (1):
Insurance and annuity benefits		735			737			635			789			767			735			767			4	%
Interest credited to policyholders’ account balances		265			275			278			283			265			265			265			0	%
Interest expense		186			195			199			201			212			186			212			14	%
Deferral of acquisition costs		(249	)		(270	)		(294	)		(333	)		(296	)		(249	)		(296	)		-19	%
Amortization of acquisition costs		202			251			210			216			206			202			206			2	%
General and administrative expenses		983			979			1,026			1,150			986			983			986			0	%

Total benefits and expenses		2,122			2,167			2,054			2,306			2,140			2,122			2,140			1	%


Adjusted operating income before income taxes		555			550			624			419			577			555			577			4	%

(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

First Quarter 2019

STATEMENTS OF OPERATIONS - U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		41			30			37			71			99			41			99			141	%
Policy charges and fee income		727			721			719			679			669			727			669			-8	%
Net investment income		169			174			174			177			191			169			191			13	%
Asset management fees, commissions and other income		315			341			294			297			276			315			276			-12	%

Total revenues		1,252			1,266			1,224			1,224			1,235			1,252			1,235			-1	%


Benefits and Expenses (1):
Insurance and annuity benefits		84			73			85			128			119			84			119			42	%
Interest credited to policyholders’ account balances		78			88			85			84			78			78			78			0	%
Interest expense		18			16			17			16			18			18			18			0	%
Deferral of acquisition costs		(90	)		(107	)		(110	)		(113	)		(110	)		(90	)		(110	)		-22	%
Amortization of acquisition costs		111			146			139			115			116			111			116			5	%
General and administrative expenses		532			543			554			549			542			532			542			2	%

Total benefits and expenses		733			759			770			779			763			733			763			4	%


Adjusted operating income before income taxes		519			507			454			445			472			519			472			-9	%

(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

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES SALES RESULTS AND ACCOUNT

(in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

SALES AND ACCOUNT VALUES:

Variable Annuities:
Beginning total account value		165,153			161,171			160,143			162,369			147,339			165,153			147,339
Sales: Highest Daily Suite (1)		1,011			1,126			1,116			1,048			950			1,011			950
Other variable annuities (2)		683			881			997			1,001			1,059			683			1,059

Total sales		1,694			2,007			2,113			2,049			2,009			1,694			2,009
Surrenders and withdrawals		(2,867	)		(2,929	)		(2,898	)		(2,883	)		(2,619	)		(2,867	)		(2,619	)

Net redemptions		(1,173	)		(922	)		(785	)		(834	)		(610	)		(1,173	)		(610	)
Benefit payments		(453	)		(469	)		(410	)		(415	)		(437	)		(453	)		(437	)

Net flows		(1,626	)		(1,391	)		(1,195	)		(1,249	)		(1,047	)		(1,626	)		(1,047	)
Change in market value, interest credited, and other		(1,418	)		1,292			4,360			(12,884	)		12,498			(1,418	)		12,498
Policy charges		(938	)		(929	)		(939	)		(897	)		(894	)		(938	)		(894	)

Ending total account value		161,171			160,143			162,369			147,339			157,896			161,171			157,896


Variable Annuities Account Value by Product: (3)
Highest Daily Suite - risk retained by Prudential (1)		118,249			117,348			118,618			106,878			114,164			118,249			114,164
Highest Daily Suite - externally reinsured living benefits		3,165			3,146			3,184			2,873			3,059			3,165			3,059
Other variable annuities (2)		39,757			39,649			40,567			37,588			40,673			39,757			40,673

Ending total account value		161,171			160,143			162,369			147,339			157,896			161,171			157,896


Fixed Annuities and other products:
Beginning total account value		3,473			3,480			3,502			3,593			3,741			3,473			3,741
Sales		30			60			128			189			298			30			298
Surrenders and withdrawals		(28	)		(28	)		(25	)		(30	)		(27	)		(28	)		(27	)

Net sales		2			32			103			159			271			2			271
Benefit payments		(84	)		(87	)		(83	)		(83	)		(93	)		(84	)		(93	)

Net flows		(82	)		(55	)		20			76			178			(82	)		178
Interest credited and other		89			77			71			72			75			89			75
Policy charges		—			—			—			—			—			—			—

Ending total account value		3,480			3,502			3,593			3,741			3,994			3,480			3,994

SALES BY DISTRIBUTION CHANNEL:

Variable and Fixed Annuities (4):
Insurance Agents		525			619			640			684			680			525			680
Wirehouses		323			355			433			430			452			323			452
Independent Financial Planners		758			951			999			974			1,001			758			1,001
Bank Distribution		118			142			169			150			174			118			174

Total		1,724			2,067			2,241			2,238			2,307			1,724			2,307

(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)	The amounts for 4Q18 period have been revised to correct the previously reported amounts for a reclass between Highest Daily Suite - risk retained by Prudential and Other variable annuities products.

(4)	Amounts represent gross sales.

Page 20

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES ACCOUNT VALUE ACTIVITY

(in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

INDIVIDUAL ANNUITIES:

Account Values in General Account (1):
Beginning balance		9,892			9,932			9,932			10,006			10,298			9,892			10,298
Premiums and deposits		211			256			318			373			466			211			466
Surrenders and withdrawals		(163	)		(155	)		(139	)		(165	)		(151	)		(163	)		(151	)

Net sales		48			101			179			208			315			48			315
Benefit payments		(100	)		(106	)		(97	)		(102	)		(108	)		(100	)		(108	)

Net flows		(52	)		(5	)		82			106			207			(52	)		207
Interest credited and other		61			69			69			69			57			61			57
Net transfers (to) from separate account		31			(64	)		(76	)		117			(133	)		31			(133	)
Policy charges		—			—			(1	)		—			—			—			—

Ending balance		9,932			9,932			10,006			10,298			10,429			9,932			10,429


Account Values in Separate Account (1):
Beginning balance		158,734			154,719			153,713			155,956			140,782			158,734			140,782
Premiums and deposits		1,513			1,811			1,923			1,865			1,841			1,513			1,841
Surrenders and withdrawals		(2,732	)		(2,802	)		(2,784	)		(2,748	)		(2,495	)		(2,732	)		(2,495	)

Net redemptions		(1,219	)		(991	)		(861	)		(883	)		(654	)		(1,219	)		(654	)
Benefit payments		(437	)		(450	)		(396	)		(396	)		(422	)		(437	)		(422	)

Net flows		(1,656	)		(1,441	)		(1,257	)		(1,279	)		(1,076	)		(1,656	)		(1,076	)
Change in market value, interest credited and other		(1,390	)		1,300			4,362			(12,881	)		12,516			(1,390	)		12,516
Net transfers (to) from general account		(31	)		64			76			(117	)		133			(31	)		133
Policy charges		(938	)		(929	)		(938	)		(897	)		(894	)		(938	)		(894	)

Ending balance		154,719			153,713			155,956			140,782			151,461			154,719			151,461

(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

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES LIVING BENEFIT FEATURES

(in millions)


	2018								2019
	1Q		2Q		3Q		4Q		1Q

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

Variable Annuity Account Values with Living Benefit Features
Guaranteed minimum accumulation benefits		3,134		2,950		2,818		2,578		2,582
Guaranteed minimum withdrawal benefits		450		433		428		364		381
Guaranteed minimum income benefits		2,690		2,651		2,661		2,306		2,474
Guaranteed minimum withdrawal & income benefits - risk retained by Prudential		128,176		127,490		129,431		118,115		126,813
Guaranteed minimum withdrawal & income benefits - externally reinsured		3,165		3,146		3,184		2,873		3,059

Total		137,615		136,670		138,522		126,236		135,309


Living Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature - risk retained by Prudential		112,913		112,055		113,257		102,300		109,191
Account Values with Auto-Rebalancing Feature - externally reinsured		3,165		3,146		3,184		2,873		3,059
Account Values without Auto-Rebalancing Feature		21,537		21,469		22,081		21,063		23,059

Total		137,615		136,670		138,522		126,236		135,309


Living Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature - risk retained by Prudential		3,506		3,775		3,634		6,714		4,551
Net Amount at Risk with Auto-Rebalancing Feature - externally reinsured		—		—		—		—		—
Net Amount at Risk without Auto-Rebalancing Feature		742		797		757		1,226		799

Total		4,248		4,572		4,391		7,940		5,350

(1)	At end of period.

Page 22

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL ANNUITIES DEATH BENEFIT FEATURES

(in millions)


	2018								2019
	1Q		2Q		3Q		4Q		1Q

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		125,515		124,777		126,693		115,489		124,019
Net amount at risk		356		456		404		917		316
Minimum return, anniversary contract value, or maximum contract value:
Account value		31,322		30,925		31,057		27,673		29,334
Net amount at risk		3,078		3,179		2,916		5,071		3,374

Death Benefit Features Account Values by Product Design Type
Account Values with Auto-Rebalancing Feature		116,078		115,201		116,441		105,172		112,250
Account Values without Auto-Rebalancing Feature		40,759		40,501		41,309		37,990		41,103

Total		156,837		155,702		157,750		143,162		153,353


Death Benefit Features Net Amount at Risk by Product Design Type
Net Amount at Risk with Auto-Rebalancing Feature		1,403		1,545		1,379		3,115		1,755
Net Amount at Risk without Auto-Rebalancing Feature		2,031		2,090		1,941		2,873		1,935

Total		3,434		3,635		3,320		5,988		3,690

(1)	At end of period.

Page 23

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - STATEMENTS OF OPERATIONS - INDIVIDUAL LIFE

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		226			232			234			235			233			226			233			3	%
Policy charges and fee income		518			515			511			552			531			518			531			3	%
Net investment income		488			512			510			523			535			488			535			10	%
Asset management fees, commissions and other income		193			192			199			191			183			193			183			-5	%

Total revenues		1,425			1,451			1,454			1,501			1,482			1,425			1,482			4	%


Benefits and Expenses (1):
Insurance and annuity benefits		651			664			550			661			648			651			648			0	%
Interest credited to policyholders’ account balances		187			187			193			199			187			187			187			0	%
Interest expense		168			179			182			185			194			168			194			15	%
Deferral of acquisition costs		(159	)		(163	)		(184	)		(220	)		(186	)		(159	)		(186	)		-17	%
Amortization of acquisition costs		91			105			71			101			90			91			90			-1	%
General and administrative expenses		451			436			472			601			444			451			444			-2	%

Total benefits and expenses		1,389			1,408			1,284			1,527			1,377			1,389			1,377			-1	%


Adjusted operating income (loss) before income taxes		36			43			170			(26	)		105			36			105			192	%

(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 24

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

U.S. FINANCIAL WELLNESS BUSINESSES - U.S. INDIVIDUAL SOLUTIONS DIVISION - INDIVIDUAL LIFE SUPPLEMENTARY

(in millions)


	2018												2019			Year-to-date
	1Q			2Q			3Q			4Q			1Q			2018			2019

ANNUALIZED NEW BUSINESS PREMIUMS (1):

Term life		49			54			55			55			51			49			51
Guaranteed Universal life		21			24			23			29			21			21			21
Other Universal life		26			29			44			51			30			26			30
Variable life		29			35			41			58			61			29			61

Total		125			142			163			193			163			125			163

ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):

Prudential Advisors		30			33			35			37			34			30			34
Third party distribution		95			109			128			156			129			95			129

Total		125			142			163			193			163			125			163

ACCOUNT VALUE ACTIVITY:

*Policyholders’ Account Balances (2):*
Beginning balance		26,861			27,420			27,942			28,347			28,728			26,861			28,728
Premiums and deposits		734			738			790			1,072			783			734			783
Surrenders and withdrawals		(249	)		(293	)		(280	)		(459	)		(291	)		(249	)		(291	)

Net sales		485			445			510			613			492			485			492
Benefit payments		(145	)		(155	)		(132	)		61			(103	)		(145	)		(103	)

Net flows		340			290			378			674			389			340			389
Interest credited and other		524			527			304			229			(24	)		524			(24	)
Net transfers (to) from separate account		119			119			136			(80	)		76			119			76
Policy charges		(424	)		(414	)		(413	)		(442	)		(432	)		(424	)		(432	)

Ending balance		27,420			27,942			28,347			28,728			28,737			27,420			28,737


Separate Account Liabilities:
*Beginning balance*		32,085			31,897			32,430			33,562			29,796			32,085			29,796
Premiums and deposits		419			379			365			438			494			419			494
Surrenders and withdrawals		(253	)		(312	)		(272	)		(262	)		(260	)		(253	)		(260	)

Net sales		166			67			93			176			234			166			234
Benefit payments		(55	)		(46	)		(41	)		(246	)		(95	)		(55	)		(95	)

Net flows		111			21			52			(70	)		139			111			139
Change in market value, interest credited and other		51			861			1,450			(3,535	)		3,232			51			3,232
Net transfers (to) from general account		(119	)		(119	)		(136	)		80			(76	)		(119	)		(76	)
Policy charges		(231	)		(230	)		(234	)		(241	)		(239	)		(231	)		(239	)

Ending balance		31,897			32,430			33,562			29,796			32,852			31,897			32,852


FACE AMOUNT IN FORCE (3):

Term life		761,014			770,208			779,181			788,013			795,539
Guaranteed Universal life		143,449			144,110			144,831			145,861			146,751
Other Universal life		47,842			48,598			49,552			50,650			51,100
Variable life		162,514			162,762			162,881			160,747			164,118

Total		1,114,820			1,125,678			1,136,445			1,145,272			1,157,509

(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 25

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		4,541			3,767			3,950			3,913			4,585			4,541			4,585			1	%
Policy charges and fee income		143			129			129			133			127			143			127			-11	%
Net investment income		1,301			1,320			1,313			1,311			1,333			1,301			1,333			2	%
Asset management fees, commissions and other income		55			72			98			59			107			55			107			95	%

Total revenues		6,040			5,288			5,490			5,416			6,152			6,040			6,152			2	%


Benefits and Expenses (1):
Insurance and annuity benefits		3,915			3,300			3,435			3,421			3,950			3,915			3,950			1	%
Interest credited to policyholders’ account balances		238			222			227			220			236			238			236			-1	%
Interest expense		4			5			6			6			6			4			6			50	%
Deferral of acquisition costs		(475	)		(413	)		(415	)		(414	)		(463	)		(475	)		(463	)		3	%
Amortization of acquisition costs		331			306			286			310			334			331			334			1	%
General and administrative expenses		1,171			1,084			1,061			1,137			1,167			1,171			1,167			0	%

Total benefits and expenses		5,184			4,504			4,600			4,680			5,230			5,184			5,230			1	%


Adjusted operating income before income taxes		856			784			890			736			922			856			922			8	%

(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

First Quarter 2019

STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION - LIFE PLANNER OPERATIONS

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		2,372			1,982			1,975			2,035			2,446			2,372			2,446			3	%
Policy charges and fee income		106			94			95			99			94			106			94			-11	%
Net investment income		562			562			571			548			581			562			581			3	%
Asset management fees, commissions and other income		38			49			55			33			54			38			54			42	%

Total revenues		3,078			2,687			2,696			2,715			3,175			3,078			3,175			3	%


Benefits and Expenses (1):
Insurance and annuity benefits		2,105			1,793			1,770			1,831			2,146			2,105			2,146			2	%
Interest credited to policyholders’ account balances		71			55			62			55			68			71			68			-4	%
Interest expense		2			3			3			3			3			2			3			50	%
Deferral of acquisition costs		(251	)		(206	)		(209	)		(220	)		(260	)		(251	)		(260	)		-4	%
Amortization of acquisition costs		173			164			135			161			171			173			171			-1	%
General and administrative expenses		562			502			486			536			566			562			566			1	%

Total benefits and expenses		2,662			2,311			2,247			2,366			2,694			2,662			2,694			1	%


Adjusted operating income before income taxes		416			376			449			349			481			416			481			16	%

(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

First Quarter 2019

STATEMENTS OF OPERATIONS - INTERNATIONAL INSURANCE DIVISION - GIBRALTAR LIFE & OTHER OPERATIONS

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		2,169			1,785			1,975			1,878			2,139			2,169			2,139			-1	%
Policy charges and fee income		37			35			34			34			33			37			33			-11	%
Net investment income		739			758			742			763			752			739			752			2	%
Asset management fees, commissions and other income		17			23			43			26			53			17			53			212	%

Total revenues		2,962			2,601			2,794			2,701			2,977			2,962			2,977			1	%


Benefits and Expenses (1):
Insurance and annuity benefits		1,810			1,507			1,665			1,590			1,804			1,810			1,804			0	%
Interest credited to policyholders’ account balances		167			167			165			165			168			167			168			1	%
Interest expense		2			2			3			3			3			2			3			50	%
Deferral of acquisition costs		(224	)		(207	)		(206	)		(194	)		(203	)		(224	)		(203	)		9	%
Amortization of acquisition costs		158			142			151			149			163			158			163			3	%
General and administrative expenses		609			582			575			601			601			609			601			-1	%

Total benefits and expenses		2,522			2,193			2,353			2,314			2,536			2,522			2,536			1	%


Adjusted operating income before income taxes		440			408			441			387			441			440			441			0	%

(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 28

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION

(in millions)


	2018								2019		Year-to-date
	1Q		2Q		3Q		4Q		1Q		2018		2019

INTERNATIONAL INSURANCE OPERATING DATA:

Actual exchange rate basis (1):

Net premiums, policy charges and fee income:
Japan, excluding Gibraltar Life		1,880		1,537		1,537		1,542		1,966		1,880		1,966
Gibraltar Life		2,206		1,820		2,009		1,912		2,172		2,206		2,172
All other countries		598		539		533		592		574		598		574

Total		4,684		3,896		4,079		4,046		4,712		4,684		4,712


Annualized new business premiums:
Japan, excluding Gibraltar Life		234		190		189		206		292		234		292
Gibraltar Life		407		399		351		326		323		407		323
All other countries		117		106		105		110		112		117		112

Total		758		695		645		642		727		758		727


Annualized new business premiums by distribution channel:
Life Planner Operations		351		296		294		316		404		351		404
Gibraltar Life Consultants		196		234		178		175		164		196		164
Banks		158		104		123		95		108		158		108
Independent Agency		53		61		50		56		51		53		51

Total		758		695		645		642		727		758		727

Constant exchange rate basis (2):
Net premiums, policy charges and fee income:
Japan, excluding Gibraltar Life		1,913		1,576		1,598		1,611		2,029		1,913		2,029
Gibraltar Life		2,244		1,861		2,076		1,989		2,235		2,244		2,235
All other countries		559		527		565		609		587		559		587

Total		4,716		3,964		4,239		4,209		4,851		4,716		4,851


Annualized new business premiums:
Japan, excluding Gibraltar Life		236		192		193		210		296		236		296
Gibraltar Life		408		401		353		328		325		408		325
All other countries		108		103		107		113		113		108		113

Total		752		696		653		651		734		752		734


Annualized new business premiums by distribution channel:
Life Planner Operations		344		295		300		323		409		344		409
Gibraltar Life Consultants		197		235		180		177		166		197		166
Banks		158		104		123		95		108		158		108
Independent Agency		53		62		50		56		51		53		51

Total		752		696		653		651		734		752		734

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

(2)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 105 per U.S. dollar and Korean won 1,110 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.

Page 29

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INTERNATIONAL INSURANCE DIVISION - SALES RESULTS AND SUPPLEMENTARY INFORMATION


	2018												2019
	1Q			2Q			3Q			4Q			1Q

Face amount of individual policies in force at end of period (in billions) (1)(2):
(Constant exchange rate basis)
Japan, excluding Gibraltar Life		359			363			367			371			378
Gibraltar Life		356			357			360			361			362
All other countries		129			127			128			131			133

Total		844			847			855			863			873


Number of individual policies in force at end of period (in thousands) (2):
Japan, excluding Gibraltar Life		3,773			3,814			3,860			3,907			3,975
Gibraltar Life		7,219			7,217			7,224			7,218			7,214
All other countries		2,134			2,096			2,116			2,134			2,152

Total		13,126			13,127			13,200			13,259			13,341


International life insurance policy persistency:

Life Planner Operations:
13 months		92.9	%		93.3	%		93.1	%		92.7	%		92.5	%
25 months		86.6	%		86.9	%		86.9	%		86.6	%		86.4	%

Gibraltar Life (3):
13 months		93.5	%		93.6	%		93.7	%		93.9	%		94.1	%
25 months		87.2	%		87.1	%		87.1	%		87.1	%		87.1	%

Number of Life Planners at end of period:
Japan		4,076			3,964			4,130			4,183			4,337
All other countries		3,695			3,674			3,668			3,786			3,757

Total Life Planners		7,771			7,638			7,798			7,969			8,094


Gibraltar Life Consultants		8,137			7,938			8,030			7,964			7,997

(1)	Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 105 per U.S. dollar and Korean won 1,110 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 30

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

STATEMENTS OF OPERATIONS - CORPORATE AND OTHER OPERATIONS

(in millions)


	2018												2019			Year-to-date						%
	1Q			2Q			3Q			4Q			1Q			2018			2019			Change

Revenues (1):
Premiums		(8	)		(8	)		(6	)		(5	)		(6	)		(8	)		(6	)		25	%
Policy charges and fee income		(13	)		(12	)		(13	)		(13	)		(14	)		(13	)		(14	)		-8	%
Net investment income		124			96			101			131			132			124			132			6	%
Asset management fees, commissions and other income		(276	)		(266	)		(268	)		(269	)		(283	)		(276	)		(283	)		-3	%

Total revenues		(173	)		(190	)		(186	)		(156	)		(171	)		(173	)		(171	)		1	%


Benefits and Expenses (1):
Insurance and annuity benefits		(9	)		(2	)		6			(7	)		12			(9	)		12			233	%
Interest credited to policyholders’ account balances		—			—			—			—			—			—			—			—
Interest expense		133			127			133			142			142			133			142			7	%
Deferral of acquisition costs		13			12			12			12			14			13			14			8	%
Amortization of acquisition costs		(10	)		(13	)		(11	)		(10	)		(11	)		(10	)		(11	)		-10	%
General and administrative expenses		(6	)		(28	)		48			36			84			(6	)		84			1500	%

Total benefits and expenses		121			96			188			173			241			121			241			99	%


Adjusted operating loss before income taxes		(294	)		(286	)		(374	)		(329	)		(412	)		(294	)		(412	)		-40	%

(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 31

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INVESTMENT PORTFOLIO COMPOSITION

(in millions)


	March 31, 2019									December 31, 2018
	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		305,139		27,080		278,059		64.6	%		295,312		26,203		269,109		64.8	%
Public, held-to-maturity, at amortized cost		1,724		—		1,724		0.4	%		1,745		—		1,745		0.4	%
Private, available-for-sale, at fair value		60,317		12,634		47,683		11.1	%		57,870		12,542		45,328		10.9	%
Private, held-to-maturity, at amortized cost		258		—		258		0.1	%		268		—		268		0.1	%
Fixed maturities, trading, at fair value		2,248		185		2,063		0.5	%		2,088		195		1,893		0.5	%
Assets supporting experience-rated contractholder liabilities, at fair value		21,668		—		21,668		5.0	%		21,254		—		21,254		5.1	%
Equity securities, at fair value		6,145		2,002		4,143		1.0	%		5,633		1,784		3,849		0.9	%
Commercial mortgage and other loans, at book value		60,369		8,623		51,746		12.0	%		59,033		8,782		50,251		12.1	%
Policy loans, at outstanding balance		11,986		4,365		7,621		1.8	%		12,016		4,410		7,606		1.8	%
Other invested assets (1)		11,938		3,296		8,642		2.0	%		11,723		3,316		8,407		2.0	%
Short-term investments		6,896		549		6,347		1.5	%		6,426		478		5,948		1.4	%

Subtotal (2)		488,688		58,734		429,954		100.0	%		473,368		57,710		415,658		100.0	%

Invested assets of other entities and operations (3)		5,715		—		5,715					5,877		—		5,877

Total investments		494,403		58,734		435,669					479,245		57,710		421,535


Fixed Maturities by Credit Quality (2)(4):	March 31, 2019											December 31, 2018
	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 (5)
1		212,857		28,757		756		240,858		86.0	%		210,578		23,776		2,307		232,047		85.5	%
2		27,238		1,905		490		28,653		10.2	%		28,246		1,453		1,195		28,504		10.5	%

Subtotal - High or Highest Quality Securities		240,095		30,662		1,246		269,511		96.2	%		238,824		25,229		3,502		260,551		96.0	%

3		5,662		391		63		5,990		2.1	%		5,973		280		240		6,013		2.2	%
4		3,523		288		144		3,667		1.3	%		3,709		275		287		3,697		1.4	%
5		680		86		29		737		0.3	%		725		85		57		753		0.3	%
6		234		14		6		242		0.1	%		181		8		7		182		0.1	%

Subtotal - Other Securities		10,099		779		242		10,636		3.8	%		10,588		648		591		10,645		4.0	%

Total		250,194		31,441		1,488		280,147		100.0	%		249,412		25,877		4,093		271,196		100.0	%


Private Fixed Maturities:


NAIC Rating (5)
1		12,088		554		87		12,555		26.2	%		11,712		362		261		11,813		25.9	%
2		28,297		1,101		493		28,905		60.3	%		27,522		814		804		27,532		60.4	%

Subtotal - High or Highest Quality Securities		40,385		1,655		580		41,460		86.5	%		39,234		1,176		1,065		39,345		86.3	%

3		4,236		74		81		4,229		8.8	%		4,176		50		168		4,058		8.9	%
4		1,640		43		66		1,617		3.4	%		1,545		16		81		1,480		3.2	%
5		585		16		18		583		1.2	%		670		14		20		664		1.5	%
6		74		7		10		71		0.1	%		72		5		11		66		0.1	%

Subtotal - Other Securities		6,535		140		175		6,500		13.5	%		6,463		85		280		6,268		13.7	%

Total		46,920		1,795		755		47,960		100.0	%		45,697		1,261		1,345		45,613		100.0	%

(1)	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.

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

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

(4)	Excludes fixed maturity securities classified as trading.

(5)

Reflects equivalent ratings for investments of the international insurance operations. Includes, as of March 31, 2019 and December 31, 2018, 1,108 securities with amortized cost of $5,230 million (fair value $5,405 million) and 1,744 securities with amortized cost of $9,079 million (fair value $9,135 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.

Page 32

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

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

(in millions)


	March 31, 2019					December 31, 2018
	Amount		% of Total			Amount		% of Total
Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		136,317		74.4	%		133,084		74.6	%
Public, held-to-maturity, at amortized cost		1,724		0.9	%		1,745		1.0	%
Private, available-for-sale, at fair value		17,271		9.4	%		16,222		9.1	%
Private, held-to-maturity, at amortized cost		258		0.1	%		268		0.1	%
Fixed maturities, trading, at fair value		363		0.2	%		328		0.2	%
Assets supporting experience-rated contractholder liabilities, at fair value		2,559		1.4	%		2,441		1.4	%
Equity securities, at fair value		2,017		1.1	%		1,972		1.1	%
Commercial mortgage and other loans, at book value		17,684		9.6	%		17,228		9.6	%
Policy loans, at outstanding balance		2,737		1.5	%		2,715		1.5	%
Other invested assets (3)		2,122		1.2	%		1,957		1.1	%
Short-term investments		443		0.2	%		451		0.3	%

Total		183,495		100.0	%		178,411		100.0	%


	March 31, 2019					December 31, 2018
	Amount		% of Total			Amount		% of Total
Excluding Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value		141,742		57.4	%		136,025		57.3	%
Public, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Private, available-for-sale, at fair value		30,412		12.3	%		29,106		12.3	%
Private, held-to-maturity, at amortized cost		—		0.0	%		—		0.0	%
Fixed maturities, trading, at fair value		1,700		0.7	%		1,565		0.7	%
Assets supporting experience-rated contractholder liabilities, at fair value		19,109		7.8	%		18,813		7.9	%
Equity securities, at fair value		2,126		0.9	%		1,877		0.8	%
Commercial mortgage and other loans, at book value		34,062		13.8	%		33,023		13.9	%
Policy loans, at outstanding balance		4,884		2.0	%		4,891		2.1	%
Other invested assets (3)		6,520		2.7	%		6,450		2.7	%
Short-term investments		5,904		2.4	%		5,497		2.3	%

Total		246,459		100.0	%		237,247		100.0	%

(1)	Excludes Closed Block Division.

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

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

Page 33

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INVESTMENT RESULTS (1)

(in millions)


	Three Months Ended March 31
	2019									2018
	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)		3.80	%		2,785			238			3.82	%		2,625			50
Equity securities		1.90	%		19			—			1.67	%		18			—
Commercial mortgage and other loans		3.94	%		447			(4	)		3.94	%		412			—
Policy loans		4.66	%		88			—			4.74	%		88			—
Short-term investments and cash equivalents		2.71	%		103			1			1.64	%		61			(1	)

Gross investment income before investment expenses		3.78	%		3,442			235			3.75	%		3,204			49
Investment expenses		-0.14	%		(174	)		—			-0.14	%		(139	)		—

Subtotal		3.64	%		3,268			235			3.61	%		3,065			49

Other investments (3)					89			(1,006	)					81			358
Investment results of other entities and operations (4)					296			(51	)					259			20
Less, investment income related to adjusted operating income reconciling items					(107	)								(68	)

Total					3,546			(822	)					3,337			427

(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 34

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS

(in millions)


	Three Months Ended March 31
	2019								2018
	Investment Income						Realized Gains / (Losses)		Investment Income						Realized Gains / (Losses)
	Yield (1)			Amount			Realized Gains / (Losses)		Yield (1)			Amount			Realized Gains / (Losses)
Japanese Insurance Operations:
Fixed maturities (2)		2.83	%		937			218		2.93	%		923			89
Equity securities		1.43	%		7			—		1.56	%		8			—
Commercial mortgage and other loans		3.81	%		165			1		3.84	%		143			—
Policy loans		3.85	%		26			—		3.80	%		25			—
Short-term investments and cash equivalents		2.90	%		8			—		1.47	%		7			—

Gross investment income before investment expenses		2.94	%		1,143			219		3.01	%		1,106			89
Investment expenses		-0.13	%		(68	)		—		-0.12	%		(53	)		—

Subtotal		2.81	%		1,075			219		2.89	%		1,053			89

Other investments (2)					51			176					27			93

Total					1,126			395					1,080			182

(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 35

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

INVESTMENT RESULTS - EXCLUDING JAPANESE INSURANCE OPERATIONS (1)

(in millions)


	Three Months Ended March 31
	2019									2018
	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)		4.61	%		1,848			20			4.56	%		1,702			(39	)
Equity securities		2.37	%		12			—			1.78	%		10			—
Commercial mortgage and other loans		4.03	%		282			(5	)		4.00	%		269			—
Policy loans		5.11	%		62			—			5.26	%		63			—
Short-term investments and cash equivalents		2.70	%		95			1			1.66	%		54			(1	)

Gross investment income before investment expenses		4.40	%		2,299			16			4.31	%		2,098			(40	)
Investment expenses		-0.15	%		(106	)		—			-0.15	%		(86	)		—

Subtotal		4.25	%		2,193			16			4.16	%		2,012			(40	)

Other investments (3)					38			(1,182	)					54			265

Total					2,231			(1,166	)					2,066			225

(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 36

Prudential Financial, Inc.

Quarterly Financial

First Quarter 2019

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

(in millions)


	First Quarter 2019																				First Quarter 2018
	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			Interest Credited to Policyholders’ Account Balances			Amortization of Acquisition Costs			Pre-Tax Adjusted Operating Income
Individual Annuities:
Market performance and experience true-ups		—			(13	)		(23	)		(1	)		(3	)		—			14		(7	)		(9	)		(3	)		(11	)		16
Individual Life:
Market performance and experience true-ups		(3	)		—			(44	)		—			(4	)		(4	)		49		—			—			—			—			—
International Insurance - Life Planner operations:
Market performance and experience true-ups		—			—			(2	)		—			(5	)		—			7		—			—			—			—			—

Page 37

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

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

(in millions)


	Three Months Ended March 31, 2019																					Three Months Ended March 31, 2018
				Reconciling Items																					Reconciling Items
	Adjusted Operating Income basis (1)			Total realized investment gains (losses), net, and related charges and adjustments			Investment gains (losses) on assets supporting experience-rated contractholder liabilities, net		Change in experience-rated contractholder liabilities due to asset value changes		Closed Block Division		Other Divested 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		7,256			—			—		—		526		118			—			7,900			6,638			—			—			—			551			122			—			7,311
Policy charges and fee income		1,542			(72	)		—		—		—		1			—			1,471			1,575			(71	)		—			—			—			—			—			1,504
Net investment income		3,546			(10	)		—		—		563		117			—			4,216			3,337			(10	)		—			—			593			78			—			3,998
Realized investment gains (losses), net		20			(910	)		—		—		56		68			—			(766	)		63			433			—			—			(2	)		(69	)		—			425
Asset management fees, commissions and other income		1,284			257			454		—		229		84			(38	)		2,270			1,262			(336	)		(403	)		—			21			1			(26	)		519
Asset management fees, commissions and other income		1,284			257			454		—		229		84			(38	)		2,270			1,262			(336	)		(403	)		—			21			1			(26	)		519

Total revenues		13,648			(735	)		454		—		1,374		388			(38	)		15,091			12,875			16			(403	)		—			1,163			132			(26	)		13,757


Benefits and Expenses:
Insurance and annuity benefits		7,520			53			—		—		1,262		180			—			9,015			6,853			(62	)		—			—			1,035			177			—			8,003
Interest credited to policyholders’ account balances		948			(43	)		—		403		32		5			—			1,345			911			25			—			(418	)		33			(1	)		—			550
Interest credited to policyholders’ account balances		948			(43	)		—		403		32		5			—			1,345			911			25			—			(418	)		33			(1	)		—			550
Interest expense		386			—			—		—		1		1			—			388			340			—			—			—			—			1			—			341
Deferral of acquisition costs		(759	)		—			—		—		—		(2	)		—			(761	)		(718	)		—			—			—			—			(1	)		—			(719	)
Amortization of acquisition costs		540			(116	)		—		—		9		2			—			435			530			47			—			—			10			1			—			588
General and administrative expenses		3,408			9			—		—		89		28			(5	)		3,529			3,238			(58	)		—			—			94			27			—			3,301

Total benefits and expenses		12,043			(97	)		—		403		1,393		214			(5	)		13,951			11,154			(48	)		—			(418	)		1,172			204			—			12,064

(1)	See page 40 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 38

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

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

(in millions)


	Three Months Ended June 30, 2018																							Three Months Ended September 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		6,710			—			—			—			600		128			—			7,438			8,143			—			—		—		529			138			—			8,810
Policy charges and fee income		1,570			(92	)		—			—			—		2			—			1,480			1,557			(60	)		—		—		—			1			—			1,498
Net investment income		3,404			(10	)		—			—			591		111			—			4,096			3,367			(10	)		—		—		560			129			—			4,046
Realized investment gains (losses), net		151			434			—			—			110		(10	)		—			685			63			120			—		—		(4	)		(28	)		—			151
Asset management fees, commissions and other income		1,208			(31	)		(193	)		—			87		(88	)		(27	)		956			1,302			161			10		—		164			36			(30	)		1,643

Total revenues		13,043			301			(193	)		—			1,388		143			(27	)		14,655			14,432			211			10		—		1,249			276			(30	)		16,148


Benefits and Expenses:

Insurance and annuity benefits		7,160			(24	)		—			—			1,288		1,628			—			10,052			8,464			(31	)		—		—		1,099			225			—			9,757

Interest credited to policyholders’ account balances		932			9			—			(85	)		33		5			—			894			940			31			—		21		33			5			—			1,030
Interest expense		347			—			—			—			—		1			—			348			355			—			—		—		1			1			—			357
Deferral of acquisition costs		(684	)		—			—			—			—		(2	)		—			(686	)		(708	)		—			—		—		—			(2	)		—			(710	)
Amortization of acquisition costs		555			48			—			—			8		2			—			613			496			57			—		—		8			2			—			563
General and administrative expenses		3,072			(9	)		—			—			90		35			(4	)		3,184			3,217			(23	)		—		—		90			33			(4	)		3,313

Total benefits and expenses		11,382			24			—			(85	)		1,419		1,669			(4	)		14,405			12,764			34			—		21		1,231			264			(4	)		14,310


	Three Months Ended December 31, 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		11,487		—	—		—			621		112	—		12,220
Policy charges and fee income		1,570		(51)	—		—			—		1	—		1,520
Net investment income		3,382		(11)	—		—			544		121	—		4,036
Realized investment gains (losses), net		249		379	—		—			26		62	—		716
Asset management fees, commissions and other income		1,092		(500)	(277)		—			(313	)	(42)	(20)		(60	)

Total revenues		17,780		(183)	(277)		—			878		254	(20)		18,432


Benefits and Expenses:
Insurance and annuity benefits		11,934		42	—		—			786		166	—		12,928
Interest credited to policyholders’ account balances		937		(25)	—		(228	)		33		5	—		722
Interest expense		372		—	—		—			1		1	—		374
Deferral of acquisition costs		(754	)	—	—		—			—		(2)	—		(756	)
Amortization of acquisition costs		533		(34)	—		—			9		1	—		509
General and administrative expenses		3,440		49	—		—			89		32	(8)		3,602

Total benefits and expenses		16,462		32	—		(228	)		918		203	(8)		17,379

(1)	See page 40 for a definition of AOI.

(2)	U.S. generally accepted accounting principles

Page 39

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

KEY DEFINITIONS AND FORMULAS

1. Adjusted operating income before income taxes:

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

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

Adjusted operating income also excludes investment gains and losses on 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 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. However, book value per share excluding both AOCI and adjusted to remove amount included for foreign currency exchange rate remeasurement 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.

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Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

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.

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Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

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. Other Related Revenues:

Other related revenues include incentive fees, transaction fees, strategic investing results, and commercial mortgage revenues.

26. 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).

27. 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.

28. Prudential Advisors:

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

29. 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.

30. 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.

31. Variable Investment Income

Consists of income from equity and alternative investments along with prepayment fee income.

32. 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 42

Prudential Financial, Inc.

Quarterly Financial Supplement

First Quarter 2019

RATINGS AND INVESTOR INFORMATION

FINANCIAL STRENGTH RATINGS

as of May 1, 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 May 1, 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 43

Form: 8-K

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