10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2015

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from              to             

Commission File Number 001-16707

Prudential Financial, Inc.

(Exact Name of Registrant as Specified in its Charter)

New Jersey	22-3703799
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

751 Broad Street

Newark, New Jersey 07102

(973) 802-6000

(Address and Telephone Number of Registrant’s Principal Executive Offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  x Accelerated filer  ¨ Non-accelerated filer  ¨     Smaller reporting company  ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2015, 451 million shares of the registrant’s Common Stock (par value $0.01) were outstanding.

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Unaudited Interim Consolidated Statements of Financial Position as of June 30, 2015 and December 31, 2014	1
	Unaudited Interim Consolidated Statements of Operations for the three and six months ended June 30, 2015 and 2014	2
	Unaudited Interim Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2015 and 2014	3
	Unaudited Interim Consolidated Statements of Equity for the six months ended June 30, 2015 and 2014	4
	Unaudited Interim Consolidated Statements of Cash Flows for the six months ended June 30, 2015 and 2014	5
	Notes to Unaudited Interim Consolidated Financial Statements	7
	1. Business and Basis of Presentation	7
	2. Significant Accounting Policies and Pronouncements	8
	3. Acquisitions	9
	4. Investments	10
	5. Variable Interest Entities	27
	6. Closed Block	29
	7. Equity	31
	8. Earnings Per Share	35
	9. Short-Term and Long-Term Debt	37
	10. Employee Benefit Plans	40
	11. Segment Information	41
	12. Income Taxes	48
	13. Fair Value of Assets and Liabilities	48
	14. Derivative Instruments	78
	15. Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters	87
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	92
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	173
Item 4.	Controls and Procedures	173
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	174
Item 1A.	Risk Factors	174
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	174
Item 6.	Exhibits	175
SIGNATURES		176
EXHIBIT INDEX		177

Forward-Looking Statements

Certain of the statements included in this Quarterly Report on Form 10-Q, including but not limited to those in Management’s Discussion and Analysis of Financial Condition and Results of Operations, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “includes,” “plans,” “assumes,” “estimates,” “projects,” “intends,” “should,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. There can be no assurance that future developments affecting Prudential Financial, Inc. and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) general economic, market and political conditions, including the performance and fluctuations of fixed income, equity, real estate and other financial markets; (2) the availability and cost of additional debt or equity capital or external financing for our operations; (3) interest rate fluctuations or prolonged periods of low interest rates; (4) the degree to which we choose not to hedge risks, or the potential ineffectiveness or insufficiency of hedging or risk management strategies we do implement; (5) any inability to access our credit facilities; (6) reestimates of our reserves for future policy benefits and claims; (7) differences between actual experience regarding mortality, morbidity, persistency, utilization, interest rates or market returns and the assumptions we use in pricing our products, establishing liabilities and reserves or for other purposes; (8) changes in our assumptions related to deferred policy acquisition costs, value of business acquired or goodwill; (9) changes in assumptions for our pension and other post-retirement benefit plans; (10) changes in our financial strength or credit ratings; (11) statutory reserve requirements associated with term and universal life insurance policies under Regulation XXX and Guideline AXXX; (12) investment losses, defaults and counterparty non-performance; (13) competition in our product lines and for personnel; (14) difficulties in marketing and distributing products through current or future distribution channels; (15) changes in tax law; (16) economic, political, currency and other risks relating to our international operations; (17) fluctuations in foreign currency exchange rates and foreign securities markets; (18) regulatory or legislative changes, including the Dodd-Frank Wall Street Reform and Consumer Protection Act; (19) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (20) adverse determinations in litigation or regulatory matters and our exposure to contingent liabilities, including in connection with our divestiture or winding down of businesses; (21) domestic or international military actions, natural or man-made disasters including terrorist activities or pandemic disease, or other events resulting in catastrophic loss of life; (22) ineffectiveness of risk management policies and procedures in identifying, monitoring and managing risks; (23) effects of acquisitions, divestitures and restructurings, including possible difficulties in integrating and realizing projected results of acquisitions; (24) interruption in telecommunication, information technology or other operational systems or failure to maintain the security, confidentiality or privacy of sensitive data on such systems; (25) changes in statutory or U.S. GAAP accounting principles, practices or policies; and (26) Prudential Financial, Inc.’s primary reliance, as a holding company, on dividends or distributions from its subsidiaries to meet debt payment obligations and the ability of the subsidiaries to pay such dividends or distributions in light of our ratings objectives and/or applicable regulatory restrictions. Prudential Financial, Inc. does not intend, and is under no obligation, to update any particular forward-looking statement included in this document. See “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2014 for discussion of certain risks relating to our businesses and investment in our securities.

i

Throughout this Quarterly Report on Form 10-Q, “Prudential Financial” and the “Registrant” refer to Prudential Financial, Inc., the ultimate holding company for all of our companies. “Prudential Insurance” refers to The Prudential Insurance Company of America. “Prudential,” the “Company,” “we” and “our” refer to our consolidated operations.

PART I - FINANCIAL INFORMATION

ITEM 1.Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Financial Position

June 30, 2015 and December 31, 2014 (in millions, except share amounts)

	June 30, 2015			December 31, 2014
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost: 2015-$262,820; 2014-$265,116)(1)	$	290,063		$	299,090
Fixed maturities, held-to-maturity, at amortized cost (fair value: 2015-$2,674; 2014-$2,902)(1)	2,396			2,575
Trading account assets supporting insurance liabilities, at fair value(1)	20,267			20,263
Other trading account assets, at fair value(1)	12,749			10,874
Equity securities, available-for-sale, at fair value (cost: 2015-$6,870; 2014-$6,921)	9,901			9,861
Commercial mortgage and other loans (includes $391 and $380 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)(1)	48,569			46,432
Policy loans	11,652			11,712
Other long-term investments (includes $1,267 and $1,082 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)(1)	10,678			10,921
Short-term investments	5,669			8,258
Total investments	411,944			419,986
Cash and cash equivalents(1)	17,038			14,918
Accrued investment income(1)	3,117			3,130
Deferred policy acquisition costs	16,569			15,971
Value of business acquired	2,994			2,836
Other assets(1)	14,728			13,379
Separate account assets	296,341			296,435
TOTAL ASSETS	$	762,731		$	766,655
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits	$	216,555		$	217,766
Policyholders’ account balances(1)	135,630			136,150
Policyholders’ dividends	6,528			7,661
Securities sold under agreements to repurchase	7,863			9,407
Cash collateral for loaned securities	3,808			4,241
Income taxes	9,239			9,881
Short-term debt	3,621			3,839
Long-term debt	20,264			19,831
Other liabilities(1)	13,135			13,037
Notes issued by consolidated variable interest entities (includes $7,434 and $6,033 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)(1)	7,455			6,058
Separate account liabilities	296,341			296,435
Total liabilities	720,439			724,306
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 15)
EQUITY
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)	0			0
Common Stock ($.01 par value; 1,500,000,000 shares authorized; 660,111,339 shares issued at both June 30, 2015 and December 31, 2014)	6			6
Class B Stock ($.01 par value; 0 shares authorized and issued at June 30, 2015; 10,000,000 shares authorized and 2,000,000 shares issued at December 31, 2014)	0			0
Additional paid-in capital	24,397			24,565
Common Stock held in treasury, at cost (208,199,088 and 205,277,862 shares at June 30, 2015 and December 31, 2014, respectively)	(13,398		)	(13,088		)
Class B Stock held in treasury, at cost (0 and 2,000,000 shares at June 30, 2015 and December 31, 2014, respectively)	0			(651		)
Accumulated other comprehensive income (loss)	13,404			16,050
Retained earnings	17,314			14,888
Total Prudential Financial, Inc. equity	41,723			41,770
Noncontrolling interests	569			579
Total equity	42,292			42,349
TOTAL LIABILITIES AND EQUITY	$	762,731		$	766,655

__________

(1) See Note 5 for details of balances associated with variable interest entities.

See Notes to Unaudited Interim Consolidated Financial Statements

1

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Operations

Three and Six Months Ended June 30, 2015 and 2014 (in millions, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
REVENUES
Premiums	$	7,582		$	6,068		$	14,229		$	11,936
Policy charges and fee income	1,250			1,520			2,858			3,021
Net investment income	3,671			3,754			7,440			7,592
Asset management and service fees	956			928			1,908			1,832
Other income	124			267			339			802
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities	(54		)	(32		)	(68		)	(111		)
Other-than-temporary impairments on fixed maturity securities transferred to Other comprehensive income	25			6			31			69
Other realized investment gains (losses), net	158			635			2,527			859
Total realized investment gains (losses), net	129			609			2,490			817
Total revenues	13,712			13,146			29,264			26,000
BENEFITS AND EXPENSES
Policyholders’ benefits	7,852			6,466			15,091			12,852
Interest credited to policyholders’ account balances	676			1,178			1,909			2,193
Dividends to policyholders	437			711			1,218			1,311
Amortization of deferred policy acquisition costs	135			482			924			919
General and administrative expenses	2,483			2,802			5,245			5,500
Total benefits and expenses	11,583			11,639			24,387			22,775
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	2,129			1,507			4,877			3,225
Total income tax expense (benefit)	679			404			1,378			877
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	1,450			1,103			3,499			2,348
Equity in earnings of operating joint ventures, net of taxes	9			6			6			6
INCOME (LOSS) FROM CONTINUING OPERATIONS	1,459			1,109			3,505			2,354
Income (loss) from discontinued operations, net of taxes	0			4			0			8
NET INCOME (LOSS)	1,459			1,113			3,505			2,362
Less: Income (loss) attributable to noncontrolling interests	53			23			63			34
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$	1,406		$	1,090		$	3,442		$	2,328
EARNINGS PER SHARE(1)
Basic earnings per share-Common Stock:
Income (loss) from continuing operations attributable to Prudential Financial, Inc.	$	3.07		$	2.25		$	7.52		$	4.87
Income (loss) from discontinued operations, net of taxes	0.00			0.01			0.00			0.02
Net income (loss) attributable to Prudential Financial, Inc.	$	3.07		$	2.26		$	7.52		$	4.89
Diluted earnings per share-Common Stock:
Income (loss) from continuing operations attributable to Prudential Financial, Inc.	$	3.03		$	2.21		$	7.40		$	4.79
Income (loss) from discontinued operations, net of taxes	0.00			0.01			0.00			0.02
Net income (loss) attributable to Prudential Financial, Inc.	$	3.03		$	2.22		$	7.40		$	4.81
Dividends declared per share of Common Stock	$	0.58		$	0.53		$	1.16		$	1.06

__________

(1) For the three and six months ended June 30, 2015, represents consolidated earnings per share of Common Stock. For the three and six months ended June 30, 2014, represents earnings of the Company’s former Financial Services Businesses per share of Common Stock. See Note 8 for additional information.

See Notes to Unaudited Interim Consolidated Financial Statements

2

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Comprehensive Income

Three and Six Months Ended June 30, 2015 and 2014 (in millions)

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
NET INCOME (LOSS)	$	1,459		$	1,113	$	3,505		$	2,362
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(96		)	167		(163		)	247
Net unrealized investment gains (losses)	(6,702		)	3,251		(4,212		)	6,319
Defined benefit pension and postretirement unrecognized periodic benefit	54			20		106			43
Total	(6,744		)	3,438		(4,269		)	6,609
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(2,380		)	1,158		(1,569		)	2,205
Other comprehensive income (loss), net of taxes	(4,364		)	2,280		(2,700		)	4,404
Comprehensive income (loss)	(2,905		)	3,393		805			6,766
Less: Comprehensive income (loss) attributable to noncontrolling interests	37			24		9			42
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$	(2,942	)	$	3,369	$	796		$	6,724

See Notes to Unaudited Interim Consolidated Financial Statements

3

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Equity

Six Months EndedJune 30, 2015 and 2014 (in millions)

	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Common Stock Held In Treasury			Class B Stock Held in Treasury			Accumulated Other Comprehensive Income (Loss)			Total Prudential Financial, Inc. Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2014	$	6	$	24,565		$	14,888		$	(13,088	)	$	(651	)	$	16,050		$	41,770		$	579		$	42,349
Common Stock acquired									(500		)							(500		)				(500		)
Class B Stock canceled			(167		)	(484		)				651						0						0
Contributions from noncontrolling interests																					23			23
Distributions to noncontrolling interests																					(42		)	(42		)
Stock-based compensation programs			(1		)				190									189						189
Dividends declared on Common Stock						(532		)										(532		)				(532		)
Comprehensive income:
Net income (loss)						3,442												3,442			63			3,505
Other comprehensive income (loss), net of tax															(2,646		)	(2,646		)	(54		)	(2,700		)
Total comprehensive income (loss)																		796			9			805
Balance, June 30, 2015	$	6	$	24,397		$	17,314		$	(13,398	)	$	0		$	13,404		$	41,723		$	569		$	42,292
	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital			Retained Earnings			Common Stock Held In Treasury			Class B Stock Held in Treasury			Accumulated Other Comprehensive Income (Loss)			Total Prudential Financial, Inc. Equity			Noncontrolling Interests			Total Equity
Balance, December 31, 2013	$	6	$	24,475		$	14,531		$	(12,415	)	$	0		$	8,681		$	35,278		$	603		$	35,881
Common Stock acquired									(500		)							(500		)				(500		)
Contributions from noncontrolling interests			(3		)													(3		)	2			(1		)
Distributions to noncontrolling interests																					(54		)	(54		)
Consolidations (deconsolidations) of noncontrolling interests																					19			19
Stock-based compensation programs			6						192									198						198
Dividends declared on Common Stock						(493		)										(493		)				(493		)
Dividends declared on Class B Stock						(9		)										(9		)				(9		)
Comprehensive income:
Net income (loss)						2,328												2,328			34			2,362
Other comprehensive income (loss), net of tax															4,396			4,396			8			4,404
Total comprehensive income (loss)																		6,724			42			6,766
Balance, June 30, 2014	$	6	$	24,478		$	16,357		$	(12,723	)	$	0		$	13,077		$	41,195		$	612		$	41,807

See Notes to Unaudited Interim Consolidated Financial Statements

4

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Six Months EndedJune 30, 2015 and 2014 (in millions)

	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	3,505		$	2,362
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	(2,490		)	(817		)
Policy charges and fee income	(760		)	(1,032		)
Interest credited to policyholders’ account balances	1,909			2,193
Depreciation and amortization	(48		)	179
(Gains) losses on trading account assets supporting insurance liabilities, net	137			(324		)
Change in:
Deferred policy acquisition costs	(387		)	(429		)
Future policy benefits and other insurance liabilities	3,157			3,251
Other trading account assets	(62		)	(1		)
Income taxes	1,038			898
Derivatives, net	(1,919		)	302
Other, net	(605		)	(1,027		)
Cash flows from (used in) operating activities	3,475			5,555
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	24,630			26,535
Fixed maturities, held-to-maturity	121			232
Trading account assets supporting insurance liabilities and other trading account assets	6,595			6,098
Equity securities, available-for-sale	2,488			2,483
Commercial mortgage and other loans	2,392			1,673
Policy loans	1,119			1,096
Other long-term investments	490			208
Short-term investments	41,720			35,249
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(23,175		)	(32,670		)
Fixed maturities, held-to-maturity	0			(23		)
Trading account assets supporting insurance liabilities and other trading account assets	(8,433		)	(7,563		)
Equity securities, available-for-sale	(2,101		)	(2,289		)
Commercial mortgage and other loans	(4,372		)	(3,527		)
Policy loans	(907		)	(969		)
Other long-term investments	(870		)	(847		)
Short-term investments	(39,095		)	(33,301		)
Acquisition of business, net of cash acquired.	0			(23		)
Derivatives, net	148			(115		)
Other, net	(36		)	228
Cash flows from (used in) investing activities	714			(7,525		)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits	10,730			12,226
Policyholders’ account withdrawals	(10,678		)	(11,617		)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	(1,978		)	736
Cash dividends paid on Common Stock	(537		)	(495		)
Cash dividends paid on Class B Stock	0			(10		)
Net change in financing arrangements (maturities 90 days or less)	493			324
Common Stock acquired	(502		)	(500		)
Class B stock acquired	(651		)	0
Common Stock reissued for exercise of stock options	125			138
Proceeds from the issuance of debt (maturities longer than 90 days)	3,348			2,817
Repayments of debt (maturities longer than 90 days)	(2,166		)	(971		)
Excess tax benefits from share-based payment arrangements	14			16
Other, net	(307		)	(47		)
Cash flows from (used in) financing activities	(2,109		)	2,617
Effect of foreign exchange rate changes on cash balances	40			74
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	2,120			721
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR	14,918			11,439
CASH AND CASH EQUIVALENTS, END OF PERIOD	$	17,038		$	12,160

5

NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs	$	109	$	94
Significant Pension Risk Transfer transactions:
Assets acquired, excluding cash and cash equivalents acquired	$	1,553	$	0
Liabilities assumed	1,919		0
Net cash received	$	366	$	0
Acquisition of Gibraltar BSN Life Berhad:
Assets acquired, excluding cash and cash equivalents acquired	$	0	$	656
Liabilities assumed	0		586
Noncontrolling Interest assumed	0		47
Net cash paid on acquisition	$	0	$	23

See Notes to Unaudited Interim Consolidated Financial Statements

6

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements

1. BUSINESS AND BASIS OF PRESENTATION

Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company” or “PFI”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds and investment management.

From December 18, 2001, the date of demutualization, through December 31, 2014, the Company organized its principal operations into the Financial Services Businesses and the Closed Block Business, and had two classes of common stock outstanding. The Common Stock, which is publicly traded (NYSE:PRU), reflected the performance of the Financial Services Businesses, while the Class B Stock, which was issued through a private placement and did not trade on any exchange, reflected the performance of the Closed Block Business.

On January 2, 2015, Prudential Financial repurchased and canceled all of the shares of the Class B Stock (the “Class B Repurchase”). As a result, the Company no longer organizes its principal operations into the Financial Services Businesses and the Closed Block Business. The Company’s principal operations are comprised of four divisions: the U.S. Retirement Solutions and Investment Management division, the U.S. Individual Life and Group Insurance division, the International Insurance division and the Closed Block division. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, businesses that are not sufficiently material to warrant separate disclosure and businesses that have been or will be divested, excluding the Closed Block division.

The Closed Block division includes certain in force participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders’ dividends on these products (the “Closed Block”), as well as certain related assets and liabilities (see Note 6). In connection with demutualization, the Company ceased offering these participating products. The Closed Block division is accounted for as a divested business that is reported separately from the divested businesses that are included in the Company’s Corporate and Other operations.

Basis of Presentation

As a result of the Class B Repurchase and resulting elimination of the separation of the Financial Services Businesses and the Closed Block Business, these Unaudited Interim Consolidated Financial Statements refer to the divisions and segments of the Company that formerly comprised the Financial Services Businesses as “PFI excluding Closed Block division” and refer to the operations that were formerly included in the Closed Block Business as the “Closed Block division,” except as otherwise noted. Closed Block Business results were associated with the Company’s Class B Stock for periods prior to January 1, 2015.

The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. See Note 5 for more information on the Company’s consolidated variable interest entities. The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The Company’s Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”) consolidated operations use a November 30 fiscal year end for purposes of inclusion in the Company’s Consolidated Financial Statements; therefore, the Unaudited Interim Consolidated Financial Statements as of June 30, 2015, include the assets and liabilities of Gibraltar Life and its results of operations as of, and for the three and six months ended, May 31, 2015, respectively.

Use of Estimates

7

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of sales inducements; measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments; future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

2. SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

This section supplements, and should be read in conjunction with, Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Earnings Per Share

As discussed in Note 1, from demutualization through December 31, 2014, the Company had two separate classes of common stock. Basic earnings per share for those periods was computed by dividing available income attributable to each of the two groups of common shareholders by the respective weighted average number of common shares outstanding for the period. Diluted earnings per share included the effect of all dilutive potential common shares that were outstanding during the period.

As a result of the Class B Repurchase, earnings per share of Common Stock for the three and six months ended June 30, 2015, reflects the consolidated earnings of Prudential Financial. Basic earnings per share is computed by dividing available income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share includes the effect of all dilutive potential common shares that were outstanding during the period. See Note 8 for additional information.

Adoption of New Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the statement of operations as a component of income tax expense (benefit) if certain conditions are met. The new guidance became effective for annual periods and interim reporting periods within those annual periods that began after December 15, 2014. The Company did not elect the proportional amortization method under this guidance.

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in-substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In April 2014, the FASB issued updated guidance that changes the criteria for reporting discontinued operations and introduces new disclosures. The new guidance became effective for new disposals and new classifications of disposal groups as held for sale that occur within annual periods that began on or after December 15, 2014, and interim periods within those annual periods. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In June 2014, the FASB issued updated guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings and eliminates existing guidance for repurchase financings. The guidance also requires new disclosures for certain transactions accounted for as secured borrowings and for transfers accounted for as sales when the transferor also retains

8

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

substantially all of the exposure to the economic return on the transferred financial assets. Accounting changes and new disclosures for transfers accounted for as sales under the new guidance were effective for the first interim or annual period beginning after December 15, 2014 and did not have a significant effect on the Company's consolidated financial position, results of operations or financial statement disclosures. Disclosures for certain transactions accounted for as secured borrowings were effective for interim periods beginning after March 15, 2015 and are included in Note 4.

In August 2014, the FASB issued guidance requiring that mortgage loans be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

Future Adoption of New Accounting Pronouncements

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, and can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities, and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In April 2015, the FASB issued guidance that simplifies presentation of debt issuance costs. The pronouncement requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The new guidance is effective for periods beginning after December 15, 2015, with early adoption permitted, and it must be applied retrospectively. The Company does not expect the impact of the guidance to have a significant effect on the Company’s consolidated financial position and financial statement disclosures.

In May 2015, the FASB issued final guidance that aims to enhance disclosures about insurance contracts classified as short-duration. The new disclosure requirements focus on providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and timing, frequency and severity of claims as they relate to short-duration insurance contracts. The new guidance is effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016 and is to be applied retrospectively. The Company is currently assessing the impact of the guidance on the Company’s financial statement disclosures but has concluded that this guidance will not impact the Company’s consolidated financial position or results of operations.

3. ACQUISITIONS

9

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

This section supplements, and should be read in conjunction with, the complete descriptions provided in Note 3 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Acquisition of Administradora de Fondos de Pensiones Habitat S.A.

In March 2015, the Company and Inversiones La Construcción S.A. signed definitive documentation related to the Company’s previously disclosed acquisition of an indirect ownership interest in Administradora de Fondos de Pensiones Habitat S.A. (“AFP Habitat”) and filed for regulatory approval. The transaction, which is subject to certain conditions, including receipt of regulatory approvals, is expected to close in the second half of 2015.

4. INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	14,196	$	3,635	$	20	$	17,811	$	0
Obligations of U.S. states and their political subdivisions	7,378		614		106		7,886		0
Foreign government bonds	68,681		10,342		162		78,861		(1		)
Corporate securities(1)	144,539		14,607		2,572		156,574		(18		)
Asset-backed securities(2)	10,948		387		100		11,235		(565		)
Commercial mortgage-backed securities	11,918		284		50		12,152		(1		)
Residential mortgage-backed securities(3)	5,160		391		7		5,544		(4		)
Total fixed maturities, available-for-sale(1)	$	262,820	$	30,260	$	3,017	$	290,063	$	(589	)
Equity securities, available-for-sale	$	6,870	$	3,119	$	88	$	9,901

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	804	$	160	$	0	$	964
Corporate securities(5)	696		60		2		754
Commercial mortgage-backed securities	59		2		0		61
Residential mortgage-backed securities(3)	837		58		0		895
Total fixed maturities, held-to-maturity(5)	$	2,396	$	280	$	2	$	2,674

__________

(1) Excludes notes with amortized cost of $693 million (fair value, $695 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income (“AOCI”), which were not included in earnings. Amount excludes $944 million of net unrealized gains on impaired available-for-sale securities and less than $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,850 million (fair value, $4,069 million) which have been offset with the associated payables under a netting agreement.

10

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,807	$	4,321	$	5	$	20,123	$	0
Obligations of U.S. states and their political subdivisions	5,720		814		3		6,531		0
Foreign government bonds	69,894		11,164		117		80,941		(1		)
Corporate securities(1)	143,631		17,799		1,054		160,376		(6		)
Asset-backed securities(2)	10,966		353		134		11,185		(592		)
Commercial mortgage-backed securities	13,486		430		39		13,877		(1		)
Residential mortgage-backed securities(3)	5,612		448		3		6,057		(5		)
Total fixed maturities, available-for-sale(1)	$	265,116	$	35,329	$	1,355	$	299,090	$	(605	)
Equity securities, available-for-sale	$	6,921	$	3,023	$	83	$	9,861

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	821	$	184	$	0	$	1,005
Corporate securities(5)	713		68		1		780
Commercial mortgage-backed securities	78		7		0		85
Residential mortgage-backed securities(3)	963		69		0		1,032
Total fixed maturities, held-to-maturity(5)	$	2,575	$	328	$	1	$	2,902

__________

(1) Excludes notes with amortized cost of $385 million (fair value, $385 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $954 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,588 million (fair value, $3,953 million) which have been offset with the associated payables under a netting agreement.

The amortized cost and fair value of fixed maturities by contractual maturities at June 30, 2015, are as follows:

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Due in one year or less	$	11,624	$	12,378	$	0	$	0
Due after one year through five years	44,963		50,198		72		77
Due after five years through ten years	56,728		62,754		167		175
Due after ten years(1)	121,479		135,802		1,261		1,466
Asset-backed securities	10,948		11,235		0		0
Commercial mortgage-backed securities	11,918		12,152		59		61
Residential mortgage-backed securities	5,160		5,544		837		895
Total	$	262,820	$	290,063	$	2,396	$	2,674

11

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________ 

(1) Excludes available-for-sale notes with amortized cost of $693 million (fair value, $695 million) and held-to-maturity notes with amortized cost of $3,850 million (fair value, $4,069 million), which have been offset with the associated payables under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale
Proceeds from sales	$	7,626		$	7,460		$	15,044		$	16,038
Proceeds from maturities/repayments	4,618			5,847			9,713			10,706
Gross investment gains from sales, prepayments and maturities	442			476			974			901
Gross investment losses from sales and maturities	(42)			(83		)	(97		)	(235		)
Fixed maturities, held-to-maturity
Gross investment gains from prepayments	$	0		$	0		$	0		$	0
Proceeds from maturities/repayments	63			138			123			232
Equity securities, available-for-sale
Proceeds from sales	$	1,564		$	1,316		$	2,553		$	2,481
Gross investment gains from sales	273			198			427			331
Gross investment losses from sales	(35		)	(22		)	(61		)	(60		)
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(1)	$	(29	)	$	(26	)	$	(37	)	$	(42	)
Writedowns for impairments on equity securities	(11		)	(7		)	(17		)	(17		)

__________ 

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

As discussed in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities is recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts:

12

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	(in millions)
Balance, beginning of period	$	773		$	781
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(15		)	(28		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	(12		)	(13		)
Credit loss impairments recognized in the current period on securities not previously impaired	0			3
Additional credit loss impairments recognized in the current period on securities previously impaired	2			2
Increases due to the passage of time on previously recorded credit losses	7			13
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(7		)
Balance, end of period	$	751		$	751

	Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
	(in millions)
Balance, beginning of period	$	838		$	968
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(59		)	(199		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	0			0
Credit loss impairments recognized in the current period on securities not previously impaired	10			12
Additional credit loss impairments recognized in the current period on securities previously impaired	0			4
Increases due to the passage of time on previously recorded credit losses	9			18
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(9		)
Balance, end of period	$	794		$	794

__________ 

(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Trading Account Assets Supporting Insurance Liabilities

The following table sets forth the composition of “Trading account assets supporting insurance liabilities” as of the dates indicated:

13

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	423	$	422	$	196	$	196
Fixed maturities:
Corporate securities	12,251		12,566		11,922		12,439
Commercial mortgage-backed securities	2,055		2,078		2,505		2,546
Residential mortgage-backed securities(1)	1,488		1,508		1,640		1,676
Asset-backed securities(2)	1,417		1,440		1,180		1,198
Foreign government bonds	635		647		621		650
U.S. government authorities and agencies and obligations of U.S. states	290		333		303		372
Total fixed maturities	18,136		18,572		18,171		18,881
Equity securities	974		1,273		896		1,186
Total trading account assets supporting insurance liabilities	$	19,533	$	20,267	$	19,263	$	20,263

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

The net change in unrealized gains (losses) from trading account assets supporting insurance liabilities still held at period end, recorded within “Other income,” was $(276) million and $201 million during the three months ended June 30, 2015 and 2014, respectively, and $(266) million and $267 million during the six months endedJune 30, 2015 and 2014, respectively.

Other Trading Account Assets

The following table sets forth the composition of the “Other trading account assets” as of the dates indicated:

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	61	$	62	$	27	$	27
Fixed maturities	9,487		9,475		8,306		8,282
Equity securities	1,027		1,135		992		1,105
Other	12		16		7		11
Subtotal	$	10,587	10,688		$	9,332	9,425
Derivative instruments			2,061				1,449
Total other trading account assets			$	12,749			$	10,874

The net change in unrealized gains (losses) from other trading account assets, excluding derivative instruments, still held at period end, recorded within “Other income,” was $61 million and $9 million during the three months ended June 30, 2015 and 2014, respectively, and $9 million and $35 million during the six months endedJune 30, 2015 and 2014, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments on an ongoing basis, and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any one issuer.

As of both June 30, 2015 and December 31, 2014, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government, certain U.S. government agencies and certain securities guaranteed by the U.S. government, as well as the securities disclosed below.

14

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	50,735	$	57,562	$	52,703	$	60,379
Fixed maturities, held-to-maturity	783		940		801		981
Trading account assets supporting insurance liabilities	475		482		457		470
Other trading account assets	35		35		36		36
Short-term investments	0		0		0		0
Cash equivalents	163		163		0		0
Total	$	52,191	$	59,182	$	53,997	$	61,866

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	7,207	$	8,815	$	6,927	$	8,438
Fixed maturities, held-to-maturity	0		0		0		0
Trading account assets supporting insurance liabilities	44		45		49		50
Other trading account assets	0		0		0		0
Short-term investments	0		0		0		0
Cash equivalents	0		0		0		0
Total	$	7,251	$	8,860	$	6,976	$	8,488

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:

15

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015					December 31, 2014
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	10,905		23.2	%	$	9,612		21.5	%
Retail	8,810			18.8		8,765			19.6
Apartments/Multi-Family	11,098			23.6		10,369			23.2
Industrial	7,542			16.1		7,628			16.9
Hospitality	2,451			5.2		2,270			5.1
Other	3,587			7.6		3,659			8.2
Total commercial mortgage loans	44,393			94.5		42,303			94.5
Agricultural property loans	2,604			5.5		2,445			5.5
Total commercial mortgage and agricultural property loans by property type	46,997			100.0	%	44,748			100.0	%
Valuation allowance	(97		)			(105		)
Total net commercial mortgage and agricultural property loans by property type	46,900					44,643
Other loans:
Uncollateralized loans	1,038					1,092
Residential property loans	327					392
Other collateralized loans	315					319
Total other loans	1,680					1,803
Valuation allowance	(11		)			(14		)
Total net other loans	1,669					1,789
Total commercial mortgage and other loans(1)	$	48,569				$	46,432

__________ 

(1) Includes loans held at fair value.

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States (with the largest concentrations in California (26%), New York (9%) and Texas (9%)) and Asia at June 30, 2015.

Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	June 30, 2015
	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	104		$	1	$	5		$	0	$	9		$	119
Addition to (release of) allowance for losses	(8		)	0		(2		)	0		0			(10		)
Charge-offs, net of recoveries	0			0		0			0		0			0
Change in foreign exchange	0			0		0			0		(1		)	(1		)
Total ending balance	$	96		$	1	$	3		$	0	$	8		$	108

16

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2014
	Commercial Mortgage Loans			Agricultural Property Loans			Residential Property Loans			Other Collateralized Loans			Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	188		$	7		$	6		$	3		$	12		$	216
Addition to (release of) allowance for losses	(77		)	(6		)	(1		)	(1		)	(2		)	(87		)
Charge-offs, net of recoveries	(7		)	0			0			(2		)	0			(9		)
Change in foreign exchange	0			0			0			0			(1		)	(1		)
Total ending balance	$	104		$	1		$	5		$	0		$	9		$	119

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	June 30, 2015
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	3	$	0	$	0	$	0	$	0	$	3
Collectively evaluated for impairment	93		1		3		0		8		105
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	96	$	1	$	3	$	0	$	8	$	108
Recorded Investment(1):
Gross of reserves: individually evaluated for impairment	$	254	$	4	$	0	$	1	$	2	$	261
Gross of reserves: collectively evaluated for impairment	44,139		2,600		327		314		1,036		48,416
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	44,393	$	2,604	$	327	$	315	$	1,038	$	48,677

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

17

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2014(1)
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	96		1		5		0		9		111
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	104	$	1	$	5	$	0	$	9	$	119
Recorded Investment(2):
Gross of reserves: individually evaluated for impairment	$	247	$	4	$	0	$	1	$	2	$	254
Gross of reserves: collectively evaluated for impairment	42,056		2,441		392		318		1,090		46,297
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	42,303	$	2,445	$	392	$	319	$	1,092	$	46,551

__________

(1) Prior period’s amounts are presented on a basis consistent with current period presentation.

(2) Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses, as of the dates indicated, are as follows:

18

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	0	$	0	$	0	$	0	$	0
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	0	$	1	$	0	$	0	$	0
With an allowance recorded:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	55	$	55	$	3	$	79	$	1
Total:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total	$	55	$	56	$	3	$	79	$	1

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

19

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2014
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	8	$	8	$	0	$	16	$	1
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	12	$	13	$	0	$	20	$	1
With an allowance recorded:
Commercial mortgage loans	$	76	$	76	$	8	$	82	$	6
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	76	$	76	$	8	$	85	$	7
Total:
Commercial mortgage loans	$	84	$	84	$	8	$	98	$	7
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		1		0		0		0
Total	$	88	$	89	$	8	$	105	$	8

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and all subsequent quarterly end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

The net carrying value of commercial and other loans held for sale by the Company as of June 30, 2015 and December 31, 2014, was $391 million and $380 million, respectively. In all of these transactions, the Company pre-arranges that it will sell the loan to an investor. As of both June 30, 2015 and December 31, 2014, all of the Company’s commercial and other loans held for sale were collateralized, with collateral primarily consisting of apartment complexes.

The following tables set forth certain key credit quality indicators as of June 30, 2015, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	23,344	$	429	$	275	$	24,048
60%-69.99%	13,434		444		79		13,957
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage loans	$	42,353	$	1,460	$	580	$	44,393

20

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,290	$	148	$	2	$	2,440
60%-69.99%	164		0		0		164
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,454	$	148	$	2	$	2,604

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	25,634	$	577	$	277	$	26,488
60%-69.99%	13,598		444		79		14,121
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage and agricultural property loans	$	44,807	$	1,608	$	582	$	46,997

The following tables set forth certain key credit quality indicators as of December 31, 2014, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	22,557	$	637	$	207	$	23,401
60%-69.99%	12,563		500		237		13,300
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage loans	$	39,708	$	1,928	$	667	$	42,303

Agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,152	$	140	$	2	$	2,294
60%-69.99%	151		0		0		151
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,303	$	140	$	2	$	2,445

21

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	24,709	$	777	$	209	$	25,695
60%-69.99%	12,714		500		237		13,451
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage and agricultural property loans	$	42,011	$	2,068	$	669	$	44,748

The following tables provide an aging of past due commercial mortgage and other loans as of the dates indicated, based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage loans on nonaccrual status as of the dates indicated.

	June 30, 2015
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	44,344	$	49	$	0	$	0	$	0	$	49	$	44,393	$	103
Agricultural property loans	2,603		0		0		0		1		1		2,604		1
Residential property loans	315		4		1		0		7		12		327		7
Other collateralized loans	314		0		0		0		1		1		315		1
Uncollateralized loans	1,038		0		0		0		0		0		1,038		0
Total	$	48,614	$	53	$	1	$	0	$	9	$	63	$	48,677	$	112

	December 31, 2014
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	42,239	$	62	$	0	$	0	$	2	$	64	$	42,303	$	101
Agricultural property loans	2,443		0		1		0		1		2		2,445		1
Residential property loans	375		7		2		0		8		17		392		8
Other collateralized loans	319		0		0		0		0		0		319		0
Uncollateralized loans	1,092		0		0		0		0		0		1,092		0
Total	$	46,468	$	69	$	3	$	0	$	11	$	83	$	46,551	$	110

See Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, for further discussion regarding nonaccrual status loans.

For both the three and six months endedJune 30, 2015, there were $53 million of commercial mortgage and other loans acquired, other than those through direct origination and there were $18 million of commercial mortgage and other loans sold, other than those classified as held-for-sale. For both the three and six months ended June 30, 2014, there were no commercial mortgage and other loans acquired, other than those through direct origination, nor were there any commercial mortgage and other loans sold, other than those classified as held-for-sale.

22

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of June 30, 2015 and December 31, 2014, the Company had no significant commitments to fund to borrowers that have been involved in a troubled debt restructuring. During the three months and six months ended June 30, 2015 and 2014, there were no new troubled debt restructurings related to commercial mortgage loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

As of June 30, 2015 and December 31, 2014, the Company did not have any foreclosed residential real estate property.

Net Investment Income

Net investment income for the three and six months endedJune 30, 2015 and 2014, was from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale(1)	$	2,611		$	2,669		$	5,194		$	5,286
Fixed maturities, held-to-maturity(1)	51			42			100			82
Equity securities, available-for-sale	81			105			177			189
Trading account assets	294			259			581			517
Commercial mortgage and other loans	556			522			1,100			1,020
Policy loans	154			158			308			312
Short-term investments and cash equivalents	11			8			24			17
Other long-term investments	137			175			381			517
Gross investment income	3,895			3,938			7,865			7,940
Less: investment expenses	(224		)	(184		)	(425		)	(348		)
Net investment income	$	3,671		$	3,754		$	7,440		$	7,592

__________ 

(1) Includes income on credit-linked notes which are reported on the same financial line item as related surplus notes, as conditions are met for right-of-offset.

The Company had $238 million and $218 million of investments in low-income housing tax credit limited partnerships and has committed to fund $52 million and $67 million as of June 30, 2015 and December 31, 2014, respectively.

Generally, the Company uses the equity method of accounting for these investments. The Company recognized $1 million and $6 million of equity method losses and utilized $0 million and $8 million of tax credits associated with these investments for the three months ended June 30, 2015 and 2014, respectively. The company recognized $3 million and $8 million of equity method losses and utilized $9 million and $15 million of tax credits associated with these investments for the six months ended June 30, 2015 and 2014, respectively. There were no impairment losses from forfeiture or ineligibility of tax credits.

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the three and six months endedJune 30, 2015 and 2014, were from the following sources:

23

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
	(in millions)
Fixed maturities	$	371		$	367	$	840		$	624
Equity securities	227			169		348			254
Commercial mortgage and other loans	20			8		31			16
Investment real estate	14			0		38			0
Joint ventures and limited partnerships	(4		)	0		(9		)	1
Derivatives(1)	(503		)	60		1,235			(85		)
Other	4			5		7			7
Realized investment gains (losses), net	$	129		$	609	$	2,490		$	817

__________ 

(1) Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.

Net Unrealized Gains (Losses) on Investments by Asset Class

The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated:

	June 30, 2015			December 31, 2014
	(in millions)
Fixed maturity securities on which an OTTI loss has been recognized	$	355		$	349
Fixed maturity securities, available-for-sale—all other	26,888			33,625
Equity securities, available-for-sale	3,031			2,940
Derivatives designated as cash flow hedges(1)	702			206
Other investments(2)	(10		)	(7		)
Net unrealized gains (losses) on investments	$	30,966		$	37,113

__________ 

(1) See Note 14 for more information on cash flow hedges.

(2) As of June 30, 2015, there were $0 million of net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

24

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,563	$	20	$	0	$	0	$	1,563	$	20
Obligations of U.S. states and their political subdivisions	3,060		105		8		1		3,068		106
Foreign government bonds	2,498		72		1,314		90		3,812		162
Corporate securities	36,276		1,984		5,642		588		41,918		2,572
Commercial mortgage-backed securities	2,983		38		550		12		3,533		50
Asset-backed securities	2,535		7		2,714		93		5,249		100
Residential mortgage-backed securities	529		4		122		3		651		7
Total	$	49,444	$	2,230	$	10,350	$	787	$	59,794	$	3,017
Equity securities, available-for-sale	$	1,855	$	87	$	6	$	1	$	1,861	$	88

__________ 

(1) Includes $84 million of fair value and $2 million of gross unrealized losses at June 30, 2015, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

	December 31, 2014
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	2,145	$	5	$	10	$	0	$	2,155	$	5
Obligations of U.S. states and their political subdivisions	105		1		89		2		194		3
Foreign government bonds	839		26		1,052		91		1,891		117
Corporate securities	11,326		401		13,346		654		24,672		1,055
Commercial mortgage-backed securities	1,299		6		1,746		33		3,045		39
Asset-backed securities	3,417		16		3,229		118		6,646		134
Residential mortgage-backed securities	35		0		194		3		229		3
Total	$	19,166	$	455	$	19,666	$	901	$	38,832	$	1,356
Equity securities, available-for-sale	$	1,670	$	82	$	9	$	1	$	1,679	$	83

__________ 

(1) Includes $91 million of fair value and $1 million of gross unrealized losses at December 31, 2014, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

The gross unrealized losses on fixed maturity securities at June 30, 2015 and December 31, 2014, are composed of $2,772 million and $1,156 million, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $245 million and $200 million, related to other than high or highest quality securities based on NAIC or equivalent rating, respectively. At June 30, 2015, the $787 million of gross unrealized losses of twelve months or more were concentrated in the energy, consumer non-cyclical and basic industry sectors of the Company’s corporate securities. At December 31, 2014, the $901 million of gross unrealized losses of twelve months or more were concentrated in the energy, consumer non-cyclical and utility sectors of the Company’s corporate securities. In accordance with its policy described in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended

25

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

December 31, 2014, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at June 30, 2015 or December 31, 2014. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to foreign currency exchange rate movements and general credit spread widening. At June 30, 2015, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.

At June 30, 2015, $13 million of the gross unrealized losses on equity securities represented declines in value of greater than 20%, $9 million of which had been in that position for less than six months. At December 31, 2014, $13 million of the gross unrealized losses on equity securities represented declines in value of greater than 20%, all of which had been in that position for less than six months. In accordance with its policy described in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at June 30, 2015 or December 31, 2014.

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of repurchase agreements as of the date indicated.

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,109	$	3,541	$	263	$	0	$	6,913
Obligations of U.S. states and their political subdivisions	0		0		0		0		0
Foreign government bonds	0		0		0		0		0
Corporate securities	20		0		0		0		20
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	0		0		0		0		0
Residential mortgage-backed securities	404		526		0		0		930
Equity securities	0		0		0		0		0
Total repurchase agreements	$	3,533	$	4,067	$	263	$	0	$	7,863

The following table sets forth the composition of securities lending transactions as of the date indicated.

26

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	299	$	0	$	0	$	0	$	299
Obligations of U.S. states and their political subdivisions	16		0		0		0		16
Foreign government bonds	323		0		0		0		323
Corporate securities	2,498		128		0		0		2,626
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	17		0		0		0		17
Residential mortgage-backed securities	0		262		0		0		262
Equity securities	265		0		0		0		265
Total securities lending transactions	$	3,418	$	390	$	0	$	0	$	3,808

5. VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE.

If the Company determines that it is the VIE’s “primary beneficiary” it consolidates the VIE. There are currently two models for determining whether or not the Company is the “primary beneficiary” of a VIE. The first (the “Investment Company Model”) relates to those VIEs that have the characteristics of an investment company and for which certain other conditions are true. These conditions are that (1) the Company does not have the implicit or explicit obligation to fund losses of the VIE and (2) the VIE is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualified special-purpose entity. In this model the Company is the primary beneficiary if it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns.

For all other VIEs, the Company is the primary beneficiary if the Company has (1) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (2) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant.

Consolidated Variable Interest Entities

The Company is the investment manager of certain asset-backed investment vehicles commonly referred to as collateralized loan obligations (“CLOs”) and certain other vehicles for which the Company earns fee income for investment management services, including certain investment structures in which the Company’s asset management business invests with other co-investors in investment funds referred to as feeder funds. The Company may sell or syndicate investments through these vehicles, principally as part of the strategic investing activity of the Company’s asset management businesses. Additionally, the Company may invest in securities issued by these vehicles. CLOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments. The Company has analyzed these relationships and determined that for certain CLOs and other investment structures it is the primary beneficiary and consolidates these entities. This analysis includes a review of (1) the Company’s rights and responsibilities as investment manager, (2) fees received by the Company and (3) other interests (if any) held by the Company. The assets of these VIEs are restricted and must be used first to settle liabilities of the VIE. The Company is not required to provide, and has not provided, material financial or other support to any of these VIEs.

Additionally, the Company is the primary beneficiary of certain VIEs in which the Company has invested, as part of its investment activities, but for which it is not the investment manager. These include structured investments issued by a VIE that manages yen-denominated investments coupled with cross-currency coupon swap agreements thereby creating synthetic dual

27

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

currency investments. The Company’s involvement in the structuring of these investments combined with its economic interest indicates that the Company is the primary beneficiary. The Company has not provided material financial support or other support that was not contractually required to these VIEs.

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs that are non-recourse to the Company. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for Which the Company is the Investment Manager				Other Consolidated VIEs
	June 30, 2015		December 31, 2014		June 30, 2015			December 31, 2014
	(in millions)
Fixed maturities, available-for-sale	$	49	$	44	$	99		$	104
Fixed maturities, held-to-maturity	0		0		747			763
Trading account assets supporting insurance liabilities	0		0		10			11
Other trading account assets	8,402		6,943		0			0
Commercial mortgage and other loans	13		13		300			300
Other long-term investments	0		0		173			159
Cash and cash equivalents	400		623		1			0
Accrued investment income	46		39		3			3
Other assets	174		166		0			0
Total assets of consolidated VIEs	$	9,084	$	7,828	$	1,333		$	1,340
Notes issued by consolidated VIEs	$	7,455	$	6,058	$	0		$	0
Other liabilities	521		674		(1		)	1
Total liabilities of consolidated VIEs	$	7,976	$	6,732	$	(1	)	$	1

As included in the table above, notes issued by consolidated VIEs are classified in the line item on the Unaudited Interim Consolidated Statements of Financial Position titled, “Notes issued by consolidated VIEs.” Recourse is limited to the assets of the respective VIE and does not extend to the general credit of Prudential Financial. As of June 30, 2015, the maturities of these obligations were greater than five years.

In addition, not reflected in the table above, the Company has created a trust that is a VIE, to facilitate Prudential Insurance’s Funding Agreement Notes Issuance Program (“FANIP”). The trust issues medium-term notes secured by funding agreements issued to the trust by Prudential Insurance with the proceeds of such notes. The trust is the beneficiary of an indemnity agreement with the Company that provides that the Company is responsible for costs related to the notes issued, with limited exceptions. As a result, the Company has determined that it is the primary beneficiary of the trust, which is therefore consolidated.

The funding agreements represent an intercompany transaction that is eliminated upon consolidation. However, in recognition of the security interest in such funding agreements, the trust’s medium-term note liability of $2,705 million at both June 30, 2015 and December 31, 2014 is classified within “Policyholders’ account balances.” Creditors of the trust have recourse to Prudential Insurance if the trust fails to make contractual payments on the medium-term notes. The Company has not provided material financial or other support to the trust that was not contractually required.

Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it is the investment manager. These VIEs consist primarily of investment funds for which the Company utilizes the Investment Company Model to assess consolidation. Accordingly, the Company has determined that it is not the primary beneficiary of these entities because it does not stand to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns. For all other investment structures, the Company has determined that it is not the primary beneficiary as it does not have both (1) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (2) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could

28

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

be potentially significant. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs for which it is the investment manager is limited to its investment in the VIEs, which was $174 million and $137 million at June 30, 2015 and December 31, 2014, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Other trading account assets, at fair value” and “Other long-term investments.” The fair value of assets held within these unconsolidated VIEs was $5,982 million and $6,973 million as of June 30, 2015 and December 31, 2014, respectively. There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In the normal course of its activities, the Company will invest in joint ventures and limited partnerships. These ventures include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company has determined that it is not required to consolidate these entities because either: (1) it does not control them or (2) it does not have the obligation to absorb losses of the entities that could be potentially significant to the entities or the right to receive benefits from the entities that could be potentially significant. The Company classifies these investments as “Other long-term investments” and its maximum exposure to loss associated with these entities was $7,482 million and $7,545 million as of June 30, 2015 and December 31, 2014, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 4 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

6. CLOSED BLOCK

On the date of demutualization, Prudential Insurance established a Closed Block for certain individual life insurance policies and annuities issued by Prudential Insurance in the U.S. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division.

The policies included in the Closed Block are specified individual life insurance policies and individual annuity contracts that were in force on the effective date of the Plan of Reorganization and for which Prudential Insurance is currently paying or expects to pay experience-based policy dividends. Assets have been allocated to the Closed Block in an amount that has been determined to produce cash flows which, together with revenues from policies included in the Closed Block, are expected to be sufficient to support obligations and liabilities relating to these policies, including provision for payment of benefits, certain expenses and taxes and to provide for continuation of the policyholder dividend scales in effect in 2000, assuming experience underlying such scales continues. To the extent that, over time, cash flows from the assets allocated to the Closed Block and claims and other experience related to the Closed Block are, in the aggregate, more or less favorable than what was assumed when the Closed Block was established, total dividends paid to Closed Block policyholders may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect in 2000 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to Closed Block policyholders and will not be available to stockholders. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from Prudential Insurance’s assets outside of the Closed Block. The Closed Block will continue in effect as long as any policy in the Closed Block remains in force unless, with the consent of the New Jersey insurance regulator, it is terminated earlier.

The excess of Closed Block liabilities over Closed Block assets at the date of the demutualization (adjusted to eliminate the impact of related amounts in AOCI) represented the estimated maximum future earnings at that date from the Closed Block expected to result from operations attributed to the Closed Block after income taxes. In establishing the Closed Block, the Company developed an actuarial calculation of the timing of such maximum future earnings. If actual cumulative earnings of the Closed Block from inception through the end of any given period are greater than the expected cumulative earnings, only the expected earnings will be recognized in income. Any excess of actual cumulative earnings over expected cumulative earnings will represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation. The policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected. If the actual cumulative earnings of the Closed Block from its inception through the end of any given period are less than the expected cumulative earnings of the Closed Block, the Company will recognize only the actual earnings in income. However, the Company may reduce

29

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

policyholder dividend scales, which would be intended to increase future actual earnings until the actual cumulative earnings equaled the expected cumulative earnings.

As of June 30, 2015 and December 31, 2014, the Company recognized a policyholder dividend obligation of $1,766 million and $1,558 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over the expected cumulative earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $3,715 million and $5,053 million at June 30, 2015 and December 31, 2014, respectively, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from Closed Block liabilities and Closed Block assets, are as follows:

	June 30, 2015			December 31, 2014
	(in millions)
Closed Block liabilities
Future policy benefits	$	49,665		$	49,863
Policyholders’ dividends payable	918			931
Policyholders’ dividend obligation	5,481			6,612
Policyholders’ account balances	5,272			5,310
Other Closed Block liabilities	4,833			5,084
Total Closed Block liabilities	66,169			67,800
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,118			40,629
Other trading account assets, at fair value	310			302
Equity securities, available-for-sale, at fair value	3,230			3,522
Commercial mortgage and other loans	9,839			9,472
Policy loans	4,848			4,914
Other long-term investments	2,837			2,765
Short-term investments	1,099			1,225
Total investments	61,281			62,829
Cash and cash equivalents	987			1,201
Accrued investment income	518			527
Other Closed Block assets	495			332
Total Closed Block assets	63,281			64,889
Excess of reported Closed Block liabilities over Closed Block assets	2,888			2,911
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses)	3,701			5,040
Allocated to policyholder dividend obligation	(3,715		)	(5,053		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,874		$	2,898

Information regarding the policyholder dividend obligation is as follows:

	Six Months Ended June 30, 2015
	(in millions)
Balance, January 1	$	6,612
Impact from earnings allocable to policyholder dividend obligation	208
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	(1,339		)
Balance, June 30	$	5,481

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Closed Block revenues and benefits and expenses for the three and six months endedJune 30, 2015 and 2014, were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Revenues
Premiums	$	701	$	711	$	1,335	$	1,350
Net investment income	642		683		1,351		1,404
Realized investment gains (losses), net	166		369		539		504
Other income	18		19		21		34
Total Closed Block revenues	1,527		1,782		3,246		3,292
Benefits and Expenses
Policyholders’ benefits	895		911		1,716		1,703
Interest credited to policyholders’ account balances	34		33		67		67
Dividends to policyholders	423		688		1,187		1,265
General and administrative expenses	107		111		215		225
Total Closed Block benefits and expenses	1,459		1,743		3,185		3,260
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes and discontinued operations	68		39		61		32
Income tax expense (benefit)	57		33		39		21
Closed Block revenues, net of Closed Block benefits and expenses and income taxes, before discontinued operations	11		6		22		11
Income (loss) from discontinued operations, net of taxes	0		0		0		0
Closed Block revenues, net of Closed Block benefits and expenses, income taxes and discontinued operations	$	11	$	6	$	22	$	11

7. EQUITY

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2014	660.1	205.3		454.8
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	6.0		(6.0	)
Stock-based compensation programs(1)	0.0	(3.1	)	3.1
Balance, June 30, 2015	660.1	208.2		451.9

__________ 

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation program.

In June 2014, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2014 through June 30, 2015. As of June 30, 2015, 11.7 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $1.0 billion, of which 6.0 million shares were repurchased in the first six months of 2015 at a total cost of $500 million.

In June 2015, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2015 through June 30, 2016. The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

Class B Stock

On December 1, 2014, Prudential Financial entered into a Share Repurchase Agreement with the holders of the Class B Stock to repurchase all of the 2.0 million outstanding shares of Class B Stock for an aggregate cash purchase price of $650.8 million. As a result, all of the outstanding shares of Class B Stock were reclassified as “held in treasury” as of December 31, 2014, resulting in a reduction to “Total Prudential Financial, Inc. equity.” As discussed in Note 1, on January 2, 2015, the Company repurchased and canceled all of the shares of the Class B Stock, resulting in the elimination of the Class B Stock held in treasury, a $483.8 million decrease in “Retained earnings” and a $167.0 million decrease in “Additional paid-in capital.”

In accordance with the terms of the Share Repurchase Agreement, the holders of a majority of the Class B Stock have exercised their right to dispute the calculation of the purchase price. Accordingly, the final purchase price of the Class B Stock could change. 

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Financial, Inc.” for the six months endedJune 30, 2015 and 2014 are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2014	$	(975	)	$	19,251		$	(2,226	)	$	16,050
Change in other comprehensive income before reclassifications	(110		)	(2,965		)	10			(3,065		)
Amounts reclassified from AOCI	1			(1,247		)	96			(1,150		)
Income tax benefit (expense)	88			1,523			(42		)	1,569
Balance, June 30, 2015	$	(996	)	$	16,562		$	(2,162	)	$	13,404

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2013	$	(113	)	$	10,344		$	(1,550	)	$	8,681
Change in other comprehensive income before reclassifications	241			7,175			(3		)	7,413
Amounts reclassified from AOCI	(2		)	(856		)	46			(812		)
Income tax benefit (expense)	(47		)	(2,142		)	(16		)	(2,205		)
Balance, June 30, 2014	$	79		$	14,521		$	(1,523	)	$	13,077

 __________

(1) Includes cash flow hedges of $702 million and $206 million as of June 30, 2015 and December 31, 2014, respectively, and $(533) million and $(446) million as of June 30, 2014 and December 31, 2013, respectively.

32

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,						Affected line item in Consolidated Statement of Operations
	2015			2014			2015			2014
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(2	)	$	1		$	(1	)	$	2		Realized investment gains (losses), net
Total foreign currency translation adjustment	(2		)	1			(1		)	2
Net unrealized investment gains (losses):
Cash flow hedges—Interest Rate	(2		)	(6		)	(3		)	(12		)	(3)
Cash flow hedges—Currency/Interest rate	(54		)	(6		)	62			(10		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	599			536			1,188			878
Total net unrealized investment gains (losses)	543			524			1,247			856			(4)
Amortization of defined benefit pension items:
Prior service cost	4			5			7			11			(5)
Actuarial gain (loss)	(51		)	(29		)	(103		)	(57		)	(5)
Total amortization of defined benefit pension items	(47		)	(24		)	(96		)	(46		)
Total reclassifications for the period	$	494		$	501		$	1,150		$	812

__________ 

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 14 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 10 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

33

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) On Investments			Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	349		$	(6	)	$	3	$	(32	)	$	(110	)	$	204
Net investment gains (losses) on investments arising during the period	24											(9		)	15
Reclassification adjustment for (gains) losses included in net income	(3		)									1			(2		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(15		)									5			(10		)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				6								(2		)	4
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							8					(3		)	5
Impact of net unrealized investment (gains) losses on policyholders’ dividends									32			(11		)	21
Balance, June 30, 2015	$	355		$	0		$	11	$	0		$	(129	)	$	237

 __________

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			Deferred Policy Acquisition Cost, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	36,764		$	(1,455	)	$	(1,282	)	$	(5,036	)	$	(9,944	)	$	19,047
Net investment gains (losses) on investments arising during the period	(4,924		)										1,759			(3,165		)
Reclassification adjustment for (gains) losses included in net income	(1,244		)										444			(800		)
Reclassification adjustment for OTTI losses excluded from net income(2)	15												(5		)	10
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				609									(208		)	401
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							(26		)				9			(17		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										1,306			(457		)	849
Balance, June 30, 2015	$	30,611		$	(846	)	$	(1,308	)	$	(3,730	)	$	(8,402	)	$	16,325

__________ 

(1) Includes cash flow hedges. See Note 14 for information on cash flow hedges.

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(2) Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

8. EARNINGS PER SHARE

From demutualization through December 31, 2014, the Company had two separate classes of common stock. The Common Stock reflected the performance of the Company’s former Financial Services Businesses and the Class B Stock reflected the performance of the Company’s former Closed Block Business. Earnings per share were calculated separately for each of these two classes of common stock and included a direct equity adjustment to modify the earnings available to each of the classes of common stock for the difference between the allocation of general and administrative expenses to each of the businesses and the cash flows between the businesses related to these expenses. Accordingly, earnings per share of Common Stock presented below for the three and six months ended June 30, 2014, reflect earnings attributable to the former Financial Services Businesses.

As discussed in Note 1, on January 2, 2015, Prudential Financial repurchased and canceled all of the 2.0 million shares of the Class B Stock. Accordingly, earnings per share of Common Stock presented below for the three and six months ended June 30, 2015, reflect the consolidated earnings of Prudential Financial. In addition, the Class B Repurchase resulted in the elimination of the separation of the former Financial Services Businesses and Closed Block Business. As a result, there was no direct equity adjustment recorded for the three and six months ended June 30, 2015.

Earnings per share of the Class B Stock for the three and six months ended June 30, 2014, is not presented herein as it is not meaningful due to the Class B Repurchase.

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the three and six months ended June 30, 2015, is as follows:

	June 30, 2015
	Three Months Ended					Six Months Ended
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations	$	1,459				$	3,505
Less: Income (loss) attributable to noncontrolling interests	53					63
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	15					34
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,391	452.6	$	3.07	$	3,408	453.4	$	7.52
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	15				$	34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	14					33
Stock options			2.5					2.4
Deferred and long-term compensation programs			0.8					0.9
Exchangeable Surplus Notes	5		5.5			9		5.5
Diluted earnings per share
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,397	461.4	$	3.03	$	3,418	462.2	$	7.40

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on earnings attributable to the former Financial Services Businesses for the three and six months ended June 30, 2014, is as follows:

35

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2014
	Three Months Ended						Six Months Ended
	Income			Weighted Average Shares	Per Share Amount		Income			Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses	$	1,068					$	2,300
Direct equity adjustment	(3		)				(5		)
Less: Income (loss) attributable to noncontrolling interests	23						34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10						21
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,032		459.4	$	2.25	$	2,240		460.1	$	4.87
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10					$	21
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10						21
Stock options				3.0						3.1
Deferred and long-term compensation programs				0.7						0.8
Exchangeable Surplus Notes	5			5.4			9			5.4
Diluted earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,037		468.5	$	2.21	$	2,249		469.4	$	4.79

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of income from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended June 30, 2015 and 2014, as applicable, were based on 4.5 million and 4.3 million of such awards, respectively, and for the six months endedJune 30, 2015 and 2014, were based on 4.5 million and 4.3 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of dilutive earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable. For the three and six months ended June 30, 2015 and 2014, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

36

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.1	$	88.70	2.3	$	89.48
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.1			2.3

	Six Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.4	$	87.92	2.1	$	89.88
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.4			2.1

In September 2009, the Company issued $500 million of surplus notes with an interest rate of 5.36% per annum which are exchangeable at the option of the note holders for shares of Common Stock. The initial exchange rate for the surplus notes was 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes, which represents an initial exchange price per share of Common Stock of $98.78; however, the exchange rate is subject to customary anti-dilution adjustments. In calculating diluted earnings per share under the if-converted method, the potential shares that would be issued assuming a hypothetical exchange, weighted for the period the notes are outstanding, are added to the denominator, and interest expense, net of tax, is added to the numerator, if the overall effect is dilutive.

9. SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

37

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	June 30, 2015			December 31, 2014
	(in millions)
Commercial paper:
Prudential Financial	$	141		$	97
Prudential Funding, LLC	731			386
Subtotal commercial paper	872			483
Current portion of long-term debt(1)	2,749			3,356
Total short-term debt(2)	$	3,621		$	3,839
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	425		$	199
Daily average commercial paper outstanding	$	1,064		$	1,409
Weighted average maturity of outstanding commercial paper, in days	15			22
Weighted average interest rate on outstanding short-term debt(3)	0.15		%	0.12		%

 __________

(1) Includes collateralized borrowings from the FHLBNY of $280 million at both June 30, 2015 and December 31, 2014.

(2) Includes Prudential Financial debt of $1,807 million and $2,319 million at June 30, 2015 and December 31, 2014, respectively.

(3) Excludes the current portion of long-term debt.

Commercial Paper

Prudential Financial has a commercial paper program with an authorized capacity of $3.0 billion. Prudential Financial’s commercial paper borrowings have generally been used to fund the working capital needs of Prudential Financial’s subsidiaries and provide short-term liquidity at Prudential Financial.

Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of Prudential Insurance, has a commercial paper program with an authorized capacity of $7.0 billion. Prudential Funding commercial paper borrowings generally have served as an additional source of financing to meet the working capital needs of Prudential Insurance and its subsidiaries. Prudential Funding also lends to other subsidiaries of Prudential Financial up to limits agreed with the New Jersey Department of Banking and Insurance (“NJDOBI”). Prudential Funding maintains a support agreement with Prudential Insurance whereby Prudential Insurance has agreed to maintain Prudential Funding’s tangible net worth at a positive level. Additionally, Prudential Financial has issued a subordinated guarantee covering Prudential Funding’s $7.0 billion commercial paper program.

Federal Home Loan Bank of New York

Prudential Insurance is a member of the Federal Home Loan Bank of New York (“FHLBNY”). Membership allows Prudential Insurance access to the FHLBNY’s financial services, including the ability to obtain collateralized loans and to issue collateralized funding agreements. Under applicable law, the funding agreements issued to the FHLBNY have priority claim status above debt holders of Prudential Insurance. FHLBNY borrowings and funding agreements are collateralized by qualifying mortgage-related assets or U.S. Treasury securities, the fair value of which must be maintained at certain specified levels relative to outstanding borrowings. FHLBNY membership requires Prudential Insurance to own member stock and borrowings require the purchase of activity-based stock in an amount equal to 4.5% of outstanding borrowings. Under FHLBNY guidelines, if any of Prudential Insurance’s financial strength ratings decline below A/A2/A Stable by S&P/Moody’s/Fitch, respectively, and the FHLBNY does not receive written assurances from the NJDOBI regarding Prudential Insurance’s solvency, new borrowings from the FHLBNY would be limited to a term of 90 days or less. Currently, there are no restrictions on the term of borrowings from the FHLBNY.

NJDOBI permits Prudential Insurance to pledge collateral to the FHLBNY in an amount of up to 5% of its prior year-end statutory net admitted assets, excluding separate account assets. Based on Prudential Insurance’s statutory net admitted assets as of December 31, 2014, the 5% limitation equates to a maximum amount of pledged assets of $8.9 billion and an estimated maximum borrowing capacity (after taking into account required collateralization levels) of approximately $7.4 billion. Nevertheless, FHLBNY borrowings are subject to the FHLBNY’s discretion and to the availability of qualifying assets at Prudential Insurance.

As of June 30, 2015, Prudential Insurance had pledged assets with a fair value of $2.4 billion supporting an aggregate outstanding collateralized advance of $280 million that is in “Short-term debt” and matures in December 2015 and outstanding funding agreements totaling $1.7 billion, which are included in “Policyholders’ account balances.” The fair value of qualifying assets that were available to Prudential Insurance, but not pledged, amounted to $4.5 billion as of June 30, 2015.

38

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Federal Home Loan Bank of Boston

Prudential Retirement Insurance and Annuity Company (“PRIAC”) is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows PRIAC access to collateralized advances which will be classified in “Short-term debt” or “Long-term debt,” depending on the maturity date of the obligation. PRIAC’s membership in FHLBB requires the ownership of member stock and borrowings from FHLBB require the purchase of activity-based stock in an amount between 3.0% and 4.5% of outstanding borrowings, depending on the maturity date of the obligation. As of June 30, 2015, PRIAC had no advances outstanding under the FHLBB facility.

Under Connecticut state insurance law, without the prior consent of the Connecticut Insurance Department, the amount of assets insurers may pledge to secure debt obligations is limited to the lesser of 5% of prior-year statutory admitted assets or 25% of prior-year statutory surplus, resulting in a maximum borrowing capacity for PRIAC under the FHLBB facility of approximately $210 million as of June 30, 2015.

Credit Facilities

As of June 30, 2015, the Company maintained a syndicated, unsecured committed credit facility as described below.

Borrowers	Original Term	Expiration Date	Capacity		Amount Outstanding
			($ in millions)
Prudential Financial and Prudential Funding	5 years	Apr 2020	$	4,000	$	0

Borrowings under this credit facility may be used for general corporate purposes, and the Company expects that it may borrow under this facility from time to time to fund its working capital needs. In addition, amounts under this credit facility may be drawn in the form of standby letters of credit that can be used to meet the Company’s operating needs. The credit facility contains representations and warranties, covenants and events of default that are customary for facilities of this type, and borrowings under the facility are not contingent on the Company’s credit ratings nor subject to material adverse change clauses. Borrowings under this credit facility are conditioned on the Company’s maintenance of consolidated net worth of at least $18.985 billion, which, under the facility, is calculated as U.S. GAAP equity, excluding AOCI, equity of noncontrolling interests and equity attributable to the Closed Block. As of June 30, 2015, the Company’s consolidated net worth exceeded this required minimum amount.

This credit facility, which was entered into on April 14, 2015, amends and restates the Company’s previously existing $2.0 billionfive-year credit facility and $1.75 billionthree-year credit facility.

Put Option Agreement for Senior Debt Issuance

In November 2013, Prudential Financial entered into a ten-year put option agreement with a Delaware trust upon the completion of the sale of $1.5 billion of trust securities by that Delaware trust in a Rule 144A private placement. The trust invested the proceeds from the sale of the trust securities in a portfolio of principal and interest strips of U.S. Treasury securities. The put option agreement provides Prudential Financial the right to sell to the trust at any time up to $1.5 billion of 4.419% senior notes due November 2023 and receive in exchange a corresponding amount of the principal and interest strips of the U.S. Treasury securities held by the trust. In return, the Company agreed to pay a semi-annual put premium to the trust at a rate of 1.777% per annum applied to the unexercised portion of the put option. The put option agreement with the trust provides Prudential Financial with a source of liquid assets.

The put option described above will be exercised automatically in full upon the Company’s failure to make certain payments to the trust, such as paying the put option premium or reimbursing the trust for its expenses, if the Company’s failure to pay is not cured within 30 days, and upon an event involving its bankruptcy. The Company is also required to exercise the put option if its consolidated stockholders’ equity, calculated in accordance with GAAP but excluding AOCI, falls below $7.0 billion, subject to adjustment in certain cases. The Company has a one-time right to unwind a prior voluntary exercise of the put option by repurchasing all of the senior notes then held by the trust in exchange for principal and interest strips of U.S. Treasury securities. Finally, any of the 4.419% senior notes that Prudential Financial issues may be redeemed prior to their maturity at par or, if greater, a make-whole price, following a voluntary exercise in full of the put option.

Long-term Debt

Surplus Notes

39

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

During the first quarter of 2015, the Company increased by $262 million the principal amount of surplus notes outstanding under its captive financing facility initially established in December 2013 for the financing of non-economic reserves required under Guideline AXXX. As of June 30, 2015, an aggregate of $2,100 million of surplus notes were outstanding under this facility and no credit-linked note payments have been required.

During the second quarter of 2015, the Company increased by $308 million the principal amount of surplus notes outstanding under its captive financing facility initially established in December 2014 for the financing of non-economic reserves required under Regulation XXX. As of June 30, 2015, an aggregate of $693 million of surplus notes were outstanding under this facility and no credit-linked note payments have been required.

Under each of the above transactions for the captive reinsurance subsidiaries, because valid rights of set-off exist, interest and principal payments on the surplus notes and on the credit-linked notes are settled on a net basis, and the surplus notes are reflected in the Company’s total consolidated borrowings on a net basis.

On February 18, 2015, Prudential Legacy Insurance Company of NJ (“PLIC”) entered into a twenty-year financing facility with certain unaffiliated financial institutions and with Essex, LLC (“LLC”), a special-purpose company affiliate, pursuant to which PLIC may, at its option and subject to the satisfaction of customary conditions, issue and sell to LLC up to $4.0 billion in aggregate principal amount of surplus notes in return for an equal principal amount of credit-linked notes issued by LLC. Upon issuance, PLIC would hold any credit-linked notes as assets to finance future statutory surplus needs within PLIC. As of June 30, 2015, there were no surplus notes outstanding under the facility.

Senior Notes

Medium-term notes. Prudential Financial maintains a medium-term notes program under its shelf registration statement with an authorized issuance capacity of $20.0 billion. As of June 30, 2015, the outstanding balance of the company’s medium-term notes was $11.8 billion, a decrease of $1.2 billion from December 31, 2014, due to maturities.

Retail medium-term notes. Prudential Financial also maintains a retail medium-term notes program, including the InterNotes^® program, under its shelf registration statement with an authorized issuance capacity of $5.0 billion. As of June 30, 2015, the outstanding balance of retail notes was $496 million. Retail notes outstanding increased by $121 million from December 31, 2014, primarily due to the issuance of $179 million of notes offset by maturities of $58 million of notes in 2015.

Mortgage debt. As of June 30, 2015, the Company’s subsidiaries had mortgage debt of $509 million that has recourse only to real estate property held for investment by those subsidiaries. This represents an increase of $7 million from December 31, 2014, due to new borrowings in 2015 of $92 million offset by prepayments and foreign exchange fluctuations totaling $85 million.

Junior Subordinated Notes. On May 18, 2015, Prudential Financial issued $1.0 billion of 5.375% fixed-to-floating rate junior subordinated notes in a public offering. The notes are considered hybrid capital securities that receive enhanced equity treatment from certain of the rating agencies. The notes have a maturity date of May 15, 2045. Interest is payable semi-annually at a fixed rate of 5.375% until May 15, 2025, from which date interest is payable quarterly at a floating rate of 3-month LIBOR plus 3.031%. Prudential Financial may redeem the notes in whole, but not in part, at any time prior to May 15, 2025, within 90 days after the occurrence of a “tax event”, a “rating agency event” or a “regulatory capital event” at a redemption price equal to (i) in the case of a “tax event” or a “rating agency event”, their principal amount or, if greater, a make-whole redemption price plus accrued and unpaid interest or (ii) in the case of a “regulatory capital event”, their principal amount plus accrued and unpaid interest. On or after May 15, 2025, Prudential Financial may redeem the notes, in whole or in part, at their principal amount plus accrued and unpaid interest.

10. EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans, which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“other postretirement benefits”). The health care plan is contributory; the life insurance plan is non-contributory.

40

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Substantially all of the Company’s U.S. employees may become eligible to receive other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Components of net periodic (benefit) cost
Service cost	$	61		$	59		$	5		$	4
Interest cost	117			121			22			24
Expected return on plan assets	(193		)	(179		)	(28		)	(29		)
Amortization of prior service cost	(2		)	(2		)	(2		)	(3		)
Amortization of actuarial (gain) loss, net	42			22			9			7
Settlements	0			1			0			0
Special termination benefits	2			0			0			0
Net periodic (benefit) cost	$	27		$	22		$	6		$	3

	Six Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Service cost	$	122		$	118		$	10		$	8
Interest cost	234			241			43			48
Expected return on plan assets	(387		)	(356		)	(57		)	(58		)
Amortization of prior service cost	(4		)	(5		)	(3		)	(6		)
Amortization of actuarial (gain) loss, net	84			43			19			14
Settlements	1			2			0			0
Special termination benefits	4			0			0			0
Net periodic (benefit) cost	$	54		$	43		$	12		$	6

11. SEGMENT INFORMATION

Segments

As discussed in Note 1, from December 18, 2001, the date of demutualization, through December 31, 2014, the Company organized its principal operations into the Financial Services Businesses and the Closed Block Business. As a result of the Class B Repurchase on January 2, 2015, the Company no longer organizes its principal operations into the Financial Services Businesses and the Closed Block Business. The Company operates through four divisions, which together encompass seven reportable segments, and its Corporate and Other operations.

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” for the following items, which are described in greater detail below:

• realized investment gains (losses), net, and related charges and adjustments;

41

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

• net investment gains (losses) on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes;

• the contribution to income (loss) of divested businesses that have been or will be sold or exited, including businesses that have been placed in wind down status, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP; and

• equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.

These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. However, the Company believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses.

Realized investment gains (losses), net, and related charges and adjustments

Realized investment gains (losses), net

Adjusted operating income excludes “Realized investment gains (losses), net,” except for certain items described below. Significant activity excluded from adjusted operating income includes impairments and credit-related gains and losses from sales of securities, the timing of which depends largely on market credit cycles and can vary considerably across periods, and interest rate-related gains and losses from sales of securities, which are largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. Additionally, certain gains and losses pertaining to derivative contracts that do not qualify for hedge accounting treatment are also excluded from adjusted operating income. Trends in the underlying profitability of the Company’s businesses can be more clearly identified without the fluctuating effects of these transactions.

The following table sets forth the significant components of “Realized investment gains (losses), net” that are included in adjusted operating income and, as a result, are reflected as adjustments to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Net gains (losses) from(1):
Terminated hedges of foreign currency earnings	$	79	$	66	$	160	$	144
Current period yield adjustments	$	125	$	122	$	248	$	246
Principal source of earnings	$	24	$	13	$	48	$	27

__________ 

(1) In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to divested businesses as results of “Divested businesses,” discussed below.

Terminated Hedges of Foreign Currency Earnings. The amounts shown in the table above primarily reflect the impact of an intercompany arrangement between Corporate and Other operations and the International Insurance segment, pursuant to which the non-U.S. dollar-denominated earnings in all countries for a particular year, including its interim reporting periods, are translated at fixed currency exchange rates. The fixed rates are determined in connection with a currency hedging program designed to mitigate the risk that unfavorable rate changes will reduce the segment’s U.S. dollar equivalent earnings. Pursuant to this program, the Company’s Corporate and Other operations may execute forward currency contracts with third parties to sell the net exposure of projected earnings from the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these contracts correspond with the future periods in which the identified non-U.S. dollar-denominated earnings are expected to be generated. These contracts do not qualify for hedge accounting under U.S. GAAP, so the resulting profits or losses are recorded in “Realized investment gains (losses), net.” When the contracts are terminated in the same period that the expected earnings emerge, the resulting positive or negative cash flow effect is included in adjusted operating income.

Current Period Yield Adjustments. The Company uses interest rate and currency swaps and other derivatives to manage interest and currency exchange rate exposures arising from mismatches between assets and liabilities, including duration mismatches. For derivative contracts that do not qualify for hedge accounting treatment, the periodic swap settlements, as well as certain other derivative related yield adjustments are recorded in “Realized investment gains (losses), net,” and are included in

42

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

adjusted operating income to reflect the after-hedge yield of the underlying instruments. In certain instances, when these derivative contracts are terminated or offset before their final maturity, the resulting realized gains or losses are recognized in adjusted operating income over periods that generally approximate the expected terms of the derivatives or underlying instruments in order for adjusted operating income to reflect the after-hedge yield of the underlying instruments. Included in the amounts shown in the table above are gains on certain derivative contracts that were terminated or offset before their final maturity of $13 million and $34 million for the three months ended June 30, 2015 and 2014, respectively, and $26 million and $52 million for the six months endedJune 30, 2015 and 2014, respectively. Additionally, as of June 30, 2015, there was a $224 million deferred net gain related to certain derivative contracts that were terminated or offset before their final maturity, primarily in the International Insurance segment. Also included in the amounts shown in the table above are fees related to synthetic GICs of $39 million and $43 million for the three months ended June 30, 2015 and 2014, respectively, and $79 million and $85 million for the six months endedJune 30, 2015 and 2014, respectively. Synthetic GICs are accounted for as derivatives under U.S. GAAP and, therefore, these fees are recorded in “Realized investment gains (losses), net.” See Note 14 for additional information on synthetic GICs.

Principal Source of Earnings. The Company conducts certain activities for which realized investment gains and losses are a principal source of earnings for its businesses and therefore included in adjusted operating income, particularly within the Company’s Asset Management segment. For example, Asset Management’s strategic investing business makes investments for sale or syndication to other investors or for placement or co-investment in the Company’s managed funds and structured products. The realized investment gains and losses associated with the sale of these strategic investments, as well as the majority of derivative results, are a principal activity for this business and included in adjusted operating income. In addition, the realized investment gains and losses associated with loans originated by the Company’s commercial mortgage operations, as well as related derivative results and retained mortgage servicing rights, are a principal activity for this business and included in adjusted operating income.

Other items reflected as adjustments to Realized investment gains (losses), net

The following table sets forth certain other items excluded from adjusted operating income and reflected as an adjustment to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Net gains (losses) from:
Other trading account assets	$	26		$	11		$	(32	)	$	33
Foreign currency exchange movements	$	133		$	(231	)	$	158		$	0
Other activities	$	(2	)	$	9		$	1		$	13

Other Trading Account Assets. The Company has certain investments in its general account portfolios that are classified as trading. These trading investments are carried at fair value and included in “Other trading account assets, at fair value” on the Company’s Unaudited Interim Consolidated Statements of Financial Position. Realized and unrealized gains and losses for these investments are recorded in “Other income.” Consistent with the exclusion of realized investment gains and losses with respect to other investments managed on a consistent basis, the net gains or losses on these investments are excluded from adjusted operating income.

Foreign Currency Exchange Movements. The Company has certain assets and liabilities for which, under U.S. GAAP, the changes in value, including those associated with changes in foreign currency exchange rates during the period, are recorded in “Other income.” To the extent the foreign currency exposure on these assets and liabilities is economically hedged or considered part of the Company’s capital funding strategies for its international subsidiaries, the change in value included in “Other income” is excluded from adjusted operating income. The amounts in the table above for the three and six months ended June 30, 2014, were largely driven by non-yen denominated insurance liabilities in the Company’s Japanese insurance operations. The insurance liabilities are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While these non-yen denominated assets and liabilities are economically hedged, unrealized gains and losses on available-for-sale investments, including those arising from foreign currency exchange rate movements, are recorded in “Accumulated other comprehensive income (loss)” under U.S. GAAP, while the non-yen denominated liabilities are re-measured for foreign currency exchange rate movements, with the related change in value recorded in earnings within “Other income.” Due to this non-economic volatility that has been reflected in U.S. GAAP earnings, the change in value recorded within “Other income” is excluded from adjusted operating income.

43

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As a result of continued growth in these portfolios, the Company implemented a new reporting structure in Gibraltar Life that disaggregated the U.S. and Australian dollar-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The new structure was effective for financial reporting beginning in the first quarter of 2015 and minimizes future volatility in reported U.S. GAAP earnings arising from foreign currency remeasurement.

Other Activities. The Company excludes certain other items from adjusted operating income that are consistent with similar adjustments described above. The significant items within other activities shown in the table above included the following:

In connection with disputes arising out of the Chapter 11 bankruptcy petition filed by Lehman Brothers Holdings Inc., the Company previously recorded losses related to a portion of its counterparty exposure on derivative transactions it had previously held with Lehman Brothers and its affiliates. The Company recorded no estimated recoveries related to this matter in 2015 and recorded estimated recoveries of $9 million and $16 million in the three and six months endedJune 30, 2014, respectively. These recoveries are recorded within “Other income” within the Company’s Corporate and Other operations. Consistent with the exclusion of credit-related losses recorded in “Realized investment gains (losses), net,” the impact of this estimated recovery is excluded from adjusted operating income.

The Company records valuation adjustments for non-performance risk (“NPR”) that relates to the uncollateralized portion of certain derivative contracts between a subsidiary of the Company and third parties and liquidity risk associated with certain derivatives. These adjustments are recorded within “Other income.” Consistent with the exclusion of the mark-to-market on derivatives recorded in “Realized investment gains (losses), net,” the impact of these risks is excluded from adjusted operating income. The net impact of these risks was to exclude from adjusted operating income net losses of $2 million and net losses of less than $1 million for the three months ended June 30, 2015 and 2014, respectively, and net gains of $1 million and net losses of $2 million for the six months endedJune 30, 2015 and 2014, respectively.

Related charges

Charges that relate to realized investment gains and losses are also excluded from adjusted operating income, and include the following:

• The portion of the amortization of DAC, VOBA, unearned revenue reserves and deferred sales inducements for certain products that is related to net realized investment gains and losses.

• Policyholder dividends and interest credited to policyholders’ account balances that relate to certain life policies that pass back certain realized investment gains and losses to the policyholder, and reserves for future policy benefits for certain policies that are affected by net realized investment gains and losses.

• Market value adjustments paid or received upon a contractholder’s surrender of certain of the Company’s annuity products as these amounts mitigate the net realized investment gains or losses incurred upon the disposition of the underlying invested assets.

Investment gains and losses on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes

Certain products included in the Retirement and International Insurance segments are experience-rated in that investment results associated with these products are expected to ultimately accrue to contractholders. The majority of investments supporting these experience-rated products are classified as trading and are carried at fair value, with realized and unrealized gains and losses reported in “Other income.” To a lesser extent, these experience-rated products are also supported by derivatives and commercial mortgage and other loans. The derivatives are carried at fair value, with realized and unrealized gains and losses reported in “Realized investment gains (losses), net.” The commercial mortgage and other loans are carried at unpaid principal, net of unamortized discounts and an allowance for losses, with gains and losses on sales and changes in the valuation allowance for commercial mortgage and other loans reported in “Realized investment gains (losses), net.”

Adjusted operating income excludes net investment gains and losses on trading account assets supporting insurance liabilities, which is consistent with the exclusion of realized investment gains and losses with respect to other investments supporting insurance liabilities managed on a consistent basis. In addition, to be consistent with the historical treatment of charges related to realized investment gains and losses on investments, adjusted operating income also excludes the change in contractholder liabilities due to asset value changes in the pool of investments (including changes in the fair value of commercial mortgage and other loans) supporting these experience-rated contracts, which are reflected in “Interest credited to policyholders’ account balances.” These adjustments are in addition to the exclusion from adjusted operating income of net investment gains and losses on the related derivatives and commercial mortgage and other loans through “Realized investment gains (losses), net, and related charges and

44

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

adjustments,” as discussed above. The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread the Company earns on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that are expected to ultimately accrue to the contractholders.

Divested businesses

The contribution to income (loss) of divested businesses that have been or will be sold or exited, including businesses that have been placed in wind down, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP, are excluded from adjusted operating income as the results of divested businesses are not considered relevant to understanding the Company’s ongoing operating results.

As discussed in Note 1, the Class B Repurchase on January 2, 2015 resulted in the elimination of the separate reporting of the Company’s former Financial Services Businesses and Closed Block Business. As a result of the Class B Repurchase, for both the three and six months ended June 30, 2015, the Closed Block division, which is comprised of the Closed Block segment, has been accounted for as a divested business because it consists primarily of certain participating insurance and annuity products that the Company ceased selling at demutualization in 2001 (See Note 6). For reporting periods through December 31, 2014, the Closed Block segment was reported as the Closed Block Business and was analyzed using U.S. GAAP rather than adjusted operating income. Both the current reporting of the Closed Block division and the historic reporting of the Closed Block Business exclude its results from adjusted operating income.

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests

Equity in earnings of operating joint ventures, on a pre-tax basis, are included in adjusted operating income as these results are a principal source of earnings. These earnings are reflected on a U.S. GAAP basis on an after-tax basis as a separate line on the Company’s Unaudited Interim Consolidated Statements of Operations.

Earnings attributable to noncontrolling interests are excluded from adjusted operating income. Earnings attributable to noncontrolling interests represents the portion of earnings from consolidated entities that relates to the equity interests of minority investors, and are reflected on a U.S. GAAP basis as a separate line on the Company’s Unaudited Interim Consolidated Statements of Operations.

The table below reconciles adjusted operating income before income taxes to income from continuing operations before income taxes and equity in earnings of operating joint ventures:

45

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Adjusted Operating Income before income taxes by Segment:
Individual Annuities	$	548		$	390		$	1,077		$	778
Retirement	237			286			521			650
Asset Management	196			200			401			393
Total U.S. Retirement Solutions and Investment Management division	981			876			1,999			1,821
Individual Life	237			158			353			283
Group Insurance	75			46			105			52
Total U.S. Individual Life and Group Insurance division	312			204			458			335
International Insurance	842			884			1,676			1,721
Total International Insurance division	842			884			1,676			1,721
Corporate Operations	(294		)	(341		)	(547		)	(683		)
Total Corporate and Other	(294		)	(341		)	(547		)	(683		)
Total Adjusted Operating Income before income taxes	1,841			1,623			3,586			3,194
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	346			(71		)	(265		)	(128		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Change in experience-rated contractholder liabilities due to asset value changes	234			(189		)	37			(232		)
Divested businesses:
Closed Block division(1)	52			0			30			0
Other divested businesses	(109		)	47			(34		)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	45			18			58			29
Subtotal(2)	2,129			1,451			4,877			3,156
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business(3)	0			56			0			69
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	2,129		$	1,507		$	4,877		$	3,225

__________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

The Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

The table below presents revenues and total assets for the Company’s reportable segments for the periods, or as of the dates, indicated:

46

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Revenue												Total Assets
	Three Months Ended June 30,						Six Months Ended June 30,						June 30, 2015		December 31, 2014
	2015			2014			2015			2014
	(in millions)
Individual Annuities	$	1,200		$	1,171		$	2,387		$	2,328		$	171,938	$	174,951
Retirement	3,180			1,469			5,658			3,000			176,582		179,674
Asset Management	776			713			1,509			1,380			52,121		50,214
Total U.S. Retirement Solutions and Investment Management division	5,156			3,353			9,554			6,708			400,641		404,839
Individual Life	1,160			1,318			2,511			2,614			71,589		70,152
Group Insurance	1,291			1,342			2,568			2,704			40,951		41,125
Total U.S. Individual Life and Group Insurance division	2,451			2,660			5,079			5,318			112,540		111,277
International Insurance	5,037			5,252			9,943			10,327			171,015		171,635
Total International Insurance division	5,037			5,252			9,943			10,327			171,015		171,635
Corporate Operations	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total Corporate and Other	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total	12,500			11,113			24,307			22,049			698,838		695,764
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	(133		)	(3		)	(79		)	(11		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Divested businesses:
Closed Block division(1)	1,525			0			3,244			0			63,893		0
Other divested businesses	109			182			333			392
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(9		)	(4		)	(6		)	(4		)
Subtotal(2)	13,712			11,311			29,264			22,599			762,731		695,764
Closed Block Business(3)	0			1,835			0			3,401			0		70,891
Total per Unaudited Interim Consolidated Financial Statements	$	13,712		$	13,146		$	29,264		$	26,000		$	762,731	$	766,655

 __________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

The Asset Management segment revenues include intersegment revenues primarily consisting of asset-based management and administration fees as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Asset Management segment intersegment revenues	$	169	$	154	$	347	$	310

47

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other.

12. INCOME TAXES

The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing authorities. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes.

The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired.

Listed below are the tax years that remain subject to examination by major tax jurisdiction, at June 30, 2015:

Major Tax Jurisdiction	Open Tax Years
United States	2007 – 2014
Japan	Fiscal years ended March 31, 2010 – 2015
Korea	Fiscal years ended March 31, 2010 – 2013 and the period ended December 31, 2013 and calendar year 2014

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is a significant component of the difference between the Company’s effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2014 and current year results, and was adjusted to take into account the current year’s equity market performance and expected business results. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.

There is a possibility that the IRS and the U.S. Treasury will address, through guidance, the issues related to the calculation of the DRD. For the last several years, the revenue proposals included in the Obama Administration’s budgets included proposed changes to the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company’s consolidated net income.

For tax years 2007 through 2015, the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions as they occur in order to reach agreement with the Company on how they should be reported in the relevant tax return. If disagreements arise, accelerated resolutions programs are available to try to resolve the disagreements in a timely manner before the tax return is filed.

Total income tax expense includes additional income tax expense related to the realization of local deferred tax assets recorded in the Unaudited Interim Consolidated Statements of Financial Position as of the acquisition date for Prudential Gibraltar Financial Life Insurance Company, Ltd. (“Prudential Gibraltar”) and AIG Star Life Insurance Co., Ltd, AIG Edison Life Insurance Company, AIG Financial Assurance Japan K.K., and AIG Edison Service Co., Ltd. (collectively, the “Star and Edison Businesses”). As of December 31, 2014 , the entire amount of additional U.S. GAAP tax expense of $734 million related to the utilization of opening balance sheet local deferred tax assets has been recognized in the Unaudited Interim Consolidated Statements of Operations.

13. FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

48

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short term investments, equity securities and derivative contracts that trade on an active exchange market.

Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value (“NAV”)), certain commercial mortgage loans, short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter (“OTC”) derivatives.

Level 3—Fair value is based on at least one or more significant unobservable inputs for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured OTC derivative contracts, certain commercial mortgage loans, certain consolidated real estate funds for which the Company is the general partner and embedded derivatives resulting from certain products with guaranteed benefits.

Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

49

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of June 30, 2015
	Level 1			Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0		$	17,811	$	0	$			$	17,811
Obligations of U.S. states and their political subdivisions	0			7,866		20					7,886
Foreign government bonds	0			78,710		151					78,861
Corporate securities	0			155,471		1,103					156,574
Asset-backed securities	0			7,418		3,817					11,235
Commercial mortgage-backed securities	0			12,111		41					12,152
Residential mortgage-backed securities	0			5,329		215					5,544
Subtotal	0			284,716		5,347					290,063
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0			170		0					170
Obligations of U.S. states and their political subdivisions	0			186		0					186
Foreign government bonds	0			683		25					708
Corporate securities	0			21,668		148					21,816
Asset-backed securities	0			873		607					1,480
Commercial mortgage-backed securities	0			2,087		2					2,089
Residential mortgage-backed securities	0			1,593		5					1,598
Equity securities	1,563			241		604					2,408
All other(3)	417			12,025		12		(9,893		)	2,561
Subtotal	1,980			39,526		1,403		(9,893		)	33,016
Equity securities, available-for-sale	6,592			3,050		259					9,901
Commercial mortgage and other loans	0			391		0					391
Other long-term investments	8			230		1,714		(8		)	1,944
Short-term investments	4,400			724		0					5,124
Cash equivalents	3,809			8,638		0					12,447
Other assets	3			110		2					115
Subtotal excluding separate account assets	16,792			337,385		8,725		(9,901		)	353,001
Separate account assets(4)	48,175			222,311		25,855					296,341
Total assets	$	64,967		$	559,696	$	34,580	$	(9,901	)	$	649,342
Future policy benefits(5)	$	0		$	0	$	5,478	$			$	5,478
Other liabilities	(2		)	5,883		2		(5,730		)	153
Notes Issued by consolidated VIEs	0			0		7,434					7,434
Total liabilities	$	(2	)	$	5,883	$	12,914	$	(5,730	)	$	13,065

50

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	20,123	$	0	$			$	20,123
Obligations of U.S. states and their political subdivisions	0		6,525		6					6,531
Foreign government bonds	0		80,939		2					80,941
Corporate securities	0		159,073		1,303					160,376
Asset-backed securities	0		7,126		4,059					11,185
Commercial mortgage-backed securities	0		13,834		43					13,877
Residential mortgage-backed securities	0		5,804		253					6,057
Subtotal	0		293,424		5,666					299,090
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		399		0					399
Obligations of U.S. states and their political subdivisions	0		199		0					199
Foreign government bonds	0		696		21					717
Corporate securities	0		20,146		124					20,270
Asset-backed securities	0		850		393					1,243
Commercial mortgage-backed securities	0		2,556		5					2,561
Residential mortgage-backed securities	0		1,767		7					1,774
Equity securities	1,396		232		663					2,291
All other(3)	194		13,803		7		(12,321		)	1,683
Subtotal	1,590		40,648		1,220		(12,321		)	31,137
Equity securities, available-for-sale	6,688		2,898		275					9,861
Commercial mortgage and other loans	0		380		0					380
Other long-term investments	12		224		1,547		(11		)	1,772
Short-term investments	5,263		2,472		0					7,735
Cash equivalents	2,657		9,188		0					11,845
Other assets	4		109		2					115
Subtotal excluding separate account assets	16,214		349,343		8,710		(12,332		)	361,935
Separate account assets(4)	48,063		223,710		24,662					296,435
Total assets	$	64,277	$	573,053	$	33,372	$	(12,332	)	$	658,370
Future policy benefits(5)	$	0	$	0	$	8,182	$			$	8,182
Other liabilities	1		6,883		5		(6,661		)	228
Notes Issued by consolidated VIEs	0		0		6,033					6,033
Total liabilities	$	1	$	6,883	$	14,220	$	(6,661	)	$	14,443

__________

(1) “Netting” amounts represent cash collateral of $4,171 million and $5,671 million as of June 30, 2015 and December 31, 2014, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Includes “Trading account assets supporting insurance liabilities” and “Other trading account assets.”

(3) Level 1 represents cash equivalents and short term investments. All other amounts primarily represent derivative assets.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(5) As of June 30, 2015, the net embedded derivative liability position of $5.5 billion includes $0.8 billion of embedded derivatives in an asset position and $6.3 billion of embedded derivatives in a liability position. As of December 31, 2014, the net embedded derivative liability position of $8.2 billion includes $0.6 billion of embedded derivatives in an asset position and $8.8 billion of embedded derivatives in a liability position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.

51

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fixed Maturity Securities—The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience with various vendors. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Typical inputs used by these pricing services include but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, and/or estimated cash flow, prepayment speeds and default rates. If the pricing information received from third party pricing services is deemed not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service or classify the securities as Level 3. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.

Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing services is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may override the information with an internally-developed valuation. As of June 30, 2015 and December 31, 2014, overrides on a net basis were not material. Pricing service overrides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

The Company conducts several specific price monitoring activities. Daily analyses identify price changes over predetermined thresholds defined at the financial instrument level. Various pricing integrity reports are reviewed on a daily and monthly basis to determine if pricing is reflective of market activity or if it would warrant any adjustments. Other procedures performed include, but are not limited to, reviews of third-party pricing services methodologies, reviews of pricing trends and back testing.

The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including observed prices and spreads for similar publicly traded or privately traded issues, they have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the price of a security, a Level 3 classification is made.

Trading Account Assets—Trading account assets consist primarily of fixed maturity securities, equity securities and derivatives whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and below under “Equity Securities” and “Derivative Instruments.”

Equity Securities—Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.

Commercial Mortgage and Other Loans—The fair value of commercial mortgage loans held for investment and accounted for using the fair value option are determined based on the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the current market spread for similar quality loans. The quality ratings for these loans, a primary determinant of the appropriate credit spread and a significant component of the pricing input, are based on internally-developed estimates. As a result, these loans are included in Level 3 in the fair value hierarchy.

The fair value of other loans held and accounted for using the fair value option is determined utilizing pricing indicators from the whole loan market, where investors are committed to purchase these loans at a predetermined price, which is considered

52

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

the principal exit market for these loans. The Company has evaluated the valuation inputs used for these assets, including the existence of predetermined exit prices, the terms of the loans, prevailing interest rates and credit risk, and deemed that the primary pricing inputs are Level 2 inputs in the fair value hierarchy.

Other Long-Term Investments—Other long-term investments include limited partnerships which are consolidated because the Company is either deemed to exercise control or considered the primary beneficiary of a variable interest entity. These entities are considered investment companies and follow specialized industry accounting whereby their assets are carried at fair value. The investments held by these entities include various feeder fund investments in underlying master funds (whose underlying holdings generally include public fixed maturities, equity securities and mutual funds), as well as wholly-owned real estate held within other investment funds. The fair value is determined by reference to the underlying direct investments, with publicly traded equity securities based on quoted prices in active markets reflected in Level 1, and public fixed maturities and mutual funds priced via quotes from pricing services or observable data reflected in Level 2. The fair value of investments in funds that are subject to significant liquidity restrictions are reflected in Level 3.

The fair value of real estate held in consolidated investment funds is determined through an independent appraisal process. The appraisals generally utilize a discounted cash flow model, supplemented with replacement cost estimates and comparable recent sales data when available. These appraisals and the related assumptions are updated at least annually. Since many of the assumptions utilized are unobservable and are considered to be significant inputs to the valuation, the real estate investments within other long-term investments have been reflected within Level 3 in the fair value hierarchy.

The fair value of fund investments, where the fair value option has been elected, is primarily determined by the fund managers and is measured at fair value using NAV as a practical expedient. Since the valuations may be based on unobservable market inputs and cannot be validated by the Company, these investments have been included within Level 3 in the fair value hierarchy.

Derivative Instruments—Derivatives are recorded at fair value either as assets, within “Other trading account assets,” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, commodity prices, credit spreads, market volatility, expected returns, NPR, liquidity and other factors. For derivative positions included within Level 3 of the fair value hierarchy, liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity and other specific attributes of the underlying derivative position.

The Company’s exchange-traded futures and options include Treasury futures, Eurodollar futures, commodity futures, Eurodollar options and commodity options. Exchange-traded futures and options are valued using quoted prices in active markets and are classified within Level 1 in the fair value hierarchy.

The majority of the Company’s derivative positions are traded in the OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross currency swaps, currency forward contracts, commodity swaps, commodity forward contracts, single name credit default swaps, loan commitments held for sale and “to be announced” (“TBA”) forward contracts on highly rated mortgage-backed securities issued by U.S. government sponsored entities are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility and other factors.

The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including Overnight Indexed Swap discount rates, obtained from external market data providers, third-party pricing vendors and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

The vast majority of the Company’s derivative agreements are with highly rated major international financial institutions. To reflect the market’s perception of its own and the counterparty’s NPR, the Company incorporates additional spreads over London Interbank Offered Rates (“LIBOR”) into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized.

53

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Derivatives classified as Level 3 include look-back equity options and other structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values.

Cash Equivalents and Short-Term Investments—Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in this category are generally fair valued based on market observable inputs and these investments have primarily been classified within Level 2.

Separate Account Assets—Separate account assets include fixed maturity securities, treasuries, equity securities, mutual funds and real estate investments for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities,” “Equity Securities” and “Other Long-Term Investments.”

Notes issued by Consolidated VIEs—The fair values of these notes are based on indicative broker quotes and classified within Level 3. See Note 5 and “Fair Value Option” below for additional information.

Other Liabilities—Other liabilities include certain derivative instruments, the fair values of which are determined consistent with similar derivative instruments described above under “Derivative Instruments.”

Future Policy Benefits—The liability for future policy benefits is related to guarantees primarily associated with the living benefit features of certain variable annuity contracts offered by the Company’s Individual Annuities segment, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of these liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally-developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management’s judgment.

The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the LIBOR swap curve adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. These assumptions are generally updated annually unless a material change that the Company feels is indicative of a long term trend is observed in an interim period.

Transfers between Levels 1 and 2—Overall, transfers between levels are made to reflect changes in observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the quarter in which the transfers occur. Periodically there are transfers between Level 1 and Level 2 for assets held in the Company’s Separate Account. The fair value of foreign common stock held in the Company’s Separate Account may reflect differences in market levels between the close of foreign trading markets and the close of U.S. trading markets for the respective day. Dependent on the existence of such a timing difference, the assets may move between Level 1 and Level 2. During the three months ended June 30, 2015, $24 million were transferred from Level 1 to Level 2 and $36 million were transferred from Level 2 to Level 1. During the six months endedJune 30, 2015, $74 million were transferred from Level 1 to Level 2 and $53 million were transferred from Level 2 to Level 1. During the three months ended June 30, 2014, $17 million were transferred from Level 1 to Level 2 and $22 million were transferred from Level 2 to Level 1. During the six months endedJune 30, 2014, $150 million were transferred from Level 1 to Level 2 and $55 million were transferred from Level 2 to Level 1.

54

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Level 3 Assets and Liabilities by Price Source—The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of June 30, 2015
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	14	$	20
Foreign government bonds	0		176		176
Corporate securities	774		477		1,251
Asset-backed securities	147		4,277		4,424
Commercial mortgage-backed securities	8		35		43
Residential mortgage-backed securities	53		167		220
Equity securities	121		742		863
Other long-term investments	12		1,702		1,714
Other assets	14		0		14
Subtotal excluding separate account assets(3)	1,135		7,590		8,725
Separate account assets	24,407		1,448		25,855
Total assets	$	25,542	$	9,038	$	34,580
Future policy benefits	$	5,478	$	0	$	5,478
Other liabilities	0		2		2
Notes Issued by consolidated VIEs	0		7,434		7,434
Total liabilities	$	5,478	$	7,436	$	12,914

	As of December 31, 2014
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	0	$	6
Foreign government bonds	0		23		23
Corporate securities	752		675		1,427
Asset-backed securities	150		4,302		4,452
Commercial mortgage-backed securities	10		38		48
Residential mortgage-backed securities	57		203		260
Equity securities	140		798		938
Other long-term investments	1		1,546		1,547
Other assets	9		0		9
Subtotal excluding separate account assets(3)	1,125		7,585		8,710
Separate account assets	23,632		1,030		24,662
Total assets	$	24,757	$	8,615	$	33,372
Future policy benefits	$	8,182	$	0	$	8,182
Other liabilities	2		3		5
Notes Issued by consolidated VIEs	0		6,033		6,033
Total liabilities	$	8,184	$	6,036	$	14,220

__________

(1) Represents valuations reflecting both internally-derived and market inputs as well as third-party pricing information or quotes. See below for additional information related to internally-developed valuation for significant items in the above table.

(2) Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3) Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.

55

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets).

	As of June 30, 2015
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	774	Discounted cash flow	Discount rate	1.05%	-	25%	8.05%	Decrease
			Market comparables	EBITDA multiples(2)	5.0X	-	6.5X	6.2X	Increase
			Liquidation	Liquidation value	22.12%	-	64.83%	43.07%	Increase
Liabilities:
Future policy benefits(3)	$	5,478	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.68%		Decrease
				Utilization rate(6)	56%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

	As of December 31, 2014
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	752	Discounted cash flow	Discount rate	0.84%	-	15%	7.73%	Decrease
			Market comparables	EBITDA multiples(2)	6.1X	-	7.0X	6.1X	Increase
			Liquidation	Liquidation value	22.12%	-	100%	82.92%	Increase
Liabilities:
Future policy benefits(3)	$	8,182	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.30%		Decrease
				Utilization rate(6)	63%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.

(2) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the reporting entity has determined that market participants would use such multiples when pricing the investments.

(3) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(4) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(5) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium.

(6) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

56

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(7) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

(8) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities—The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors.

Future Policy Benefits—The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Separate Account Assets—In addition to the significant internally-priced Level 3 assets and liabilities presented and described above, the Company also has internally-priced separate account assets reported within Level 3. Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments do not impact the Company’s Unaudited Interim Consolidated Statements of Operations. In addition, fees earned by the Company related to the management of most separate account assets classified as Level 3 do not change due to changes in the fair value of these investments. Quantitative information about significant internally-priced Level 3 separate account assets is as follows:

Real Estate and Other Invested Assets—Separate account assets include $23,435 million and $22,641 million of investments in real estate as of June 30, 2015 and December 31, 2014, respectively, that are classified as Level 3 and reported at fair value. In general, these fair value estimates are based on property appraisal reports prepared by independent real estate appraisers. Key inputs and assumptions to the appraisal process include rental income and expense amounts, related growth rates, discount rates and capitalization rates. In cases where real estate investments are made through indirect investments, fair value is generally determined by the Company’s equity in net assets of the entities. The debt associated with real estate, other invested assets and the Company’s equity position in entities are externally valued. Because of the subjective nature of inputs and the judgment involved in the appraisal process, real estate investments and their corresponding debt are typically included in the Level 3 classification. Key unobservable inputs to real estate valuation include capitalization rates, which ranged from 4.50% to 10.00% (5.93% weighted average) as of June 30, 2015, and 4.50% to 9.75% (6.05% weighted average) as of December 31, 2014, and discount rates, which ranged from 6.00% to 15.00% (7.19% weighted average) as of June 30, 2015, and 6.00% to 15.00% (7.36% weighted average) as of December 31, 2014. Key unobservable inputs to real estate debt valuation include yield to maturity, which ranged from 0.76% to 6.04% (3.94% weighted average) as of June 30, 2015, and 0.77% to 6.76% (4.02% weighted average) as of December 31, 2014, and market spread over base rate, which ranged from 1.50% to 4.20% (2.34% weighted average) as of June 30, 2015, and 1.50% to 4.76% (2.67% weighted average) as of December 31, 2014.

Commercial Mortgage Loans—Separate account assets include $936 million and $943 million of commercial mortgage loans as of June 30, 2015 and December 31, 2014, respectively, that are classified as Level 3 and reported at fair value. Commercial mortgage loans are primarily valued internally using discounted cash flow techniques, as described further under “Fair Value of Financial Instruments.” The primary unobservable input used is the spread to discount cash flows, which ranged from 1.27% to 8.41% (1.55% weighted average) as of June 30, 2015, and 1.17% to 8.39% (1.44% weighted average) as of December 31, 2014. In isolation, an increase (decrease) in the value of this input would result in a lower (higher) fair value measurement.

Valuation Process for Fair Value Measurements Categorized within Level 3—The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various business groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company

57

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

has established oversight teams, often in the form of pricing committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company’s investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of living benefit features of the Company’s variable annuity contracts.

The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, analysis of portfolio returns to corresponding benchmark returns, back-testing, review of bid/ask spreads to assess activity, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For living benefit features of the Company’s variable annuity products, the actuarial valuation unit periodically tests contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. The valuation policies and guidelines are reviewed and updated as appropriate.

Within the trading and investing functions, the Company has established policies and procedures that relate to the approval of all new transaction types, transaction pricing sources and fair value hierarchy coding within the financial reporting system. For variable annuity product changes or new launches of living benefit features, the actuarial valuation unit validates input logic and new product features and agrees new input data directly to source documents.

Changes in Level 3 assets and liabilities—The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	136		$	1,250		$	4,362		$	75		$	242
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(13		)	0			0			0
Included in other comprehensive income (loss)	0			(3		)	10			15			0			(1		)
Net investment income	0			0			(9		)	10			0			0
Purchases	15			20			208			615			2			0
Sales	(1		)	0			(154		)	(286		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(21		)	(39		)	(2		)	(16		)
Foreign currency translation	0			2			(9		)	(11		)	0			(7		)
Transfers into Level 3(2)	0			(4		)	0			293			0			0
Transfers out of Level 3(2)	0			0			(159		)	(1,142		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(13	)	$	4		$	0		$	0

58

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	22		$	144		$	376		$	3		$	6		$	634		$	8
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			1			0
Other income	0			(2		)	1			0			0			(6		)	4
Net Investment Income	0			1			1			0			0			0			0
Purchases	4			51			243			(1		)	0			1			0
Sales	0			(4		)	(2		)	0			0			(12		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(1		)	0			0			0			(1		)	0
Foreign currency translation	0			0			0			0			0			(13		)	0
Transfers into Level 3(2)	0			0			27			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(39		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Other income	$	0		$	(2	)	$	1		$	0		$	0		$	(7	)	$	4

	Three Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	263		$	0	$	1,617		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			0		0			0
Other income	0			0		60			0
Included in other comprehensive income (loss)	(4		)	0		0			0
Net investment income	0			0		0			0
Purchases	8			0		92			0
Sales	(9		)	0		(1		)	0
Issuances	0			0		0			0
Settlements	0			0		(33		)	0
Foreign currency translation	(7		)	0		(14		)	0
Other(1)	0			0		(7		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		0			0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0	$	(1	)	$	0
Other income	$	0		$	0	$	58		$	0

59

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2015
	Separate Account Assets (4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	25,067		$	(9,473	)	$	(2	)	$	(6,810	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	8			4,236			0			(68		)
Other Income	0			0			0			(62		)
Interest credited to policyholders’ account balances	755			0			0			0
Net investment income	6			0			0			0
Purchases	1,052			0			0			0
Sales	(237		)	0			0			0
Issuances	0			(241		)	0			(494		)
Settlements	(513		)	0			0			0
Foreign currency translation	(1		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(283		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	4,167		$	0		$	(68	)
Other Income	$	0		$	0		$	0		$	(62	)
Interest credited to policyholders’ account	$	502		$	0		$	0		$	0

60

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	2		$	1,303		$	4,059		$	43		$	253
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(14		)	6			0			0
Included in other comprehensive income (loss)	0			(3		)	2			17			0			(1		)
Net investment income	0			0			(15		)	13			0			0
Purchases	15			20			427			940			34			0
Sales	(1		)	0			(347		)	(390		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(56		)	(78		)	(4		)	(25		)
Foreign currency translation	0			(2		)	(11		)	(14		)	0			(9		)
Other(1)	0			0			(3		)	3			0			0
Transfers into Level 3(2)	0			134			16			803			2			0
Transfers out of Level 3(2)	0			0			(199		)	(1,542		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(16	)	$	4		$	0		$	0

	Six Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	21		$	124		$	393		$	5		$	7		$	663		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			(2		)	0
Other income	0			(7		)	3			0			0			(9		)	5
Net investment income	0			1			1			0			0			0			0
Purchases	5			71			247			0			0			8			0
Sales	0			(4		)	(2		)	(2		)	0			(16		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(3		)	(1		)	(1		)	(1		)	(16		)	0
Foreign currency translation	0			0			0			0			0			(17		)	0
Other(1)	0			0			0			0			0			(7		)	0
Transfers into Level 3(2)	0			7			73			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(107		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	(2	)	$	0
Other income	$	0		$	(7	)	$	3		$	0		$	0		$	6		$	5

61

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	275		$	0	$	1,547		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	10			0		(2		)	0
Other income	0			0		99			0
Included in other comprehensive income (loss)	(1		)	0		0			0
Net investment income	0			0		(1		)	0
Purchases	12			0		201			0
Sales	(31		)	0		(2		)	0
Issuances	0			0		0			0
Settlements	0			0		(50		)	0
Foreign currency translation	(8		)	0		(52		)	0
Other(1)	0			0		(25		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		(1		)	0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(1	)	$	0	$	(2	)	$	0
Other income	$	0		$	0	$	98		$	0

62

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2015
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	24,662		$	(8,182	)	$	(5	)	$	(6,033	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	11			3,184			1			(53		)
Other Income	0			0			0			92
Interest credited to policyholders’ account balances	1,426			0			0			0
Net investment income	12			0			0			0
Purchases	1,965			0			0			0
Sales	(417		)	0			0			0
Issuances	0			(480		)	0			(1,440		)
Settlements	(1,026		)	0			2			0
Foreign currency translation	(2		)	0			0			0
Other(1)	(472		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(305		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	3,062		$	1		$	(53	)
Other Income	$	0		$	0		$	0		$	(92	)
Interest credited to policyholders’ account	$	860		$	0		$	0		$	0

63

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	2	$	1,332		$	3,734		$	549		$	329
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		15			7			1			0
Included in other comprehensive income (loss)	0		0		20			3			3			0
Net investment income	0		0		3			5			0			(1		)
Purchases	0		0		203			674			0			0
Sales	0		0		(196		)	(45		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(117		)	(523		)	(1		)	(13		)
Foreign currency translation	0		0		2			0			0			2
Other(1)	0		0		4			(1		)	0			(1		)
Transfers into Level 3(2)	0		0		54			303			0			0
Transfers out of Level 3(2)	0		0		(25		)	(333		)	(497		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(12	)	$	2		$	0		$	0

64

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	121		$	390		$	52		$	9		$	771		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			3			0
Other income	0		2			2			0			1			12			(1		)
Net investment income	0		0			1			0			0			0			0
Purchases	12		53			89			(1		)	0			9			0
Sales	0		(46		)	(9		)	0			0			(26		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(1		)	(10		)	1			(1		)	(8		)	0
Foreign currency translation	0		0			(612		)	612			0			3			0
Transfers into Level 3(2)	0		0			18			2			0			0			0
Transfers out of Level 3(2)	0		0			577			(664		)	0			(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	1		$	3		$	0		$	0		$	8		$	0

65

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	310		$	0	$	1,368		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	2			0		9			0
Other income	0			0		39			0
Included in other comprehensive income (loss)	(15		)	0		0			0
Net investment income	0			0		(3		)	0
Purchases	15			0		85			0
Sales	(12		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(48		)	0
Foreign currency translation	0			0		2			0
Other(1)	0			0		(15		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(2		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	43		$	0

66

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,997		$	(2,443	)	$	(6	)	$	(4,062	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	3			(732		)	1			3
Interest credited to policyholders’ account balances	750			0			0			0
Net investment income	6			0			0			0
Purchases	524			0			0			0
Sales	(149		)	0			0			0
Issuances	0			(225		)	0			(480		)
Settlements	(387		)	0			0			0
Other(1)	57			0			0			0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(25		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(751	)	$	1		$	2
Interest credited to policyholders’ account	$	501		$	0		$	0		$	0

67

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	1	$	1,329		$	3,112		$	165		$	338
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		10			10			1			0
Included in other comprehensive income (loss)	0		0		67			6			2			0
Net investment income	0		0		4			10			0			(1		)
Purchases	0		1		309			1,092			496			0
Sales	0		0		(283		)	(49		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(149		)	(709		)	(4		)	(24		)
Foreign currency translation	0		0		6			0			0			3
Other(1)	0		0		4			(2		)	0			0
Transfers into Level 3(2)	0		0		58			979			0			0
Transfers out of Level 3(2)	0		0		(60		)	(625		)	(605		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(18	)	$	2		$	0		$	0

68

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	115		$	395		$	1		$	9		$	842		$	6
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			2			0
Other income	0		6			3			0			1			11			0
Net investment income	0		0			1			0			0			0			0
Purchases	12		63			90			51			0			14			0
Sales	0		(51		)	(9		)	0			0			(34		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(4		)	(23		)	0			(1		)	(79		)	0
Foreign currency translation	0		0			(659		)	612			47			8			0
Transfers into Level 3(2)	0		0			41			2			0			0			0
Transfers out of Level 3(2)	0		0			607			(664		)	(47		)	(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	5		$	4		$	0		$	0		$	12		$	0

69

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	304		$	0	$	1,396		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	4			0		3			0
Other income	0			0		59			0
Included in other comprehensive income (loss)	1			0		0			0
Net investment income	0			0		(2		)	0
Purchases	18			0		94			0
Sales	(24		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(65		)	0
Foreign currency translation	1			0		4			0
Other(1)	1			0		(52		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(7		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	54		$	0

70

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,603		$	(441	)	$	(5	)	$	(3,254	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			(2,514		)	2			(1		)
Interest credited to policyholders’ account balances	1,353			0			0			0
Net investment income	12			0			0			0
Purchases	832			0			0			0
Sales	(328		)	0			0			0
Issuances	0			(445		)	0			(1,284		)
Settlements	(664		)	0			0			0
Other(1)	57			0			(2		)	0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(95		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(2,538	)	$	2		$	(1	)
Interest credited to policyholders’ account	$	872		$	0		$	0		$	0

__________

(1) Other primarily represents reclassifications of certain assets between reporting categories and eliminations of intercompany separate account investments.

(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

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

Transfers—Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company is able to validate.

Derivative Fair Value Information

The following tables present the balance of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying. These tables include NPR and exclude embedded derivatives which are typically recorded with the associated host contract. The derivative assets and liabilities shown below are included in “Trading account assets-All Other,” “Other long-term investments” or “Other liabilities” in the tables presented previously in this note, under the headings “Assets and Liabilities by Hierarchy Level” and “Changes in Level 3 Assets and Liabilities.”

71

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	As of June 30, 2015
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	1	$	8,562	$	7	$			$	8,570
Currency	0		366		0					366
Credit	0		4		0					4
Currency/Interest Rate	0		2,650		0					2,650
Equity	2		514		8					524
Commodity	0		0		0					0
Netting(1)							(9,901		)	(9,901		)
Total derivative assets	$	3	$	12,096	$	15	$	(9,901	)	$	2,213
Derivative liabilities:
Interest Rate	$	0	$	4,959	$	2	$			$	4,961
Currency	0		460		0					460
Credit	0		28		0					28
Currency/Interest Rate	0		269		0					269
Equity	0		114		0					114
Commodity	1		0		0					1
Netting(1)							(5,730		)	(5,730		)
Total derivative liabilities	$	1	$	5,830	$	2	$	(5,730	)	$	103

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	5	$	10,584	$	6	$			$	10,595
Currency	0		865		0					865
Credit	0		7		0					7
Currency/Interest Rate	0		1,885		0					1,885
Equity	5		562		5					572
Commodity	1		0		0					1
Netting(1)							(12,332		)	(12,332		)
Total derivative assets	$	11	$	13,903	$	11	$	(12,332	)	$	1,593
Derivative liabilities:
Interest Rate	$	3	$	4,948	$	3	$			$	4,954
Currency	0		1,025		0					1,025
Credit	0		30		0					30
Currency/Interest Rate	0		307		0					307
Equity	0		503		0					503
Commodity	0		0		0					0
Netting(1)							(6,661		)	(6,661		)
Total derivative liabilities	$	3	$	6,813	$	3	$	(6,661	)	$	158

__________ 

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

Changes in Level 3 derivative assets and liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities for the three and six months endedJune 30, 2015, as well as the portion of gains or losses included in income for the three and six months endedJune 30, 2015, attributable to unrealized gains or losses related to those assets and liabilities still held at June 30, 2015.

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Derivative Assets- Equity			Derivative Assets- Interest Rate		Derivative Assets- Equity			Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	5		$	4	$	6		$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	(2		)	2		(4		)	3
Other income	0			0		0			0
Purchases	4			0		6			0
Sales	0			0		0			0
Issuances	0			0		0			0
Settlements	0			0		0			0
Transfers into Level 3(1)	0			0		0			0
Transfers out of Level 3(1)	0			0		(1		)	0
Fair Value, end of period	$	7		$	6	$	7		$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	2	$	(4	)	$	3
Other income	$	0		$	0	$	0		$	0

	Three Months Ended June 30, 2014				Six Months Ended June 30, 2014
	Derivative Assets- Equity		Derivative Assets- Interest Rate		Derivative Assets- Equity		Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	0	$	5	$	0	$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	1		1		1		3
Other income	0		0		0		0
Purchases	0		0		0		0
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	0		0		0		0
Transfers into Level 3(1)	5		0		5		0
Transfers out of Level 3(1)	0		0		0		0
Fair Value, end of period	$	6	$	6	$	6	$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	1	$	1	$	1	$	3
Other income	$	0	$	0	$	0	$	0

73

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________ 

(1) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

Nonrecurring Fair Value Measurements—The following table represents information for assets measured at fair value on a nonrecurring basis. The estimated fair values were classified as Level 3 in the valuation hierarchy.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in millions)
Commercial mortgage loans(1):
Carrying value	$	0		$	33		$	0		$	33
Gains (Losses)	$	0		$	(4	)	$	0		$	(4	)
Mortgage servicing rights (“MSR”)(2):
Carrying value	$	98		$	89		$	98		$	89
Gains (Losses)	$	2		$	4		$	(1	)	$	8
Cost method investments(3):
Carrying value	$	131		$	2		$	131		$	2
Gains (Losses)	$	(12	)	$	0		$	(36	)	$	(1	)

__________

(1) The reserve adjustments were based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2) Mortgage servicing rights are revalued based on internal models which utilize inputs. The fair value for mortgage servicing rights is determined using a discounted cash flow model incorporating assumptions for servicing revenues, adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses.

(3) For cost method impairments, the methodologies utilized were primarily discounted cash flow and, where appropriate, valuations provided by the general partners taking into consideration investment-related expenses.

Fair Value Option

The fair value option provides the Company an option to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that results from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities.

The following table presents information regarding changes in fair values recorded in earnings for commercial mortgage and other loans, other long-term investments and notes issued by consolidated VIEs, where the fair value option has been elected.

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
	(in millions)
Assets:
Commercial mortgage and other loans:
Changes in instrument-specific credit risk	$	0	$	0		$	0		$	0
Other changes in fair value	$	0	$	0		$	0		$	0
Other long-term investments:
Changes in fair value	$	11	$	24		$	43		$	42
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	129	$	(3	)	$	(39	)	$	1

Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income” for other long-term investments and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated based on changes in credit spreads and quality ratings for the period reported.

74

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Interest income on commercial mortgage and other loans is included in net investment income. The Company recorded $2 million and $1 million of interest income for the three months ended June 30, 2015 and 2014, respectively, and $5 million and $3 million for the six months endedJune 30, 2015 and 2014, respectively, on fair value option loans. Interest income on these loans is recorded based on the effective interest rates as determined at the closing of the loan.

The fair values and aggregate contractual principal amounts of commercial mortgage and other loans, for which the fair value option has been elected, were $391 million and $384 million, respectively, as of June 30, 2015, and $380 million and $372 million, respectively, as of December 31, 2014. As of June 30, 2015, there were no loans in non-accrual status and none of the loans are more than 90 days past due and still accruing.

The fair value of other long-term investments was $1,267 million as of June 30, 2015 and $1,082 million as of December 31, 2014.

The fair values and aggregate contractual principal amounts of limited recourse notes issued by consolidated VIEs, for which the fair value option has been elected at issuance, were $7,434 million and $7,654 million, respectively, as of June 30, 2015, and $6,033 million and $6,216 million, respectively as of December 31, 2014. Interest expense recorded for these liabilities was $86 million and $50 million for the three months ended June 30, 2015 and 2014, respectively, and $154 million and $90 million for the six months endedJune 30, 2015 and 2014, respectively.

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position; however, in some cases, as described below, the carrying amount equals or approximates fair value.

	June 30, 2015
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,570	$	1,105	$	2,675	$	2,396
Commercial mortgage and other loans	0		545		49,716		50,261		48,178
Policy loans	0		0		11,652		11,652		11,652
Other long-term investments	0		0		1,821		1,821		1,612
Short-term investments	0		545		0		545		545
Cash and cash equivalents	3,884		707		0		4,591		4,591
Accrued investment income	0		3,117		0		3,117		3,117
Other assets	204		2,624		718		3,546		3,546
Total assets	$	4,088	$	9,108	$	65,012	$	78,208	$	75,637
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	39,723	$	54,769	$	94,492	$	93,602
Securities sold under agreements to repurchase	0		7,863		0		7,863		7,863
Cash collateral for loaned securities	0		3,808		0		3,808		3,808
Short-term debt	0		3,551		100		3,651		3,621
Long-term debt	1,281		16,591		4,042		21,914		20,264
Notes issued by consolidated VIEs	0		0		15		15		21
Other liabilities	0		5,636		724		6,360		6,360
Separate account liabilities—investment contracts	0		74,894		30,535		105,429		105,429
Total liabilities	$	1,281	$	152,066	$	90,185	$	243,532	$	240,968

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	December 31, 2014
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,703	$	1,199	$	2,902	$	2,575
Commercial mortgage and other loans	0		559		48,158		48,717		46,052
Policy loans	0		0		11,712		11,712		11,712
Other long-term investments	0		0		1,917		1,917		1,712
Short-term investments	0		523		0		523		523
Cash and cash equivalents	2,230		843		0		3,073		3,073
Accrued investment income	0		3,130		0		3,130		3,130
Other assets	143		2,106		109		2,358		2,358
Total assets	$	2,373	$	8,864	$	63,095	$	74,332	$	71,135
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	40,264	$	56,111	$	96,375	$	95,069
Securities sold under agreements to repurchase	0		9,407		0		9,407		9,407
Cash collateral for loaned securities	0		4,241		0		4,241		4,241
Short-term debt	0		3,784		104		3,888		3,839
Long-term debt	1,285		16,718		4,083		22,086		19,831
Notes issued by consolidated VIEs	0		0		18		18		25
Other liabilities	0		6,254		120		6,374		6,374
Separate account liabilities—investment contracts	0		82,801		24,175		106,976		106,976
Total liabilities	$	1,285	$	163,469	$	84,611	$	249,365	$	245,762

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

Fixed Maturities, Held-to-Maturity

The fair values of public fixed maturity securities are generally based on prices from third-party pricing services, which are reviewed for reasonableness; however, for certain public fixed maturity securities and investments in private placement fixed maturity securities, this information is either not available or not reliable. For these public fixed maturity securities, the fair value is based on indicative broker quotes, if available, or determined using a discounted cash flow model or other internally-developed models. For private fixed maturities, fair value is determined using a discounted cash flow model. In determining the fair value of certain fixed maturity securities, the discounted cash flow model may also use unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the security.

Commercial Mortgage and Other Loans

The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology.

Certain commercial mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk. Other loan valuations are primarily based upon the present value of the expected future cash flows discounted at the appropriate local government bond rate and local market swap rates or

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

credit default swap spreads, plus an appropriate credit spread and liquidity premium. The credit spread and liquidity premium are a significant component of the pricing inputs, and are based upon an internally-developed methodology, which takes into account, among other factors, the credit quality of the loans, the property type of the collateral, the weighted average coupon and the weighted average life of the loans.

Policy Loans

The Company’s valuation technique for policy loans is to discount cash flows at the current policy loan coupon rate. Policy loans are fully collateralized by the cash surrender value of underlying insurance policies. As a result, the carrying value of the policy loans approximates the fair value.

Other Long-term Investments

Other long-term investments include investments in joint ventures and limited partnerships. The estimated fair values of these cost method investments are generally based on the Company’s NAV as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. No such adjustments were made as of June 30, 2015 and December 31, 2014.

Short-Term Investments, Cash and Cash Equivalents, Accrued Investment Income and Other Assets

The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: certain short-term investments which are not securities, are recorded at amortized cost and include quality loans; cash and cash equivalent instruments; accrued investment income; and other assets that meet the definition of financial instruments, including receivables, such as reinsurance recoverables, unsettled trades, accounts receivable and restricted cash.

Policyholders’ Account Balances—Investment Contracts

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, single premium endowments, payout annuities and other similar contracts without life contingencies, fair values are generally derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s own NPR. For guaranteed investment contracts, funding agreements, structured settlements without life contingencies and other similar products, fair values are generally derived using discounted projected cash flows based on interest rates being offered for similar contracts with maturities consistent with those of the contracts being valued. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. For defined contribution and defined benefit contracts and certain other products, the fair value is the market value of the assets supporting the liabilities.

Securities Sold Under Agreements to Repurchase

The Company receives collateral for selling securities under agreements to repurchase, or pledges collateral under agreements to resell. Repurchase and resale agreements are also generally short-term in nature and, therefore, the carrying amounts of these instruments approximate fair value.

Cash Collateral for Loaned Securities

Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities, similar to the securities sold under agreement to repurchase above. For these transactions, the carrying value of the related asset or liability approximates fair value, as they equal the amount of cash collateral received or paid.

Debt

The fair value of short-term and long-term debt, as well as notes issued by consolidated VIEs, is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. With the exception of the notes issued by consolidated VIEs for which recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company, the fair values of these instruments consider the Company’s own NPR. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other Liabilities

Other liabilities are primarily payables, such as reinsurance payables, unsettled trades, drafts and accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

Separate Account Liabilities—Investment Contracts

Only the portion of separate account liabilities related to products that are investment contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees; therefore, carrying value approximates fair value.

14. DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

Interest Rate Contracts

Interest rate swaps, options and futures are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling.

Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount.

The Company also uses swaptions, interest rate caps and interest rate floors to manage interest rate risk. A swaption is an option to enter into a swap with a forward starting effective date. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. In an interest rate cap, the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. Similarly, in an interest rate floor, the buyer receives payments at the end of each period in which the interest rate is below the agreed strike price. Swaptions and interest rate caps and floors are included in interest rate options.

In exchange-traded interest rate futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the values of underlying referenced investments, and posts variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission’s merchants who are members of a trading exchange.

Equity Contracts

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with counterparties to exchange, at specified intervals, the difference between the return on an asset (or market index) and LIBOR plus an associated funding spread based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

Foreign Exchange Contracts

Currency derivatives, including currency futures, options, forwards and swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell, and to hedge the currency risk associated with net investments in foreign operations and anticipated earnings of its foreign operations.

Under currency forwards, the Company agrees with counterparties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. As noted above, the Company uses currency forwards to mitigate the impact of changes in currency exchange rates on U.S. dollar equivalent earnings generated by certain of its non-U.S. businesses, primarily its international insurance and investments operations. The Company executes forward sales of the hedged currency in exchange for U.S. dollars

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated. These earnings hedges do not qualify for hedge accounting.

Under currency swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party.

Credit Contracts

The Company writes credit default swaps for which it receives a premium to insure credit risk. These are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With these derivatives the Company sells credit protection on a single name reference, or certain index reference, and in return receives a quarterly premium. This premium or credit spread generally corresponds to the difference between the yield on the referenced names (or an index’s referenced names) public fixed maturity cash instruments and swap rates, at the time the agreement is executed. If there is an event of default by the referenced name or one of the referenced names in the index, as defined by the agreement, then the Company is obligated to pay the referenced amount of the contract to the counterparty and receive in return the referenced defaulted security or similar security or (in the case of a credit default index) pay the referenced amount less the auction recovery rate. See credit derivatives written section for further discussion of guarantees. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Other Contracts

TBAs. The Company uses TBA forward contracts to gain exposure to the investment risk and return of mortgage-backed securities. TBA transactions can help the Company enhance the return on its investment portfolio, and can provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual mortgage-backed pools. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. Additionally, pursuant to the Company’s mortgage dollar roll program, TBAs or mortgage-backed securities are transferred to counterparties with a corresponding agreement to repurchase them at a future date. These transactions do not qualify as secured borrowings and are accounted for as derivatives.

Loan Commitments. In its mortgage operations, the Company enters into commitments to fund commercial mortgage loans at specified interest rates and other applicable terms within specified periods of time. These commitments are legally binding agreements to extend credit to a counterparty. Loan commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. The determination of the fair value of loan commitments accounted for as derivatives considers various factors including, among others, terms of the related loan, the intended exit strategy for the loans based upon either securitization valuation models or investor purchase commitments, prevailing interest rates, origination income or expense, and the value of service rights. Loan commitments that relate to the origination of mortgage loans that will be held for investment are not accounted for as derivatives and accordingly are not recognized in the Company’s financial statements. See Note 15 for a further discussion of these loan commitments.

Embedded Derivatives. The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models. The Company maintains a portfolio of derivative instruments that is intended to offset certain risks related to the above products’ features. The derivatives may include, but are not limited to equity options, total return swaps, interest rate swaptions, caps, floors and other instruments.

Synthetic Guarantees. The Company sells synthetic GICs, through both full service and investment-only sales channels, to qualified pension plans. The assets are owned by the trustees of such plans, who invest the assets according to the contract terms agreed to with the Company. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated withdrawals from the contract. Under U.S. GAAP, these contracts are accounted for as derivatives and recorded at fair value.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying, excluding embedded derivatives which are recorded with the associated host. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral held with the same counterparty and NPR. This netting impact results in total derivative assets of $2,213 million and $1,593 million as of June 30, 2015 and December 31, 2014, respectively,

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

and total derivative liabilities of $103 million and $158 million as of June 30, 2015 and December 31, 2014, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

Primary Underlying/Instrument Type	June 30, 2015							December 31, 2014
			Gross Fair Value							Gross Fair Value
	Notional(1)		Assets		Liabilities			Notional(1)		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	1,492	$	20	$	(167	)	$	1,714	$	21	$	(191	)
Foreign Currency
Foreign Currency Forwards	378		7		(6		)	443		5		(14		)
Currency/Interest Rate
Foreign Currency Swaps	11,561		1,212		(91		)	10,772		679		(161		)
Total Qualifying Hedges	$	13,431	$	1,239	$	(264	)	$	12,929	$	705	$	(366	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	177,577	$	8,136	$	(4,322	)	$	182,937	$	9,904	$	(4,578	)
Interest Rate Futures	30,502		1		0			32,008		5		(3		)
Interest Rate Options	45,361		411		(471		)	27,561		663		(180		)
Interest Rate Forwards	168		3		(2		)	877		2		(1		)
Foreign Currency
Foreign Currency Forwards	16,804		349		(454		)	21,197		854		(1,011		)
Foreign Currency Options	158		9		0			203		6		0
Currency/Interest Rate
Foreign Currency Swaps	11,165		1,440		(178		)	11,083		1,207		(145		)
Credit
Credit Default Swaps	1,450		4		(28		)	2,622		7		(30		)
Equity
Equity Futures	379		0		0			331		3		0
Equity Options	69,003		271		(100		)	57,590		504		(41		)
Total Return Swaps	15,902		252		(13		)	15,217		65		(462		)
Commodity
Commodity Futures	18		0		(1		)	18		1		0
Synthetic GICs	73,166		7		0			74,707		6		0
Total Non-Qualifying Derivatives(2)	$	441,653	$	10,883	$	(5,569	)	$	426,351	$	13,227	$	(6,451	)
Total Derivatives(3)	$	455,084	$	12,122	$	(5,833	)	$	439,280	$	13,932	$	(6,817	)

__________

(1) Notional amounts are presented on a gross basis and include derivatives used to offset existing positions.

(2) Based on notional amounts, most of the Company’s derivatives do not qualify for hedge accounting as follows: i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income, ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules, and iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.

(3) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a net liability of $5,454 million and $8,162 million as of June 30, 2015 and December 31, 2014, respectively, primarily included in “Future policy benefits.”

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	June 30, 2015
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented  in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	11,967	$	(9,901	)	$	2,066	$	(568	)	$	1,498
Securities purchased under agreement to resell	691		0			691		(691		)	0
Total assets	$	12,658	$	(9,901	)	$	2,757	$	(1,259	)	$	1,498
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,821	$	(5,730	)	$	91	$	(37	)	$	54
Securities sold under agreement to repurchase	7,863		0			7,863		(7,863		)	0
Total liabilities	$	13,684	$	(5,730	)	$	7,954	$	(7,900	)	$	54

	December 31, 2014
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	13,786	$	(12,332	)	$	1,454	$	(623	)	$	831
Securities purchased under agreement to resell	702		0			702		(702		)	0
Total assets	$	14,488	$	(12,332	)	$	2,156	$	(1,325	)	$	831
Offsetting of Financial Liabilities:
Derivatives(1)	$	6,810	$	(6,661	)	$	149	$	(149	)	$	0
Securities sold under agreement to repurchase	9,407		0			9,407		(9,407		)	0
Total liabilities	$	16,217	$	(6,661	)	$	9,556	$	(9,556	)	$	0

__________

(1) Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. These instruments are only designated for hedge

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship.

	Three Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	26		$	(11	)	$	0		$	0		$	0	$	0
Currency	(10		)	0			0			0			0		0
Total fair value hedges	16			(11		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(2		)	0		6
Currency/Interest Rate	0			16			(79		)	0			0		(308		)
Total cash flow hedges	0			16			(79		)	(2		)	0		(302		)
Net investment hedges
Currency	1			0			0			0			0		(3		)
Currency/Interest Rate	0			0			0			0			0		18
Total net investment hedges	1			0			0			0			0		15
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(4,180		)	0			0			0			0		0
Currency	(339		)	0			1			0			0		0
Currency/Interest Rate	(28		)	0			0			0			0		0
Credit	7			0			0			0			0		0
Equity	(177		)	0			0			0			0		0
Commodity	(1		)	0			0			0			0		0
Embedded Derivatives	4,217			0			0			0			0		0
Total non-qualifying hedges	(501		)	0			1			0			0		0
Total	$	(484	)	$	5		$	(78	)	$	(2	)	$	0	$	(287	)

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income		Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	21		$	(23	)	$	0	$	0		$	0	$	0
Currency	9			0			0		0			0		0
Total fair value hedges	30			(23		)	0		0			0		0
Cash flow hedges
Interest Rate	0			0			0		(3		)	0		1
Currency/Interest Rate	0			27			25		0			0		495
Total cash flow hedges	0			27			25		(3		)	0		496
Net investment hedges
Currency	(3		)	0			0		0			0		7
Currency/Interest Rate	0			0			0		0			0		26
Total net investment hedges	(3		)	0			0		0			0		33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,468		)	0			0		0			0		0
Currency	(228		)	0			1		0			0		0
Currency/Interest Rate	405			0			4		0			0		0
Credit	0			0			0		0			0		0
Equity	(657		)	0			0		0			0		0
Commodity	(1		)	0			0		0			0		0
Embedded Derivatives	3,181			0			0		0			0		0
Total non-qualifying hedges	1,232			0			5		0			0		0
Total	$	1,259		$	4		$	30	$	(3	)	$	0	$	529

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Three Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(3	)	$	(15	)	$	0		$	0		$	0	$	0
Currency	4			0			0			0			0		0
Total fair value hedges	1			(15		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(6		)	0		2
Currency/Interest Rate	0			1			(18		)	0			0		(61		)
Total cash flow hedges	0			1			(18		)	(6		)	0		(59		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(11		)
Total net investment hedges	0			0			0			0			0		(12		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,470			0			0			0			0		0
Currency	(42		)	0			0			0			0		0
Currency/Interest Rate	15			0			0			0			0		0
Credit	(2		)	0			0			0			0		0
Equity	(687		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(696		)	0			0			0			0		0
Total non-qualifying hedges	58			0			0			0			0		0
Total	$	59		$	(14	)	$	(18	)	$	(6	)	$	0	$	(71	)

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

	Six Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(8	)	$	(31	)	$	0		$	0		$	2	$	0
Currency	6			0			0			0			0		0
Total fair value hedges	(2		)	(31		)	0			0			2		0
Cash flow hedges
Interest Rate	0			0			0			(11		)	0		5
Currency/Interest Rate	0			3			(22		)	0			0		(92		)
Total cash flow hedges	0			3			(22		)	(11		)	0		(87		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(29		)
Total net investment hedges	0			0			0			0			0		(30		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	3,379			0			0			0			0		0
Currency	(48		)	0			0			0			0		0
Currency/Interest Rate	3			0			(1		)	0			0		0
Credit	(1		)	0			0			0			0		0
Equity	(980		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(2,442		)	0			0			0			0		0
Total non-qualifying hedges	(89		)	0			(1		)	0			0		0
Total	$	(91	)	$	(28	)	$	(23	)	$	(11	)	$	2	$	(117	)

__________

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

For the three and six months endedJune 30, 2015, the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations. Also, there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in millions)
Balance, December 31, 2014	$	206
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2015	555
Amount reclassified into current period earnings	(59		)
Balance, June 30, 2015	$	702

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Using June 30, 2015 values, it is anticipated that a pre-tax gain of approximately $43 million will be reclassified from “Accumulated other comprehensive income (loss)” to earnings during the subsequent twelve months ending June 30, 2016, offset by amounts pertaining to the hedged items. As of June 30, 2015, the Company does not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 29 years. Income amounts deferred in AOCI as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within AOCI were $533 million and $501 million as of June 30, 2015 and December 31, 2014, respectively.

Credit Derivatives

Credit derivatives, where the Company has written credit protection on a single name reference, had outstanding notional amounts of $5 million as of both June 30, 2015 and December 31, 2014. These credit derivatives are reported at fair value as an asset of less than $1 million as of both June 30, 2015 and December 31, 2014. These credit derivatives have a NAIC designation of 2. The Company has also written credit protection on certain index references with notional amounts of $349 million and $1,544 million, respectively, reported at fair value as an asset of less than $1 million and a liability of $2 million, respectively, as of June 30, 2015 and December 31, 2014. As of June 30, 2015, these credit derivatives’ notionals had the following NAIC ratings: $67 million in NAIC 3, $251 million in NAIC 5 and $31 million in NAIC 6. As of December 31, 2014, the credit derivatives where the Company had written credit protection on an index reference had an NAIC designation of 3. NAIC designations are based on the lowest rated single name reference included in the index.

The Company’s maximum amount at risk under these credit derivatives equals the aforementioned notional amounts and assumes the value of the underlying referenced securities become worthless. These single name credit derivatives have maturities of less than 1 year, while the credit protection on the index references have maturities of less than 10 years. This excludes a credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance.

The Company also entered into a credit derivative that will require the Company to make certain payments in the event of deterioration in the value of the surplus notes issued by a subsidiary of Prudential Insurance. The notional amount of this credit derivative is $500 million and the fair value as of June 30, 2015 and December 31, 2014, was a liability of $10 million and $4 million, respectively. No collateral was pledged in either period.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of June 30, 2015 and December 31, 2014, the Company had $596 million and $573 million of outstanding notional amounts, respectively, reported at fair value as a liability of $14 million and $17 million, respectively.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions. The Company manages credit risk by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral, such as cash and securities, when appropriate. Additionally, limits are set on single party credit exposures which are subject to periodic management review.

The credit exposure of the Company’s OTC derivative transactions is represented by the contracts with a positive fair value at the reporting date. To reduce credit exposures, the Company seeks to: (i) enter into OTC derivative transactions pursuant to master agreements that provide for a netting of payments and receipts with a single counterparty, and (ii) enter into agreements that allow the use of credit support annexes, which are bilateral rating-sensitive agreements that require collateral postings at established threshold levels. Cleared derivatives are transactions between the Company and a counterparty where the transactions are cleared through a clearinghouse, such that each derivative counterparty is only exposed to the default of the clearinghouse. These cleared transactions require initial and daily variation margin collateral postings and include certain interest rate swaps and credit default swaps entered into on or after June 10, 2013, related to guidelines under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Company also enters into exchange-traded futures and certain options transactions through regulated exchanges and these transactions are settled on a daily basis, thereby reducing credit risk exposure in the event of non-performance by counterparties to such financial instruments.

Under fair value measurements, the Company incorporates the market’s perception of its own and the counterparty’s NPR in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are

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applied to the derivative fair values on a net basis by counterparty. To reflect the Company’s own credit spread, a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions.

Certain of the Company’s derivative agreements with some of its counterparties contain credit-rating related triggers. If the Company’s credit rating were to fall below a certain level, the counterparties to the derivative instruments could request termination at the then fair value of the derivative or demand immediate full collateralization on derivative instruments in net liability positions. As of June 30, 2015, there were no net liability derivative positions by counterparty with credit-risk-related contingent features. As such, the Company has not posted any collateral related to these positions and the Company would not be required to post any additional collateral to the counterparties if the credit-risk-related contingent features underlying these agreements had been triggered as of June 30, 2015.

15. COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY

MATTERS

Commitments and Guarantees

Commercial Mortgage Loan Commitments

	June 30, 2015		December 31, 2014
	(in millions)
Total outstanding mortgage loan commitments	$	2,979	$	2,442
Portion of commitment where prearrangement to sell to investor exists	$	428	$	958

In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company pre-arranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	June 30, 2015		December 31, 2014
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts(1)	$	4,498	$	4,883
Expected to be funded from separate accounts	$	163	$	28

__________ 

(1) Includes a remaining commitment of $169 million and $194 million at June 30, 2015 and December 31, 2014, respectively, related to the Company’s agreement to co-invest with the Fosun Group (“Fosun”) in a private equity fund, managed by Fosun, for the Chinese marketplace.

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts.

Indemnification of Securities Lending Transactions

	June 30, 2015		December 31, 2014
	(in millions)
Indemnification provided to mutual fund and separate account clients for securities lending	$	13,602	$	14,334
Fair value of related collateral associated with above indemnifications	$	13,886	$	14,740
Accrued liability associated with guarantee	$	0	$	0

In the normal course of business, the Company may facilitate securities lending transactions on behalf of mutual funds and separate accounts for which the Company is the investment advisor and/or the asset manager. In certain of these arrangements, the Company has provided an indemnification to the mutual funds or separate accounts to hold them harmless against losses caused

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

by counterparty (i.e., borrower) defaults associated with the securities lending activity facilitated by the Company. Collateral is provided by the counterparty to the mutual fund or separate account at the inception of the loan equal to or greater than 102% of the fair value of the loaned securities and the collateral is maintained daily at 102% or greater of the fair value of the loaned securities. The Company is only at risk if the counterparty to the securities lending transaction defaults and the value of the collateral held is less than the value of the securities loaned to such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 14, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

	June 30, 2015		December 31, 2014
	(in millions)
Guaranteed value of third parties’ assets	$	73,166	$	74,707
Fair value of collateral supporting these assets	$	74,896	$	76,711
Asset associated with guarantee, carried at fair value	$	7	$	6

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Guarantees of Credit Enhancements

	June 30, 2015		December 31, 2014
	(in millions)
Guarantees of credit enhancements of debt instruments associated with commercial real estate assets	$	5	$	5
Fair value of properties and associated tax credits that secure the guarantee	$	7	$	8
Accrued liability associated with guarantee	$	0	$	0

The Company arranges for credit enhancements of certain debt instruments that provide financing primarily for affordable multi-family real estate assets, including certain tax-exempt bond financings. The credit enhancements provide assurances to the debt holders as to the timely payment of amounts due under the debt instruments. The remaining contractual maturities for these guarantees are up to fifteen years. The Company’s obligations to reimburse required credit enhancement payments are secured by mortgages on the related real estate. The Company receives certain ongoing fees for providing these enhancement arrangements and anticipates the extinguishment of its obligation under these enhancements prior to maturity through the aggregation and transfer of its positions to a substitute enhancement provider.

Indemnification of Serviced Mortgage Loans

	June 30, 2015		December 31, 2014
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,324	$	1,248
First-loss exposure portion of above	$	408	$	388
Accrued liability associated with guarantees	$	15	$	16

As part of the commercial mortgage activities of the Company’s Asset Management segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and

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Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 2% to 20% of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company services $10,560 million of mortgages subject to these loss-sharing arrangements as of June 30, 2015, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of June 30, 2015, these mortgages had a weighted-average debt service coverage ratio of 2.09 times and a weighted-average loan-to-value ratio of 61%. The Company’s total share of losses related to indemnifications that were settled was $0.0 million and $1.0 million, for the six months endedJune 30, 2015 and 2014, respectively.

Other Guarantees

	June 30, 2015		December 31, 2014
	(in millions)
Other guarantees where amount can be determined	$	316	$	331
Accrued liability for other guarantees and indemnifications	$	4	$	5

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Included above are $308 million and $323 million as of June 30, 2015 and December 31, 2014, respectively, of yield maintenance guarantees related to certain investments the Company sold. The Company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liabilities identified above do not include retained liabilities associated with sold businesses.

Contingent Liabilities

On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind-down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if material, is

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disclosed, including matters discussed below. The Company estimates that as of June 30, 2015, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigations and regulatory matters provides an update of those matters discussed in Note 23 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

Lederman v. PFI

In March 2015, the court granted the Company summary judgment and dismissed with prejudice the complaint of the remaining plaintiff with claims against the Company.

Escheatment Litigation

State of West Virginia cx. Rd. John D. Perdue v. Prudential Insurance Company of America; and State of West Virginia cx. Rd. John D. Perdue v. Pruco Life Insurance Company

In June 2015, the West Virginia Supreme Court issued a decision in each of the above captioned cases: (i) reversing the trial court’s dismissal of the West Virginia Treasurer’s complaint alleging violations of West Virginia’s unclaimed property law; and (ii) remanding the case to the Circuit Court of Putnam County for proceedings consistent with its decision. In July 2015, a petition for rehearing was filed with the West Virginia Supreme Court for each case.

Huffman v. The Prudential Insurance Company of America

In July 2015, the Court granted plaintiffs’ motion to file an amended complaint.

Other Matters

Bouder v. PFI

In February 2015, the federal District Court for New Jersey granted in part, and denied in part, plaintiffs’ renewed class certification motion. It certified for class treatment plaintiffs’ wage payment claims which include allegations that the Company made improper deductions from the wages of its former common law agents in California, New York, and Pennsylvania, and its financial services associates in California and New York. The Court denied plaintiffs’ attempt to certify a class based on the Company’s alleged failure to pay overtime to its former common law agents and its financial services associates in California, Illinois, New York and Pennsylvania. In March 2015, the Company filed a motion requesting that the Court reconsider its decision to partially grant plaintiffs’ renewed class certification motion with regard to its former common law agents.

Residential Mortgage-Backed Securities (“RMBS”) Litigation

PICA et al. v. Bank of America National Association & Merrill Lynch & Co., Inc., et al.—In April 2015, this lawsuit was settled.

PICA et al. v. Countrywide Financial Corp., et al.—In April 2015, this lawsuit was settled.

PICA et al. v. RBS Financial Products, Inc., et al.—In June 2015, this lawsuit was settled.

RMBS Trustee

PICA et al. v. Bank of New York Mellon—In March 2015, defendants filed a motion to dismiss the amended complaint.

PICA et al. v. Citibank N.A.—In February 2015, defendants filed a motion to dismiss the amended complaint.

PICA et al. v. Deutsche Bank, et al.—In April 2015, defendants filed a motion to dismiss the amended complaint.

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PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

PICA et al. v. HSBC, et al.—In January 2015, defendants filed a motion to dismiss the amended complaint. In June 2015, the Court granted in part, and denied in part, defendants’ motion to dismiss the complaint for failure to state a claim and granted leave to file an amended complaint. In July 2015, plaintiffs filed an amended complaint.

PICA et al. v. U.S. Bank National Association—In February 2015, defendants filed a motion to dismiss the amended complaint. In May 2015, the Court granted defendants’ motion to dismiss: (1) declining to exercise supplemental jurisdiction regarding claims involving the PSA trusts; and (2) granting leave for plaintiffs to file an amended complaint asserting direct claims involving the Indenture trusts. In June 2015, the Company, together with other institutional investors, filed a complaint in New York State Supreme Court, captioned BlackRock Balanced Capital Portfolio (FI), et al. v. U.S. Bank Nat’l Ass’n, asserting claims relating to the PSA trusts. In July 2015, plaintiffs filed with the Court an amended complaint asserting direct claims relating to the Indenture trusts.

PICA et al. v. Wells Fargo Bank, et al.—In April 2015, defendants filed a motion to dismiss the amended complaint.

Prudential Investment Portfolios 2, f/k/a Dryden Core Investment Fund, o/b/o Prudential Core Short-Term Bond Fund and Prudential Core Taxable Money Market Fund v. Bank of America Corporation et al.

In August 2015, the Court issued a decision granting in part, and denying in part, defendants' motions to dismiss. The Court dismissed certain of the Funds' claims, including those alleging fraud based on offering material statements; New Jersey RICO; and express breach of contract. The Court upheld certain of the Funds' claims, including those alleging fraud based on false LIBOR submissions to the British Bankers’ Association; negligent misrepresentation; unjust enrichment; and breach of the implied covenant of good faith and fair dealing.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the consolidated financial condition of Prudential Financial, Inc. (“Prudential Financial”) as of June 30, 2015, compared with December 31, 2014, and its consolidated results of operations for the three and six months ended June 30, 2015 and 2014. You should read the following analysis of our consolidated financial condition and results of operations in conjunction with the MD&A, the “Risk Factors” section, and the audited Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, as well as the statements under “Forward-Looking Statements” and the Unaudited Interim Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Overview

From December 18, 2001, the date of demutualization, through December 31, 2014, we organized our principal operations into the Financial Services Businesses and the Closed Block Business, and had two classes of common stock outstanding. The Common Stock, which is publicly traded (NYSE:PRU), reflected the performance of the Financial Services Businesses, while the Class B Stock, which was issued through a private placement and did not trade on any exchange, reflected the performance of the Closed Block Business.

On January 2, 2015, Prudential Financial repurchased and canceled all of the shares of the Class B Stock (the “Class B Repurchase”). As a result, earnings per share of Common Stock for the three and six months ended June 30, 2015 reflect the consolidated earnings of Prudential Financial. In addition, we no longer organize our principal operations into the Financial Services Businesses and the Closed Block Business. Our principal operations are comprised of four divisions, which together encompass seven segments, and our Corporate and Other operations. The U.S. Retirement Solutions and Investment Management division consists of our Individual Annuities, Retirement and Asset Management segments. The U.S. Individual Life and Group Insurance division consists of our Individual Life and Group Insurance segments. The International Insurance division consists of our International Insurance segment. The Closed Block division consists of our Closed Block segment, which includes certain in force participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders’ dividends on these products (the “Closed Block”), as well as certain related assets and liabilities. The Closed Block segment is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations. Our Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, businesses that are not sufficiently material to warrant separate disclosure and other businesses that have been or will be divested. See Note 6 to the Unaudited Interim Consolidated Financial Statements for additional information on the Closed Block.

As a result of the Class B Repurchase and resulting elimination of the separation of the Financial Services Businesses and the Closed Block Business, in this MD&A we refer to the divisions and segments of the Company that formerly comprised the Financial Services Businesses as “PFI excluding Closed Block division” and we refer to the operations that were formerly included in the Closed Block Business as the “Closed Block division,” except as otherwise noted. Closed Block Business results were associated with the Company’s Class B Stock for periods prior to January 1, 2015.

We attribute financing costs to each segment based on the amount of financing used by each segment, excluding financing costs associated with corporate debt which are reflected in Corporate and Other operations. The net investment income of each segment includes earnings on the amount of capital that management believes is necessary to support the risks of that segment.

Executive Summary

Prudential Financial, a financial services leader with approximately $1.187 trillion of assets under management as of June 30, 2015, has operations in the United States, Asia, Europe and Latin America. Through our subsidiaries and affiliates, we offer a wide array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management. We offer these products and services to individual and institutional customers through one of the largest distribution networks in the financial services industry.

On June 9, 2015, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock during the period from July 1, 2015 through June 30, 2016. The timing and amount of any share repurchases will be determined by management based upon market conditions and other considerations, and such repurchases may be effected in the open market, through derivative, accelerated repurchase and negotiated transactions and through prearranged trading plans designed to comply with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. We purchased 11.7 million shares of our Common Stock at a total cost of $1.0 billion, under the

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prior twelve-month $1.0 billion share repurchase authorization that expired on June 30, 2015, including 6.0 million shares purchased in the first six months of 2015 at a total cost of $500 million.

On each of February 10, 2015 and May 12, 2015, Prudential Financial’s Board of Directors declared a cash dividend of $0.58 per share of Common Stock.

Regulatory Developments

In April 2015, the U.S. Department of Labor (“DOL”) released a proposed regulation accompanied by new class exemptions and proposed amendments to long-standing exemptions from the prohibited transaction provisions under the Employee Retirement Income Security Act of 1974 (“ERISA”). The comment period for the proposed regulation ended on July 21, 2015, and it is expected that the DOL will seek to promulgate final regulations in 2016. If enacted, the proposals will redefine who would be considered a “fiduciary” for purposes of transactions with qualified plans, plan participants and Individual Retirement Accounts (“IRAs”). We cannot predict the exact nature and scope of any new final regulations or their impact on our business; however, the new rules may effectively impose limits on interactions with existing and prospective customers in our Individual Annuities, Retirement, Asset Management, Individual Life and Group Insurance businesses, and increase compliance costs.

The Company is required as a non-bank financial company to submit to the Board of Governors of the Federal Reserve System (“FRB”) and the Federal Deposit Insurance Corporation (“FDIC”) an annual plan for rapid and orderly resolution in the event of severe financial distress. We submitted our initial resolution plan in June 2014, and were advised by the FRB and FDIC in September 2014 that the plan was “not incomplete,” the standard for an initial plan. In July 2015, the FRB and the FDIC provided feedback to the Company, as well as to the other two non-bank financial companies which filed initial plans in 2014, on our respective resolution plans. The FRB and FDIC also provided guidance on common areas that should be addressed in preparing the resolution plans to be submitted by December 31, 2015.

The Financial Stability Board (“FSB”), consisting of representatives of financial authorities from over 20 nations and global institutions, has identified Prudential Financial as a global systemically important insurer (“G-SII”) that is to be subject to enhanced regulation. In June 2015, the International Association of Insurance Supervisors (“IAIS”), acting at the direction of the FSB, issued a public consultation document on the development of higher loss absorbency (“HLA”) requirements for G-SIIs. HLA requirements will establish an additional capital buffer above the IAIS’s basic capital requirement (“BCR”) that G-SIIs would need to hold to support their insurance and non-insurance activities. The IAIS expects that HLA requirements would increase G-SIIs’ BCR by an average of 20%. The HLA requirements are expected to be presented to the G20 for endorsement in November 2015 and applied to G-SIIs beginning in 2019. We continue to evaluate the potential impact the HLA requirements could have on us if they are adopted in the jurisdictions in which we operate.

The New Jersey Department of Banking and Insurance (“NJDOBI”) has notified Prudential Financial that New Jersey’s recently enacted legislation authorizing group-wide supervision of internationally active insurance groups (the “GWS Law”) authorizes NJDOBI to act as the group-wide supervisor (“GWS”) of Prudential Financial under the GWS Law. The GWS Law, among other provisions, authorizes NJDOBI to examine Prudential Financial and its subsidiaries, in addition to its New Jersey domiciled insurance subsidiaries, for the purpose of ascertaining the financial condition of the insurance companies and compliance with New Jersey insurance laws. We cannot predict what additional requirements or costs may result from NJDOBI’s assertion of GWS status with respect to Prudential Financial.

For additional information on the potential impacts of regulation on the Company, including the topics described above, see “Business—Regulation” and “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014.

Impact of a Low Interest Rate Environment

U.S. Operations excluding the Closed Block Division

As interest rates in the U.S. continue to remain lower than historical levels, our current reinvestment yields are consequently lower than the overall portfolio yield, primarily for our investments in fixed maturity securities and commercial mortgage loans. With the Federal Reserve Board’s stated intention to keep interest rates low for some time, our overall portfolio yields are expected to continue to decline.

For the general account supporting our U.S. Retirement Solutions and Investment Management division, our U.S. Individual Life and Group Insurance division and our Corporate and Other operations, we expect annual scheduled payments and prepayments to be approximately 10% of the fixed maturity security and commercial mortgage loan portfolios through 2016. The general account for these operations has approximately $168 billion of such assets (based on net carrying value) as of June 30, 2015. As these assets mature, the current average portfolio yield for fixed maturities and commercial mortgage loans of approximately

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4.5%, as of June 30, 2015, is expected to decline due to reinvesting in a lower interest rate environment. Included in the $168 billion of fixed maturity securities and commercial mortgage loans are approximately $79 billion that are subject to call or redemption features at the issuer’s option and have a weighted average interest rate of approximately 5%. As of June 30, 2015, approximately 75% of these assets contain prepayment penalties.

The reinvestment of scheduled payments and prepayments at rates below the current portfolio yield, including in some cases at rates below those guaranteed under our insurance contracts, will impact future operating results to the extent we do not, or are unable to, reduce crediting rates on in force blocks of business, or effectively utilize other asset/liability management strategies described below, in order to maintain current net interest margins. As of June 30, 2015, these operations have approximately $165 billion of insurance liabilities and policyholder account balances. Of this amount, approximately $51 billion represents contracts with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums. Although we may have the ability to lower crediting rates for those contracts above guaranteed minimums, our willingness to do so may be limited by competitive pressures.

The following table sets forth the related account values by range of guaranteed minimum crediting rates and the related range of the difference, in basis points (“bps”), between rates being credited to contractholders as of June 30, 2015, and the respective guaranteed minimums.

	Account Values with Crediting Rates:
	At guaranteed minimum			1-49 bps above guaranteed minimum			50-99 bps above guaranteed minimum			100-150 bps above guaranteed minimum			Greater than 150 bps above guaranteed minimum			Total
	($ in billions)
Range of Guaranteed Minimum Crediting Rates:
Less than 1.00%	$	0.9		$	0.0		$	0.0		$	0.0		$	0.0		$	0.9
1.00% - 1.99%	2.0			2.5			11.1			1.4			0.2			17.2
2.00% - 2.99%	2.2			0.2			0.4			1.9			0.2			4.9
3.00% - 4.00%	24.1			2.0			0.4			0.2			0.0			26.7
Greater than 4.00%	0.9			0.0			0.0			0.0			0.0			0.9
Total	$	30.1		$	4.7		$	11.9		$	3.5		$	0.4		$	50.6
Percentage of total	59		%	9		%	24		%	7		%	1		%	100		%

Also included in the table above is approximately $1.5 billion related to contracts that impose a market value adjustment if the invested amount is not held to maturity.

These operations also have approximately $14 billion of insurance liabilities and policyholder account balances representing participating contracts for which the investment income risk is expected to ultimately accrue to contractholders. The crediting rates for these contracts are periodically adjusted based on the yield earned on the related assets. The remaining $100 billion of the $165 billion of insurance liabilities and policyholder account balances in these operations represents long duration products such as group annuities, structured settlements and other insurance products that have fixed and guaranteed terms, for which underlying assets may have to be reinvested at interest rates that are lower than portfolio rates. We seek to mitigate the impact of a prolonged low interest rate environment on these contracts through asset/liability management, as discussed further below.

Assuming a hypothetical scenario where the average 10-year U.S. Treasury rate is 2.25% for the period from July 1, 2015 through December 31, 2016, and credit spreads remain unchanged from levels as of June 30, 2015, we estimate that the unfavorable impact to net interest margins included in pre-tax adjusted operating income of reinvesting in such an environment, compared to reinvesting at current average portfolio yields, would be approximately $5 million in 2015 and $44 million in 2016. This impact is most significant in the Retirement, Individual Life and Individual Annuities segments. This hypothetical scenario only reflects the impact related to the approximately $51 billion of contracts shown in the table above, and does not reflect: i) any benefit from potential changes to the crediting rates on the corresponding contractholder liabilities where the Company has the contractual ability to do so, or other potential mitigants such as changes in investment mix that we may implement as funds are reinvested; ii) any impact related to assets that do not directly support our liabilities; iii) any impact from other factors, including but not limited to, new business, contractholder behavior, changes in competitive conditions, and changes in capital markets; or iv) any impact from other factors described below.

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In order to mitigate the unfavorable impact that the current interest rate environment has on our net interest margins, we employ a proactive asset/liability management program, which includes strategic asset allocation and derivative strategies within a disciplined risk management framework. These strategies seek to match the characteristics of our products, and to closely approximate the interest rate sensitivity of the assets with the estimated interest rate sensitivity of the product liabilities. Our asset/liability management program also helps manage duration gaps, currency and other risks between assets and liabilities through the use of derivatives. We adjust this dynamic process as products change, as customer behavior changes and as changes in the market environment occur. As a result, our asset/liability management process has permitted us to manage interest-sensitive products through several market cycles. Our interest rate exposure is also mitigated by our business mix, which includes lines of business for which fee-based and insurance underwriting earnings play a more prominent role in product profitability.

Closed Block Division

Substantially all of the $61 billion of general account assets in the Closed Block division support obligations and liabilities relating to the Closed Block policies only. See Note 6 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

Japanese Insurance Operations

Our Japanese insurance operations have experienced a low interest rate environment for many years. As of June 30, 2015, these operations have $119 billion of insurance liabilities and policyholder account balances, which are predominantly comprised of long duration insurance products that have fixed and guaranteed terms, for which underlying assets may have to be reinvested at interest rates that are lower than portfolio rates. Also included in the $119 billion is approximately $21 billion related to contracts that impose a market value adjustment if the invested amount is not held to maturity, and $8 billion of insurance liabilities and policyholder account balances with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums; however, for these contracts, most of the current crediting rates are at or near contractual minimums. Although we have the ability to lower crediting rates in some cases for those contracts above guaranteed minimum crediting rates, the majority of this business has credited interest rates which are determined by formula. Our Japanese insurance operations employ a proactive asset/liability management program in order to mitigate the unfavorable impact that the current interest rate environment has on our net interest margins, and includes strategies similar to those described for the U.S. insurance operations excluding the Closed Block division above.

Results of Operations

Net income attributable to Prudential Financial, Inc. for the three and six months ended June 30, 2015 was $1,406 million and $3,442 million, respectively, compared to $1,090 million and $2,328 million, respectively, for the three and six months ended June 30, 2014.

We analyze performance of our segments and Corporate and Other operations using a measure called adjusted operating income. As discussed in “—Overview,” for the three and six months ended June 30, 2015, the Closed Block division is accounted for as a divested business under our definition of adjusted operating income. For the three and six months ended June 30, 2014, the former Closed Block Business was analyzed using accounting principles generally accepted in the United States of America (“U.S. GAAP”). Under both the current reporting for the Closed Block division and the former reporting for the Closed Block Business, its results are excluded from adjusted operating income. See “—Consolidated Results of Operations—Segment Measures” for a discussion of adjusted operating income and its use as a measure of segment operating performance.

Shown below are the contributions of each segment and Corporate and Other operations to our adjusted operating income for the periods indicated and a reconciliation of adjusted operating income of our segments and Corporate and Other operations to income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures.

Results for the three and six months ended June 30, 2015, reflect the impact of our annual review and update of assumptions, which we performed in the second quarter. Prior to 2015, this review and update was performed in the third quarter of each year. Accordingly, results for the three and six months ended June 30, 2014, do not reflect an impact from the annual review and update of assumptions performed in 2014.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Adjusted operating income before income taxes:
Individual Annuities	$	548		$	390		$	1,077		$	778
Retirement	237			286			521			650
Asset Management	196			200			401			393
Total U.S. Retirement Solutions and Investment Management division	981			876			1,999			1,821
Individual Life	237			158			353			283
Group Insurance	75			46			105			52
Total U.S. Individual Life and Group Insurance division	312			204			458			335
International Insurance	842			884			1,676			1,721
Total International Insurance division	842			884			1,676			1,721
Corporate Operations	(294		)	(341		)	(547		)	(683		)
Total Corporate and Other	(294		)	(341		)	(547		)	(683		)
Adjusted operating income before income taxes	1,841			1,623			3,586			3,194
Reconciling Items:
Realized investment gains (losses), net, and related adjustments(1)	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net(2)	346			(71		)	(265		)	(128		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net(3)	(220		)	225			(137		)	326
Change in experience-rated contractholder liabilities due to asset value changes(4)	234			(189		)	37			(232		)
Divested businesses:
Closed Block division(5)	52			0			30			0
Other divested businesses(6)	(109		)	47			(34		)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests(7)	45			18			58			29
Subtotal(8)	2,129			1,451			4,877			3,156
Income (loss) from continuing operations before income taxes for Closed Block Business(9)	0			56			0			69
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	2,129		$	1,507		$	4,877		$	3,225

__________

(1) Represents “Realized investment gains (losses), net,” and related adjustments. See “—Realized Investment Gains and Losses” and Note 11 to our Unaudited Interim Consolidated Financial Statements for additional information.

(2) Includes charges that represent the impact of realized investment gains (losses), net, on the amortization of deferred policy acquisition costs (“DAC”) and other costs, and on changes in reserves. Also includes charges resulting from payments related to market value adjustment features of certain of our annuity products and the impact of realized investment gains (losses), net, on the amortization of unearned revenue reserves.

(3) Represents net investment gains and losses on trading account assets supporting insurance liabilities. See “—Experience-Rated Contractholder Liabilities, Trading Account Assets Supporting Insurance Liabilities and Other Related Investments.”

(4) Represents changes in contractholder liabilities due to asset value changes in the pool of investments supporting these experience-rated contracts. See “—Experience-Rated Contractholder Liabilities, Trading Account Assets Supporting Insurance Liabilities and Other Related Investments.”

(5) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations. See “—Overview” above.

(6) See “—Divested Businesses.”

(7) Equity in earnings of operating joint ventures are included in adjusted operating income but excluded from income from continuing operations before income taxes and equity in earnings of operating joint ventures as they are reflected on a U.S. GAAP basis on an after-tax basis as a separate line in our Unaudited Interim Consolidated Statements of Operations. Earnings attributable to noncontrolling interests are excluded from adjusted operating income but included in income from continuing operations before taxes and equity earnings of operating joint ventures as they are reflected on a U.S. GAAP basis as a separate line in our Unaudited Interim Consolidated Statements of Operations. Earnings attributable to noncontrolling interests represent the portion of earnings from consolidated entities that relates to the equity interests of minority investors.

(8) Amounts for the three and six months ended June 30, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

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(9) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

Results for the periods presented above reflect the following:

Individual Annuities. Results for both the second quarter and first six months of 2015 increased in comparison to the prior year periods, primarily reflecting favorable comparative impacts on reserves and the amortization of DAC and other costs from changes in the estimated profitability of the business, including those resulting from the annual review and update of assumptions performed in the second quarter of 2015. Also contributing to the increases for both periods was higher net asset-based fee income.

Retirement. Results for both the second quarter and first six months of 2015 decreased in comparison to the prior year periods, reflecting lower net investment spread results, partially offset by more favorable reserve impacts from case experience.

Asset Management. Results for the second quarter of 2015 decreased in comparison to the prior year period, reflecting lower strategic investing results, partially offset by higher asset management fees, net of expenses. Results for the first six months of 2015 increased in comparison to the prior year period, reflecting higher performance-based incentive fees and higher asset management fees, net of expenses, partially offset by lower strategic investing results and lower transaction fees.

Individual Life. Results for both the second quarter and first six months of 2015 increased in comparison to the prior year periods, reflecting a favorable net impact from our annual review and update of assumptions, as well as favorable reserve updates for guaranteed minimum death benefits, partially offset by unfavorable comparative mortality experience, net of reinsurance.

Group Insurance. Results for both the second quarter and first six months of 2015 increased in comparison to the prior year periods, primarily reflecting a favorable net impact from our annual review and update of assumptions, as well as more favorable comparative underwriting results, partially offset by a lower contribution from net investment spread results.

International Insurance. Results for both the second quarter and first six months of 2015 decreased in comparison to the prior year periods, primarily from net unfavorable impacts from foreign currency exchange rates and from our annual review and update of assumptions. Excluding these items, segment results increased from the prior year periods, reflecting net business growth driven by higher sales and a greater contribution from net investment results, partially offset by higher expenses.

Corporate and Other operations. Results for both the second quarter and first six months of 2015 reflect decreased losses in comparison to the prior year periods, primarily reflecting lower operating debt interest expense, net of investment income, and lower levels of corporate expenses, partially offset by higher capital debt interest expense.

Closed Block Division. Closed Block division results for the second quarter of 2015 decreased in comparison to Closed Block Business results in the second quarter of 2014, primarily driven by a decrease in net realized investment gains and lower net investment income, partially offset by a decrease in the policyholder dividend obligation. Closed Block division results for the first six months of 2015 decreased in comparison to Closed Block Business results in the first six months of 2014, primarily driven by lower net investment income and a decline in net insurance results, partially offset by a decrease in the policyholder dividend obligation and an increase in net realized investment gains.

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Consolidated Results of Operations

The following table summarizes net income (loss) for the periods presented.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Revenues	$	13,712	$	13,146	$	29,264	$	26,000
Benefits and expenses	11,583		11,639		24,387		22,775
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	2,129		1,507		4,877		3,225
Income tax expense (benefit)	679		404		1,378		877
Income (loss) from continuing operations before equity in earnings of operating joint ventures	1,450		1,103		3,499		2,348
Equity in earnings of operating joint ventures, net of taxes	9		6		6		6
Income (loss) from continuing operations	1,459		1,109		3,505		2,354
Income (loss) from discontinued operations, net of taxes	0		4		0		8
Net income (loss)	1,459		1,113		3,505		2,362
Less: Income attributable to noncontrolling interests	53		23		63		34
Net income (loss) attributable to Prudential Financial, Inc.	$	1,406	$	1,090	$	3,442	$	2,328

Results of Operations

Three Month Comparison. The increase in income (loss) from continuing operations for the second quarter of 2015 compared to the second quarter of 2014 reflected the following:

• $1,802 million favorable variance, on a pre-tax basis, resulting from a net gain in the current quarter compared to a net loss in the year ago quarter, reflecting our decision to manage a portion of our interest rate risk through our Capital Protection Framework (see “—Results of Operations by Segment—Corporate and Other—Capital Protection Framework” for additional information);

• $328 million higher net pre-tax earnings primarily resulting from a gain in the second quarter of 2015 compared to a loss in the year ago quarter from foreign currency exchange rate movements on certain assets and liabilities within our Japanese insurance operations (see “—Results of Operations by Segment—International Insurance Division—Impact of foreign currency exchange rate movements on earnings—U.S. GAAP earnings impact of products denominated in non-local currencies” for additional information); and

• $173 million favorable variance, before taxes, from adjustments to DAC and other costs as well as reserves, reflecting updates to the estimated profitability of our businesses, including the impact of our annual review and update of assumptions performed in the second quarter of of 2015. This excludes the impact associated with the variable annuity hedging program discussed below (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities” for additional information).

Partially offsetting these increases in income (loss) from continuing operations were the following items:

• $1,447 million lower net pre-tax realized gains (losses) for PFI excluding the Closed Block division, excluding the impact of the hedging program associated with certain variable annuities described below, primarily reflecting changes in the market value of derivatives due to increases in interest rates in the current quarter compared to decreases in interest rates in the year ago quarter (see “—Realized Investment Gains and Losses” for additional information);

• $504 million unfavorable variance, before income taxes, reflecting the net impact from changes in the value of our embedded derivatives and related hedge positions associated with certain variable annuities (see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities—Variable Annuity Hedging Program Results” for additional information); and

• $275 million unfavorable impact of higher tax expense reflecting higher pre-tax income in the current quarter compared to the year ago quarter.

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Six Month Comparison. The increase in income (loss) from continuing operations for the first six months of 2015 compared to the first six months of 2014 reflected the following:

• $2,007 million favorable variance, on a pre-tax basis, resulting from a net gain in the first six months of 2015 compared to a net loss in the year ago period, reflecting our decision to manage a portion of our interest rate risk through our Capital Protection Framework;

• $300 million favorable variance, before taxes, from adjustments to DAC and other costs as well as reserves, reflecting updates to the estimated profitability of our businesses, including the impact of our annual review and update of assumptions performed in the second quarter of 2015. This excludes the impact associated with the variable annuity hedging program discussed below;

• $200 million favorable variance, before income taxes, reflecting the net impact from changes in the value of our embedded derivatives and related hedge positions associated with certain variable annuities; and

• $139 million higher net pre-tax earnings primarily resulting from a gain in the first six months of 2015 compared to a loss in the year ago period from foreign currency exchange rate movements on certain assets and liabilities within our Japanese insurance operations.

Partially offsetting these increases in income (loss) from continuing operations were the following items:

• $927 million lower net pre-tax realized gains (losses) for PFI excluding the Closed Block division, excluding the impact of the hedging program associated with certain variable annuities described above, primarily reflecting changes in the market value of derivatives due to increases in interest rates in the first six months of 2015 compared to decreases in interest rates in the year ago period; and

• $501 million unfavorable impact of higher tax expense reflecting higher pre-tax income in the first six months of 2015 compared to the year ago period.

Segment Measures

Adjusted Operating Income. In managing our business, we analyze our segments’ operating performance using “adjusted operating income.” Adjusted operating income does not equate to “income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” or “net income” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss we use to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is our measure of segment performance. The adjustments to derive adjusted operating income are important to an understanding of our overall results of operations. 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. 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. As discussed in “—Results of Operations” above, under both the current reporting for the Closed Block division and the former reporting for the Closed Block Business, its results are excluded from adjusted operating income.

See Note 11 to the Unaudited Interim Consolidated Financial Statements for further information on the presentation of segment results and our definition of adjusted operating income.

Annualized New Business Premiums. In managing certain of our businesses, we analyze annualized new business premiums, which do not correspond to revenues under U.S. GAAP. Annualized new business premiums measure the current sales performance of the business, while revenues primarily reflect the renewal persistency of policies written in prior years and net investment income, in addition to current sales. Annualized new business premiums include 10% of first year premiums or deposits from single pay products. No other adjustments are made for limited pay contracts.

Assets Under Management. In managing our Asset Management business, we analyze assets under management, which do not correspond to U.S. GAAP assets, because the principal source of revenues is fees based on assets under management. Assets under management represents the fair market value or account value of assets which we manage directly for institutional clients, retail clients, and for our general account, as well as assets invested in our products that are managed by third party managers.

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Account Values. In managing our Individual Annuity and Retirement businesses, we analyze account values, which do not correspond to U.S. GAAP assets. Net sales (redemptions) in our Individual Annuity business and net additions (withdrawals) in our Retirement business do not correspond to revenues under U.S. GAAP, but are used as a relevant measure of business activity.

Accounting Policies & Pronouncements

Application of Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires the application of accounting policies that often involve a significant degree of judgment. Management, on an ongoing basis, reviews estimates and assumptions used in the preparation of financial statements. If management determines that modifications in assumptions and estimates are appropriate given current facts and circumstances, the Company’s results of operations and financial position as reported in the Unaudited Interim Consolidated Financial Statements could change significantly.

Management believes the accounting policies relating to the following areas are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments:

• DAC and other costs, including deferred sales inducements (“DSI”) and value of business acquired (“VOBA”);

• Goodwill;

• Valuation of investments, including derivatives, and the recognition of other-than-temporary impairments;

• Policyholder liabilities;

• Pension and other postretirement benefits;

• Taxes on income; and

• Reserves for contingencies, including reserves for losses in connection with unresolved legal matters.

Annually, we perform a comprehensive review of the assumptions used in establishing reserves and in calculating the amortization of DAC and other costs. As discussed in “—Consolidated Results of Operations—Results of Operations” above, beginning in 2015, we perform our annual review of assumptions during the second quarter.

DAC and Other Costs

The near-term future equity rate of return assumption used in evaluating DAC and other costs for our domestic variable annuity and variable life insurance products is derived using a reversion to the mean approach, a common industry practice. Under this approach, we consider historical equity returns and adjust projected equity returns over an initial future period of five years (the “near-term”) so that equity returns converge to the long-term expected rate of return. If the near-term projected future rate of return is greater than our near-term maximum future rate of return of 15%, we use our maximum future rate of return. As of June 30, 2015, our variable annuities and variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 4.7% near-term mean reversion equity rate of return.

The weighted average rate of return assumptions for these businesses consider many factors specific to each business, including asset durations, asset allocations and other factors. We generally update the near-term equity rates of return and our estimate of total gross profits each quarter to reflect the result of the reversion to the mean approach. These market performance related adjustments to our estimate of total gross profits result in cumulative adjustments to prior amortization, reflecting the application of the new required rate of amortization to all prior periods’ gross profits.

For additional information on our policies for DAC and other costs and for the remaining critical accounting estimates listed above, see our Annual Report on Form 10-K for the year ended December 31, 2014, under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Policies & Pronouncements—Application of Critical Accounting Estimates.”

Adoption of New Accounting Pronouncements

See Note 2 to our Unaudited Interim Consolidated Financial Statements for a discussion of newly adopted accounting pronouncements.

Results of Operations by Segment

U.S. Retirement Solutions and Investment Management Division

Individual Annuities

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The Individual Annuities segment offers both variable and fixed annuities that may include guaranteed living or death benefits. It also offers fixed annuities that provide a guarantee of principal and interest credited at rates we determine, subject to certain contractual minimums. We derive our revenue mainly from fee income generated on variable annuity account values, as the investment return on the contractholder funds is generally attributed directly to the contractholder. We also earn investment income on fixed annuity account values and certain other management fees. Our expenses primarily consist of interest credited and other benefits to contractholders, amortization of DAC and other costs, non-deferred expenses related to the selling and servicing of the various products we offer, costs of hedging certain risks associated with these products, changes in the reserves for benefit guarantees and other general business expenses. These drivers of our business results are generally included in adjusted operating income, with exceptions related to certain guarantees, as discussed below.

The U.S. GAAP accounting and our adjusted operating income treatment for our guarantees differ depending upon the specific feature. The reserves for our guaranteed minimum death benefit (“GMDB”) and guaranteed minimum income benefit (“GMIB”) features are calculated based on our best estimate of actuarial and capital markets return assumptions. The risks associated with these benefit features are retained and results are included in adjusted operating income. In contrast, certain of our guaranteed living benefit features are accounted for as embedded derivatives and reported at fair value. Under U.S. GAAP, the fair values of these benefit features are based on assumptions a market participant would use in valuing these embedded derivatives.We hedge or limit our exposure to certain risks associated with these features through our living benefits hedging program and product design features. Adjusted operating income, as discussed below in “—Adjusted Operating Income” and “—Revenues, Benefits and Expenses,” excludes amounts related to changes in the market value of the embedded derivatives and related hedge positions, and the related impact to amortization of DAC and other costs. The items excluded from adjusted operating income are discussed below in “—Variable Annuity Hedging Program Results.”

Account Values

Account values are a significant driver of our operating results. Since most fees are determined by the level of separate account assets, fee income varies according to the level of account values. Additionally, our fee income generally drives other items such as our pattern of amortization of DAC and other costs. Account values are driven by net flows from new business sales, the impact of market changes which can be either positive or negative, and outflows related to surrenders, withdrawals, benefit payments and policy charges. The annuity industry competitive landscape, which has been dynamic over the last few years, may impact our net flows and new business sales. The following table sets forth account value information for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30,
	2015			2014			2015			2014			2015
	(in millions)
Total Individual Annuities(1):
Beginning total account value	$	161,127		$	155,276		$	158,664		$	154,140		$	159,528
Sales	2,341			2,664			4,568			4,985			9,591
Surrenders and withdrawals	(2,203		)	(2,221		)	(4,399		)	(4,414		)	(8,837		)
Net sales	138			443			169			571			754
Benefit payments	(489		)	(481		)	(977		)	(892		)	(1,884		)
Net flows	(351		)	(38		)	(808		)	(321		)	(1,130		)
Change in market value, interest credited and other activity	(889		)	5,159			2,923			7,426			4,163
Policy charges	(911		)	(869		)	(1,803		)	(1,717		)	(3,585		)
Ending total account value	$	158,976		$	159,528		$	158,976		$	159,528		$	158,976

__________

(1) Includes variable and fixed annuities sold as retail investment products. Investments sold through defined contribution plan products are included with such products within the Retirement segment. Variable annuity account values were $155.4 billion and $155.9 billion as of June 30, 2015 and 2014, respectively. Fixed annuity account values were $3.6 billion as of both June 30, 2015 and 2014.

The decrease in account values as of June 30, 2015 compared to June 30, 2014 was largely driven by benefit payments and contract charges on contractholder accounts. These decreases were partially offset by favorable changes in the market value of contractholder funds, primarily reflecting equity market appreciation over the last twelve months, and positive net sales to a lesser extent.

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The decline in net sales for the three and six months ended June 30, 2015 compared to the prior year periods, respectively, reflects a decline in sales of our products with the highest daily benefit, partially offset by higher sales of other variable annuity products, including our Prudential Premier® Investment Variable Annuity (“PPI”) and our Prudential Defined Income Variable Annuity (“PDI”), as we have sought to broaden our offerings and diversify our risk profile.

Operating Results

The following table sets forth the Individual Annuities segment’s operating results for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Revenues	$	1,200		$	1,171		$	2,387		$	2,328
Benefits and expenses	652			781			1,310			1,550
Adjusted operating income	548			390			1,077			778
Realized investment gains (losses), net, and related adjustments	(409		)	262			1,000			466
Related charges	128			(3		)	(325		)	33
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	267		$	649		$	1,752		$	1,277

Adjusted Operating Income

Three Month Comparison. Adjusted operating income increased $158 million. Excluding the impacts of changes in the estimated profitability of the business, discussed below, adjusted operating income increased $29 million. The increase was driven by higher asset-based fee income due to growth in average variable annuity account values, net of an increase in asset-based commissions, partially offset by a decline in net investment income driven by lower income on non-coupon investments.

The impacts of changes in the estimated profitability of the business include adjustments to the amortization of DAC and other costs and to the reserves for the GMDB and GMIB features of our variable annuity products. These adjustments resulted in a net benefit of $125 million and a net charge of $4 million in the second quarter of 2015 and 2014, respectively. The net benefit in the second quarter of 2015 primarily reflects the impact of expected favorable future equity market performance and higher expected rates of return on fixed income investments within contractholder accounts and on future expected claims relative to our assumptions. The remaining net benefit included a $31 million net benefit resulting from our annual review and update of assumptions, driven by modifications to both our actuarial and economic assumptions. The net charge in the second quarter of 2014 primarily reflected the impact of lower expected rates of return on fixed income investments within contractholder accounts and on future expected claims relative to our assumptions, which more than offset the impact of favorable equity market performance.

Six Month Comparison. Adjusted operating income increased $299 million. Excluding the impacts of changes in the estimated profitability of the business, discussed below, adjusted operating income increased $43 million. The increase was driven by higher asset-based fee income due to growth in average variable annuity account values, net of a related increase in asset-based commissions, amortization costs and reserve provisions for the GMDB and GMIB features of our variable annuity products. Partially offsetting this net increase was a decline in net investment income driven by lower income on non-coupon investments.

Adjustments to the amortization of DAC and other costs and to the reserves for the GMDB and GMIB features of our variable annuity products resulted in a net benefit of $231 million and a net charge of $25 million in the first six months of 2015 and 2014, respectively. The net benefit in the first six months of 2015 primarily reflected the impact of favorable equity market performance and the net benefit resulting from an annual review and update of assumptions, as discussed above. The net charge in the first six months of 2014 primarily reflected the impact of lower expected rates of return on fixed income investments within contractholder accounts and on future expected claims relative to our assumptions, which more than offset the impact of favorable equity market performance.

Revenues, Benefits and Expenses

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Three Month Comparison. Revenues, as shown in the table above under “—Operating Results,” increased $29 million, primarily driven by a $36 million increase in policy charges and fee income, asset management and service fees and other income, due to growth in average variable annuity account values. Partially offsetting this increase was a $10 million decline in net investment income, driven by lower income on non-coupon investments.

Benefits and expenses, as shown in the table above under “—Operating Results,” decreased $129 million. Excluding the $129 million net decrease related to the impacts of certain changes in our estimated profitability of the business discussed above, benefits and expenses remained unchanged. General and administrative expenses, net of capitalization, increased $11 million, driven by higher asset-based commissions and asset management costs due to average account value growth, and higher operating expenses. Amortization of DAC increased $2 million, primarily driven by higher fee income, as discussed above. Partially offsetting these increases were an $11 million decrease in interest expense, driven by lower debt, and a $5 million decrease in interest credited to policyholders’ account balances, driven by lower average account values in the general account.

Six Month Comparison. Revenues increased $59 million, primarily driven by an $80 million increase in policy charges and fee income, asset management and service fees and other income, due to growth in average variable annuity account values. Partially offsetting this increase was a $24 million decline in net investment income, driven by lower income on non-coupon investments.

Benefits and expenses decreased $240 million. Excluding the $256 million net decrease related to the impacts of certain changes in our estimated profitability of the business discussed above, benefits and expenses increased $16 million. General and administrative expenses, net of capitalization, increased $27 million, driven by higher asset-based commissions and asset management costs due to average account value growth, and higher operating expenses. Amortization of DAC and policyholders’ benefits each increased $7 million, primarily driven by higher fee income, as discussed above. Partially offsetting these increases were a $13 million decrease in interest expense, driven by lower debt, and a $12 million decrease in interest credited to policyholders’ account balances, driven by lower average account values in the general account.

Variable Annuity Risks and Risk Mitigants

The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For our actuarial assumptions, we have retained the majority of the risk that actual experience will differ from the assumptions used in the original pricing of these products. For our capital markets assumptions, we hedge or limit our exposure to certain risks created by capital markets fluctuations through a combination of product design features, such as an automatic rebalancing feature, also referred to as an asset transfer feature, and inclusion of certain living benefits in our hedging program. In addition, we consider external reinsurance a form of risk mitigation. Effective April 1, 2015, we entered into an agreement with Union Hamilton Reinsurance, Ltd., an external counterparty, to reinsure approximately 50% of the Highest Daily Lifetime Income (“HDI”) v.3.0, the newest version of our variable annuity with a “highest daily” living benefits guarantee. This reinsurance agreement covers most new HDI v.3.0 variable annuity business issued between April 1, 2015 and December 31, 2016 on a quota share basis, subject to a maximum $5 billion of new rider purchase payments made through December 31, 2016.

Our automatic rebalancing feature occurs at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate accounts. The automatic rebalancing feature associated with currently-sold highest daily benefit products uses a designated bond fund sub-account within the separate accounts. The transfers are based on a static mathematical formula used with the particular benefit which considers a number of factors, including, but not limited to, the impact of investment performance on the contractholder’s total account value. The objective of the automatic rebalancing feature is to reduce our exposure to equity market risk and market volatility. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of contractholder deposits, as well as a required allocation to our general account for certain of our products. We have also introduced new products that diversify our risk profile and incorporate provisions in product design allowing frequent revisions of key pricing elements. In addition, certain fees are based on the benefit guarantee amount or the contractholder account value, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

We use our hedging program to help manage certain risks associated with certain of our guarantees. The hedging program’s objective is to help mitigate fluctuations in net income and capital from living benefit liabilities due to capital market movements, within firm established tolerances. Through our hedging program, we enter into derivative positions that seek to offset the net change in our hedge target, discussed further below. In addition to mitigating fluctuations of the living benefit liabilities due to

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capital market movements, the hedging program is also focused on a long-term goal of accumulating assets that could be used to pay claims under these benefits irrespective of market path. For additional information regarding this program, see “—Variable Annuities Hedging Program Results” below.

For certain living benefits features, claims will primarily represent the funding of contractholder lifetime withdrawals after the cumulative withdrawals have first exhausted the contractholder account value. Due to the age of the in force block, limited claim payments have occurred to date, and they are not expected to increase significantly within the next five years, based upon current assumptions. The timing and amount of future claims will depend on actual returns on contractholder account value and actual contractholder behavior relative to our assumptions. The majority of our current living benefits features provide for guaranteed lifetime contractholder withdrawal payments inclusive of a “highest daily” contract value guarantee. Our PDI variable annuity complements our variable annuity products with the highest daily benefit and provides for guaranteed lifetime contractholder withdrawal payments, but restricts contractholder asset allocation to a single bond fund sub-account within the separate account.

The majority of our variable annuity contracts with living benefits features, and all new contracts sold with our highest daily living benefits feature, include risk mitigants in the form of an automatic rebalancing feature and/or inclusion in our hedging program. As discussed above, we also utilize external reinsurance as a form of additional risk mitigation. The guaranteed benefits of certain legacy products that were sold prior to our implementation of the automatic rebalancing feature are also included in our hedging program. Certain legacy guaranteed minimum accumulation benefit (“GMAB”) products include the automatic rebalancing feature, but are not included in the hedging program. The PDI product and contracts with the GMIB feature have neither risk mitigant. Rather than utilizing a capital markets hedging strategy, certain risks associated with PDI are managed through the limitation of contractholder asset allocations to a single bond fund sub-account.

For our GMDBs, we provide a benefit payable in the event of death. Our base GMDB is generally equal to a return of cumulative deposits adjusted for any partial withdrawals. Certain products include an optional enhanced GMDB based on the greater of a minimum return on the contract value or an enhanced value. We have retained the risk that the total amount of death benefit payable may be greater than the contractholder account value. However, a substantial portion of the account values associated with GMDBs are subject to an automatic rebalancing feature because the contractholder also selected a living benefit feature which includes an automatic rebalancing feature. All of the variable annuity account values with living benefit features also contain GMDBs. The living and death benefit features for these contracts cover the same insured life and, consequently, we have insured both the longevity and mortality risk on these contracts.

The following table sets forth the risk profile of our living benefits and GMDB features as of the periods indicated.

	June 30, 2015				December 31, 2014				June 30, 2014
	Account Value		% of Total		Account Value		% of Total		Account Value		% of Total
	(in millions)
Living benefit/GMDB features(1):
Both hedging program and automatic rebalancing(2)	$	111,196	72	%	$	110,953	72	%	$	110,660	71	%
Hedging program only	10,896		7	%	11,395		7	%	12,052		8	%
Automatic rebalancing only	1,574		1	%	1,771		1	%	2,035		1	%
External reinsurance(3)	553		0	%	0		0	%	0		0	%
PDI	3,634		2	%	2,777		2	%	1,846		1	%
Other Products	3,151		2	%	3,324		2	%	3,545		2	%
Total living benefit/GMDB features	$	131,004			$	130,220			$	130,138
GMDB features and other(4):	24,420		16	%	24,863		16	%	25,752		17	%
Total variable annuity account value	$	155,424			$	155,083			$	155,890

__________

(1) All contracts with living benefit guarantees also contain GMDB features, covering the same insured contract.

(2) Contracts with living benefits that are included in our hedging program, and have an automatic rebalancing feature.

(3) Represents reinsurance transaction with external counterparty effective April 2015. These contracts with living benefits also have an automatic rebalancing feature.

(4) Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature.

The changes in the risk profile of our variable annuity account values reflect our product risk diversification strategy and broadening of our product offerings over the past year, as well as the runoff of legacy products over time.

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Variable Annuity Hedging Program Results

Under U.S. GAAP, the liability for certain living benefit features is accounted for as an embedded derivative and recorded at fair value, based on assumptions a market participant would use in valuing these features. The fair value is calculated as the present value of future expected benefit payments to contractholders less the present value of assessed rider fees attributable to the applicable living benefit features using option pricing techniques. See Note 13 to the Unaudited Interim Consolidated Financial Statements for additional information regarding the methodology and assumptions used in calculating the fair value under U.S. GAAP.

As noted within “—Variable Annuity Risks and Risk Mitigants” above, we maintain a hedging program to help manage certain capital market risks associated with certain of these guarantees. Our hedging program utilizes an internally-defined hedge target. We review our hedge target and hedging program on an ongoing basis, and may periodically adjust them based on our evaluation of the risks associated with the guarantees and other factors. As currently defined, our hedge target includes the following modifications to the assumptions used in the U.S. GAAP valuation:

• The impact of non-performance risk (“NPR”) is excluded to maximize protection against the entire projected claim irrespective of the possibility of our own default.

• The assumptions used in the projection of customer account values for fixed income and equity funds and the discounted net living benefits (claims less fees) are adjusted to reflect returns in excess of risk-free rates equal to our expectations of credit risk premiums.

• Actuarial assumptions are adjusted to remove risk margins and reflect our best estimates.

Due to these modifications, we expect differences each period between the change in the value of the embedded derivative as defined by U.S. GAAP and the change in the value of the hedge positions used to manage the hedge target, thus potentially increasing volatility in U.S. GAAP earnings.Application of the valuation methodologies described above could result in either a liability or contra-liability balance for the fair value of the embedded derivative under U.S. GAAP and/or the value of the hedge target, given changing capital market conditions and various actuarial assumptions.The following table provides a reconciliation between the fair value of the embedded derivative as defined by U.S. GAAP and the value of our hedge target as of the periods indicated.

	As of June 30, 2015			As of December 31, 2014
	(in billions)
Embedded derivative liability as defined by U.S. GAAP	$	5.5		$	8.1
Less: NPR Adjustment	(7.3		)	(6.7		)
Embedded derivative liability as defined by U.S. GAAP, excluding NPR	12.8			14.8
Less: Amount of embedded derivative liability, excluding NPR, excluded from hedge target liability	5.9			6.1
Hedge target liability (contra-liability)	$	6.9		$	8.7

We seek to offset the changes in our hedge target by entering into a range of exchange-traded, cleared and over-the-counter (“OTC”) equity and interest rate derivatives to hedge certain capital market risks present in our hedge target. The instruments include, but are not limited to, interest rate swaps, swaptions, floors and caps as well as equity options, total return swaps and equity futures. The following table sets forth the market and notional values of these instruments as of the periods indicated.

	As of June 30, 2015								As of December 31, 2014
	Equity				Interest Rate				Equity					Interest Rate
Instrument	Notional		Market Value		Notional		Market Value		Notional		Market Value			Notional		Market Value
	(in billions)
Futures	$	0.0	$	0.0	$	0.1	$	0.0	$	0.2	$	0.0		$	0.0	$	0.0
Swaps(1)	15.5		0.2		88.4		3.6		14.5		(0.4		)	87.7		5.1
Options	9.4		0.2		23.1		0.2		10.4		0.4			25.5		0.5
Total	$	24.9	$	0.4	$	111.6	$	3.8	$	25.1	$	0.0		$	113.2	$	5.6

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__________

(1) Includes interest rate swaps for which offsetting positions exist in Corporate and Other operations, reflecting the impact of managing interest rate risk through capital management strategies other than hedging of particular exposures. See “—Corporate and Other.”

Due to cash flow timing differences between our hedging instruments and the corresponding hedge target, as well as other factors such as updates to actuarial assumptions which are not hedged, the market value of the hedge portfolio compared to our hedge target measured as of any specific point in time may be different and is not expected to be fully offsetting. In addition to the derivatives held as part of the hedging program, we have cash and other invested assets available to cover the future claims payable under these guarantees and other liabilities. For additional information on the liquidity needs associated with our hedging program, see “—Liquidity and Capital Resources—Liquidity—Liquidity associated with other activities—Hedging activities associated with living benefit guarantees.”

The primary sources of differences between the changes in the fair value of the hedge positions and the hedge target, other than changes related to actuarial valuation assumption updates, fall into one of three categories:

• Fund Performance—In order to project future account value changes, we make certain assumptions about how each underlying fund will perform. We map contractholder funds to hedgeable indices that we believe are the best representation of the liability to be hedged in the capital markets. The difference between the modeled fund performance and actual fund performance results in basis that can be either positive or negative.

• Net Market Impact—We incur rebalancing costs related to the dynamic rebalancing of the hedging instruments as markets move. Our hedging program is also subject to the impact of implied and realized market volatility on the hedge positions relative to our hedge target that can lead to positive or negative results.

• Liability Basis—We make assumptions about expected changes in the hedge target related to certain items, such as contractholder behavior. The difference between the actual change in the hedge target and the expected changes we have modeled results in basis that can be either positive or negative.

The net impact of the change in the fair value of the embedded derivative associated with our living benefit features and the change in the fair value of the related hedge positions is included in “Realized investment gains (losses), net, and related adjustments” and the related impact to the amortization of DAC and other costs is included in “Related charges,” both of which are excluded from adjusted operating income. The following table shows the net impact of changes in the embedded derivative and related hedge positions, as well as the related amortization of DAC and other costs, for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(1) (in millions)
Hedge Program Results:
Change in value of hedge target(2)	$	4,581		$	(859	)	$	2,166		$	(2,795	)
Change in fair value of hedge positions	(4,582		)	971			(2,165		)	2,927
Net hedging impact(2)(3)	$	(1	)	$	112		$	1		$	132
Reconciliation of Hedge Program Results to U.S. GAAP Results:
Net hedging impact (from above)	$	(1	)	$	112		$	1		$	132
Change in portions of U.S. GAAP liability, before NPR, excluded from hedge target(2)(4)	840			(349		)	409			(910		)
Change in the NPR adjustment(2)	(1,148		)	486			660			1,214
Net impact from changes in the U.S. GAAP embedded derivative and hedge positions—reported in Individual Annuities	(309		)	249			1,070			436
Related benefit (charge) to amortization of DAC and other costs(2)	77			(11		)	(382		)	18
Net impact of assumption updates and other refinements	(34		)	0			(34		)	0
Net impact from changes in the U.S. GAAP embedded derivative and hedge positions, after the impact of NPR, DAC and other costs—reported in Individual Annuities(3)	$	(266	)	$	238		$	654		$	454

__________

(1) Positive amount represents income; negative amount represents a loss.

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(2) Excludes the net impacts of assumption updates and other refinements, and includes rider fees received attributable to future benefit payments. For both the three and six months ended June 30, 2015, the assumption update impact to the change in value of hedge target, change in portions of U.S. GAAP liability, before NPR, excluded from hedge target, change in the NPR adjustment and related benefit (charge) to amortization of DAC and other costs was approximately $106 million, $(172) million, $(8) million and $40 million, respectively. Attributed fees received for the three and six months ended June 30, 2015, were approximately $250 million and $494 million, respectively, and were included in “Change in value of hedge target.”

(3) Excludes $768 million and $(592) million for the three months ended June 30, 2015 and 2014, respectively, and $111 million and $(1,462) million for the six months ended June 30, 2015 and 2014, respectively, representing the impact of managing interest rate risk through capital management strategies other than hedging of particular exposures. Because this decision is based on the capital considerations of the Company as a whole, the impact is reported in Corporate and Other operations. See “—Corporate and Other.”

(4) Represents the impact attributable to the difference between the value of the hedge target and the value of the embedded derivative as defined by U.S. GAAP, before adjusting for NPR, as discussed above.

The net hedging charge of $266 million and benefit of $654 million for the three and six months ended June 30, 2015, respectively, were primarily driven by changes in the NPR adjustment. For the three months ended June 30, 2015, rising interest rates drove decreases in the base embedded derivative liability before NPR, which resulted in corresponding decreases in the NPR adjustment. The impact on NPR from rising interest rates was partially offset by the impact of widening credit spreads. For the six months ended June 30, 2015, increases in the NPR adjustment driven by widening credit spreads more than offset the decrease due to net interest rate increases. These impacts were partially offset by related impacts to the amortization of DAC and other costs for both periods. Results for both periods also reflected the changes in the portions of the U.S. GAAP liability that are excluded from our hedge target, net of related impacts to the amortization of DAC and other costs. The net charge from the impact of assumption updates and other refinements of $34 million for both periods resulted from our annual review and update of assumptions, primarily driven by modifications to our actuarial assumptions and other refinements.

The net hedging benefits of $238 million and $454 million for the three and six months ended June 30, 2014, respectively, were primarily driven by changes in the NPR adjustment. Declining interest rates in 2014 drove increases in the base embedded derivative liability before NPR which resulted in corresponding increases in the NPR adjustment for both periods. To a lesser extent, results for both periods also reflected the net impacts of changes in the value of our hedge target and related hedge positions. Lower interest rate volatility and fund outperformance relative to indices, partially offset by unfavorable liability basis, drove net hedging benefits for both periods. The changes in the NPR adjustment and the net hedging impacts resulted in related impacts to the amortization of DAC and other costs in all periods. Results for both periods also reflected the changes in the portions of the U.S. GAAP liability that are excluded from our hedge target, net of related impacts to the amortization of DAC and other costs.

For information regarding the Capital Protection Framework we use to evaluate and support the risks of our hedging program, see “—Liquidity and Capital Resources—Capital.”

Retirement

Operating Results

The following table sets forth the Retirement segment’s operating results for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Revenues	$	3,180		$	1,469		$	5,658		$	3,000
Benefits and expenses	2,943			1,183			5,137			2,350
Adjusted operating income	237			286			521			650
Realized investment gains (losses), net, and related adjustments	(273		)	93			136			211
Related charges	0			1			(1		)	1
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(270		)	172			(243		)	345
Change in experience-rated contractholder liabilities due to asset value changes	284			(136		)	143			(251		)
Income from continuing operations before income taxes and equity in earnings of operating joint ventures	$	(22	)	$	416		$	556		$	956

Adjusted Operating Income

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Three Month Comparison. Adjusted operating income decreased $49 million, primarily driven by lower net investment spread results, partially offset by a more favorable reserve impact from case experience. The decrease in net investment spread results primarily reflected lower income on non-coupon investments, lower reinvestment rates and lower income on derivatives used in portfolio management, partially offset by growth in account values primarily from significant pension risk transfer transactions. The more favorable reserve impact from case experience reflected favorable mortality for pension risk transfer contracts. There was no net impact to adjusted operating income from our annual review and update of assumptions and other refinements.

Six Month Comparison. Adjusted operating income decreased $129 million, primarily driven by lower net investment spread results, partially offset by a more favorable reserve impact from case experience. The decrease in net investment spread results primarily reflected lower income on non-coupon investments, lower reinvestment rates and lower income on derivatives used in portfolio management, partially offset by growth in account values primarily from significant pension risk transfer transactions. The more favorable reserve impact from case experience reflected favorable mortality for pension risk transfer contracts. There was no net impact to adjusted operating income from our annual review and update of assumptions and other refinements.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues, as shown in the table above under “—Operating Results,” increased $1,711 million. Premiums increased $1,735 million, primarily driven by pension risk transfer transactions, including a significant payout annuity transaction that closed in the second quarter of 2015 and ongoing premiums assumed for longevity reinsurance contracts sold over the last year. This increase in premiums resulted in a corresponding increase in policyholders’ benefits, as discussed below. Net investment income decreased $12 million, primarily reflecting lower income on non-coupon investments and lower reinvestment rates, partially offset by growth in account values from significant pension risk transfer transactions. Policy charges and fee income, asset management and service fees and other income decreased $12 million, primarily from lower income on derivatives used in portfolio management and lower fee income.

Benefits and expenses, as shown in the table above under “—Operating Results,” increased $1,760 million. Policyholders’ benefits, including the change in policy reserves, increased $1,745 million, primarily related to the increase in premiums discussed above. Amortization of DAC increased $30 million primarily driven by a net unfavorable impact from our annual review and update of assumptions and other refinements, and an increase from amortization related to the significant pension risk transfer transactions discussed above. Partially offsetting these increases was a $9 million decrease in interest credited to policyholders’ account balances, driven by the impact of crediting rate reductions on full service general account stable value account values and maturities of contracts with higher crediting rates. In addition, general and administrative expenses, net of capitalization, decreased $7 million primarily driven by a favorable impact from our annual review and update of assumptions and other refinements on the amortization of VOBA, partially offset by higher operating expenses, including costs to support strategic initiatives.

Six Month Comparison. Revenues increased $2,658 million. Premiums increased $2,751 million, primarily driven by pension risk transfer transactions, including two significant payout annuity transactions that closed in 2015 and ongoing premiums assumed for longevity reinsurance contracts sold over the last year. This increase in premiums resulted in a corresponding increase in policyholders’ benefits, as discussed below. Net investment income decreased $58 million primarily reflecting lower income on non-coupon investments and lower reinvestment rates, partially offset by growth in account values from significant pension risk transfer transactions. Policy charges and fee income, asset management and service fees and other income decreased $35 million primarily from lower income on derivatives used in portfolio management and lower fee income.

Benefits and expenses increased $2,787 million. Policyholders’ benefits, including the change in policy reserves, increased $2,768 million, primarily related to the increase in premiums discussed above. Amortization of DAC increased $30 million primarily driven by a net unfavorable impact from our annual review and update of assumptions and other refinements, and an increase from amortization related to the significant pension risk transfer transactions discussed above. Partially offsetting these increases was an $11 million decrease in interest credited to policyholders’ account balances, driven by maturities of contracts with higher crediting rates and the impact of crediting rate reductions on full service general account stable value account values. In addition, general and administrative expenses, net of capitalization, decreased $2 million primarily driven by a favorable impact from our annual review and update of assumptions and other refinements on the amortization of VOBA, partially offset by higher operating expenses, including costs to support strategic initiatives.

Account Values

Account values are a significant driver of our operating results, and are primarily driven by net additions (withdrawals) and the impact of market changes. The income we earn on our fee-based products varies with the level of fee-based account values, since many policy fees are determined by these values. The investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values. To a lesser extent, changes in account values impact our

108

pattern of amortization of DAC and VOBA and general and administrative expenses. The following table shows the changes in the account values and net additions (withdrawals) of Retirement segment products for the periods indicated. Net additions (withdrawals) are plan sales and participant deposits or additions, as applicable, minus plan and participant withdrawals and benefits. Account values include both internally- and externally-managed client balances as the total balances drive revenue for the Retirement segment. For more information on internally-managed balances, see “—Asset Management.”

	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30,
	2015			2014			2015			2014			2015
	(in millions)
Full Service:
Beginning total account value	$	188,145		$	178,150		$	184,196		$	173,502		$	181,577
Deposits and sales	5,040			4,528			11,354			13,115			22,173
Withdrawals and benefits	(4,683		)	(6,066		)	(10,912		)	(12,069		)	(21,444		)
Change in market value, interest credited and interest income and other activity	305			4,965			4,169			7,029			6,501
Ending total account value	$	188,807		$	181,577		$	188,807		$	181,577		$	188,807
Net additions (withdrawals)	$	357		$	(1,538	)	$	442		$	1,046		$	729
Institutional Investment Products:
Beginning total account value	$	177,120		$	149,661		$	179,641		$	149,402		$	148,971
Additions	9,147			2,075			10,116			3,808			49,601
Withdrawals and benefits	(3,808		)	(4,602		)	(7,303		)	(7,619		)	(15,720		)
Change in market value, interest credited and interest income(1)	83			1,753			1,712			3,194			4,351
Other(1)(2)	1,256			84			(368		)	186			(3,405		)
Ending total account value	$	183,798		$	148,971		$	183,798		$	148,971		$	183,798
Net additions (withdrawals)	$	5,339		$	(2,527	)	$	2,813		$	(3,811	)	$	33,881

__________

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

(2) “Other” activity includes the effect of foreign exchange rate changes associated with our United Kingdom longevity reinsurance business and changes in asset balances for externally-managed accounts.

The increase in full service account values as of June 30, 2015, compared to June 30, 2014, primarily reflects the impact of equity market appreciation on the market value of customer funds over the past twelve months. The increase in net additions (withdrawals) for the three months ended June 30, 2015, compared to the prior year period was primarily driven by a lower volume of large plan lapses and a higher volume of large plan sales. The decrease in net additions for the six months endedJune 30, 2015, compared to the prior year period was driven by a significant plan sale in the prior period.

The increase in institutional investment products account values as of June 30, 2015, compared to June 30, 2014, primarily reflects additions resulting from significant pension risk transfer transactions over the past twelve months and a bank-owned life insurance stable value transaction in the second quarter of 2015, partially offset by net withdrawals of investment-only stable value accounts. The increase in net additions (withdrawals) for both the three and six months endedJune 30, 2015, compared to the prior year periods was primarily driven by additions resulting from significant pension risk transfer transactions, and a bank-owned life insurance stable value transaction.

Asset Management

Operating Results

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The following table sets forth the Asset Management segment’s operating results for the periods indicated.

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
	(in millions)
Operating results:
Revenues	$	776		$	713	$	1,509		$	1,380
Expenses	580			513		1,108			987
Adjusted operating income	196			200		401			393
Realized investment gains (losses), net, and related adjustments	(9		)	0		(3		)	7
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	49			22		54			29
Income from continuing operations before income taxes and equity in earnings of operating joint ventures	$	236		$	222	$	452		$	429

Adjusted Operating Income

Three Month Comparison. Adjusted operating income decreased $4 million. The decrease primarily reflected lower strategic investing results driven by lower income from fixed income funds. Partially offsetting the decrease were higher asset management fees, net of expenses, as a result of higher assets under management due to positive net flows and market appreciation.

Six Month Comparison. Adjusted operating income increased $8 million. The increase reflected higher performance-based incentive fees, net of expenses, primarily related to certain real estate funds, and higher asset management fees, net of expenses, as a result of higher assets under management due to positive net asset flows and market appreciation. These increases were partially offset by lower strategic investing results, driven by a gain on the sale of an investment in the prior period, and lower transaction fees in certain real estate portfolios.

Revenues and Expenses

The following table sets forth the Asset Management segment’s revenues, presented on a basis consistent with the table above under “—Operating Results,” by type.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Revenues by type:
Asset management fees by source:
Institutional customers	$	230	$	225	$	458	$	439
Retail customers(1)	197		177		386		350
General account	113		105		226		207
Total asset management fees	540		507		1,070		996
Incentive fees	16		17		47		38
Transaction fees	5		8		10		15
Strategic investing	7		20		23		37
Commercial mortgage(2)	24		22		44		43
Other related revenues(3)	52		67		124		133
Service, distribution and other revenues(4)	184		139		315		251
Total revenues	$	776	$	713	$	1,509	$	1,380

__________

(1) Consists of fees from: individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Revenues from fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.

(2) Includes mortgage origination and spread lending revenues of our commercial mortgage origination and servicing business.

(3) Future revenues will be impacted by the level and diversification of our strategic investments, the commercial real estate market, and other domestic and international markets.

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(4) Includes payments from Wells Fargo under an agreement dated as of July 30, 2004, implementing arrangements with respect to money market mutual funds in connection with the combination of our retail securities brokerage and clearing operations with those of Wells Fargo. The agreement extends for ten years after termination of the Wachovia Securities joint venture, which occurred on December 31, 2009. The revenue from Wells Fargo under this agreement was $20 million for both the three months ended June 30, 2015 and 2014, and $39 million for both the six months endedJune 30, 2015 and 2014.

Three Month Comparison. Revenues, as shown in the table above, under “—Operating Results,” increased $63 million. Service, distribution and other revenues increased $45 million reflecting higher fees from certain consolidated funds, which were partially offset by higher expenses related to noncontrolling interests in these funds. Asset management fees increased $33 million primarily as a result of higher assets under management due to positive net asset flows and market appreciation. Partially offsetting these increases was a $13 million decrease in strategic investing revenues, primarily reflecting lower income from fixed income funds.

Expenses, as shown in the table above under “—Operating Results,” increased $67 million, including expenses relating to business growth initiatives, commissions from higher retail sales and higher expenses related to revenues associated with certain consolidated funds, as discussed above.

Six Month Comparison. Revenues increased $129 million. Asset management fees increased $74 million primarily as a result of higher assets under management due to positive net asset flows and market appreciation. Service, distribution and other revenues increased $64 million reflecting higher fees from certain consolidated funds, which were partially offset by higher expenses related to noncontrolling interests in these funds. Partially offsetting these increases was a $14 million decrease in strategic investing revenues, primarily reflecting a gain on the sale of an investment in the prior period.

Expenses increased $121 million, including expenses relating to business growth initiatives, commissions from higher retail sales and higher expenses related to revenues associated with certain consolidated funds, as discussed above.

Assets Under Management

The following table sets forth assets under management by asset class and source as of the dates indicated.

	June 30, 2015		December 31, 2014		June 30, 2014
	(in billions)
Assets Under Management (at fair market value):
Institutional customers:
Equity	$	65.7	$	63.8	$	66.2
Fixed income	277.4		270.0		264.7
Real estate	37.5		36.2		36.1
Institutional customers(1)	380.6		370.0		367.0
Retail customers:
Equity	128.5		122.8		122.2
Fixed income	68.4		61.0		55.7
Real estate	2.3		2.3		2.2
Retail customers(2)	199.2		186.1		180.1
General account:
Equity	7.7		7.7		8.1
Fixed income	359.0		368.1		364.6
Real estate	1.8		1.6		1.7
General account	368.5		377.4		374.4
Total assets under management	$	948.3	$	933.5	$	921.5

__________

(1) Consists of third-party institutional assets and group insurance contracts.

(2) Consists of: individual mutual funds and variable annuities and variable life insurance separate account assets; funds invested in proprietary mutual funds through our defined contribution plan products; and third-party sub-advisory relationships. Fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance are included in the general account.

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The following table sets forth the component changes in assets under management by asset source for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,						Twelve Months Ended June 30, 2015
	2015			2014			2015			2014
	(in billions)
Institutional Customers:
Beginning Assets Under Management	$	380.9		$	352.2		$	370.0		$	341.7		$	367.0
Net additions (withdrawals), excluding money market activity:
Third party	6.8			2.7			10.5			4.6			6.6
Affiliated	(1.1		)	0.4			(1.8		)	0.1			(0.1		)
Total	5.7			3.1			8.7			4.7			6.5
Market appreciation (depreciation)	(5.8		)	11.7			1.9			20.8			8.0
Other increases (decreases)(1)	(0.2		)	0.0			0.0			(0.2		)	(0.9		)
Ending Assets Under Management	$	380.6		$	367.0		$	380.6		$	367.0		$	380.6
Retail Customers:
Beginning Assets Under Management	$	198.4		$	172.9		$	186.1		$	170.7		$	180.1
Net additions (withdrawals), excluding money market activity:
Third party	(0.4		)	0.7			3.6			0.9			7.4
Affiliated	0.8			(1.0		)	3.6			(1.5		)	4.6
Total	0.4			(0.3		)	7.2			(0.6		)	12.0
Market appreciation (depreciation)	0.2			7.0			6.0			9.8			7.8
Other increases (decreases)(1)	0.2			0.5			(0.1		)	0.2			(0.7		)
Ending Assets Under Management	$	199.2		$	180.1		$	199.2		$	180.1		$	199.2
General Account:
Beginning Assets Under Management	$	382.4		$	365.8		$	377.4		$	357.5		$	374.4
Net additions (withdrawals), excluding money market activity:
Third party	0.0			0.0			0.0			0.0			0.0
Affiliated	(0.9		)	(0.3		)	(2.0		)	1.7			0.2
Total	(0.9		)	(0.3		)	(2.0		)	1.7			0.2
Market appreciation (depreciation)	(9.1		)	7.1			(3.8		)	15.1			6.9
Other increases (decreases)(1)	(3.9		)	1.8			(3.1		)	0.1			(13.0		)
Ending Assets Under Management	$	368.5		$	374.4		$	368.5		$	374.4		$	368.5

__________

(1) Includes the effect of foreign exchange rate changes, net money market activity and transfers from/(to) the Retirement segment as a result of changes in the client contract form. The impact from foreign currency fluctuations, which primarily impact the general account, resulted in losses of $1.4 billion and gains of $1.2 billion for the three months ended June 30, 2015 and 2014, respectively, losses of $2.0 billion and gains of $1.7 billion for the six months endedJune 30, 2015 and 2014, respectively, and losses of $17.6 billion for the twelve months ended June 30, 2015.

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Strategic Investments

The following table sets forth the strategic investments of the Asset Management segment at carrying value (including the value of derivative instruments used to mitigate equity market and currency risk) by asset class and source as of the dates indicated.

	June 30,
	2015		2014
	(in millions)
Co-Investments:
Real estate	$	245	$	348
Fixed income	150		70
Seed Investments:
Real estate	37		33
Public equity	290		265
Fixed income	165		238
Loans Secured by Investor Equity Commitments or Fund Assets:
Private equity secured by investor equity	15		0
Total	$	902	$	954

U.S. Individual Life and Group Insurance Division

Individual Life

Operating Results

The following table sets forth the Individual Life segment’s operating results for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Revenues	$	1,160		$	1,318		$	2,511		$	2,614
Benefits and expenses	923			1,160			2,158			2,331
Adjusted operating income	237			158			353			283
Realized investment gains (losses), net, and related adjustments	(429		)	221			(135		)	548
Related charges	244			(56		)	96			(138		)
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	52		$	323		$	314		$	693

On January 2, 2013, we acquired The Hartford Financial Services Group’s individual life insurance business (“the Hartford Life Business”) through a reinsurance transaction. As of June 30, 2015, the integration of the Hartford Life Business is substantially complete. We incurred approximately $110 million of pre-tax integration costs, inclusive of capitalized expenses, relative to expected costs of $120 million. We have also achieved annualized cost savings of approximately $90 million on a run rate basis commencing in the third quarter, which is in line with our expectations.

Adjusted Operating Income

Three Month Comparison. Adjusted operating income increased $79 million, primarily reflecting a $68 million net benefit from our annual review and update of assumptions and other refinements, mainly driven by net favorable modifications to our economic and actuarial assumptions. Excluding this impact, adjusted operating income increased $11 million, primarily driven by reserve updates for guaranteed minimum death benefits, partially offset by less favorable mortality experience, net of reinsurance, and a related decrease in the amortization of VOBA.

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Six Month Comparison. Adjusted operating income increased $70 million, primarily reflecting the net benefit from our annual review and update of assumptions and other refinements, as discussed above. Excluding this impact, adjusted operating income increased$2 million. This increase was primarily driven by reserve updates for guaranteed minimum death benefits, partially offset by unfavorable mortality experience, net of reinsurance, and a related decrease in the amortization of VOBA.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues, as shown in the table above under “—Operating Results,” decreased $158 million. Excluding the impact of our annual review and update of assumptions and other refinements, as discussed above, revenues decreased $5 million. Policy charges and fee income, asset management and service fees and other income decreased $29 million primarily reflecting a decrease in the amortization of unearned revenue reserves, driven by the impact of changes in the estimated profitability of the business due to market performance and other experience relative to our assumptions, partially offset by growth in our universal life business. Net investment income increased $14 million, reflecting higher invested assets resulting from business growth, required capital and increased unaffiliated reserve financing, which was offset by higher interest expense, as discussed below. Premiums increased $10 million primarily driven by growth in our term life insurance business.

Benefits and expenses, as shown in the table above under “—Operating Results,” decreased $237 million. Excluding the impact of our annual review and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $16 million. The amortization of DAC decreased $48 million, including the impact of changes in the estimated profitability of the business due to market performance and other experience relative to our assumptions. General and administrative expenses, net of capitalization, decreased $6 million, driven by lower amortization of VOBA primarily due to less favorable mortality experience. Policyholders’ benefits, including interest credited to account balances, increased $28 million, primarily reflecting universal life business growth and less favorable mortality experience. Interest expense increased$10 million related to unaffiliated reserve financing transactions with offsets in revenue, as discussed above.

Six Month Comparison. Revenues decreased $103 million. Excluding the impact of our annual review and update of assumptions and other refinements, as discussed above, revenues increased$50 million. Premiums increased$28 million primarily driven by growth in our term life insurance business. Net investment income increased$18 million, reflecting higher invested assets resulting from business growth, required capital and increased unaffiliated reserve financing, which was offset by higher interest expense, as discussed below.

Benefits and expenses decreased $173 million. Excluding the impact of our annual review and update of assumptions and other refinements, as discussed above, benefits and expenses increased$48 million. Policyholders’ benefits, including interest credited to account balances, increased$100 million, primarily reflecting universal life business growth and unfavorable mortality experience. Interest expense increased$22 million related to unaffiliated reserve financing transactions with offsets in revenue, as discussed above. The amortization of DAC decreased$58 million, including the impact of changes in the estimated profitability of the business due to market performance and other experience relative to our assumptions. General and administrative expenses, net of capitalization, decreased$17 million, driven by lower amortization of VOBA primarily due to less favorable mortality experience.

Sales Results

The following table sets forth individual life insurance annualized new business premiums, as defined under “—Segment Measures” above, by distribution channel and product, for the periods indicated.

	Three Months Ended June 30, 2015						Three Months Ended June 30, 2014
	Prudential Agents		Third Party		Total		Prudential Agents		Third Party		Total
	(in millions)
Variable Life	$	3	$	10	$	13	$	4	$	7	$	11
Universal Life(1)	16		49		65		11		35		46
Term Life	8		44		52		10		36		46
Total	$	27	$	103	$	130	$	25	$	78	$	103

114

	Six Months Ended June 30, 2015						Six Months Ended June 30, 2014
	Prudential Agents		Third Party		Total		Prudential Agents		Third Party		Total
	(in millions)
Variable Life	$	10	$	21	$	31	$	9	$	11	$	20
Universal Life(1)	26		96		122		20		97		117
Term Life	16		85		101		18		70		88
Total	$	52	$	202	$	254	$	47	$	178	$	225

__________

(1) Single pay life annualized new business premiums, which include 10% of excess (unscheduled) premiums, represented approximately 15% and 7% of Universal Life annualized new business premiums for the three months ended June 30, 2015 and 2014, respectively, and approximately 13% and 11% of Universal Life annualized new business premiums for the six months endedJune 30, 2015 and 2014, respectively.

Annualized new business premiums for both the second quarter and the first six months of 2015 increased relative to the prior year periods, primarily driven by pricing and other actions we have taken to diversify product sales.

Group Insurance

Operating Results

The following table sets forth the Group Insurance segment’s operating results and benefits and administrative operating expense ratios for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Revenues	$	1,291		$	1,342		$	2,568		$	2,704
Benefits and expenses	1,216			1,296			2,463			2,652
Adjusted operating income	75			46			105			52
Realized investment gains (losses), net, and related adjustments	(21		)	8			8			25
Related charges	0			(1		)	(1		)	(3		)
Income from continuing operations before income taxes and equity in earnings of operating joint ventures	$	54		$	53		$	112		$	74
Benefits ratio(1):
Group life(2)	86.5		%	89.3		%	89.6		%	89.5		%
Group disability(2)	61.6		%	83.9		%	67.0		%	92.2		%
Administrative operating expense ratio(3):
Group life	10.5		%	9.9		%	10.6		%	10.5		%
Group disability	34.1		%	29.4		%	33.4		%	29.2		%

__________ 

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

(2) 2015 benefits ratios reflect the impacts of our annual reviews and updates of assumptions and other refinements. Excluding these impacts, the group life and group disability benefits ratios were 88.3% and 76.3% for the three months ended June 30, 2015, respectively, and 90.5% and 74.2% for the six months ended June 30, 2015, respectively.

(3) Ratio of general and administrative expenses (excluding commissions) to gross premiums plus policy charges and fee income.

Adjusted Operating Income

Three Month Comparison. Adjusted operating income increased $29 million, primarily reflecting favorable impacts from our annual review and update of assumptions and other refinements. Results for the second quarter of 2015 included a $28 million net benefit from these updates related to actuarial assumptions used in calculating both group disability and group life reserves and other refinements. Excluding the effect of these items, adjusted operating income increased $1 million primarily driven by more favorable underwriting results in both our group disability and group life businesses, largely offset by higher expenses

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reflecting a decrease in litigation reserves in the second quarter of 2014 and a lower contribution from net investment spread results. The favorable underwriting results for the group disability business reflected the impact of higher claim resolutions for long-term contracts. The more favorable underwriting results for our group life business primarily reflected improved claim experience.

Six Month Comparison. Adjusted operating income increased $53 million, primarily reflecting favorable impacts from our annual review and update of assumptions and other refinements, as discussed above. Excluding the effect of these items, adjusted operating income increased $25 million primarily driven by more favorable underwriting results in our group disability business and lower expenses, partially offset by less favorable underwriting results in our group life business and a lower contribution from net investment spread results. The favorable underwriting results for our group disability business reflected the impact of higher claim resolutions and fewer new claims for long-term contracts. The less favorable underwriting results for our group life business reflected unfavorable claim experience.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues, as shown in the table above under “—Operating Results,” decreased $51 million. Excluding a favorable impact of $5 million resulting from our annual review and update of assumptions and other refinements, as discussed above, revenues decreased $56 million. The decrease reflected $43 million lower premiums and policy charges and fee income in our group life and group disability businesses driven by lapses resulting from continued pricing discipline on contract renewals.

Benefits and expenses, as shown in the table above under “—Operating Results,” decreased $80 million. Excluding a favorable impact of $23 million resulting from our annual reviews and updates of assumptions and other refinements, as discussed above, benefits and expenses decreased $57 million. Policyholders’ benefits, including the change in reserves, decreased $60 million, driven by declines for both our group disability and group life businesses.The decline in our group disability business primarily reflected the impact of higher claim resolutions for long-term contracts. The decline in our group life business reflected fewer claims, partially offset by higher claim severity for non-experience-rated contracts.

Six Month Comparison. Revenues decreased $136 million. Excluding a favorable impact of $5 million resulting from our annual review and update of assumptions and other refinements, as discussed above, revenues decreased $141 million. The decrease reflected $118 million lower premiums and policy charges and fee income in our group life and group disability businesses primarily driven by lapses resulting from continued pricing discipline on contract renewals. Net investment income decreased $16 million driven by lower income from non-coupon investments.

Benefits and expenses decreased $189 million. Excluding a favorable impact of $23 million resulting from our annual review and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $166 million. Policyholders’ benefits, including the change in reserves, decreased $150 million, driven by declines for both our group disability and group life businesses. The decline in our disability business reflected the impact of higher claim resolutions and fewer new claims for long-term contracts.The decline in our group life business reflected fewer claims, partially offset by higher claim severity for non-experience-rated contracts. These decreases were partially offset by favorable reserve refinements in the first quarter of 2014.

Sales Results

The following table sets forth the Group Insurance segment’s annualized new business premiums, as defined under “—Segment Measures” above, for the periods indicated.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Annualized new business premiums(1):
Group life	$	10	$	10	$	141	$	147
Group disability	14		12		45		45
Total	$	24	$	22	$	186	$	192

__________ 

(1) Amounts exclude new premiums resulting from rate changes on existing policies, from additional coverage 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.

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Total annualized new business premiums were relatively flat for both the second quarter and the first six months of 2015 compared to 2014, reflecting our continued pricing discipline for both group life and group disability products.

International Insurance Division

Foreign Currency Exchange Rate Movements and Related Hedging Strategies

As a U.S.-based company with significant business operations outside the U.S., particularly in Japan, we are subject to foreign currency exchange rate movements that could impact our U.S. dollar-equivalent shareholder return on equity. We seek to mitigate this impact through various hedging strategies, including the use of derivative contracts and by holding U.S. dollar-denominated assets in certain of our foreign subsidiaries.

The operations of our International Insurance division are subject to currency fluctuations that can materially affect our U.S. dollar-equivalent earnings from period to period, even if earnings on a local currency basis are relatively constant. We enter into forward currency derivative contracts as part of our strategy to effectively fix the currency exchange rates for a portion of our prospective non-U.S. dollar-denominated earnings streams, thereby reducing earnings volatility from foreign currency exchange rate movements. The forward currency hedging program is primarily associated with our insurance operations in Japan and Korea.

Separately, our Japanese insurance operations offer a variety of non-yen denominated products, primarily comprised of U.S. and Australian dollar-denominated products that are supported by investments in corresponding currencies. While these non-yen denominated assets and liabilities are economically matched, differences in the accounting for changes in the value of these assets and liabilities due to changes in foreign currency exchange rate movements have historically resulted in volatility in reported U.S. GAAP earnings. As a result of continued growth in these portfolios, we implemented a new structure in Gibraltar Life that disaggregated the U.S. and Australian dollar-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The new structure became effective for financial reporting in the first quarter of 2015.

For further information on the hedging strategies used to mitigate the risks of foreign currency exchange rate movements on earnings as well as the U.S. GAAP earnings impact from products denominated in non-local currencies, see “—Impact of foreign currency exchange rate movements on earnings.”

We utilize a yen hedging strategy that calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company’s overall return on equity on a leverage neutral basis. We implement this hedging strategy utilizing a variety of instruments, including foreign currency derivative contracts, as discussed above, as well as U.S. dollar-denominated assets and, to a lesser extent, “dual currency” and “synthetic dual currency” assets held locally in our Japanese insurance subsidiaries. We may also hedge using instruments held in our U.S. domiciled entities, such as U.S. dollar-denominated debt that has been swapped to yen. The total hedge level may vary based on our periodic assessment of the relative contribution of our yen-based business to the Company’s overall return on equity.

The table below presents the aggregate amount of instruments that serve to hedge the impact of foreign currency exchange movements on our U.S. dollar-equivalent shareholder return on equity from our Japanese insurance subsidiaries for the periods indicated.

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	June 30, 2015		December 31, 2014
	(in billions)
Instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent earnings:
Forward currency hedging program(1)	$	1.8	$	2.0
Instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent equity:
U.S. dollar-denominated assets held in yen-based entities(2):
Available-for-sale U.S. dollar-denominated investments, at amortized cost	12.2		12.2
Held-to-maturity U.S. dollar-denominated investments, at amortized cost	0.1		0.1
Other	0.1		0.1
Subtotal	12.4		12.4
Yen-denominated liabilities held in U.S. dollar-based entities(3)	0.6		0.8
Dual currency and synthetic dual currency investments(4)	0.8		0.8
Total instruments hedging foreign currency exchange rate exposure on U.S. dollar-equivalent equity	13.8		14.0
Total hedges	$	15.6	$	16.0

__________

(1) Represents the notional amount of forward currency contracts outstanding.

(2) Excludes $29.7 billion and $29.1 billion as of June 30, 2015 and December 31, 2014, respectively, of U.S. dollar assets supporting U.S. dollar liabilities related to U.S. dollar-denominated products issued by our Japanese insurance operations.

(3) The yen-denominated liabilities are reported in Corporate and Other operations.

(4) Dual currency and synthetic dual currency investments are held by our yen-based entities in the form of fixed maturities and loans with a yen-denominated principal component and U.S. dollar-denominated interest income. The amounts shown represent the present value of future U.S. dollar cash flows.

Impact of foreign currency exchange rate movements on earnings

Forward currency hedging program

The financial results of our International Insurance segment reflect the impact of an intercompany arrangement with Corporate and Other operations pursuant to which certain of the segment’s non-U.S. dollar-denominated earnings are translated at fixed currency exchange rates. The fixed rates are determined in connection with a foreign currency income hedging program designed to mitigate the impact of exchange rate changes on the segment’s U.S. dollar-equivalent earnings. Pursuant to this program, Corporate and Other operations execute forward currency contracts with third parties to sell the net exposure of projected earnings for certain currencies in exchange for U.S. dollars at specified exchange rates. The maturities of these contracts correspond with the future periods (typically on a three-year rolling basis) in which the identified non-U.S. dollar-denominated earnings are expected to be generated. In establishing the level of non-U.S. dollar-denominated earnings that will be hedged through this program, we exclude the anticipated level of U.S. dollar-denominated earnings that will be generated by dual currency and synthetic dual currency investments, as well as the anticipated level of non-yen denominated earnings that will be generated by non-yen denominated products and investments. For the six months ended June 30, 2015, approximately 38% of the segment’s earnings were yen-based and, as of June 30, 2015, we have hedged 100% of expected yen-based earnings for 2015 and 92%, 50% and 8% of expected yen-based earnings for 2016, 2017 and 2018, respectively. To the extent currently unhedged, our International Insurance segment’s future expected U.S. dollar-equivalent earnings will be impacted by yen exchange rate movements.

As a result of this intercompany arrangement, our International Insurance segment’s results for 2015 and 2014 reflect the impact of translating yen-denominated earnings at fixed currency exchange rates of 91 and 82 yen per U.S. dollar, respectively, and Korean won-denominated earnings at fixed currency exchange rates of 1120 and 1150 Korean won per U.S. dollar, respectively. Since determination of the fixed currency exchange rates for each respective year is impacted by changes in foreign currency exchange rates over time, the segment’s future earnings will ultimately be impacted by these changes in exchange rates.

Results of Corporate and Other operations include any differences between the translation adjustments recorded by the segment at the fixed currency exchange rate versus the actual average rate during the period, and the gains or losses recorded from the forward currency contracts that settled during the period, which include the impact of any over or under hedging of actual earnings that differ from projected earnings. The table below presents, for the periods indicated, the increase (decrease) to revenues and adjusted operating income for the International Insurance segment and for Corporate and Other operations, reflecting the impact of this intercompany arrangement.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
International Insurance Segment:
Impact of intercompany arrangement(1)	$	85		$	70		$	165		$	143
Corporate and Other operations:
Impact of intercompany arrangement(1)	(85		)	(70		)	(165		)	(143		)
Settlement gains (losses) on forward currency contracts	78			66			161			144
Net benefit (detriment) to Corporate and Other operations	(7		)	(4		)	(4		)	1
Net impact on consolidated revenues and adjusted operating income	$	78		$	66		$	161		$	144

__________ 

(1) Represents the difference between non-U.S. dollar-denominated earnings translated on the basis of weighted average monthly currency exchange rates versus fixed currency exchange rates determined in connection with the forward currency hedging program.

As of June 30, 2015 and December 31, 2014, the notional amounts of these forward currency contracts were $2.3 billion and $2.6 billion, respectively, of which $1.8 billion and $2.0 billion, respectively, were related to our Japanese insurance operations.

U.S. GAAP earnings impact of products denominated in non-local currencies

Our international insurance operations primarily offer products denominated in local currency; however, several of our international insurance operations, most notably our Japanese operations, also offer products denominated in non-local currencies, primarily comprised of U.S. and Australian dollar-denominated products. The non-yen denominated insurance liabilities related to these products are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While the impact from foreign currency exchange rate movements on these non-yen denominated assets and liabilities is economically matched, differences in the accounting for changes in the value of these assets and liabilities due to changes in foreign currency exchange rate movements have historically resulted in volatility in U.S. GAAP earnings. For example, unrealized gains and losses on available-for-sale investments, including those arising from non-functional currency exchange rate movements, are recorded in AOCI, whereas the non-functional currency-denominated liabilities are remeasured for foreign currency exchange rate movements, and the related changes in value are recorded in earnings within “Other income.” Investments designated as held-to-maturity under U.S. GAAP are recorded at amortized cost on the balance sheet, but are remeasured for foreign currency exchange rate movements, with the related change in value recorded in earnings within “Other income.” Due to this non-economic volatility that is reflected in U.S. GAAP earnings, the gains and losses resulting from the remeasurement of these non-yen denominated liabilities, and certain related non-yen denominated assets, were excluded from adjusted operating income and included in “Realized investment gains (losses), net, and related adjustments.”

As discussed above, we have implemented a new structure in Gibraltar Life that disaggregated the U.S. and Australian dollar-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The new structure became effective for financial reporting beginning in the first quarter of 2015 and will minimize future volatility in reported U.S. GAAP earnings arising from foreign currency remeasurement. Included in “Realized investment gains (losses), net, and related adjustments” were net gains of $104 million and net losses of $224 million for the three months ended June 30, 2015 and 2014, respectively, and net gains of $132 million and net losses of $7 million for the six months ended June 30, 2015 and 2014, respectively. For the U.S. and Australian dollar-denominated assets that were transferred under the new structure in Gibraltar Life, the net cumulative unrealized investment gains associated with foreign exchange remeasurement that were recorded in AOCI totaled $6.0 billion and will be recognized in earnings within “Realized investment gains (losses), net” over time as these assets mature or are sold. Absent the sale of any of these assets prior to their stated maturity, approximately 3% of the initial $6.0 billion of gains will be recognized throughout the remainder of 2015 and approximately 9% will be recognized in 2016, with the remainder primarily recognized over the following ten years. As of June 30, 2015, the remaining net cumulative unrealized investment gains balance related to these assets was $5.7 billion.

International Insurance

Operating Results

The results of our International Insurance operations are translated on the basis of weighted average monthly exchange rates, inclusive of the effects of the intercompany arrangement discussed above. To provide a better understanding of operating performance within the International Insurance segment, where indicated below, we have analyzed our results of operations excluding the effect of the year over year change in foreign currency exchange rates. Our results of operations, excluding the effect

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of foreign currency fluctuations, were derived by translating foreign currencies to U.S. dollars at uniform exchange rates for all periods presented, including for constant dollar information discussed below. The exchange rates used were Japanese yen at a rate of 91 yen per U.S. dollar and Korean won at a rate of 1120 won per U.S. dollar, both of which were determined in connection with the foreign currency income hedging program discussed above. In addition, for constant dollar information discussed below, activity denominated in U.S. dollars is generally reported based on the amounts as transacted in U.S. dollars. Annualized new business premiums presented on a constant exchange rate basis in the “Sales Results” section below reflect translation based on these same uniform exchange rates.

The following table sets forth the International Insurance segment’s operating results for the periods indicated.

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Revenues:
Life Planner operations	$	2,231		$	2,261		$	4,673		$	4,740
Gibraltar Life and Other operations	2,806			2,991			5,270			5,587
Total revenues	5,037			5,252			9,943			10,327
Benefits and expenses:
Life Planner operations	1,850			1,879			3,853			3,939
Gibraltar Life and Other operations	2,345			2,489			4,414			4,667
Total benefits and expenses	4,195			4,368			8,267			8,606
Adjusted operating income:
Life Planner operations	381			382			820			801
Gibraltar Life and Other operations	461			502			856			920
Total adjusted operating income	842			884			1,676			1,721
Realized investment gains (losses), net, and related adjustments(1)	11			36			451			571
Related charges	(20		)	(11		)	(43		)	(20		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	50			53			106			(19		)
Change in experience-rated contractholder liabilities due to asset value changes	(50		)	(53		)	(106		)	19
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(2		)	(2		)	6			2
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	831		$	907		$	2,090		$	2,274

__________

(1) Includes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that are economically matched, as discussed above.

Adjusted Operating Income

Three Month Comparison. Adjusted operating income from our Life Planner operations decreased $1 million including a net unfavorable impact of $12 million from currency fluctuations, inclusive of the currency hedging program discussed above. Results for the current quarter also included a net charge of $11 million from our annual review and update of assumptions and other refinements.

Excluding the effect of these items, adjusted operating income of our Life Planner operations increased $22 million, primarily reflecting the growth of business in force driven by sales results and continued strong persistency, partially offset by the impact of higher expenses supporting business growth, less favorable mortality experience and lower net investment spread results.

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Adjusted operating income from our Gibraltar Life and Other operations decreased $41 million including a net unfavorable impact of $26 million from currency fluctuations, inclusive of the currency hedging program discussed above. Results for the current quarter also included a net charge of $10 million from our annual review and update of assumptions and other refinements.

Excluding the effect of these items, adjusted operating income from our Gibraltar Life and Other operations decreased $5 million primarily reflecting the absence of gains on sales of fixed assets that occurred in the second quarter of 2014, largely offset by a higher contribution from net investment results.

Six Month Comparison. Adjusted operating income from our Life Planner operations increased $19 million including a net unfavorable impact of $29 million from currency fluctuations. Results for the first six months of 2015 also included a net charge of $11 million related to our annual review and update of assumptions and other refinements, while the results for the first six months of 2014 included a $16 million net unfavorable impact primarily from reserve refinements in our Korean operation.

Excluding the effect of these items, adjusted operating income increased $43 million primarily reflecting growth of business in force driven by sales results and continued strong persistency, partially offset by the impact of higher expenses supporting business growth and lower net investment spread results.

Adjusted operating income from our Gibraltar Life and Other operations decreased $64 million including a net unfavorable impact of $45 million from currency fluctuations. Results for the first six months of 2015 also included a net charge of $10 million related to our annual review and update of assumptions and other refinements.

Excluding the effect of these items, adjusted operating income from our Gibraltar Life and Other operations decreased $9 million primarily reflecting the absence of gains on sales of fixed assets that occurred during the first six months of 2014 and higher expenses, partially offset by a higher contribution from net investment results.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues from our Life Planner operations, as shown in the table above under “—Operating Results,” decreased $30 million including a net unfavorable impact of $256 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues increased $226 million. This increase was primarily driven by higher premiums and policy charges and fee income of $165 million related to growth of business in force. Net investment income increased $45 million primarily reflecting investment portfolio growth, partially offset by the impact of lower reinvestment rates.

Benefits and expenses of our Life Planner operations, as shown in the table above under “—Operating Results,” decreased $29 million including a net favorable impact of $244 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $215 million. Policyholder benefits, including changes in reserves, increased $172 million primarily driven by business growth. General and administrative expenses, net of capitalization, increased $29 million primarily due to higher distribution costs and other costs supporting business growth.

Revenues from our Gibraltar Life and Other operations decreased $185 million including a net unfavorable impact of $295 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues increased $110 million, driven by a $117 million increase in premiums and policy charges and fee income due to business growth and a $25 million increase in net investment income related to a higher contribution from net investment spreads. These impacts were partially offset by a decline of $28 million in other income, reflecting the absence of gains on sales of fixed assets that occurred in the second quarter of 2014.

Benefits and expenses of our Gibraltar Life and Other operations decreased $144 million including a net favorable impact of $269 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $125 million, driven by an increase of $148 million in policyholder benefits, including changes in reserves, due to business growth.

Six Month Comparison. Revenues from our Life Planner operations decreased $67 million including a net unfavorable impact of $507 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues increased $440 million. This increase was primarily driven by higher premiums and policy charges and fee income of $326 million related to growth of business in force. Net investment income increased $83 million primarily reflecting investment portfolio growth, partially offset by the impact of lower reinvestment rates.

Benefits and expenses of our Life Planner operations decreased $86 million including a net favorable impact of $478 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $392 million. Policyholder benefits, including changes in reserves, increased $313 million primarily driven by business growth. General and administrative expenses, net of capitalization, increased $60 million primarily due to higher distribution costs and other costs supporting business growth.

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Revenues from our Gibraltar Life and Other operations decreased $317 million including a net unfavorable impact of $524 million from currency fluctuations. Excluding the impact of currency fluctuations, revenues for Gibraltar Life increased $207 million, driven by a $180 million increase in premiums and policy charges and fee income due to business growth. The increase in revenues also includes the impact of a $90 million increase in net investment income reflecting higher income from non-coupon investments and higher net investment spreads. These increases were partially offset by a decline of $53 million in other income, primarily reflecting the absence of gains on sales of fixed assets that occurred in the first six months of 2014.

Benefits and expenses of our Gibraltar Life and Other operations decreased $253 million including a net favorable impact of $479 million from currency fluctuations. Excluding the impact of currency fluctuations, benefits and expenses increased $226 million driven by an increase of $250 million in policyholder benefits, including changes in reserves, related to business growth.

Sales Results

The following table sets forth annualized new business premiums, as defined under “—Segment Measures” above, on an actual and constant exchange rate basis for the periods indicated.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Annualized new business premiums:
On an actual exchange rate basis:
Life Planner operations	$	258	$	272	$	574	$	603
Gibraltar Life	413		437		770		798
Total	$	671	$	709	$	1,344	$	1,401
On a constant exchange rate basis:
Life Planner operations	$	301	$	275	$	667	$	624
Gibraltar Life	476		457		890		841
Total	$	777	$	732	$	1,557	$	1,465

The amount of annualized new business premiums for any given period can be significantly impacted by several factors, including but not limited to: addition of new products, discontinuation of existing products, changes in credited interest rates for certain products and other product modifications, changes in tax laws, changes in life insurance regulations or changes in the competitive environment. Sales volume may increase or decrease prior to certain of these changes becoming effective, and then fluctuate in the other direction following such changes.

The tables below present annualized new business premiums on a constant exchange rate basis, by product and distribution channel, for the periods indicated.

	Three Months Ended June 30, 2015										Three Months Ended June 30, 2014
	Life		Accident & Health		Retirement(1)		Annuity		Total		Life		Accident & Health		Retirement(1)		Annuity		Total
	(in millions)
Life Planners	$	190	$	30	$	64	$	17	$	301	$	168	$	26	$	69	$	12	$	275
Gibraltar Life:
Life Consultants	106		18		36		44		204		108		17		33		62		220
Banks(2)	135		1		3		52		191		110		0		2		49		161
Independent Agency	35		9		20		17		81		33		11		14		18		76
Subtotal	276		28		59		113		476		251		28		49		129		457
Total	$	466	$	58	$	123	$	130	$	777	$	419	$	54	$	118	$	141	$	732

__________

(1) Includes retirement income, endowment and savings variable universal life.

(2) Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business premiums, which include 100% of new business premiums, represented 6% and 53%, respectively, of total Japanese bank distribution channel annualized new business

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premiums, excluding annuity products, for the three months ended June 30, 2015, and 6% and 51%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the three months ended June 30, 2014.

Three Month Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner operations increased $26 million. The increase reflects growth in both Life Planner headcount and productivity in our Brazilian operation as well as our Japanese operations, which resulted in an increase in sales of whole life products in Brazil and an increase in sales of term life products in Japan, partially offset by a net decline in sales of retirement income products.

Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life operations increased $19 million. Bank channel sales increased $30 million primarily driven by higher sales of U.S. dollar-denominated whole life products. Independent Agency sales increased $5 million primarily driven by higher sales of certain retirement products. Life Consultant sales declined $16 million primarily driven by lower sales of Australian dollar-denominated annuity products.

	Six Months Ended June 30, 2015										Six Months Ended June 30, 2014
	Life		Accident & Health		Retirement(1)		Annuity		Total		Life		Accident & Health		Retirement(1)		Annuity		Total
	(in millions)
Life Planners	$	420	$	66	$	152	$	29	$	667	$	338	$	57	$	198	$	31	$	624
Gibraltar Life:
Life Consultants	196		38		71		74		379		198		37		60		96		391
Banks(2)	254		2		6		100		362		211		1		4		95		311
Independent Agency	59		14		38		38		149		54		17		34		34		139
Subtotal	509		54		115		212		890		463		55		98		225		841
Total	$	929	$	120	$	267	$	241	$	1,557	$	801	$	112	$	296	$	256	$	1,465

__________

(1) Includes retirement income, endowment and savings variable universal life.

(2) Single pay life annualized new business premiums, which include 10% of first year premiums, and 3-year limited pay annualized new business premiums, which include 100% of new business premiums, represented 6% and 49%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the six months ended June 30, 2015, and 6% and 52%, respectively, of total Japanese bank distribution channel annualized new business premiums, excluding annuity products, for the six months ended June 30, 2014.

Six Month Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner operations increased $43 million. The increase primarily reflects growth in both Life Planner headcount and productivity in our Brazilian operation as well as our Japanese operations, which resulted in an increase in sales of whole life products and accident and health products in Brazil, and an increase in sales of term life products in Japan, partially offset by a net decline in sales of retirement income products. The increase also reflects higher sales of certain life protection products in our Korean operation.

Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life operations increased $49 million. Bank channel sales increased $51 million primarily driven by higher sales of U.S. dollar-denominated whole life products and certain yen-denominated life protection products. Independent Agency sales increased $10 million primarily driven by higher sales of yen-denominated term life products and certain retirement products. Life Consultant sales declined $12 million primarily driven by lower sales of Australian dollar-denominated annuity products, partially offset by higher sales of yen-denominated whole life products and Australian dollar-denominated retirement products.

Corporate and Other

As described in our Annual Report on Form 10-K for the year ended December 31, 2014 under “Business—Financial Services Businesses—Corporate and Other,” Corporate and Other includes corporate operations, after allocations to our business segments, and divested businesses other than those that qualify for “discontinued operations” accounting treatment under U.S. GAAP.

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	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Operating results:
Capital debt interest expense	$	(198	)	$	(152	)	$	(390	)	$	(298	)
Operating debt interest expense, net of investment income	25			(20		)	60			(64		)
Pension and employee benefits	51			42			83			86
Other corporate activities(1)	(172		)	(211		)	(300		)	(407		)
Adjusted operating income	(294		)	(341		)	(547		)	(683		)
Realized investment gains (losses), net, and related adjustments	1,070			(822		)	145			(1,981		)
Related charges	(6		)	(1		)	9			(1		)
Divested businesses	(109		)	47			(34		)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(2		)	(2		)	(2		)	(2		)
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	659		$	(1,119	)	$	(429	)	$	(2,547	)

__________ 

(1) Includes consolidating adjustments.

Three Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $47 million. Operating debt interest expense, net of investment income, decreased $45 million, primarily reflecting increased income from higher levels of invested assets due to the transfer of invested assets to Corporate and Other operations related to the restructuring of the former Closed Block Business, the reassignment of operating debt to capital debt to support capital needs related to our living benefits hedging program described in “—Liquidity and Capital Resources—Capital Protection Framework” and lower levels of operating debt proceeds held in cash. Net charges from other corporate activities decreased $39 million, primarily reflecting a favorable impact from updates to reserves for certain retained obligations relating to pre-demutualization policyholders and the absence of costs related to the settlement of a legal matter in the prior period. Results from pension and employee benefits increased $9 million, primarily driven by a favorable comparative impact of retained benefit expenses. Results for the qualified pension plan were essentially flat as the net positive impact of lower interest rates was offset by the negative impact of our mortality assumption update as of December 31, 2014. These favorable impacts were partially offset by $46 million higher capital debt interest expense, primarily reflecting the reassignment of operating debt to capital debt, as discussed above.

Six Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $136 million. Operating debt interest expense, net of investment income, decreased $124 million, primarily reflecting increased income from higher levels of invested assets due to the transfer of invested assets to Corporate and Other operations related to the restructuring of the former Closed Block Business, the reassignment of operating debt to capital debt as discussed above and lower levels of operating debt proceeds held in cash. Net charges from other corporate activities decreased $107 million, primarily reflecting the absence of costs related to the settlement of a legal matter in the prior period and the absence of an unfavorable change in our estimate of payments arising from the use of the Social Security Master Death file matching criteria in the first half of 2014. Also contributing to the decrease was a gain on the sale of a home office property in 2015 and a favorable impact from updates to reserves for certain retained obligations relating to pre-demutualization policyholders. These favorable impacts were partially offset by $92 million higher Capital debt interest expense, primarily reflecting the reassignment of operating debt to capital debt, as discussed above.

Capital Protection Framework

Results related to our Capital Protection Framework hedging costs that are included in adjusted operating income were $4 million and $8 million for the three and six months endedJune 30, 2015, respectively, and $10 million and $21 million for the three and six months endedJune 30, 2014, respectively. “Realized investment gains (losses), net and related adjustments,” which are excluded from adjusted operating income, included net gains of $1,091 million and $239 million for the three and six months endedJune 30, 2015, respectively, and net losses of $705 million and $1,755 million for the three and six months endedJune 30, 2014, respectively, primarily resulting from our utilization of capital management strategies to manage a portion of our interest rate risk. The net gains in 2015 were driven by increases in interest rates with respect to the exposures outstanding during the second quarter, while the net losses in 2014 were driven by declines in interest rates with respect to the exposures outstanding during the respective periods. For more information on our Capital Protection Framework, see “—Liquidity and Capital Resources—Capital Protection Framework.”

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Divested Businesses

Divested Businesses Included in Corporate and Other

Our income from continuing operations includes results from several 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. The results of these divested businesses are reflected in our Corporate and Other operations, but are excluded from adjusted operating income. A summary of the results of the divested businesses reflected in our Corporate and Other operations is as follows for the periods indicated:

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
	(in millions)
Long-Term Care	$	(94	)	$	47	$	(38	)	$	123
Other	(15		)	0		4			(3		)
Total divested businesses income (loss) excluded from adjusted operating income	$	(109	)	$	47	$	(34	)	$	120

Long-Term Care. Results for the second quarter and first six months of 2015 decreased compared to the prior year periods primarily reflecting realized losses in 2015, compared to realized gains in 2014, from derivatives used in duration management, driven by the impact of rising interest rates in 2015 and declining interest rates in 2014. The decrease also included an unfavorable impact from our annual review and update of assumptions and other refinements.

Other. Results for the second quarter of 2015 decreased compared to the prior year period primarily reflecting an unfavorable impact from our annual review and update of assumptions for individual health products. Results for the first six months of 2015 increased compared to the prior year period primarily due to a gain on sale of a real estate limited partnership interest of our former Financial Advisory business, partially offset by an unfavorable impact from our annual review and update of assumptions for individual health products.

Closed Block Division

The Closed Block division includes certain in force traditional domestic participating life insurance and annuity products and assets that are used for the payment of benefits and policyholder dividends on these policies, as well as certain related assets and liabilities. We no longer offer these traditional domestic participating policies. See Note 6 to the Unaudited Interim Consolidated Financial Statements for additional details.

Each year, the Board of Directors of Prudential Insurance determines the dividends payable on participating policies for the following year based on the experience of the Closed Block, including investment income, net realized and unrealized investment gains, mortality experience and other factors. Although Closed Block experience for dividend action decisions is based upon statutory results, at the time the Closed Block was established, we developed, as required by U.S. GAAP, an actuarial calculation of the timing of the maximum future earnings from the policies included in the Closed Block. If actual cumulative earnings in any given period are greater than the cumulative earnings we expected, we record this excess as a policyholder dividend obligation. We will subsequently pay this excess to Closed Block policyholders as an additional dividend unless it is otherwise offset by future Closed Block performance that is less favorable than we originally expected. The policyholder dividends we charge to expense within the Closed Block division will include any change in our policyholder dividend obligation that we recognize for the excess of actual cumulative earnings in any given period over the cumulative earnings we expected in addition to the actual policyholder dividends declared by the Board of Directors of Prudential Insurance.

As of June 30, 2015, the excess of actual cumulative earnings over the expected cumulative earnings was $1,766 million, which was recorded as a policyholder dividend obligation. Actual cumulative earnings, as required by U.S. GAAP, reflect the recognition of realized investment gains and losses in the current period, as well as changes in assets and related liabilities that support the Closed Block policies. Additionally, the accumulation of net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $3,715 million at June 30, 2015, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Operating Results

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The following table sets forth the Closed Block division’s results for the periods indicated.

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
U.S. GAAP results:
Revenues	$	1,525	$	1,835	$	3,244	$	3,401
Benefits and expenses	1,473		1,779		3,214		3,332
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	52	$	56	$	30	$	69

Income (loss) from Continuing Operations Before Income Taxes and Equity in Earnings of Operating Joint Ventures

Three Month Comparison. Income from continuing operations before income taxes and equity in earnings of operating joint ventures decreased $4 million. Results for the second quarter of 2015 reflected a decrease in net realized investment gains of $203 million primarily due to unfavorable changes in the value of derivatives and lower gains from sales of fixed maturities. Net investment income decreased $96 million primarily reflecting the sale and transfer of invested assets as a result of the restructuring of the former Closed Block Business and lower income from non-coupon investments. As a result of the above and other variances, a $67 million reduction in the policyholder dividend obligation was recorded in the second quarter of 2015, compared to a $201 million increase in the second quarter of 2014. As noted above, as of June 30, 2015, the excess of actual cumulative earnings over the expected cumulative earnings was $1,766 million. If actual cumulative earnings fall below expected cumulative earnings in future periods, earnings volatility in the Closed Block division, which is primarily due to changes in investment results, may not be offset by changes in the cumulative earnings policyholder dividend obligation. For a discussion of Closed Block division realized investment gains (losses), net, see “—Realized Investment Gains and Losses.”

Six Month Comparison. Income from continuing operations before income taxes and equity in earnings of operating joint ventures decreased $39 million. Results for the first six months of 2015 reflected a $162 million decrease in net investment income primarily due to the sale and transfer of invested assets as a result of the restructuring of the former Closed Block Business and lower income from non-coupon investments. Net insurance activity results declined $43 million primarily reflecting higher dividends to policyholders as a result of an increase in the 2015 dividend scale and unfavorable mortality in the first quarter of 2015, partially offset by the runoff of policies in force. Net realized investment gains increased $33 million reflecting favorable changes in the value of derivatives. As a result of the above and other variances, a $208 million increase in the policyholder dividend obligation was recorded in the first six months of 2015, compared to a $300 million increase in the first six months of 2014.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues, as shown in the table above under “—Operating Results,” decreased $310 million, primarily driven by a $203 million decrease in net realized investment gains and a $96 million decrease in net investment income, as discussed above. In addition, premiums declined $9 million, primarily due to the runoff of policies in force.

Benefits and expenses, as shown in the table above under “—Operating Results,” decreased $306 million, primarily driven by a $263 million decrease in dividends to policyholders, including a $268 million decrease in the policyholder dividend obligation expense reflecting lower cumulative earnings and a $5 million increase in dividends paid and accrued to policyholders as a result of an increase in the 2015 dividend scale. The decrease in benefits and expenses also reflected a $16 million decrease in policyholders’ benefits, including changes in reserves, due to the runoff of policies in force. General and administrative expenses, inclusive of interest expense, decreased $28 million, primarily driven by the decrease in interest expense related to the senior secured notes issued by Prudential Holdings LLC, which were redeemed in the fourth quarter of 2014.

Six Month Comparison. Revenues decreased $157 million, primarily driven by a $162 million decrease in net investment income, partially offset by a $33 million increase in net realized investment gains, as discussed above. In addition, premiums declined $14 million, primarily due to the runoff of policies in force.

Benefits and expenses decreased $118 million, primarily driven by a $77 million decrease in dividends to policyholders including a $92 million decrease in the policyholder dividend obligation expense reflecting lower cumulative earnings and a $15 million increase in dividends paid and accrued to policyholders as a result of an increase in the 2015 dividend scale. General and

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administrative expenses, inclusive of interest expense, decreased $54 million, primarily driven by the decrease in interest expense related to the senior secured notes issued by Prudential Holdings LLC, which were redeemed in the fourth quarter of 2014.

Income Taxes

Our income tax provision, on a consolidated basis, amounted to an income tax expense of $679 million in the second quarter of 2015, compared to an expense of $404 million in the second quarter of 2014. The increased expense was primarily due to an increase in “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” in the current quarter compared to the year ago quarter. In addition, during the fourth quarter of 2014, we changed the repatriation assertion for our Japanese insurance companies with respect to post-2013 operating earnings and AOCI, except realized and unrealized capital gains and losses. On March 31, 2015, the government of Japan enacted a reduction in the Japanese tax rate by approximately 2%, effective April 1, 2015. Our income tax provision for the second quarter of 2015 includes $70 million of additional tax expense related to re-measurement of Japan deferred tax assets as a result of the tax rate reduction that was partially offset by a tax benefit from the lower Japan tax rate for permanently reinvested earnings of our Japanese insurance operations.

Our income tax provision, on a consolidated basis, amounted to an income tax expense of $1,378 million in the first six months of 2015 compared to an expense of $877 million in the first six months of 2014. The increased expense was primarily due an increase in “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” in the first six months of 2015 compared to the first six months of 2014. In addition, due to the change in repatriation assertion for our Japanese insurance companies and tax rate reduction discussed above, our income tax provision for the first six months in 2015 includes $75 million of additional tax expense related to re-measurement of Japan deferred tax assets that was partially offset by a tax benefit from the lower Japan tax rate for permanently reinvested earnings of our Japanese insurance operations.

For additional information regarding income taxes, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

Discontinued Operations

Included within net income are the results of businesses that are reflected as discontinued operations under U.S. GAAP. Income (loss) from discontinued operations, net of taxes, was $0 million and $4 million for the three months ended June 30, 2015 and 2014, respectively, and $0 million and $8 million for the six months ended June 30, 2015 and 2014, respectively. For additional information regarding discontinued operations, see Note 3 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Experience-Rated Contractholder Liabilities,

Trading Account Assets Supporting Insurance Liabilities and Other Related Investments

Certain products included in the Retirement and International Insurance segments are experience-rated in that investment results associated with these products are expected to ultimately accrue to contractholders. The majority of investments supporting these experience-rated products are classified as trading and are carried at fair value. These trading investments are reflected on the statements of financial position as “Trading account assets supporting insurance liabilities, at fair value” (“TAASIL”). Realized and unrealized gains and losses for these investments are reported in “Other income.” Interest and dividend income for these investments is reported in “Net investment income.” To a lesser extent, these experience-rated products are also supported by derivatives and commercial mortgage and other loans. The derivatives that support these experience-rated products are reflected on the statement of financial position as “Other long-term investments” and are carried at fair value, and the realized and unrealized gains and losses are reported in “Realized investment gains (losses), net.” The commercial mortgage and other loans that support these experience-rated products are carried at unpaid principal, net of unamortized discounts and an allowance for losses, and are reflected on the statements of financial position as “Commercial mortgage and other loans.” Gains and losses on sales and changes in the valuation allowance for commercial mortgage and other loans are reported in “Realized investment gains (losses), net.”

Our Retirement segment has two types of experience-rated products that are supported by TAASIL and other related investments. Fully participating products are those for which the entire return on underlying investments is passed back to the policyholders through a corresponding adjustment to the related liability. The adjustment to the liability is based on changes in the fair value of all of the related assets, including commercial mortgage and other loans, which are carried at amortized cost, less any valuation allowance. Partially participating products are those for which only a portion of the return on underlying investments is passed back to the policyholders over time through changes to the contractual crediting rates. The crediting rates are typically reset semiannually, often subject to a minimum crediting rate, and returns are required to be passed back within ten years.

In our International Insurance segment, the experience-rated products are fully participating. As a result, the entire return on the underlying investments is passed back to policyholders through a corresponding adjustment to the related liability.

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Adjusted operating income excludes net investment gains and losses on TAASIL, related derivatives and commercial mortgage and other loans. This is consistent with the exclusion of realized investment gains and losses with respect to other investments supporting insurance liabilities managed on a consistent basis. In addition, to be consistent with the historical treatment of charges related to realized investment gains and losses on investments, adjusted operating income also excludes the change in contractholder liabilities due to asset value changes in the pool of investments (including changes in the fair value of commercial mortgage and other loans) supporting these experience-rated contracts, which are reflected in “Interest credited to policyholders’ account balances.” The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread we earn on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that we expect will ultimately accrue to the contractholders.

The following tables set forth the impact on results for the periods indicated of these items that are excluded from adjusted operating income:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Retirement Segment:
Investment gains (losses) on:
Trading account assets supporting insurance liabilities, net	$	(270	)	$	172		$	(243	)	$	345
Derivatives	12			(36		)	122			(82		)
Commercial mortgages and other loans	1			(2		)	4			(3		)
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)	284			(136		)	143			(251		)
Net gains (losses)	$	27		$	(2	)	$	26		$	9
International Insurance Segment:
Investment gains (losses) on trading account assets supporting insurance liabilities, net	$	50		$	53		$	106		$	(19	)
Change in experience-rated contractholder liabilities due to asset value changes	(50		)	(53		)	(106		)	19
Net gains (losses)	$	0		$	0		$	0		$	0
Total:
Investment gains (losses) on:
Trading account assets supporting insurance liabilities, net	$	(220	)	$	225		$	(137	)	$	326
Derivatives	12			(36		)	122			(82		)
Commercial mortgages and other loans	1			(2		)	4			(3		)
Change in experience-rated contractholder liabilities due to asset value changes(1)(2)	234			(189		)	37			(232		)
Net gains (losses)	$	27		$	(2	)	$	26		$	9

__________ 

(1) Decreases to contractholder liabilities due to asset value changes are limited by certain floors and therefore do not reflect cumulative declines in recorded asset values of $3 million as of both June 30, 2015 and 2014. We have recovered and expect to recover in future periods these declines in recorded asset values through subsequent increases in recorded asset values or reductions in crediting rates on contractholder liabilities.

(2) Included in the amounts above related to the change in the liability to contractholders as a result of commercial mortgage and other loans are decreases of $30 million and increases of $10 million for the three months ended June 30, 2015 and 2014, respectively, and decreases of $25 million and increases of $17 million for the six months endedJune 30, 2015 and 2014, respectively. As prescribed by U.S. GAAP, changes in the fair value of commercial mortgage and other loans held for investment in our general account, other than when associated with impairments, are not recognized in income in the current period, while the impact of these changes in fair value are reflected as a change in the liability to fully participating contractholders in the current period.

The net impacts for the Retirement segment of changes in experience-rated contractholder liabilities and investment gains and losses on trading account assets supporting insurance liabilities and other related investments reflect timing differences between the recognition of the mark-to-market adjustments and the recognition of the recovery of these adjustments in future periods through subsequent increases in asset values or reductions in crediting rates on contractholder liabilities for partially participating products. These impacts also reflect the difference between the fair value of the underlying commercial mortgage and other loans and the amortized cost, less any valuation allowance, of these loans, as described above.

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Valuation of Assets and Liabilities

Fair Value of Assets and Liabilities

The authoritative guidance related to fair value measurement establishes a framework that includes a three-level hierarchy used to classify the inputs used in measuring fair value. The level in the hierarchy within which the fair value falls is determined based on the lowest level input that is significant to the measurement. The fair values of assets and liabilities classified as Level 3 include at least one or more significant unobservable input in the measurement. See Note 13 to the Unaudited Interim Consolidated Financial Statements for an additional description of the valuation hierarchy levels as well as for the balances of assets and liabilities measured at fair value on a recurring basis by hierarchy level presented on a consolidated basis.

The table below presents the balances of assets and liabilities measured at fair value on a recurring basis, as of the periods indicated, and the portion of such assets and liabilities that are classified in Level 3 of the valuation hierarchy. The table also provides details about these assets and liabilities excluding those held in the Closed Block division. We believe the amounts excluding the Closed Block division are most relevant to an understanding of our operations that are pertinent to investors in Prudential Financial because substantially all Closed Block division assets support obligations and liabilities relating to the Closed Block policies only. See Note 6 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

	As of June 30, 2015								As of December 31, 2014
	PFI excluding Closed Block Division				Closed Block Division				PFI excluding Closed Block Division				Closed Block Division
	Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)		Total at Fair Value		Total Level 3(1)
	(in millions)
Fixed maturities, available-for-sale	$	250,739	$	4,478	$	39,324	$	869	$	255,424	$	4,655	$	43,666	$	1,011
Trading account assets:
Fixed maturities	27,857		787		190		0		26,965		550		198		0
Equity securities	2,287		544		121		60		2,139		555		152		108
All other(2)	2,561		12		0		0		1,683		7		0		0
Subtotal	32,705		1,343		311		60		30,787		1,112		350		108
Equity securities, available-for-sale	6,671		257		3,230		2		6,339		272		3,522		3
Commercial mortgage and other loans	391		0		0		0		380		0		0		0
Other long-term investments	1,514		1,284		430		430		1,441		1,216		331		331
Short-term investments	4,226		0		898		0		5,898		0		1,837		0
Cash equivalents	11,478		0		969		0		10,647		0		1,198		0
Other assets	115		2		0		0		115		2		0		0
Subtotal excluding separate account assets	307,839		7,364		45,162		1,361		311,031		7,257		50,904		1,453
Separate account assets	296,341		25,855		0		0		296,435		24,662		0		0
Total assets	$	604,180	$	33,219	$	45,162	$	1,361	$	607,466	$	31,919	$	50,904	$	1,453
Future policy benefits	$	5,478	$	5,478	$	0	$	0	$	8,182	$	8,182	$	0	$	0
Other liabilities(2)	152		2		1		0		228		5		0		0
Notes issued by consolidated variable interest entities (“VIE”)	7,434		7,434		0		0		6,033		6,033		0		0
Total liabilities	$	13,064	$	12,914	$	1	$	0	$	14,443	$	14,220	$	0	$	0

__________

(1) The amount of Level 3 assets taken as a percentage of total assets measured at fair value on a recurring basis for PFI excluding the Closed Block division and for the Closed Block division totaled 5.5% and 3.0%, respectively, as of June 30, 2015, and 5.3% and 2.9%, respectively, as of December 31, 2014.

(2) “All other” and “Other liabilities” primarily include derivatives. The amounts classified as Level 3 exclude the impact of netting.

The determination of fair value, which for certain assets and liabilities is dependent on the application of estimates and assumptions, can have a significant impact on our results of operations and may require the application of a greater degree of

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judgment depending on market conditions, as the ability to value assets and liabilities can be significantly impacted by a decrease in market activity or a lack of transactions executed in an orderly manner. The following sections provide information regarding certain assets and liabilities which are valued using Level 3 inputs and could have a significant impact on our results of operations.

Fixed Maturity and Equity Securities

Fixed maturity securities included in Level 3 in our fair value hierarchy are generally priced based on internally-developed valuations or indicative broker quotes. For certain private fixed maturity and equity securities, the internally-developed valuation model uses significant unobservable inputs and, accordingly, such securities are included in Level 3 in our fair value hierarchy. Level 3 fixed maturity securities for PFI excluding the Closed Block division included approximately $4.3 billion of public fixed maturities as of June 30, 2015 with values primarily based on indicative broker quotes, and approximately $1.0 billion of private fixed maturities, with values primarily based on internally-developed models. Significant unobservable inputs used included: issue specific credit adjustments, material non-public financial information, management judgment, estimation of future earnings and cash flows, default rate assumptions, liquidity assumptions and indicative quotes from market makers. These inputs are usually considered unobservable, as not all market participants have access to this data.

The impact our determination of fair value for fixed maturity and equity securities has on our results of operations is dependent on our classification of the security as either trading, available-for-sale, or held-to-maturity. For our investments classified as trading, the impact of changes in fair value is recorded within “Other income.” For our investments classified as available-for-sale, the impact of changes in fair value is recorded as an unrealized gain or loss in AOCI, a separate component of equity. Our investments classified as held-to-maturity are carried at amortized cost.

Other Long-Term Investments

Other long-term investments classified in Level 3 primarily include real estate held in consolidated investment funds and fund investments where the fair value option has been elected. The fair value of real estate held in consolidated investment funds is determined through an independent appraisal process. The appraisals generally utilize a discounted cash flow model. The appraisals also include replacement cost estimates and recent sales data as alternate methods of fair value. These appraisals and the related assumptions are updated at least annually. Since many of the assumptions utilized are unobservable and are considered to be significant inputs to the valuation, the real estate investments within other long-term investments are reflected within Level 3. Consolidated real estate investment funds classified as Level 3 for PFI excluding the Closed Block division totaled approximately $0.4 billion as of June 30, 2015. The fair value of fund investments, where the fair value option has been elected, is primarily determined by the fund managers. Since the valuations may be based on unobservable market inputs and cannot be validated by the Company, these investments are included within Level 3. Investments in these funds for PFI excluding the Closed Block division included in Level 3 totaled approximately $0.9 billion as of June 30, 2015.

Separate Account Assets

Separate account assets included in Level 3 primarily include real estate investments for which values are determined as described above under “Other Long-Term Investments.” Separate account liabilities are reported at contract value and not at fair value.

Variable Annuity Living Benefit Features

Future policy benefits classified in Level 3 primarily include liabilities related to guarantees associated with the living benefit features of certain variable annuity contracts offered by our Individual Annuities segment, including GMAB, guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”). These benefits are accounted for as embedded derivatives and carried at fair value with changes in fair value included in “Realized investment gains (losses), net.” The fair values of the GMAB, GMWB and GMIWB liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or contra-liability balance, based on capital market conditions and various policyholder behavior assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally-developed models with option pricing techniques. These models utilize significant assumptions that are primarily unobservable, including assumptions as to lapse rates, NPR, utilization rates, withdrawal rates, mortality rates and equity market volatility. Future policy benefits classified as Level 3 for PFI excluding the Closed Block division were a net liability of $5.5 billion as of June 30, 2015. For additional information, see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities.”

Notes Issued by Consolidated VIEs

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As discussed in Note 5 to the Unaudited Interim Consolidated Financial Statements, notes issued by consolidated VIEs represent non-recourse notes issued by certain asset-backed investment vehicles, primarily collateralized loan obligations, which we are required to consolidate. We have elected the fair value option for these notes, which are valued based on broker quotes.

For additional information about the key estimates and assumptions used in our determination of fair value, see Note 13 to the Unaudited Interim Consolidated Financial Statements.

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Realized Investment Gains and Losses

Realized investment gains and losses are generated from numerous sources, including the following significant items:

• sale of investments;

• maturities of foreign denominated investments;

• adjustments to the cost basis of investments for other-than-temporary impairments;

• recognition of other-than-temporary impairments in earnings for foreign denominated securities that are approaching maturity and are in an unrealized loss position due to foreign currency exchange rate movements;

• prepayment premiums received on private fixed maturity securities;

• net changes in the allowance for losses, certain restructurings and foreclosures on commercial mortgage and other loans; and

• fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment.

The level of other-than-temporary impairments generally reflects economic conditions and is expected to increase when economic conditions worsen and to decrease when economic conditions improve. Historically, the causes of other-than-temporary impairments have been specific to each individual issuer and have not directly resulted in impairments to other securities within the same industry or geographic region. We may also realize additional credit and interest rate related losses through sales of investments pursuant to our credit risk and portfolio management objectives. For additional information regarding our policies regarding other-than-temporary-impairments for fixed maturity and equity securities, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

We use interest rate and currency swaps and other derivatives to manage interest and currency exchange rate exposures arising from mismatches between assets and liabilities, including duration mismatches. We use derivative contracts to mitigate the risk that unfavorable changes in currency exchange rates will materially affect U.S. dollar equivalent earnings generated by certain of our non-U.S. businesses. We also use equity-based and interest rate derivatives to hedge a portion of the risks embedded in certain variable annuity products with living benefit guarantees. Derivative contracts also include forward purchases and sales of “to be announced” (“TBA”) mortgage-backed securities primarily related to our dollar roll program. Many of these derivative contracts do not qualify for hedge accounting and, consequently, we recognize the changes in fair value of such contracts from period to period in current earnings, although we do not necessarily account for the related assets or liabilities the same way.

Accordingly, realized investment gains and losses from our derivative activities can contribute significantly to fluctuations in net income. For a further discussion of living benefit guarantees and related hedge positions in our Individual Annuities segment, see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities” above.

Adjusted operating income generally excludes “Realized investment gains (losses), net,” subject to certain exceptions. These exceptions primarily include realized investment gains or losses within certain of our businesses for which such gains or losses are a principal source of earnings, gains or losses associated with terminating hedges of foreign currency earnings and current period yield adjustments, and related charges and adjustments. Other-than-temporary impairments, interest rate related losses and credit related losses on sales (other than those related to certain of our businesses which primarily originate investments for sale or syndication to unrelated investors) are excluded from adjusted operating income.

The following table sets forth “Realized investment gains (losses), net,” by investment type as well as related charges and adjustments for the periods indicated. For additional details regarding adjusted operating income, see Note 11 to the Unaudited Interim Consolidated Financial Statements.

132

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Realized investment gains (losses), net:
PFI excluding Closed Block division	$	(36	)	$	241		$	1,952		$	312
Closed Block division	165			368			538			505
Consolidated realized investment gains (losses), net	$	129		$	609		$	2,490		$	817
PFI excluding Closed Block Division:
Realized investment gains (losses), net:
Fixed maturity securities	$	312		$	183		$	672		$	379
Equity securities	33			31			78			64
Commercial mortgage and other loans	20			8			30			16
Derivative instruments	(415		)	14			1,129			(155		)
Other	14			5			43			8
Total	$	(36	)	$	241		$	1,952		$	312
Related adjustments	(24		)	(443		)	(350		)	(465		)
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Related charges	346			(71		)	(265		)	(128		)
Realized investment gains (losses), net, and related charges and adjustments	$	286		$	(273	)	$	1,337		$	(281	)
Closed Block Division:
Realized investment gains (losses), net:
Fixed maturity securities	$	59		$	185		$	168		$	246
Equity securities	194			137			269			189
Commercial mortgage and other loans	0			0			1			0
Derivative instruments	(88		)	46			106			70
Other	0			0			(6		)	0
Total	$	165		$	368		$	538		$	505

2015 to 2014 Three Month Comparison

PFI excluding Closed Block Division

Net realized investment losses were $36 million in the second quarter of 2015, compared to net realized investment gains of $241 million in the second quarter of 2014.

Net realized gains on fixed maturity securities were $312 million and $183 million in the second quarter of 2015 and 2014, respectively, as set forth in the following table:

133

	Three Months Ended June 30,
	2015			2014
	(in millions)
Realized investment gains (losses), net—Fixed Maturity Securities—PFI excluding Closed Block Division
Gross realized investment gains:
Gross gains on sales and maturities(1)	$	350		$	250
Private bond prepayment premiums	9			21
Total gross realized investment gains	359			271
Gross realized investment losses:
Net other-than-temporary impairments recognized in earnings(2)	(18		)	(17		)
Gross losses on sales and maturities(1)	(29		)	(67		)
Credit related losses on sales	0			(4		)
Total gross realized investment losses	(47		)	(88		)
Realized investment gains (losses), net—Fixed Maturity Securities	$	312		$	183
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)	$	321		$	183

  __________

(1) Amounts exclude prepayment premiums, other-than-temporary impairments, and credit related losses through sales of investments pursuant to our credit risk objectives.

(2) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

Net gains on sales and maturities of fixed maturity securities were $321 million and $183 million in the second quarter of 2015 and 2014, respectively, primarily due to sales and maturities of U.S. dollar-denominated securities within our International Insurance segment. Gains associated with foreign exchange remeasurement on assets that were transferred under the new structure in Gibraltar Life will be recognized in earnings over time as these assets mature or are sold. See “Results of Operations by Segment–International Insurance Division” above. See below for additional information regarding the other-than-temporary impairments of fixed maturity securities in the second quarter of 2015 and 2014.

Net realized gains on equity securities were $33 million and $31 million in the second quarter of 2015 and 2014, respectively, and included net gains on sales of equity securities of $42 million and $37 million, respectively. The gains were offset by other-than-temporary impairments of $9 million and $6 million in 2015 and 2014, respectively. See below for additional information regarding other-than-temporary impairments of equity securities in the second quarter of 2015 and of 2014.

Net realized gains on commercial mortgage and other loans in the second quarter of 2015 were $20 million, primarily driven by servicing revenue of $10 million in our Asset Management business and a net decrease in the loan loss reserve of $6 million. For additional information regarding our commercial mortgage and other loan loss reserves see “—General Account Investments—Commercial Mortgage and Other Loans—Commercial Mortgage and Other Loan Quality.”

Net realized losses on derivatives were $415 million in the second quarter of 2015, compared to net realized gains of $14 million in the second quarter of 2014. The net losses in the second quarter of 2015 primarily reflect $520 million of losses on interest rate derivatives used to manage duration as interest rates increased and $300 million of losses on foreign currency derivatives used to hedge portfolio assets in our Japan operations due to the weakening of the Japanese yen against the U.S. dollar and in our U.S. businesses due to the U.S. dollar weakening against the euro. Partially offsetting these losses were net gains of $393 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts, and $41 million of gains primarily representing risk fees earned on synthetic guaranteed investment contracts which are accounted for as derivatives under U.S. GAAP. The net gains in the second quarter of 2014 primarily reflect $309 million of gains on interest rate derivatives used to manage duration as interest rates decreased and $43 million of gains representing risk fees earned on synthetic guaranteed investment contracts. Offsetting these gains were net losses of $354 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts.

Related adjustments include the portions of “Realized investment gains (losses), net” that are included in adjusted operating income and the portions of “Other income” and “Net investment income” that are excluded from adjusted operating income. These adjustments are made to arrive at “Realized investment gains (losses), net, and related adjustments” which are excluded from adjusted operating income. Results for the second quarter of 2015 include net negative related adjustments of $24 million driven by settlements on interest rate and currency derivatives, partially offset by the impact of foreign currency exchange rate movements

134

on certain non-yen denominated assets and liabilities within our Japan insurance operations. Results for the second quarter of 2014 include net negative related adjustments of $443 million driven by the impact of foreign currency exchange rate movements on certain non-yen denominated assets and liabilities within our Japan insurance operations, and by settlements on interest rate and currency derivatives. We implemented a new structure in Gibraltar Life, effective for financial reporting beginning in the first quarter of 2015, which has minimized volatility in reported U.S. GAAP earnings arising from foreign currency remeasurement. For additional information, see “—Results of Operations by Segment—International Insurance Division” above.

     Charges that relate to “Realized investment gains (losses), net” are also excluded from adjusted operating income, and may be reflected as net charges or net benefits. Results for the second quarter of 2015 include a net related benefit of $346 million, compared to a net related charge of $71 million for the second quarter of 2014. Both periods’ results were driven by the impact of derivative activity on the amortization of DAC and other costs and certain policyholder reserves. For additional information, see Note 11 to the Unaudited Interim Consolidated Financial Statements.

During the second quarter of 2015, we recorded other-than-temporary impairments of $34 million in earnings, compared to $23 million in the second quarter of 2014. The following tables set forth, for the periods indicated, the composition of other-than-temporary impairments recorded in earnings attributable to the PFI excluding the Closed Block division by asset type, and for fixed maturity securities, by reason.

	Three Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments recorded in earnings—PFI excluding Closed Block Division(1)
Public fixed maturity securities	$	3	$	10
Private fixed maturity securities	15		7
Total fixed maturity securities	18		17
Equity securities	9		6
Other invested assets(2)	7		0
Total	$	34	$	23

__________

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Includes other-than-temporary impairments relating to investments in joint ventures and partnerships.

	Three Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments on fixed maturity securities recorded in earnings—PFI excluding Closed Block Division(1)
Due to credit events or adverse conditions of the respective issuer(2)	$	17	$	11
Due to other accounting guidelines(3)	1		6
Total	$	18	$	17

__________

(1) Excludes the portion of other-than-temporary impairment recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

(3) Primarily represents circumstances where securities with losses from foreign currency exchange rate movements approach maturity.

Fixed maturity security other-than-temporary impairments in the second quarter of 2015 were concentrated in the industrial other, utility and consumer non-cyclical sectors within corporate securities. Fixed maturity security other-than-temporary impairments in the second quarter of 2014 were concentrated in the consumer cyclical, finance, and utility sectors within corporate securities and asset backed securities. In both periods, these other-than-temporary impairments were primarily related to securities with liquidity concerns, downgrades in credit, bankruptcy or other adverse financial conditions of the respective issuers.

135

Equity security other-than-temporary impairments in the second quarter of 2015 and 2014 were primarily driven by the extent and duration of declines in values.

Other invested assets other-than-temporary impairments in the second quarter of 2015 were primarily due to a decline in value of investments in limited partnerships within the energy sector.

Closed Block Division

Net realized investment gains were $165 million and $368 million in the second quarter of 2015 and 2014, respectively.

Net realized gains on fixed maturity securities were $59 million and $185 million in the second quarter of 2015 and 2014, respectively, as set forth in the following table.

	Three Months Ended June 30,
	2015			2014
	(in millions)
Realized investment gains (losses), net—Fixed Maturity Securities—Closed Block Division
Gross realized investment gains:
Gross gains on sales and maturities(1)	$	76		$	198
Private bond prepayment premiums	6			7
Total gross realized investment gains	82			205
Gross realized investment losses:
Net other-than-temporary impairments recognized in earnings(2)	(11		)	(9		)
Gross losses on sales and maturities(1)	(12		)	(9		)
Credit related losses on sales	0			(2		)
Total gross realized investment losses	(23		)	(20		)
Realized investment gains (losses), net—Fixed Maturity Securities	$	59		$	185
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)	$	64		$	189

__________

(1) Amounts exclude prepayment premiums, other-than-temporary impairments, and credit related losses through sales of investments pursuant to our credit risk objectives.

(2) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

Net realized gains on equity securities were $194 million and $137 million in the second quarter of 2015 and 2014, respectively, primarily driven by net gains on sales of equity securities. See below for additional information regarding other-than-temporary impairments of fixed maturity securities in the second quarter of 2015 and 2014.

Net realized losses on derivatives were $88 million in the second quarter of 2015, compared to net realized gains of $46 million in the second quarter of 2014. The net losses in the second quarter of 2015 primarily reflect net losses of $66 million on currency derivatives used to hedge foreign denominated investments as the U.S. dollar weakened against the euro and net losses of $20 million on interest rate derivatives primarily used to manage duration as interest rates increased. The net gains in the second quarter of 2014 primarily reflect net gains of $28 million on interest rate derivatives primarily used to manage duration and net gains of $17 million on TBA forward contracts as interest rates decreased.

During the second quarter of 2015, we recorded other-than-temporary impairments of $18 million in earnings, compared to $10 million in the second quarter of 2014. The following tables set forth, for the periods indicated, the composition of other-than-temporary impairments recorded in earnings attributable to the Closed Block division by asset type, and for fixed maturity securities, by reason.

136

	Three Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments recorded in earnings—Closed Block Division(1)
Public fixed maturity securities	$	2	$	4
Private fixed maturity securities	9		5
Total fixed maturity securities	11		9
Equity securities	2		1
Other invested assets(2)	5		0
Total	$	18	$	10

__________

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Includes other-than-temporary impairments relating to investments in joint ventures and partnerships.

	Three Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments on fixed maturity securities recorded in earnings—Closed Block Division(1)
Due to credit events or adverse conditions of the respective issuer(2)	$	11	$	9
Due to other accounting guidelines	0		0
Total	$	11	$	9

__________

(1) Excludes the portion of other-than-temporary impairment recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

Fixed maturity security other-than-temporary impairments in the second quarter of 2015 were concentrated in the industrial other, utility and consumer non-cyclical sectors within corporate securities. Fixed maturity security other-than-temporary impairments in the second quarter of 2014 were concentrated in the consumer cyclical, communications and utility sectors within corporate securities. In both periods these other-than-temporary impairments reflect adverse financial conditions of the respective issuers.

Equity security other-than-temporary impairments in the second quarter of 2015 were primarily due to the extent and duration of declines in values.

Other-than-temporary impairments in the second quarter of 2015 were primarily due to declines in value of investments in limited partnerships in the energy sector.

2015 to 2014 Six Month Comparison

PFI excluding Closed Block Division

Net realized investment gains were $1,952 million and $312 million in the first six months of 2015 and 2014, respectively.

Net realized gains on fixed maturity securities were $672 million and $379 million in the first six months of 2015 and 2014, respectively, as set forth in the following table.

137

	Six Months Ended June 30,
	2015			2014
	(in millions)
Realized investment gains (losses), net—Fixed Maturity Securities—PFI excluding Closed Block Division
Gross realized investment gains:
Gross gains on sales and maturities(1)	$	737		$	572
Private bond prepayment premiums	29			33
Total gross realized investment gains	766			605
Gross realized investment losses:
Net other-than-temporary impairments recognized in earnings(2)	(22		)	(27		)
Gross losses on sales and maturities(1)	(69		)	(176		)
Credit related losses on sales	(3		)	(23		)
Total gross realized investment losses	(94		)	(226		)
Realized investment gains (losses), net—Fixed Maturity Securities	$	672		$	379
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)	$	668		$	396

__________ 

(1) Amounts exclude prepayment premiums, other-than-temporary impairments, and credit related losses through sales of investments pursuant to our credit risk objectives.

(2) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

Net gains on sales and maturities of fixed maturity securities in the first six months of 2015 and 2014 were $668 million and $396 million, respectively, primarily due to maturities of U.S. dollar-denominated securities within our International Insurance segment. Gains associated with foreign exchange remeasurement on assets that were transferred under the new structure in Gibraltar Life will be recognized in earnings over time as these assets mature or are sold. See “Results of Operations by Segment–International Insurance Division” above. See below for additional information regarding the other-than-temporary impairments of fixed maturity securities in the first six months of 2015 and 2014.

Net realized gains on equity securities were $78 million and $64 million in the first six months of 2015 and 2014, respectively, and included net gains on sales of equity securities of $92 million and $78 million, respectively. Both periods’ gains were primarily offset by other-than-temporary impairments of $14 million. See below for additional information regarding other-than-temporary impairments of equity securities in the first six months of 2014 and of 2013.

Net realized gains on commercial mortgage and other loans in the first six months of 2015 were $30 million, primarily driven by servicing revenue of $19 million in our Asset Management businesses and a net decrease in the loan loss reserve of $9 million. For additional information regarding our commercial mortgage and other loan loss reserves, see “—General Account Investments—Commercial Mortgage and Other Loans—Commercial Mortgage and Other Loan Quality.”

Net realized gains on derivatives were $1,129 million in the first six months of 2015, compared to net realized losses of $155 million in the first six months of 2014. The net gains in the first six months of 2015 primarily reflect net gains of $1,117 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts. The net losses in the first six months of 2014 primarily reflect net losses of $1,040 million on product related embedded derivatives and related hedge positions mainly associated with certain variable annuity contracts. Partially offsetting these losses are net gains of $746 million on interest rate derivatives used to manage duration as interest rates decreased, and $86 million of gains representing risk fees earned on synthetic guaranteed investment contracts.

Related adjustments for the first six months of 2015 include net negative related adjustments of $350 million compared to net negative related adjustments of $465 million for the first six months of 2014. Results for the first six months of 2015 were driven by settlements on interest rate and currency derivatives, partially offset by the impact of foreign currency exchange rate movements on certain non-yen denominated assets and liabilities within our Japan insurance operations. Results for the first six months of 2014 were driven by settlements on interest rate and currency derivatives.

Related charges include net related charges of $265 million for the first six months of 2015 compared to net related charges of $128 million for the first six months of 2014. Both periods’ results were driven by the impact of derivative activity on the amortization of DAC and other costs and certain policyholder reserves.

138

    During the first six months of 2015, we recorded other-than-temporary impairments of $62 million in earnings, compared to $41 million in the first six months of 2014. The following tables set forth, for the periods indicated, the composition of other-than-temporary impairments recorded in earnings attributable to the PFI excluding the Closed Block division by asset type, and for fixed maturity securities, by reason.

	Six Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments recorded in earnings—PFI excluding Closed Block Division(1)
Public fixed maturity securities	$	6	$	16
Private fixed maturity securities	16		11
Total fixed maturity securities	22		27
Equity securities	14		14
Other invested assets(2)	26		0
Total	$	62	$	41

__________ 

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Includes other-than-temporary impairments relating to investments in joint ventures and partnerships.

	Six Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments on fixed maturity securities recorded in earnings—PFI excluding Closed Block Division(1)
Due to credit events or adverse conditions of the respective issuer(2)	$	21	$	18
Due to other accounting guidelines(3)	1		9
Total	$	22	$	27

__________

(1) Excludes the portion of other-than-temporary impairment recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

(3) Primarily represents circumstances where securities with losses from foreign currency exchange rate movements approach maturity.

Fixed maturity security other-than-temporary impairments in the first six months of 2015 were concentrated in the industrial other, consumer cyclical and utility sectors within corporate securities. Fixed maturity security other-than-temporary impairments in the first six months of 2014 were concentrated in the communications, utility and consumer non-cyclical sectors within corporate securities. In both periods, these other-than-temporary impairments were primarily related to securities with liquidity concerns, downgrades in credit, bankruptcy or other adverse financial conditions of the respective issuers.

Equity security other-than-temporary impairments in the first six months of 2015 and 2014, were primarily due to the extent and duration of declines in values. 

Other invested assets other-than-temporary impairments in the first six months of 2015 were primarily due to declines in value of investments in limited partnerships in the energy sector.

Closed Block Division

Net realized investment gains were $538 million and $505 million in the first six months of 2015 and 2014, respectively.

Net realized gains on fixed maturity securities were $168 million and $246 million in the first six months of 2015 and 2014, respectively, as set forth in the following table.

139

	Six Months Ended June 30,
	2015			2014
	(in millions)
Realized investment gains (losses), net—Fixed Maturity Securities—Closed Block Division
Gross realized investment gains:
Gross gains on sales and maturities(1)	$	188		$	281
Private bond prepayment premiums	20			15
Total gross realized investment gains	208			296
Gross realized investment losses:
Net other-than-temporary impairments recognized in earnings(2)	(15		)	(15		)
Gross losses on sales and maturities(1)	(25		)	(27		)
Credit related losses on sales	0			(8		)
Total gross realized investment losses	(40		)	(50		)
Realized investment gains (losses), net—Fixed Maturity Securities	$	168		$	246
Net gains (losses) on sales and maturities—Fixed Maturity Securities(1)	$	163		$	254

__________

(1) Amounts exclude prepayment premiums, other-than-temporary impairments, and credit related losses through sales of investments pursuant to our credit risk objectives.

(2) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

Net realized gains on equity securities were $269 million and $189 million in the first six months of 2015 and 2014, respectively, resulting from net gains on sales of equity securities. See below for additional information regarding the other-than-temporary impairments of equity securities in the first six months of 2015 and 2014.

Net realized gains on derivatives were $106 million in the first six months of 2015, compared to net realized gains of $70 million in the first six months of 2014. The net gains in the first six months of 2015 primarily reflect net gains of $110 million on currency derivatives used to hedge foreign denominated investments as the U.S. dollar strengthened against the euro. The net gains in the first six months of 2014 primarily reflect net gains of $47 million on interest rate derivatives primarily used to manage duration and net gains of $30 million on TBA forward contracts as interest rates decreased.

During the first six months of 2015, we recorded other-than-temporary impairments of $29 million in earnings, compared to $18 million in the first six months of 2014. The following tables set forth, for the periods indicated, the composition of other-than-temporary impairments recorded in earnings attributable to the Closed Block division by asset type, and for fixed maturity securities, by reason.

	Six Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments recorded in earnings—Closed Block Division(1)
Public fixed maturity securities	$	4	$	9
Private fixed maturity securities	11		6
Total fixed maturity securities	15		15
Equity securities	3		3
Other invested assets(2)	11		0
Total	$	29	$	18

__________

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Includes other-than-temporary impairments relating to investments in joint ventures and partnerships.

140

	Six Months Ended June 30,
	2015		2014
	(in millions)
Other-than-temporary impairments on fixed maturity securities recorded in earnings—Closed Block Division(1)
Due to credit events or adverse conditions of the respective issuer(2)	$	15	$	14
Due to other accounting guidelines	0		1
Total	$	15	$	15

__________

(1) Excludes the portion of other-than-temporary impairment recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

(2) Represents circumstances where we believe credit events or other adverse conditions of the respective issuers have caused, or will lead to, a deficiency in the contractual cash flows related to the investment. The amount of the impairment recorded in earnings is the difference between the amortized cost of the debt security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment.

Fixed maturity security other-than-temporary impairments in the first six months of 2015 were concentrated in the industrial other, capital goods and utility sectors within corporate securities. Fixed maturity security other-than-temporary impairments in the first six months of 2014 were concentrated in the consumer cyclical and communications sectors within corporate securities. In both periods these other-than-temporary impairments reflect adverse financial conditions of the respective issuers.

Equity security other-than-temporary impairments in the first six months of both 2015 and 2014 were primarily due to the extent and duration of declines in values.

General Account Investments

Portfolio Composition

Our investment portfolio consists of public and private fixed maturity securities, commercial mortgage and other loans, policy loans, and non-coupon investments, which include equity securities and other long-term investments such as joint ventures and limited partnerships, real estate held through direct ownership and seed money in separate accounts. The composition of our general account reflects, within the discipline provided by our risk management approach, our need for competitive results and the selection of diverse investment alternatives available primarily through our Asset Management segment. The size of our portfolio enables us to invest in asset classes that may be unavailable to the typical investor.

The following tables set forth the composition of the investments of our general account apportioned between PFI excluding the Closed Block division and the Closed Block division as of the dates indicated.

141

	June 30, 2015
	PFI excluding Closed Block Division				Closed Block Division		Consolidated
	($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	215,100	63.7	%	$	24,582	$	239,682
Public, held-to-maturity, at amortized cost	1,887		0.6		0		1,887
Private, available-for-sale, at fair value	35,491		10.5		14,742		50,233
Private, held-to-maturity, at amortized cost	509		0.1		0		509
Trading account assets supporting insurance liabilities, at fair value	20,267		6.0		0		20,267
Other trading account assets, at fair value	1,455		0.4		310		1,765
Equity securities, available-for-sale, at fair value	6,663		2.0		3,230		9,893
Commercial mortgage and other loans, at book value	38,297		11.3		9,838		48,135
Policy loans, at outstanding balance	6,804		2.0		4,848		11,652
Other long-term investments(1)	6,929		2.1		2,837		9,766
Short-term investments	4,419		1.3		1,098		5,517
Total general account investments	337,821		100.0	%	61,485		399,306
Invested assets of other entities and operations(2)	12,638				0		12,638
Total investments	$	350,459			$	61,485	$	411,944

	December 31, 2014
	PFI excluding Closed Block Division				Closed Block Division		Consolidated
	($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	220,539	64.4	%	$	28,626	$	249,165
Public, held-to-maturity, at amortized cost	2,000		0.6		0		2,000
Private, available-for-sale, at fair value	34,738		10.1		15,039		49,777
Private, held-to-maturity, at amortized cost	575		0.2		0		575
Trading account assets supporting insurance liabilities, at fair value	20,263		5.9		0		20,263
Other trading account assets, at fair value	1,456		0.5		350		1,806
Equity securities, available-for-sale, at fair value	6,331		1.8		3,522		9,853
Commercial mortgage and other loans, at book value	36,538		10.7		9,475		46,013
Policy loans, at outstanding balance	6,798		2.0		4,914		11,712
Other long-term investments(1)	7,169		2.1		2,766		9,935
Short-term investments	5,874		1.7		2,037		7,911
Total general account investments	342,281		100.0	%	66,729		409,010
Invested assets of other entities and operations(2)	10,976				0		10,976
Total investments	$	353,257			$	66,729	$	419,986

__________ 

(1) Other long-term investments consist of real estate and non-real estate-related investments in joint ventures and partnerships, investment real estate held through direct ownership and other miscellaneous investments. For additional information regarding these investments, see “—Other Long-Term Investments” below.

(2) Includes invested assets of our asset management and derivative operations. Excludes assets of our asset management operations that are managed for third parties and those assets classified as “Separate account assets” on our balance sheet. For additional information regarding these investments, see “—Invested Assets of Other Entities and Operations” below.

The decrease in general account investments attributable to PFI excluding the Closed Block division in the first six months of 2015 was primarily due to a net decrease in fair value driven by an increase in interest rates in the U.S. and Japan, partially offset by the reinvestment of net investment income, net business inflows, and the transfer of assets from the former Closed Block Business. The general account investments attributable to the Closed Block division also decreased in the first six months of 2015, primarily due to an increase in interest rates in the U.S. and the transfer of assets related to the former Closed Block Business. For

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information regarding the methodology used in determining the fair value of our fixed maturities, see Note 13 to the Unaudited Interim Consolidated Financial Statements.

As of both June 30, 2015 and December 31, 2014, 41% of our general account investments, other than those of the Closed Block division, relate to our Japanese insurance operations.

Although the majority of the Japanese general account is invested in yen-denominated investments, our Japanese insurance operations also hold significant investments denominated in U.S. and Australian dollars, including those that support liabilities denominated in these currencies. As a result of continued growth in these portfolios, we have implemented a new reporting structure in Gibraltar Life that disaggregates the U.S. and Australian dollar-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The new structure was effective for financial reporting beginning in the first quarter of 2015. For additional information, see “—Results of Operations by Segment—International Insurance Division,” above.

The following table sets forth the composition related to the investments of our Japanese insurance operations’ general account as of the dates indicated.

	June 30, 2015		December 31, 2014
	(in millions)
Fixed maturities:
Public, available-for-sale, at fair value	$	106,894	$	111,991
Public, held-to-maturity, at amortized cost	1,887		2,000
Private, available-for-sale, at fair value	9,368		8,835
Private, held-to-maturity, at amortized cost	509		575
Trading account assets supporting insurance liabilities, at fair value	2,000		1,910
Other trading account assets, at fair value	650		672
Equity securities, available-for-sale, at fair value	2,697		2,504
Commercial mortgage and other loans, at book value	8,821		8,215
Policy loans, at outstanding balance	2,129		2,146
Other long-term investments(1)	1,731		1,606
Short-term investments	366		406
Total Japanese general account investments	$	137,052	$	140,860

__________ 

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

The decrease in general account investments related to our Japanese insurance operations in the first six months of 2015 was primarily attributable to the translation impact of the yen and the Australian dollar weakening against the U.S. dollar, and a net decrease in fair value driven by an increase in interest rates.

As of June 30, 2015, our Japanese insurance operations had $49.7 billion, at fair value, of investments denominated in U.S. dollars, including $4.2 billion that were hedged to yen through third party derivative contracts and $32.0 billion that support liabilities denominated in U.S. dollars, with the remainder hedging our foreign currency exchange rate exposure on U.S. dollar-equivalent equity. As of December 31, 2014, our Japanese insurance operations had $48.9 billion, at fair value, of investments denominated in U.S. dollars, including $3.6 billion that were hedged to yen through third party derivative contracts and $31.9 billion that support liabilities denominated in U.S. dollars, with the remainder hedging our foreign currency exchange rate exposure on U.S. dollar-equivalent equity. The $0.8 billion increase in the fair value of U.S. dollar-denominated investments from December 31, 2014, is primarily attributable to portfolio growth as a result of business inflows and the reinvestment of net investment income, partially offset by a net decrease in fair value driven by higher interest rates.

Our Japanese insurance operations had $10.0 billion and $10.4 billion, at fair value, of investments denominated in Australian dollars that support liabilities denominated in Australian dollars as of June 30, 2015 and December 31, 2014, respectively. The $0.4 billion decrease in the fair value of Australian dollar-denominated investments from December 31, 2014, is primarily attributable to the translation impact of the Australian dollar weakening against the U.S. dollar, partially offset by portfolio growth as a result of business inflows and the reinvestment of net investment income.

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For additional information regarding U.S. and Australian dollar investments held in our Japanese insurance operations and a discussion of our yen hedging strategy, see “—Results of Operations by Segment—International Insurance Division,” above.

Investment Results

The following tables set forth the income yield and investment income for each major investment category of our general account for the periods indicated. The 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 gains and losses.

	Three Months Ended June 30, 2015
	PFI Excluding Closed Block Division					Closed Block Division					Consolidated
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	4.01	%	$	2,234		5.02	%	$	432		4.14	%	$	2,666
Trading account assets supporting insurance liabilities	3.50		178			0.00		0			3.50		178
Equity securities	6.31		75			1.10		5			4.68		80
Commercial mortgage and other loans	4.51		426			5.26		127			4.67		553
Policy loans	4.92		83			5.91		71			5.33		154
Short-term investments and cash equivalents	0.20		8			2.29		3			0.24		11
Other investments	4.20		89			4.54		36			4.29		125
Gross investment income before investment expenses	3.91		3,093			4.93		674			4.06		3,767
Investment expenses	(0.15	)	(97		)	(0.25	)	(35		)	(0.16	)	(132		)
Investment income after investment expenses	3.76	%	2,996			4.68	%	639			3.90	%	3,635
Investment results of other entities and operations(2)			36					0					36
Total investment income			$	3,032				$	639				$	3,671

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	Three Months Ended June 30, 2014
	PFI Excluding Closed Block Division					Closed Block Division					Consolidated
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	3.82	%	$	2,210		5.07	%	$	484		4.00	%	$	2,694
Trading account assets supporting insurance liabilities	3.59		188			0.00		0			3.59		188
Equity securities	6.64		80			4.22		25			5.83		105
Commercial mortgage and other loans	4.83		390			5.24		130			4.92		520
Policy loans	4.93		85			5.90		73			5.34		158
Short-term investments and cash equivalents	0.22		6			1.47		2			0.27		8
Other investments	5.99		129			9.08		60			6.72		189
Gross investment income before investment expenses	3.93		3,088			5.29		774			4.14		3,862
Investment expenses	(0.13	)	(101		)	(0.26	)	(39		)	(0.15	)	(140		)
Investment income after investment expenses	3.80	%	2,987			5.03	%	735			3.99	%	3,722
Investment results of other entities and operations(2)			32					0					32
Total investment income			$	3,019				$	735				$	3,754

__________ 

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

(2) Includes investment income of our asset management operations and derivative operations.

See below for a discussion of the change in the yields for PFI excluding the Closed Block division. The net investment income yield attributable to the Closed Block division for the three months ended June 30, 2015 decreased compared to the three months ended June 30, 2014 due to lower income on non-coupon investments and lower fixed income reinvestment rates.

The following table sets forth the income yield and investment income for each major investment category of our general account investments, excluding the Closed Block division, other than the Japanese insurance operations’ portion of the general account which is presented separately below, for the periods indicated. The 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 gains and losses.

145

	Six Months Ended June 30, 2015
	PFI Excluding Closed Block Division					Closed Block Division					Consolidated
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	4.00	%	$	4,434		4.90	%	$	859		4.13	%	$	5,293
Trading account assets supporting insurance liabilities	3.62		365			0.00		0			3.62		365
Equity securities	5.80		136			3.77		40			5.16		176
Commercial mortgage and other loans	4.56		845			5.24		249			4.70		1,094
Policy loans	4.93		166			5.92		142			5.34		308
Short-term investments and cash equivalents	0.22		17			1.43		6			0.26		23
Other investments	6.10		258			7.72		120			6.53		378
Gross investment income before investment expenses	3.97		6,221			5.11		1,416			4.14		7,637
Investment expenses	(0.15	)	(190		)	(0.23	)	(68		)	(0.15	)	(258		)
Investment income after investment expenses	3.82	%	6,031			4.88	%	1,348			3.99	%	7,379
Investment results of other entities and operations(2)			61					0					61
Total investment income			$	6,092				$	1,348				$	7,440

	Six Months Ended June 30, 2014
	PFI Excluding Closed Block Division					Closed Block Division					Consolidated
	Yield(1)		Amount			Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	3.83	%	$	4,367		5.12	%	$	966		4.01	%	$	5,333
Trading account assets supporting insurance liabilities	3.72		387			0.00		0			3.72		387
Equity securities	6.12		143			3.82		46			5.34		189
Commercial mortgage and other loans	4.76		753			5.38		262			4.90		1,015
Policy loans	4.92		167			5.91		145			5.33		312
Short-term investments and cash equivalents	0.23		12			1.13		3			0.28		15
Other investments	8.97		379			13.15		164			9.93		543
Gross investment income before investment expenses	4.00		6,208			5.48		1,586			4.23		7,794
Investment expenses	(0.13	)	(173		)	(0.26	)	(76		)	(0.15	)	(249		)
Investment income after investment expenses	3.87	%	6,035			5.22	%	1,510			4.08	%	7,545
Investment results of other entities and operations(2)			47					0					47
Total investment income			$	6,082				$	1,510				$	7,592

__________ 

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

(2) Includes investment income of our asset management operations and derivative operations.

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See below for a discussion of the change in the yields for PFI excluding the Closed Block division. The net investment income yield attributable to the Closed Block division for the six months ended June 30, 2015, decreased compared to the six months ended June 30, 2014, due to lower income on non-coupon investments and lower fixed income reinvestment rates.

The following table sets forth the income yield and investment income for each major investment category of our general account investments, excluding the Closed Block division, other than the Japanese insurance operations’ portion of the general account which is presented separately below, for the periods indicated. The 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 gains and losses.

	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	4.57	%	$	1,423		4.62	%	$	1,373
Trading account assets supporting insurance liabilities	3.77		173			3.85		183
Equity securities	6.60		55			6.73		51
Commercial mortgage and other loans	4.51		327			4.86		310
Policy loans	5.40		63			5.53		62
Short-term investments and cash equivalents	0.20		7			0.23		5
Other investments	3.78		56			6.15		98
Gross investment income before investment expenses	4.22		2,104			4.49		2,082
Investment expenses	(0.16	)	(56		)	(0.16	)	(63		)
Investment income after investment expenses	4.06	%	2,048			4.33	%	2,019
Investment results of other entities and operations(2)			36					32
Total investment income			$	2,084				$	2,051

__________

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

(2) Includes investment income of our asset management operations and derivative operations.

The decrease in net investment income yield attributable to our general account investments, excluding the Closed Block division, other than the Japanese operations’ portfolio, for the three months ended June 30, 2015, compared to the three months ended June 30, 2014, was primarily the result of lower income from non-coupon investments and lower fixed income reinvestment rates.

The following table sets forth the income yield and investment income for each major investment category of our general account investments, excluding the Closed Block division, other than the Japanese insurance operations’ portion of the general account which is presented separately below, for the periods indicated. The 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 gains and losses.

147

	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	4.62	%	$	2,834		4.65	%	$	2,733
Trading account assets supporting insurance liabilities	3.81		348			3.90		368
Equity securities	6.31		102			6.61		98
Commercial mortgage and other loans	4.58		654			4.85		606
Policy loans	5.42		125			5.51		123
Short-term investments and cash equivalents	0.21		15			0.23		10
Other investments	5.62		170			9.73		300
Gross investment income before investment expenses	4.31		4,248			4.61		4,238
Investment expenses	(0.16	)	(109		)	(0.15	)	(99		)
Investment income after investment expenses	4.15	%	4,139			4.46	%	4,139
Investment results of other entities and operations(2)			61					47
Total investment income			$	4,200				$	4,186

__________

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

(2) Includes investment income of our asset management operations and derivative operations.

The decrease in net investment income yield attributable to our general account investments, excluding the Closed Block division, other than the Japanese operations’ portfolio, for the six months ended June 30, 2015, compared to the six months ended June 30, 2014, was primarily the result of lower income from non-coupon investments and lower fixed income reinvestment rates.

The following table sets forth the income yield and investment income for each major investment category of our Japanese insurance operations’ general account for the periods indicated. The 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 gains and losses.

	Three Months Ended June 30, 2015					Three Months Ended June 30, 2014
	Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	3.29	%	$	811		2.98	%	$	837
Trading account assets supporting insurance liabilities	1.06		5			1.08		5
Equity securities	5.64		20			6.49		29
Commercial mortgage and other loans	4.54		99			4.72		80
Policy loans	3.87		20			3.81		23
Short-term investments and cash equivalents	0.26		1			0.21		1
Other investments	5.19		33			5.53		31
Gross investment income before investment expenses	3.40		989			3.12		1,006
Investment expenses	(0.14	)	(41		)	(0.13	)	(38		)
Total investment income	3.26	%	$	948		2.99	%	$	968

__________ 

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

148

The increase in net investment income yield on the Japanese insurance portfolio for the three months ended June 30, 2015, compared to the three months ended June 30, 2014, was primarily attributable to a higher allocation of U.S. dollar-denominated investments and higher income from non-coupon investments.

Both the U.S. dollar-denominated and Australian dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts provide a yield that is substantially higher than the yield on comparable yen-denominated fixed maturities. The average amortized cost of U.S. dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts was approximately $35.5 billion and $33.3 billion, for the three months ended June 30, 2015 and 2014, respectively. The majority of U.S. dollar-denominated fixed maturities support liabilities that are denominated in U.S. dollars. The average amortized cost of Australian dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts was approximately $9.0 billion and $8.5 billion, for the three months ended June 30, 2015 and 2014, respectively. The Australian dollar-denominated fixed maturities support liabilities that are denominated in Australian dollars.

The following table sets forth the income yield and investment income for each major investment category of our Japanese insurance operations’ general account for the periods indicated. The 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 gains and losses.

	Six Months Ended June 30, 2015					Six Months Ended June 30, 2014
	Yield(1)		Amount			Yield(1)		Amount
	($ in millions)
Fixed maturities	3.23	%	$	1,600		2.95	%	$	1,634
Trading account assets supporting insurance liabilities	1.78		17			1.96		19
Equity securities	4.67		34			5.31		45
Commercial mortgage and other loans	4.51		191			4.39		147
Policy loans	3.87		41			3.78		44
Short-term investments and cash equivalents	0.26		2			0.26		2
Other investments	7.28		88			6.91		79
Gross investment income before investment expenses	3.39		1,973			3.11		1,970
Investment expenses	(0.14	)	(81		)	(0.13	)	(74		)
Total investment income	3.25	%	$	1,892		2.98	%	$	1,896

__________ 

(1) Yields are annualized, for interim periods, and are based on quarterly average carrying values except for fixed maturities, equity securities and securities lending activity. Yields for fixed maturities are based on amortized cost. Yields for equity securities are based on cost. Yields for fixed maturities and short-term investments and cash equivalents are calculated net of liabilities and rebate expenses corresponding to securities lending activity. Yields exclude investment income on assets other than those included in invested assets. Prior period’s yields are presented on a basis consistent with the current period presentation.

The increase in net investment income yield on the Japanese insurance portfolio for the six months ended June 30, 2015, compared to the six months ended June 30, 2014, was primarily attributable to a higher allocation of U.S. dollar-denominated investments and higher income from non-coupon investments.

Both the U.S. dollar-denominated and Australian dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts provide a yield that is substantially higher than the yield on comparable yen-denominated fixed maturities. The average amortized cost of U.S. dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts was approximately $35.5 billion and $33.3 billion, for the six months ended June 30, 2015, and 2014, respectively. The majority of U.S. dollar-denominated fixed maturities support liabilities that are denominated in U.S. dollars. The average amortized cost of Australian dollar-denominated fixed maturities that are not hedged to yen through third party derivative contracts was approximately $9.4 billion and $8.3 billion for the six months ended June 30, 2015, and 2014, respectively. The Australian dollar-denominated fixed maturities support liabilities that are denominated in Australian dollars.

For additional information regarding U.S. and Australian dollar investments held in our Japanese insurance operations see, “—Results of Operations by Segment—International Insurance Division.”

General Account Investments of PFI excluding Closed Block Division

149

In the following sections, we provide details about our investment portfolio, excluding investments held in the Closed Block division. We believe the details of the composition of our investment portfolio excluding the Closed Block division are most relevant to an understanding of our operations that are pertinent to investors in Prudential Financial because substantially all Closed Block division assets support obligations and liabilities relating to the Closed Block policies only. See Note 6 to the Unaudited Interim Consolidated Financial Statements for further information on the Closed Block.

Fixed Maturity Securities

Fixed Maturity Securities and Unrealized Gains and Losses by Industry Category

The following table sets forth the composition of the portion of our fixed maturity securities portfolio by industry category attributable to PFI excluding the Closed Block division as of the dates indicated and the associated gross unrealized gains and losses.

	June 30, 2015								December 31, 2014
Industry(1)	Amortized Cost		Gross Unrealized Gains(2)		Gross Unrealized Losses(2)		Fair Value		Amortized Cost		Gross Unrealized Gains(2)		Gross Unrealized Losses(2)		Fair Value
	(in millions)
Corporate securities:
Finance	$	20,876	$	1,594	$	215	$	22,255	$	20,569	$	1,984	$	55	$	22,498
Consumer non-cyclical	20,879		2,370		358		22,891		20,956		2,822		141		23,637
Utility	16,554		1,652		309		17,897		16,144		2,149		82		18,211
Capital goods	10,493		1,162		185		11,470		10,170		1,348		67		11,451
Consumer cyclical	9,351		1,005		117		10,239		9,447		1,129		37		10,539
Foreign agencies	5,346		1,226		49		6,523		5,186		1,227		38		6,375
Energy	11,382		1,028		361		12,049		11,395		1,135		275		12,255
Communications	6,590		842		162		7,270		6,465		1,021		41		7,445
Basic industry	5,945		561		155		6,351		6,003		640		71		6,572
Transportation	5,938		668		74		6,532		5,718		769		18		6,469
Technology	3,551		352		63		3,840		3,474		389		30		3,833
Industrial other	3,281		252		52		3,481		2,746		333		21		3,058
Total corporate securities	120,186		12,712		2,100		130,798		118,273		14,946		876		132,343
Foreign government(3)	69,094		10,453		152		79,395		70,327		11,286		111		81,502
Residential mortgage-backed	5,225		407		6		5,626		5,747		466		4		6,209
Asset-backed securities(4)	7,323		331		56		7,598		7,094		292		78		7,308
Commercial mortgage-backed	8,652		233		25		8,860		9,688		344		24		10,008
U.S. Government	10,604		3,034		8		13,630		11,493		3,468		5		14,956
State & Municipal(5)	6,918		542		102		7,358		5,163		693		3		5,853
Total(6)	$	228,002	$	27,712	$	2,449	$	253,265	$	227,785	$	31,495	$	1,101	$	258,179

__________ 

(1) Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.

(2) Includes $280 million of gross unrealized gains and $2 million of gross unrealized losses as of June 30, 2015, compared to $328 million of gross unrealized gains and $1 million of gross unrealized losses as of December 31, 2014, on securities classified as held-to-maturity.

(3) As of June 30, 2015 and December 31, 2014, based on amortized cost, 75%and76% represent Japanese government bonds held by our Japanese insurance operations, respectively, with no other individual country representing more than 10% of the balance.

(4) Includes securities collateralized by sub-prime mortgages. See “—Asset-Backed Securities” below.

(5) Includes securities related to the Build America Bonds program.

(6) Excluded from the table above are securities held outside the general account in other entities and operations. For additional information regarding investments held outside the general account, see “—Invested Assets of Other Entities and Operations” below. Also excluded from the table above are fixed maturity securities classified as trading. See “—Trading Account Assets Supporting Insurance Liabilities” and “—Other Trading Account Assets” for additional information.

The decrease in net unrealized gains from December 31, 2014 to June 30, 2015, was primarily due to a net increase in interest rates in both the U.S. and Japan.

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As of June 30, 2015, PFI excluding the Closed Block division had direct and indirect energy exposure of approximately $15 billion on a market value basis with a carrying value of approximately $14 billion, primarily through public and private corporate bonds, substantially all of which are investment grade. We could be exposed to future valuation declines or impairments if oil prices remain at current or lower levels for an extended period of time.

Asset-Backed Securities

The following tables set forth the amortized cost and fair value of our asset-backed securities attributable to PFI excluding the Closed Block division, by credit quality, as of the dates indicated.

Asset-Backed Securities at Amortized Cost

	June 30, 2015
	Lowest Rating Agency Rating										Total Amortized Cost		Total December 31, 2014
	AAA		AA		A		BBB		BB and below
	(in millions)
Collateralized by sub-prime mortgages	$	0	$	1	$	91	$	86	$	1,341	$	1,519	$	1,627
Collateralized loan obligations	4,130		34		0		0		0		4,164		3,821
Collateralized by education loans(1)	29		416		0		0		0		445		382
Collateralized by credit cards	262		0		7		0		0		269		268
Collateralized by auto loans	518		0		0		0		0		518		492
Other asset-backed securities(2)	85		111		79		23		110		408		504
Total asset-backed securities(3)	$	5,024	$	562	$	177	$	109	$	1,451	$	7,323	$	7,094

__________ 

(1) Approximately 99% of the $445 million of education loans included above carry a Department of Education guaranty as of June 30, 2015.

(2) Includes asset-backed securities collateralized by aircraft, equipment leases, franchises, and timeshares.

(3) Excluded from the table above are asset-backed securities held outside the general account in other entities and operations. Also excluded from the table above are asset-backed securities classified as trading.

Asset-Backed Securities at Fair Value

	June 30, 2015
	Lowest Rating Agency Rating										Total Fair Value		Total December 31, 2014
	AAA		AA		A		BBB		BB and below
	(in millions)
Collateralized by sub-prime mortgages	$	0	$	1	$	89	$	85	$	1,490	$	1,665	$	1,742
Collateralized loan obligations	4,193		35		0		0		4		4,232		3,867
Collateralized by education loans(1)	29		438		0		0		0		467		398
Collateralized by credit cards	269		0		7		0		0		276		277
Collateralized by auto loans	519		0		0		0		0		519		493
Other asset-backed securities(2)	100		112		87		25		115		439		531
Total asset-backed securities(3)	$	5,110	$	586	$	183	$	110	$	1,609	$	7,598	$	7,308

__________ 

(1) Approximately 99% of the $467 million of education loans included above carry a Department of Education guaranty as of June 30, 2015.

(2) Includes asset-backed securities collateralized by aircraft, equipment leases, franchises, and timeshares.

(3) Excluded from the table above are asset-backed securities held outside the general account in other entities and operations. Also excluded from the table above are asset-backed securities classified as trading.

The tables above provide ratings as assigned by nationally recognized rating agencies as of June 30, 2015, including Standard & Poor’s, Moody’s and Fitch. In making our investment decisions, rather than relying solely on the rating agencies’ evaluations, we assign internal ratings to our asset-backed securities based upon our dedicated asset-backed securities unit’s independent evaluation of the underlying collateral and securitization structure, including any guarantees from monoline bond insurers.

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While there is no market standard definition for securities collateralized by sub-prime mortgages, we define sub-prime mortgages as residential mortgages that are originated to weaker-quality obligors as indicated by weaker credit scores, as well as mortgages with higher loan-to-value ratios or limited documentation.

On an amortized cost basis, asset-backed securities collateralized by sub-prime mortgages attributable to PFI excluding the Closed Block division decreased from $1.627 billion as of December 31, 2014, to $1.519 billion as of June 30, 2015, primarily reflecting sales and principal paydowns. Gross unrealized losses related to our asset-backed securities collateralized by sub-prime mortgages were $45 million as of June 30, 2015, and $55 million as of December 31, 2014. For information regarding the methodology used in determining the fair value of our asset-backed securities collateralized by sub-prime mortgages, see Note 13 to the Unaudited Interim Consolidated Financial Statements.

Residential Mortgage-Backed Securities

The following tables set forth the amortized cost of our residential mortgage-backed securities attributable to PFI excluding the Closed Block division as of the dates indicated.

	June 30, 2015				December 31, 2014
	Amortized Cost		% of Total		Amortized Cost		% of Total
	($ in millions)
By security type:
Agency pass-through securities(1)	$	4,686	89.7	%	$	5,118	89.1	%
Collateralized mortgage obligations	539		10.3		629		10.9
Total residential mortgage-backed securities	$	5,225	100.0	%	$	5,747	100.0	%
Portion rated AA or higher(2)	$	5,148	98.5	%	$	5,672	98.7	%

__________ 

(1) As of June 30, 2015, of these securities, $3.512 billion are supported by U.S. government and $1.174 billion are supported by foreign governments. As of December 31, 2014, of these securities, $3.855 billion were supported by the U.S. government and $1.263 billion were supported by foreign governments.

(2) Based on lowest external rating agency rating.

Commercial Mortgage-Backed Securities

The following tables set forth the amortized cost and fair value of our commercial mortgage-backed securities attributable to PFI excluding the Closed Block division as of the dates indicated, by credit quality and by year of issuance (vintage).

Commercial Mortgage-Backed Securities at Amortized Cost

	June 30, 2015												Total December 31, 2014
	Lowest Rating Agency Rating(1)										Total Amortized Cost
	AAA		AA		A		BBB		BB and below
Vintage	(in millions)
2015	$	58	$	21	$	0	$	0	$	0	$	79	$	0
2014	2,393		1		0		0		0		2,394		2,383
2013	2,435		99		0		9		0		2,543		2,481
2012—2009	217		309		0		0		0		526		529
2008—2007	140		43		16		5		0		204		301
2006	2,270		88		7		3		0		2,368		2,576
2005 & Prior	532		1		4		0		1		538		1,418
Total commercial mortgage-backed securities(2)(3)(4)	$	8,045	$	562	$	27	$	17	$	1	$	8,652	$	9,688

__________ 

(1) The table above provides ratings as assigned by nationally recognized rating agencies as of June 30, 2015, including Standard & Poor’s, Moody’s, Fitch and Realpoint.

(2) Excluded from the table above are commercial mortgage-backed securities held outside the general account in other entities and operations. Also excluded from the table above are commercial mortgage-backed securities classified as trading.

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(3) Included in the table above, as of June 30, 2015, are downgraded super senior securities with amortized cost of $96 million in AA and $23 million in A.

(4) Included in the table above, as of June 30, 2015, are agency commercial mortgage-backed securities with amortized cost of $465 million, all rated AA.

Commercial Mortgage-Backed Securities at Fair Value

	June 30, 2015												Total December 31, 2014
	Lowest Rating Agency Rating(1)										Total Fair Value
	AAA		AA		A		BBB		BB and below
Vintage	(in millions)
2015	$	56	$	21	$	0	$	0	$	0	$	77	$	0
2014	2,460		1		0		0		0		2,461		2,474
2013	2,507		102		0		9		0		2,618		2,571
2012—2009	215		329		0		0		0		544		547
2008—2007	142		46		16		4		0		208		305
2006	2,297		91		6		4		0		2,398		2,642
2005 & Prior	548		2		4		0		0		554		1,469
Total commercial mortgage-backed securities(2)(3)	$	8,225	$	592	$	26	$	17	$	0	$	8,860	$	10,008

__________ 

(1) The table above provides ratings as assigned by nationally recognized rating agencies as of June 30, 2015, including Standard & Poor’s, Moody’s, Fitch and Realpoint.

(2) Excluded from the table above are commercial mortgage-backed securities held outside the general account in other entities and operations. Also excluded from the table above are commercial mortgage-backed securities classified as trading.

(3) Included in the table above, as of June 30, 2015, are agency commercial mortgage-backed securities with fair value of $492 million, all rated AA.

Fixed Maturity Securities Credit Quality

The Securities Valuation Office (“SVO”) of the National Association of Insurance Commissioners (“NAIC”), evaluates the investments of insurers for statutory reporting purposes and assigns fixed maturity securities to one of six categories called “NAIC Designations.” In general, NAIC Designations of “1” highest quality, or “2” high quality, include fixed maturities considered investment grade, which include securities rated Baa3 or higher by Moody’s or BBB- or higher by Standard & Poor’s. NAIC Designations of “3” through “6” generally include fixed maturities referred to as below investment grade, which include securities rated Ba1 or lower by Moody’s and BB+ or lower by Standard & Poor’s. The NAIC Designations for commercial mortgage-backed securities and non-agency residential mortgage-backed securities, including our asset-backed securities collateralized by sub-prime mortgages, are based on security level expected losses as modeled by an independent third-party (engaged by the NAIC) and the statutory carrying value of the security, including any purchase discounts or impairment charges previously recognized.

As a result of time lags between the funding of investments, the finalization of legal documents, and the completion of the SVO filing process, the fixed maturity portfolio generally includes securities that have not yet been rated by the SVO as of each balance sheet date. Pending receipt of SVO ratings, the categorization of these securities by NAIC Designation is based on the expected ratings indicated by internal analysis.

Investments of our international insurance companies are not subject to NAIC guidelines. Investments of our Japanese insurance operations are regulated locally by the Financial Services Agency, an agency of the Japanese government. The Financial Services Agency has its own investment quality criteria and risk control standards. Our Japanese insurance companies comply with the Financial Services Agency’s credit quality review and risk monitoring guidelines. The credit quality ratings of the investments of our Japanese insurance companies are based on ratings assigned by nationally recognized credit rating agencies, including Moody’s, Standard & Poor’s, or rating equivalents based on ratings assigned by Japanese credit ratings agencies.

The following table sets forth our fixed maturity portfolio by NAIC Designation or equivalent ratings attributable to PFI excluding the Closed Block division as of the dates indicated.

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	June 30, 2015								December 31, 2014
NAIC Designation(1)(2)	Amortized Cost		Gross Unrealized Gains(3)		Gross Unrealized Losses(3)(4)		Fair Value		Amortized Cost		Gross Unrealized Gains(3)		Gross Unrealized Losses(3)(4)		Fair Value
	(in millions)
1	$	173,839	$	22,384	$	1,398	$	194,825	$	176,122	$	25,715	$	564	$	201,273
2	43,947		4,452		880		47,519		42,111		4,934		402		46,643
Subtotal High or Highest Quality Securities(5)	217,786		26,836		2,278		242,344		218,233		30,649		966		247,916
3	7,189		546		109		7,626		6,619		537		58		7,098
4	2,193		208		42		2,359		2,228		204		50		2,382
5	529		96		17		608		441		83		24		500
6	305		26		3		328		264		22		3		283
Subtotal Other Securities(6)(7)	10,216		876		171		10,921		9,552		846		135		10,263
Total Fixed Maturities	$	228,002	$	27,712	$	2,449	$	253,265	$	227,785	$	31,495	$	1,101	$	258,179

__________ 

(1) Reflects equivalent ratings for investments of the international insurance operations.

(2) Includes, as of June 30, 2015 and December 31, 2014, 791 securities with amortized cost of $3,473 million (fair value, $3,538 million) and 1,330 securities with amortized cost of $6,864 million (fair value, $7,342 million), respectively, that have been categorized based on expected NAIC Designations pending receipt of SVO ratings.

(3) Includes $280 million of gross unrealized gains and $2 million of gross unrealized losses as of June 30, 2015, compared to $328 million of gross unrealized gains and $1 million of gross unrealized losses as of December 31, 2014, on securities classified as held-to-maturity.

(4) As of June 30, 2015, includes gross unrealized losses of $98 million on public fixed maturities and $73 million on private fixed maturities considered to be other than high or highest quality and, as of December 31, 2014, includes gross unrealized losses of $71 million on public fixed maturities and $64 million on private fixed maturities considered to be other than high or highest quality.

(5) On amortized cost basis, as of June 30, 2015, includes $188,212 million of public fixed maturities and $29,574 million of private fixed maturities and, as of December 31, 2014, includes $189,713 million of public fixed maturities and $28,520 million of private fixed maturities.

(6) On an amortized cost basis, as of June 30, 2015, includes $6,231 million of public fixed maturities and $3,985 million of private fixed maturities and, as of December 31, 2014, includes $5,712 million of public fixed maturities and $3,840 million of private fixed maturities.

(7) On an amortized cost basis, as of June 30, 2015, securities considered below investment grade based on lowest of external rating agency ratings, total $11,890 million, or 5% of the total fixed maturities, and include securities considered high or highest quality by the NAIC based on the rules described above.

Credit Derivative Exposure to Public Fixed Maturities

In addition to the credit exposure from public fixed maturities noted above, we sell credit derivatives to enhance the return on our investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments.

In a credit derivative, we may sell credit protection on an identified name or a broad based index, and in return receive a quarterly premium. The majority of the underlying reference names in single name and index credit derivatives where we have sold credit protection, as well as all the counterparties to these agreements, are investment grade credit quality and our credit derivatives have a remaining term to maturity of ten years or less. The premium or credit spread generally corresponds to the difference between the yield on the reference name’s (or index’s underlying reference names) public fixed maturity cash instruments and swap rates at the time the agreement is executed. Credit derivative contracts are recorded at fair value with changes in fair value, including the premium received, recorded in “Realized investment gains (losses), net.”

As of June 30, 2015 and December 31, 2014, PFI excluding Closed Block division had $349 million and $1.5 billion notional amounts of exposure, respectively, where we have sold credit protection through credit derivatives, reported at fair value as an asset of less than $1 million and a liability of $2 million, respectively. Adjusted operating income from credit derivatives we sold was $2 million and $3 million for the three and six months ended June 30, 2015, respectively, which represents net premiums received attributable to each period. There were no premiums received for the credit derivatives we sell for the three and six months ended June 30, 2014. This excludes a credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance. See Note 14 to the Unaudited Interim Consolidated Financial Statements for additional information regarding this derivative.

In addition to selling credit protection, we have purchased credit protection using credit derivatives in order to hedge specific credit exposures in our investment portfolio. As of June 30, 2015 and December 31, 2014, PFI excluding the Closed Block division had $459 million and $405 million of notional amounts, respectively, reported at fair value as a liability of $9 million and $11 million, respectively. Adjusted operating income from credit derivatives we purchased was a loss of $2 million and $5 million for

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the three and six months ended June 30, 2015 and was a loss of $6 million and $13 million for the three and six months ended June 30, 2014, respectively, which represents net premiums paid attributable to each period. See Note 14 to the Unaudited Interim Consolidated Financial Statements for additional information regarding credit derivatives and an overall description of our derivative activities.

Other-Than-Temporary Impairments of Fixed Maturity Securities

We maintain separate monitoring processes for public and private fixed maturities and create watch lists to highlight securities that require special scrutiny and management. Our public fixed maturity asset managers formally review all public fixed maturity holdings on a quarterly basis and more frequently when necessary to identify potential credit deterioration whether due to ratings downgrades, unexpected price variances, and/or company or industry specific concerns.

For private placements, our credit and portfolio management processes help ensure prudent controls over valuation and management. We have separate pricing and authorization processes to establish “checks and balances” for new investments. We apply consistent standards of credit analysis and due diligence for all transactions, whether they originate through our own in-house origination staff or through agents. Our regional offices closely monitor the portfolios in their regions. We set all valuation standards centrally, and we assess the fair value of all investments quarterly. Our private fixed maturity asset managers formally review all private fixed maturity holdings on a quarterly basis and more frequently when necessary to identify potential credit deterioration whether due to ratings downgrades, unexpected price variances, and/or company or industry specific concerns. For additional information regarding our policies regarding other-than-temporary impairments for fixed maturity securities, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Other-than-temporary impairments of general account fixed maturity securities attributable to PFI excluding the Closed Block division that were recognized in earnings were $18 million and $17 million for the three months ended June 30, 2015 and 2014, respectively, and $22 million and $27 million for the six months ended June 30, 2015 and 2014, respectively.

Trading Account Assets Supporting Insurance Liabilities

The following table sets forth the composition of the TAASIL portfolio attributable to PFI excluding the Closed Block division as of the dates indicated.

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	423	$	422	$	196	$	196
Fixed maturities:
Corporate securities	12,251		12,566		11,922		12,439
Commercial mortgage-backed securities	2,055		2,078		2,505		2,546
Residential mortgage-backed securities	1,488		1,508		1,640		1,676
Asset-backed securities	1,417		1,440		1,180		1,198
Foreign government bonds	635		647		621		650
U.S. government authorities and agencies and obligations of U.S. states	290		333		303		372
Total fixed maturities	18,136		18,572		18,171		18,881
Equity securities	974		1,273		896		1,186
Total trading account assets supporting insurance liabilities	$	19,533	$	20,267	$	19,263	$	20,263

As a percentage of amortized cost, 76% and 75% of the portfolio was publicly traded as of June 30, 2015 and December 31, 2014, respectively. As of June 30, 2015 and December 31, 2014, 90% and 92%, respectively, of the fixed maturity portfolio was considered high or highest quality based on NAIC or equivalent rating. As of June 30, 2015, $1.448 billion of the residential mortgage-backed securities were publicly traded agency pass-through securities, which are supported by implicit or explicit government guarantees, of which more than 99% have credit ratings of A or higher. Collateralized mortgage obligations, including approximately $31 million secured by “ALT-A” mortgages, represented the remaining $40 million of residential mortgage-backed securities, of which 46% have credit ratings of A or better and 54% are BBB and below. For a discussion of this portfolio and

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changes in the fair value, see “—Experience-Rated Contractholder Liabilities, Trading Account Assets Supporting Insurance Liabilities and Other Related Investments,” above.

Other Trading Account Assets

Other trading account assets consist primarily of certain financial instruments that contain an embedded derivative where we elected to classify the entire instrument as a trading account asset rather than bifurcate. These instruments are carried at fair value, with realized and unrealized gains and losses reported in “Other income,” and excluded from adjusted operating income. Interest and dividend income from these investments is reported in “Net investment income,” and is included in adjusted operating income.

The following table sets forth the composition of our other trading account assets attributable to PFI excluding the Closed Block division as of the dates indicated.

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	1	$	1	$	1	$	1
Fixed maturities	841		845		849		878
Equity securities(1)	535		609		502		577
Total other trading account assets	$	1,377	$	1,455	$	1,352	$	1,456

__________ 

(1) Included in equity securities are perpetual preferred stock securities that have characteristics of both debt and equity securities.

Included in the $841 million of fixed maturities as of June 30, 2015, on an amortized cost basis, are $30 million of asset-backed securities, 61% of which have credit ratings of A or above, 19% have BBB credit ratings, and the remaining 20% have BB and below credit ratings.

Commercial Mortgage and Other Loans

Investment Mix

As of both June 30, 2015 and December 31, 2014, we held approximately 11% of our general account investments attributable to PFI excluding the Closed Block division in commercial mortgage and other loans. This percentage is net of a $91 million and $99 million allowance for losses as of June 30, 2015 and December 31, 2014, respectively.

The following table sets forth the composition of our commercial mortgage and other loans portfolio, before the allowance for losses, attributable to PFI excluding the Closed Block division as of the dates indicated.

	June 30, 2015		December 31, 2014
	(in millions)
Commercial and agricultural mortgage loans	$	36,755	$	34,882
Uncollateralized loans	992		1,045
Residential property loans	327		392
Other collateralized loans	314		318
Total commercial mortgage and other loans(1)	$	38,388	$	36,637

__________

(1) Excluded from the table above are commercial mortgage and other loans held outside the general account in other entities and operations. For additional information regarding commercial mortgage and other loans held outside the general account, see “—Invested Assets of Other Entities and Operations” below.

We originate commercial and agricultural mortgage loans using a dedicated investment staff and a network of independent companies through our various regional offices. All loans are underwritten consistently to our standards using a proprietary quality rating system that has been developed from our experience in real estate and mortgage lending.

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Uncollateralized loans primarily represent reverse dual currency loans and corporate loans which do not meet the definition of a security under authoritative accounting guidance.

Residential property loans primarily include Japanese recourse loans. Upon default of these recourse loans we can make a claim against the personal assets of the property owner, in addition to the mortgaged property. These loans are also backed by third party guarantors.

Other collateralized loans include collateralized structured loans and consumer loans.

Composition of Commercial and Agricultural Mortgage Loans

Our commercial and agricultural mortgage loan portfolio strategy emphasizes diversification by property type and geographic location. The following tables set forth the breakdown of the gross carrying values of our general account investments in commercial and agricultural mortgage loans attributable to PFI excluding the Closed Block division by geographic region and property type as of the dates indicated.

	June 30, 2015				December 31, 2014
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
	($ in millions)
Commercial and agricultural mortgage loans by region:
U.S. Regions:
Pacific	$	11,786	32.1	%	$	10,951	31.4	%
South Atlantic	7,426		20.2		6,939		19.9
Middle Atlantic	4,651		12.7		4,595		13.2
East North Central	2,654		7.2		2,662		7.6
West South Central	3,655		9.9		3,671		10.5
Mountain	1,695		4.6		1,646		4.7
New England	1,722		4.7		1,736		5.0
West North Central	698		1.9		580		1.7
East South Central	534		1.5		258		0.7
Subtotal-U.S.	34,821		94.8		33,038		94.7
Asia	405		1.1		693		2.0
Other	1,529		4.1		1,151		3.3
Total commercial and agricultural mortgage loans	$	36,755	100.0	%	$	34,882	100.0	%

	June 30, 2015				December 31, 2014
	Gross Carrying Value		% of Total		Gross Carrying Value		% of Total
	($ in millions)
Commercial and agricultural mortgage loans by property type:
Industrial	$	6,232	17.0	%	$	6,266	18.0	%
Retail	6,633		18.0		6,515		18.7
Office	8,126		22.1		7,111		20.4
Apartments/Multi-Family	9,099		24.8		8,536		24.4
Other	2,884		7.8		2,972		8.5
Agricultural properties	1,950		5.3		1,787		5.1
Hospitality	1,831		5.0		1,695		4.9
Total commercial and agricultural mortgage loans	$	36,755	100.0	%	$	34,882	100.0	%

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Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial and agricultural mortgage loans. The loan-to-value ratio compares the amount of the loan to the fair value of the underlying property collateralizing the loan, and is commonly expressed as a percentage. Loan-to-value ratios greater than 100% indicate that the loan amount is greater than the collateral value. A smaller loan-to-value ratio indicates a greater excess of collateral value over the loan amount. The debt service coverage ratio compares a property’s net operating income to its debt service payments. Debt service coverage ratios less than 1.0 times indicate that property operations do not generate enough income to cover the loan’s current debt payments. A larger debt service coverage ratio indicates a greater excess of net operating income over the debt service payments.

As of June 30, 2015, our general account investments in commercial and agricultural mortgage loans attributable to PFI excluding the Closed Block division had a weighted average debt service coverage ratio of 2.34 times, and a weighted average loan-to-value ratio of 55%. As of June 30, 2015, approximately 96% of commercial and agricultural mortgage loans were fixed rate loans. For those general account commercial and agricultural mortgage loans that were originated in 2015, the weighted average debt service coverage ratio was 2.46 times and the weighted average loan-to-value ratio was 63%.

The values utilized in calculating these loan-to-value ratios are developed as part of our periodic review of the commercial and agricultural mortgage loan portfolio, which includes an internal evaluation of the underlying collateral value. Our periodic review also includes a quality re-rating process, whereby we update the internal quality rating originally assigned at underwriting based on the proprietary quality rating system mentioned above. As discussed below, the internal quality rating is a key input in determining our allowance for loan losses.

For loans with collateral under construction, renovation or lease-up, a stabilized value and projected net operating income are used in the calculation of the loan-to-value and debt service coverage ratios. Our commercial and agricultural mortgage loan portfolio included approximately $1.5 billion and $1.3 billion of such loans as of June 30, 2015 and December 31, 2014, respectively. All else being equal, these loans are inherently more risky than those collateralized by properties that have already stabilized. As of June 30, 2015, there are no loan-specific reserves related to these loans. In addition, these unstabilized loans are included in the calculation of our portfolio reserve as discussed below. For information regarding similar loans we hold as part of our commercial and agricultural mortgage operations, see “—Invested Assets of Other Entities and Operations” below.

The following tables set forth the gross carrying value of our general account investments in commercial and agricultural mortgage loans attributable to PFI excluding the Closed Block division as of the dates indicated by loan-to-value and debt service coverage ratios.

Commercial and Agricultural Mortgage Loans by Loan-to-Value and Debt Service Coverage Ratios

	June 30, 2015
	Debt Service Coverage Ratio
	Greater than 1.2x		1.0x to < 1.2x		Less than 1.0x		Total Commercial and Agricultural Mortgage Loans
Loan-to-Value Ratio	(in millions)
0%-59.99%	$	19,138	$	437	$	246	$	19,821
60%-69.99%	11,193		389		46		11,628
70%-79.99%	4,496		390		60		4,946
Greater than 80%	96		108		156		360
Total commercial and agricultural mortgage loans	$	34,923	$	1,324	$	508	$	36,755

The following table sets forth the breakdown of our commercial and agricultural mortgage loans attributable to PFI excluding the Closed Block division by year of origination as of June 30, 2015.

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	June 30, 2015
Year of Origination	Gross Carrying Value		% of Total
	($ in millions)
2015	$	3,707	10.1	%
2014	7,532		20.5
2013	8,239		22.4
2012	4,427		12.0
2011	4,560		12.4
2010	2,718		7.4
2009	683		1.9
2008 & prior	4,889		13.3
Total commercial and agricultural mortgage loans	$	36,755	100.0	%

Commercial Mortgage and Other Loan Quality

Ongoing review of the portfolio is performed and loans are placed on watch list status based on a predefined set of criteria, where they are assigned to one of the following categories. We place loans on early warning status in cases where, based on our analysis of the loan’s collateral, the financial situation of the borrower or tenants or other market factors, we believe a loss of principal or interest could occur. We classify loans as closely monitored when we determine there is a collateral deficiency or other credit events that may lead to a potential loss of principal or interest. Loans not in good standing are those loans where we have concluded that there is a high probability of loss of principal, such as when the loan is in the process of foreclosure or the borrower is in bankruptcy. Our workout and special servicing professionals manage the loans on the watch list. As described below, in determining our allowance for losses we evaluate each loan on the watch list to determine if it is probable that amounts due according to the contractual terms of the loan agreement will not be collected.

We establish an allowance for losses to provide for the risk of credit losses inherent in the lending process. The allowance includes loan specific reserves for loans that are determined to be impaired as a result of our loan review process, and a portfolio reserve for probable incurred but not specifically identified losses for loans which are not on the watch list. We define an impaired loan as a loan for which we estimate it is probable that amounts due according to the contractual terms of the loan agreement will not be collected. The loan specific portion of the loss allowance is based on our assessment as to ultimate collectability of loan principal and interest. Valuation allowances for an impaired loan are recorded based on the present value of expected future cash flows discounted at the loan’s effective interest rate or based on the fair value of the collateral if the loan is collateral dependent. The portfolio reserve for incurred but not specifically identified losses considers the current credit composition of the portfolio based on the internal quality ratings mentioned above. The portfolio reserves are determined using past loan experience, including historical credit migration, loss probability, and loss severity factors by property type. These factors are reviewed and updated as appropriate. The valuation allowance for commercial mortgage and other loans can increase or decrease from period to period based on these factors.

Our general account investments in commercial mortgage and other loans attributable to PFI excluding the Closed Block division, based upon the recorded investment gross of allowance for credit losses, was $38,388 million and $36,637 million as of June 30, 2015 and December 31, 2014, respectively. As a percentage of recorded investment gross of allowance, more than 99.8% of these assets were current for both periods.

The following table sets forth the change in valuation allowances for our commercial mortgage and other loan portfolio as of the dates indicated.

159

	June 30, 2015			December 31, 2014
	(in millions)
Allowance, beginning of year	$	99		$	164
Addition to (release of) allowance for losses	(8		)	(55		)
Charge-offs, net of recoveries	0			(8		)
Change in foreign exchange	0			(2		)
Allowance, end of period	$	91		$	99
Loan specific reserve	$	2		$	5
Portfolio reserve	$	89		$	94

Equity Securities

Investment Mix

The equity securities attributable to PFI excluding the Closed Block division consist principally of investments in common and preferred stock of publicly-traded companies, as well as mutual fund shares. The following table sets forth the composition of our equity securities portfolio and the associated gross unrealized gains and losses as of the dates indicated.

	June 30, 2015								December 31, 2014
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Non-redeemable preferred stocks	$	22	$	3	$	2	$	23	$	23	$	3	$	1	$	25
Mutual fund common stocks(1)	2,788		460		35		3,213		2,638		468		30		3,076
Other common stocks	1,994		1,449		16		3,427		2,064		1,190		24		3,230
Total equity securities(2)	$	4,804	$	1,912	$	53	$	6,663	$	4,725	$	1,661	$	55	$	6,331

__________  

(1) Includes mutual fund shares representing our interest in the underlying assets of certain of our separate account investments supporting corporate-owned life insurance. These mutual funds invest primarily in high yield bonds.

(2) Amounts presented exclude hedge funds and other alternative investments which are reported in “Other long-term investments.”

Other-Than-Temporary Impairments of Equity Securities

For those equity securities classified as available-for-sale, we record unrealized gains and losses to the extent cost is different from estimated fair value. All securities with unrealized losses are subject to our review to identify other-than-temporary impairments in value. For additional information regarding our policies regarding other-than-temporary impairments for equity securities, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Impairments of equity securities attributable to PFI excluding the Closed Block division were $9 million and $6 million for the three months ended June 30, 2015 and 2014, respectively, and $14 million for both the six months ended June 30, 2015 and 2014. For a further discussion of impairments, see “—Realized Investment Gains and Losses” above.

Other Long-Term Investments

The following table sets forth the composition of “Other long-term investments,” which primarily consists of investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments attributable to PFI excluding the Closed Block division, as of the dates indicated.

160

	June 30, 2015		December 31, 2014
	(in millions)
Joint ventures and limited partnerships:
Non-real estate-related(1)	$	4,117	$	4,267
Real estate-related	268		235
Real estate held through direct ownership	1,669		1,795
Other(2)	875		872
Total other long-term investments	$	6,929	$	7,169

__________ 

(1) Primarily includes investments in private equity and hedge funds.

(2) Primarily includes derivatives and member and activity stock held in the Federal Home Loan Banks of New York and Boston. For additional information regarding our holdings in the Federal Home Loan Banks of New York and Boston, see Note 9 to the Unaudited Interim Consolidated Financial Statements.

Other-Than Temporary Impairments of Other Long-Term Investments

Other long-term investments consist of the Company’s non-coupon investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned real estate and other investments. For joint ventures and limited partnerships, the carrying value of these investments is written down, or impaired to fair value when a decline in value is considered to be other-than-temporary.

Impairments on joint ventures and limited partnerships attributable to PFI excluding the Closed Block division were $7 million and $26 million for the three and six months ended June 30, 2015, respectively. There were no impairments for the three and six months ended June 30, 2014. For a further discussion of impairments, see “—Realized Investment Gains and Losses” above.

For additional information regarding our policies regarding other-than-temporary impairments for joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Invested Assets of Other Entities and Operations

“Invested Assets of Other Entities and Operations” presented below includes investments held outside the general account and primarily represents investments associated with our asset management operations and derivative operations. Our derivative operations act on behalf of affiliates primarily to manage interest rates, foreign currency, credit and equity exposures. Assets within our asset management operations that are managed for third parties and those assets classified as “Separate account assets” on our balance sheet are not included below.

	June 30, 2015		December 31, 2014
	(in millions)
Fixed Maturities:
Public, available-for-sale, at fair value	$	93	$	96
Private, available-for-sale, at fair value	55		52
Other trading account assets, at fair value	10,984		9,068
Equity securities, available-for-sale, at fair value	8		8
Commercial mortgage and other loans, at book value(1)	434		419
Other long-term investments	912		986
Short-term investments	152		347
Total investments	$	12,638	$	10,976

__________ 

(1) Book value is generally based on unpaid principal balance net of any allowance for losses, the lower of cost or fair value, or fair value, depending on the loan.

Other Trading Account Assets

161

Other trading account assets are primarily related to assets associated with consolidated variable interest entities, for which the Company is the investment manager, as well as our derivative operations used to manage interest rate, foreign currency, credit and equity exposures. The assets of the consolidated variable interest entities are generally offset by liabilities for which the fair value option has been elected. For further information on these consolidated variable interest entities, see Note 5 to the Unaudited Interim Consolidated Financial Statements.

Commercial Mortgage and Other Loans

Our asset management operations include our commercial mortgage operations, which provide mortgage origination, asset management and servicing for our general account, institutional clients, and government sponsored entities such as Fannie Mae, the Federal Housing Administration, and Freddie Mac.

The mortgage loans of our commercial mortgage operations are included in “Commercial mortgage and other loans,” with related derivatives and other hedging instruments primarily included in “Other trading account assets” and “Other long-term investments.”

Other Long-Term Investments

Other long-term investments primarily include strategic investments made as part of our asset management operations. We make these strategic investments in real estate, as well as fixed income, public equity and real estate securities, including controlling interests. Certain of these investments are made primarily for purposes of co-investment in our managed funds and structured products. Other strategic investments are made with the intention to sell or syndicate to investors, including our general account, or for placement in funds and structured products that we offer and manage (seed investments). As part of our asset management operations, we also make loans to our managed funds that are secured by equity commitments from investors or assets of the funds. Other long-term investments also include certain assets in consolidated investment funds where the Company is deemed to exercise control over the funds.

Liquidity and Capital Resources

This section supplements, and should be read in conjunction with, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Overview

Liquidity refers to the ability to generate sufficient cash resources to meet the payment obligations of the Company. Capital refers to the long-term financial resources available to support the operations of our businesses, fund business growth, and provide a cushion to withstand adverse circumstances. Our ability to generate and maintain sufficient liquidity and capital depends on the profitability of our businesses, general economic conditions and our access to the capital markets and the alternate sources of liquidity and capital described herein.

Effective and prudent liquidity and capital management is a priority across the organization. Management monitors the liquidity of Prudential Financial and its subsidiaries on a daily basis and projects borrowing and capital needs over a multi-year time horizon through our quarterly planning process. We believe that cash flows from the sources of funds available to us are sufficient to satisfy the current liquidity requirements of Prudential Financial and its subsidiaries, including under reasonably foreseeable stress scenarios. We have a capital management framework in place that governs the allocation of capital and approval of capital uses, and we forecast capital sources and uses on a quarterly basis. We also employ a Capital Protection Framework to ensure the availability of capital resources to maintain adequate capitalization on a consolidated basis and competitive risk-based capital ratios and solvency margins for our insurance subsidiaries under various stress scenarios.

Prudential Financial is a non-bank financial company under the Dodd-Frank Act (“Dodd-Frank”). As a non-bank financial company, Prudential Financial is subject to supervision and examination by the Federal Reserve Bank of Boston and to prudential regulatory standards, which include or will include requirements and limitations (some of which are the subject of ongoing rule-making) relating to risk-based capital, leverage, liquidity, stress-testing, overall risk management, resolution plans and early remediation; and may also include additional standards regarding capital, public disclosure, short-term debt limits, and other related subjects. In addition, the FSB has identified the Company as a G-SII. For information on the potential impact of this regulation on us, see “Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2014.

During the six months endedJune 30, 2015, we took the following significant actions that impacted our liquidity and capital position:

162

• On January 2, 2015, we repurchased and canceled all of the outstanding shares of our Class B Stock for a cash purchase price of $651 million. In accordance with the terms of the Class B Stock repurchase agreement, the holders of a majority of the Class B Stock have exercised their right to dispute the calculation of the purchase price. Accordingly, the final purchase price of the Class B Stock could change;

• We repurchased $500 million of shares of our Common Stock and declared aggregate Common Stock dividends of $532 million;

• We issued $1.0 billion of junior subordinated notes to be utilized for general corporate purposes; and

• We obtained additional financing for Regulation XXX and Guideline AXXX reserves by increasing the amount outstanding under our captive financing facilities by $308 million and $262 million, respectively.

Capital

The primary components of the Company’s capitalization consist of equity and outstanding capital debt, including junior subordinated debt. As shown in the table below, as of June 30, 2015, the Company had $39.8 billion in capital, all of which was available to support the aggregate capital requirements of its divisions and its Corporate and Other operations. Based on our assessment of these businesses and operations, we believe this level of capital is consistent with our ratings targets.

	June 30, 2015		December 31, 2014
	(in millions)
Equity(1)	$	28,319	$	25,720
Junior subordinated debt (i.e. hybrid securities)	5,884		4,884
Other capital debt	5,603		8,451
Total capital	$	39,806	$	39,055

__________ 

(1) Amounts attributable to Prudential Financial excluding AOCI.

The decrease in other capital debt from December 31, 2014, primarily reflects a reduction in capital required as a result of positive net cash flows, including proceeds from the Closed Block restructuring received as part of the Prudential Insurance dividend, and a reduction in capital debt due to proceeds received from an issuance of junior subordinated debt.

We manage Prudential Insurance, Prudential of Japan, Gibraltar Life, and our other domestic and international insurance subsidiaries to regulatory capital levels consistent with our “AA” ratings targets. We utilize the Risk-Based Capital (“RBC”) ratio as a primary measure of the capital adequacy of our domestic insurance subsidiaries and the Solvency Margin ratio as a primary measure of the capital adequacy of our Japanese insurance subsidiaries.

The table below presents the RBC ratios of our most significant domestic insurance subsidiaries as of December 31, 2014, the most recent statutory fiscal year-end and RBC reporting date for these subsidiaries.

	Ratio(1)
Prudential Insurance(2)	498	%
Prudential Annuities Life Assurance Corporation (“PALAC”)	647	%

__________ 

(1) The RBC ratio calculations are intended to assist insurance regulators in measuring an insurer’s solvency and ability to pay future claims. The reporting of RBC measures is not intended for the purpose of ranking any insurance company or for use in connection with any marketing, advertising or promotional activities, but is available to the public.

(2) Includes Prudential Retirement Insurance and Annuity Company (“PRIAC”), Pruco Life Insurance Company (“Pruco Life”) and Pruco Life Insurance Company of New Jersey (“PLNJ”), a subsidiary of Pruco Life.

The table below presents the Solvency Margin ratios of our most significant international insurance subsidiaries as of March 31, 2015, their most recent statutory fiscal year end.

	Ratio
Prudential of Japan	844	%
Gibraltar Life consolidated(1)	882	%

__________ 

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(1) Includes Prudential Gibraltar Financial Life Insurance Co., Ltd., a wholly-owned subsidiary of Gibraltar Life.

All of our domestic and international insurance subsidiaries have capital levels that substantially exceed the minimum level required by applicable insurance regulations.

The regulatory capital levels of our domestic and international insurance subsidiaries can be materially impacted by interest rate, equity market and real estate market fluctuations, changes in the values of derivatives, the level of impairments recorded, credit quality migration of our investment portfolio, foreign exchange rate movements and business growth, among other items. In addition, particularly for our domestic insurance subsidiaries, the recapture of business subject to third-party reinsurance arrangements due to, for example, defaults by, or credit quality migration affecting, the third-party reinsurers could negatively impact regulatory capital. Our regulatory capital levels are also affected by statutory accounting rules, which are subject to change by each applicable insurance regulator. We evaluate the regulatory capital of our domestic and international insurance operations under reasonably foreseeable stress scenarios and believe we have adequate resources to maintain our capital levels comfortably above regulatory requirements under these scenarios.

Capital Protection Framework

We employ a “Capital Protection Framework” (“the Framework”) to ensure that sufficient capital resources are available to maintain adequate capitalization on a consolidated basis and competitive RBC ratios and solvency margins for our insurance subsidiaries under various stress scenarios. The Framework incorporates the potential impacts from market related stresses, including equity markets, real estate, interest rates, credit losses, and foreign currency exchange rates. In evaluating these potential impacts, we assess risk holistically at the enterprise level, recognizing that our business mix may produce results that partially offset on a net basis. The Framework addresses the potential capital consequences, under stress scenarios, of certain of these net risks and the strategies we use to mitigate them, including the following:

• Equity market exposure affecting the statutory capital of the Company as a whole, which we manage through our equity hedge program and on-balance sheet and contingent sources of capital;

• Our decision to manage a portion of our interest rate risk internally, on a net basis, at an enterprise level. In implementing this strategy, we execute intercompany derivative transactions between our Corporate and Other operations and certain business segments. We limit our exposure to the resulting net interest rate risk at the enterprise level through options embedded in our hedging strategy that may be exercised if interest rates decline below certain thresholds. The results of this strategy are described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Corporate and Other”; and

• Activities of our business segments, including those for which specific risk mitigation strategies have been implemented, such as our living benefits hedging program that covers certain risks associated with our variable annuity products.

We periodically recalibrate our hedging strategies in response to changing market conditions. The Framework accommodates periodic volatility within ranges that we deem acceptable, while also providing for additional potential sources of capital, including on-balance sheet capital, derivatives, and contingent sources of capital. Although we continue to enhance our approach, we believe we currently have access to sufficient resources to maintain adequate capitalization and competitive RBC ratios and solvency margins under a range of potential stress scenarios.

Captive Reinsurance Companies

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Capital—Captive Reinsurance Companies” included in our Annual Report on Form 10-K for the year ended December 31, 2014, for a discussion of our use of captive reinsurance companies.

Shareholder Distributions

In June 2015, our Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock during the period from July 1, 2015 through June 30, 2016. This authorization succeeds the Board’s previous $1.0 billion repurchase authority, which covered the prior twelve month period. The timing and amount of share repurchases will be determined by management based on market conditions and other considerations, including any increased capital needs of our businesses due to, among other things, changes in regulatory capital requirements and opportunities for growth and acquisitions. Repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through plans designed to comply with Rule 10b5-1(c) under the Exchange Act. The following table sets forth information about declarations of Common Stock dividends, as well as repurchases of shares of Prudential Financial’s Common Stock, for the three months ended March 31 and June 30, 2015.

164

	Dividend Amount				Shares Repurchased
Three months ended:	Per Share		Aggregate		Shares	Total Cost
	(in millions, except per share data)
March 31, 2015	$	0.58	$	267	3.1	$	250
June 30, 2015	$	0.58	$	265	2.9	$	250

As a non-bank financial company under Dodd-Frank, Prudential Financial expects to be subject to minimum risk-based capital and leverage requirements and to the submission of annual capital plans to the Federal Reserve System. Our compliance with these and other requirements under Dodd-Frank could limit our ability to pay Common Stock dividends and repurchase shares in the future.

Liquidity

Liquidity management and stress testing are performed on a legal entity basis as the ability to transfer funds between subsidiaries is limited due in part to regulatory restrictions. Liquidity needs are determined through daily and quarterly cash flow forecasting at the holding company and within our operating subsidiaries. A minimum cash balance of at least $1.3 billion is targeted to ensure that adequate liquidity is available at Prudential Financial to cover fixed expenses in the event that we experience reduced cash flows from our operating subsidiaries. This targeted minimum balance is reviewed and approved annually by the Board of Directors.

We seek to mitigate the risk of having limited or no access to financing due to stressed market conditions by generally pre-funding capital debt in advance of maturity. We mitigate the refinancing risk associated with our debt that is used to fund operating needs by matching the term of debt with the assets financed. To ensure adequate liquidity in stress scenarios, stress testing is performed on a quarterly basis for our major operating subsidiaries. We seek to further mitigate liquidity risk by maintaining our access to alternative sources of liquidity, as discussed below.

Liquidity of Prudential Financial

The principal sources of funds available to Prudential Financial, the parent holding company, are dividends and returns of capital from subsidiaries, repayments of operating loans from subsidiaries and cash and short-term investments. These sources of funds may be supplemented by Prudential Financial’s access to the capital markets as well as the “—Alternative Sources of Liquidity” described below.

The primary uses of funds at Prudential Financial include servicing debt, paying operating expenses, making capital contributions and loans to subsidiaries, paying declared shareholder dividends and repurchasing outstanding shares of Common Stock executed under authority from our Board of Directors.

As of June 30, 2015, Prudential Financial had cash and short-term investments of $9,758 million, a decrease of $1,306 million from December 31, 2014. We maintain an intercompany liquidity account that is designed to optimize the use of cash by facilitating the lending and borrowing of funds between Prudential Financial and its subsidiaries on a daily basis. Excluding net borrowings from this intercompany liquidity account, Prudential Financial had cash and short-term investments of $5,716 million as of June 30, 2015, an increase of $1,400 million from December 31, 2014.

The following table sets forth Prudential Financial’s principal sources and uses of cash and short-term investments, excluding net borrowings from our intercompany liquidity account, for the period indicated.

165

	Six Months Ended June 30, 2015
	(in millions)
Sources:
Dividends and/or returns of capital from subsidiaries(1)	$	2,940
Net receipts under intercompany loan agreements(2)	2,644
Proceeds from the issuance of junior subordinated debt (hybrid securities)	1,000
Proceeds from stock-based compensation and exercise of stock options	216
Proceeds from the issuance of retail medium-term notes	180
Interest income from subsidiaries on intercompany agreements, net of interest paid	53
Proceeds from short-term debt, net of repayments	45
Total sources	7,078
Uses:
Capital contributions to subsidiaries(3)	1,598
Maturities of medium-term notes, excluding retail medium-term notes	1,248
Class B Stock repurchase(4)	651
Common Stock dividends(5)	537
Share repurchases(6)	502
Interest paid on external debt	484
Net income tax payments	463
Repayment of retail medium-term notes	59
Other, net	136
Total uses	5,678
Net increase (decrease) in cash and short-term investments	$	1,400

__________ 

(1) Includes dividends and/or returns of capital of $1,950 million from Prudential Insurance, $480 million from International subsidiaries, $336 million from Prudential Annuities Holding Company, of which $270 million was from PALAC, $144 million from Asset Management subsidiaries, and $30 million from other subsidiaries.

(2) Includes net receipts from subsidiaries of $2,113 million from Pruco Reinsurance, Ltd. (“Pruco Re”) and $292 million from Asset Management subsidiaries, and net proceeds of $561 million from the issuance of notes to International subsidiaries, offset by net borrowing of $22 million by Pruco Life, and net repayments of $200 million to Pruco Re, and $100 million to Prudential Mortgage Capital Company.

(3) Includes capital contributions of $1,562 million to Pruco Re, $33 million to International subsidiaries, and $3 million to Asset Management subsidiaries.

(4) Class B Stock repurchase settlement.

(5) Includes cash payments made on dividends declared in prior periods.

(6) Includes $13 million related to trades that settled in January 2015 and excludes $11 million related to trades that settled in July 2015.

Restrictions on Dividends and Returns of Capital from Subsidiaries

Our insurance companies are subject to limitations on the payment of dividends and other transfers of funds to Prudential Financial and other affiliates under applicable insurance law and regulation. In the United States, dividends above thresholds calculated under applicable insurance laws are considered “extraordinary” and require the approval of the relevant state insurance regulator. Also, more generally, the payment of dividends by any of our subsidiaries is subject to declaration by their Board of Directors and can be affected by market conditions and other factors. See Note 15 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014, for details on specific dividend restrictions.

Domestic insurance subsidiaries. In May 2015, Prudential Insurance paid an extraordinary dividend in the amount of $1.95 billion to its parent, Prudential Financial. In June 2015, PALAC paid an extraordinary dividend of $270 million to Prudential Financial.

International insurance subsidiaries. During the first six months of 2015, Prudential of Korea paid a dividend of ₩35.0 billion, or approximately $30 million, to its parent, Prudential International Insurance Holding Ltd., which was ultimately sent to Prudential Financial.

Other subsidiaries. The ability of our asset management subsidiaries and the majority of our other operating subsidiaries to pay dividends is largely unrestricted from a regulatory standpoint.

166

Liquidity of Insurance Subsidiaries

We continue to believe that cash generated by ongoing operations and the liquidity profile of our assets provide sufficient liquidity under reasonably foreseeable stress scenarios for each of our insurance subsidiaries.

The principal sources of liquidity for our insurance subsidiaries are premiums and certain annuity considerations, investment and fee income, and investment maturities and sales associated with our insurance and annuity operations, as well as internal and external borrowings. The principal uses of that liquidity include benefits, claims and dividends paid to policyholders, and payments to policyholders and contractholders in connection with surrenders, withdrawals and net policy loan activity. Other uses of liquidity include commissions, general and administrative expenses, purchases of investments, the payment of dividends to the parent holding company, hedging activity and payments in connection with financing activities. We use a projection process for cash flows from operations to ensure sufficient liquidity is available to meet projected cash outflows, including claims.

We manage the liquidity of our insurance operations to ensure stable, reliable and cost-effective sources of cash flows to meet all of our obligations. Liquidity within each of our insurance subsidiaries is provided by a variety of sources, including portfolios of liquid assets. The investment portfolios of our subsidiaries are integral to the overall liquidity of our insurance operations. We segment our investment portfolios and employ an asset/liability management approach specific to the requirements of each of our product lines. This enhances the discipline applied in managing the liquidity, as well as the interest rate and credit risk profiles, of each portfolio in a manner consistent with the unique characteristics of the product liabilities.

The following table sets forth the fair value of certain of our domestic insurance operations’ portfolio of liquid assets, including cash and short-term investments, fixed maturity investments other than those designated as held-to-maturity, classified by NAIC or equivalent rating, and public equity securities, as of the dates indicated.

	June 30, 2015
	Prudential Insurance		PLIC(1)		PRIAC		Other(2)		Total		December 31, 2014
	(in billions)
Cash and short-term investments	$	3.9	$	2.0	$	0.5	$	0.5	$	6.9	$	7.7
Fixed maturity investments:
High or highest quality	90.4		33.7		18.0		8.4		150.5		157.8
Other than high or highest quality	6.1		3.9		1.9		0.7		12.6		11.6
Subtotal	96.5		37.6		19.9		9.1		163.1		169.4
Public equity securities	0.2		3.3		0.0		0.1		3.6		4.0
Total	$	100.6	$	42.9	$	20.4	$	9.7	$	173.6	$	181.1

__________ 

(1) Prudential Legacy Insurance Company of New Jersey.

(2) Includes PALAC and Pruco Life.

The following table sets forth the fair value of our international insurance operations’ portfolio of liquid assets, including cash and short-term investments, fixed maturity investments other than those designated as held-to-maturity, classified by NAIC or equivalent rating, and public equity securities, as of the dates indicated.

	June 30, 2015
	Prudential of Japan		Gibraltar Life(1)		All Other(2)		Total		December 31, 2014
	(in billions)
Cash and short-term investments	$	1.0	$	1.8	$	1.5	$	4.3	$	2.1
Fixed maturity investments:
High or highest quality(3)	26.7		78.8		14.7		120.2		123.9
Other than high or highest quality	0.5		2.7		0.2		3.4		3.0
Subtotal	27.2		81.5		14.9		123.6		126.9
Public equity securities	1.8		2.4		0.5		4.7		4.3
Total	$	30.0	$	85.7	$	16.9	$	132.6	$	133.3

__________ 

(1) Includes Prudential Gibraltar Financial Life Insurance Co., Ltd., a wholly-owned subsidiary of Gibraltar Life.

(2) Represents our international insurance operations, excluding Japan.

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(3) Of the $120.2 billion of fixed maturity investments that are not designated as held-to-maturity and considered high or highest quality as of June 30, 2015, $81.9 billion, or 68%, were invested in government or government agency bonds.

Liquidity associated with other activities

Hedging activities associated with living benefit guarantees

We reinsure living benefit guarantees on certain variable annuity and retirement products from our domestic life insurance companies to Pruco Re. This enables us to execute our living benefit hedging program primarily within a single legal entity. As part of the living benefit hedging program, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives to hedge certain living benefit features accounted for as embedded derivatives against changes in certain capital market conditions such as interest rates and equity index levels. For a full discussion of our living benefits hedging program, see “—Results of Operations by Segment—U.S. Retirement Solutions and Investment Management Division—Individual Annuities.” Pruco Re requires access to liquidity to meet its payment obligations under this program, such as payments for periodic settlements, purchases, maturities, terminations and breakage. Pruco Re’s liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior. Currently, we fund these liquidity needs with a combination of capital contributions and loans from Prudential Financial and other affiliates.

The living benefits hedging activity in Pruco Re may also result in collateral postings on derivatives to or from counterparties. The net collateral position depends on changes in interest rates and equity markets related to the amount of the exposures hedged. Depending on market conditions, the collateral posting requirements can result in material liquidity needs. Also, certain derivatives entered into on or after June 10, 2013, are subject to mandatory clearing requirements under Dodd-Frank and, as a result, typically have additional collateral requirements. As of June 30, 2015, the living benefit hedging derivatives were in a net receive position of $3.4 billion compared to a net receive position of $4.7 billion as of December 31, 2014. The change in collateral position was primarily driven by an increase in interest rates.

Foreign exchange hedging activities

We employ various hedging strategies to manage potential exposure to foreign currency exchange rate movements, particularly those associated with the yen. Our overall yen hedging strategy calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company’s overall return on equity on a leverage neutral basis. The hedging strategy includes two primary components:

Income Hedges—We hedge a portion of our prospective yen-based earnings streams by entering into external forward currency derivative contracts that effectively fix the currency exchange rates for that portion of earnings, thereby reducing volatility from foreign currency exchange rate movements. As of June 30, 2015, we have hedged 100%, 92%, 50% and 8% of expected yen-based earnings for 2015, 2016, 2017 and 2018 respectively.

Equity Hedges—We hold both internal and external hedges primarily to hedge our U.S. dollar-equivalent equity. These hedges also mitigate volatility in the solvency margins of yen-based subsidiaries resulting from changes in the market value of their U.S. dollar-denominated investments hedging our U.S. dollar-equivalent equity attributable to changes in the yen-U.S. dollar exchange rate.

For additional information on our hedging strategy, see “—Results of Operations by Segment—International Insurance Division.”

Cash settlements from these hedging activities result in cash flows between subsidiaries of Prudential Financial and either yen-based subsidiaries or external parties. The cash flows are dependent on changes in foreign currency exchange rates and the notional amount of the exposures hedged. A significant yen depreciation over an extended period of time could result in net cash inflows, while a significant yen appreciation could result in net cash outflows. The following tables set forth information about net cash settlements and the net asset or liability resulting from these hedging activities.

168

	Six months ended June 30,
Cash Settlements:	2015			2014
	(in millions)
Income Hedges (External)(1)	$	161		$	144
Equity Hedges:
Internal	615			274
External	(151		)	56
Total Equity Hedges	464			330
Total Cash Settlements	$	625		$	474
	As of
	June 30,			December 31,
Assets/Liabilities:	2015			2014
	(in millions)
Income Hedges (External)(2)	$	286		$	404
Equity Hedges:
Internal	1,540			1,841
External	774			597
Total Equity Hedges(3)	2,314			2,438
Total Assets/Liabilities	$	2,600		$	2,842

__________

(1) Includes Korean won related cash settlements of $(4) million and $(12) million for the six months endedJune 30, 2015 and 2014, respectively.

(2) Includes a Korean won related asset of $10 million and $2.5 million as of June 30, 2015 and December 31, 2014, respectively.

(3) As of June 30, 2015, approximately 13%, 23% and 64% of the net asset is scheduled to settle in the remainder of 2015, 2016 and thereafter, respectively. The net market value of the assets/liabilities will vary with changing market conditions to the extent there are no corresponding offsetting positions.

Asset Management operations

The principal sources of liquidity for our fee-based asset management businesses include asset management fees and commercial mortgage origination and servicing fees. The principal uses of liquidity include general and administrative expenses and distributions of dividends and returns of capital to Prudential Financial. The primary liquidity risks for our fee-based asset management businesses relate to their profitability, which is impacted by market conditions and our investment management performance. We believe the cash flows from our fee-based asset management businesses are adequate to satisfy the current liquidity requirements of these operations, as well as requirements that could arise under reasonably foreseeable stress scenarios, which are monitored through the use of internal measures.

The principal sources of liquidity for our strategic investments held in our asset management businesses are cash flows from investments, the ability to liquidate investments, and available borrowing lines from internal sources, including Prudential Financial and Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of Prudential Insurance. The primary liquidity risks include the inability to sell assets in a timely manner, declines in the value of assets and credit defaults. There have been no material changes to the liquidity position of our asset management operations since December 31, 2014.

Alternative Sources of Liquidity

In addition to the sources of liquidity discussed throughout this section, Prudential Financial and certain subsidiaries have access to the following alternative sources of liquidity:

• Asset-based financing, as discussed further below.

• Membership in the Federal Home Loan Banks, which provides Prudential Insurance and PRIAC the ability to obtain loans and to issue funding agreements up to specified regulatory limits that are collateralized by qualifying mortgage-related assets or U.S. Treasury securities. As of June 30, 2015, Prudential Insurance had an estimated maximum borrowing capacity of $7.4 billion, of which $2.0 billion was outstanding, and PRIAC had an estimated maximum borrowing capacity of $0.2 billion with no advances outstanding. As of June 30, 2015, Prudential Insurance and PRIAC had qualifying assets available but not pledged with fair value of $4.5 billion and $1.9 billion, respectively.

• Commercial paper programs maintained by Prudential Financial and Prudential Funding, with authorized issuance capacity of $3.0 billion and $7.0 billion, respectively, of which $141 million and $731 million, respectively, were outstanding as of June 30, 2015.

• A $4.0 billion syndicated, committed credit facility that expires in April 2020, and has Prudential Financial and Prudential Funding as borrowers. This credit facility, which was entered into on April 14, 2015, amends and restates our previously-

169

existing $2.0 billion five-year credit facility and $1.75 billion three-year credit facility. There were no outstanding borrowings under this credit facility as of June 30, 2015, or as of the date of this filing.

• A put option agreement giving Prudential Financial the right to issue up to $1.5 billion in senior notes due November 2023 to a trust entity at any time in return for principal and interest strips of U.S. Treasury securities.

For further information on our Federal Home Loan Bank memberships, commercial paper programs, credit facilities and the put option agreement, see Note 9 to our Unaudited Interim Consolidated Financial Statements.

Asset-based Financing

We conduct asset-based or secured financing within our insurance and other subsidiaries, including transactions such as securities lending, repurchase agreements and mortgage dollar rolls, to earn spread income, to borrow funds, or to facilitate trading activity. These programs are primarily driven by portfolio holdings of securities that are lendable based on counterparty demand for these securities in the marketplace. The collateral received in connection with these programs is primarily used to purchase securities in the short-term spread portfolios of our insurance entities. Investments held in the short-term spread portfolios include cash and cash equivalents, short-term investments, mortgage loans and fixed maturities, including mortgage- and asset-backed securities, with a weighted average life at time of purchase by the short-term portfolios of four years or less. Floating rate assets comprise the majority of our short-term spread portfolio. These short-term portfolios are subject to specific investment policy statements, which among other things, do not allow for significant asset/liability interest rate duration mismatch.

The following table sets forth our liabilities under asset-based or secured financing programs as of the dates indicated.

	June 30, 2015						December 31, 2014
	PFI Excluding Closed Block Division		Closed Block Division		Consolidated		PFI Excluding Closed Block Division		Closed Block Division		Consolidated
	($ in millions)
Securities sold under agreements to repurchase	$	4,592	$	3,271	$	7,863	$	5,492	$	3,915	$	9,407
Cash collateral for loaned securities	2,679		1,129		3,808		3,064		1,177		4,241
Securities sold but not yet purchased	62		0		62		77		0		77
Total(1)	$	7,333	$	4,400	$	11,733	$	8,633	$	5,092	$	13,725
Portion of above securities that may be returned to the Company overnight requiring immediate return of the cash collateral	$	5,304	$	1,708	$	7,012	$	6,610	$	1,975	$	8,585
Weighted average maturity, in days(2)	17		25				23		52

__________ 

(1) The daily weighted average outstanding balance for the three and six months ended June 30, 2015, was $7,994 million and $8,399 million, respectively, for PFI excluding the Closed Block division, and $5,014 million and $5,119 million, respectively, for the Closed Block division.

(2) Excludes securities that may be returned to the Company overnight.

As of June 30, 2015, our domestic insurance entities had assets eligible for the asset-based or secured financing programs of $101.4 billion, of which $11.5 billion were on loan. Taking into account market conditions and outstanding loan balances as of June 30, 2015, we believe approximately $15.8 billion of the remaining eligible assets are readily lendable, including approximately $12.2 billion relating to PFI excluding the Closed Block division, of which $2.0 billion relates to certain separate accounts and may only be used for financing activities related to those accounts, and the remaining $3.6 billion relating to the Closed Block division.

Financing Activities

As of June 30, 2015, total short- and long-term debt of the Company on a consolidated basis was $23.9 billion, an increase of $0.2 billion from December 31, 2014. The following table sets forth total consolidated borrowings of the Company as of the dates indicated. We may, from time to time, seek to redeem or repurchase our outstanding debt securities through open market purchases, individually negotiated transactions or otherwise. Any such repurchases will depend on prevailing market conditions, our liquidity position and other factors.

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	June 30, 2015						December 31, 2014
	Prudential Financial		Other Subsidiaries		Consolidated		Prudential Financial		Other Subsidiaries		Consolidated
	(in millions)
General obligation short-term debt:
Commercial paper	$	141	$	731	$	872	$	97	$	386	$	483
Current portion of long-term debt and other(1)(2)	1,666		1,083		2,749		2,222		1,134		3,356
Subtotal	1,807		1,814		3,621		2,319		1,520		3,839
General obligation long-term debt:
Senior debt	10,606		1,923		12,529		11,177		1,927		13,104
Junior subordinated debt	5,884		0		5,884		4,884		0		4,884
Surplus notes(3)	0		1,341		1,341		0		1,341		1,341
Subtotal	16,490		3,264		19,754		16,061		3,268		19,329
Total general obligations	18,297		5,078		23,375		18,380		4,788		23,168
Limited recourse borrowing(4):
Long-term debt	0		510		510		0		502		502
Total limited recourse borrowings	0		510		510		0		502		502
Total borrowings	$	18,297	$	5,588	$	23,885	$	18,380	$	5,290	$	23,670

__________ 

(1) Does not include $2,705 million of medium-term notes of consolidated trust entities secured by funding agreements purchased with the proceeds of such notes at both June 30, 2015 and December 31, 2014, or $1,697 million and $1,947 million of collateralized funding agreements issued to the Federal Home Loan Bank of New York as of June 30, 2015 and December 31, 2014, respectively. These notes and funding agreements are included in “Policyholders’ account balances.” For additional information on these obligations, see Note 9 to our Unaudited Interim Consolidated Financial Statements contained herein and Note 10 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014.

(2) Includes collateralized borrowings from the Federal Home Loan Bank of New York of $280 million at both June 30, 2015 and December 31, 2014. For additional information on these borrowings, see Note 9 to our Unaudited Interim Consolidated Financial Statements.

(3) Amounts are net of assets under set-off arrangements of $4,543 million and $3,973 million as of June 30, 2015 and December 31, 2014, respectively.

(4) Limited and non-recourse borrowing primarily represents mortgage debt of our subsidiaries that has recourse only to real estate investment property.

As of June 30, 2015 and December 31, 2014, we were in compliance with all debt covenants related to the borrowings in the table above. For further information on our short- and long-term debt obligations, see Note 9 to our Unaudited Interim Consolidated Financial Statements contained herein and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Prudential Financial’s borrowings of $18.3 billion decreased $83 million from December 31, 2014, driven by the maturity of $1.3 billion of medium-term notes and retail notes, partially offset by the issuance of $1.0 billion of junior subordinated notes and $0.2 billion of retail notes. Borrowings of our subsidiaries of $5.6 billion increased $298 million from December 31, 2014, primarily driven by an increase in commercial paper issuances.

Term and Universal Life Reserve Financing

We use captive reinsurance subsidiaries to finance the portion of the statutory reserves required to be held by our domestic life insurance companies under Regulation XXX and Guideline AXXX that we consider to be non-economic. The financing arrangements involve the reinsurance of term and universal life business to our captive reinsurers and the issuance of surplus notes by those captives that are treated as capital for statutory purposes.

To date, we have entered into agreements with external counterparties providing for the issuance of up to an aggregate of $8.25 billion of surplus notes by our captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”). Under the agreements, the captive receives in exchange for the surplus notes one or more credit-linked notes issued by a special-purpose affiliate of the Company with an aggregate principal amount equal to the surplus notes outstanding. The captive holds the credit-linked notes as assets supporting Regulation XXX or Guideline AXXX non-economic reserves, as applicable. As of June 30, 2015, an aggregate of $5.543 billion of surplus notes was outstanding under our Credit-Linked Note Structures, reflecting an increase of $570 million since December 31, 2014. For more information on our Credit-Linked Note Structures, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities” in our Annual Report on Form 10-K for the year ended December 31, 2014.

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The following table summarizes our Credit-Linked Note Structures, which are reported on a net basis, as of June 30, 2015.

	Surplus Notes
Credit-Linked Note Structures:	Original Issue Dates	Maturity Dates	Outstanding as of June 30, 2015			Facility Size
	($ in millions)
XXX	2011-2014	2021-2024	$	1,750	(1)	$	2,000
AXXX	2013	2033	2,100			3,500
XXX	2014	2034	1,000		(1)(2)	1,000
XXX	2014	2024	693			1,750
Total Credit-Linked Note Structures			$	5,543		$	8,250

__________

(1) Prudential Financial has agreed to reimburse any amounts paid under the credit-linked notes issued in these structures.

(2) The $1 billion surplus note represents an intercompany transaction that eliminates upon consolidation.

As of June 30, 2015, we also had outstanding an aggregate of $4.0 billion of debt issued for the purpose of financing Regulation XXX and Guideline AXXX non-economic reserves, of which approximately $2.4 billion relates to Regulation XXX reserves and approximately $1.6 billion relates to Guideline AXXX reserves, all of which was issued directly by or guaranteed by Prudential Financial. Under certain of the financing arrangements pursuant to which this debt was issued, Prudential Financial has agreed to make capital contributions to the applicable captive reinsurance subsidiary to reimburse it for investment losses or to maintain its capital above prescribed minimum levels. In addition, as of June 30, 2015, for purposes of financing Guideline AXXX reserves, our captives had outstanding approximately $4.0 billion of surplus notes that were issued to affiliates.

In December 2014, the NAIC adopted a new actuarial guideline, known as “AG 48,” that governs the reinsurance of term and universal life insurance business to captives by prescribing requirements for the types of assets that may be held by captives to support the reserves. The requirements in AG 48 became effective on January 1, 2015, and apply in respect of term and universal life insurance policies written from and after January 1, 2015, or written prior to January 1, 2015, but not included in a captive reserve financing arrangement as of December 31, 2014. AG 48 will, for a period of time, require us to hold cash or rated securities in greater amounts than we currently hold to support economic reserves for certain of our term and universal life policies. We may seek to finance all or a portion of this requirement, but we have not yet finalized our funding plans.

Other Insurance Financing

See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Financing Activities—Secured Borrowings” included in our Annual Report on Form 10-K for the year ended December 31, 2014, for a discussion of our use of captive reinsurance companies.

Ratings

The following is an update of the discussion included under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Ratings" in our Annual Report on Form 10-K for the year ended December 31, 2014, and should be read in conjunction with the Form 10-K.

On May 13, 2015, A.M. Best affirmed Prudential Financial’s long-term senior debt rating at “a-” and short-term debt rating at “AMB-1”. A.M. Best also affirmed the “A+” financial strength ratings of Prudential Financial’s core subsidiaries, including Prudential Insurance, PALAC and PRIAC, with stable outlooks.

On May 15, 2015, Fitch affirmed Prudential Financial’s long-term senior debt rating at “A-” and the financial strength ratings of our U.S. operating entities at “A+”, with positive outlooks.

Off-Balance Sheet Arrangements

Guarantees and Other Contingencies

In the course of our business, we provide certain guarantees and indemnities to third parties pursuant to which we may be contingently required to make payments in the future. See “Commitments and Guarantees” within Note 15 to the Unaudited Interim Consolidated Financial Statements for additional information.

Other Contingent Commitments

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We also have other commitments, some of which are contingent upon events or circumstances not under our control, including those at the discretion of our counterparties. See “Commitments and Guarantees” within Note 15 to the Unaudited Interim Consolidated Financial Statements for additional information regarding these commitments. For further discussion of certain of these commitments that relate to our separate accounts, also see “—Liquidity—Liquidity associated with other activities—Asset Management operations.”

Other Off-Balance Sheet Arrangements

In November 2013, we entered into a put option agreement with a Delaware trust that gives Prudential Financial the right, at any time over a ten-year period, to issue up to $1.5 billion of senior notes to the trust in return for principal and interest strips of U.S. Treasury securities that are held by the trust. See Note 9 to our Unaudited Interim Consolidated Financial Statements for more information on this put option agreement. In 2014, Prudential Financial entered into financing transactions, pursuant to which it issued $500 million of limited recourse notes and, in return, obtained $500 million of asset-backed notes from a Delaware master trust and ultimately contributed the asset-backed notes to its subsidiary, PRIAC. As of June 30, 2015, no principal payments have been received or are currently due on the asset-backed notes and, as a result, there was no payment obligation under the limited recourse notes. Accordingly, neither of the notes is reflected in the Company’s Unaudited Interim Consolidated Financial Statements as of that date.

Other than as described above, we do not have retained or contingent interests in assets transferred to unconsolidated entities, or variable interests in unconsolidated entities or other similar transactions, arrangements or relationships that serve as credit, liquidity or market risk support, that we believe are reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or our access to or requirements for capital resources. In addition, other than the agreements referred to above, we do not have relationships with any unconsolidated entities that are contractually limited to narrow activities that facilitate our transfer of or access to associated assets.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the risk of fluctuations in the value of financial instruments as a result of absolute or relative changes in interest rates, foreign currency exchange rates, equity prices or commodity prices. To varying degrees, our products and services, and the investment activities supporting them, generate exposure to market risk. The market risk incurred, and our strategies for managing this risk, vary by product. There have been no material changes in our market risk exposures from December 31, 2014, a description of which may be found in our Annual Report on Form 10-K, for the year ended December 31, 2014, Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” filed with the Securities and Exchange Commission. See Item 1A, “Risk Factors” included in the Annual Report on Form 10-K for the year ended December 31, 2014, for a discussion of how difficult conditions in the financial markets and the economy generally may materially adversely affect our business and results of our operations.

ITEM 4. CONTROLS AND PROCEDURES

In order to ensure that the information we must disclose in our filings with the SEC is recorded, processed, summarized, and reported on a timely basis, the Company’s management, including our Chief Executive Officer and Chief Financial Officer, have reviewed and evaluated the effectiveness of our disclosure controls and procedures, as defined in Exchange Act Rule 13a-15(e), as of June 30, 2015. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of June 30, 2015, our disclosure controls and procedures were effective. No change in our internal control over financial reporting, as defined in Exchange Act Rule 13a-15(f), occurred during the quarter ended June 30, 2015, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

173

PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See Note 15 to the Unaudited Interim Consolidated Financial Statements under “—Litigation and Regulatory Matters” for a description of material pending litigation and regulatory matters affecting us, and certain risks to our businesses presented by such matters, which is incorporated herein by reference.

ITEM 1A.  RISK FACTORS

You should carefully consider the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2014. These risks could materially affect our business, results of operations or financial condition, cause the trading price of our Common Stock to decline materially or cause our actual results to differ materially from those expected or those expressed in any forward looking statements made by or on behalf of the Company. These risks are not exclusive, and additional risks to which we are subject include, but are not limited to, the factors mentioned under “Forward-Looking Statements” above and the risks of our businesses described elsewhere in this Quarterly Report on Form 10-Q.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) The following table provides information about purchases by the Company during the three months ended June 30, 2015, of its Common Stock:

Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program(2)	Approximate Dollar Value of Shares that May Yet be Purchased under the Program(2)(3)
April 1, 2015 through April 30, 2015	1,037,838	$	80.53	1,034,779
May 1, 2015 through May 31, 2015	974,742	$	85.65	972,983
June 1, 2015 through June 30, 2015	950,789	$	88.80	938,425
Total	2,963,369	$	84.87	2,946,187	$0

__________

(1) Includes shares of Common Stock withheld from participants for income tax withholding purposes whose shares of restricted stock units vested during the period. Such restricted stock units were originally issued to participants pursuant to the Prudential Financial, Inc. Omnibus Incentive Plan that was adopted by the Company’s Board of Directors in March 2003 (as subsequently amended and restated).

(2) In June 2014, the Board authorized the Company to repurchase up to $1.0 billion of its outstanding Common Stock during the twelve month period from July 1, 2014 through June 30, 2015.

(3) The stock repurchase program authorized in June 2014 expired on June 30, 2015; therefore, the Company can no longer purchase any additional shares of Common Stock under this authorization. In June 2015, the Board authorized the Company to repurchase up to $1.0 billion of its outstanding Common Stock during the twelve month period from July 1, 2015 through June 30, 2016.

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ITEM 6. EXHIBITS

See accompanying Exhibit Index.

175

SIGNATURES

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

Prudential Financial, Inc.
By:	/S/     ROBERT M. FALZON
	Robert M. Falzon Executive Vice President and Chief Financial Officer (Authorized signatory and principal financial officer)

Date: August 6, 2015

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EXHIBIT INDEX

10.1	Amended and Restated Credit Agreement dated as of April 14, 2015 among Prudential Financial, Inc., Prudential Funding, LLC, as Borrowers, The Prudential Insurance Company of America, JP Morgan, as Administrative Agent and Several L/C Agent, and the lenders party thereto. Incorporated by reference to Exhibit 10.1 to the Registrant’s April 17, 2015 Current Report on Form 8-K.
12.1	Statement of Ratio of Earnings to Fixed Charges.
31.1	Section 302 Certification of the Chief Executive Officer.
31.2	Section 302 Certification of the Chief Financial Officer.
32.1	Section 906 Certification of the Chief Executive Officer.
32.2	Section 906 Certification of the Chief Financial Officer.

101.INS - XBRL	Instance Document.
101.SCH - XBRL	Taxonomy Extension Schema Document.
101.CAL - XBRL	Taxonomy Extension Calculation Linkbase Document.
101.LAB - XBRL	Taxonomy Extension Label Linkbase Document.
101.PRE - XBRL	Taxonomy Extension Presentation Linkbase Document.
101.DEF - XBRL	Taxonomy Extension Definition Linkbase Document.

Prudential Financial, Inc. will furnish upon request a copy of any exhibit listed above upon the payment of a reasonable fee covering the expense of furnishing the copy. Requests should be directed to:

Shareholder Services

Prudential Financial, Inc.

751 Broad Street, 21st Floor

Newark, New Jersey 07102

177

EX-12.1

Exhibit 12.1

PRUDENTIAL FINANCIAL, INC.

RATIO OF EARNINGS TO FIXED CHARGES

	Three Months Ended		Six Months Ended		Year Ended December 31,
	June 30, 2015		June 30, 2015		2014		2013		2012		2011		2010
	($ in millions)
Earnings:
Income (loss) from continuing operations before income taxes (1)	$	2,084	$	4,819	$	1,715	$	(1,712)	$	737	$	5,191	$	4,233
Less:
Undistributed income (loss) of investees accounted for under the equity method		(186)		(119)		134		223		107		286		100
Interest capitalized		—		—		—		—		—		—		—
Adjusted earnings		2,270		4,938		1,581		(1,935)		630		4,905		4,133
Add fixed charges:
Interest credited to policyholders’ account balances		676		1,909		4,263		3,111		4,234		4,484		4,209
Gross interest expense (2)		337		663		1,934		1,419		1,389		1,315		1,224
Interest component of rental expense		20		39		75		85		96		93		69
Total fixed charges		1,033		2,611		6,272		4,615		5,719		5,892		5,502
Total earnings plus fixed charges	$	3,303	$	7,549	$	7,853	$	2,680	$	6,349	$	10,797	$	9,635
Ratio of earnings to fixed charges (3)		3.20		2.89		1.25		—		1.11		1.83		1.75

(1)	Excludes earnings attributable to noncontrolling interests.
(2)	Interest expense on short-term and long-term debt, including interest expense of securities businesses reported in “Net investment income” in the Consolidated Statements of Operations, capitalized interest and amortization of debt discounts and premiums. Interest expense does not include interest on liabilities recorded under the authoritative guidance on accounting for uncertainty in income taxes. The Company’s policy is to classify such interest in income tax provision in the consolidated statements of operations.
(3)	Due to the Company’s loss for the twelve months ended December 31, 2013, the ratio coverage was less than 1:1 and is therefore not presented. Additional earnings of $1,935 million would have been required for the twelve months ended December 31, 2013, to achieve a ratio of 1:1.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, John R. Strangfeld, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Prudential Financial, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2015	/s/ John R. Strangfeld
	John R. Strangfeld Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Robert M. Falzon, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Prudential Financial, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 6, 2015	/s/ Robert M. Falzon
	Robert M. Falzon Chief Financial Officer

EX-32.1

Exhibit 32.1

Certification

Pursuant to 18 U.S.C. § 1350, I, John R. Strangfeld, Chief Executive Officer of Prudential Financial, Inc. (the “Company”), hereby certify that the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2015		/s/ John R. Strangfeld
	Name:	John R. Strangfeld
	Title:	Chief Executive Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

Certification

Pursuant to 18 U.S.C. § 1350, I, Robert M. Falzon, Chief Financial Officer of Prudential Financial, Inc. (the “Company”), hereby certify that the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 6, 2015		/s/ Robert M. Falzon
	Name:	Robert M. Falzon
	Title:	Chief Financial Officer

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Investments (Fixed Maturities Proceeds) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings	$ (29)	$ (26)	$ (37)	$ (42)
Writedowns for impairments on equity securities	(11)	(7)	(17)	(17)
Fixed maturities, available-for-sale
Fixed maturities, available-for-sale
Proceeds from sales	7,626	7,460	15,044	16,038
Proceeds from maturities/repayments	4,618	5,847	9,713	10,706
Gross investment gains from sales, prepayments and maturities	442	476	974	901
Gross investment losses from sales and maturities	(42)	(83)	(97)	(235)
Fixed maturities, held-to-maturity
Fixed maturities, held-to-maturity
Gross investment gains from prepayments	0	0	0	0
Proceeds from maturities/repayments	63	138	123	232
Equity securities, available-for-sale
Fixed maturities, available-for-sale
Gross investment gains from sales, prepayments and maturities	273	198	427	331
Gross investment losses from sales and maturities	(35)	(22)	(61)	(60)
Equity securities, available-for-sale
Proceeds from sales	$ 1,564	$ 1,316	$ 2,553	$ 2,481

XML

Investments (Fair Value and Losses by Investment Category and Length of Time in a Loss Position) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	$ 49,444	$ 19,166
Less than 12 months Gross Unrealized Losses	2,230	455
Twelve months or more Fair Value	10,350	19,666
Twelve months or more Gross Unrealized Losses	787	901
Total Fair Value	59,794	38,832
Total Gross Unrealized Losses	3,017	1,356
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	1,563	2,145
Less than 12 months Gross Unrealized Losses	20	5
Twelve months or more Fair Value	0	10
Twelve months or more Gross Unrealized Losses	0	0
Total Fair Value	1,563	2,155
Total Gross Unrealized Losses	20	5
Obligations of U.S. states and their political subdivisions
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	3,060	105
Less than 12 months Gross Unrealized Losses	105	1
Twelve months or more Fair Value	8	89
Twelve months or more Gross Unrealized Losses	1	2
Total Fair Value	3,068	194
Total Gross Unrealized Losses	106	3
Foreign government bonds
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	2,498	839
Less than 12 months Gross Unrealized Losses	72	26
Twelve months or more Fair Value	1,314	1,052
Twelve months or more Gross Unrealized Losses	90	91
Total Fair Value	3,812	1,891
Total Gross Unrealized Losses	162	117
Corporate securities
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	36,276	11,326
Less than 12 months Gross Unrealized Losses	1,984	401
Twelve months or more Fair Value	5,642	13,346
Twelve months or more Gross Unrealized Losses	588	654
Total Fair Value	41,918	24,672
Total Gross Unrealized Losses	2,572	1,055
Commercial mortgage-backed securities
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	2,983	1,299
Less than 12 months Gross Unrealized Losses	38	6
Twelve months or more Fair Value	550	1,746
Twelve months or more Gross Unrealized Losses	12	33
Total Fair Value	3,533	3,045
Total Gross Unrealized Losses	50	39
Asset-backed securities
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	2,535	3,417
Less than 12 months Gross Unrealized Losses	7	16
Twelve months or more Fair Value	2,714	3,229
Twelve months or more Gross Unrealized Losses	93	118
Total Fair Value	5,249	6,646
Total Gross Unrealized Losses	100	134
Residential mortgage-backed securities
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	529	35
Less than 12 months Gross Unrealized Losses	4	0
Twelve months or more Fair Value	122	194
Twelve months or more Gross Unrealized Losses	3	3
Total Fair Value	651	229
Total Gross Unrealized Losses	7	3
Equity securities, available-for-sale
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Less than twelve months Fair Value	1,855	1,670
Less than 12 months Gross Unrealized Losses	87	82
Twelve months or more Fair Value	6	9
Twelve months or more Gross Unrealized Losses	1	1
Total Fair Value	1,861	1,679
Total Gross Unrealized Losses	88	83
Held-to-maturity
Duration Of Unrealized Losses On Fixed Maturities Investments [Line Items]
Total Fair Value	84	91
Total Gross Unrealized Losses	$ 2	$ 1

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Investments (Impaired Loans) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	$ 55	$ 88
Unpaid Principal Balance	56	89
Related Allowance	3	8
Average Recorded Investment Before Allowance	79	105
Interest Income Recognized	1	8
Commercial mortgage loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	55	84
Unpaid Principal Balance	55	84
Related Allowance	3	8
Average Recorded Investment Before Allowance	79	98
Interest Income Recognized	1	7
Agricultural property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	4
Unpaid Principal Balance	0	4
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	4
Interest Income Recognized	0	0
Residential property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
Other collateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	3
Interest Income Recognized	0	1
Uncollateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	1	1
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With no related allowance recorded:
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	12
Unpaid Principal Balance	1	13
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	20
Interest Income Recognized	0	1
With no related allowance recorded: | Commercial mortgage loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	8
Unpaid Principal Balance	0	8
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	16
Interest Income Recognized	0	1
With no related allowance recorded: | Agricultural property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	4
Unpaid Principal Balance	0	4
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	4
Interest Income Recognized	0	0
With no related allowance recorded: | Residential property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With no related allowance recorded: | Other collateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With no related allowance recorded: | Uncollateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	1	1
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With an allowance recorded:
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	55	76
Unpaid Principal Balance	55	76
Related Allowance	3	8
Average Recorded Investment Before Allowance	79	85
Interest Income Recognized	1	7
With an allowance recorded: | Commercial mortgage loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	55	76
Unpaid Principal Balance	55	76
Related Allowance	3	8
Average Recorded Investment Before Allowance	79	82
Interest Income Recognized	1	6
With an allowance recorded: | Agricultural property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With an allowance recorded: | Residential property loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	0	0
With an allowance recorded: | Other collateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	3
Interest Income Recognized	0	1
With an allowance recorded: | Uncollateralized loans
Valuation and Qualifying Accounts Disclosure [Line Items]
Recorded Investment	0	0
Unpaid Principal Balance	0	0
Related Allowance	0	0
Average Recorded Investment Before Allowance	0	0
Interest Income Recognized	$ 0	$ 0

XML

Earnings Per Share (Antidilutive Securities Excluded From the Computation of Diluted Earnings Per Share) (Details) - $ / shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average shares of antidilutive security excluded from computation of diluted earnings per share (in shares)	2.1	2.3	2.4	2.1
Employee And Non Employee Stock Option | Treasury Stock Method
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average shares of antidilutive security excluded from computation of diluted earnings per share (in shares)	2.1	2.3	2.4	2.1
Weighted average exercise price of options excluded from computation of diluted earnings per share (in dollars per share)	$ 88.70	$ 89.48	$ 87.92	$ 89.88
Employee And Non Employee Stock Option | Loss From Continuing Operation Available To Holders Of Common Stock After Direct Equity Adjustment
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average shares of antidilutive security excluded from computation of diluted earnings per share (in shares)	0.0	0.0	0.0	0.0
Employee And Non Employee Restricted Stock Shares Restricted Stock Units Performance Shares And Performance Units | Loss From Continuing Operation Available To Holders Of Common Stock After Direct Equity Adjustment
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Weighted average shares of antidilutive security excluded from computation of diluted earnings per share (in shares)	0.0	0.0	0.0	0.0

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Investments (Repurchase Agreements and Securities Lending Transactions) (Details) $ in Millions	Jun. 30, 2015 USD ($)
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	$ 7,863
Total securities lending transactions	3,808
Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	3,533
Total securities lending transactions	3,418
Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	4,067
Total securities lending transactions	390
30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	263
Total securities lending transactions	0
Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
U.S. Treasury securities and obligations of U.S. government authorities and agencies
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	6,913
Total securities lending transactions	299
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	3,109
Total securities lending transactions	299
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	3,541
Total securities lending transactions	0
U.S. Treasury securities and obligations of U.S. government authorities and agencies | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	263
Total securities lending transactions	0
U.S. Treasury securities and obligations of U.S. government authorities and agencies | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Obligations of U.S. states and their political subdivisions
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	16
Obligations of U.S. states and their political subdivisions | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	16
Obligations of U.S. states and their political subdivisions | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Obligations of U.S. states and their political subdivisions | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Obligations of U.S. states and their political subdivisions | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Foreign government bonds
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	323
Foreign government bonds | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	323
Foreign government bonds | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Foreign government bonds | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Foreign government bonds | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Corporate securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	20
Total securities lending transactions	2,626
Corporate securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	20
Total securities lending transactions	2,498
Corporate securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	128
Corporate securities | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Corporate securities | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Asset-backed securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Asset-backed securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Asset-backed securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Asset-backed securities | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Asset-backed securities | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Commercial mortgage-backed securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	17
Commercial mortgage-backed securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	17
Commercial mortgage-backed securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Commercial mortgage-backed securities | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Commercial mortgage-backed securities | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Residential mortgage-backed securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	930
Total securities lending transactions	262
Residential mortgage-backed securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	404
Total securities lending transactions	0
Residential mortgage-backed securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	526
Total securities lending transactions	262
Residential mortgage-backed securities | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Residential mortgage-backed securities | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Equity securities
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	265
Equity securities | Overnight & Continuous
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	265
Equity securities | Up to 30 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Equity securities | 30 to 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	0
Equity securities | Greater than 90 Days
Transfer Of Certain Financial Assets Accounted For As Secured Borrowings [Line Items]
Total repurchase agreements	0
Total securities lending transactions	$ 0

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Segment Information (Operating Income of Reportable Segments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$ 2,129	$ 1,507	$ 4,877	$ 3,225
Operating Segments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	1,841	1,623	3,586	3,194
Operating Segments | Total U.S. Retirement Solutions and Investment Management division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	981	876	1,999	1,821
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Individual Annuities
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	548	390	1,077	778
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Retirement
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	237	286	521	650
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Asset Management
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	196	200	401	393
Operating Segments | Total U.S. Individual Life and Group Insurance division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	312	204	458	335
Operating Segments | Total U.S. Individual Life and Group Insurance division | Individual Life
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	237	158	353	283
Operating Segments | Total U.S. Individual Life and Group Insurance division | Group Insurance
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	75	46	105	52
Operating Segments | Total International Insurance division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	842	884	1,676	1,721
Operating Segments | Total International Insurance division | International Insurance
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	842	884	1,676	1,721
Operating Segments | Total Corporate and Other
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	(294)	(341)	(547)	(683)
Operating Segments | Total Corporate and Other | Corporate Operations
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	(294)	(341)	(547)	(683)
Realized investment gains (losses), net, and related adjustments
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	(60)	(202)	1,602	(153)
Charges related to realized investment gains (losses), net
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	346	(71)	(265)	(128)
Investment gains (losses) on trading account assets supporting insurance liabilities, net
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	(220)	225	(137)	326
Change in experience-rated contractholder liabilities due to asset value changes
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	234	(189)	37	(232)
Divested businesses: | Closed Block division
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	52	0	30	0
Divested businesses: | Other divested businesses
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	(109)	47	(34)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	45	18	58	29
Subtotal
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	2,129	1,451	4,877	3,156
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items]
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$ 0	$ 56	$ 0	$ 69

XML

Investments (Allowance for Losses) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	$ 119	$ 216
Addition to (release of) allowance for losses	(10)	(87)
Charge-offs, net of recoveries	0	(9)
Change in foreign exchange	(1)	(1)
Total ending balance	108	119
Commercial Mortgage Loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	104	188
Addition to (release of) allowance for losses	(8)	(77)
Charge-offs, net of recoveries	0	(7)
Change in foreign exchange	0	0
Total ending balance	96	104
Agricultural Property Loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	1	7
Addition to (release of) allowance for losses	0	(6)
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	1	1
Residential Property Loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	5	6
Addition to (release of) allowance for losses	(2)	(1)
Charge-offs, net of recoveries	0	0
Change in foreign exchange	0	0
Total ending balance	3	5
Other Collateralized Loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	0	3
Addition to (release of) allowance for losses	0	(1)
Charge-offs, net of recoveries	0	(2)
Change in foreign exchange	0	0
Total ending balance	0	0
Uncollateralized Loans
Allowance for Loan and Lease Losses [Roll Forward]
Allowance for credit losses, beginning of year	9	12
Addition to (release of) allowance for losses	0	(2)
Charge-offs, net of recoveries	0	0
Change in foreign exchange	(1)	(1)
Total ending balance	$ 8	$ 9

XML

Fair Value of Assets and Liabilities (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value, Assets and Liabilities Measured on Recurring Basis

The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	As of June 30, 2015
	Level 1			Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0		$	17,811	$	0	$			$	17,811
Obligations of U.S. states and their political subdivisions	0			7,866		20					7,886
Foreign government bonds	0			78,710		151					78,861
Corporate securities	0			155,471		1,103					156,574
Asset-backed securities	0			7,418		3,817					11,235
Commercial mortgage-backed securities	0			12,111		41					12,152
Residential mortgage-backed securities	0			5,329		215					5,544
Subtotal	0			284,716		5,347					290,063
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0			170		0					170
Obligations of U.S. states and their political subdivisions	0			186		0					186
Foreign government bonds	0			683		25					708
Corporate securities	0			21,668		148					21,816
Asset-backed securities	0			873		607					1,480
Commercial mortgage-backed securities	0			2,087		2					2,089
Residential mortgage-backed securities	0			1,593		5					1,598
Equity securities	1,563			241		604					2,408
All other(3)	417			12,025		12		(9,893		)	2,561
Subtotal	1,980			39,526		1,403		(9,893		)	33,016
Equity securities, available-for-sale	6,592			3,050		259					9,901
Commercial mortgage and other loans	0			391		0					391
Other long-term investments	8			230		1,714		(8		)	1,944
Short-term investments	4,400			724		0					5,124
Cash equivalents	3,809			8,638		0					12,447
Other assets	3			110		2					115
Subtotal excluding separate account assets	16,792			337,385		8,725		(9,901		)	353,001
Separate account assets(4)	48,175			222,311		25,855					296,341
Total assets	$	64,967		$	559,696	$	34,580	$	(9,901	)	$	649,342
Future policy benefits(5)	$	0		$	0	$	5,478	$			$	5,478
Other liabilities	(2		)	5,883		2		(5,730		)	153
Notes Issued by consolidated VIEs	0			0		7,434					7,434
Total liabilities	$	(2	)	$	5,883	$	12,914	$	(5,730	)	$	13,065

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	20,123	$	0	$			$	20,123
Obligations of U.S. states and their political subdivisions	0		6,525		6					6,531
Foreign government bonds	0		80,939		2					80,941
Corporate securities	0		159,073		1,303					160,376
Asset-backed securities	0		7,126		4,059					11,185
Commercial mortgage-backed securities	0		13,834		43					13,877
Residential mortgage-backed securities	0		5,804		253					6,057
Subtotal	0		293,424		5,666					299,090
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		399		0					399
Obligations of U.S. states and their political subdivisions	0		199		0					199
Foreign government bonds	0		696		21					717
Corporate securities	0		20,146		124					20,270
Asset-backed securities	0		850		393					1,243
Commercial mortgage-backed securities	0		2,556		5					2,561
Residential mortgage-backed securities	0		1,767		7					1,774
Equity securities	1,396		232		663					2,291
All other(3)	194		13,803		7		(12,321		)	1,683
Subtotal	1,590		40,648		1,220		(12,321		)	31,137
Equity securities, available-for-sale	6,688		2,898		275					9,861
Commercial mortgage and other loans	0		380		0					380
Other long-term investments	12		224		1,547		(11		)	1,772
Short-term investments	5,263		2,472		0					7,735
Cash equivalents	2,657		9,188		0					11,845
Other assets	4		109		2					115
Subtotal excluding separate account assets	16,214		349,343		8,710		(12,332		)	361,935
Separate account assets(4)	48,063		223,710		24,662					296,435
Total assets	$	64,277	$	573,053	$	33,372	$	(12,332	)	$	658,370
Future policy benefits(5)	$	0	$	0	$	8,182	$			$	8,182
Other liabilities	1		6,883		5		(6,661		)	228
Notes Issued by consolidated VIEs	0		0		6,033					6,033
Total liabilities	$	1	$	6,883	$	14,220	$	(6,661	)	$	14,443

__________

(1) “Netting” amounts represent cash collateral of $4,171 million and $5,671 million as of June 30, 2015 and December 31, 2014, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Includes “Trading account assets supporting insurance liabilities” and “Other trading account assets.”

(3) Level 1 represents cash equivalents and short term investments. All other amounts primarily represent derivative assets.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(5) As of June 30, 2015, the net embedded derivative liability position of $5.5 billion includes $0.8 billion of embedded derivatives in an asset position and $6.3 billion of embedded derivatives in a liability position. As of December 31, 2014, the net embedded derivative liability position of $8.2 billion includes $0.6 billion of embedded derivatives in an asset position and $8.8 billion of embedded derivatives in a liability position.

Fair Value Level Three Amounts By Pricing Source

The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of June 30, 2015
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	14	$	20
Foreign government bonds	0		176		176
Corporate securities	774		477		1,251
Asset-backed securities	147		4,277		4,424
Commercial mortgage-backed securities	8		35		43
Residential mortgage-backed securities	53		167		220
Equity securities	121		742		863
Other long-term investments	12		1,702		1,714
Other assets	14		0		14
Subtotal excluding separate account assets(3)	1,135		7,590		8,725
Separate account assets	24,407		1,448		25,855
Total assets	$	25,542	$	9,038	$	34,580
Future policy benefits	$	5,478	$	0	$	5,478
Other liabilities	0		2		2
Notes Issued by consolidated VIEs	0		7,434		7,434
Total liabilities	$	5,478	$	7,436	$	12,914

	As of December 31, 2014
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	0	$	6
Foreign government bonds	0		23		23
Corporate securities	752		675		1,427
Asset-backed securities	150		4,302		4,452
Commercial mortgage-backed securities	10		38		48
Residential mortgage-backed securities	57		203		260
Equity securities	140		798		938
Other long-term investments	1		1,546		1,547
Other assets	9		0		9
Subtotal excluding separate account assets(3)	1,125		7,585		8,710
Separate account assets	23,632		1,030		24,662
Total assets	$	24,757	$	8,615	$	33,372
Future policy benefits	$	8,182	$	0	$	8,182
Other liabilities	2		3		5
Notes Issued by consolidated VIEs	0		6,033		6,033
Total liabilities	$	8,184	$	6,036	$	14,220

__________

(1) Represents valuations reflecting both internally-derived and market inputs as well as third-party pricing information or quotes. See below for additional information related to internally-developed valuation for significant items in the above table.

(2) Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3) Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.

Fair Value Inputs Quantitative Information

The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets).

	As of June 30, 2015
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	774	Discounted cash flow	Discount rate	1.05%	-	25%	8.05%	Decrease
			Market comparables	EBITDA multiples(2)	5.0X	-	6.5X	6.2X	Increase
			Liquidation	Liquidation value	22.12%	-	64.83%	43.07%	Increase
Liabilities:
Future policy benefits(3)	$	5,478	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.68%		Decrease
				Utilization rate(6)	56%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

	As of December 31, 2014
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	752	Discounted cash flow	Discount rate	0.84%	-	15%	7.73%	Decrease
			Market comparables	EBITDA multiples(2)	6.1X	-	7.0X	6.1X	Increase
			Liquidation	Liquidation value	22.12%	-	100%	82.92%	Increase
Liabilities:
Future policy benefits(3)	$	8,182	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.30%		Decrease
				Utilization rate(6)	63%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.

(2) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the reporting entity has determined that market participants would use such multiples when pricing the investments.

(3) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(4) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(5) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium.

(6) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(7) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

(8) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	136		$	1,250		$	4,362		$	75		$	242
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(13		)	0			0			0
Included in other comprehensive income (loss)	0			(3		)	10			15			0			(1		)
Net investment income	0			0			(9		)	10			0			0
Purchases	15			20			208			615			2			0
Sales	(1		)	0			(154		)	(286		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(21		)	(39		)	(2		)	(16		)
Foreign currency translation	0			2			(9		)	(11		)	0			(7		)
Transfers into Level 3(2)	0			(4		)	0			293			0			0
Transfers out of Level 3(2)	0			0			(159		)	(1,142		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(13	)	$	4		$	0		$	0

	Three Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	22		$	144		$	376		$	3		$	6		$	634		$	8
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			1			0
Other income	0			(2		)	1			0			0			(6		)	4
Net Investment Income	0			1			1			0			0			0			0
Purchases	4			51			243			(1		)	0			1			0
Sales	0			(4		)	(2		)	0			0			(12		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(1		)	0			0			0			(1		)	0
Foreign currency translation	0			0			0			0			0			(13		)	0
Transfers into Level 3(2)	0			0			27			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(39		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Other income	$	0		$	(2	)	$	1		$	0		$	0		$	(7	)	$	4

	Three Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	263		$	0	$	1,617		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			0		0			0
Other income	0			0		60			0
Included in other comprehensive income (loss)	(4		)	0		0			0
Net investment income	0			0		0			0
Purchases	8			0		92			0
Sales	(9		)	0		(1		)	0
Issuances	0			0		0			0
Settlements	0			0		(33		)	0
Foreign currency translation	(7		)	0		(14		)	0
Other(1)	0			0		(7		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		0			0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0	$	(1	)	$	0
Other income	$	0		$	0	$	58		$	0

	Three Months Ended June 30, 2015
	Separate Account Assets (4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	25,067		$	(9,473	)	$	(2	)	$	(6,810	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	8			4,236			0			(68		)
Other Income	0			0			0			(62		)
Interest credited to policyholders’ account balances	755			0			0			0
Net investment income	6			0			0			0
Purchases	1,052			0			0			0
Sales	(237		)	0			0			0
Issuances	0			(241		)	0			(494		)
Settlements	(513		)	0			0			0
Foreign currency translation	(1		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(283		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	4,167		$	0		$	(68	)
Other Income	$	0		$	0		$	0		$	(62	)
Interest credited to policyholders’ account	$	502		$	0		$	0		$	0

	Six Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	2		$	1,303		$	4,059		$	43		$	253
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(14		)	6			0			0
Included in other comprehensive income (loss)	0			(3		)	2			17			0			(1		)
Net investment income	0			0			(15		)	13			0			0
Purchases	15			20			427			940			34			0
Sales	(1		)	0			(347		)	(390		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(56		)	(78		)	(4		)	(25		)
Foreign currency translation	0			(2		)	(11		)	(14		)	0			(9		)
Other(1)	0			0			(3		)	3			0			0
Transfers into Level 3(2)	0			134			16			803			2			0
Transfers out of Level 3(2)	0			0			(199		)	(1,542		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(16	)	$	4		$	0		$	0

	Six Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	21		$	124		$	393		$	5		$	7		$	663		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			(2		)	0
Other income	0			(7		)	3			0			0			(9		)	5
Net investment income	0			1			1			0			0			0			0
Purchases	5			71			247			0			0			8			0
Sales	0			(4		)	(2		)	(2		)	0			(16		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(3		)	(1		)	(1		)	(1		)	(16		)	0
Foreign currency translation	0			0			0			0			0			(17		)	0
Other(1)	0			0			0			0			0			(7		)	0
Transfers into Level 3(2)	0			7			73			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(107		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	(2	)	$	0
Other income	$	0		$	(7	)	$	3		$	0		$	0		$	6		$	5

	Six Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	275		$	0	$	1,547		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	10			0		(2		)	0
Other income	0			0		99			0
Included in other comprehensive income (loss)	(1		)	0		0			0
Net investment income	0			0		(1		)	0
Purchases	12			0		201			0
Sales	(31		)	0		(2		)	0
Issuances	0			0		0			0
Settlements	0			0		(50		)	0
Foreign currency translation	(8		)	0		(52		)	0
Other(1)	0			0		(25		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		(1		)	0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(1	)	$	0	$	(2	)	$	0
Other income	$	0		$	0	$	98		$	0

	Six Months Ended June 30, 2015
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	24,662		$	(8,182	)	$	(5	)	$	(6,033	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	11			3,184			1			(53		)
Other Income	0			0			0			92
Interest credited to policyholders’ account balances	1,426			0			0			0
Net investment income	12			0			0			0
Purchases	1,965			0			0			0
Sales	(417		)	0			0			0
Issuances	0			(480		)	0			(1,440		)
Settlements	(1,026		)	0			2			0
Foreign currency translation	(2		)	0			0			0
Other(1)	(472		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(305		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	3,062		$	1		$	(53	)
Other Income	$	0		$	0		$	0		$	(92	)
Interest credited to policyholders’ account	$	860		$	0		$	0		$	0

	Three Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	2	$	1,332		$	3,734		$	549		$	329
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		15			7			1			0
Included in other comprehensive income (loss)	0		0		20			3			3			0
Net investment income	0		0		3			5			0			(1		)
Purchases	0		0		203			674			0			0
Sales	0		0		(196		)	(45		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(117		)	(523		)	(1		)	(13		)
Foreign currency translation	0		0		2			0			0			2
Other(1)	0		0		4			(1		)	0			(1		)
Transfers into Level 3(2)	0		0		54			303			0			0
Transfers out of Level 3(2)	0		0		(25		)	(333		)	(497		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(12	)	$	2		$	0		$	0

	Three Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	121		$	390		$	52		$	9		$	771		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			3			0
Other income	0		2			2			0			1			12			(1		)
Net investment income	0		0			1			0			0			0			0
Purchases	12		53			89			(1		)	0			9			0
Sales	0		(46		)	(9		)	0			0			(26		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(1		)	(10		)	1			(1		)	(8		)	0
Foreign currency translation	0		0			(612		)	612			0			3			0
Transfers into Level 3(2)	0		0			18			2			0			0			0
Transfers out of Level 3(2)	0		0			577			(664		)	0			(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	1		$	3		$	0		$	0		$	8		$	0

	Three Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	310		$	0	$	1,368		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	2			0		9			0
Other income	0			0		39			0
Included in other comprehensive income (loss)	(15		)	0		0			0
Net investment income	0			0		(3		)	0
Purchases	15			0		85			0
Sales	(12		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(48		)	0
Foreign currency translation	0			0		2			0
Other(1)	0			0		(15		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(2		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	43		$	0

	Three Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,997		$	(2,443	)	$	(6	)	$	(4,062	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	3			(732		)	1			3
Interest credited to policyholders’ account balances	750			0			0			0
Net investment income	6			0			0			0
Purchases	524			0			0			0
Sales	(149		)	0			0			0
Issuances	0			(225		)	0			(480		)
Settlements	(387		)	0			0			0
Other(1)	57			0			0			0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(25		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(751	)	$	1		$	2
Interest credited to policyholders’ account	$	501		$	0		$	0		$	0

	Six Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	1	$	1,329		$	3,112		$	165		$	338
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		10			10			1			0
Included in other comprehensive income (loss)	0		0		67			6			2			0
Net investment income	0		0		4			10			0			(1		)
Purchases	0		1		309			1,092			496			0
Sales	0		0		(283		)	(49		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(149		)	(709		)	(4		)	(24		)
Foreign currency translation	0		0		6			0			0			3
Other(1)	0		0		4			(2		)	0			0
Transfers into Level 3(2)	0		0		58			979			0			0
Transfers out of Level 3(2)	0		0		(60		)	(625		)	(605		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(18	)	$	2		$	0		$	0

	Six Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	115		$	395		$	1		$	9		$	842		$	6
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			2			0
Other income	0		6			3			0			1			11			0
Net investment income	0		0			1			0			0			0			0
Purchases	12		63			90			51			0			14			0
Sales	0		(51		)	(9		)	0			0			(34		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(4		)	(23		)	0			(1		)	(79		)	0
Foreign currency translation	0		0			(659		)	612			47			8			0
Transfers into Level 3(2)	0		0			41			2			0			0			0
Transfers out of Level 3(2)	0		0			607			(664		)	(47		)	(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	5		$	4		$	0		$	0		$	12		$	0

	Six Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	304		$	0	$	1,396		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	4			0		3			0
Other income	0			0		59			0
Included in other comprehensive income (loss)	1			0		0			0
Net investment income	0			0		(2		)	0
Purchases	18			0		94			0
Sales	(24		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(65		)	0
Foreign currency translation	1			0		4			0
Other(1)	1			0		(52		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(7		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	54		$	0

	Six Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,603		$	(441	)	$	(5	)	$	(3,254	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			(2,514		)	2			(1		)
Interest credited to policyholders’ account balances	1,353			0			0			0
Net investment income	12			0			0			0
Purchases	832			0			0			0
Sales	(328		)	0			0			0
Issuances	0			(445		)	0			(1,284		)
Settlements	(664		)	0			0			0
Other(1)	57			0			(2		)	0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(95		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(2,538	)	$	2		$	(1	)
Interest credited to policyholders’ account	$	872		$	0		$	0		$	0

__________

(1) Other primarily represents reclassifications of certain assets between reporting categories and eliminations of intercompany separate account investments.

(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

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

Fair Value Assets and Liabilities Measured on Recurring Basis, Derivatives

The following tables present the balance of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying. These tables include NPR and exclude embedded derivatives which are typically recorded with the associated host contract. The derivative assets and liabilities shown below are included in “Trading account assets-All Other,” “Other long-term investments” or “Other liabilities” in the tables presented previously in this note, under the headings “Assets and Liabilities by Hierarchy Level” and “Changes in Level 3 Assets and Liabilities.”

	As of June 30, 2015
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	1	$	8,562	$	7	$			$	8,570
Currency	0		366		0					366
Credit	0		4		0					4
Currency/Interest Rate	0		2,650		0					2,650
Equity	2		514		8					524
Commodity	0		0		0					0
Netting(1)							(9,901		)	(9,901		)
Total derivative assets	$	3	$	12,096	$	15	$	(9,901	)	$	2,213
Derivative liabilities:
Interest Rate	$	0	$	4,959	$	2	$			$	4,961
Currency	0		460		0					460
Credit	0		28		0					28
Currency/Interest Rate	0		269		0					269
Equity	0		114		0					114
Commodity	1		0		0					1
Netting(1)							(5,730		)	(5,730		)
Total derivative liabilities	$	1	$	5,830	$	2	$	(5,730	)	$	103

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	5	$	10,584	$	6	$			$	10,595
Currency	0		865		0					865
Credit	0		7		0					7
Currency/Interest Rate	0		1,885		0					1,885
Equity	5		562		5					572
Commodity	1		0		0					1
Netting(1)							(12,332		)	(12,332		)
Total derivative assets	$	11	$	13,903	$	11	$	(12,332	)	$	1,593
Derivative liabilities:
Interest Rate	$	3	$	4,948	$	3	$			$	4,954
Currency	0		1,025		0					1,025
Credit	0		30		0					30
Currency/Interest Rate	0		307		0					307
Equity	0		503		0					503
Commodity	0		0		0					0
Netting(1)							(6,661		)	(6,661		)
Total derivative liabilities	$	3	$	6,813	$	3	$	(6,661	)	$	158

__________ 

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

Fair Value Assets and Liabilities Measured on Recurring Basis Unobservable Input Reconciliation, Derivatives

The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities for the three and six months endedJune 30, 2015, as well as the portion of gains or losses included in income for the three and six months endedJune 30, 2015, attributable to unrealized gains or losses related to those assets and liabilities still held at June 30, 2015.

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Derivative Assets- Equity			Derivative Assets- Interest Rate		Derivative Assets- Equity			Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	5		$	4	$	6		$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	(2		)	2		(4		)	3
Other income	0			0		0			0
Purchases	4			0		6			0
Sales	0			0		0			0
Issuances	0			0		0			0
Settlements	0			0		0			0
Transfers into Level 3(1)	0			0		0			0
Transfers out of Level 3(1)	0			0		(1		)	0
Fair Value, end of period	$	7		$	6	$	7		$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	2	$	(4	)	$	3
Other income	$	0		$	0	$	0		$	0

	Three Months Ended June 30, 2014				Six Months Ended June 30, 2014
	Derivative Assets- Equity		Derivative Assets- Interest Rate		Derivative Assets- Equity		Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	0	$	5	$	0	$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	1		1		1		3
Other income	0		0		0		0
Purchases	0		0		0		0
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	0		0		0		0
Transfers into Level 3(1)	5		0		5		0
Transfers out of Level 3(1)	0		0		0		0
Fair Value, end of period	$	6	$	6	$	6	$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	1	$	1	$	1	$	3
Other income	$	0	$	0	$	0	$	0

__________ 

(1) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

Fair Value Measurements, Nonrecurring

The following table represents information for assets measured at fair value on a nonrecurring basis. The estimated fair values were classified as Level 3 in the valuation hierarchy.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in millions)
Commercial mortgage loans(1):
Carrying value	$	0		$	33		$	0		$	33
Gains (Losses)	$	0		$	(4	)	$	0		$	(4	)
Mortgage servicing rights (“MSR”)(2):
Carrying value	$	98		$	89		$	98		$	89
Gains (Losses)	$	2		$	4		$	(1	)	$	8
Cost method investments(3):
Carrying value	$	131		$	2		$	131		$	2
Gains (Losses)	$	(12	)	$	0		$	(36	)	$	(1	)

__________

(1) The reserve adjustments were based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2) Mortgage servicing rights are revalued based on internal models which utilize inputs. The fair value for mortgage servicing rights is determined using a discounted cash flow model incorporating assumptions for servicing revenues, adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses.

(3) For cost method impairments, the methodologies utilized were primarily discounted cash flow and, where appropriate, valuations provided by the general partners taking into consideration investment-related expenses.

Fair Value, Option

The following table presents information regarding changes in fair values recorded in earnings for commercial mortgage and other loans, other long-term investments and notes issued by consolidated VIEs, where the fair value option has been elected.

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
	(in millions)
Assets:
Commercial mortgage and other loans:
Changes in instrument-specific credit risk	$	0	$	0		$	0		$	0
Other changes in fair value	$	0	$	0		$	0		$	0
Other long-term investments:
Changes in fair value	$	11	$	24		$	43		$	42
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	129	$	(3	)	$	(39	)	$	1

Fair Value Disclosure Financial Instruments Not Carried at Fair Value

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position; however, in some cases, as described below, the carrying amount equals or approximates fair value.

	June 30, 2015
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,570	$	1,105	$	2,675	$	2,396
Commercial mortgage and other loans	0		545		49,716		50,261		48,178
Policy loans	0		0		11,652		11,652		11,652
Other long-term investments	0		0		1,821		1,821		1,612
Short-term investments	0		545		0		545		545
Cash and cash equivalents	3,884		707		0		4,591		4,591
Accrued investment income	0		3,117		0		3,117		3,117
Other assets	204		2,624		718		3,546		3,546
Total assets	$	4,088	$	9,108	$	65,012	$	78,208	$	75,637
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	39,723	$	54,769	$	94,492	$	93,602
Securities sold under agreements to repurchase	0		7,863		0		7,863		7,863
Cash collateral for loaned securities	0		3,808		0		3,808		3,808
Short-term debt	0		3,551		100		3,651		3,621
Long-term debt	1,281		16,591		4,042		21,914		20,264
Notes issued by consolidated VIEs	0		0		15		15		21
Other liabilities	0		5,636		724		6,360		6,360
Separate account liabilities—investment contracts	0		74,894		30,535		105,429		105,429
Total liabilities	$	1,281	$	152,066	$	90,185	$	243,532	$	240,968

	December 31, 2014
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,703	$	1,199	$	2,902	$	2,575
Commercial mortgage and other loans	0		559		48,158		48,717		46,052
Policy loans	0		0		11,712		11,712		11,712
Other long-term investments	0		0		1,917		1,917		1,712
Short-term investments	0		523		0		523		523
Cash and cash equivalents	2,230		843		0		3,073		3,073
Accrued investment income	0		3,130		0		3,130		3,130
Other assets	143		2,106		109		2,358		2,358
Total assets	$	2,373	$	8,864	$	63,095	$	74,332	$	71,135
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	40,264	$	56,111	$	96,375	$	95,069
Securities sold under agreements to repurchase	0		9,407		0		9,407		9,407
Cash collateral for loaned securities	0		4,241		0		4,241		4,241
Short-term debt	0		3,784		104		3,888		3,839
Long-term debt	1,285		16,718		4,083		22,086		19,831
Notes issued by consolidated VIEs	0		0		18		18		25
Other liabilities	0		6,254		120		6,374		6,374
Separate account liabilities—investment contracts	0		82,801		24,175		106,976		106,976
Total liabilities	$	1,285	$	163,469	$	84,611	$	249,365	$	245,762

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

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Segment Information (Certain Financial Information for the Reportable Segments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Segment Reporting Information [Line Items]
Revenue	$ 13,712	$ 13,146	$ 29,264	$ 26,000
Total Assets	762,731		762,731		$ 766,655
Operating Segments
Segment Reporting Information [Line Items]
Revenue	12,500	11,113	24,307	22,049
Total Assets	698,838		698,838		695,764
Operating Segments | Total U.S. Retirement Solutions and Investment Management division
Segment Reporting Information [Line Items]
Revenue	5,156	3,353	9,554	6,708
Total Assets	400,641		400,641		404,839
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Individual Annuities
Segment Reporting Information [Line Items]
Revenue	1,200	1,171	2,387	2,328
Total Assets	171,938		171,938		174,951
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Retirement
Segment Reporting Information [Line Items]
Revenue	3,180	1,469	5,658	3,000
Total Assets	176,582		176,582		179,674
Operating Segments | Total U.S. Retirement Solutions and Investment Management division | Asset Management
Segment Reporting Information [Line Items]
Revenue	776	713	1,509	1,380
Total Assets	52,121		52,121		50,214
Operating Segments | Total U.S. Individual Life and Group Insurance division
Segment Reporting Information [Line Items]
Revenue	2,451	2,660	5,079	5,318
Total Assets	112,540		112,540		111,277
Operating Segments | Total U.S. Individual Life and Group Insurance division | Individual Life
Segment Reporting Information [Line Items]
Revenue	1,160	1,318	2,511	2,614
Total Assets	71,589		71,589		70,152
Operating Segments | Total U.S. Individual Life and Group Insurance division | Group Insurance
Segment Reporting Information [Line Items]
Revenue	1,291	1,342	2,568	2,704
Total Assets	40,951		40,951		41,125
Operating Segments | Total International Insurance division
Segment Reporting Information [Line Items]
Revenue	5,037	5,252	9,943	10,327
Total Assets	171,015		171,015		171,635
Operating Segments | Total International Insurance division | International Insurance
Segment Reporting Information [Line Items]
Revenue	5,037	5,252	9,943	10,327
Total Assets	171,015		171,015		171,635
Operating Segments | Total Corporate and Other
Segment Reporting Information [Line Items]
Revenue	(144)	(152)	(269)	(304)
Total Assets	14,642		14,642		8,013
Operating Segments | Total Corporate and Other | Corporate Operations
Segment Reporting Information [Line Items]
Revenue	(144)	(152)	(269)	(304)
Total Assets	14,642		14,642		8,013
Operating Segments | Closed Block Business
Segment Reporting Information [Line Items]
Revenue	0	1,835	0	3,401
Total Assets	0		0		70,891
Realized investment gains (losses), net, and related adjustments
Segment Reporting Information [Line Items]
Revenue	(60)	(202)	1,602	(153)
Charges related to realized investment gains (losses), net
Segment Reporting Information [Line Items]
Revenue	(133)	(3)	(79)	(11)
Investment gains (losses) on trading account assets supporting insurance liabilities, net
Segment Reporting Information [Line Items]
Revenue	(220)	225	(137)	326
Divested businesses: | Closed Block division
Segment Reporting Information [Line Items]
Revenue	1,525	0	3,244	0
Total Assets	63,893		63,893		0
Divested businesses: | Other divested businesses
Segment Reporting Information [Line Items]
Revenue	109	182	333	392
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests
Segment Reporting Information [Line Items]
Revenue	(9)	(4)	(6)	(4)
Subtotal
Segment Reporting Information [Line Items]
Revenue	13,712	11,311	29,264	22,599
Total Assets	762,731		762,731		$ 695,764
Intersegment Eliminations | Total U.S. Retirement Solutions and Investment Management division | Asset Management
Segment Reporting Information [Line Items]
Revenue	$ 169	$ 154	$ 347	$ 310

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Short-Term and Long-Term Debt (Credit Facilities) (Details) - Jun. 30, 2015 - Prudential Financial and Prudential Funding - USD ($)	Total
CreditFacility [Line Items]
Original Term	05 years
Capacity	$ 4,000,000,000
Amount Outstanding	$ 0

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Fair Value of Assets and Liabilities (Changes in Fair Values Recorded in Earnings for FVO Assets-Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Commercial mortgage and other loans
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in instrument-specific credit risk	$ 0	$ 0	$ 0	$ 0
Other changes in fair value	0	0	0	0
Other long-term investments
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value	11	24	43	42
Notes issued by consolidated VIEs:
Fair Value, Option, Quantitative Disclosures [Line Items]
Changes in fair value	$ 129	$ (3)	$ (39)	$ 1

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Variable Interest Entities (Narrative) (Details) - USD ($)	Jun. 30, 2015	Dec. 31, 2014
Variable Interest Entity [Line Items]
Principal Amount	$ 2,705,000,000	$ 2,705,000,000
Variable Interest Entity, Not Primary Beneficiary
Variable Interest Entity [Line Items]
Fair value of assets held within unconsolidated VIEs	5,982,000,000	6,973,000,000
Fair value of liabilities held within unconsolidated VIEs	0	0
Other long-term investments | Net unrealized investment gains (losses)—all other
Variable Interest Entity [Line Items]
Maximum exposure to loss resulting from investment in unconsolidated VIEs	7,482,000,000	7,545,000,000
Available-for-sale | Other long-term investments | Fixed Maturities | Variable Interest Entity, Not Primary Beneficiary | Other trading account assets
Variable Interest Entity [Line Items]
Maximum exposure to loss resulting from investment in unconsolidated VIEs	$ 174,000,000	$ 137,000,000

XML

Segment Information (Narrative) (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) division segment	Jun. 30, 2014 USD ($)
Segment Reporting [Abstract]
Number of divisions | division			4
Number of reportable segments | segment			7
Segment Reporting Information [Line Items]
Total deferred gain (loss)	$ 224,000,000		$ 224,000,000
Synthetic Gic Fees	39,000,000	$ 43,000,000	79,000,000	$ 85,000,000
Realized investment gains (losses), net, and related adjustments
Segment Reporting Information [Line Items]
Derivative, Gain (Loss) on Derivative, Net, Terminated Or Offset Before Maturity	13,000,000	34,000,000	26,000,000	52,000,000
Gain (Loss) From Derivative Counterparty Exposure Adjustments	0	9,000,000	0	16,000,000
Gain (Loss) From Non-Performance Risk Adjustments	$ (2,000,000)	$ (1,000,000)	$ 1,000,000	$ (2,000,000)

XML

Fair Value of Assets and Liabilities (Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	$ 2,213	$ 1,593
Netting	(9,901)	(12,332)
Total derivative liabilities	103	158
Netting	(5,730)	(6,661)
Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	8,570	10,595
Total derivative liabilities	4,961	4,954
Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	366	865
Total derivative liabilities	460	1,025
Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	4	7
Total derivative liabilities	28	30
Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2,650	1,885
Total derivative liabilities	269	307
Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	524	572
Total derivative liabilities	114	503
Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	1
Total derivative liabilities	1	0
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	3	11
Total derivative liabilities	1	3
Level 1 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	1	5
Total derivative liabilities	0	3
Level 1 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 1 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2	5
Total derivative liabilities	0	0
Level 1 | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	1
Total derivative liabilities	1	0
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	12,096	13,903
Total derivative liabilities	5,830	6,813
Level 2 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	8,562	10,584
Total derivative liabilities	4,959	4,948
Level 2 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	366	865
Total derivative liabilities	460	1,025
Level 2 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	4	7
Total derivative liabilities	28	30
Level 2 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	2,650	1,885
Total derivative liabilities	269	307
Level 2 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	514	562
Total derivative liabilities	114	503
Level 2 | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	15	11
Total derivative liabilities	2	3
Level 3 | Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	7	6
Total derivative liabilities	2	3
Level 3 | Currency
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Credit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Currency/Interest Rate
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	0	0
Level 3 | Equity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	8	5
Total derivative liabilities	0	0
Level 3 | Commodity
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total derivative assets	0	0
Total derivative liabilities	$ 0	$ 0

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Fair Value of Assets and Liabilities (Balances of Assets and Liabilities Measured at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value	[1]	$ 290,063	$ 299,090
Equity securities, available-for-sale		9,901	9,861
Total commercial mortgage and other loans	[1]	48,569	46,432
Other long-term investments	[1]	10,678	10,921
Short-term investments		5,669	8,258
Other assets	[1]	14,728	13,379
Separate account assets		296,341	296,435
TOTAL ASSETS		762,731	766,655
Future policy benefits		216,555	217,766
Total liabilities		720,439	724,306
Netting		9,901	12,332
Embedded Derivative, Fair Value Of Embedded Derivative Liability		5,500	8,200
Gross Asset Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded Derivative, Fair Value Of Embedded Derivative Asset		800	600
Gross Liability Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Embedded Derivative, Fair Value Of Embedded Derivative Liability		6,300	8,800
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		290,063	299,090
Trading accounts assets		33,016	31,137
Equity securities, available-for-sale		9,901	9,861
Total commercial mortgage and other loans		391	380
Other long-term investments		1,944	1,772
Short-term investments		5,124	7,735
Cash equivalents		12,447	11,845
Other assets		115	115
Subtotal excluding separate account assets		353,001	361,935
Separate account assets		296,341	296,435
TOTAL ASSETS		649,342	658,370
Future policy benefits		5,478	8,182
Other liabilities		153	228
Notes Issued by consolidated VIEs		7,434	6,033
Total liabilities		13,065	14,443
Assets Netting		(9,901)	(12,332)
Liabilities Netting		(5,730)	(6,661)
Netting		4,171	5,671
Fair Value, Measurements, Recurring | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Netting		(9,893)	(12,321)
Fair Value, Measurements, Recurring | Other long-term investments
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Netting		(8)	(11)
Fair Value, Measurements, Recurring | Other liabilities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Liabilities Netting		(5,730)	(6,661)
Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		17,811	20,123
Trading Account Assets - Debt		170	399
Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		7,886	6,531
Trading Account Assets - Debt		186	199
Fair Value, Measurements, Recurring | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		78,861	80,941
Trading Account Assets - Debt		708	717
Fair Value, Measurements, Recurring | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		156,574	160,376
Trading Account Assets - Debt		21,816	20,270
Fair Value, Measurements, Recurring | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		11,235	11,185
Trading Account Assets - Debt		1,480	1,243
Fair Value, Measurements, Recurring | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		12,152	13,877
Trading Account Assets - Debt		2,089	2,561
Fair Value, Measurements, Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		5,544	6,057
Trading Account Assets - Debt		1,598	1,774
Fair Value, Measurements, Recurring | Equity securities, available-for-sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		2,408	2,291
Fair Value, Measurements, Recurring | Other activities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
All other		2,561	1,683
Fair Value, Measurements, Recurring | Other activities | Other
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets Netting		(9,893)	(12,321)
Fair Value, Measurements, Recurring | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading accounts assets		1,980	1,590
Equity securities, available-for-sale		6,592	6,688
Total commercial mortgage and other loans		0	0
Other long-term investments		8	12
Short-term investments		4,400	5,263
Cash equivalents		3,809	2,657
Other assets		3	4
Subtotal excluding separate account assets		16,792	16,214
Separate account assets		48,175	48,063
TOTAL ASSETS		64,967	64,277
Future policy benefits		0	0
Other liabilities		(2)	1
Notes Issued by consolidated VIEs		0	0
Total liabilities		(2)	1
Fair Value, Measurements, Recurring | Level 1 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 1 | Equity securities, available-for-sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		1,563	1,396
Fair Value, Measurements, Recurring | Level 1 | Other activities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
All other		417	194
Fair Value, Measurements, Recurring | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		284,716	293,424
Trading accounts assets		39,526	40,648
Equity securities, available-for-sale		3,050	2,898
Total commercial mortgage and other loans		391	380
Other long-term investments		230	224
Short-term investments		724	2,472
Cash equivalents		8,638	9,188
Other assets		110	109
Subtotal excluding separate account assets		337,385	349,343
Separate account assets		222,311	223,710
TOTAL ASSETS		559,696	573,053
Future policy benefits		0	0
Other liabilities		5,883	6,883
Notes Issued by consolidated VIEs		0	0
Total liabilities		5,883	6,883
Fair Value, Measurements, Recurring | Level 2 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		17,811	20,123
Trading Account Assets - Debt		170	399
Fair Value, Measurements, Recurring | Level 2 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		7,866	6,525
Trading Account Assets - Debt		186	199
Fair Value, Measurements, Recurring | Level 2 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		78,710	80,939
Trading Account Assets - Debt		683	696
Fair Value, Measurements, Recurring | Level 2 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		155,471	159,073
Trading Account Assets - Debt		21,668	20,146
Fair Value, Measurements, Recurring | Level 2 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		7,418	7,126
Trading Account Assets - Debt		873	850
Fair Value, Measurements, Recurring | Level 2 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		12,111	13,834
Trading Account Assets - Debt		2,087	2,556
Fair Value, Measurements, Recurring | Level 2 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		5,329	5,804
Trading Account Assets - Debt		1,593	1,767
Fair Value, Measurements, Recurring | Level 2 | Equity securities, available-for-sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		241	232
Fair Value, Measurements, Recurring | Level 2 | Other activities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
All other		12,025	13,803
Fair Value, Measurements, Recurring | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		5,347	5,666
Trading accounts assets		1,403	1,220
Equity securities, available-for-sale		259	275
Total commercial mortgage and other loans		0	0
Other long-term investments		1,714	1,547
Short-term investments		0	0
Cash equivalents		0	0
Other assets		2	2
Subtotal excluding separate account assets		8,725	8,710
Separate account assets		25,855	24,662
TOTAL ASSETS		34,580	33,372
Future policy benefits		5,478	8,182
Other liabilities		2	5
Notes Issued by consolidated VIEs		7,434	6,033
Total liabilities		12,914	14,220
Fair Value, Measurements, Recurring | Level 3 | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		0	0
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 3 | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		20	6
Trading Account Assets - Debt		0	0
Fair Value, Measurements, Recurring | Level 3 | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		151	2
Trading Account Assets - Debt		25	21
Fair Value, Measurements, Recurring | Level 3 | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		1,103	1,303
Trading Account Assets - Debt		148	124
Fair Value, Measurements, Recurring | Level 3 | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		3,817	4,059
Trading Account Assets - Debt		607	393
Fair Value, Measurements, Recurring | Level 3 | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		41	43
Trading Account Assets - Debt		2	5
Fair Value, Measurements, Recurring | Level 3 | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities, available for-sale, at fair value		215	253
Trading Account Assets - Debt		5	7
Fair Value, Measurements, Recurring | Level 3 | Equity securities, available-for-sale
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		604	663
Fair Value, Measurements, Recurring | Level 3 | Other activities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
All other		$ 12	$ 7

[1] See Note 5 for details of balances associated with variable interest entities.

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Fair Value of Assets and Liabilities (Changes in Level 3 Derivative Assets and Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair Value, beginning of period	$ 5	$ 0	$ 6	$ 0
Included in earnings:
Realized investment gains (losses), net	(2)	1	(4)	1
Other income	0	0	0	0
Purchases	4	0	6	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Transfers into Level 3	0	5	0	5
Transfers out of Level 3	0	0	(1)	0
Fair Value, end of period	7	6	7	6
Included in earnings:
Realized investment gains (losses), net	(2)	1	(4)	1
Other income	0	0	0	0
Interest Rate
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair Value, beginning of period	4	5	3	3
Included in earnings:
Realized investment gains (losses), net	2	1	3	3
Other income	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	6	6	6	6
Included in earnings:
Realized investment gains (losses), net	2	1	3	3
Other income	$ 0	$ 0	$ 0	$ 0

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Segment Information (Operating Income of Reportable Segments) (Reconciling Items) (Details) - Realized investment gains (losses), net, and related adjustments - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Segment Reporting Information [Line Items]
Terminated hedges of foreign currency earnings	$ 79	$ 66	$ 160	$ 144
Current period yield adjustments	125	122	248	246
Principal source of earnings	24	13	48	27
Other trading account assets	26	11	(32)	33
Foreign currency exchange movements	133	(231)	158	0
Other activities	$ (2)	$ 9	$ 1	$ 13

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Short-Term and Long-Term Debt (Short-Term Debt) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Short-term Debt [Line Items]
Short-term debt	$ 3,621	$ 3,839
Portion of commercial paper borrowings due overnight	425	199
Daily average commercial paper outstanding	$ 1,064	$ 1,409
Weighted average maturity of outstanding commercial paper, in days	15 days	22 days
Weighted average interest rate on outstanding short-term debt	0.15%	0.12%
Federal Home Loan Bank of New York
Short-term Debt [Line Items]
Short-term debt	$ 280	$ 280
Prudential Financial
Short-term Debt [Line Items]
Short-term debt	1,807	2,319
Commercial paper
Short-term Debt [Line Items]
Short-term debt	872	483
Commercial paper | Prudential Financial
Short-term Debt [Line Items]
Short-term debt	141	97
Commercial paper | Prudential Funding, LLC
Short-term Debt [Line Items]
Short-term debt	731	386
Current portion of long-term debt
Short-term Debt [Line Items]
Short-term debt	$ 2,749	$ 3,356

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Variable Interest Entities (Tables)

6 Months Ended

Jun. 30, 2015

Variable Interest Entities [Abstract]

Schedule of Qualified Special Purpose Entities and Variable Interest Entities

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs that are non-recourse to the Company. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for Which the Company is the Investment Manager				Other Consolidated VIEs
	June 30, 2015		December 31, 2014		June 30, 2015			December 31, 2014
	(in millions)
Fixed maturities, available-for-sale	$	49	$	44	$	99		$	104
Fixed maturities, held-to-maturity	0		0		747			763
Trading account assets supporting insurance liabilities	0		0		10			11
Other trading account assets	8,402		6,943		0			0
Commercial mortgage and other loans	13		13		300			300
Other long-term investments	0		0		173			159
Cash and cash equivalents	400		623		1			0
Accrued investment income	46		39		3			3
Other assets	174		166		0			0
Total assets of consolidated VIEs	$	9,084	$	7,828	$	1,333		$	1,340
Notes issued by consolidated VIEs	$	7,455	$	6,058	$	0		$	0
Other liabilities	521		674		(1		)	1
Total liabilities of consolidated VIEs	$	7,976	$	6,732	$	(1	)	$	1

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Investments (Analysis of Past Due Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Servicing Liabilities at Fair Value [Line Items]
Current	$ 48,614	$ 46,468
30-59 Days Past Due	53	69
60-89 Days Past Due	1	3
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	9	11
Total Past Due	63	83
Total Commercial Mortgage and Other Loans	48,677	46,551
Non Accrual Status	112	110
Commercial mortgage loans
Servicing Liabilities at Fair Value [Line Items]
Current	44,344	42,239
30-59 Days Past Due	49	62
60-89 Days Past Due	0	0
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	0	2
Total Past Due	49	64
Total Commercial Mortgage and Other Loans	44,393	42,303
Non Accrual Status	103	101
Agricultural property loans
Servicing Liabilities at Fair Value [Line Items]
Current	2,603	2,443
30-59 Days Past Due	0	0
60-89 Days Past Due	0	1
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	1	1
Total Past Due	1	2
Total Commercial Mortgage and Other Loans	2,604	2,445
Non Accrual Status	1	1
Residential property loans
Servicing Liabilities at Fair Value [Line Items]
Current	315	375
30-59 Days Past Due	4	7
60-89 Days Past Due	1	2
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	7	8
Total Past Due	12	17
Total Commercial Mortgage and Other Loans	327	392
Non Accrual Status	7	8
Other collateralized loans
Servicing Liabilities at Fair Value [Line Items]
Current	314	319
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	1	0
Total Past Due	1	0
Total Commercial Mortgage and Other Loans	315	319
Non Accrual Status	1	0
Uncollateralized loans
Servicing Liabilities at Fair Value [Line Items]
Current	1,038	1,092
30-59 Days Past Due	0	0
60-89 Days Past Due	0	0
Greater Than 90 Days - Accruing	0	0
Greater Than 90 Days - Not Accruing	0	0
Total Past Due	0	0
Total Commercial Mortgage and Other Loans	1,038	1,092
Non Accrual Status	$ 0	$ 0

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Investments (Narrative) (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Investments [Abstract]
Net change in unrealized gains (losses) from trading account assets supporting insurance liabilities	$ (276,000,000)	$ 201,000,000	$ (266,000,000)	$ 267,000,000
Net change in unrealized gains (losses) from other trading account assets	61,000,000	9,000,000	9,000,000	35,000,000
Schedule Of Marketable Securities [Line Items]
Net carrying value of commercial loans held for sale	391,000,000		391,000,000		$ 380,000,000
Acquired	53,000,000	0	71,000,000	0
Sold	18,000,000	0	18,000,000	0
Troubled Debt Restructuring Commitment To Borrowers	0		0		0
Amortization Method Qualified Affordable Housing Project Investments	238,000,000		238,000,000		218,000,000
Qualified Affordable Housing Project Investments, Commitment	52,000,000		52,000,000		67,000,000
Loss from Affordable Housing Projects, Equity Method Investments	1,000,000	6,000,000	3,000,000	8,000,000
Affordable Housing Tax Credits And Other Tax Benefits, Amount	0	$ 8,000,000	9,000,000	$ 15,000,000
Affordable Housing Project Investment, Write-down, Amount			0
Gross unrealized losses related to high or highest quality securities	2,772,000,000		2,772,000,000		1,156,000,000
Gross unrealized losses related to other than high or highest quality securities	245,000,000		245,000,000		200,000,000
Twelve months or more Unrealized Losses	787,000,000		787,000,000		901,000,000
Gross unrealized losses representing declines in value of greater than 20%	13,000,000		13,000,000		13,000,000
Gross unrealized losses in a continuous loss position for less than six months	$ 9,000,000		$ 9,000,000		$ 13,000,000
California
Schedule Of Marketable Securities [Line Items]
Commercial mortgage loan, concentration percentage	26.00%		26.00%
New York
Schedule Of Marketable Securities [Line Items]
Commercial mortgage loan, concentration percentage	9.00%		9.00%
Texas
Schedule Of Marketable Securities [Line Items]
Commercial mortgage loan, concentration percentage	9.00%		9.00%

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Employee Benefit Plans (Components of Net Periodic Benefit Cost Included in General and Administrative Expenses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 61	$ 59	$ 122	$ 118
Interest cost	117	121	234	241
Expected return on plan assets	(193)	(179)	(387)	(356)
Amortization of prior service cost	(2)	(2)	(4)	(5)
Amortization of actuarial (gain) loss, net	42	22	84	43
Settlements	0	1	1	2
Special termination benefits	2	0	4	0
Net periodic (benefit) cost	27	22	54	43
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	5	4	10	8
Interest cost	22	24	43	48
Expected return on plan assets	(28)	(29)	(57)	(58)
Amortization of prior service cost	(2)	(3)	(3)	(6)
Amortization of actuarial (gain) loss, net	9	7	19	14
Settlements	0	0	0	0
Special termination benefits	0	0	0	0
Net periodic (benefit) cost	$ 6	$ 3	$ 12	$ 6

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Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters (Narrative Excluding Litigation) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Yield Maintenance Guarantee
Commitments Guarantees Contingent Liabilities And Litigation [Line Items]
Guarantee obligation - maximum exposure	$ 308.0		$ 323.0
Securities Lending Transactions
Commitments Guarantees Contingent Liabilities And Litigation [Line Items]
Fair value of the loaned securities, minimum collateral (greater than)	102.00%
Guarantee obligation - maximum exposure	$ 13,602.0		14,334.0
Credit Enhancements
Commitments Guarantees Contingent Liabilities And Litigation [Line Items]
Guarantee Expiration	15 years
Guarantee obligation - maximum exposure	$ 5.0		5.0
Serviced Mortgage Loans
Commitments Guarantees Contingent Liabilities And Litigation [Line Items]
Minimum percentage share of losses incurred of loan balance	2.00%
Maximum percentage share of losses incurred of loan balance	20.00%
Mortgages subject to loss-sharing arrangements	$ 10,560.0
Average debt service coverage ratio of mortgages subject to loss-sharing arrangements	2.09
Average loan-to-value ratio of mortgages subject to loss-sharing arrangements	61.00%
Indemnification of Serviced Mortgage Loans, Losses	$ 0.0	$ 1.0
Guarantee obligation - maximum exposure	$ 1,324.0		$ 1,248.0

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Investments (Fixed Maturities and Equity Securities Excluding Investments Classified as Trading) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		$ 262,820	$ 265,116
Amortized Cost		6,870	6,921
Fair Value	[1]	290,063	299,090
Fair Value		9,901	9,861
Amortized Cost	[1]	2,396	2,575
Fair Value		2,674	2,902
Net unrealized gains on impaired available for sale securities relating to changes in value of securities subsequent to the impairment measurement date		944	954
Net unrealized gains on impaired held to maturity securities (less than)		1	1
Prudential Netting Agreement
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		3,850	3,588
Fair Value		4,069	3,953
Fixed maturities, available-for-sale
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		262,820	265,116
Gross Unrealized Gains		30,260	35,329
Gross Unrealized Losses		3,017	1,355
Fair Value		290,063	299,090
Other-than-temporary Impairments in AOCI		(589)	(605)
Amortized Cost		2,396	2,575
Gross Unrealized Gains		280	328
Gross Unrealized Losses		2	1
Fair Value		2,674	2,902
Fixed maturities, available-for-sale | Prudential Netting Agreement
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		693	385
Fair Value		695	385
Fixed maturities, available-for-sale | U.S. Treasury securities and obligations of U.S. government authorities and agencies
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		14,196	15,807
Gross Unrealized Gains		3,635	4,321
Gross Unrealized Losses		20	5
Fair Value		17,811	20,123
Other-than-temporary Impairments in AOCI		0	0
Fixed maturities, available-for-sale | Obligations of U.S. states and their political subdivisions
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		7,378	5,720
Gross Unrealized Gains		614	814
Gross Unrealized Losses		106	3
Fair Value		7,886	6,531
Other-than-temporary Impairments in AOCI		0	0
Fixed maturities, available-for-sale | Foreign government bonds
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		68,681	69,894
Gross Unrealized Gains		10,342	11,164
Gross Unrealized Losses		162	117
Fair Value		78,861	80,941
Other-than-temporary Impairments in AOCI		(1)	(1)
Amortized Cost		804	821
Gross Unrealized Gains		160	184
Gross Unrealized Losses		0	0
Fair Value		964	1,005
Fixed maturities, available-for-sale | Corporate securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		144,539	143,631
Gross Unrealized Gains		14,607	17,799
Gross Unrealized Losses		2,572	1,054
Fair Value		156,574	160,376
Other-than-temporary Impairments in AOCI		(18)	(6)
Amortized Cost		696	713
Gross Unrealized Gains		60	68
Gross Unrealized Losses		2	1
Fair Value		754	780
Fixed maturities, available-for-sale | Asset-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		10,948	10,966
Gross Unrealized Gains		387	353
Gross Unrealized Losses		100	134
Fair Value		11,235	11,185
Other-than-temporary Impairments in AOCI		(565)	(592)
Fixed maturities, available-for-sale | Commercial mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		11,918	13,486
Gross Unrealized Gains		284	430
Gross Unrealized Losses		50	39
Fair Value		12,152	13,877
Other-than-temporary Impairments in AOCI		(1)	(1)
Amortized Cost		59	78
Gross Unrealized Gains		2	7
Gross Unrealized Losses		0	0
Fair Value		61	85
Fixed maturities, available-for-sale | Residential mortgage-backed securities
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		5,160	5,612
Gross Unrealized Gains		391	448
Gross Unrealized Losses		7	3
Fair Value		5,544	6,057
Other-than-temporary Impairments in AOCI		(4)	(5)
Amortized Cost		837	963
Gross Unrealized Gains		58	69
Gross Unrealized Losses		0	0
Fair Value		895	1,032
Equity securities, available-for-sale
Summary Of Investments Other Than Investments In Related Parties Reportable Data [Line Items]
Amortized Cost		6,870	6,921
Gross Unrealized Gains		3,119	3,023
Gross Unrealized Losses		88	83
Fair Value		$ 9,901	$ 9,861

[1] See Note 5 for details of balances associated with variable interest entities.

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Investments (Realized Investment Gains Losses Net) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	$ 129	$ 609	$ 2,490	$ 817
Fixed maturities
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	371	367	840	624
Equity securities
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	227	169	348	254
Commercial mortgage and other loans
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	20	8	31	16
Investment real estate
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	14	0	38	0
Joint ventures and limited partnerships
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	(4)	0	(9)	1
Derivatives
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	(503)	60	1,235	(85)
Other
Schedule Of Gain Loss On Investments [Line Items]
Realized investment gains (losses), net	$ 4	$ 5	$ 7	$ 7

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Equity (All Other Net Unrealized Investment Gains and Losses in AOCI) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	$ 16,050
Balance, ending	13,404
Other Net Unrealized Investment Gains and Losses | Net Unrealized Gains (Losses) On Investments
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	36,764
Net investment gains (losses) on investments arising during the period	(4,924)
Reclassification adjustment for (gains) losses included in net income	(1,244)
Reclassification adjustment for OTTI losses excluded from net income	15
Balance, ending	30,611
Other Net Unrealized Investment Gains and Losses | Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(1,455)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	609
Balance, ending	(846)
Other Net Unrealized Investment Gains and Losses | Future Policy Benefits and Policyholders’ Account Balances
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(1,282)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	(26)
Balance, ending	(1,308)
Other Net Unrealized Investment Gains and Losses | Policyholders’ Dividends
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(5,036)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	1,306
Balance, ending	(3,730)
Other Net Unrealized Investment Gains and Losses | Deferred Income Tax (Liability) Benefit
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(9,944)
Net investment gains (losses) on investments arising during the period	1,759
Reclassification adjustment for (gains) losses included in net income	444
Reclassification adjustment for OTTI losses excluded from net income	(5)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	(208)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	9
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(457)
Balance, ending	(8,402)
Other Net Unrealized Investment Gains and Losses | Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	19,047
Net investment gains (losses) on investments arising during the period	(3,165)
Reclassification adjustment for (gains) losses included in net income	(800)
Reclassification adjustment for OTTI losses excluded from net income	10
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	401
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	(17)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	849
Balance, ending	$ 16,325

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Closed Block (Closed Block Revenues and Benefits and Expenses) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues
Premiums	$ 701	$ 711	$ 1,335	$ 1,350
Net investment income	642	683	1,351	1,404
Realized investment gains (losses), net	166	369	539	504
Other income	18	19	21	34
Total Closed Block revenues	1,527	1,782	3,246	3,292
Benefits and Expenses
Policyholders’ benefits	895	911	1,716	1,703
Interest credited to policyholders’ account balances	34	33	67	67
Dividends to policyholders	423	688	1,187	1,265
General and administrative expenses	107	111	215	225
Total Closed Block benefits and expenses	1,459	1,743	3,185	3,260
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes and discontinued operations	68	39	61	32
Income tax expense (benefit)	57	33	39	21
Closed Block revenues, net of Closed Block benefits and expenses and income taxes, before discontinued operations	11	6	22	11
Income (loss) from discontinued operations, net of taxes	0	0	0	0
Closed Block revenues, net of Closed Block benefits and expenses, income taxes and discontinued operations	$ 11	$ 6	$ 22	$ 11

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Investments (Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Allowance for Credit Losses:
Individually evaluated for impairment	$ 3	$ 8
Collectively evaluated for impairment	105	111
Loans acquired with deteriorated credit quality	0	0
Total ending balance	108	119
Recorded Investment:
Gross of reserves: individually evaluated for impairment	261	254
Gross of reserves: collectively evaluated for impairment	48,416	46,297
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	48,677	46,551
Commercial Mortgage Loans
Allowance for Credit Losses:
Individually evaluated for impairment	3	8
Collectively evaluated for impairment	93	96
Loans acquired with deteriorated credit quality	0	0
Total ending balance	96	104
Recorded Investment:
Gross of reserves: individually evaluated for impairment	254	247
Gross of reserves: collectively evaluated for impairment	44,139	42,056
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	44,393	42,303
Agricultural Property Loans
Allowance for Credit Losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	1	1
Loans acquired with deteriorated credit quality	0	0
Total ending balance	1	1
Recorded Investment:
Gross of reserves: individually evaluated for impairment	4	4
Gross of reserves: collectively evaluated for impairment	2,600	2,441
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	2,604	2,445
Residential Property Loans
Allowance for Credit Losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	3	5
Loans acquired with deteriorated credit quality	0	0
Total ending balance	3	5
Recorded Investment:
Gross of reserves: individually evaluated for impairment	0	0
Gross of reserves: collectively evaluated for impairment	327	392
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	327	392
Other Collateralized Loans
Allowance for Credit Losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	0	0
Loans acquired with deteriorated credit quality	0	0
Total ending balance	0	0
Recorded Investment:
Gross of reserves: individually evaluated for impairment	1	1
Gross of reserves: collectively evaluated for impairment	314	318
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	315	319
Uncollateralized Loans
Allowance for Credit Losses:
Individually evaluated for impairment	0	0
Collectively evaluated for impairment	8	9
Loans acquired with deteriorated credit quality	0	0
Total ending balance	8	9
Recorded Investment:
Gross of reserves: individually evaluated for impairment	2	2
Gross of reserves: collectively evaluated for impairment	1,036	1,090
Gross of reserves: loans acquired with deteriorated credit quality	0	0
Total ending balance, gross of reserves	$ 1,038	$ 1,092

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Significant Accounting Policies and Pronouncements

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Significant Accounting Policies and Pronouncements

SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

This section supplements, and should be read in conjunction with, Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

Earnings Per Share

As discussed in Note 1, from demutualization through December 31, 2014, the Company had two separate classes of common stock. Basic earnings per share for those periods was computed by dividing available income attributable to each of the two groups of common shareholders by the respective weighted average number of common shares outstanding for the period. Diluted earnings per share included the effect of all dilutive potential common shares that were outstanding during the period.

As a result of the Class B Repurchase, earnings per share of Common Stock for the three and six months ended June 30, 2015, reflects the consolidated earnings of Prudential Financial. Basic earnings per share is computed by dividing available income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share includes the effect of all dilutive potential common shares that were outstanding during the period. See Note 8 for additional information.

Adoption of New Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the statement of operations as a component of income tax expense (benefit) if certain conditions are met. The new guidance became effective for annual periods and interim reporting periods within those annual periods that began after December 15, 2014. The Company did not elect the proportional amortization method under this guidance.

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in-substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In April 2014, the FASB issued updated guidance that changes the criteria for reporting discontinued operations and introduces new disclosures. The new guidance became effective for new disposals and new classifications of disposal groups as held for sale that occur within annual periods that began on or after December 15, 2014, and interim periods within those annual periods. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In June 2014, the FASB issued updated guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings and eliminates existing guidance for repurchase financings. The guidance also requires new disclosures for certain transactions accounted for as secured borrowings and for transfers accounted for as sales when the transferor also retains substantially all of the exposure to the economic return on the transferred financial assets. Accounting changes and new disclosures for transfers accounted for as sales under the new guidance were effective for the first interim or annual period beginning after December 15, 2014 and did not have a significant effect on the Company's consolidated financial position, results of operations or financial statement disclosures. Disclosures for certain transactions accounted for as secured borrowings were effective for interim periods beginning after March 15, 2015 and are included in Note 4.

In August 2014, the FASB issued guidance requiring that mortgage loans be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

Future Adoption of New Accounting Pronouncements

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, and can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities, and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In April 2015, the FASB issued guidance that simplifies presentation of debt issuance costs. The pronouncement requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The new guidance is effective for periods beginning after December 15, 2015, with early adoption permitted, and it must be applied retrospectively. The Company does not expect the impact of the guidance to have a significant effect on the Company’s consolidated financial position and financial statement disclosures.

In May 2015, the FASB issued final guidance that aims to enhance disclosures about insurance contracts classified as short-duration. The new disclosure requirements focus on providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and timing, frequency and severity of claims as they relate to short-duration insurance contracts. The new guidance is effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016 and is to be applied retrospectively. The Company is currently assessing the impact of the guidance on the Company’s financial statement disclosures but has concluded that this guidance will not impact the Company’s consolidated financial position or results of operations.

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Equity (Common Stock and Class B Stock Changes in Number of Shares Issued, Held in Treasury and Outstanding) (Details) - Jun. 30, 2015 - shares shares in Millions	Total
Common Stock Issued
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	660.1
Common Stock issued	0.0
Common Stock acquired	0.0
Stock-based compensation programs	0.0
Balance, ending	660.1
Common Stock Held In Treasury
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	205.3
Common Stock issued	0.0
Common Stock acquired	6.0
Stock-based compensation programs	(3.1)
Balance, ending	208.2
Common Stock Outstanding
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Balance, beginning	454.8
Common Stock issued	0.0
Common Stock acquired	(6.0)
Stock-based compensation programs	3.1
Balance, ending	451.9

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Investments (Other Trading Account Assets) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Schedule Of Marketable Securities [Line Items]
Fair Value	$ 12,749	$ 10,874
Investments excluding derivative instruments
Schedule Of Marketable Securities [Line Items]
Amortized Cost	10,587	9,332
Fair Value	10,688	9,425
Derivative instruments
Schedule Of Marketable Securities [Line Items]
Fair Value	2,061	1,449
Other
Schedule Of Marketable Securities [Line Items]
Amortized Cost	12	7
Fair Value	16	11
Fixed Maturities
Schedule Of Marketable Securities [Line Items]
Amortized Cost	9,487	8,306
Fair Value	9,475	8,282
Equity securities
Schedule Of Marketable Securities [Line Items]
Amortized Cost	1,027	992
Fair Value	1,135	1,105
Short-term investments and cash equivalents
Schedule Of Marketable Securities [Line Items]
Amortized Cost	61	27
Fair Value	$ 62	$ 27

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Short-Term and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

	June 30, 2015			December 31, 2014
	(in millions)
Commercial paper:
Prudential Financial	$	141		$	97
Prudential Funding, LLC	731			386
Subtotal commercial paper	872			483
Current portion of long-term debt(1)	2,749			3,356
Total short-term debt(2)	$	3,621		$	3,839
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	425		$	199
Daily average commercial paper outstanding	$	1,064		$	1,409
Weighted average maturity of outstanding commercial paper, in days	15			22
Weighted average interest rate on outstanding short-term debt(3)	0.15		%	0.12		%

 __________

(1) Includes collateralized borrowings from the FHLBNY of $280 million at both June 30, 2015 and December 31, 2014.

(2) Includes Prudential Financial debt of $1,807 million and $2,319 million at June 30, 2015 and December 31, 2014, respectively.

(3) Excludes the current portion of long-term debt.

Schedule of Credit Facilities

As of June 30, 2015, the Company maintained a syndicated, unsecured committed credit facility as described below.

Borrowers	Original Term	Expiration Date	Capacity		Amount Outstanding
			($ in millions)
Prudential Financial and Prudential Funding	5 years	Apr 2020	$	4,000	$	0

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Reconciliation of Earnings Per Share

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the three and six months ended June 30, 2015, is as follows:

	June 30, 2015
	Three Months Ended					Six Months Ended
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations	$	1,459				$	3,505
Less: Income (loss) attributable to noncontrolling interests	53					63
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	15					34
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,391	452.6	$	3.07	$	3,408	453.4	$	7.52
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	15				$	34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	14					33
Stock options			2.5					2.4
Deferred and long-term compensation programs			0.8					0.9
Exchangeable Surplus Notes	5		5.5			9		5.5
Diluted earnings per share
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,397	461.4	$	3.03	$	3,418	462.2	$	7.40

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on earnings attributable to the former Financial Services Businesses for the three and six months ended June 30, 2014, is as follows:

	June 30, 2014
	Three Months Ended						Six Months Ended
	Income			Weighted Average Shares	Per Share Amount		Income			Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses	$	1,068					$	2,300
Direct equity adjustment	(3		)				(5		)
Less: Income (loss) attributable to noncontrolling interests	23						34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10						21
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,032		459.4	$	2.25	$	2,240		460.1	$	4.87
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10					$	21
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10						21
Stock options				3.0						3.1
Deferred and long-term compensation programs				0.7						0.8
Exchangeable Surplus Notes	5			5.4			9			5.4
Diluted earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,037		468.5	$	2.21	$	2,249		469.4	$	4.79

Earnings Per Share Computation

he number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

	Three Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.1	$	88.70	2.3	$	89.48
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.1			2.3

	Six Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.4	$	87.92	2.1	$	89.88
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.4			2.1

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Variable Interest Entities (Total Assets of Consolidated VIEs) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Consolidated VIEs for Which the Company is the Investment Manager
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	$ 9,084	$ 7,828
Total liabilities of consolidated VIEs	7,976	6,732
Consolidated VIEs for Which the Company is the Investment Manager | Fixed maturities, available-for-sale
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	49	44
Consolidated VIEs for Which the Company is the Investment Manager | Fixed maturities, held-to-maturity
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	0	0
Consolidated VIEs for Which the Company is the Investment Manager | Trading account assets supporting insurance liabilities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	0	0
Consolidated VIEs for Which the Company is the Investment Manager | Other trading account assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	8,402	6,943
Consolidated VIEs for Which the Company is the Investment Manager | Commercial mortgage and other loans
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	13	13
Consolidated VIEs for Which the Company is the Investment Manager | Other long-term investments
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	0	0
Consolidated VIEs for Which the Company is the Investment Manager | Cash and cash equivalents
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	400	623
Consolidated VIEs for Which the Company is the Investment Manager | Accrued investment income
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	46	39
Consolidated VIEs for Which the Company is the Investment Manager | Other assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	174	166
Consolidated VIEs for Which the Company is the Investment Manager | Notes issued by consolidated VIEs
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs	7,455	6,058
Consolidated VIEs for Which the Company is the Investment Manager | Other liabilities
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs	521	674
Other Consolidated VIEs
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	1,333	1,340
Total liabilities of consolidated VIEs	(1)	1
Other Consolidated VIEs | Fixed maturities, available-for-sale
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	99	104
Other Consolidated VIEs | Fixed maturities, held-to-maturity
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	747	763
Other Consolidated VIEs | Trading account assets supporting insurance liabilities
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	10	11
Other Consolidated VIEs | Other trading account assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	0	0
Other Consolidated VIEs | Commercial mortgage and other loans
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	300	300
Other Consolidated VIEs | Other long-term investments
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	173	159
Other Consolidated VIEs | Cash and cash equivalents
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	1	0
Other Consolidated VIEs | Accrued investment income
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	3	3
Other Consolidated VIEs | Other assets
Variable Interest Entity [Line Items]
Total assets of consolidated VIEs	0	0
Other Consolidated VIEs | Notes issued by consolidated VIEs
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs	0	0
Other Consolidated VIEs | Other liabilities
Variable Interest Entity [Line Items]
Total liabilities of consolidated VIEs	$ (1)	$ 1

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Investments (Concentrations of Financial Instruments) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Investments in Japanese government and government agency securities:
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	$ 52,191	$ 53,997
Fair Value	59,182	61,866
Investments in Japanese government and government agency securities: | Fixed maturities, available-for-sale
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	50,735	52,703
Fair Value	57,562	60,379
Investments in Japanese government and government agency securities: | Fixed maturities, held-to-maturity
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	783	801
Fair Value	940	981
Investments in Japanese government and government agency securities: | Trading account assets supporting insurance liabilities
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	475	457
Fair Value	482	470
Investments in Japanese government and government agency securities: | Other trading account assets
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	35	36
Fair Value	35	36
Investments in Japanese government and government agency securities: | Short-term investments
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	0	0
Fair Value	0	0
Investments in Japanese government and government agency securities: | Cash equivalents
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	163	0
Fair Value	163	0
Investments in South Korean government and government agency securities:
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	7,251	6,976
Fair Value	8,860	8,488
Investments in South Korean government and government agency securities: | Fixed maturities, available-for-sale
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	7,207	6,927
Fair Value	8,815	8,438
Investments in South Korean government and government agency securities: | Fixed maturities, held-to-maturity
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	0	0
Fair Value	0	0
Investments in South Korean government and government agency securities: | Trading account assets supporting insurance liabilities
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	44	49
Fair Value	45	50
Investments in South Korean government and government agency securities: | Other trading account assets
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	0	0
Fair Value	0	0
Investments in South Korean government and government agency securities: | Short-term investments
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	0	0
Fair Value	0	0
Investments in South Korean government and government agency securities: | Cash equivalents
Schedule of Fair Value of Separate Accounts by Major Category of Investment [Line Items]
Amortized Cost	0	0
Fair Value	$ 0	$ 0

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Employee Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Components of net periodic (benefit) cost
Service cost	$	61		$	59		$	5		$	4
Interest cost	117			121			22			24
Expected return on plan assets	(193		)	(179		)	(28		)	(29		)
Amortization of prior service cost	(2		)	(2		)	(2		)	(3		)
Amortization of actuarial (gain) loss, net	42			22			9			7
Settlements	0			1			0			0
Special termination benefits	2			0			0			0
Net periodic (benefit) cost	$	27		$	22		$	6		$	3

	Six Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Service cost	$	122		$	118		$	10		$	8
Interest cost	234			241			43			48
Expected return on plan assets	(387		)	(356		)	(57		)	(58		)
Amortization of prior service cost	(4		)	(5		)	(3		)	(6		)
Amortization of actuarial (gain) loss, net	84			43			19			14
Settlements	1			2			0			0
Special termination benefits	4			0			0			0
Net periodic (benefit) cost	$	54		$	43		$	12		$	6

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Segment Information (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

The following table sets forth the significant components of “Realized investment gains (losses), net” that are included in adjusted operating income and, as a result, are reflected as adjustments to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Net gains (losses) from(1):
Terminated hedges of foreign currency earnings	$	79	$	66	$	160	$	144
Current period yield adjustments	$	125	$	122	$	248	$	246
Principal source of earnings	$	24	$	13	$	48	$	27

__________ 

(1) In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to divested businesses as results of “Divested businesses,” discussed below.

The following table sets forth certain other items excluded from adjusted operating income and reflected as an adjustment to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Net gains (losses) from:
Other trading account assets	$	26		$	11		$	(32	)	$	33
Foreign currency exchange movements	$	133		$	(231	)	$	158		$	0
Other activities	$	(2	)	$	9		$	1		$	13

The table below reconciles adjusted operating income before income taxes to income from continuing operations before income taxes and equity in earnings of operating joint ventures:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Adjusted Operating Income before income taxes by Segment:
Individual Annuities	$	548		$	390		$	1,077		$	778
Retirement	237			286			521			650
Asset Management	196			200			401			393
Total U.S. Retirement Solutions and Investment Management division	981			876			1,999			1,821
Individual Life	237			158			353			283
Group Insurance	75			46			105			52
Total U.S. Individual Life and Group Insurance division	312			204			458			335
International Insurance	842			884			1,676			1,721
Total International Insurance division	842			884			1,676			1,721
Corporate Operations	(294		)	(341		)	(547		)	(683		)
Total Corporate and Other	(294		)	(341		)	(547		)	(683		)
Total Adjusted Operating Income before income taxes	1,841			1,623			3,586			3,194
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	346			(71		)	(265		)	(128		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Change in experience-rated contractholder liabilities due to asset value changes	234			(189		)	37			(232		)
Divested businesses:
Closed Block division(1)	52			0			30			0
Other divested businesses	(109		)	47			(34		)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	45			18			58			29
Subtotal(2)	2,129			1,451			4,877			3,156
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business(3)	0			56			0			69
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	2,129		$	1,507		$	4,877		$	3,225

__________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

Reconciliation of Certain Financial Information from Segments to Consolidated

The table below presents revenues and total assets for the Company’s reportable segments for the periods, or as of the dates, indicated:

	Revenue												Total Assets
	Three Months Ended June 30,						Six Months Ended June 30,						June 30, 2015		December 31, 2014
	2015			2014			2015			2014
	(in millions)
Individual Annuities	$	1,200		$	1,171		$	2,387		$	2,328		$	171,938	$	174,951
Retirement	3,180			1,469			5,658			3,000			176,582		179,674
Asset Management	776			713			1,509			1,380			52,121		50,214
Total U.S. Retirement Solutions and Investment Management division	5,156			3,353			9,554			6,708			400,641		404,839
Individual Life	1,160			1,318			2,511			2,614			71,589		70,152
Group Insurance	1,291			1,342			2,568			2,704			40,951		41,125
Total U.S. Individual Life and Group Insurance division	2,451			2,660			5,079			5,318			112,540		111,277
International Insurance	5,037			5,252			9,943			10,327			171,015		171,635
Total International Insurance division	5,037			5,252			9,943			10,327			171,015		171,635
Corporate Operations	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total Corporate and Other	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total	12,500			11,113			24,307			22,049			698,838		695,764
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	(133		)	(3		)	(79		)	(11		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Divested businesses:
Closed Block division(1)	1,525			0			3,244			0			63,893		0
Other divested businesses	109			182			333			392
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(9		)	(4		)	(6		)	(4		)
Subtotal(2)	13,712			11,311			29,264			22,599			762,731		695,764
Closed Block Business(3)	0			1,835			0			3,401			0		70,891
Total per Unaudited Interim Consolidated Financial Statements	$	13,712		$	13,146		$	29,264		$	26,000		$	762,731	$	766,655

 __________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

Schedule Of Intersegment Revenues

The Asset Management segment revenues include intersegment revenues primarily consisting of asset-based management and administration fees as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Asset Management segment intersegment revenues	$	169	$	154	$	347	$	310

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Business and Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business and Basis of Presentation

BUSINESS AND BASIS OF PRESENTATION

Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company” or “PFI”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds and investment management.

From December 18, 2001, the date of demutualization, through December 31, 2014, the Company organized its principal operations into the Financial Services Businesses and the Closed Block Business, and had two classes of common stock outstanding. The Common Stock, which is publicly traded (NYSE:PRU), reflected the performance of the Financial Services Businesses, while the Class B Stock, which was issued through a private placement and did not trade on any exchange, reflected the performance of the Closed Block Business.

On January 2, 2015, Prudential Financial repurchased and canceled all of the shares of the Class B Stock (the “Class B Repurchase”). As a result, the Company no longer organizes its principal operations into the Financial Services Businesses and the Closed Block Business. The Company’s principal operations are comprised of four divisions: the U.S. Retirement Solutions and Investment Management division, the U.S. Individual Life and Group Insurance division, the International Insurance division and the Closed Block division. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, businesses that are not sufficiently material to warrant separate disclosure and businesses that have been or will be divested, excluding the Closed Block division.

The Closed Block division includes certain in force participating insurance and annuity products and corresponding assets that are used for the payment of benefits and policyholders’ dividends on these products (the “Closed Block”), as well as certain related assets and liabilities (see Note 6). In connection with demutualization, the Company ceased offering these participating products. The Closed Block division is accounted for as a divested business that is reported separately from the divested businesses that are included in the Company’s Corporate and Other operations.

Basis of Presentation

As a result of the Class B Repurchase and resulting elimination of the separation of the Financial Services Businesses and the Closed Block Business, these Unaudited Interim Consolidated Financial Statements refer to the divisions and segments of the Company that formerly comprised the Financial Services Businesses as “PFI excluding Closed Block division” and refer to the operations that were formerly included in the Closed Block Business as the “Closed Block division,” except as otherwise noted. Closed Block Business results were associated with the Company’s Class B Stock for periods prior to January 1, 2015.

The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. See Note 5 for more information on the Company’s consolidated variable interest entities. The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The Company’s Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”) consolidated operations use a November 30 fiscal year end for purposes of inclusion in the Company’s Consolidated Financial Statements; therefore, the Unaudited Interim Consolidated Financial Statements as of June 30, 2015, include the assets and liabilities of Gibraltar Life and its results of operations as of, and for the three and six months ended, May 31, 2015, respectively.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of sales inducements; measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments; future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Open Tax Years By Major Tax Jurisdictions

Listed below are the tax years that remain subject to examination by major tax jurisdiction, at June 30, 2015:

Major Tax Jurisdiction	Open Tax Years
United States	2007 – 2014
Japan	Fiscal years ended March 31, 2010 – 2015
Korea	Fiscal years ended March 31, 2010 – 2013 and the period ended December 31, 2013 and calendar year 2014

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Fair Value of Assets and Liabilities (Level 3 by Pricing Source) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other long-term investments	[1]	$ 10,678	$ 10,921
Separate account assets		296,341	296,435
TOTAL ASSETS		762,731	766,655
Future policy benefits		216,555	217,766
Total liabilities		720,439	724,306
Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Other long-term investments		1,944	1,772
Subtotal excluding separate account assets		353,001	361,935
Separate account assets		296,341	296,435
TOTAL ASSETS		649,342	658,370
Future policy benefits		5,478	8,182
Other liabilities		153	228
Notes Issued by consolidated VIEs		7,434	6,033
Total liabilities		13,065	14,443
Level 3 | Fair Value, Measurements, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		863	938
Other long-term investments		1,714	1,547
Other assets		14	9
Subtotal excluding separate account assets		8,725	8,710
Separate account assets		25,855	24,662
TOTAL ASSETS		34,580	33,372
Future policy benefits		5,478	8,182
Other liabilities		2	5
Notes Issued by consolidated VIEs		7,434	6,033
Total liabilities		12,914	14,220
Level 3 | Fair Value, Measurements, Recurring | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		20	6
Level 3 | Fair Value, Measurements, Recurring | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		176	23
Level 3 | Fair Value, Measurements, Recurring | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		1,251	1,427
Level 3 | Fair Value, Measurements, Recurring | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		4,424	4,452
Level 3 | Fair Value, Measurements, Recurring | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		43	48
Level 3 | Fair Value, Measurements, Recurring | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		220	260
Level 3 | Fair Value, Measurements, Recurring | Internal
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		121	140
Other long-term investments		12	1
Other assets		14	9
Subtotal excluding separate account assets		1,135	1,125
Separate account assets		24,407	23,632
TOTAL ASSETS		25,542	24,757
Future policy benefits		5,478	8,182
Other liabilities		0	2
Notes Issued by consolidated VIEs		0	0
Total liabilities		5,478	8,184
Level 3 | Fair Value, Measurements, Recurring | Internal | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		6	6
Level 3 | Fair Value, Measurements, Recurring | Internal | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		0	0
Level 3 | Fair Value, Measurements, Recurring | Internal | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		774	752
Level 3 | Fair Value, Measurements, Recurring | Internal | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		147	150
Level 3 | Fair Value, Measurements, Recurring | Internal | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		8	10
Level 3 | Fair Value, Measurements, Recurring | Internal | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		53	57
Level 3 | Fair Value, Measurements, Recurring | External
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Equity securities		742	798
Other long-term investments		1,702	1,546
Other assets		0	0
Subtotal excluding separate account assets		7,590	7,585
Separate account assets		1,448	1,030
TOTAL ASSETS		9,038	8,615
Future policy benefits		0	0
Other liabilities		2	3
Notes Issued by consolidated VIEs		7,434	6,033
Total liabilities		7,436	6,036
Level 3 | Fair Value, Measurements, Recurring | External | Obligations of U.S. states and their political subdivisions
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		14	0
Level 3 | Fair Value, Measurements, Recurring | External | Foreign government bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		176	23
Level 3 | Fair Value, Measurements, Recurring | External | Corporate securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		477	675
Level 3 | Fair Value, Measurements, Recurring | External | Asset-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		4,277	4,302
Level 3 | Fair Value, Measurements, Recurring | External | Commercial mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		35	38
Level 3 | Fair Value, Measurements, Recurring | External | Residential mortgage-backed securities
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Fixed maturities		$ 167	$ 203

[1] See Note 5 for details of balances associated with variable interest entities.

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Investments (Credit Losses Recognized In Earnings on Fixed Maturity Securities Held by the Company) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Credit losses recognized in earnings on fixed maturity securities
Balance, beginning of period	$ 773	$ 838	$ 781	$ 968
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(15)	(59)	(28)	(199)
Credit loss impairments previously recognized on securities impaired to fair value during the period	(12)	0	(13)	0
Credit loss impairments recognized in the current period on securities not previously impaired	0	10	3	12
Additional credit loss impairments recognized in the current period on securities previously impaired	2	0	2	4
Increases due to the passage of time on previously recorded credit losses	7	9	13	18
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4)	(4)	(7)	(9)
Balance, end of period	$ 751	$ 794	$ 751	$ 794

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Investments (Net Unrealized Gains Losses on Investments by Asset Class) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	$ 30,966	$ 37,113
Net unrealized losses on held to maturity securities transferred from available-for-sale	0
Derivatives designated as cash flow hedges
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	702	206
Fixed maturities | Available-for-sale
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	26,888	33,625
Fixed maturities | Fixed maturity securities on which an OTTI loss has been recognized
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	355	349
Equity securities, available-for-sale | Available-for-sale
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	3,031	2,940
Other investments
Schedule Of Marketable Securities [Line Items]
Net unrealized gains (losses) on investments	$ (10)	$ (7)

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Short-Term and Long-Term Debt (Narrative) (Details) - USD ($)				1 Months Ended	3 Months Ended		6 Months Ended
	May. 18, 2015	Apr. 13, 2015	Feb. 18, 2015	Nov. 30, 2013	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2015
Line of Credit and Other Credit Facilities
Debt Instrument [Line Items]
Minimum statutory consolidated net worth (at least)					$ 18,985,000,000		$ 18,985,000,000
Credit Facility One Replaced
Debt Instrument [Line Items]
Capacity		$ 2,000,000,000.0
Original Term		5 years
Credit Facility Two Replaced
Debt Instrument [Line Items]
Capacity		$ 1,750,000,000.00
Original Term		3 years
Put Option
Debt Instrument [Line Items]
Derivative, Term of Contract				10 years
Put Option Premium				1.777%
Derivative, Time To Cure				30 days
Minimum Equity Less AOCI For Automatic Exercise				$ 7,000,000,000.0
Medium Term Note
Debt Instrument [Line Items]
Maturities of Senior Debt							1,200,000,000
Increase (decrease) in outstanding debt							(1,200,000,000)
Outstanding amount of notes					11,800,000,000		11,800,000,000
Debt Instrument Authorized					20,000,000,000.0		20,000,000,000.0
Retail Medium Term Note
Debt Instrument [Line Items]
Issued amount					179,000,000		179,000,000
Maturities of Senior Debt							58,000,000
Increase (decrease) in outstanding debt							121,000,000
Outstanding amount of notes					496,000,000		496,000,000
Debt Instrument Authorized					$ 5,000,000,000.0		$ 5,000,000,000.0
5.375% Fixed-To-Floating Rate Junior Subordinated Note Due 2045 | Junior Subordinated Debt
Debt Instrument [Line Items]
Issued amount	$ 1,000,000,000.0
Interest rate percent	5.375%
Debt Instrument, Redemption Period Upon Certain Events	90 days
5.375% Fixed-To-Floating Rate Junior Subordinated Note Due 2045 | Junior Subordinated Debt | London Interbank Offered Rate (LIBOR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	3.031%
Debt Instrument, Variable Rate Measurement Period	3 months
Federal Home Loan Bank of New York
Debt Instrument [Line Items]
Purchase requirement of FHLBNY activity based stock in percent of the outstanding borrowings					4.50%		4.50%
Debt Instrument, Term Upon Certain Events							90 days
Maximum amount of qualifying assets, percentage collateral to the FHLBNY, prior year-end statutory net admitted assets exclusive of separate account assets					5.00%		5.00%
Maximum amount of pledged asset					$ 8,900,000,000		$ 8,900,000,000
Estimated maximum borrowing capacity, after taking into account applicable required collateralization levels and required purchases of activity based stock					7,400,000,000		7,400,000,000
Pledged qualifying assets with a fair value					2,400,000,000		2,400,000,000
Federal Home Loan Bank, Advances, Maturities Summary, Due in Next Twelve Months					280,000,000		280,000,000
Collateralized agreements					1,700,000,000		1,700,000,000
Assets not pledged fair value					4,500,000,000		4,500,000,000
Federal Home Loan Bank of Boston
Debt Instrument [Line Items]
Estimated maximum borrowing capacity, after taking into account applicable required collateralization levels and required purchases of activity based stock					$ 210,000,000		$ 210,000,000
Minimum purchase requirement of activity based stock in percent of the outstanding borrowings					3.00%		3.00%
Maximum purchase requirement of activity based stock in percent of the outstanding borrowings					4.50%		4.50%
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances					$ 0		$ 0
Prudential Financial
Debt Instrument [Line Items]
Commercial paper authorized capacity					3,000,000,000		3,000,000,000
Prudential Funding, LLC
Debt Instrument [Line Items]
Commercial paper authorized capacity					7,000,000,000		7,000,000,000
Trust | Private Placement
Debt Instrument [Line Items]
Issued amount				$ 1,500,000,000.0
Interest rate percent				4.419%
Captive Reinsurance Subsidiary | Fixed Rate Debt Surplus Notes | Guidline AXXX
Debt Instrument [Line Items]
Increase (decrease) in outstanding debt						$ 262,000,000
Outstanding amount of notes					2,100,000,000		2,100,000,000
Captive Reinsurance Subsidiary | Floating Rate Debt Surplus Notes | Regulation XXX
Debt Instrument [Line Items]
Increase (decrease) in outstanding debt					308,000,000
Outstanding amount of notes					693,000,000		693,000,000
Prudential Legacy Insurance Company
Debt Instrument [Line Items]
Debt Instrument, Term			20 years
Debt Instrument Authorized			$ 4,000,000,000.0
Surplus Notes					0		0
Real Estate subsidiaries
Debt Instrument [Line Items]
Issued amount					92,000,000		92,000,000
Prepayments of Debt and Exchange Adjustments							85,000,000
Increase (decrease) in outstanding debt							7,000,000
Outstanding amount of notes					$ 509,000,000		$ 509,000,000

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Unaudited Interim Consolidated Statements of Financial Position - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
ASSETS
Fixed maturities, available-for-sale, at fair value (amortized cost: 2015-$262,820; 2014-$265,116)	[1]	$ 290,063	$ 299,090
Fixed maturities, held-to-maturity, at amortized cost (fair value: 2015-$2,674; 2014-$2,902)	[1]	2,396	2,575
Trading account assets supporting insurance liabilities, at fair value	[1]	20,267	20,263
Other trading account assets, at fair value	[1]	12,749	10,874
Equity securities, available-for-sale, at fair value (cost: 2015-$6,870; 2014-$6,921)		9,901	9,861
Commercial mortgage and other loans (includes $391 and $380 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)	[1]	48,569	46,432
Policy loans		11,652	11,712
Other long-term investments (includes $1,267 and $1,082 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)	[1]	10,678	10,921
Short-term investments		5,669	8,258
Total investments		411,944	419,986
Cash and cash equivalents	[1]	17,038	14,918
Accrued investment income	[1]	3,117	3,130
Deferred policy acquisition costs		16,569	15,971
Value of business acquired		2,994	2,836
Other assets	[1]	14,728	13,379
Separate account assets		296,341	296,435
TOTAL ASSETS		762,731	766,655
LIABILITIES
Future policy benefits		216,555	217,766
Policyholders’ account balances	[1]	135,630	136,150
Policyholders’ dividends		6,528	7,661
Securities sold under agreements to repurchase		7,863	9,407
Cash collateral for loaned securities		3,808	4,241
Income taxes		9,239	9,881
Short-term debt		3,621	3,839
Long-term debt		20,264	19,831
Other liabilities	[1]	13,135	13,037
Notes issued by consolidated variable interest entities (includes $7,434 and $6,033 measured at fair value under the fair value option at June 30, 2015 and December 31, 2014, respectively)	[1]	7,455	6,058
Separate account liabilities		296,341	296,435
Total liabilities		$ 720,439	$ 724,306
COMMITMENTS AND CONTINGENT LIABILITIES
EQUITY
Preferred Stock ($.01 par value; 10,000,000 shares authorized; none issued)		$ 0	$ 0
Additional paid-in capital		24,397	24,565
Common Stock held in treasury, at cost (208,199,088 and 205,277,862 shares at June 30, 2015 and December 31, 2014, respectively)		(13,398)	(13,088)
Class B Stock held in treasury, at cost (0 and 2,000,000 shares at June 30, 2015 and December 31, 2014, respectively)		0	(651)
Accumulated other comprehensive income (loss)		13,404	16,050
Retained earnings		17,314	14,888
Total Prudential Financial, Inc. equity		41,723	41,770
Noncontrolling interests		569	579
Total equity		42,292	42,349
TOTAL LIABILITIES AND EQUITY		762,731	766,655
Common Stock
EQUITY
Common Stock		6	6
Class B Stock
EQUITY
Common Stock		$ 0	$ 0

[1] See Note 5 for details of balances associated with variable interest entities.

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Investments (Commercial Mortgage and Other Loans) (Details) - USD ($) $ in Millions		6 Months Ended	12 Months Ended
		Jun. 30, 2015	Dec. 31, 2014
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 46,997	$ 44,748
Valuation allowance		(97)	(105)
Total net commercial mortgage and agricultural property loans by property type		46,900	44,643
Total other loans		1,680	1,803
Valuation allowance		(11)	(14)
Total net other loans		1,669	1,789
Total commercial mortgage and other loans	[1]	$ 48,569	$ 46,432
% of Total		100.00%	100.00%
Commercial Mortgage Loans
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 44,393	$ 42,303
% of Total		94.50%	94.50%
Uncollateralized loans
Servicing Assets at Fair Value [Line Items]
Total other loans		$ 1,038	$ 1,092
Residential property loans
Servicing Assets at Fair Value [Line Items]
Total other loans		327	392
Other collateralized loans
Servicing Assets at Fair Value [Line Items]
Total other loans		315	319
Office
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 10,905	$ 9,612
% of Total		23.20%	21.50%
Retail
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 8,810	$ 8,765
% of Total		18.80%	19.60%
Apartments/Multi-Family
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 11,098	$ 10,369
% of Total		23.60%	23.20%
Industrial
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 7,542	$ 7,628
% of Total		16.10%	16.90%
Hospitality
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 2,451	$ 2,270
% of Total		5.20%	5.10%
Other
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 3,587	$ 3,659
% of Total		7.60%	8.20%
Agricultural property loans
Servicing Assets at Fair Value [Line Items]
Total commercial mortgage and agricultural property loans by property type		$ 2,604	$ 2,445
% of Total		5.50%	5.50%

[1] See Note 5 for details of balances associated with variable interest entities.

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Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters (Commitments and Guarantees) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Securities Lending Transactions
Commitments Gurantees And Contingent Liabilities [Line Items]
Guarantee obligation - maximum exposure	$ 13,602	$ 14,334
Fair value of related collateral	13,886	14,740
Accrued liability (asset) associated with guarantee	0	0
Asset Values
Commitments Gurantees And Contingent Liabilities [Line Items]
Guarantee obligation - maximum exposure	73,166	74,707
Fair value of related collateral	74,896	76,711
Accrued liability (asset) associated with guarantee	(7)	(6)
Credit Enhancements
Commitments Gurantees And Contingent Liabilities [Line Items]
Guarantee obligation - maximum exposure	5	5
Fair value of related collateral	7	8
Accrued liability (asset) associated with guarantee	0	0
Serviced Mortgage Loans
Commitments Gurantees And Contingent Liabilities [Line Items]
Guarantee obligation - maximum exposure	1,324	1,248
First-loss exposure portion of above	408	388
Accrued liability (asset) associated with guarantee	15	16
Guarantee Type, Other
Commitments Gurantees And Contingent Liabilities [Line Items]
Guarantee obligation - maximum exposure	316	331
Accrued liability (asset) associated with guarantee	4	5
Commercial mortgage and other loans
Commitments Gurantees And Contingent Liabilities [Line Items]
Total outstanding mortgage loan commitments	2,979	2,442
Portion of commitment where prearrangement to sell to investor exists	428	958
Investments Excluding Commercial Mortgage Loans
Commitments Gurantees And Contingent Liabilities [Line Items]
Expected to be funded from the general account and other operations outside the separate accounts	4,498	4,883
Expected to be funded from separate accounts	163	28
Investments Excluding Commercial Mortgage Loans | Fosun Group
Commitments Gurantees And Contingent Liabilities [Line Items]
Expected to be funded from the general account and other operations outside the separate accounts	$ 169	$ 194

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Unaudited Interim Consolidated Statements of Equity - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Common Stock Held In Treasury	Common Stock Held In Treasury Class B Stock	Accumulated Other Comprehensive Income (Loss)	Total Prudential Financial, Inc. Equity	Noncontrolling Interests
Balance at Dec. 31, 2013	$ 35,881	$ 6	$ 24,475	$ 14,531	$ (12,415)	$ 0	$ 8,681	$ 35,278	$ 603
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock acquired	(500)				(500)			(500)
Contributions from noncontrolling interests	(1)		(3)					(3)	2
Distributions to noncontrolling interests	(54)								(54)
Consolidations (deconsolidations) of noncontrolling interests	19								19
Stock-based compensation programs	198		6		192			198
Dividends declared on Common Stock	(493)			(493)				(493)
Dividends declared on Class B Stock	(9)			(9)				(9)
Comprehensive income:
Net income (loss)	2,362			2,328				2,328	34
Other comprehensive income (loss), net of tax	4,404						4,396	4,396	8
Comprehensive income (loss)	6,766							6,724	42
Balance at Jun. 30, 2014	41,807	6	24,478	16,357	(12,723)	0	13,077	41,195	612
Balance at Dec. 31, 2014	42,349	6	24,565	14,888	(13,088)	(651)	16,050	41,770	579
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common Stock acquired	(500)				(500)			(500)
Class B Stock canceled	0		(167)	(484)		651		0
Contributions from noncontrolling interests	23								23
Distributions to noncontrolling interests	(42)								(42)
Stock-based compensation programs	189		(1)		190			189
Dividends declared on Common Stock	(532)			(532)				(532)
Comprehensive income:
Net income (loss)	3,505			3,442				3,442	63
Other comprehensive income (loss), net of tax	(2,700)						(2,646)	(2,646)	(54)
Comprehensive income (loss)	805							796	9
Balance at Jun. 30, 2015	$ 42,292	$ 6	$ 24,397	$ 17,314	$ (13,398)	$ 0	$ 13,404	$ 41,723	$ 569

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Derivative Instruments (Financial Statement Classification and Impact of Derivatives Used in Qualifying and Non-qualifying Hedge Relationships) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	$ (484)	$ 59	$ 1,259	$ (91)
Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	5	(14)	4	(28)
Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(78)	(18)	30	(23)
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(2)	(6)	(3)	(11)
Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	2
Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(287)	(71)	529	(117)
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	16	1	30	(2)
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(11)	(15)	(23)	(31)
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	2
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	26	(3)	21	(8)
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(11)	(15)	(23)	(31)
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	2
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(10)	4	9	6
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Fair value hedges | Currency | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	16	1	27	3
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(79)	(18)	25	(22)
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(2)	(6)	(3)	(11)
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(302)	(59)	496	(87)
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(2)	(6)	(3)	(11)
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	6	2	1	5
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	16	1	27	3
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(79)	(18)	25	(22)
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Cash flow hedges | Currency/Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(308)	(61)	495	(92)
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	0	(3)	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	15	(12)	33	(30)
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	0	(3)	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(3)	(1)	7	(1)
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Designated as Hedge Accounting Instruments: | Net investment hedges | Currency/Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	18	(11)	26	(29)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(501)	58	1,232	(89)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	0	5	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(4,180)	1,470	(1,468)	3,379
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(339)	(42)	(228)	(48)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	1	0	1	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(28)	15	405	3
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	4	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Currency/Interest Rate | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	7	(2)	0	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(177)	(687)	(657)	(980)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	(1)	0	(1)	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Realized Investment Gains (Losses)
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	4,217	(696)	3,181	(2,442)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Net Investment Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Other Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Interest Credited To Policyholders’ Account Balances
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	0	0	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Embedded Derivatives | Accumulated Other Comprehensive Income
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments Gain (Loss) Recognized In Income Net	$ 0	$ 0	$ 0	$ 0

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Closed Block (Closed Block Liabilities and Assets Designated to Closed Block; Maximum Future Earnings to be Recognized) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Closed Block liabilities
Future policy benefits	$ 49,665	$ 49,863
Policyholders’ dividends payable	918	931
Policyholders’ dividend obligation	5,481	6,612
Policyholders’ account balances	5,272	5,310
Other Closed Block liabilities	4,833	5,084
Total Closed Block liabilities	66,169	67,800
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,118	40,629
Other trading account assets, at fair value	310	302
Equity securities, available-for-sale, at fair value	3,230	3,522
Commercial mortgage and other loans	9,839	9,472
Policy loans	4,848	4,914
Other long-term investments	2,837	2,765
Short-term investments	1,099	1,225
Total investments	61,281	62,829
Cash and cash equivalents	987	1,201
Accrued investment income	518	527
Other Closed Block assets	495	332
Total Closed Block assets	63,281	64,889
Excess of reported Closed Block liabilities over Closed Block assets	2,888	2,911
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses)	3,701	5,040
Allocated to policyholder dividend obligation	(3,715)	(5,053)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$ 2,874	$ 2,898

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Commitments and Guarantees, Contingent Liabilities, and Litigation and Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2015

Securities Lending Transactions

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Indemnification of Securities Lending Transactions

	June 30, 2015		December 31, 2014
	(in millions)
Indemnification provided to mutual fund and separate account clients for securities lending	$	13,602	$	14,334
Fair value of related collateral associated with above indemnifications	$	13,886	$	14,740
Accrued liability associated with guarantee	$	0	$	0

Asset Values

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Guarantees of Asset Values

	June 30, 2015		December 31, 2014
	(in millions)
Guaranteed value of third parties’ assets	$	73,166	$	74,707
Fair value of collateral supporting these assets	$	74,896	$	76,711
Asset associated with guarantee, carried at fair value	$	7	$	6

Credit Enhancements

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Guarantees of Credit Enhancements

	June 30, 2015		December 31, 2014
	(in millions)
Guarantees of credit enhancements of debt instruments associated with commercial real estate assets	$	5	$	5
Fair value of properties and associated tax credits that secure the guarantee	$	7	$	8
Accrued liability associated with guarantee	$	0	$	0

Serviced Mortgage Loans

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Indemnification of Serviced Mortgage Loans

	June 30, 2015		December 31, 2014
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,324	$	1,248
First-loss exposure portion of above	$	408	$	388
Accrued liability associated with guarantees	$	15	$	16

Guarantee Type, Other

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Other Guarantees

	June 30, 2015		December 31, 2014
	(in millions)
Other guarantees where amount can be determined	$	316	$	331
Accrued liability for other guarantees and indemnifications	$	4	$	5

Commercial mortgage and other loans

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Commercial Mortgage Loan Commitments

	June 30, 2015		December 31, 2014
	(in millions)
Total outstanding mortgage loan commitments	$	2,979	$	2,442
Portion of commitment where prearrangement to sell to investor exists	$	428	$	958

Investments Excluding Commercial Mortgage Loans

Commitments Gurantees And Contingent Liabilities [Line Items]

Commitments and Guarantees

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	June 30, 2015		December 31, 2014
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts(1)	$	4,498	$	4,883
Expected to be funded from separate accounts	$	163	$	28

__________ 

(1) Includes a remaining commitment of $169 million and $194 million at June 30, 2015 and December 31, 2014, respectively, related to the Company’s agreement to co-invest with the Fosun Group (“Fosun”) in a private equity fund, managed by Fosun, for the Chinese marketplace.

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Equity (Reclassifications out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	$ 129	$ 609	$ 2,490	$ 817
Foreign Currency Translation Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI			1	(2)
Net unrealized investment gains (losses)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI			(1,247)	(856)
Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI			(1,150)	(812)
Amounts reclassified from AOCI
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(47)	(24)	(96)	(46)
Amortization of defined benefit pension items:
Prior service cost	4	5	7	11
Actuarial gain (loss)	(51)	(29)	(103)	(57)
Amounts reclassified from AOCI | Cash flow hedges—Interest Rate
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	(2)	(6)	(3)	(12)
Amounts reclassified from AOCI | Cash flow hedges—Currency/Interest rate
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	(54)	(6)	62	(10)
Amounts reclassified from AOCI | Available-for-sale
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Realized investment gains (losses), net	599	536	1,188	878
Amounts reclassified from AOCI | Foreign Currency Translation Adjustment
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	(2)	1	(1)	2
Realized investment gains (losses), net	(2)	1	(1)	2
Amounts reclassified from AOCI | Net unrealized investment gains (losses)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	543	524	1,247	856
Amounts reclassified from AOCI | Accumulated Other Comprehensive Income (Loss)
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Amounts reclassified from AOCI	$ 494	$ 501	$ 1,150	$ 812

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Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters

6 Months Ended

Jun. 30, 2015

Commitments And Guarantees And Contingent Liabilities [Abstract]

Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters

COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY

MATTERS

Commitments and Guarantees

Commercial Mortgage Loan Commitments

	June 30, 2015		December 31, 2014
	(in millions)
Total outstanding mortgage loan commitments	$	2,979	$	2,442
Portion of commitment where prearrangement to sell to investor exists	$	428	$	958

In connection with the Company’s commercial mortgage operations, it originates commercial mortgage loans. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company pre-arranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)

	June 30, 2015		December 31, 2014
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts(1)	$	4,498	$	4,883
Expected to be funded from separate accounts	$	163	$	28

__________ 

(1) Includes a remaining commitment of $169 million and $194 million at June 30, 2015 and December 31, 2014, respectively, related to the Company’s agreement to co-invest with the Fosun Group (“Fosun”) in a private equity fund, managed by Fosun, for the Chinese marketplace.

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts.

Indemnification of Securities Lending Transactions

	June 30, 2015		December 31, 2014
	(in millions)
Indemnification provided to mutual fund and separate account clients for securities lending	$	13,602	$	14,334
Fair value of related collateral associated with above indemnifications	$	13,886	$	14,740
Accrued liability associated with guarantee	$	0	$	0

In the normal course of business, the Company may facilitate securities lending transactions on behalf of mutual funds and separate accounts for which the Company is the investment advisor and/or the asset manager. In certain of these arrangements, the Company has provided an indemnification to the mutual funds or separate accounts to hold them harmless against losses caused by counterparty (i.e., borrower) defaults associated with the securities lending activity facilitated by the Company. Collateral is provided by the counterparty to the mutual fund or separate account at the inception of the loan equal to or greater than 102% of the fair value of the loaned securities and the collateral is maintained daily at 102% or greater of the fair value of the loaned securities. The Company is only at risk if the counterparty to the securities lending transaction defaults and the value of the collateral held is less than the value of the securities loaned to such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 14, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

Guarantees of Asset Values

	June 30, 2015		December 31, 2014
	(in millions)
Guaranteed value of third parties’ assets	$	73,166	$	74,707
Fair value of collateral supporting these assets	$	74,896	$	76,711
Asset associated with guarantee, carried at fair value	$	7	$	6

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. The collateral supporting these guarantees is not reflected on the Unaudited Interim Consolidated Statements of Financial Position.

Guarantees of Credit Enhancements

	June 30, 2015		December 31, 2014
	(in millions)
Guarantees of credit enhancements of debt instruments associated with commercial real estate assets	$	5	$	5
Fair value of properties and associated tax credits that secure the guarantee	$	7	$	8
Accrued liability associated with guarantee	$	0	$	0

The Company arranges for credit enhancements of certain debt instruments that provide financing primarily for affordable multi-family real estate assets, including certain tax-exempt bond financings. The credit enhancements provide assurances to the debt holders as to the timely payment of amounts due under the debt instruments. The remaining contractual maturities for these guarantees are up to fifteen years. The Company’s obligations to reimburse required credit enhancement payments are secured by mortgages on the related real estate. The Company receives certain ongoing fees for providing these enhancement arrangements and anticipates the extinguishment of its obligation under these enhancements prior to maturity through the aggregation and transfer of its positions to a substitute enhancement provider.

Indemnification of Serviced Mortgage Loans

	June 30, 2015		December 31, 2014
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	1,324	$	1,248
First-loss exposure portion of above	$	408	$	388
Accrued liability associated with guarantees	$	15	$	16

As part of the commercial mortgage activities of the Company’s Asset Management segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 2% to 20% of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company services $10,560 million of mortgages subject to these loss-sharing arrangements as of June 30, 2015, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of June 30, 2015, these mortgages had a weighted-average debt service coverage ratio of 2.09 times and a weighted-average loan-to-value ratio of 61%. The Company’s total share of losses related to indemnifications that were settled was $0.0 million and $1.0 million, for the six months endedJune 30, 2015 and 2014, respectively.

Other Guarantees

	June 30, 2015		December 31, 2014
	(in millions)
Other guarantees where amount can be determined	$	316	$	331
Accrued liability for other guarantees and indemnifications	$	4	$	5

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Included above are $308 million and $323 million as of June 30, 2015 and December 31, 2014, respectively, of yield maintenance guarantees related to certain investments the Company sold. The Company does not expect to make any payments on these guarantees and is not carrying any liabilities associated with these guarantees.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liabilities identified above do not include retained liabilities associated with sold businesses.

Contingent Liabilities

On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements. From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements. For additional discussion of these matters, see “Litigation and Regulatory Matters” below.

It is possible that the results of operations or the cash flow of the Company in a particular quarterly or annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind-down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if material, is disclosed, including matters discussed below. The Company estimates that as of June 30, 2015, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

The following discussion of litigations and regulatory matters provides an update of those matters discussed in Note 23 to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

Lederman v. PFI

In March 2015, the court granted the Company summary judgment and dismissed with prejudice the complaint of the remaining plaintiff with claims against the Company.

Escheatment Litigation

State of West Virginia cx. Rd. John D. Perdue v. Prudential Insurance Company of America; and State of West Virginia cx. Rd. John D. Perdue v. Pruco Life Insurance Company

In June 2015, the West Virginia Supreme Court issued a decision in each of the above captioned cases: (i) reversing the trial court’s dismissal of the West Virginia Treasurer’s complaint alleging violations of West Virginia’s unclaimed property law; and (ii) remanding the case to the Circuit Court of Putnam County for proceedings consistent with its decision. In July 2015, a petition for rehearing was filed with the West Virginia Supreme Court for each case.

Huffman v. The Prudential Insurance Company of America

In July 2015, the Court granted plaintiffs’ motion to file an amended complaint.

Other Matters

Bouder v. PFI

In February 2015, the federal District Court for New Jersey granted in part, and denied in part, plaintiffs’ renewed class certification motion. It certified for class treatment plaintiffs’ wage payment claims which include allegations that the Company made improper deductions from the wages of its former common law agents in California, New York, and Pennsylvania, and its financial services associates in California and New York. The Court denied plaintiffs’ attempt to certify a class based on the Company’s alleged failure to pay overtime to its former common law agents and its financial services associates in California, Illinois, New York and Pennsylvania. In March 2015, the Company filed a motion requesting that the Court reconsider its decision to partially grant plaintiffs’ renewed class certification motion with regard to its former common law agents.

Residential Mortgage-Backed Securities (“RMBS”) Litigation

PICA et al. v. Bank of America National Association & Merrill Lynch & Co., Inc., et al.—In April 2015, this lawsuit was settled.

PICA et al. v. Countrywide Financial Corp., et al.—In April 2015, this lawsuit was settled.

PICA et al. v. RBS Financial Products, Inc., et al.—In June 2015, this lawsuit was settled.

RMBS Trustee

PICA et al. v. Bank of New York Mellon—In March 2015, defendants filed a motion to dismiss the amended complaint.

PICA et al. v. Citibank N.A.—In February 2015, defendants filed a motion to dismiss the amended complaint.

PICA et al. v. Deutsche Bank, et al.—In April 2015, defendants filed a motion to dismiss the amended complaint.

PICA et al. v. HSBC, et al.—In January 2015, defendants filed a motion to dismiss the amended complaint. In June 2015, the Court granted in part, and denied in part, defendants’ motion to dismiss the complaint for failure to state a claim and granted leave to file an amended complaint. In July 2015, plaintiffs filed an amended complaint.

PICA et al. v. U.S. Bank National Association—In February 2015, defendants filed a motion to dismiss the amended complaint. In May 2015, the Court granted defendants’ motion to dismiss: (1) declining to exercise supplemental jurisdiction regarding claims involving the PSA trusts; and (2) granting leave for plaintiffs to file an amended complaint asserting direct claims involving the Indenture trusts. In June 2015, the Company, together with other institutional investors, filed a complaint in New York State Supreme Court, captioned BlackRock Balanced Capital Portfolio (FI), et al. v. U.S. Bank Nat’l Ass’n, asserting claims relating to the PSA trusts. In July 2015, plaintiffs filed with the Court an amended complaint asserting direct claims relating to the Indenture trusts.

PICA et al. v. Wells Fargo Bank, et al.—In April 2015, defendants filed a motion to dismiss the amended complaint.

Prudential Investment Portfolios 2, f/k/a Dryden Core Investment Fund, o/b/o Prudential Core Short-Term Bond Fund and Prudential Core Taxable Money Market Fund v. Bank of America Corporation et al.

In August 2015, the Court issued a decision granting in part, and denying in part, defendants' motions to dismiss. The Court dismissed certain of the Funds' claims, including those alleging fraud based on offering material statements; New Jersey RICO; and express breach of contract. The Court upheld certain of the Funds' claims, including those alleging fraud based on false LIBOR submissions to the British Bankers’ Association; negligent misrepresentation; unjust enrichment; and breach of the implied covenant of good faith and fair dealing.

Summary

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position. Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

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Business and Basis of Presentation (Narrative) (Details)	6 Months Ended
	Jun. 30, 2015 division
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of divisions	4

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Commitments and Guarantees, Contingent Liabilities and Litigation and Regulatory Matters (Litigation Narrative) (Details) $ in Millions	Jun. 30, 2015 USD ($)
Litigation And Regulatory Matters
Litigation [Line Items]
Estimate of possible losses in excess of accruals (less than)	$ 250

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Investments (Tables)

6 Months Ended

Jun. 30, 2015

Investments [Abstract]

Fixed Maturities and Equity Securities, Available-for-sale Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	14,196	$	3,635	$	20	$	17,811	$	0
Obligations of U.S. states and their political subdivisions	7,378		614		106		7,886		0
Foreign government bonds	68,681		10,342		162		78,861		(1		)
Corporate securities(1)	144,539		14,607		2,572		156,574		(18		)
Asset-backed securities(2)	10,948		387		100		11,235		(565		)
Commercial mortgage-backed securities	11,918		284		50		12,152		(1		)
Residential mortgage-backed securities(3)	5,160		391		7		5,544		(4		)
Total fixed maturities, available-for-sale(1)	$	262,820	$	30,260	$	3,017	$	290,063	$	(589	)
Equity securities, available-for-sale	$	6,870	$	3,119	$	88	$	9,901

(1) Excludes notes with amortized cost of $385 million (fair value, $385 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $954 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,807	$	4,321	$	5	$	20,123	$	0
Obligations of U.S. states and their political subdivisions	5,720		814		3		6,531		0
Foreign government bonds	69,894		11,164		117		80,941		(1		)
Corporate securities(1)	143,631		17,799		1,054		160,376		(6		)
Asset-backed securities(2)	10,966		353		134		11,185		(592		)
Commercial mortgage-backed securities	13,486		430		39		13,877		(1		)
Residential mortgage-backed securities(3)	5,612		448		3		6,057		(5		)
Total fixed maturities, available-for-sale(1)	$	265,116	$	35,329	$	1,355	$	299,090	$	(605	)
Equity securities, available-for-sale	$	6,921	$	3,023	$	83	$	9,861

(1) Excludes notes with amortized cost of $693 million (fair value, $695 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income (“AOCI”), which were not included in earnings. Amount excludes $944 million of net unrealized gains on impaired available-for-sale securities and less than $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

Fixed Maturities, Held-to-maturity Securities

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	821	$	184	$	0	$	1,005
Corporate securities(5)	713		68		1		780
Commercial mortgage-backed securities	78		7		0		85
Residential mortgage-backed securities(3)	963		69		0		1,032
Total fixed maturities, held-to-maturity(5)	$	2,575	$	328	$	1	$	2,902

__________

(1) Excludes notes with amortized cost of $385 million (fair value, $385 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $954 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,588 million (fair value, $3,953 million) which have been offset with the associated payables under a netting agreement.

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	804	$	160	$	0	$	964
Corporate securities(5)	696		60		2		754
Commercial mortgage-backed securities	59		2		0		61
Residential mortgage-backed securities(3)	837		58		0		895
Total fixed maturities, held-to-maturity(5)	$	2,396	$	280	$	2	$	2,674

__________

(1) Excludes notes with amortized cost of $693 million (fair value, $695 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income (“AOCI”), which were not included in earnings. Amount excludes $944 million of net unrealized gains on impaired available-for-sale securities and less than $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,850 million (fair value, $4,069 million) which have been offset with the associated payables under a netting agreement.

Investments Classified by Contractual Maturity Date

The amortized cost and fair value of fixed maturities by contractual maturities at June 30, 2015, are as follows:

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Due in one year or less	$	11,624	$	12,378	$	0	$	0
Due after one year through five years	44,963		50,198		72		77
Due after five years through ten years	56,728		62,754		167		175
Due after ten years(1)	121,479		135,802		1,261		1,466
Asset-backed securities	10,948		11,235		0		0
Commercial mortgage-backed securities	11,918		12,152		59		61
Residential mortgage-backed securities	5,160		5,544		837		895
Total	$	262,820	$	290,063	$	2,396	$	2,674

__________ 

(1) Excludes available-for-sale notes with amortized cost of $693 million (fair value, $695 million) and held-to-maturity notes with amortized cost of $3,850 million (fair value, $4,069 million), which have been offset with the associated payables under a netting agreement.

Sources of Fixed Maturity Proceeds, Related Investment Gains (Losses), and Losses on Impairments of Fixed Maturities and Equity Securities

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale
Proceeds from sales	$	7,626		$	7,460		$	15,044		$	16,038
Proceeds from maturities/repayments	4,618			5,847			9,713			10,706
Gross investment gains from sales, prepayments and maturities	442			476			974			901
Gross investment losses from sales and maturities	(42)			(83		)	(97		)	(235		)
Fixed maturities, held-to-maturity
Gross investment gains from prepayments	$	0		$	0		$	0		$	0
Proceeds from maturities/repayments	63			138			123			232
Equity securities, available-for-sale
Proceeds from sales	$	1,564		$	1,316		$	2,553		$	2,481
Gross investment gains from sales	273			198			427			331
Gross investment losses from sales	(35		)	(22		)	(61		)	(60		)
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(1)	$	(29	)	$	(26	)	$	(37	)	$	(42	)
Writedowns for impairments on equity securities	(11		)	(7		)	(17		)	(17		)

__________ 

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

Credit Losses Recognized in Earnings on Fixed Maturity Securities Held by the Company for which a Portion of the OTTI Loss was Recognized in OCI

The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts:

	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	(in millions)
Balance, beginning of period	$	773		$	781
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(15		)	(28		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	(12		)	(13		)
Credit loss impairments recognized in the current period on securities not previously impaired	0			3
Additional credit loss impairments recognized in the current period on securities previously impaired	2			2
Increases due to the passage of time on previously recorded credit losses	7			13
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(7		)
Balance, end of period	$	751		$	751

	Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
	(in millions)
Balance, beginning of period	$	838		$	968
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(59		)	(199		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	0			0
Credit loss impairments recognized in the current period on securities not previously impaired	10			12
Additional credit loss impairments recognized in the current period on securities previously impaired	0			4
Increases due to the passage of time on previously recorded credit losses	9			18
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(9		)
Balance, end of period	$	794		$	794

__________ 

(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure

The following table sets forth the composition of “Trading account assets supporting insurance liabilities” as of the dates indicated:

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	423	$	422	$	196	$	196
Fixed maturities:
Corporate securities	12,251		12,566		11,922		12,439
Commercial mortgage-backed securities	2,055		2,078		2,505		2,546
Residential mortgage-backed securities(1)	1,488		1,508		1,640		1,676
Asset-backed securities(2)	1,417		1,440		1,180		1,198
Foreign government bonds	635		647		621		650
U.S. government authorities and agencies and obligations of U.S. states	290		333		303		372
Total fixed maturities	18,136		18,572		18,171		18,881
Equity securities	974		1,273		896		1,186
Total trading account assets supporting insurance liabilities	$	19,533	$	20,267	$	19,263	$	20,263

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

Other Trading Account Assets Disclosure

The following table sets forth the composition of the “Other trading account assets” as of the dates indicated:

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	61	$	62	$	27	$	27
Fixed maturities	9,487		9,475		8,306		8,282
Equity securities	1,027		1,135		992		1,105
Other	12		16		7		11
Subtotal	$	10,587	10,688		$	9,332	9,425
Derivative instruments			2,061				1,449
Total other trading account assets			$	12,749			$	10,874

Investments Securities Disclosure

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	50,735	$	57,562	$	52,703	$	60,379
Fixed maturities, held-to-maturity	783		940		801		981
Trading account assets supporting insurance liabilities	475		482		457		470
Other trading account assets	35		35		36		36
Short-term investments	0		0		0		0
Cash equivalents	163		163		0		0
Total	$	52,191	$	59,182	$	53,997	$	61,866

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	7,207	$	8,815	$	6,927	$	8,438
Fixed maturities, held-to-maturity	0		0		0		0
Trading account assets supporting insurance liabilities	44		45		49		50
Other trading account assets	0		0		0		0
Short-term investments	0		0		0		0
Cash equivalents	0		0		0		0
Total	$	7,251	$	8,860	$	6,976	$	8,488

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:

	June 30, 2015					December 31, 2014
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	10,905		23.2	%	$	9,612		21.5	%
Retail	8,810			18.8		8,765			19.6
Apartments/Multi-Family	11,098			23.6		10,369			23.2
Industrial	7,542			16.1		7,628			16.9
Hospitality	2,451			5.2		2,270			5.1
Other	3,587			7.6		3,659			8.2
Total commercial mortgage loans	44,393			94.5		42,303			94.5
Agricultural property loans	2,604			5.5		2,445			5.5
Total commercial mortgage and agricultural property loans by property type	46,997			100.0	%	44,748			100.0	%
Valuation allowance	(97		)			(105		)
Total net commercial mortgage and agricultural property loans by property type	46,900					44,643
Other loans:
Uncollateralized loans	1,038					1,092
Residential property loans	327					392
Other collateralized loans	315					319
Total other loans	1,680					1,803
Valuation allowance	(11		)			(14		)
Total net other loans	1,669					1,789
Total commercial mortgage and other loans(1)	$	48,569				$	46,432

__________ 

(1) Includes loans held at fair value.

Allowance for Losses

Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	June 30, 2015
	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	104		$	1	$	5		$	0	$	9		$	119
Addition to (release of) allowance for losses	(8		)	0		(2		)	0		0			(10		)
Charge-offs, net of recoveries	0			0		0			0		0			0
Change in foreign exchange	0			0		0			0		(1		)	(1		)
Total ending balance	$	96		$	1	$	3		$	0	$	8		$	108

	December 31, 2014
	Commercial Mortgage Loans			Agricultural Property Loans			Residential Property Loans			Other Collateralized Loans			Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	188		$	7		$	6		$	3		$	12		$	216
Addition to (release of) allowance for losses	(77		)	(6		)	(1		)	(1		)	(2		)	(87		)
Charge-offs, net of recoveries	(7		)	0			0			(2		)	0			(9		)
Change in foreign exchange	0			0			0			0			(1		)	(1		)
Total ending balance	$	104		$	1		$	5		$	0		$	9		$	119

Allowance for Credit Losses and Recorded Investment in Commercial Mortgage and Other Loans

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	June 30, 2015
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	3	$	0	$	0	$	0	$	0	$	3
Collectively evaluated for impairment	93		1		3		0		8		105
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	96	$	1	$	3	$	0	$	8	$	108
Recorded Investment(1):
Gross of reserves: individually evaluated for impairment	$	254	$	4	$	0	$	1	$	2	$	261
Gross of reserves: collectively evaluated for impairment	44,139		2,600		327		314		1,036		48,416
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	44,393	$	2,604	$	327	$	315	$	1,038	$	48,677

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

	December 31, 2014(1)
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	96		1		5		0		9		111
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	104	$	1	$	5	$	0	$	9	$	119
Recorded Investment(2):
Gross of reserves: individually evaluated for impairment	$	247	$	4	$	0	$	1	$	2	$	254
Gross of reserves: collectively evaluated for impairment	42,056		2,441		392		318		1,090		46,297
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	42,303	$	2,445	$	392	$	319	$	1,092	$	46,551

__________

(1) Prior period’s amounts are presented on a basis consistent with current period presentation.

(2) Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired Financing Receivables

Impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses, as of the dates indicated, are as follows:

	June 30, 2015
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	0	$	0	$	0	$	0	$	0
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	0	$	1	$	0	$	0	$	0
With an allowance recorded:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	55	$	55	$	3	$	79	$	1
Total:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total	$	55	$	56	$	3	$	79	$	1

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

	December 31, 2014
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	8	$	8	$	0	$	16	$	1
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	12	$	13	$	0	$	20	$	1
With an allowance recorded:
Commercial mortgage loans	$	76	$	76	$	8	$	82	$	6
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	76	$	76	$	8	$	85	$	7
Total:
Commercial mortgage loans	$	84	$	84	$	8	$	98	$	7
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		1		0		0		0
Total	$	88	$	89	$	8	$	105	$	8

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and all subsequent quarterly end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

Financing Receivable Credit Quality Indicators

The following tables set forth certain key credit quality indicators as of December 31, 2014, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	22,557	$	637	$	207	$	23,401
60%-69.99%	12,563		500		237		13,300
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage loans	$	39,708	$	1,928	$	667	$	42,303

Agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,152	$	140	$	2	$	2,294
60%-69.99%	151		0		0		151
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,303	$	140	$	2	$	2,445

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	24,709	$	777	$	209	$	25,695
60%-69.99%	12,714		500		237		13,451
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage and agricultural property loans	$	42,011	$	2,068	$	669	$	44,748

The following tables set forth certain key credit quality indicators as of June 30, 2015, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	23,344	$	429	$	275	$	24,048
60%-69.99%	13,434		444		79		13,957
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage loans	$	42,353	$	1,460	$	580	$	44,393

Agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,290	$	148	$	2	$	2,440
60%-69.99%	164		0		0		164
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,454	$	148	$	2	$	2,604

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	25,634	$	577	$	277	$	26,488
60%-69.99%	13,598		444		79		14,121
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage and agricultural property loans	$	44,807	$	1,608	$	582	$	46,997

Aging of Past Due Commercial Mortgage and Other Loans and Nonaccrual Status

The following tables provide an aging of past due commercial mortgage and other loans as of the dates indicated, based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage loans on nonaccrual status as of the dates indicated.

	June 30, 2015
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	44,344	$	49	$	0	$	0	$	0	$	49	$	44,393	$	103
Agricultural property loans	2,603		0		0		0		1		1		2,604		1
Residential property loans	315		4		1		0		7		12		327		7
Other collateralized loans	314		0		0		0		1		1		315		1
Uncollateralized loans	1,038		0		0		0		0		0		1,038		0
Total	$	48,614	$	53	$	1	$	0	$	9	$	63	$	48,677	$	112

	December 31, 2014
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	42,239	$	62	$	0	$	0	$	2	$	64	$	42,303	$	101
Agricultural property loans	2,443		0		1		0		1		2		2,445		1
Residential property loans	375		7		2		0		8		17		392		8
Other collateralized loans	319		0		0		0		0		0		319		0
Uncollateralized loans	1,092		0		0		0		0		0		1,092		0
Total	$	46,468	$	69	$	3	$	0	$	11	$	83	$	46,551	$	110

Net Investment Income

Net investment income for the three and six months endedJune 30, 2015 and 2014, was from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale(1)	$	2,611		$	2,669		$	5,194		$	5,286
Fixed maturities, held-to-maturity(1)	51			42			100			82
Equity securities, available-for-sale	81			105			177			189
Trading account assets	294			259			581			517
Commercial mortgage and other loans	556			522			1,100			1,020
Policy loans	154			158			308			312
Short-term investments and cash equivalents	11			8			24			17
Other long-term investments	137			175			381			517
Gross investment income	3,895			3,938			7,865			7,940
Less: investment expenses	(224		)	(184		)	(425		)	(348		)
Net investment income	$	3,671		$	3,754		$	7,440		$	7,592

__________ 

(1) Includes income on credit-linked notes which are reported on the same financial line item as related surplus notes, as conditions are met for right-of-offset.

Realized Gain (Loss) on Investments

Realized investment gains (losses), net, for the three and six months endedJune 30, 2015 and 2014, were from the following sources:

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
	(in millions)
Fixed maturities	$	371		$	367	$	840		$	624
Equity securities	227			169		348			254
Commercial mortgage and other loans	20			8		31			16
Investment real estate	14			0		38			0
Joint ventures and limited partnerships	(4		)	0		(9		)	1
Derivatives(1)	(503		)	60		1,235			(85		)
Other	4			5		7			7
Realized investment gains (losses), net	$	129		$	609	$	2,490		$	817

__________ 

(1) Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.

Unrealized Gains and (Losses) on Investments

The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated:

	June 30, 2015			December 31, 2014
	(in millions)
Fixed maturity securities on which an OTTI loss has been recognized	$	355		$	349
Fixed maturity securities, available-for-sale—all other	26,888			33,625
Equity securities, available-for-sale	3,031			2,940
Derivatives designated as cash flow hedges(1)	702			206
Other investments(2)	(10		)	(7		)
Net unrealized gains (losses) on investments	$	30,966		$	37,113

__________ 

(1) See Note 14 for more information on cash flow hedges.

(2) As of June 30, 2015, there were $0 million of net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Duration Of Gross Unrealized Losses On Fixed Maturity and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

	June 30, 2015
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,563	$	20	$	0	$	0	$	1,563	$	20
Obligations of U.S. states and their political subdivisions	3,060		105		8		1		3,068		106
Foreign government bonds	2,498		72		1,314		90		3,812		162
Corporate securities	36,276		1,984		5,642		588		41,918		2,572
Commercial mortgage-backed securities	2,983		38		550		12		3,533		50
Asset-backed securities	2,535		7		2,714		93		5,249		100
Residential mortgage-backed securities	529		4		122		3		651		7
Total	$	49,444	$	2,230	$	10,350	$	787	$	59,794	$	3,017
Equity securities, available-for-sale	$	1,855	$	87	$	6	$	1	$	1,861	$	88

__________ 

(1) Includes $84 million of fair value and $2 million of gross unrealized losses at June 30, 2015, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

	December 31, 2014
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	2,145	$	5	$	10	$	0	$	2,155	$	5
Obligations of U.S. states and their political subdivisions	105		1		89		2		194		3
Foreign government bonds	839		26		1,052		91		1,891		117
Corporate securities	11,326		401		13,346		654		24,672		1,055
Commercial mortgage-backed securities	1,299		6		1,746		33		3,045		39
Asset-backed securities	3,417		16		3,229		118		6,646		134
Residential mortgage-backed securities	35		0		194		3		229		3
Total	$	19,166	$	455	$	19,666	$	901	$	38,832	$	1,356
Equity securities, available-for-sale	$	1,670	$	82	$	9	$	1	$	1,679	$	83

__________ 

(1) Includes $91 million of fair value and $1 million of gross unrealized losses at December 31, 2014, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

Schedule of Underlying Assets of Repurchase Agreements when Amount of Repurchase Agreements Exceeds 10 Percent of Assets

The following table sets forth the composition of repurchase agreements as of the date indicated.

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,109	$	3,541	$	263	$	0	$	6,913
Obligations of U.S. states and their political subdivisions	0		0		0		0		0
Foreign government bonds	0		0		0		0		0
Corporate securities	20		0		0		0		20
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	0		0		0		0		0
Residential mortgage-backed securities	404		526		0		0		930
Equity securities	0		0		0		0		0
Total repurchase agreements	$	3,533	$	4,067	$	263	$	0	$	7,863

The following table sets forth the composition of securities lending transactions as of the date indicated.

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	299	$	0	$	0	$	0	$	299
Obligations of U.S. states and their political subdivisions	16		0		0		0		16
Foreign government bonds	323		0		0		0		323
Corporate securities	2,498		128		0		0		2,626
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	17		0		0		0		17
Residential mortgage-backed securities	0		262		0		0		262
Equity securities	265		0		0		0		265
Total securities lending transactions	$	3,418	$	390	$	0	$	0	$	3,808

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Earnings Per Share (Narrative) (Details) - USD ($)			1 Months Ended	3 Months Ended		6 Months Ended
	Jan. 02, 2015	Dec. 01, 2014	Sep. 30, 2009	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]
Undistributed earnings allocated to participating unvested share-based payment awards, weighted outstanding shares				4,500,000	4,300,000	4,500,000	4,300,000
Exhangeable Surplus Notes
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]
Long Term Debt Gross Of Set Off Arrangements			$ 500,000,000
Interest Rate			5.36%
Debt Instrument Convertible Exchange Ratio per $1,000 (in shares)			10.1235
Surplus notes principle amount			$ 1,000
Initial exchange price per share of Common Stock (in dollars per share)			$ 98.78
Class B Stock
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract]
Number of shares repurchased and canceled	2,000,000	2,000,000

XML

Unaudited Interim Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended			6 Months Ended			12 Months Ended
	Jun. 30, 2015		Jun. 30, 2014	Jun. 30, 2015		Jun. 30, 2014	Jun. 30, 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 1,459		$ 1,113	$ 3,505		$ 2,362
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	(129)		(609)	(2,490)		(817)
Policy charges and fee income				(760)		(1,032)
Interest credited to policyholders’ account balances				1,909		2,193
Depreciation and amortization				(48)		179
(Gains) losses on trading account assets supporting insurance liabilities, net				137		(324)
Change in:
Deferred policy acquisition costs				(387)		(429)
Future policy benefits and other insurance liabilities				3,157		3,251
Other trading account assets				(62)		(1)
Income taxes				1,038		898
Derivatives, net				(1,919)		302
Other, net				(605)		(1,027)
Cash flows from (used in) operating activities				3,475		5,555
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale				24,630		26,535
Fixed maturities, held-to-maturity				121		232
Trading account assets supporting insurance liabilities and other trading account assets				6,595		6,098
Equity securities, available-for-sale				2,488		2,483
Commercial mortgage and other loans				2,392		1,673
Policy loans				1,119		1,096
Other long-term investments				490		208
Short-term investments				41,720		35,249
Payments for the purchase/origination of:
Fixed maturities, available-for-sale				(23,175)		(32,670)
Fixed maturities, held-to-maturity				0		(23)
Trading account assets supporting insurance liabilities and other trading account assets				(8,433)		(7,563)
Equity securities, available-for-sale				(2,101)		(2,289)
Commercial mortgage and other loans				(4,372)		(3,527)
Policy loans				(907)		(969)
Other long-term investments				(870)		(847)
Short-term investments				(39,095)		(33,301)
Acquisition of business, net of cash acquired.				0		(23)
Derivatives, net				148		(115)
Other, net				(36)		228
Cash flows from (used in) investing activities				714		(7,525)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits				10,730		12,226
Policyholders’ account withdrawals				(10,678)		(11,617)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities				(1,978)		736
Cash dividends paid on Common Stock				(537)		(495)
Net change in financing arrangements (maturities 90 days or less)				493		324
Common Stock acquired				(502)		(500)
Common Stock reissued for exercise of stock options				125		138
Proceeds from the issuance of debt (maturities longer than 90 days)				3,348		2,817
Repayments of debt (maturities longer than 90 days)				(2,166)		(971)
Excess tax benefits from share-based payment arrangements				14		16
Other, net				(307)		(47)
Cash flows from (used in) financing activities				(2,109)		2,617
Effect of foreign exchange rate changes on cash balances				40		74
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				2,120		721
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR				14,918	[1]	11,439	$ 12,160
CASH AND CASH EQUIVALENTS, END OF PERIOD	17,038	[1]	12,160	17,038	[1]	12,160	17,038	[1]
NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs				109		94
Pension Risk Transfer
NON-CASH TRANSACTIONS DURING THE PERIOD
Assets acquired, excluding cash and cash equivalents acquired				1,553		0
Liabilities assumed	1,919		0	1,919		0	1,919
Net cash paid (received) on acquisition				(366)		0
Gibraltar BSN Life Berhad
NON-CASH TRANSACTIONS DURING THE PERIOD
Assets acquired, excluding cash and cash equivalents acquired				0		656
Liabilities assumed	0		586	0		586	0
Noncontrolling Interest assumed	$ 0		$ 47	0		47	$ 0
Net cash paid (received) on acquisition				0		23
Class B Stock
CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends paid on Common Stock				0		(10)
Common Stock acquired				$ (651)		$ 0

[1] See Note 5 for details of balances associated with variable interest entities.

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Unaudited Interim Consolidated Statements of Financial Position (Parenthetical) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Fixed maturities, available-for-sale, amortized cost		$ 262,820	$ 265,116
Fixed maturities, held-to-maturity, fair value		2,674	2,902
Equity securities, available-for-sale, at fair value		6,870	6,921
Total commercial mortgage and other loans	[1]	48,569	46,432
Other long-term investments	[1]	10,678	10,921
Notes Of Consolidated Variable Interest Entities	[1]	$ 7,455	$ 6,058
Preferred Stock, par value (in dollars per share)		$ 0.01	$ 0.01
Preferred Stock, Shares Authorized		10,000,000	10,000,000
Preferred Stock, Shares Issued		0	0
Common Stock
Common Stock, par value (in dollars per share)		$ 0.01	$ 0.01
Common Stock, shares authorized		1,500,000,000	1,500,000,000
Common Stock, shares issued		660,111,339	660,111,339
Treasury Stock, Shares		208,199,088	205,277,862
Class B Stock
Common Stock, par value (in dollars per share)		$ 0	$ 0.01
Common Stock, shares authorized		0	10,000,000
Common Stock, shares issued		0	2,000,000
Treasury Stock, Shares		0	2,000,000
Fair Value Option
Total commercial mortgage and other loans		$ 391	$ 380
Other long-term investments		1,267	1,082
Notes Of Consolidated Variable Interest Entities		$ 7,434	$ 6,033

[1] See Note 5 for details of balances associated with variable interest entities.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded non-contributory defined benefit pension plans, which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“other postretirement benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

Net periodic (benefit) cost included in “General and administrative expenses” includes the following components:

	Three Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Components of net periodic (benefit) cost
Service cost	$	61		$	59		$	5		$	4
Interest cost	117			121			22			24
Expected return on plan assets	(193		)	(179		)	(28		)	(29		)
Amortization of prior service cost	(2		)	(2		)	(2		)	(3		)
Amortization of actuarial (gain) loss, net	42			22			9			7
Settlements	0			1			0			0
Special termination benefits	2			0			0			0
Net periodic (benefit) cost	$	27		$	22		$	6		$	3

	Six Months Ended June 30,
	Pension Benefits						Other Postretirement Benefits
	2015			2014			2015			2014
	(in millions)
Service cost	$	122		$	118		$	10		$	8
Interest cost	234			241			43			48
Expected return on plan assets	(387		)	(356		)	(57		)	(58		)
Amortization of prior service cost	(4		)	(5		)	(3		)	(6		)
Amortization of actuarial (gain) loss, net	84			43			19			14
Settlements	1			2			0			0
Special termination benefits	4			0			0			0
Net periodic (benefit) cost	$	54		$	43		$	12		$	6

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Derivative Instruments (Offsetting Assets and Liabilities) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Derivatives
Gross Amounts of Recognized Financial Instruments	$ 12,122	$ 13,932
Securities purchased under agreement to resell
Gross Amounts of Recognized Financial Instruments	691	702
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts Presented in the Statement of Financial Position	691	702
Financial Instruments/Collateral	(691)	(702)
Net Amount	0	0
Total assets
Gross Amounts of Recognized Financial Instruments	12,658	14,488
Gross Amounts Offset in the Statement of Financial Position	(9,901)	(12,332)
Net Amounts Presented in the Statement of Financial Position	2,757	2,156
Financial Instruments/Collateral	(1,259)	(1,325)
Net Amount	1,498	831
Derivatives
Gross Amounts of Recognized Financial Instruments	5,833	6,817
Securities sold under agreement to repurchase
Gross Amounts of Recognized Financial Instruments	7,863	9,407
Gross Amounts Offset in the Statement of Financial Position	0	0
Net Amounts Presented in the Statement of Financial Position	7,863	9,407
Financial Instruments/Collateral	(7,863)	(9,407)
Net Amount	0	0
Total liabilities
Gross Amounts of Recognized Financial Instruments	13,684	16,217
Gross Amounts Offset in the Statement of Financial Position	(5,730)	(6,661)
Net Amounts Presented in the Statement of Financial Position	7,954	9,556
Financial Instruments/Collateral	(7,900)	(9,556)
Net Amount	54	0
Counterparty
Derivatives
Gross Amounts of Recognized Financial Instruments	11,967	13,786
Gross Amounts Offset in the Statement of Financial Position	(9,901)	(12,332)
Net Amounts Presented in the Statement of Financial Position	2,066	1,454
Financial Instruments/Collateral	(568)	(623)
Net Amount	1,498	831
Derivatives
Gross Amounts of Recognized Financial Instruments	5,821	6,810
Gross Amounts Offset in the Statement of Financial Position	(5,730)	(6,661)
Net Amounts Presented in the Statement of Financial Position	91	149
Financial Instruments/Collateral	(37)	(149)
Net Amount	$ 54	$ 0

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Derivative Instruments (Narrative) (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Total derivative assets	$ 2,213,000,000	$ 1,593,000,000
Total derivative liabilities	103,000,000	158,000,000
Anticipated pre-tax loss reclassified from accumulated other comprehensive income (loss) to earnings	$ 43,000,000
Maximum Length of Time Hedged in Cash Flow Hedge	29 years
Net investment hedges income (loss) before taxes	$ 533,000,000	501,000,000
Derivative [Line Items]
Notional of credit derivative	500,000,000	500,000,000
Fair value of credit derivative liability	10,000,000	4,000,000
Credit protection derivatives outstanding notional amounts	596,000,000	573,000,000
Credit Derivative Purchased Credit Protection, Liability	$ 14,000,000	17,000,000
Single Name
Derivative [Line Items]
Credit Derivatives Written Max Length Of Maturities (less than)	1 year
Credit Default Index
Derivative [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	$ 349,000,000	1,544,000,000
Credit Risk Derivatives, at Fair Value, Net (less than)	$ 1,000,000	(2,000,000)
Credit Derivatives Written Max Length Of Maturities (less than)	10 years
Standard & Poor's, CCC Rating | Credit Default Index
Derivative [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	$ 251,000,000
Standard & Poor's, D Rating | Credit Default Index
Derivative [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	31,000,000
Moodys Baa1 Rating | Single Name
Derivative [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	5,000,000	5,000,000
Credit Risk Derivatives, at Fair Value, Net (less than)	1,000,000	$ 1,000,000
Moodys Ba1 Rating | Credit Default Index
Derivative [Line Items]
Credit Derivative, Maximum Exposure, Undiscounted	$ 67,000,000

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Document and Entity Information - shares shares in Millions	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Trading Symbol	PRU
Entity Registrant Name	PRUDENTIAL FINANCIAL INC
Entity Central Index Key	0001137774
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		451

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Segment Information

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION

Segments

As discussed in Note 1, from December 18, 2001, the date of demutualization, through December 31, 2014, the Company organized its principal operations into the Financial Services Businesses and the Closed Block Business. As a result of the Class B Repurchase on January 2, 2015, the Company no longer organizes its principal operations into the Financial Services Businesses and the Closed Block Business. The Company operates through four divisions, which together encompass seven reportable segments, and its Corporate and Other operations.

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the Company’s chief operating decision maker to evaluate segment performance and allocate resources, and consistent with authoritative guidance, is the measure of segment performance presented below. Adjusted operating income is calculated by adjusting each segment’s “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” for the following items, which are described in greater detail below:

• realized investment gains (losses), net, and related charges and adjustments;

• net investment gains (losses) on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes;

• the contribution to income (loss) of divested businesses that have been or will be sold or exited, including businesses that have been placed in wind down status, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP; and

• equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests.

These items are important to an understanding of overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. However, the Company believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses.

Realized investment gains (losses), net, and related charges and adjustments

Realized investment gains (losses), net

Adjusted operating income excludes “Realized investment gains (losses), net,” except for certain items described below. Significant activity excluded from adjusted operating income includes impairments and credit-related gains and losses from sales of securities, the timing of which depends largely on market credit cycles and can vary considerably across periods, and interest rate-related gains and losses from sales of securities, which are largely subject to the Company’s discretion and influenced by market opportunities, as well as the Company’s tax and capital profile. Additionally, certain gains and losses pertaining to derivative contracts that do not qualify for hedge accounting treatment are also excluded from adjusted operating income. Trends in the underlying profitability of the Company’s businesses can be more clearly identified without the fluctuating effects of these transactions.

The following table sets forth the significant components of “Realized investment gains (losses), net” that are included in adjusted operating income and, as a result, are reflected as adjustments to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Net gains (losses) from(1):
Terminated hedges of foreign currency earnings	$	79	$	66	$	160	$	144
Current period yield adjustments	$	125	$	122	$	248	$	246
Principal source of earnings	$	24	$	13	$	48	$	27

__________ 

(1) In addition to the items in the table above, “Realized investment gains (losses), net, and related charges and adjustments” also includes an adjustment to reflect “Realized investment gains (losses), net” related to divested businesses as results of “Divested businesses,” discussed below.

Terminated Hedges of Foreign Currency Earnings. The amounts shown in the table above primarily reflect the impact of an intercompany arrangement between Corporate and Other operations and the International Insurance segment, pursuant to which the non-U.S. dollar-denominated earnings in all countries for a particular year, including its interim reporting periods, are translated at fixed currency exchange rates. The fixed rates are determined in connection with a currency hedging program designed to mitigate the risk that unfavorable rate changes will reduce the segment’s U.S. dollar equivalent earnings. Pursuant to this program, the Company’s Corporate and Other operations may execute forward currency contracts with third parties to sell the net exposure of projected earnings from the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these contracts correspond with the future periods in which the identified non-U.S. dollar-denominated earnings are expected to be generated. These contracts do not qualify for hedge accounting under U.S. GAAP, so the resulting profits or losses are recorded in “Realized investment gains (losses), net.” When the contracts are terminated in the same period that the expected earnings emerge, the resulting positive or negative cash flow effect is included in adjusted operating income.

Current Period Yield Adjustments. The Company uses interest rate and currency swaps and other derivatives to manage interest and currency exchange rate exposures arising from mismatches between assets and liabilities, including duration mismatches. For derivative contracts that do not qualify for hedge accounting treatment, the periodic swap settlements, as well as certain other derivative related yield adjustments are recorded in “Realized investment gains (losses), net,” and are included in adjusted operating income to reflect the after-hedge yield of the underlying instruments. In certain instances, when these derivative contracts are terminated or offset before their final maturity, the resulting realized gains or losses are recognized in adjusted operating income over periods that generally approximate the expected terms of the derivatives or underlying instruments in order for adjusted operating income to reflect the after-hedge yield of the underlying instruments. Included in the amounts shown in the table above are gains on certain derivative contracts that were terminated or offset before their final maturity of $13 million and $34 million for the three months ended June 30, 2015 and 2014, respectively, and $26 million and $52 million for the six months endedJune 30, 2015 and 2014, respectively. Additionally, as of June 30, 2015, there was a $224 million deferred net gain related to certain derivative contracts that were terminated or offset before their final maturity, primarily in the International Insurance segment. Also included in the amounts shown in the table above are fees related to synthetic GICs of $39 million and $43 million for the three months ended June 30, 2015 and 2014, respectively, and $79 million and $85 million for the six months endedJune 30, 2015 and 2014, respectively. Synthetic GICs are accounted for as derivatives under U.S. GAAP and, therefore, these fees are recorded in “Realized investment gains (losses), net.” See Note 14 for additional information on synthetic GICs.

Principal Source of Earnings. The Company conducts certain activities for which realized investment gains and losses are a principal source of earnings for its businesses and therefore included in adjusted operating income, particularly within the Company’s Asset Management segment. For example, Asset Management’s strategic investing business makes investments for sale or syndication to other investors or for placement or co-investment in the Company’s managed funds and structured products. The realized investment gains and losses associated with the sale of these strategic investments, as well as the majority of derivative results, are a principal activity for this business and included in adjusted operating income. In addition, the realized investment gains and losses associated with loans originated by the Company’s commercial mortgage operations, as well as related derivative results and retained mortgage servicing rights, are a principal activity for this business and included in adjusted operating income.

Other items reflected as adjustments to Realized investment gains (losses), net

The following table sets forth certain other items excluded from adjusted operating income and reflected as an adjustment to “Realized investment gains (losses), net” for purposes of calculating adjusted operating income:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Net gains (losses) from:
Other trading account assets	$	26		$	11		$	(32	)	$	33
Foreign currency exchange movements	$	133		$	(231	)	$	158		$	0
Other activities	$	(2	)	$	9		$	1		$	13

Other Trading Account Assets. The Company has certain investments in its general account portfolios that are classified as trading. These trading investments are carried at fair value and included in “Other trading account assets, at fair value” on the Company’s Unaudited Interim Consolidated Statements of Financial Position. Realized and unrealized gains and losses for these investments are recorded in “Other income.” Consistent with the exclusion of realized investment gains and losses with respect to other investments managed on a consistent basis, the net gains or losses on these investments are excluded from adjusted operating income.

Foreign Currency Exchange Movements. The Company has certain assets and liabilities for which, under U.S. GAAP, the changes in value, including those associated with changes in foreign currency exchange rates during the period, are recorded in “Other income.” To the extent the foreign currency exposure on these assets and liabilities is economically hedged or considered part of the Company’s capital funding strategies for its international subsidiaries, the change in value included in “Other income” is excluded from adjusted operating income. The amounts in the table above for the three and six months ended June 30, 2014, were largely driven by non-yen denominated insurance liabilities in the Company’s Japanese insurance operations. The insurance liabilities are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While these non-yen denominated assets and liabilities are economically hedged, unrealized gains and losses on available-for-sale investments, including those arising from foreign currency exchange rate movements, are recorded in “Accumulated other comprehensive income (loss)” under U.S. GAAP, while the non-yen denominated liabilities are re-measured for foreign currency exchange rate movements, with the related change in value recorded in earnings within “Other income.” Due to this non-economic volatility that has been reflected in U.S. GAAP earnings, the change in value recorded within “Other income” is excluded from adjusted operating income.

As a result of continued growth in these portfolios, the Company implemented a new reporting structure in Gibraltar Life that disaggregated the U.S. and Australian dollar-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The new structure was effective for financial reporting beginning in the first quarter of 2015 and minimizes future volatility in reported U.S. GAAP earnings arising from foreign currency remeasurement.

Other Activities. The Company excludes certain other items from adjusted operating income that are consistent with similar adjustments described above. The significant items within other activities shown in the table above included the following:

In connection with disputes arising out of the Chapter 11 bankruptcy petition filed by Lehman Brothers Holdings Inc., the Company previously recorded losses related to a portion of its counterparty exposure on derivative transactions it had previously held with Lehman Brothers and its affiliates. The Company recorded no estimated recoveries related to this matter in 2015 and recorded estimated recoveries of $9 million and $16 million in the three and six months endedJune 30, 2014, respectively. These recoveries are recorded within “Other income” within the Company’s Corporate and Other operations. Consistent with the exclusion of credit-related losses recorded in “Realized investment gains (losses), net,” the impact of this estimated recovery is excluded from adjusted operating income.

The Company records valuation adjustments for non-performance risk (“NPR”) that relates to the uncollateralized portion of certain derivative contracts between a subsidiary of the Company and third parties and liquidity risk associated with certain derivatives. These adjustments are recorded within “Other income.” Consistent with the exclusion of the mark-to-market on derivatives recorded in “Realized investment gains (losses), net,” the impact of these risks is excluded from adjusted operating income. The net impact of these risks was to exclude from adjusted operating income net losses of $2 million and net losses of less than $1 million for the three months ended June 30, 2015 and 2014, respectively, and net gains of $1 million and net losses of $2 million for the six months endedJune 30, 2015 and 2014, respectively.

Related charges

Charges that relate to realized investment gains and losses are also excluded from adjusted operating income, and include the following:

• The portion of the amortization of DAC, VOBA, unearned revenue reserves and deferred sales inducements for certain products that is related to net realized investment gains and losses.

• Policyholder dividends and interest credited to policyholders’ account balances that relate to certain life policies that pass back certain realized investment gains and losses to the policyholder, and reserves for future policy benefits for certain policies that are affected by net realized investment gains and losses.

• Market value adjustments paid or received upon a contractholder’s surrender of certain of the Company’s annuity products as these amounts mitigate the net realized investment gains or losses incurred upon the disposition of the underlying invested assets.

Investment gains and losses on trading account assets supporting insurance liabilities and changes in experience-rated contractholder liabilities due to asset value changes

Certain products included in the Retirement and International Insurance segments are experience-rated in that investment results associated with these products are expected to ultimately accrue to contractholders. The majority of investments supporting these experience-rated products are classified as trading and are carried at fair value, with realized and unrealized gains and losses reported in “Other income.” To a lesser extent, these experience-rated products are also supported by derivatives and commercial mortgage and other loans. The derivatives are carried at fair value, with realized and unrealized gains and losses reported in “Realized investment gains (losses), net.” The commercial mortgage and other loans are carried at unpaid principal, net of unamortized discounts and an allowance for losses, with gains and losses on sales and changes in the valuation allowance for commercial mortgage and other loans reported in “Realized investment gains (losses), net.”

Adjusted operating income excludes net investment gains and losses on trading account assets supporting insurance liabilities, which is consistent with the exclusion of realized investment gains and losses with respect to other investments supporting insurance liabilities managed on a consistent basis. In addition, to be consistent with the historical treatment of charges related to realized investment gains and losses on investments, adjusted operating income also excludes the change in contractholder liabilities due to asset value changes in the pool of investments (including changes in the fair value of commercial mortgage and other loans) supporting these experience-rated contracts, which are reflected in “Interest credited to policyholders’ account balances.” These adjustments are in addition to the exclusion from adjusted operating income of net investment gains and losses on the related derivatives and commercial mortgage and other loans through “Realized investment gains (losses), net, and related charges and adjustments,” as discussed above. The result of this approach is that adjusted operating income for these products includes net fee revenue and interest spread the Company earns on these experience-rated contracts, and excludes changes in fair value of the pool of investments, both realized and unrealized, that are expected to ultimately accrue to the contractholders.

Divested businesses

The contribution to income (loss) of divested businesses that have been or will be sold or exited, including businesses that have been placed in wind down, but that did not qualify for “discontinued operations” accounting treatment under U.S. GAAP, are excluded from adjusted operating income as the results of divested businesses are not considered relevant to understanding the Company’s ongoing operating results.

As discussed in Note 1, the Class B Repurchase on January 2, 2015 resulted in the elimination of the separate reporting of the Company’s former Financial Services Businesses and Closed Block Business. As a result of the Class B Repurchase, for both the three and six months ended June 30, 2015, the Closed Block division, which is comprised of the Closed Block segment, has been accounted for as a divested business because it consists primarily of certain participating insurance and annuity products that the Company ceased selling at demutualization in 2001 (See Note 6). For reporting periods through December 31, 2014, the Closed Block segment was reported as the Closed Block Business and was analyzed using U.S. GAAP rather than adjusted operating income. Both the current reporting of the Closed Block division and the historic reporting of the Closed Block Business exclude its results from adjusted operating income.

Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests

Equity in earnings of operating joint ventures, on a pre-tax basis, are included in adjusted operating income as these results are a principal source of earnings. These earnings are reflected on a U.S. GAAP basis on an after-tax basis as a separate line on the Company’s Unaudited Interim Consolidated Statements of Operations.

Earnings attributable to noncontrolling interests are excluded from adjusted operating income. Earnings attributable to noncontrolling interests represents the portion of earnings from consolidated entities that relates to the equity interests of minority investors, and are reflected on a U.S. GAAP basis as a separate line on the Company’s Unaudited Interim Consolidated Statements of Operations.

The table below reconciles adjusted operating income before income taxes to income from continuing operations before income taxes and equity in earnings of operating joint ventures:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Adjusted Operating Income before income taxes by Segment:
Individual Annuities	$	548		$	390		$	1,077		$	778
Retirement	237			286			521			650
Asset Management	196			200			401			393
Total U.S. Retirement Solutions and Investment Management division	981			876			1,999			1,821
Individual Life	237			158			353			283
Group Insurance	75			46			105			52
Total U.S. Individual Life and Group Insurance division	312			204			458			335
International Insurance	842			884			1,676			1,721
Total International Insurance division	842			884			1,676			1,721
Corporate Operations	(294		)	(341		)	(547		)	(683		)
Total Corporate and Other	(294		)	(341		)	(547		)	(683		)
Total Adjusted Operating Income before income taxes	1,841			1,623			3,586			3,194
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	346			(71		)	(265		)	(128		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Change in experience-rated contractholder liabilities due to asset value changes	234			(189		)	37			(232		)
Divested businesses:
Closed Block division(1)	52			0			30			0
Other divested businesses	(109		)	47			(34		)	120
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	45			18			58			29
Subtotal(2)	2,129			1,451			4,877			3,156
Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures for Closed Block Business(3)	0			56			0			69
Consolidated income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures	$	2,129		$	1,507		$	4,877		$	3,225

__________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent “Income (loss) from continuing operations before income taxes and equity in earnings of operating joint ventures” of the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

The Individual Annuities segment results reflect DAC as if the individual annuity business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

The table below presents revenues and total assets for the Company’s reportable segments for the periods, or as of the dates, indicated:

	Revenue												Total Assets
	Three Months Ended June 30,						Six Months Ended June 30,						June 30, 2015		December 31, 2014
	2015			2014			2015			2014
	(in millions)
Individual Annuities	$	1,200		$	1,171		$	2,387		$	2,328		$	171,938	$	174,951
Retirement	3,180			1,469			5,658			3,000			176,582		179,674
Asset Management	776			713			1,509			1,380			52,121		50,214
Total U.S. Retirement Solutions and Investment Management division	5,156			3,353			9,554			6,708			400,641		404,839
Individual Life	1,160			1,318			2,511			2,614			71,589		70,152
Group Insurance	1,291			1,342			2,568			2,704			40,951		41,125
Total U.S. Individual Life and Group Insurance division	2,451			2,660			5,079			5,318			112,540		111,277
International Insurance	5,037			5,252			9,943			10,327			171,015		171,635
Total International Insurance division	5,037			5,252			9,943			10,327			171,015		171,635
Corporate Operations	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total Corporate and Other	(144		)	(152		)	(269		)	(304		)	14,642		8,013
Total	12,500			11,113			24,307			22,049			698,838		695,764
Reconciling items:
Realized investment gains (losses), net, and related adjustments	(60		)	(202		)	1,602			(153		)
Charges related to realized investment gains (losses), net	(133		)	(3		)	(79		)	(11		)
Investment gains (losses) on trading account assets supporting insurance liabilities, net	(220		)	225			(137		)	326
Divested businesses:
Closed Block division(1)	1,525			0			3,244			0			63,893		0
Other divested businesses	109			182			333			392
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests	(9		)	(4		)	(6		)	(4		)
Subtotal(2)	13,712			11,311			29,264			22,599			762,731		695,764
Closed Block Business(3)	0			1,835			0			3,401			0		70,891
Total per Unaudited Interim Consolidated Financial Statements	$	13,712		$	13,146		$	29,264		$	26,000		$	762,731	$	766,655

 __________

(1) As a result of the Class B Repurchase, for the three and six months ended June 30, 2015, the Closed Block, along with certain related assets and liabilities, comprises the Closed Block division, which is accounted for as a divested business that is reported separately from the divested businesses that are included in Corporate and Other operations.

(2) Amounts for the three and six months ended June 30, 2014 represent the Company’s former Financial Services Businesses, reflecting the existence of two classes of common stock and the separate reporting of the Financial Services Businesses and the Closed Block Business for that period.

(3) Reflects the existence of two classes of common stock and the separate reporting of the Company’s former Financial Services Businesses and the Closed Block Business for the three and six months ended June 30, 2014.

The Asset Management segment revenues include intersegment revenues primarily consisting of asset-based management and administration fees as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Asset Management segment intersegment revenues	$	169	$	154	$	347	$	310

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated in consolidation in Corporate and Other.

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Income Taxes (Narrative) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Deductions, Dividends	35.00%
Additional Tax Expense Recognized In Statement Of Operations 2014		$ 734

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Fair Value of Assets and Liabilities (Financial Instruments where Carrying Amounts and Fair Values May Differ) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Assets:
Fixed maturities, held-to-maturity	[1]	$ 2,396	$ 2,575
Policy loans		11,652	11,712
Accrued investment income	[1]	3,117	3,130
Liabilities:
Securities sold under agreements to repurchase		7,863	9,407
Cash collateral for loaned securities		3,808	4,241
Short-term debt		3,621	3,839
Long-term debt		20,264	19,831
Fair Value
Assets:
Fixed maturities, held-to-maturity		2,675	2,902
Commercial mortgage and other loans		50,261	48,717
Policy loans		11,652	11,712
Other long-term investments		1,821	1,917
Short-term investments		545	523
Cash and cash equivalents		4,591	3,073
Accrued investment income		3,117	3,130
Other assets		3,546	2,358
Total assets		78,208	74,332
Liabilities:
Policyholders’ account balances—investment contracts		94,492	96,375
Securities sold under agreements to repurchase		7,863	9,407
Cash collateral for loaned securities		3,808	4,241
Short-term debt		3,651	3,888
Long-term debt		21,914	22,086
Notes issued by consolidated VIEs		15	18
Other liabilities		6,360	6,374
Separate account liabilities—investment contracts		105,429	106,976
Total liabilities		243,532	249,365
Fair Value | Level 1
Assets:
Fixed maturities, held-to-maturity		0	0
Commercial mortgage and other loans		0	0
Policy loans		0	0
Other long-term investments		0	0
Short-term investments		0	0
Cash and cash equivalents		3,884	2,230
Accrued investment income		0	0
Other assets		204	143
Total assets		4,088	2,373
Liabilities:
Policyholders’ account balances—investment contracts		0	0
Securities sold under agreements to repurchase		0	0
Cash collateral for loaned securities		0	0
Short-term debt		0	0
Long-term debt		1,281	1,285
Notes issued by consolidated VIEs		0	0
Other liabilities		0	0
Separate account liabilities—investment contracts		0	0
Total liabilities		1,281	1,285
Fair Value | Level 2
Assets:
Fixed maturities, held-to-maturity		1,570	1,703
Commercial mortgage and other loans		545	559
Policy loans		0	0
Other long-term investments		0	0
Short-term investments		545	523
Cash and cash equivalents		707	843
Accrued investment income		3,117	3,130
Other assets		2,624	2,106
Total assets		9,108	8,864
Liabilities:
Policyholders’ account balances—investment contracts		39,723	40,264
Securities sold under agreements to repurchase		7,863	9,407
Cash collateral for loaned securities		3,808	4,241
Short-term debt		3,551	3,784
Long-term debt		16,591	16,718
Notes issued by consolidated VIEs		0	0
Other liabilities		5,636	6,254
Separate account liabilities—investment contracts		74,894	82,801
Total liabilities		152,066	163,469
Fair Value | Level 3
Assets:
Fixed maturities, held-to-maturity		1,105	1,199
Commercial mortgage and other loans		49,716	48,158
Policy loans		11,652	11,712
Other long-term investments		1,821	1,917
Short-term investments		0	0
Cash and cash equivalents		0	0
Accrued investment income		0	0
Other assets		718	109
Total assets		65,012	63,095
Liabilities:
Policyholders’ account balances—investment contracts		54,769	56,111
Securities sold under agreements to repurchase		0	0
Cash collateral for loaned securities		0	0
Short-term debt		100	104
Long-term debt		4,042	4,083
Notes issued by consolidated VIEs		15	18
Other liabilities		724	120
Separate account liabilities—investment contracts		30,535	24,175
Total liabilities		90,185	84,611
Carrying Amount
Assets:
Fixed maturities, held-to-maturity		2,396	2,575
Commercial mortgage and other loans		48,178	46,052
Policy loans		11,652	11,712
Other long-term investments		1,612	1,712
Short-term investments		545	523
Cash and cash equivalents		4,591	3,073
Accrued investment income		3,117	3,130
Other assets		3,546	2,358
Total assets		75,637	71,135
Liabilities:
Policyholders’ account balances—investment contracts		93,602	95,069
Securities sold under agreements to repurchase		7,863	9,407
Cash collateral for loaned securities		3,808	4,241
Short-term debt		3,621	3,839
Long-term debt		20,264	19,831
Notes issued by consolidated VIEs		21	25
Other liabilities		6,360	6,374
Separate account liabilities—investment contracts		105,429	106,976
Total liabilities		$ 240,968	$ 245,762

[1] See Note 5 for details of balances associated with variable interest entities.

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Unaudited Interim Consolidated Statements of Operations - USD ($) $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
REVENUES
Premiums		$ 7,582	$ 6,068	$ 14,229	$ 11,936
Policy charges and fee income		1,250	1,520	2,858	3,021
Net investment income		3,671	3,754	7,440	7,592
Asset management and service fees		956	928	1,908	1,832
Other income		124	267	339	802
Realized investment gains (losses), net:
Other-than-temporary impairments on fixed maturity securities		(54)	(32)	(68)	(111)
Other-than-temporary impairments on fixed maturity securities transferred to Other comprehensive income		25	6	31	69
Other realized investment gains (losses), net		158	635	2,527	859
Total realized investment gains (losses), net		129	609	2,490	817
Total revenues		13,712	13,146	29,264	26,000
BENEFITS AND EXPENSES
Policyholders’ benefits		7,852	6,466	15,091	12,852
Interest credited to policyholders’ account balances		676	1,178	1,909	2,193
Dividends to policyholders		437	711	1,218	1,311
Amortization of deferred policy acquisition costs		135	482	924	919
General and administrative expenses		2,483	2,802	5,245	5,500
Total benefits and expenses		11,583	11,639	24,387	22,775
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES		2,129	1,507	4,877	3,225
Total income tax expense (benefit)		679	404	1,378	877
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES		1,450	1,103	3,499	2,348
Equity in earnings of operating joint ventures, net of taxes		9	6	6	6
INCOME (LOSS) FROM CONTINUING OPERATIONS		1,459	1,109	3,505	2,354
Income (loss) from discontinued operations, net of taxes		0	4	0	8
NET INCOME (LOSS)		1,459	1,113	3,505	2,362
Less: Income (loss) attributable to noncontrolling interests		53	23	63	34
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.		$ 1,406	$ 1,090	$ 3,442	$ 2,328
Basic earnings per share-Common Stock:
Income (loss) from continuing operations attributable to Prudential Financial, Inc. (in dollars per share)	[1]	$ 3.07	$ 2.25	$ 7.52	$ 4.87
Income (loss) from discontinued operations, net of taxes (in dollars per share)	[1]	0.00	0.01	0.00	0.02
Net income (loss) attributable to Prudential Financial, Inc. (in dollars per share)	[1]	3.07	2.26	7.52	4.89
Diluted earnings per share-Common Stock:
Income (loss) from continuing operations attributable to Prudential Financial, Inc. (in dollars per share)	[1]	3.03	2.21	7.40	4.79
Income (loss) from discontinued operations, net of taxes (in dollars per share)	[1]	0.00	0.01	0.00	0.02
Net income (loss) attributable to Prudential Financial, Inc. (in dollars per share)	[1]	3.03	2.22	7.40	4.81
Dividends declared per share of Common Stock (in dollars per share)		$ 0.58	$ 0.53	$ 1.16	$ 1.06

[1] For the three and six months ended June 30, 2015, represents consolidated earnings per share of Common Stock. For the three and six months ended June 30, 2014, represents earnings of the Company’s former Financial Services Businesses per share of Common Stock. See Note 8 for additional information.

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Variable Interest Entities

6 Months Ended

Jun. 30, 2015

Variable Interest Entities [Abstract]

Variable Interest Entities

VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control activities of the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE.

If the Company determines that it is the VIE’s “primary beneficiary” it consolidates the VIE. There are currently two models for determining whether or not the Company is the “primary beneficiary” of a VIE. The first (the “Investment Company Model”) relates to those VIEs that have the characteristics of an investment company and for which certain other conditions are true. These conditions are that (1) the Company does not have the implicit or explicit obligation to fund losses of the VIE and (2) the VIE is not a securitization entity, asset-backed financing entity or an entity that was formerly considered a qualified special-purpose entity. In this model the Company is the primary beneficiary if it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns.

For all other VIEs, the Company is the primary beneficiary if the Company has (1) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (2) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant.

Consolidated Variable Interest Entities

The Company is the investment manager of certain asset-backed investment vehicles commonly referred to as collateralized loan obligations (“CLOs”) and certain other vehicles for which the Company earns fee income for investment management services, including certain investment structures in which the Company’s asset management business invests with other co-investors in investment funds referred to as feeder funds. The Company may sell or syndicate investments through these vehicles, principally as part of the strategic investing activity of the Company’s asset management businesses. Additionally, the Company may invest in securities issued by these vehicles. CLOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments. The Company has analyzed these relationships and determined that for certain CLOs and other investment structures it is the primary beneficiary and consolidates these entities. This analysis includes a review of (1) the Company’s rights and responsibilities as investment manager, (2) fees received by the Company and (3) other interests (if any) held by the Company. The assets of these VIEs are restricted and must be used first to settle liabilities of the VIE. The Company is not required to provide, and has not provided, material financial or other support to any of these VIEs.

Additionally, the Company is the primary beneficiary of certain VIEs in which the Company has invested, as part of its investment activities, but for which it is not the investment manager. These include structured investments issued by a VIE that manages yen-denominated investments coupled with cross-currency coupon swap agreements thereby creating synthetic dual currency investments. The Company’s involvement in the structuring of these investments combined with its economic interest indicates that the Company is the primary beneficiary. The Company has not provided material financial support or other support that was not contractually required to these VIEs.

The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported. The liabilities primarily comprise obligations under debt instruments issued by the VIEs that are non-recourse to the Company. The creditors of these VIEs do not have recourse to the Company in excess of the assets contained within the VIEs.

	Consolidated VIEs for Which the Company is the Investment Manager				Other Consolidated VIEs
	June 30, 2015		December 31, 2014		June 30, 2015			December 31, 2014
	(in millions)
Fixed maturities, available-for-sale	$	49	$	44	$	99		$	104
Fixed maturities, held-to-maturity	0		0		747			763
Trading account assets supporting insurance liabilities	0		0		10			11
Other trading account assets	8,402		6,943		0			0
Commercial mortgage and other loans	13		13		300			300
Other long-term investments	0		0		173			159
Cash and cash equivalents	400		623		1			0
Accrued investment income	46		39		3			3
Other assets	174		166		0			0
Total assets of consolidated VIEs	$	9,084	$	7,828	$	1,333		$	1,340
Notes issued by consolidated VIEs	$	7,455	$	6,058	$	0		$	0
Other liabilities	521		674		(1		)	1
Total liabilities of consolidated VIEs	$	7,976	$	6,732	$	(1	)	$	1

As included in the table above, notes issued by consolidated VIEs are classified in the line item on the Unaudited Interim Consolidated Statements of Financial Position titled, “Notes issued by consolidated VIEs.” Recourse is limited to the assets of the respective VIE and does not extend to the general credit of Prudential Financial. As of June 30, 2015, the maturities of these obligations were greater than five years.

In addition, not reflected in the table above, the Company has created a trust that is a VIE, to facilitate Prudential Insurance’s Funding Agreement Notes Issuance Program (“FANIP”). The trust issues medium-term notes secured by funding agreements issued to the trust by Prudential Insurance with the proceeds of such notes. The trust is the beneficiary of an indemnity agreement with the Company that provides that the Company is responsible for costs related to the notes issued, with limited exceptions. As a result, the Company has determined that it is the primary beneficiary of the trust, which is therefore consolidated.

The funding agreements represent an intercompany transaction that is eliminated upon consolidation. However, in recognition of the security interest in such funding agreements, the trust’s medium-term note liability of $2,705 million at both June 30, 2015 and December 31, 2014 is classified within “Policyholders’ account balances.” Creditors of the trust have recourse to Prudential Insurance if the trust fails to make contractual payments on the medium-term notes. The Company has not provided material financial or other support to the trust that was not contractually required.

Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it is the investment manager. These VIEs consist primarily of investment funds for which the Company utilizes the Investment Company Model to assess consolidation. Accordingly, the Company has determined that it is not the primary beneficiary of these entities because it does not stand to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns. For all other investment structures, the Company has determined that it is not the primary beneficiary as it does not have both (1) the power to direct the activities of the VIE that most significantly impact the economic performance of the entity and (2) the obligation to absorb losses of the entity that could be potentially significant to the VIE or the right to receive benefits from the entity that could be potentially significant. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs for which it is the investment manager is limited to its investment in the VIEs, which was $174 million and $137 million at June 30, 2015 and December 31, 2014, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Other trading account assets, at fair value” and “Other long-term investments.” The fair value of assets held within these unconsolidated VIEs was $5,982 million and $6,973 million as of June 30, 2015 and December 31, 2014, respectively. There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In the normal course of its activities, the Company will invest in joint ventures and limited partnerships. These ventures include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company’s maximum exposure to loss on these investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company has determined that it is not required to consolidate these entities because either: (1) it does not control them or (2) it does not have the obligation to absorb losses of the entities that could be potentially significant to the entities or the right to receive benefits from the entities that could be potentially significant. The Company classifies these investments as “Other long-term investments” and its maximum exposure to loss associated with these entities was $7,482 million and $7,545 million as of June 30, 2015 and December 31, 2014, respectively.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 4 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

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Investments

6 Months Ended

Jun. 30, 2015

Investments [Abstract]

Investments

INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) as of the dates indicated:

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	14,196	$	3,635	$	20	$	17,811	$	0
Obligations of U.S. states and their political subdivisions	7,378		614		106		7,886		0
Foreign government bonds	68,681		10,342		162		78,861		(1		)
Corporate securities(1)	144,539		14,607		2,572		156,574		(18		)
Asset-backed securities(2)	10,948		387		100		11,235		(565		)
Commercial mortgage-backed securities	11,918		284		50		12,152		(1		)
Residential mortgage-backed securities(3)	5,160		391		7		5,544		(4		)
Total fixed maturities, available-for-sale(1)	$	262,820	$	30,260	$	3,017	$	290,063	$	(589	)
Equity securities, available-for-sale	$	6,870	$	3,119	$	88	$	9,901

	June 30, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	804	$	160	$	0	$	964
Corporate securities(5)	696		60		2		754
Commercial mortgage-backed securities	59		2		0		61
Residential mortgage-backed securities(3)	837		58		0		895
Total fixed maturities, held-to-maturity(5)	$	2,396	$	280	$	2	$	2,674

__________

(1) Excludes notes with amortized cost of $693 million (fair value, $695 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in Accumulated Other Comprehensive Income (“AOCI”), which were not included in earnings. Amount excludes $944 million of net unrealized gains on impaired available-for-sale securities and less than $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,850 million (fair value, $4,069 million) which have been offset with the associated payables under a netting agreement.

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than- temporary Impairments in AOCI(4)
	(in millions)
Fixed maturities, available-for-sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	15,807	$	4,321	$	5	$	20,123	$	0
Obligations of U.S. states and their political subdivisions	5,720		814		3		6,531		0
Foreign government bonds	69,894		11,164		117		80,941		(1		)
Corporate securities(1)	143,631		17,799		1,054		160,376		(6		)
Asset-backed securities(2)	10,966		353		134		11,185		(592		)
Commercial mortgage-backed securities	13,486		430		39		13,877		(1		)
Residential mortgage-backed securities(3)	5,612		448		3		6,057		(5		)
Total fixed maturities, available-for-sale(1)	$	265,116	$	35,329	$	1,355	$	299,090	$	(605	)
Equity securities, available-for-sale	$	6,921	$	3,023	$	83	$	9,861

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, held-to-maturity
Foreign government bonds	$	821	$	184	$	0	$	1,005
Corporate securities(5)	713		68		1		780
Commercial mortgage-backed securities	78		7		0		85
Residential mortgage-backed securities(3)	963		69		0		1,032
Total fixed maturities, held-to-maturity(5)	$	2,575	$	328	$	1	$	2,902

__________

(1) Excludes notes with amortized cost of $385 million (fair value, $385 million) which have been offset with the associated payables under a netting agreement.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

(3) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(4) Represents the amount of other-than-temporary impairment losses in AOCI, which were not included in earnings. Amount excludes $954 million of net unrealized gains on impaired available-for-sale securities and $1 million of net unrealized gains on impaired held-to-maturity securities relating to changes in the value of such securities subsequent to the impairment measurement date.

(5) Excludes notes with amortized cost of $3,588 million (fair value, $3,953 million) which have been offset with the associated payables under a netting agreement.

The amortized cost and fair value of fixed maturities by contractual maturities at June 30, 2015, are as follows:

	Available-for-Sale				Held-to-Maturity
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Due in one year or less	$	11,624	$	12,378	$	0	$	0
Due after one year through five years	44,963		50,198		72		77
Due after five years through ten years	56,728		62,754		167		175
Due after ten years(1)	121,479		135,802		1,261		1,466
Asset-backed securities	10,948		11,235		0		0
Commercial mortgage-backed securities	11,918		12,152		59		61
Residential mortgage-backed securities	5,160		5,544		837		895
Total	$	262,820	$	290,063	$	2,396	$	2,674

__________ 

(1) Excludes available-for-sale notes with amortized cost of $693 million (fair value, $695 million) and held-to-maturity notes with amortized cost of $3,850 million (fair value, $4,069 million), which have been offset with the associated payables under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale
Proceeds from sales	$	7,626		$	7,460		$	15,044		$	16,038
Proceeds from maturities/repayments	4,618			5,847			9,713			10,706
Gross investment gains from sales, prepayments and maturities	442			476			974			901
Gross investment losses from sales and maturities	(42)			(83		)	(97		)	(235		)
Fixed maturities, held-to-maturity
Gross investment gains from prepayments	$	0		$	0		$	0		$	0
Proceeds from maturities/repayments	63			138			123			232
Equity securities, available-for-sale
Proceeds from sales	$	1,564		$	1,316		$	2,553		$	2,481
Gross investment gains from sales	273			198			427			331
Gross investment losses from sales	(35		)	(22		)	(61		)	(60		)
Fixed maturity and equity security impairments
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(1)	$	(29	)	$	(26	)	$	(37	)	$	(42	)
Writedowns for impairments on equity securities	(11		)	(7		)	(17		)	(17		)

__________ 

(1) Excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

As discussed in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities is recognized in “Other comprehensive income (loss)” (“OCI”). For these securities, the net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts:

	Three Months Ended June 30, 2015			Six Months Ended June 30, 2015
	(in millions)
Balance, beginning of period	$	773		$	781
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(15		)	(28		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	(12		)	(13		)
Credit loss impairments recognized in the current period on securities not previously impaired	0			3
Additional credit loss impairments recognized in the current period on securities previously impaired	2			2
Increases due to the passage of time on previously recorded credit losses	7			13
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(7		)
Balance, end of period	$	751		$	751

	Three Months Ended June 30, 2014			Six Months Ended June 30, 2014
	(in millions)
Balance, beginning of period	$	838		$	968
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period	(59		)	(199		)
Credit loss impairments previously recognized on securities impaired to fair value during the period(1)	0			0
Credit loss impairments recognized in the current period on securities not previously impaired	10			12
Additional credit loss impairments recognized in the current period on securities previously impaired	0			4
Increases due to the passage of time on previously recorded credit losses	9			18
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected	(4		)	(9		)
Balance, end of period	$	794		$	794

__________ 

(1) Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Trading Account Assets Supporting Insurance Liabilities

The following table sets forth the composition of “Trading account assets supporting insurance liabilities” as of the dates indicated:

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	423	$	422	$	196	$	196
Fixed maturities:
Corporate securities	12,251		12,566		11,922		12,439
Commercial mortgage-backed securities	2,055		2,078		2,505		2,546
Residential mortgage-backed securities(1)	1,488		1,508		1,640		1,676
Asset-backed securities(2)	1,417		1,440		1,180		1,198
Foreign government bonds	635		647		621		650
U.S. government authorities and agencies and obligations of U.S. states	290		333		303		372
Total fixed maturities	18,136		18,572		18,171		18,881
Equity securities	974		1,273		896		1,186
Total trading account assets supporting insurance liabilities	$	19,533	$	20,267	$	19,263	$	20,263

__________ 

(1) Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

(2) Includes credit-tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans and other asset types.

The net change in unrealized gains (losses) from trading account assets supporting insurance liabilities still held at period end, recorded within “Other income,” was $(276) million and $201 million during the three months ended June 30, 2015 and 2014, respectively, and $(266) million and $267 million during the six months endedJune 30, 2015 and 2014, respectively.

Other Trading Account Assets

The following table sets forth the composition of the “Other trading account assets” as of the dates indicated:

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Short-term investments and cash equivalents	$	61	$	62	$	27	$	27
Fixed maturities	9,487		9,475		8,306		8,282
Equity securities	1,027		1,135		992		1,105
Other	12		16		7		11
Subtotal	$	10,587	10,688		$	9,332	9,425
Derivative instruments			2,061				1,449
Total other trading account assets			$	12,749			$	10,874

The net change in unrealized gains (losses) from other trading account assets, excluding derivative instruments, still held at period end, recorded within “Other income,” was $61 million and $9 million during the three months ended June 30, 2015 and 2014, respectively, and $9 million and $35 million during the six months endedJune 30, 2015 and 2014, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments on an ongoing basis, and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any one issuer.

As of both June 30, 2015 and December 31, 2014, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s stockholders’ equity included securities of the U.S. government, certain U.S. government agencies and certain securities guaranteed by the U.S. government, as well as the securities disclosed below.

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	50,735	$	57,562	$	52,703	$	60,379
Fixed maturities, held-to-maturity	783		940		801		981
Trading account assets supporting insurance liabilities	475		482		457		470
Other trading account assets	35		35		36		36
Short-term investments	0		0		0		0
Cash equivalents	163		163		0		0
Total	$	52,191	$	59,182	$	53,997	$	61,866

	June 30, 2015				December 31, 2014
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in South Korean government and government agency securities:
Fixed maturities, available-for-sale	$	7,207	$	8,815	$	6,927	$	8,438
Fixed maturities, held-to-maturity	0		0		0		0
Trading account assets supporting insurance liabilities	44		45		49		50
Other trading account assets	0		0		0		0
Short-term investments	0		0		0		0
Cash equivalents	0		0		0		0
Total	$	7,251	$	8,860	$	6,976	$	8,488

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows, as of the dates indicated:

	June 30, 2015					December 31, 2014
	Amount (in millions)			% of Total		Amount (in millions)			% of Total
Commercial mortgage and agricultural property loans by property type:
Office	$	10,905		23.2	%	$	9,612		21.5	%
Retail	8,810			18.8		8,765			19.6
Apartments/Multi-Family	11,098			23.6		10,369			23.2
Industrial	7,542			16.1		7,628			16.9
Hospitality	2,451			5.2		2,270			5.1
Other	3,587			7.6		3,659			8.2
Total commercial mortgage loans	44,393			94.5		42,303			94.5
Agricultural property loans	2,604			5.5		2,445			5.5
Total commercial mortgage and agricultural property loans by property type	46,997			100.0	%	44,748			100.0	%
Valuation allowance	(97		)			(105		)
Total net commercial mortgage and agricultural property loans by property type	46,900					44,643
Other loans:
Uncollateralized loans	1,038					1,092
Residential property loans	327					392
Other collateralized loans	315					319
Total other loans	1,680					1,803
Valuation allowance	(11		)			(14		)
Total net other loans	1,669					1,789
Total commercial mortgage and other loans(1)	$	48,569				$	46,432

__________ 

(1) Includes loans held at fair value.

The commercial mortgage and agricultural property loans are geographically dispersed throughout the United States (with the largest concentrations in California (26%), New York (9%) and Texas (9%)) and Asia at June 30, 2015.

Activity in the allowance for credit losses for all commercial mortgage and other loans, as of the dates indicated, is as follows:

	June 30, 2015
	Commercial Mortgage Loans			Agricultural Property Loans		Residential Property Loans			Other Collateralized Loans		Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	104		$	1	$	5		$	0	$	9		$	119
Addition to (release of) allowance for losses	(8		)	0		(2		)	0		0			(10		)
Charge-offs, net of recoveries	0			0		0			0		0			0
Change in foreign exchange	0			0		0			0		(1		)	(1		)
Total ending balance	$	96		$	1	$	3		$	0	$	8		$	108

	December 31, 2014
	Commercial Mortgage Loans			Agricultural Property Loans			Residential Property Loans			Other Collateralized Loans			Uncollateralized Loans			Total
	(in millions)
Allowance for credit losses, beginning of year	$	188		$	7		$	6		$	3		$	12		$	216
Addition to (release of) allowance for losses	(77		)	(6		)	(1		)	(1		)	(2		)	(87		)
Charge-offs, net of recoveries	(7		)	0			0			(2		)	0			(9		)
Change in foreign exchange	0			0			0			0			(1		)	(1		)
Total ending balance	$	104		$	1		$	5		$	0		$	9		$	119

The following tables set forth the allowance for credit losses and the recorded investment in commercial mortgage and other loans as of the dates indicated:

	June 30, 2015
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	3	$	0	$	0	$	0	$	0	$	3
Collectively evaluated for impairment	93		1		3		0		8		105
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	96	$	1	$	3	$	0	$	8	$	108
Recorded Investment(1):
Gross of reserves: individually evaluated for impairment	$	254	$	4	$	0	$	1	$	2	$	261
Gross of reserves: collectively evaluated for impairment	44,139		2,600		327		314		1,036		48,416
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	44,393	$	2,604	$	327	$	315	$	1,038	$	48,677

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

	December 31, 2014(1)
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance for Credit Losses:
Individually evaluated for impairment	$	8	$	0	$	0	$	0	$	0	$	8
Collectively evaluated for impairment	96		1		5		0		9		111
Loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance	$	104	$	1	$	5	$	0	$	9	$	119
Recorded Investment(2):
Gross of reserves: individually evaluated for impairment	$	247	$	4	$	0	$	1	$	2	$	254
Gross of reserves: collectively evaluated for impairment	42,056		2,441		392		318		1,090		46,297
Gross of reserves: loans acquired with deteriorated credit quality	0		0		0		0		0		0
Total ending balance, gross of reserves	$	42,303	$	2,445	$	392	$	319	$	1,092	$	46,551

__________

(1) Prior period’s amounts are presented on a basis consistent with current period presentation.

(2) Recorded investment reflects the balance sheet carrying value gross of related allowance.

Impaired loans include those loans for which it is probable that all amounts due will not be collected according to the contractual terms of the loan agreement. Impaired commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses, as of the dates indicated, are as follows:

	June 30, 2015
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	0	$	0	$	0	$	0	$	0
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	0	$	1	$	0	$	0	$	0
With an allowance recorded:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	55	$	55	$	3	$	79	$	1
Total:
Commercial mortgage loans	$	55	$	55	$	3	$	79	$	1
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total	$	55	$	56	$	3	$	79	$	1

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

	December 31, 2014
	Recorded Investment(1)		Unpaid Principal Balance		Related Allowance		Average Recorded Investment Before Allowance(2)		Interest Income Recognized(3)
	(in millions)
With no related allowance recorded:
Commercial mortgage loans	$	8	$	8	$	0	$	16	$	1
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		0		0
Uncollateralized loans	0		1		0		0		0
Total with no related allowance	$	12	$	13	$	0	$	20	$	1
With an allowance recorded:
Commercial mortgage loans	$	76	$	76	$	8	$	82	$	6
Agricultural property loans	0		0		0		0		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		0		0		0		0
Total with related allowance	$	76	$	76	$	8	$	85	$	7
Total:
Commercial mortgage loans	$	84	$	84	$	8	$	98	$	7
Agricultural property loans	4		4		0		4		0
Residential property loans	0		0		0		0		0
Other collateralized loans	0		0		0		3		1
Uncollateralized loans	0		1		0		0		0
Total	$	88	$	89	$	8	$	105	$	8

__________ 

(1) Recorded investment reflects the balance sheet carrying value gross of related allowance.

(2) Average recorded investment represents the average of the beginning-of-period and all subsequent quarterly end-of-period balances.

(3) The interest income recognized is for the year-to-date income regardless of when the impairments occurred.

The net carrying value of commercial and other loans held for sale by the Company as of June 30, 2015 and December 31, 2014, was $391 million and $380 million, respectively. In all of these transactions, the Company pre-arranges that it will sell the loan to an investor. As of both June 30, 2015 and December 31, 2014, all of the Company’s commercial and other loans held for sale were collateralized, with collateral primarily consisting of apartment complexes.

The following tables set forth certain key credit quality indicators as of June 30, 2015, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	23,344	$	429	$	275	$	24,048
60%-69.99%	13,434		444		79		13,957
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage loans	$	42,353	$	1,460	$	580	$	44,393

Agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,290	$	148	$	2	$	2,440
60%-69.99%	164		0		0		164
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,454	$	148	$	2	$	2,604

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—June 30, 2015
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	25,634	$	577	$	277	$	26,488
60%-69.99%	13,598		444		79		14,121
70%-79.99%	5,440		448		60		5,948
Greater than 80%	135		139		166		440
Total commercial mortgage and agricultural property loans	$	44,807	$	1,608	$	582	$	46,997

The following tables set forth certain key credit quality indicators as of December 31, 2014, based upon the recorded investment gross of allowance for credit losses.

Commercial mortgage loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	22,557	$	637	$	207	$	23,401
60%-69.99%	12,563		500		237		13,300
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage loans	$	39,708	$	1,928	$	667	$	42,303

Agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	2,152	$	140	$	2	$	2,294
60%-69.99%	151		0		0		151
70%-79.99%	0		0		0		0
Greater than 80%	0		0		0		0
Total agricultural property loans	$	2,303	$	140	$	2	$	2,445

Total commercial mortgage and agricultural property loans

	Debt Service Coverage Ratio—December 31, 2014
	Greater than 1.2X		1.0X to <1.2X		Less than 1.0X		Total
	(in millions)
Loan-to-Value Ratio
0%-59.99%	$	24,709	$	777	$	209	$	25,695
60%-69.99%	12,714		500		237		13,451
70%-79.99%	4,354		664		21		5,039
Greater than 80%	234		127		202		563
Total commercial mortgage and agricultural property loans	$	42,011	$	2,068	$	669	$	44,748

The following tables provide an aging of past due commercial mortgage and other loans as of the dates indicated, based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage loans on nonaccrual status as of the dates indicated.

	June 30, 2015
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	44,344	$	49	$	0	$	0	$	0	$	49	$	44,393	$	103
Agricultural property loans	2,603		0		0		0		1		1		2,604		1
Residential property loans	315		4		1		0		7		12		327		7
Other collateralized loans	314		0		0		0		1		1		315		1
Uncollateralized loans	1,038		0		0		0		0		0		1,038		0
Total	$	48,614	$	53	$	1	$	0	$	9	$	63	$	48,677	$	112

	December 31, 2014
	Current		30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days - Accruing		Greater Than 90 Days - Not Accruing		Total Past Due		Total Commercial Mortgage and Other Loans		Non Accrual Status
	(in millions)
Commercial mortgage loans	$	42,239	$	62	$	0	$	0	$	2	$	64	$	42,303	$	101
Agricultural property loans	2,443		0		1		0		1		2		2,445		1
Residential property loans	375		7		2		0		8		17		392		8
Other collateralized loans	319		0		0		0		0		0		319		0
Uncollateralized loans	1,092		0		0		0		0		0		1,092		0
Total	$	46,468	$	69	$	3	$	0	$	11	$	83	$	46,551	$	110

See Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, for further discussion regarding nonaccrual status loans.

For both the three and six months endedJune 30, 2015, there were $53 million of commercial mortgage and other loans acquired, other than those through direct origination and there were $18 million of commercial mortgage and other loans sold, other than those classified as held-for-sale. For both the three and six months ended June 30, 2014, there were no commercial mortgage and other loans acquired, other than those through direct origination, nor were there any commercial mortgage and other loans sold, other than those classified as held-for-sale.

The Company’s commercial mortgage and other loans may occasionally be involved in a troubled debt restructuring. As of June 30, 2015 and December 31, 2014, the Company had no significant commitments to fund to borrowers that have been involved in a troubled debt restructuring. During the three months and six months ended June 30, 2015 and 2014, there were no new troubled debt restructurings related to commercial mortgage loans, and no payment defaults on commercial mortgage and other loans that were modified as a troubled debt restructuring within the 12 months preceding each respective period. For additional information relating to the accounting for troubled debt restructurings, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

As of June 30, 2015 and December 31, 2014, the Company did not have any foreclosed residential real estate property.

Net Investment Income

Net investment income for the three and six months endedJune 30, 2015 and 2014, was from the following sources:

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
	(in millions)
Fixed maturities, available-for-sale(1)	$	2,611		$	2,669		$	5,194		$	5,286
Fixed maturities, held-to-maturity(1)	51			42			100			82
Equity securities, available-for-sale	81			105			177			189
Trading account assets	294			259			581			517
Commercial mortgage and other loans	556			522			1,100			1,020
Policy loans	154			158			308			312
Short-term investments and cash equivalents	11			8			24			17
Other long-term investments	137			175			381			517
Gross investment income	3,895			3,938			7,865			7,940
Less: investment expenses	(224		)	(184		)	(425		)	(348		)
Net investment income	$	3,671		$	3,754		$	7,440		$	7,592

__________ 

(1) Includes income on credit-linked notes which are reported on the same financial line item as related surplus notes, as conditions are met for right-of-offset.

The Company had $238 million and $218 million of investments in low-income housing tax credit limited partnerships and has committed to fund $52 million and $67 million as of June 30, 2015 and December 31, 2014, respectively.

Generally, the Company uses the equity method of accounting for these investments. The Company recognized $1 million and $6 million of equity method losses and utilized $0 million and $8 million of tax credits associated with these investments for the three months ended June 30, 2015 and 2014, respectively. The company recognized $3 million and $8 million of equity method losses and utilized $9 million and $15 million of tax credits associated with these investments for the six months ended June 30, 2015 and 2014, respectively. There were no impairment losses from forfeiture or ineligibility of tax credits.

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the three and six months endedJune 30, 2015 and 2014, were from the following sources:

	Three Months Ended June 30,					Six Months Ended June 30,
	2015			2014		2015			2014
	(in millions)
Fixed maturities	$	371		$	367	$	840		$	624
Equity securities	227			169		348			254
Commercial mortgage and other loans	20			8		31			16
Investment real estate	14			0		38			0
Joint ventures and limited partnerships	(4		)	0		(9		)	1
Derivatives(1)	(503		)	60		1,235			(85		)
Other	4			5		7			7
Realized investment gains (losses), net	$	129		$	609	$	2,490		$	817

__________ 

(1) Includes the offset of hedged items in qualifying effective hedge relationships prior to maturity or termination.

Net Unrealized Gains (Losses) on Investments by Asset Class

The table below presents net unrealized gains (losses) on investments by asset class as of the dates indicated:

	June 30, 2015			December 31, 2014
	(in millions)
Fixed maturity securities on which an OTTI loss has been recognized	$	355		$	349
Fixed maturity securities, available-for-sale—all other	26,888			33,625
Equity securities, available-for-sale	3,031			2,940
Derivatives designated as cash flow hedges(1)	702			206
Other investments(2)	(10		)	(7		)
Net unrealized gains (losses) on investments	$	30,966		$	37,113

__________ 

(1) See Note 14 for more information on cash flow hedges.

(2) As of June 30, 2015, there were $0 million of net unrealized losses on held-to-maturity securities that were previously transferred from available-for-sale. Includes net unrealized gains on certain joint ventures that are strategic in nature and are included in “Other assets.”

Duration of Gross Unrealized Loss Positions for Fixed Maturities and Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities and equity securities have been in a continuous unrealized loss position, as of the dates indicated:

	June 30, 2015
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	1,563	$	20	$	0	$	0	$	1,563	$	20
Obligations of U.S. states and their political subdivisions	3,060		105		8		1		3,068		106
Foreign government bonds	2,498		72		1,314		90		3,812		162
Corporate securities	36,276		1,984		5,642		588		41,918		2,572
Commercial mortgage-backed securities	2,983		38		550		12		3,533		50
Asset-backed securities	2,535		7		2,714		93		5,249		100
Residential mortgage-backed securities	529		4		122		3		651		7
Total	$	49,444	$	2,230	$	10,350	$	787	$	59,794	$	3,017
Equity securities, available-for-sale	$	1,855	$	87	$	6	$	1	$	1,861	$	88

__________ 

(1) Includes $84 million of fair value and $2 million of gross unrealized losses at June 30, 2015, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

	December 31, 2014
	Less than twelve months				Twelve months or more				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities(1)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	2,145	$	5	$	10	$	0	$	2,155	$	5
Obligations of U.S. states and their political subdivisions	105		1		89		2		194		3
Foreign government bonds	839		26		1,052		91		1,891		117
Corporate securities	11,326		401		13,346		654		24,672		1,055
Commercial mortgage-backed securities	1,299		6		1,746		33		3,045		39
Asset-backed securities	3,417		16		3,229		118		6,646		134
Residential mortgage-backed securities	35		0		194		3		229		3
Total	$	19,166	$	455	$	19,666	$	901	$	38,832	$	1,356
Equity securities, available-for-sale	$	1,670	$	82	$	9	$	1	$	1,679	$	83

__________ 

(1) Includes $91 million of fair value and $1 million of gross unrealized losses at December 31, 2014, on securities classified as held-to-maturity, a portion of which is not reflected in AOCI.

The gross unrealized losses on fixed maturity securities at June 30, 2015 and December 31, 2014, are composed of $2,772 million and $1,156 million, related to high or highest quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $245 million and $200 million, related to other than high or highest quality securities based on NAIC or equivalent rating, respectively. At June 30, 2015, the $787 million of gross unrealized losses of twelve months or more were concentrated in the energy, consumer non-cyclical and basic industry sectors of the Company’s corporate securities. At December 31, 2014, the $901 million of gross unrealized losses of twelve months or more were concentrated in the energy, consumer non-cyclical and utility sectors of the Company’s corporate securities. In accordance with its policy described in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at June 30, 2015 or December 31, 2014. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to foreign currency exchange rate movements and general credit spread widening. At June 30, 2015, the Company does not intend to sell these securities and it is not more likely than not that the Company will be required to sell these securities before the anticipated recovery of its remaining amortized cost basis.

At June 30, 2015, $13 million of the gross unrealized losses on equity securities represented declines in value of greater than 20%, $9 million of which had been in that position for less than six months. At December 31, 2014, $13 million of the gross unrealized losses on equity securities represented declines in value of greater than 20%, all of which had been in that position for less than six months. In accordance with its policy described in Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014, the Company concluded that an adjustment for other-than-temporary impairments for these equity securities was not warranted at June 30, 2015 or December 31, 2014.

In the normal course of business, the Company sells securities under agreements to repurchase and enters into securities lending transactions. The following table sets forth the composition of repurchase agreements as of the date indicated.

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,109	$	3,541	$	263	$	0	$	6,913
Obligations of U.S. states and their political subdivisions	0		0		0		0		0
Foreign government bonds	0		0		0		0		0
Corporate securities	20		0		0		0		20
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	0		0		0		0		0
Residential mortgage-backed securities	404		526		0		0		930
Equity securities	0		0		0		0		0
Total repurchase agreements	$	3,533	$	4,067	$	263	$	0	$	7,863

The following table sets forth the composition of securities lending transactions as of the date indicated.

	June 30, 2015
	Remaining Contractual Maturity of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Greater than 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	299	$	0	$	0	$	0	$	299
Obligations of U.S. states and their political subdivisions	16		0		0		0		16
Foreign government bonds	323		0		0		0		323
Corporate securities	2,498		128		0		0		2,626
Asset-backed securities	0		0		0		0		0
Commercial mortgage-backed securities	17		0		0		0		17
Residential mortgage-backed securities	0		262		0		0		262
Equity securities	265		0		0		0		265
Total securities lending transactions	$	3,418	$	390	$	0	$	0	$	3,808

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Significant Accounting Policies and Pronouncements (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Basis of Presentation, Policy

Basis of Presentation

As a result of the Class B Repurchase and resulting elimination of the separation of the Financial Services Businesses and the Closed Block Business, these Unaudited Interim Consolidated Financial Statements refer to the divisions and segments of the Company that formerly comprised the Financial Services Businesses as “PFI excluding Closed Block division” and refer to the operations that were formerly included in the Closed Block Business as the “Closed Block division,” except as otherwise noted. Closed Block Business results were associated with the Company’s Class B Stock for periods prior to January 1, 2015.

The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. See Note 5 for more information on the Company’s consolidated variable interest entities. The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

The Company’s Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”) consolidated operations use a November 30 fiscal year end for purposes of inclusion in the Company’s Consolidated Financial Statements; therefore, the Unaudited Interim Consolidated Financial Statements as of June 30, 2015, include the assets and liabilities of Gibraltar Life and its results of operations as of, and for the three and six months ended, May 31, 2015, respectively.

Use of Estimates, Policy

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs (“DAC”) and related amortization; value of business acquired (“VOBA”) and its amortization; amortization of sales inducements; measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments; future policy benefits including guarantees; pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters.

Reclassifications, Policy

Reclassifications

Certain amounts in prior periods have been reclassified to conform to the current period presentation.

Earnings Per Share, Policy

Earnings Per Share

As discussed in Note 1, from demutualization through December 31, 2014, the Company had two separate classes of common stock. Basic earnings per share for those periods was computed by dividing available income attributable to each of the two groups of common shareholders by the respective weighted average number of common shares outstanding for the period. Diluted earnings per share included the effect of all dilutive potential common shares that were outstanding during the period.

As a result of the Class B Repurchase, earnings per share of Common Stock for the three and six months ended June 30, 2015, reflects the consolidated earnings of Prudential Financial. Basic earnings per share is computed by dividing available income attributable to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share includes the effect of all dilutive potential common shares that were outstanding during the period. See Note 8 for additional information.

Impact of Adoption of New Accounting Pronouncements

Adoption of New Accounting Pronouncements

In January 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance regarding investments in flow-through limited liability entities that manage or invest in affordable housing projects that qualify for the low-income housing tax credit. Under the guidance, an entity is permitted to make an accounting policy election to amortize the initial cost of its investment in proportion to the tax credits and other tax benefits received and recognize the net investment performance in the statement of operations as a component of income tax expense (benefit) if certain conditions are met. The new guidance became effective for annual periods and interim reporting periods within those annual periods that began after December 15, 2014. The Company did not elect the proportional amortization method under this guidance.

In January 2014, the FASB issued updated guidance for troubled debt restructurings clarifying when an in-substance repossession or foreclosure occurs, and when a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In April 2014, the FASB issued updated guidance that changes the criteria for reporting discontinued operations and introduces new disclosures. The new guidance became effective for new disposals and new classifications of disposal groups as held for sale that occur within annual periods that began on or after December 15, 2014, and interim periods within those annual periods. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

In June 2014, the FASB issued updated guidance that requires repurchase-to-maturity transactions to be accounted for as secured borrowings and eliminates existing guidance for repurchase financings. The guidance also requires new disclosures for certain transactions accounted for as secured borrowings and for transfers accounted for as sales when the transferor also retains substantially all of the exposure to the economic return on the transferred financial assets. Accounting changes and new disclosures for transfers accounted for as sales under the new guidance were effective for the first interim or annual period beginning after December 15, 2014 and did not have a significant effect on the Company's consolidated financial position, results of operations or financial statement disclosures. Disclosures for certain transactions accounted for as secured borrowings were effective for interim periods beginning after March 15, 2015 and are included in Note 4.

In August 2014, the FASB issued guidance requiring that mortgage loans be derecognized and that a separate other receivable be recognized upon foreclosure if certain conditions are met. Upon foreclosure, the separate other receivable should be measured based on the amount of the loan balance (principal and interest) expected to be recovered from the guarantor. The new guidance became effective for annual periods and interim periods within those annual periods that began after December 15, 2014, and was applied prospectively. Adoption of the guidance did not have a significant effect on the Company’s consolidated financial position, results of operations or financial statement disclosures.

Future Adoption of New Accounting Pronouncements

Future Adoption of New Accounting Pronouncements

In May 2014, the FASB issued updated guidance on accounting for revenue recognition. The guidance is based on the core principle that revenue is recognized to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The guidance also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from cost incurred to obtain or fulfill a contract. Revenue recognition for insurance contracts is explicitly scoped out of the guidance. The new guidance is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2017, and must be applied using one of two retrospective application methods. Early adoption is not permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In August 2014, the FASB issued updated guidance for measuring the financial assets and the financial liabilities of a consolidated collateralized financing entity. Under the guidance, an entity within scope is permitted to measure both the financial assets and financial liabilities of a consolidated collateralized financing entity based on either the fair value of the financial assets or the financial liabilities, whichever is more observable. If elected, the guidance will eliminate the measurement difference that exists when both are measured at fair value. The new guidance is effective for annual periods and interim reporting periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted, and can be elected for modified retrospective or full retrospective adoption. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In February 2015, the FASB issued updated guidance that changes the rules regarding consolidation. The pronouncement eliminates specialized guidance for limited partnerships and similar legal entities, and removes the indefinite deferral for certain investment funds. The new guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015, with early adoption permitted. The Company is currently assessing the impact of the guidance on the Company’s consolidated financial position, results of operations and financial statement disclosures.

In April 2015, the FASB issued guidance that simplifies presentation of debt issuance costs. The pronouncement requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The new guidance is effective for periods beginning after December 15, 2015, with early adoption permitted, and it must be applied retrospectively. The Company does not expect the impact of the guidance to have a significant effect on the Company’s consolidated financial position and financial statement disclosures.

In May 2015, the FASB issued final guidance that aims to enhance disclosures about insurance contracts classified as short-duration. The new disclosure requirements focus on providing users of financial statements with more transparent information about an insurance entity’s initial claim estimates and subsequent adjustments to those estimates, methodologies and judgments in estimating claims, and timing, frequency and severity of claims as they relate to short-duration insurance contracts. The new guidance is effective for annual periods beginning after December 15, 2015 and interim periods within annual periods beginning after December 15, 2016 and is to be applied retrospectively. The Company is currently assessing the impact of the guidance on the Company’s financial statement disclosures but has concluded that this guidance will not impact the Company’s consolidated financial position or results of operations.

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Income Taxes

6 Months Ended

Jun. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing authorities. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes.

The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired.

Listed below are the tax years that remain subject to examination by major tax jurisdiction, at June 30, 2015:

Major Tax Jurisdiction	Open Tax Years
United States	2007 – 2014
Japan	Fiscal years ended March 31, 2010 – 2015
Korea	Fiscal years ended March 31, 2010 – 2013 and the period ended December 31, 2013 and calendar year 2014

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is a significant component of the difference between the Company’s effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2014 and current year results, and was adjusted to take into account the current year’s equity market performance and expected business results. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.

There is a possibility that the IRS and the U.S. Treasury will address, through guidance, the issues related to the calculation of the DRD. For the last several years, the revenue proposals included in the Obama Administration’s budgets included proposed changes to the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through guidance or legislation, could increase actual tax expense and reduce the Company’s consolidated net income.

For tax years 2007 through 2015, the Company is participating in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions as they occur in order to reach agreement with the Company on how they should be reported in the relevant tax return. If disagreements arise, accelerated resolutions programs are available to try to resolve the disagreements in a timely manner before the tax return is filed.

Total income tax expense includes additional income tax expense related to the realization of local deferred tax assets recorded in the Unaudited Interim Consolidated Statements of Financial Position as of the acquisition date for Prudential Gibraltar Financial Life Insurance Company, Ltd. (“Prudential Gibraltar”) and AIG Star Life Insurance Co., Ltd, AIG Edison Life Insurance Company, AIG Financial Assurance Japan K.K., and AIG Edison Service Co., Ltd. (collectively, the “Star and Edison Businesses”). As of December 31, 2014 , the entire amount of additional U.S. GAAP tax expense of $734 million related to the utilization of opening balance sheet local deferred tax assets has been recognized in the Unaudited Interim Consolidated Statements of Operations.

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Fair Value of Assets and Liabilities (Quantitative Info for Level 3 Inputs) (Details) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)
Fair Value Quantiative Information [Line Items]
Future policy benefits	$ 216,555	$ 217,766
Level 3 | Minimum
Fair Value Quantiative Information [Line Items]
Fair Value Inputs, Policyholder Age		35 years
Level 3 | Minimum | Discounted cash flow | Future Policy Benefits
Fair Value Quantiative Information [Line Items]
Lapse rate	0.00%	0.00%
NPR spread	0.00%	0.00%
Utilization rate	56.00%	63.00%
Withdrawal rate	74.00%	74.00%
Mortality rate	0.00%	0.00%
Equity volatility curve	17.00%	17.00%
Level 3 | Maximum
Fair Value Quantiative Information [Line Items]
Fair Value Inputs, Policyholder Age		90 years
Level 3 | Maximum | Discounted cash flow | Future Policy Benefits
Fair Value Quantiative Information [Line Items]
Lapse rate	14.00%	14.00%
NPR spread	1.68%	1.30%
Utilization rate	96.00%	96.00%
Withdrawal rate	100.00%	100.00%
Mortality rate	14.00%	14.00%
Equity volatility curve	28.00%	28.00%
Level 3 | Corporate securities | Minimum | Discounted cash flow
Fair Value Quantiative Information [Line Items]
Discount rate	1.05%	0.84%
Level 3 | Corporate securities | Minimum | Market comparables
Fair Value Quantiative Information [Line Items]
EBITDA multiples	5.0	6.1
Level 3 | Corporate securities | Minimum | Liquidation
Fair Value Quantiative Information [Line Items]
Liquidation value	22.12%	22.12%
Level 3 | Corporate securities | Maximum | Discounted cash flow
Fair Value Quantiative Information [Line Items]
Discount rate	25.00%	15.00%
Level 3 | Corporate securities | Maximum | Market comparables
Fair Value Quantiative Information [Line Items]
EBITDA multiples	6.5	7.0
Level 3 | Corporate securities | Maximum | Liquidation
Fair Value Quantiative Information [Line Items]
Liquidation value	64.83%	100.00%
Level 3 | Corporate securities | Weighted Average | Discounted cash flow
Fair Value Quantiative Information [Line Items]
Discount rate	8.05%	7.73%
Level 3 | Corporate securities | Weighted Average | Market comparables
Fair Value Quantiative Information [Line Items]
EBITDA multiples	6.2	6.1
Level 3 | Corporate securities | Weighted Average | Liquidation
Fair Value Quantiative Information [Line Items]
Liquidation value	43.07%	82.92%
Fair Value, Measurements, Recurring
Fair Value Quantiative Information [Line Items]
Future policy benefits	$ 5,478	$ 8,182
Fair Value, Measurements, Recurring | Level 3
Fair Value Quantiative Information [Line Items]
Future policy benefits	5,478	8,182
Fair Value, Measurements, Recurring | Level 3 | Corporate securities
Fair Value Quantiative Information [Line Items]
Fair Value	1,251	1,427
Internal | Fair Value, Measurements, Recurring | Level 3
Fair Value Quantiative Information [Line Items]
Future policy benefits	5,478	8,182
Internal | Fair Value, Measurements, Recurring | Level 3 | Future Policy Benefits
Fair Value Quantiative Information [Line Items]
Future policy benefits	5,478	8,182
Internal | Fair Value, Measurements, Recurring | Level 3 | Corporate securities
Fair Value Quantiative Information [Line Items]
Fair Value	$ 774	$ 752

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Earnings Per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

From demutualization through December 31, 2014, the Company had two separate classes of common stock. The Common Stock reflected the performance of the Company’s former Financial Services Businesses and the Class B Stock reflected the performance of the Company’s former Closed Block Business. Earnings per share were calculated separately for each of these two classes of common stock and included a direct equity adjustment to modify the earnings available to each of the classes of common stock for the difference between the allocation of general and administrative expenses to each of the businesses and the cash flows between the businesses related to these expenses. Accordingly, earnings per share of Common Stock presented below for the three and six months ended June 30, 2014, reflect earnings attributable to the former Financial Services Businesses.

As discussed in Note 1, on January 2, 2015, Prudential Financial repurchased and canceled all of the 2.0 million shares of the Class B Stock. Accordingly, earnings per share of Common Stock presented below for the three and six months ended June 30, 2015, reflect the consolidated earnings of Prudential Financial. In addition, the Class B Repurchase resulted in the elimination of the separation of the former Financial Services Businesses and Closed Block Business. As a result, there was no direct equity adjustment recorded for the three and six months ended June 30, 2015.

Earnings per share of the Class B Stock for the three and six months ended June 30, 2014, is not presented herein as it is not meaningful due to the Class B Repurchase.

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the three and six months ended June 30, 2015, is as follows:

	June 30, 2015
	Three Months Ended					Six Months Ended
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations	$	1,459				$	3,505
Less: Income (loss) attributable to noncontrolling interests	53					63
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	15					34
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,391	452.6	$	3.07	$	3,408	453.4	$	7.52
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	15				$	34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	14					33
Stock options			2.5					2.4
Deferred and long-term compensation programs			0.8					0.9
Exchangeable Surplus Notes	5		5.5			9		5.5
Diluted earnings per share
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock	$	1,397	461.4	$	3.03	$	3,418	462.2	$	7.40

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on earnings attributable to the former Financial Services Businesses for the three and six months ended June 30, 2014, is as follows:

	June 30, 2014
	Three Months Ended						Six Months Ended
	Income			Weighted Average Shares	Per Share Amount		Income			Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses	$	1,068					$	2,300
Direct equity adjustment	(3		)				(5		)
Less: Income (loss) attributable to noncontrolling interests	23						34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10						21
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,032		459.4	$	2.25	$	2,240		460.1	$	4.87
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10					$	21
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10						21
Stock options				3.0						3.1
Deferred and long-term compensation programs				0.7						0.8
Exchangeable Surplus Notes	5			5.4			9			5.4
Diluted earnings per share
Income (loss) from continuing operations attributable to the Financial Services Businesses available to holders of Common Stock after direct equity adjustment	$	1,037		468.5	$	2.21	$	2,249		469.4	$	4.79

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of income from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended June 30, 2015 and 2014, as applicable, were based on 4.5 million and 4.3 million of such awards, respectively, and for the six months endedJune 30, 2015 and 2014, were based on 4.5 million and 4.3 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of dilutive earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of loss from continuing operations available to holders of Common Stock, after direct equity adjustment as applicable. For the three and six months ended June 30, 2015 and 2014, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

	Three Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.1	$	88.70	2.3	$	89.48
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.1			2.3

	Six Months Ended June 30,
	2015			2014
	Shares	Exercise Price Per Share		Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	2.4	$	87.92	2.1	$	89.88
Antidilutive stock options due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Antidilutive shares due to loss from continuing operations available to holders of Common Stock after direct equity adjustment	0.0			0.0
Total antidilutive stock options and shares	2.4			2.1

In September 2009, the Company issued $500 million of surplus notes with an interest rate of 5.36% per annum which are exchangeable at the option of the note holders for shares of Common Stock. The initial exchange rate for the surplus notes was 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes, which represents an initial exchange price per share of Common Stock of $98.78; however, the exchange rate is subject to customary anti-dilution adjustments. In calculating diluted earnings per share under the if-converted method, the potential shares that would be issued assuming a hypothetical exchange, weighted for the period the notes are outstanding, are added to the denominator, and interest expense, net of tax, is added to the numerator, if the overall effect is dilutive.

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Closed Block (Information Regarding Policyholder Dividend Obligation) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Movement in Closed Block Dividend Obligation [Roll Forward]
Balance, beginning	$ 6,612
Impact from earnings allocable to policyholder dividend obligation	208
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	(1,339)
Balance, ending	$ 5,481

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Closed Block

6 Months Ended

Jun. 30, 2015

Closed Block Disclosure [Abstract]

Closed Block

CLOSED BLOCK

On the date of demutualization, Prudential Insurance established a Closed Block for certain individual life insurance policies and annuities issued by Prudential Insurance in the U.S. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division.

The policies included in the Closed Block are specified individual life insurance policies and individual annuity contracts that were in force on the effective date of the Plan of Reorganization and for which Prudential Insurance is currently paying or expects to pay experience-based policy dividends. Assets have been allocated to the Closed Block in an amount that has been determined to produce cash flows which, together with revenues from policies included in the Closed Block, are expected to be sufficient to support obligations and liabilities relating to these policies, including provision for payment of benefits, certain expenses and taxes and to provide for continuation of the policyholder dividend scales in effect in 2000, assuming experience underlying such scales continues. To the extent that, over time, cash flows from the assets allocated to the Closed Block and claims and other experience related to the Closed Block are, in the aggregate, more or less favorable than what was assumed when the Closed Block was established, total dividends paid to Closed Block policyholders may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect in 2000 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to Closed Block policyholders and will not be available to stockholders. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from Prudential Insurance’s assets outside of the Closed Block. The Closed Block will continue in effect as long as any policy in the Closed Block remains in force unless, with the consent of the New Jersey insurance regulator, it is terminated earlier.

The excess of Closed Block liabilities over Closed Block assets at the date of the demutualization (adjusted to eliminate the impact of related amounts in AOCI) represented the estimated maximum future earnings at that date from the Closed Block expected to result from operations attributed to the Closed Block after income taxes. In establishing the Closed Block, the Company developed an actuarial calculation of the timing of such maximum future earnings. If actual cumulative earnings of the Closed Block from inception through the end of any given period are greater than the expected cumulative earnings, only the expected earnings will be recognized in income. Any excess of actual cumulative earnings over expected cumulative earnings will represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation. The policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected. If the actual cumulative earnings of the Closed Block from its inception through the end of any given period are less than the expected cumulative earnings of the Closed Block, the Company will recognize only the actual earnings in income. However, the Company may reduce policyholder dividend scales, which would be intended to increase future actual earnings until the actual cumulative earnings equaled the expected cumulative earnings.

As of June 30, 2015 and December 31, 2014, the Company recognized a policyholder dividend obligation of $1,766 million and $1,558 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over the expected cumulative earnings. Additionally, accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block have been reflected as a policyholder dividend obligation of $3,715 million and $5,053 million at June 30, 2015 and December 31, 2014, respectively, to be paid to Closed Block policyholders unless offset by future experience, with a corresponding amount reported in AOCI.

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from Closed Block liabilities and Closed Block assets, are as follows:

	June 30, 2015			December 31, 2014
	(in millions)
Closed Block liabilities
Future policy benefits	$	49,665		$	49,863
Policyholders’ dividends payable	918			931
Policyholders’ dividend obligation	5,481			6,612
Policyholders’ account balances	5,272			5,310
Other Closed Block liabilities	4,833			5,084
Total Closed Block liabilities	66,169			67,800
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,118			40,629
Other trading account assets, at fair value	310			302
Equity securities, available-for-sale, at fair value	3,230			3,522
Commercial mortgage and other loans	9,839			9,472
Policy loans	4,848			4,914
Other long-term investments	2,837			2,765
Short-term investments	1,099			1,225
Total investments	61,281			62,829
Cash and cash equivalents	987			1,201
Accrued investment income	518			527
Other Closed Block assets	495			332
Total Closed Block assets	63,281			64,889
Excess of reported Closed Block liabilities over Closed Block assets	2,888			2,911
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses)	3,701			5,040
Allocated to policyholder dividend obligation	(3,715		)	(5,053		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,874		$	2,898

Information regarding the policyholder dividend obligation is as follows:

	Six Months Ended June 30, 2015
	(in millions)
Balance, January 1	$	6,612
Impact from earnings allocable to policyholder dividend obligation	208
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	(1,339		)
Balance, June 30	$	5,481

Closed Block revenues and benefits and expenses for the three and six months endedJune 30, 2015 and 2014, were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Revenues
Premiums	$	701	$	711	$	1,335	$	1,350
Net investment income	642		683		1,351		1,404
Realized investment gains (losses), net	166		369		539		504
Other income	18		19		21		34
Total Closed Block revenues	1,527		1,782		3,246		3,292
Benefits and Expenses
Policyholders’ benefits	895		911		1,716		1,703
Interest credited to policyholders’ account balances	34		33		67		67
Dividends to policyholders	423		688		1,187		1,265
General and administrative expenses	107		111		215		225
Total Closed Block benefits and expenses	1,459		1,743		3,185		3,260
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes and discontinued operations	68		39		61		32
Income tax expense (benefit)	57		33		39		21
Closed Block revenues, net of Closed Block benefits and expenses and income taxes, before discontinued operations	11		6		22		11
Income (loss) from discontinued operations, net of taxes	0		0		0		0
Closed Block revenues, net of Closed Block benefits and expenses, income taxes and discontinued operations	$	11	$	6	$	22	$	11

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Equity

6 Months Ended

Jun. 30, 2015

Stockholders' Equity Note [Abstract]

Equity

EQUITY

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2014	660.1	205.3		454.8
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	6.0		(6.0	)
Stock-based compensation programs(1)	0.0	(3.1	)	3.1
Balance, June 30, 2015	660.1	208.2		451.9

__________ 

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation program.

In June 2014, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2014 through June 30, 2015. As of June 30, 2015, 11.7 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $1.0 billion, of which 6.0 million shares were repurchased in the first six months of 2015 at a total cost of $500 million.

In June 2015, Prudential Financial’s Board of Directors authorized the Company to repurchase at management’s discretion up to $1.0 billion of its outstanding Common Stock from July 1, 2015 through June 30, 2016. The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and repurchases may be effected in the open market, through derivative, accelerated repurchase and other negotiated transactions and through prearranged trading plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”). Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions on the segments.

Class B Stock

On December 1, 2014, Prudential Financial entered into a Share Repurchase Agreement with the holders of the Class B Stock to repurchase all of the 2.0 million outstanding shares of Class B Stock for an aggregate cash purchase price of $650.8 million. As a result, all of the outstanding shares of Class B Stock were reclassified as “held in treasury” as of December 31, 2014, resulting in a reduction to “Total Prudential Financial, Inc. equity.” As discussed in Note 1, on January 2, 2015, the Company repurchased and canceled all of the shares of the Class B Stock, resulting in the elimination of the Class B Stock held in treasury, a $483.8 million decrease in “Retained earnings” and a $167.0 million decrease in “Additional paid-in capital.”

In accordance with the terms of the Share Repurchase Agreement, the holders of a majority of the Class B Stock have exercised their right to dispute the calculation of the purchase price. Accordingly, the final purchase price of the Class B Stock could change.

Accumulated Other Comprehensive Income (Loss)

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Financial, Inc.” for the six months endedJune 30, 2015 and 2014 are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2014	$	(975	)	$	19,251		$	(2,226	)	$	16,050
Change in other comprehensive income before reclassifications	(110		)	(2,965		)	10			(3,065		)
Amounts reclassified from AOCI	1			(1,247		)	96			(1,150		)
Income tax benefit (expense)	88			1,523			(42		)	1,569
Balance, June 30, 2015	$	(996	)	$	16,562		$	(2,162	)	$	13,404

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2013	$	(113	)	$	10,344		$	(1,550	)	$	8,681
Change in other comprehensive income before reclassifications	241			7,175			(3		)	7,413
Amounts reclassified from AOCI	(2		)	(856		)	46			(812		)
Income tax benefit (expense)	(47		)	(2,142		)	(16		)	(2,205		)
Balance, June 30, 2014	$	79		$	14,521		$	(1,523	)	$	13,077

 __________

(1) Includes cash flow hedges of $702 million and $206 million as of June 30, 2015 and December 31, 2014, respectively, and $(533) million and $(446) million as of June 30, 2014 and December 31, 2013, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,						Affected line item in Consolidated Statement of Operations
	2015			2014			2015			2014
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(2	)	$	1		$	(1	)	$	2		Realized investment gains (losses), net
Total foreign currency translation adjustment	(2		)	1			(1		)	2
Net unrealized investment gains (losses):
Cash flow hedges—Interest Rate	(2		)	(6		)	(3		)	(12		)	(3)
Cash flow hedges—Currency/Interest rate	(54		)	(6		)	62			(10		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	599			536			1,188			878
Total net unrealized investment gains (losses)	543			524			1,247			856			(4)
Amortization of defined benefit pension items:
Prior service cost	4			5			7			11			(5)
Actuarial gain (loss)	(51		)	(29		)	(103		)	(57		)	(5)
Total amortization of defined benefit pension items	(47		)	(24		)	(96		)	(46		)
Total reclassifications for the period	$	494		$	501		$	1,150		$	812

__________ 

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 14 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 10 for information on employee benefit plans.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as available-for-sale and certain other long-term investments and other assets are included in the Company’s Unaudited Interim Consolidated Statements of Financial Position as a component of AOCI. Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) On Investments			Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	349		$	(6	)	$	3	$	(32	)	$	(110	)	$	204
Net investment gains (losses) on investments arising during the period	24											(9		)	15
Reclassification adjustment for (gains) losses included in net income	(3		)									1			(2		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(15		)									5			(10		)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				6								(2		)	4
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							8					(3		)	5
Impact of net unrealized investment (gains) losses on policyholders’ dividends									32			(11		)	21
Balance, June 30, 2015	$	355		$	0		$	11	$	0		$	(129	)	$	237

 __________

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			Deferred Policy Acquisition Cost, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	36,764		$	(1,455	)	$	(1,282	)	$	(5,036	)	$	(9,944	)	$	19,047
Net investment gains (losses) on investments arising during the period	(4,924		)										1,759			(3,165		)
Reclassification adjustment for (gains) losses included in net income	(1,244		)										444			(800		)
Reclassification adjustment for OTTI losses excluded from net income(2)	15												(5		)	10
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				609									(208		)	401
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							(26		)				9			(17		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										1,306			(457		)	849
Balance, June 30, 2015	$	30,611		$	(846	)	$	(1,308	)	$	(3,730	)	$	(8,402	)	$	16,325

__________ 

(1) Includes cash flow hedges. See Note 14 for information on cash flow hedges.

(2) Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

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Short-Term and Long-Term Debt

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Short-Term and Long-Term Debt

SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

The table below presents the Company’s short-term debt as of the dates indicated:

	June 30, 2015			December 31, 2014
	(in millions)
Commercial paper:
Prudential Financial	$	141		$	97
Prudential Funding, LLC	731			386
Subtotal commercial paper	872			483
Current portion of long-term debt(1)	2,749			3,356
Total short-term debt(2)	$	3,621		$	3,839
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	425		$	199
Daily average commercial paper outstanding	$	1,064		$	1,409
Weighted average maturity of outstanding commercial paper, in days	15			22
Weighted average interest rate on outstanding short-term debt(3)	0.15		%	0.12		%

 __________

(1) Includes collateralized borrowings from the FHLBNY of $280 million at both June 30, 2015 and December 31, 2014.

(2) Includes Prudential Financial debt of $1,807 million and $2,319 million at June 30, 2015 and December 31, 2014, respectively.

(3) Excludes the current portion of long-term debt.

Commercial Paper

Prudential Financial has a commercial paper program with an authorized capacity of $3.0 billion. Prudential Financial’s commercial paper borrowings have generally been used to fund the working capital needs of Prudential Financial’s subsidiaries and provide short-term liquidity at Prudential Financial.

Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of Prudential Insurance, has a commercial paper program with an authorized capacity of $7.0 billion. Prudential Funding commercial paper borrowings generally have served as an additional source of financing to meet the working capital needs of Prudential Insurance and its subsidiaries. Prudential Funding also lends to other subsidiaries of Prudential Financial up to limits agreed with the New Jersey Department of Banking and Insurance (“NJDOBI”). Prudential Funding maintains a support agreement with Prudential Insurance whereby Prudential Insurance has agreed to maintain Prudential Funding’s tangible net worth at a positive level. Additionally, Prudential Financial has issued a subordinated guarantee covering Prudential Funding’s $7.0 billion commercial paper program.

Federal Home Loan Bank of New York

Prudential Insurance is a member of the Federal Home Loan Bank of New York (“FHLBNY”). Membership allows Prudential Insurance access to the FHLBNY’s financial services, including the ability to obtain collateralized loans and to issue collateralized funding agreements. Under applicable law, the funding agreements issued to the FHLBNY have priority claim status above debt holders of Prudential Insurance. FHLBNY borrowings and funding agreements are collateralized by qualifying mortgage-related assets or U.S. Treasury securities, the fair value of which must be maintained at certain specified levels relative to outstanding borrowings. FHLBNY membership requires Prudential Insurance to own member stock and borrowings require the purchase of activity-based stock in an amount equal to 4.5% of outstanding borrowings. Under FHLBNY guidelines, if any of Prudential Insurance’s financial strength ratings decline below A/A2/A Stable by S&P/Moody’s/Fitch, respectively, and the FHLBNY does not receive written assurances from the NJDOBI regarding Prudential Insurance’s solvency, new borrowings from the FHLBNY would be limited to a term of 90 days or less. Currently, there are no restrictions on the term of borrowings from the FHLBNY.

NJDOBI permits Prudential Insurance to pledge collateral to the FHLBNY in an amount of up to 5% of its prior year-end statutory net admitted assets, excluding separate account assets. Based on Prudential Insurance’s statutory net admitted assets as of December 31, 2014, the 5% limitation equates to a maximum amount of pledged assets of $8.9 billion and an estimated maximum borrowing capacity (after taking into account required collateralization levels) of approximately $7.4 billion. Nevertheless, FHLBNY borrowings are subject to the FHLBNY’s discretion and to the availability of qualifying assets at Prudential Insurance.

As of June 30, 2015, Prudential Insurance had pledged assets with a fair value of $2.4 billion supporting an aggregate outstanding collateralized advance of $280 million that is in “Short-term debt” and matures in December 2015 and outstanding funding agreements totaling $1.7 billion, which are included in “Policyholders’ account balances.” The fair value of qualifying assets that were available to Prudential Insurance, but not pledged, amounted to $4.5 billion as of June 30, 2015.

Federal Home Loan Bank of Boston

Prudential Retirement Insurance and Annuity Company (“PRIAC”) is a member of the Federal Home Loan Bank of Boston (“FHLBB”). Membership allows PRIAC access to collateralized advances which will be classified in “Short-term debt” or “Long-term debt,” depending on the maturity date of the obligation. PRIAC’s membership in FHLBB requires the ownership of member stock and borrowings from FHLBB require the purchase of activity-based stock in an amount between 3.0% and 4.5% of outstanding borrowings, depending on the maturity date of the obligation. As of June 30, 2015, PRIAC had no advances outstanding under the FHLBB facility.

Under Connecticut state insurance law, without the prior consent of the Connecticut Insurance Department, the amount of assets insurers may pledge to secure debt obligations is limited to the lesser of 5% of prior-year statutory admitted assets or 25% of prior-year statutory surplus, resulting in a maximum borrowing capacity for PRIAC under the FHLBB facility of approximately $210 million as of June 30, 2015.

Credit Facilities

As of June 30, 2015, the Company maintained a syndicated, unsecured committed credit facility as described below.

Borrowers	Original Term	Expiration Date	Capacity		Amount Outstanding
			($ in millions)
Prudential Financial and Prudential Funding	5 years	Apr 2020	$	4,000	$	0

Borrowings under this credit facility may be used for general corporate purposes, and the Company expects that it may borrow under this facility from time to time to fund its working capital needs. In addition, amounts under this credit facility may be drawn in the form of standby letters of credit that can be used to meet the Company’s operating needs. The credit facility contains representations and warranties, covenants and events of default that are customary for facilities of this type, and borrowings under the facility are not contingent on the Company’s credit ratings nor subject to material adverse change clauses. Borrowings under this credit facility are conditioned on the Company’s maintenance of consolidated net worth of at least $18.985 billion, which, under the facility, is calculated as U.S. GAAP equity, excluding AOCI, equity of noncontrolling interests and equity attributable to the Closed Block. As of June 30, 2015, the Company’s consolidated net worth exceeded this required minimum amount.

This credit facility, which was entered into on April 14, 2015, amends and restates the Company’s previously existing $2.0 billionfive-year credit facility and $1.75 billionthree-year credit facility.

Put Option Agreement for Senior Debt Issuance

In November 2013, Prudential Financial entered into a ten-year put option agreement with a Delaware trust upon the completion of the sale of $1.5 billion of trust securities by that Delaware trust in a Rule 144A private placement. The trust invested the proceeds from the sale of the trust securities in a portfolio of principal and interest strips of U.S. Treasury securities. The put option agreement provides Prudential Financial the right to sell to the trust at any time up to $1.5 billion of 4.419% senior notes due November 2023 and receive in exchange a corresponding amount of the principal and interest strips of the U.S. Treasury securities held by the trust. In return, the Company agreed to pay a semi-annual put premium to the trust at a rate of 1.777% per annum applied to the unexercised portion of the put option. The put option agreement with the trust provides Prudential Financial with a source of liquid assets.

The put option described above will be exercised automatically in full upon the Company’s failure to make certain payments to the trust, such as paying the put option premium or reimbursing the trust for its expenses, if the Company’s failure to pay is not cured within 30 days, and upon an event involving its bankruptcy. The Company is also required to exercise the put option if its consolidated stockholders’ equity, calculated in accordance with GAAP but excluding AOCI, falls below $7.0 billion, subject to adjustment in certain cases. The Company has a one-time right to unwind a prior voluntary exercise of the put option by repurchasing all of the senior notes then held by the trust in exchange for principal and interest strips of U.S. Treasury securities. Finally, any of the 4.419% senior notes that Prudential Financial issues may be redeemed prior to their maturity at par or, if greater, a make-whole price, following a voluntary exercise in full of the put option.

Long-term Debt

Surplus Notes

During the first quarter of 2015, the Company increased by $262 million the principal amount of surplus notes outstanding under its captive financing facility initially established in December 2013 for the financing of non-economic reserves required under Guideline AXXX. As of June 30, 2015, an aggregate of $2,100 million of surplus notes were outstanding under this facility and no credit-linked note payments have been required.

During the second quarter of 2015, the Company increased by $308 million the principal amount of surplus notes outstanding under its captive financing facility initially established in December 2014 for the financing of non-economic reserves required under Regulation XXX. As of June 30, 2015, an aggregate of $693 million of surplus notes were outstanding under this facility and no credit-linked note payments have been required.

Under each of the above transactions for the captive reinsurance subsidiaries, because valid rights of set-off exist, interest and principal payments on the surplus notes and on the credit-linked notes are settled on a net basis, and the surplus notes are reflected in the Company’s total consolidated borrowings on a net basis.

On February 18, 2015, Prudential Legacy Insurance Company of NJ (“PLIC”) entered into a twenty-year financing facility with certain unaffiliated financial institutions and with Essex, LLC (“LLC”), a special-purpose company affiliate, pursuant to which PLIC may, at its option and subject to the satisfaction of customary conditions, issue and sell to LLC up to $4.0 billion in aggregate principal amount of surplus notes in return for an equal principal amount of credit-linked notes issued by LLC. Upon issuance, PLIC would hold any credit-linked notes as assets to finance future statutory surplus needs within PLIC. As of June 30, 2015, there were no surplus notes outstanding under the facility.

Senior Notes

Medium-term notes. Prudential Financial maintains a medium-term notes program under its shelf registration statement with an authorized issuance capacity of $20.0 billion. As of June 30, 2015, the outstanding balance of the company’s medium-term notes was $11.8 billion, a decrease of $1.2 billion from December 31, 2014, due to maturities.

Retail medium-term notes. Prudential Financial also maintains a retail medium-term notes program, including the InterNotes^® program, under its shelf registration statement with an authorized issuance capacity of $5.0 billion. As of June 30, 2015, the outstanding balance of retail notes was $496 million. Retail notes outstanding increased by $121 million from December 31, 2014, primarily due to the issuance of $179 million of notes offset by maturities of $58 million of notes in 2015.

Mortgage debt. As of June 30, 2015, the Company’s subsidiaries had mortgage debt of $509 million that has recourse only to real estate property held for investment by those subsidiaries. This represents an increase of $7 million from December 31, 2014, due to new borrowings in 2015 of $92 million offset by prepayments and foreign exchange fluctuations totaling $85 million.

Junior Subordinated Notes. On May 18, 2015, Prudential Financial issued $1.0 billion of 5.375% fixed-to-floating rate junior subordinated notes in a public offering. The notes are considered hybrid capital securities that receive enhanced equity treatment from certain of the rating agencies. The notes have a maturity date of May 15, 2045. Interest is payable semi-annually at a fixed rate of 5.375% until May 15, 2025, from which date interest is payable quarterly at a floating rate of 3-month LIBOR plus 3.031%. Prudential Financial may redeem the notes in whole, but not in part, at any time prior to May 15, 2025, within 90 days after the occurrence of a “tax event”, a “rating agency event” or a “regulatory capital event” at a redemption price equal to (i) in the case of a “tax event” or a “rating agency event”, their principal amount or, if greater, a make-whole redemption price plus accrued and unpaid interest or (ii) in the case of a “regulatory capital event”, their principal amount plus accrued and unpaid interest. On or after May 15, 2025, Prudential Financial may redeem the notes, in whole or in part, at their principal amount plus accrued and unpaid interest.

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Equity (Balance of and Changes in Each Component of "AOCI Attributable to Prudential Financial, Inc.") (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning			$ 16,050
Income tax benefit (expense)	$ 2,380	$ (1,158)	1,569	$ (2,205)
Balance, ending	13,404		13,404
Accumulated Net Unrealized Investment Gain (Loss), Cash Flow Hedges	702	(533)	702	(533)	$ 206	$ (446)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning			(975)	(113)
Change in other comprehensive income before reclassifications			(110)	241
Amounts reclassified from AOCI			1	(2)
Income tax benefit (expense)			88	(47)
Balance, ending	(996)	79	(996)	79
Net unrealized investment gains (losses)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning			19,251	10,344
Change in other comprehensive income before reclassifications			(2,965)	7,175
Amounts reclassified from AOCI			(1,247)	(856)
Income tax benefit (expense)			1,523	(2,142)
Balance, ending	16,562	14,521	16,562	14,521
Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning			(2,226)	(1,550)
Change in other comprehensive income before reclassifications			10	(3)
Amounts reclassified from AOCI			96	46
Income tax benefit (expense)			(42)	(16)
Balance, ending	(2,162)	(1,523)	(2,162)	(1,523)
Accumulated Other Comprehensive Income (Loss)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning			16,050	8,681
Change in other comprehensive income before reclassifications			(3,065)	7,413
Amounts reclassified from AOCI			(1,150)	(812)
Income tax benefit (expense)			1,569	(2,205)
Balance, ending	$ 13,404	$ 13,077	$ 13,404	$ 13,077

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Fair Value of Assets and Liabilities (Changes in Level 3 Assets and Liabilities) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Equity
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	$ 263	$ 310	$ 275	$ 304
Included in earnings:
Realized investment gains (losses), net	6	2	10	4
Included in other comprehensive income (loss)	(4)	(15)	(1)	1
Purchases	8	15	12	18
Sales	(9)	(12)	(31)	(24)
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	(7)	0	(8)	1
Other	0	0	0	1
Transfers into Level 3	2	1	2	1
Transfers out of Level 3	0	(2)	0	(7)
Fair Value, end of period	259	299	259	299
Included in earnings:
Realized investment gains (losses), net	0	(2)	(1)	(2)
Other income	0	0	0	0
Equity | Other income
Included in earnings:
Net investment income/other income	0	0	0	0
Equity | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Notes Issued by consolidated VIEs
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(6,810)	(4,062)	(6,033)	(3,254)
Included in earnings:
Realized investment gains (losses), net	(68)	3	(53)	(1)
Interest credited to policyholders’ account balances	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	(494)	(480)	(1,440)	(1,284)
Settlements	0	0	0	0
Foreign currency translation	0		0
Other		0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	(7,434)	(4,539)	(7,434)	(4,539)
Included in earnings:
Realized investment gains (losses), net	(68)	2	(53)	(1)
Other income	(62)		(92)
Interest credited to policyholders’ account	0	0	0	0
Notes Issued by consolidated VIEs | Other income
Included in earnings:
Net investment income/other income	(62)		92
Notes Issued by consolidated VIEs | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Fixed Maturities Available-For-Sale | U.S. States
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	6	0	6	0
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Included in other comprehensive income (loss)	0	0	0	0
Purchases	15	0	15	0
Sales	(1)	0	(1)	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	0	0	0	0
Other		0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	20	0	20	0
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Fixed Maturities Available-For-Sale | U.S. States | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Fixed Maturities Available-For-Sale | Foreign Government
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	136	2	2	1
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Included in other comprehensive income (loss)	(3)	0	(3)	0
Purchases	20	0	20	1
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	2	0	(2)	0
Other		0	0	0
Transfers into Level 3	(4)	0	134	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	151	2	151	2
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Fixed Maturities Available-For-Sale | Foreign Government | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Fixed Maturities Available-For-Sale | Corporate
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1,250	1,332	1,303	1,329
Included in earnings:
Realized investment gains (losses), net	(13)	15	(14)	10
Included in other comprehensive income (loss)	10	20	2	67
Purchases	208	203	427	309
Sales	(154)	(196)	(347)	(283)
Issuances	0	0	0	0
Settlements	(21)	(117)	(56)	(149)
Foreign currency translation	(9)	2	(11)	6
Other		4	(3)	4
Transfers into Level 3	0	54	16	58
Transfers out of Level 3	(159)	(25)	(199)	(60)
Fair Value, end of period	1,103	1,295	1,103	1,295
Included in earnings:
Realized investment gains (losses), net	(13)	(12)	(16)	(18)
Fixed Maturities Available-For-Sale | Corporate | Net investment income
Included in earnings:
Net investment income/other income	(9)	3	(15)	4
Fixed Maturities Available-For-Sale | Asset- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	4,362	3,734	4,059	3,112
Included in earnings:
Realized investment gains (losses), net	0	7	6	10
Included in other comprehensive income (loss)	15	3	17	6
Purchases	615	674	940	1,092
Sales	(286)	(45)	(390)	(49)
Issuances	0	0	0	0
Settlements	(39)	(523)	(78)	(709)
Foreign currency translation	(11)	0	(14)	0
Other		(1)	3	(2)
Transfers into Level 3	293	303	803	979
Transfers out of Level 3	(1,142)	(333)	(1,542)	(625)
Fair Value, end of period	3,817	3,824	3,817	3,824
Included in earnings:
Realized investment gains (losses), net	4	2	4	2
Fixed Maturities Available-For-Sale | Asset- Backed | Net investment income
Included in earnings:
Net investment income/other income	10	5	13	10
Fixed Maturities Available-For-Sale | Commercial Mortgage- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	75	549	43	165
Included in earnings:
Realized investment gains (losses), net	0	1	0	1
Included in other comprehensive income (loss)	0	3	0	2
Purchases	2	0	34	496
Sales	0	(6)	0	(6)
Issuances	0	0	0	0
Settlements	(2)	(1)	(4)	(4)
Foreign currency translation	0	0	0	0
Other		0	0	0
Transfers into Level 3	0	0	2	0
Transfers out of Level 3	(34)	(497)	(34)	(605)
Fair Value, end of period	41	49	41	49
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Fixed Maturities Available-For-Sale | Commercial Mortgage- Backed | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Fixed Maturities Available-For-Sale | Residential Mortgage- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	242	329	253	338
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Included in other comprehensive income (loss)	(1)	0	(1)	0
Purchases	0	0	0	0
Sales	(3)	0	(3)	0
Issuances	0	0	0	0
Settlements	(16)	(13)	(25)	(24)
Foreign currency translation	(7)	2	(9)	3
Other		(1)	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	215	316	215	316
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Fixed Maturities Available-For-Sale | Residential Mortgage- Backed | Net investment income
Included in earnings:
Net investment income/other income	0	(1)	0	(1)
Trading Account Assets | Foreign Government
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	22	0	21	0
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	4	12	5	12
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	(1)	0	(1)	0
Foreign currency translation	0	0	0	0
Other			0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	25	12	25	12
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0	0	0	0
Trading Account Assets | Foreign Government | Other income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | Foreign Government | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | Corporate
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	144	121	124	115
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	51	53	71	63
Sales	(4)	(46)	(4)	(51)
Issuances	0	0	0	0
Settlements	(1)	(1)	(3)	(4)
Foreign currency translation	0	0	0	0
Other			0
Transfers into Level 3	0	0	7	0
Transfers out of Level 3	(41)	0	(41)	0
Fair Value, end of period	148	129	148	129
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	(2)	1	(7)	5
Trading Account Assets | Corporate | Other income
Included in earnings:
Net investment income/other income	(2)	2	(7)	6
Trading Account Assets | Corporate | Net investment income
Included in earnings:
Net investment income/other income	1	0	1	0
Trading Account Assets | Asset- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	376	390	393	395
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	243	89	247	90
Sales	(2)	(9)	(2)	(9)
Issuances	0	0	0	0
Settlements	0	(10)	(1)	(23)
Foreign currency translation	0	(612)	0	(659)
Other			0
Transfers into Level 3	27	18	73	41
Transfers out of Level 3	(39)	577	(107)	607
Fair Value, end of period	607	446	607	446
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	1	3	3	4
Trading Account Assets | Asset- Backed | Other income
Included in earnings:
Net investment income/other income	1	2	3	3
Trading Account Assets | Asset- Backed | Net investment income
Included in earnings:
Net investment income/other income	1	1	1	1
Trading Account Assets | Commercial Mortgage- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	3	52	5	1
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	(1)	(1)	0	51
Sales	0	0	(2)	0
Issuances	0	0	0	0
Settlements	0	1	(1)	0
Foreign currency translation	0	612	0	612
Other			0
Transfers into Level 3	0	2	0	2
Transfers out of Level 3	0	(664)	0	(664)
Fair Value, end of period	2	2	2	2
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0	0	0	0
Trading Account Assets | Commercial Mortgage- Backed | Other income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | Commercial Mortgage- Backed | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | Residential Mortgage- Backed
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	6	9	7	9
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	(1)	(1)	(1)
Foreign currency translation	0	0	0	47
Other			0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	(1)	0	(1)	(47)
Fair Value, end of period	5	9	5	9
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0	0	0	0
Trading Account Assets | Residential Mortgage- Backed | Other income
Included in earnings:
Net investment income/other income	0	1	0	1
Trading Account Assets | Residential Mortgage- Backed | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | Equity
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	634	771	663	842
Included in earnings:
Realized investment gains (losses), net	1	3	(2)	2
Purchases	1	9	8	14
Sales	(12)	(26)	(16)	(34)
Issuances	0	0	0	0
Settlements	(1)	(8)	(16)	(79)
Foreign currency translation	(13)	3	(17)	8
Other			(7)
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	(1)	0	(1)
Fair Value, end of period	604	763	604	763
Included in earnings:
Realized investment gains (losses), net	0	2	(2)	2
Other income	(7)	8	6	12
Trading Account Assets | Equity | Other income
Included in earnings:
Net investment income/other income	(6)	12	(9)	11
Trading Account Assets | Equity | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Trading Account Assets | All Other Activity
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	8	7	7	6
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	0	0	0	0
Other			0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	12	6	12	6
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	4	0	5	0
Trading Account Assets | All Other Activity | Other income
Included in earnings:
Net investment income/other income	4	(1)	5	0
Trading Account Assets | All Other Activity | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Commercial Mortgage and Other Loans
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	0	0	0	0
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Included in other comprehensive income (loss)	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	0	0	0	0
Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	0	0	0	0
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0	0	0	0
Commercial Mortgage and Other Loans | Other income
Included in earnings:
Net investment income/other income	0	0	0	0
Commercial Mortgage and Other Loans | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Other long-term investments
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	1,617	1,368	1,547	1,396
Included in earnings:
Realized investment gains (losses), net	0	9	(2)	3
Included in other comprehensive income (loss)	0	0	0	0
Purchases	92	85	201	94
Sales	(1)	0	(2)	0
Issuances	0	0	0	0
Settlements	(33)	(48)	(50)	(65)
Foreign currency translation	(14)	2	(52)	4
Other	(7)	(15)	(25)	(52)
Transfers into Level 3	0	5	0	5
Transfers out of Level 3	0	0	(1)	0
Fair Value, end of period	1,714	1,442	1,714	1,442
Included in earnings:
Realized investment gains (losses), net	(1)	1	(2)	1
Other income	58	43	98	54
Other long-term investments | Other income
Included in earnings:
Net investment income/other income	60	39	99	59
Other long-term investments | Net investment income
Included in earnings:
Net investment income/other income	0	(3)	(1)	(2)
Other Assets
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	2	4	2	4
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Included in other comprehensive income (loss)	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	0	0
Foreign currency translation	0	0	0	0
Other	0	0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	2	4	2	4
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0	0	0	0
Other Assets | Other income
Included in earnings:
Net investment income/other income	0	0	0	0
Other Assets | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Separate Accounts Assets
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	25,067	22,997	24,662	22,603
Included in earnings:
Realized investment gains (losses), net	8	3	11	6
Interest credited to policyholders’ account balances	755	750	1,426	1,353
Purchases	1,052	524	1,965	832
Sales	(237)	(149)	(417)	(328)
Issuances	0	0	0	0
Settlements	(513)	(387)	(1,026)	(664)
Foreign currency translation	(1)		(2)
Other		57	(472)	57
Transfers into Level 3	1	3	1	3
Transfers out of Level 3	(283)	(25)	(305)	(95)
Fair Value, end of period	25,855	23,779	25,855	23,779
Included in earnings:
Realized investment gains (losses), net	0	0	0	0
Other income	0		0
Interest credited to policyholders’ account	502	501	860	872
Separate Accounts Assets | Other income
Included in earnings:
Net investment income/other income	0		0
Separate Accounts Assets | Net investment income
Included in earnings:
Net investment income/other income	6	6	12	12
Future Policy Benefits
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(9,473)	(2,443)	(8,182)	(441)
Included in earnings:
Realized investment gains (losses), net	4,236	(732)	3,184	(2,514)
Interest credited to policyholders’ account balances	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	(241)	(225)	(480)	(445)
Settlements	0	0	0	0
Foreign currency translation	0		0
Other		0	0	0
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	(5,478)	(3,400)	(5,478)	(3,400)
Included in earnings:
Realized investment gains (losses), net	4,167	(751)	3,062	(2,538)
Other income	0		0
Interest credited to policyholders’ account	0	0	0	0
Future Policy Benefits | Other income
Included in earnings:
Net investment income/other income	0		0
Future Policy Benefits | Net investment income
Included in earnings:
Net investment income/other income	0	0	0	0
Other Liabilities
Fair Value, Assets And Liabilities Measured On Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, beginning of period	(2)	(6)	(5)	(5)
Included in earnings:
Realized investment gains (losses), net	0	1	1	2
Interest credited to policyholders’ account balances	0	0	0	0
Purchases	0	0	0	0
Sales	0	0	0	0
Issuances	0	0	0	0
Settlements	0	0	2	0
Foreign currency translation	0		0
Other		0	0	(2)
Transfers into Level 3	0	0	0	0
Transfers out of Level 3	0	0	0	0
Fair Value, end of period	(2)	(5)	(2)	(5)
Included in earnings:
Realized investment gains (losses), net	0	1	1	2
Other income	0		0
Interest credited to policyholders’ account	0	0	0	0
Other Liabilities | Other income
Included in earnings:
Net investment income/other income	0		0
Other Liabilities | Net investment income
Included in earnings:
Net investment income/other income	$ 0	$ 0	$ 0	$ 0

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Equity (Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	$ 16,050
Balance, ending	13,404
Net Unrealized Gains (Losses) On Investments | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	349
Net investment gains (losses) on investments arising during the period	24
Reclassification adjustment for (gains) losses included in net income	(3)
Reclassification adjustment for OTTI losses excluded from net income	(15)
Balance, ending	355
Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(6)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	6
Balance, ending	0
Future Policy Benefits and Policyholders’ Account Balances | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	3
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	8
Balance, ending	11
Policyholders’ Dividends | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(32)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	32
Balance, ending	0
Deferred Income Tax (Liability) Benefit | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	(110)
Net investment gains (losses) on investments arising during the period	(9)
Reclassification adjustment for (gains) losses included in net income	1
Reclassification adjustment for OTTI losses excluded from net income	5
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	(2)
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	(3)
Impact of net unrealized investment (gains) losses on policyholders’ dividends	(11)
Balance, ending	(129)
Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses) | Fixed maturity securities on which an OTTI loss has been recognized
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance, beginning	204
Net investment gains (losses) on investments arising during the period	15
Reclassification adjustment for (gains) losses included in net income	(2)
Reclassification adjustment for OTTI losses excluded from net income	(10)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired	4
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances	5
Impact of net unrealized investment (gains) losses on policyholders’ dividends	21
Balance, ending	$ 237

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Equity (Narrative) (Details) - USD ($) shares in Millions			6 Months Ended		12 Months Ended
	Jan. 02, 2015	Dec. 01, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Dec. 31, 2014
Class of Stock [Line Items]
Cost of Treasury Stock Acquired			$ 502,000,000	$ 500,000,000
Class B Stock held in treasury, at cost			0		$ 0	$ 651,000,000
Class B Stock
Class of Stock [Line Items]
Number of Treasury Stock Shares Acquired	2.0	2.0
Cost of Treasury Stock Acquired			$ 651,000,000	0
Class B Stock Held in Treasury
Class of Stock [Line Items]
Class B Stock held in treasury, at cost		$ 650,800,000
Class B Stock Held in Treasury | Retained Earnings
Class of Stock [Line Items]
Stockholders' Equity, Period Increase (Decrease)	$ (483,800,000)
Class B Stock Held in Treasury | Additional Paid-in Capital
Class of Stock [Line Items]
Stockholders' Equity, Period Increase (Decrease)	$ (167,000,000)
Under June 2014 Board Of Directors Authorization
Class of Stock [Line Items]
Amount of Stock Repurchases Authorized by the Board of Directors				$ 1,000,000,000.0
Under June 2014 Board Of Directors Authorization | Common Stock
Class of Stock [Line Items]
Number of Treasury Stock Shares Acquired			6.0		11.7
Cost of Treasury Stock Acquired			$ 500,000,000		$ 1,000,000,000
Under June 2015 Board Of Directors Authorization
Class of Stock [Line Items]
Amount of Stock Repurchases Authorized by the Board of Directors			$ 1,000,000,000		$ 1,000,000,000

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Derivative Instruments (Gross Notional Amount and Fair Value of Derivatives Contracts) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Derivative [Line Items]
Notional	$ 455,084	$ 439,280
Assets	12,122	13,932
Liabilities	(5,833)	(6,817)
Net Embedded Derivative Liability	5,454	8,162
Derivatives Designated as Hedge Accounting Instruments:
Derivative [Line Items]
Notional	13,431	12,929
Assets	1,239	705
Liabilities	(264)	(366)
Derivatives Designated as Hedge Accounting Instruments: | Interest Rate Swaps
Derivative [Line Items]
Notional	1,492	1,714
Assets	20	21
Liabilities	(167)	(191)
Derivatives Designated as Hedge Accounting Instruments: | Foreign Currency Forwards
Derivative [Line Items]
Notional	378	443
Assets	7	5
Liabilities	(6)	(14)
Derivatives Designated as Hedge Accounting Instruments: | Foreign Currency Swaps
Derivative [Line Items]
Notional	11,561	10,772
Assets	1,212	679
Liabilities	(91)	(161)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Derivative [Line Items]
Notional	441,653	426,351
Assets	10,883	13,227
Liabilities	(5,569)	(6,451)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Swaps
Derivative [Line Items]
Notional	177,577	182,937
Assets	8,136	9,904
Liabilities	(4,322)	(4,578)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Futures
Derivative [Line Items]
Notional	30,502	32,008
Assets	1	5
Liabilities	0	(3)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Options
Derivative [Line Items]
Notional	45,361	27,561
Assets	411	663
Liabilities	(471)	(180)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Interest Rate Forwards
Derivative [Line Items]
Notional	168	877
Assets	3	2
Liabilities	(2)	(1)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Forwards
Derivative [Line Items]
Notional	16,804	21,197
Assets	349	854
Liabilities	(454)	(1,011)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Options
Derivative [Line Items]
Notional	158	203
Assets	9	6
Liabilities	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Foreign Currency Swaps
Derivative [Line Items]
Notional	11,165	11,083
Assets	1,440	1,207
Liabilities	(178)	(145)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Credit Default Swaps
Derivative [Line Items]
Notional	1,450	2,622
Assets	4	7
Liabilities	(28)	(30)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity Futures
Derivative [Line Items]
Notional	379	331
Assets	0	3
Liabilities	0	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Equity Options
Derivative [Line Items]
Notional	69,003	57,590
Assets	271	504
Liabilities	(100)	(41)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Total Return Swaps
Derivative [Line Items]
Notional	15,902	15,217
Assets	252	65
Liabilities	(13)	(462)
Derivatives Not Qualifying as Hedge Accounting Instruments: | Commodity Futures
Derivative [Line Items]
Notional	18	18
Assets	0	1
Liabilities	(1)	0
Derivatives Not Qualifying as Hedge Accounting Instruments: | Synthetic GICs
Derivative [Line Items]
Notional	73,166	74,707
Assets	7	6
Liabilities	$ 0	$ 0

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Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying, excluding embedded derivatives which are recorded with the associated host. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral held with the same counterparty and NPR. This netting impact results in total derivative assets of $2,213 million and $1,593 million as of June 30, 2015 and December 31, 2014, respectively, and total derivative liabilities of $103 million and $158 million as of June 30, 2015 and December 31, 2014, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

Primary Underlying/Instrument Type	June 30, 2015							December 31, 2014
			Gross Fair Value							Gross Fair Value
	Notional(1)		Assets		Liabilities			Notional(1)		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	1,492	$	20	$	(167	)	$	1,714	$	21	$	(191	)
Foreign Currency
Foreign Currency Forwards	378		7		(6		)	443		5		(14		)
Currency/Interest Rate
Foreign Currency Swaps	11,561		1,212		(91		)	10,772		679		(161		)
Total Qualifying Hedges	$	13,431	$	1,239	$	(264	)	$	12,929	$	705	$	(366	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	177,577	$	8,136	$	(4,322	)	$	182,937	$	9,904	$	(4,578	)
Interest Rate Futures	30,502		1		0			32,008		5		(3		)
Interest Rate Options	45,361		411		(471		)	27,561		663		(180		)
Interest Rate Forwards	168		3		(2		)	877		2		(1		)
Foreign Currency
Foreign Currency Forwards	16,804		349		(454		)	21,197		854		(1,011		)
Foreign Currency Options	158		9		0			203		6		0
Currency/Interest Rate
Foreign Currency Swaps	11,165		1,440		(178		)	11,083		1,207		(145		)
Credit
Credit Default Swaps	1,450		4		(28		)	2,622		7		(30		)
Equity
Equity Futures	379		0		0			331		3		0
Equity Options	69,003		271		(100		)	57,590		504		(41		)
Total Return Swaps	15,902		252		(13		)	15,217		65		(462		)
Commodity
Commodity Futures	18		0		(1		)	18		1		0
Synthetic GICs	73,166		7		0			74,707		6		0
Total Non-Qualifying Derivatives(2)	$	441,653	$	10,883	$	(5,569	)	$	426,351	$	13,227	$	(6,451	)
Total Derivatives(3)	$	455,084	$	12,122	$	(5,833	)	$	439,280	$	13,932	$	(6,817	)

__________

(1) Notional amounts are presented on a gross basis and include derivatives used to offset existing positions.

(2) Based on notional amounts, most of the Company’s derivatives do not qualify for hedge accounting as follows: i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income, ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules, and iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.

(3) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a net liability of $5,454 million and $8,162 million as of June 30, 2015 and December 31, 2014, respectively, primarily included in “Future policy benefits.”

Offsetting of Financial Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	June 30, 2015
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented  in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	11,967	$	(9,901	)	$	2,066	$	(568	)	$	1,498
Securities purchased under agreement to resell	691		0			691		(691		)	0
Total assets	$	12,658	$	(9,901	)	$	2,757	$	(1,259	)	$	1,498
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,821	$	(5,730	)	$	91	$	(37	)	$	54
Securities sold under agreement to repurchase	7,863		0			7,863		(7,863		)	0
Total liabilities	$	13,684	$	(5,730	)	$	7,954	$	(7,900	)	$	54

	December 31, 2014
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	13,786	$	(12,332	)	$	1,454	$	(623	)	$	831
Securities purchased under agreement to resell	702		0			702		(702		)	0
Total assets	$	14,488	$	(12,332	)	$	2,156	$	(1,325	)	$	831
Offsetting of Financial Liabilities:
Derivatives(1)	$	6,810	$	(6,661	)	$	149	$	(149	)	$	0
Securities sold under agreement to repurchase	9,407		0			9,407		(9,407		)	0
Total liabilities	$	16,217	$	(6,661	)	$	9,556	$	(9,556	)	$	0

__________

(1) Amounts exclude the excess of collateral received/pledged from/to the counterparty.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship.

	Three Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	26		$	(11	)	$	0		$	0		$	0	$	0
Currency	(10		)	0			0			0			0		0
Total fair value hedges	16			(11		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(2		)	0		6
Currency/Interest Rate	0			16			(79		)	0			0		(308		)
Total cash flow hedges	0			16			(79		)	(2		)	0		(302		)
Net investment hedges
Currency	1			0			0			0			0		(3		)
Currency/Interest Rate	0			0			0			0			0		18
Total net investment hedges	1			0			0			0			0		15
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(4,180		)	0			0			0			0		0
Currency	(339		)	0			1			0			0		0
Currency/Interest Rate	(28		)	0			0			0			0		0
Credit	7			0			0			0			0		0
Equity	(177		)	0			0			0			0		0
Commodity	(1		)	0			0			0			0		0
Embedded Derivatives	4,217			0			0			0			0		0
Total non-qualifying hedges	(501		)	0			1			0			0		0
Total	$	(484	)	$	5		$	(78	)	$	(2	)	$	0	$	(287	)

	Six Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income		Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	21		$	(23	)	$	0	$	0		$	0	$	0
Currency	9			0			0		0			0		0
Total fair value hedges	30			(23		)	0		0			0		0
Cash flow hedges
Interest Rate	0			0			0		(3		)	0		1
Currency/Interest Rate	0			27			25		0			0		495
Total cash flow hedges	0			27			25		(3		)	0		496
Net investment hedges
Currency	(3		)	0			0		0			0		7
Currency/Interest Rate	0			0			0		0			0		26
Total net investment hedges	(3		)	0			0		0			0		33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,468		)	0			0		0			0		0
Currency	(228		)	0			1		0			0		0
Currency/Interest Rate	405			0			4		0			0		0
Credit	0			0			0		0			0		0
Equity	(657		)	0			0		0			0		0
Commodity	(1		)	0			0		0			0		0
Embedded Derivatives	3,181			0			0		0			0		0
Total non-qualifying hedges	1,232			0			5		0			0		0
Total	$	1,259		$	4		$	30	$	(3	)	$	0	$	529

	Three Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(3	)	$	(15	)	$	0		$	0		$	0	$	0
Currency	4			0			0			0			0		0
Total fair value hedges	1			(15		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(6		)	0		2
Currency/Interest Rate	0			1			(18		)	0			0		(61		)
Total cash flow hedges	0			1			(18		)	(6		)	0		(59		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(11		)
Total net investment hedges	0			0			0			0			0		(12		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,470			0			0			0			0		0
Currency	(42		)	0			0			0			0		0
Currency/Interest Rate	15			0			0			0			0		0
Credit	(2		)	0			0			0			0		0
Equity	(687		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(696		)	0			0			0			0		0
Total non-qualifying hedges	58			0			0			0			0		0
Total	$	59		$	(14	)	$	(18	)	$	(6	)	$	0	$	(71	)

	Six Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(8	)	$	(31	)	$	0		$	0		$	2	$	0
Currency	6			0			0			0			0		0
Total fair value hedges	(2		)	(31		)	0			0			2		0
Cash flow hedges
Interest Rate	0			0			0			(11		)	0		5
Currency/Interest Rate	0			3			(22		)	0			0		(92		)
Total cash flow hedges	0			3			(22		)	(11		)	0		(87		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(29		)
Total net investment hedges	0			0			0			0			0		(30		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	3,379			0			0			0			0		0
Currency	(48		)	0			0			0			0		0
Currency/Interest Rate	3			0			(1		)	0			0		0
Credit	(1		)	0			0			0			0		0
Equity	(980		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(2,442		)	0			0			0			0		0
Total non-qualifying hedges	(89		)	0			(1		)	0			0		0
Total	$	(91	)	$	(28	)	$	(23	)	$	(11	)	$	2	$	(117	)

__________

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

Schedule of Derivative Instruments Recognized in Accumulated Other Comprehensive Income (Loss) Before Taxes

Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in millions)
Balance, December 31, 2014	$	206
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2015	555
Amount reclassified into current period earnings	(59		)
Balance, June 30, 2015	$	702

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Investments (Net Investment Income) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 3,895	$ 3,938	$ 7,865	$ 7,940
Less: investment expenses	(224)	(184)	(425)	(348)
Net investment income	3,671	3,754	7,440	7,592
Fixed maturities, available-for-sale(1)
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	2,611	2,669	5,194	5,286
Fixed maturities, held-to-maturity
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	51	42	100	82
Equity securities, available-for-sale
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	81	105	177	189
Trading account assets
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	294	259	581	517
Commercial mortgage and other loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	556	522	1,100	1,020
Policy loans
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	154	158	308	312
Short-term investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	11	8	24	17
Other long-term investments
Schedule of Investment Income, Reported Amounts, by Category [Line Items]
Gross investment income	$ 137	$ 175	$ 381	$ 517

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Derivative Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies

Interest Rate Contracts

Interest rate swaps, options and futures are used by the Company to reduce risks from changes in interest rates, manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it owns or anticipates acquiring or selling.

Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between fixed-rate and floating-rate interest amounts calculated by reference to an agreed upon notional principal amount.

The Company also uses swaptions, interest rate caps and interest rate floors to manage interest rate risk. A swaption is an option to enter into a swap with a forward starting effective date. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. In an interest rate cap, the buyer receives payments at the end of each period in which the interest rate exceeds the agreed strike price. Similarly, in an interest rate floor, the buyer receives payments at the end of each period in which the interest rate is below the agreed strike price. Swaptions and interest rate caps and floors are included in interest rate options.

In exchange-traded interest rate futures transactions, the Company purchases or sells a specified number of contracts, the values of which are determined by the values of underlying referenced investments, and posts variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission’s merchants who are members of a trading exchange.

Equity Contracts

Equity index options are contracts which will settle in cash based on differentials in the underlying indices at the time of exercise and the strike price. The Company uses combinations of purchases and sales of equity index options to hedge the effects of adverse changes in equity indices within a predetermined range.

Total return swaps are contracts whereby the Company agrees with counterparties to exchange, at specified intervals, the difference between the return on an asset (or market index) and LIBOR plus an associated funding spread based on a notional amount. The Company generally uses total return swaps to hedge the effect of adverse changes in equity indices.

Foreign Exchange Contracts

Currency derivatives, including currency futures, options, forwards and swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell, and to hedge the currency risk associated with net investments in foreign operations and anticipated earnings of its foreign operations.

Under currency forwards, the Company agrees with counterparties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. As noted above, the Company uses currency forwards to mitigate the impact of changes in currency exchange rates on U.S. dollar equivalent earnings generated by certain of its non-U.S. businesses, primarily its international insurance and investments operations. The Company executes forward sales of the hedged currency in exchange for U.S. dollars at a specified exchange rate. The maturities of these forwards correspond with the future periods in which the non-U.S. dollar-denominated earnings are expected to be generated. These earnings hedges do not qualify for hedge accounting.

Under currency swaps, the Company agrees with counterparties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party.

Credit Contracts

The Company writes credit default swaps for which it receives a premium to insure credit risk. These are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With these derivatives the Company sells credit protection on a single name reference, or certain index reference, and in return receives a quarterly premium. This premium or credit spread generally corresponds to the difference between the yield on the referenced names (or an index’s referenced names) public fixed maturity cash instruments and swap rates, at the time the agreement is executed. If there is an event of default by the referenced name or one of the referenced names in the index, as defined by the agreement, then the Company is obligated to pay the referenced amount of the contract to the counterparty and receive in return the referenced defaulted security or similar security or (in the case of a credit default index) pay the referenced amount less the auction recovery rate. See credit derivatives written section for further discussion of guarantees. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

Other Contracts

TBAs. The Company uses TBA forward contracts to gain exposure to the investment risk and return of mortgage-backed securities. TBA transactions can help the Company enhance the return on its investment portfolio, and can provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual mortgage-backed pools. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. Additionally, pursuant to the Company’s mortgage dollar roll program, TBAs or mortgage-backed securities are transferred to counterparties with a corresponding agreement to repurchase them at a future date. These transactions do not qualify as secured borrowings and are accounted for as derivatives.

Loan Commitments. In its mortgage operations, the Company enters into commitments to fund commercial mortgage loans at specified interest rates and other applicable terms within specified periods of time. These commitments are legally binding agreements to extend credit to a counterparty. Loan commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. The determination of the fair value of loan commitments accounted for as derivatives considers various factors including, among others, terms of the related loan, the intended exit strategy for the loans based upon either securitization valuation models or investor purchase commitments, prevailing interest rates, origination income or expense, and the value of service rights. Loan commitments that relate to the origination of mortgage loans that will be held for investment are not accounted for as derivatives and accordingly are not recognized in the Company’s financial statements. See Note 15 for a further discussion of these loan commitments.

Embedded Derivatives. The Company sells variable annuity products, which may include guaranteed benefit features that are accounted for as embedded derivatives. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models. The Company maintains a portfolio of derivative instruments that is intended to offset certain risks related to the above products’ features. The derivatives may include, but are not limited to equity options, total return swaps, interest rate swaptions, caps, floors and other instruments.

Synthetic Guarantees. The Company sells synthetic GICs, through both full service and investment-only sales channels, to qualified pension plans. The assets are owned by the trustees of such plans, who invest the assets according to the contract terms agreed to with the Company. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated withdrawals from the contract. Under U.S. GAAP, these contracts are accounted for as derivatives and recorded at fair value.

The table below provides a summary of the gross notional amount and fair value of derivatives contracts by the primary underlying, excluding embedded derivatives which are recorded with the associated host. Many derivative instruments contain multiple underlyings. The fair value amounts below represent the gross fair value of derivative contracts prior to taking into account the netting effects of master netting agreements, cash collateral held with the same counterparty and NPR. This netting impact results in total derivative assets of $2,213 million and $1,593 million as of June 30, 2015 and December 31, 2014, respectively, and total derivative liabilities of $103 million and $158 million as of June 30, 2015 and December 31, 2014, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

Primary Underlying/Instrument Type	June 30, 2015							December 31, 2014
			Gross Fair Value							Gross Fair Value
	Notional(1)		Assets		Liabilities			Notional(1)		Assets		Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	1,492	$	20	$	(167	)	$	1,714	$	21	$	(191	)
Foreign Currency
Foreign Currency Forwards	378		7		(6		)	443		5		(14		)
Currency/Interest Rate
Foreign Currency Swaps	11,561		1,212		(91		)	10,772		679		(161		)
Total Qualifying Hedges	$	13,431	$	1,239	$	(264	)	$	12,929	$	705	$	(366	)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	177,577	$	8,136	$	(4,322	)	$	182,937	$	9,904	$	(4,578	)
Interest Rate Futures	30,502		1		0			32,008		5		(3		)
Interest Rate Options	45,361		411		(471		)	27,561		663		(180		)
Interest Rate Forwards	168		3		(2		)	877		2		(1		)
Foreign Currency
Foreign Currency Forwards	16,804		349		(454		)	21,197		854		(1,011		)
Foreign Currency Options	158		9		0			203		6		0
Currency/Interest Rate
Foreign Currency Swaps	11,165		1,440		(178		)	11,083		1,207		(145		)
Credit
Credit Default Swaps	1,450		4		(28		)	2,622		7		(30		)
Equity
Equity Futures	379		0		0			331		3		0
Equity Options	69,003		271		(100		)	57,590		504		(41		)
Total Return Swaps	15,902		252		(13		)	15,217		65		(462		)
Commodity
Commodity Futures	18		0		(1		)	18		1		0
Synthetic GICs	73,166		7		0			74,707		6		0
Total Non-Qualifying Derivatives(2)	$	441,653	$	10,883	$	(5,569	)	$	426,351	$	13,227	$	(6,451	)
Total Derivatives(3)	$	455,084	$	12,122	$	(5,833	)	$	439,280	$	13,932	$	(6,817	)

__________

(1) Notional amounts are presented on a gross basis and include derivatives used to offset existing positions.

(2) Based on notional amounts, most of the Company’s derivatives do not qualify for hedge accounting as follows: i) derivatives that economically hedge embedded derivatives do not qualify for hedge accounting because changes in the fair value of the embedded derivatives are already recorded in net income, ii) derivatives that are utilized as macro hedges of the Company’s exposure to various risks typically do not qualify for hedge accounting because they do not meet the criteria required under portfolio hedge accounting rules, and iii) synthetic GICs, which are product standalone derivatives, do not qualify as hedging instruments under hedge accounting rules.

(3) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a net liability of $5,454 million and $8,162 million as of June 30, 2015 and December 31, 2014, respectively, primarily included in “Future policy benefits.”

Offsetting Assets and Liabilities

The following table presents recognized derivative instruments (including bifurcated embedded derivatives), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.

	June 30, 2015
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented  in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	11,967	$	(9,901	)	$	2,066	$	(568	)	$	1,498
Securities purchased under agreement to resell	691		0			691		(691		)	0
Total assets	$	12,658	$	(9,901	)	$	2,757	$	(1,259	)	$	1,498
Offsetting of Financial Liabilities:
Derivatives(1)	$	5,821	$	(5,730	)	$	91	$	(37	)	$	54
Securities sold under agreement to repurchase	7,863		0			7,863		(7,863		)	0
Total liabilities	$	13,684	$	(5,730	)	$	7,954	$	(7,900	)	$	54

	December 31, 2014
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statement of Financial Position			Net Amounts Presented in the Statement of Financial Position		Financial Instruments/ Collateral(1)			Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives(1)	$	13,786	$	(12,332	)	$	1,454	$	(623	)	$	831
Securities purchased under agreement to resell	702		0			702		(702		)	0
Total assets	$	14,488	$	(12,332	)	$	2,156	$	(1,325	)	$	831
Offsetting of Financial Liabilities:
Derivatives(1)	$	6,810	$	(6,661	)	$	149	$	(149	)	$	0
Securities sold under agreement to repurchase	9,407		0			9,407		(9,407		)	0
Total liabilities	$	16,217	$	(6,661	)	$	9,556	$	(9,556	)	$	0

__________

(1) Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information on the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship.

	Three Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	26		$	(11	)	$	0		$	0		$	0	$	0
Currency	(10		)	0			0			0			0		0
Total fair value hedges	16			(11		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(2		)	0		6
Currency/Interest Rate	0			16			(79		)	0			0		(308		)
Total cash flow hedges	0			16			(79		)	(2		)	0		(302		)
Net investment hedges
Currency	1			0			0			0			0		(3		)
Currency/Interest Rate	0			0			0			0			0		18
Total net investment hedges	1			0			0			0			0		15
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(4,180		)	0			0			0			0		0
Currency	(339		)	0			1			0			0		0
Currency/Interest Rate	(28		)	0			0			0			0		0
Credit	7			0			0			0			0		0
Equity	(177		)	0			0			0			0		0
Commodity	(1		)	0			0			0			0		0
Embedded Derivatives	4,217			0			0			0			0		0
Total non-qualifying hedges	(501		)	0			1			0			0		0
Total	$	(484	)	$	5		$	(78	)	$	(2	)	$	0	$	(287	)

	Six Months Ended June 30, 2015
	Realized Investment Gains (Losses)			Net Investment Income			Other Income		Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	21		$	(23	)	$	0	$	0		$	0	$	0
Currency	9			0			0		0			0		0
Total fair value hedges	30			(23		)	0		0			0		0
Cash flow hedges
Interest Rate	0			0			0		(3		)	0		1
Currency/Interest Rate	0			27			25		0			0		495
Total cash flow hedges	0			27			25		(3		)	0		496
Net investment hedges
Currency	(3		)	0			0		0			0		7
Currency/Interest Rate	0			0			0		0			0		26
Total net investment hedges	(3		)	0			0		0			0		33
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(1,468		)	0			0		0			0		0
Currency	(228		)	0			1		0			0		0
Currency/Interest Rate	405			0			4		0			0		0
Credit	0			0			0		0			0		0
Equity	(657		)	0			0		0			0		0
Commodity	(1		)	0			0		0			0		0
Embedded Derivatives	3,181			0			0		0			0		0
Total non-qualifying hedges	1,232			0			5		0			0		0
Total	$	1,259		$	4		$	30	$	(3	)	$	0	$	529

	Three Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(3	)	$	(15	)	$	0		$	0		$	0	$	0
Currency	4			0			0			0			0		0
Total fair value hedges	1			(15		)	0			0			0		0
Cash flow hedges
Interest Rate	0			0			0			(6		)	0		2
Currency/Interest Rate	0			1			(18		)	0			0		(61		)
Total cash flow hedges	0			1			(18		)	(6		)	0		(59		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(11		)
Total net investment hedges	0			0			0			0			0		(12		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	1,470			0			0			0			0		0
Currency	(42		)	0			0			0			0		0
Currency/Interest Rate	15			0			0			0			0		0
Credit	(2		)	0			0			0			0		0
Equity	(687		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(696		)	0			0			0			0		0
Total non-qualifying hedges	58			0			0			0			0		0
Total	$	59		$	(14	)	$	(18	)	$	(6	)	$	0	$	(71	)

	Six Months Ended June 30, 2014
	Realized Investment Gains (Losses)			Net Investment Income			Other Income			Interest Expense			Interest Credited To Policyholders’ Account Balances		Accumulated Other Comprehensive Income (Losses)(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Interest Rate	$	(8	)	$	(31	)	$	0		$	0		$	2	$	0
Currency	6			0			0			0			0		0
Total fair value hedges	(2		)	(31		)	0			0			2		0
Cash flow hedges
Interest Rate	0			0			0			(11		)	0		5
Currency/Interest Rate	0			3			(22		)	0			0		(92		)
Total cash flow hedges	0			3			(22		)	(11		)	0		(87		)
Net investment hedges
Currency	0			0			0			0			0		(1		)
Currency/Interest Rate	0			0			0			0			0		(29		)
Total net investment hedges	0			0			0			0			0		(30		)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	3,379			0			0			0			0		0
Currency	(48		)	0			0			0			0		0
Currency/Interest Rate	3			0			(1		)	0			0		0
Credit	(1		)	0			0			0			0		0
Equity	(980		)	0			0			0			0		0
Commodity	0			0			0			0			0		0
Embedded Derivatives	(2,442		)	0			0			0			0		0
Total non-qualifying hedges	(89		)	0			(1		)	0			0		0
Total	$	(91	)	$	(28	)	$	(23	)	$	(11	)	$	2	$	(117	)

__________

(1) Amounts deferred in “Accumulated other comprehensive income (loss).”

For the three and six months endedJune 30, 2015, the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations. Also, there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

Presented below is a rollforward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in millions)
Balance, December 31, 2014	$	206
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2015	555
Amount reclassified into current period earnings	(59		)
Balance, June 30, 2015	$	702

Using June 30, 2015 values, it is anticipated that a pre-tax gain of approximately $43 million will be reclassified from “Accumulated other comprehensive income (loss)” to earnings during the subsequent twelve months ending June 30, 2016, offset by amounts pertaining to the hedged items. As of June 30, 2015, the Company does not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 29 years. Income amounts deferred in AOCI as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within AOCI were $533 million and $501 million as of June 30, 2015 and December 31, 2014, respectively.

Credit Derivatives

Credit derivatives, where the Company has written credit protection on a single name reference, had outstanding notional amounts of $5 million as of both June 30, 2015 and December 31, 2014. These credit derivatives are reported at fair value as an asset of less than $1 million as of both June 30, 2015 and December 31, 2014. These credit derivatives have a NAIC designation of 2. The Company has also written credit protection on certain index references with notional amounts of $349 million and $1,544 million, respectively, reported at fair value as an asset of less than $1 million and a liability of $2 million, respectively, as of June 30, 2015 and December 31, 2014. As of June 30, 2015, these credit derivatives’ notionals had the following NAIC ratings: $67 million in NAIC 3, $251 million in NAIC 5 and $31 million in NAIC 6. As of December 31, 2014, the credit derivatives where the Company had written credit protection on an index reference had an NAIC designation of 3. NAIC designations are based on the lowest rated single name reference included in the index.

The Company’s maximum amount at risk under these credit derivatives equals the aforementioned notional amounts and assumes the value of the underlying referenced securities become worthless. These single name credit derivatives have maturities of less than 1 year, while the credit protection on the index references have maturities of less than 10 years. This excludes a credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance.

The Company also entered into a credit derivative that will require the Company to make certain payments in the event of deterioration in the value of the surplus notes issued by a subsidiary of Prudential Insurance. The notional amount of this credit derivative is $500 million and the fair value as of June 30, 2015 and December 31, 2014, was a liability of $10 million and $4 million, respectively. No collateral was pledged in either period.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of June 30, 2015 and December 31, 2014, the Company had $596 million and $573 million of outstanding notional amounts, respectively, reported at fair value as a liability of $14 million and $17 million, respectively.

Counterparty Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions. The Company manages credit risk by entering into derivative transactions with highly rated major international financial institutions and other creditworthy counterparties, and by obtaining collateral, such as cash and securities, when appropriate. Additionally, limits are set on single party credit exposures which are subject to periodic management review.

The credit exposure of the Company’s OTC derivative transactions is represented by the contracts with a positive fair value at the reporting date. To reduce credit exposures, the Company seeks to: (i) enter into OTC derivative transactions pursuant to master agreements that provide for a netting of payments and receipts with a single counterparty, and (ii) enter into agreements that allow the use of credit support annexes, which are bilateral rating-sensitive agreements that require collateral postings at established threshold levels. Cleared derivatives are transactions between the Company and a counterparty where the transactions are cleared through a clearinghouse, such that each derivative counterparty is only exposed to the default of the clearinghouse. These cleared transactions require initial and daily variation margin collateral postings and include certain interest rate swaps and credit default swaps entered into on or after June 10, 2013, related to guidelines under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Company also enters into exchange-traded futures and certain options transactions through regulated exchanges and these transactions are settled on a daily basis, thereby reducing credit risk exposure in the event of non-performance by counterparties to such financial instruments.

Under fair value measurements, the Company incorporates the market’s perception of its own and the counterparty’s NPR in determining the fair value of the portion of its OTC derivative assets and liabilities that are uncollateralized. Credit spreads are applied to the derivative fair values on a net basis by counterparty. To reflect the Company’s own credit spread, a proxy based on relevant debt spreads is applied to OTC derivative net liability positions. Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions.

Certain of the Company’s derivative agreements with some of its counterparties contain credit-rating related triggers. If the Company’s credit rating were to fall below a certain level, the counterparties to the derivative instruments could request termination at the then fair value of the derivative or demand immediate full collateralization on derivative instruments in net liability positions. As of June 30, 2015, there were no net liability derivative positions by counterparty with credit-risk-related contingent features. As such, the Company has not posted any collateral related to these positions and the Company would not be required to post any additional collateral to the counterparties if the credit-risk-related contingent features underlying these agreements had been triggered as of June 30, 2015.

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Closed Block (Tables)

6 Months Ended

Jun. 30, 2015

Closed Block Disclosure [Abstract]

Schedule of Closed Block Liabilities and Assets

Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from Closed Block liabilities and Closed Block assets, are as follows:

	June 30, 2015			December 31, 2014
	(in millions)
Closed Block liabilities
Future policy benefits	$	49,665		$	49,863
Policyholders’ dividends payable	918			931
Policyholders’ dividend obligation	5,481			6,612
Policyholders’ account balances	5,272			5,310
Other Closed Block liabilities	4,833			5,084
Total Closed Block liabilities	66,169			67,800
Closed Block assets
Fixed maturities, available-for-sale, at fair value	39,118			40,629
Other trading account assets, at fair value	310			302
Equity securities, available-for-sale, at fair value	3,230			3,522
Commercial mortgage and other loans	9,839			9,472
Policy loans	4,848			4,914
Other long-term investments	2,837			2,765
Short-term investments	1,099			1,225
Total investments	61,281			62,829
Cash and cash equivalents	987			1,201
Accrued investment income	518			527
Other Closed Block assets	495			332
Total Closed Block assets	63,281			64,889
Excess of reported Closed Block liabilities over Closed Block assets	2,888			2,911
Portion of above representing accumulated other comprehensive income:
Net unrealized investment gains (losses)	3,701			5,040
Allocated to policyholder dividend obligation	(3,715		)	(5,053		)
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,874		$	2,898

Schedule of Closed Block Dividend Obligation

Information regarding the policyholder dividend obligation is as follows:

	Six Months Ended June 30, 2015
	(in millions)
Balance, January 1	$	6,612
Impact from earnings allocable to policyholder dividend obligation	208
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	(1,339		)
Balance, June 30	$	5,481

Schedule of Closed Block Revenues Benefits Expenses

Closed Block revenues and benefits and expenses for the three and six months endedJune 30, 2015 and 2014, were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
	(in millions)
Revenues
Premiums	$	701	$	711	$	1,335	$	1,350
Net investment income	642		683		1,351		1,404
Realized investment gains (losses), net	166		369		539		504
Other income	18		19		21		34
Total Closed Block revenues	1,527		1,782		3,246		3,292
Benefits and Expenses
Policyholders’ benefits	895		911		1,716		1,703
Interest credited to policyholders’ account balances	34		33		67		67
Dividends to policyholders	423		688		1,187		1,265
General and administrative expenses	107		111		215		225
Total Closed Block benefits and expenses	1,459		1,743		3,185		3,260
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes and discontinued operations	68		39		61		32
Income tax expense (benefit)	57		33		39		21
Closed Block revenues, net of Closed Block benefits and expenses and income taxes, before discontinued operations	11		6		22		11
Income (loss) from discontinued operations, net of taxes	0		0		0		0
Closed Block revenues, net of Closed Block benefits and expenses, income taxes and discontinued operations	$	11	$	6	$	22	$	11

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Derivative Instruments (Current Period Cash Flow Hedges in AOCI (loss) before Taxes) (Details) $ in Millions	6 Months Ended
	Jun. 30, 2015 USD ($)
Accumulated Other Comprehensive Income (Loss), before Tax [Roll Forward]
Balance, beginning	$ 206
Net deferred gains (losses) on cash flow hedges from January 1 to June 30, 2015	555
Amount reclassified into current period earnings	(59)
Balance, ending	$ 702

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Investments (Credit Quality Indicators) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	$ 48,677	$ 46,551
Greater than 1.2X | 0%-59.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	23,344	22,557
Greater than 1.2X | 0%-59.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2,290	2,152
Greater than 1.2X | 0%-59.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	25,634	24,709
Greater than 1.2X | 60%-69.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	13,434	12,563
Greater than 1.2X | 60%-69.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	164	151
Greater than 1.2X | 60%-69.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	13,598	12,714
Greater than 1.2X | 70%-79.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	5,440	4,354
Greater than 1.2X | 70%-79.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Greater than 1.2X | 70%-79.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	5,440	4,354
Greater than 1.2X | Greater than 80% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	135	234
Greater than 1.2X | Greater than 80% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Greater than 1.2X | Greater than 80% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	135	234
Greater than 1.2X | Total | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	42,353	39,708
Greater than 1.2X | Total | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2,454	2,303
Greater than 1.2X | Total | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	44,807	42,011
1.0X to 1.2X | 0%-59.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	429	637
1.0X to 1.2X | 0%-59.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	148	140
1.0X to 1.2X | 0%-59.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	577	777
1.0X to 1.2X | 60%-69.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	444	500
1.0X to 1.2X | 60%-69.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
1.0X to 1.2X | 60%-69.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	444	500
1.0X to 1.2X | 70%-79.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	448	664
1.0X to 1.2X | 70%-79.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
1.0X to 1.2X | 70%-79.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	448	664
1.0X to 1.2X | Greater than 80% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	139	127
1.0X to 1.2X | Greater than 80% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
1.0X to 1.2X | Greater than 80% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	139	127
1.0X to 1.2X | Total | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	1,460	1,928
1.0X to 1.2X | Total | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	148	140
1.0X to 1.2X | Total | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	1,608	2,068
Less than 1.0X | 0%-59.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	275	207
Less than 1.0X | 0%-59.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2	2
Less than 1.0X | 0%-59.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	277	209
Less than 1.0X | 60%-69.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	79	237
Less than 1.0X | 60%-69.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 60%-69.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	79	237
Less than 1.0X | 70%-79.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	60	21
Less than 1.0X | 70%-79.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | 70%-79.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	60	21
Less than 1.0X | Greater than 80% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	166	202
Less than 1.0X | Greater than 80% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Less than 1.0X | Greater than 80% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	166	202
Less than 1.0X | Total | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	580	667
Less than 1.0X | Total | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2	2
Less than 1.0X | Total | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	582	669
Total | 0%-59.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	24,048	23,401
Total | 0%-59.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2,440	2,294
Total | 0%-59.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	26,488	25,695
Total | 60%-69.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	13,957	13,300
Total | 60%-69.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	164	151
Total | 60%-69.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	14,121	13,451
Total | 70%-79.99% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	5,948	5,039
Total | 70%-79.99% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Total | 70%-79.99% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	5,948	5,039
Total | Greater than 80% | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	440	563
Total | Greater than 80% | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	0	0
Total | Greater than 80% | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	440	563
Total | Total | Commercial mortgage loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	44,393	42,303
Total | Total | Agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	2,604	2,445
Total | Total | Commercial mortgage and agricultural property loans
Credit Quality Indicators [Line Items]
Recording investment gross of allowance for credit losses	$ 46,997	$ 44,748

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Investments (Trading Account Assets Supporting Insurance Liabilities) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Major Types Of Investment Securities [Line Items]
Amortized Cost		$ 19,533	$ 19,263
Fair Value	[1]	20,267	20,263
Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		18,136	18,171
Fair Value		18,572	18,881
Equity securities
Major Types Of Investment Securities [Line Items]
Amortized Cost		974	896
Fair Value		1,273	1,186
Short-term investments and cash equivalents
Major Types Of Investment Securities [Line Items]
Amortized Cost		423	196
Fair Value		422	196
Corporate securities | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		12,251	11,922
Fair Value		12,566	12,439
Commercial mortgage-backed securities | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		2,055	2,505
Fair Value		2,078	2,546
Residential mortgage-backed securities | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		1,488	1,640
Fair Value		1,508	1,676
Asset-backed securities | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		1,417	1,180
Fair Value		1,440	1,198
Foreign government bonds | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		635	621
Fair Value		647	650
U.S. government authorities and agencies and obligations of U.S. states | Fixed Maturities
Major Types Of Investment Securities [Line Items]
Amortized Cost		290	303
Fair Value		$ 333	$ 372

[1] See Note 5 for details of balances associated with variable interest entities.

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Unaudited Interim Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
NET INCOME (LOSS)	$ 1,459	$ 1,113	$ 3,505	$ 2,362
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(96)	167	(163)	247
Net unrealized investment gains (losses)	(6,702)	3,251	(4,212)	6,319
Defined benefit pension and postretirement unrecognized periodic benefit	54	20	106	43
Total	(6,744)	3,438	(4,269)	6,609
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(2,380)	1,158	(1,569)	2,205
Other comprehensive income (loss), net of taxes	(4,364)	2,280	(2,700)	4,404
Comprehensive income (loss)	(2,905)	3,393	805	6,766
Less: Comprehensive income (loss) attributable to noncontrolling interests	37	24	9	42
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$ (2,942)	$ 3,369	$ 796	$ 6,724

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Fair Value of Assets and Liabilities (Nonrecurring Fair Value Measurements) (Details) - Fair Value, Measurements, Nonrecurring - Level 3 - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Commercial Mortgage Loans
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	$ 0	$ 33	$ 0	$ 33
Gains (Losses)	0	(4)	0	(4)
Mortgage Servicing Rights
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	98	89	98	89
Gains (Losses)	2	4	(1)	8
Cost Method Investment
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Carrying value	131	2	131	2
Gains (Losses)	$ (12)	$ 0	$ (36)	$ (1)

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Acquisitions

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Acquisitions

ACQUISITIONS

This section supplements, and should be read in conjunction with, the complete descriptions provided in Note 3 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2014.

Acquisition of Administradora de Fondos de Pensiones Habitat S.A.

In March 2015, the Company and Inversiones La Construcción S.A. signed definitive documentation related to the Company’s previously disclosed acquisition of an indirect ownership interest in Administradora de Fondos de Pensiones Habitat S.A. (“AFP Habitat”) and filed for regulatory approval. The transaction, which is subject to certain conditions, including receipt of regulatory approvals, is expected to close in the second half of 2015.

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Closed Block (Narrative) (Details) - USD ($) $ in Millions	Jun. 30, 2015	Dec. 31, 2014
Closed Block [Line Items]
Closed Block Liabilities, Policyholder Dividend Obligation	$ 5,481	$ 6,612
Excess Of Actual Cumulative Earnings Over Expected Cumulative Earnings
Closed Block [Line Items]
Closed Block Liabilities, Policyholder Dividend Obligation	1,766	1,558
Accumulated Net Unrealized Investment Gains That Have Arisen Subsequent To Establishment Of Closed Block
Closed Block [Line Items]
Closed Block Liabilities, Policyholder Dividend Obligation	$ 3,715	$ 5,053

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Fair Value of Assets and Liabilities (Narrative) (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Fair Value Disclosures [Abstract]
Fair Value Assets Level1 To Level2 Transfers		$ 24,000,000	$ 17,000,000	$ 74,000,000	$ 150,000,000
Fair Value Assets Level2 to Level1 Transfers		36,000,000	22,000,000	53,000,000	55,000,000
Fair Value Reporting [Line Items]
Total commercial mortgage and other loans	[1]	48,569,000,000		48,569,000,000		$ 46,432,000,000
Interest income recorded on certain commercial loans		2,000,000	1,000,000	5,000,000	3,000,000
Other long-term investments	[1]	10,678,000,000		10,678,000,000		10,921,000,000
Notes Of Consolidated Variable Interest Entities	[1]	7,455,000,000		7,455,000,000		6,058,000,000
Fair Value Option
Fair Value Reporting [Line Items]
Contractual principal amounts of commercial mortgage loans, for which the fair value option has been elected		384,000,000		384,000,000		372,000,000
Other long-term investments		1,267,000,000		1,267,000,000		1,082,000,000
Notes Of Consolidated Variable Interest Entities		7,434,000,000		7,434,000,000		6,033,000,000
Notes Of Vies Contractual Principle Amount		7,654,000,000		7,654,000,000		6,216,000,000
Interest Expense		86,000,000	$ 50,000,000	154,000,000	$ 90,000,000
Non Accrual Loans
Fair Value Reporting [Line Items]
Contractual principal amounts of commercial mortgage loans, for which the fair value option has been elected		0		0
Fair Value, Measurements, Recurring
Fair Value Reporting [Line Items]
Total commercial mortgage and other loans		391,000,000		391,000,000		380,000,000
Other long-term investments		1,944,000,000		1,944,000,000		1,772,000,000
Fair Value, Measurements, Recurring | Fair Value Option
Fair Value Reporting [Line Items]
Total commercial mortgage and other loans		391,000,000		$ 391,000,000		$ 380,000,000
Level 3 | Separate Account Real Estate | Minimum | Market comparables
Fair Value Reporting [Line Items]
Cap Rate				4.50%		4.50%
Discount rate				6.00%		6.00%
Yield To Maturity				0.76%		0.77%
Market Spread Over Base Rate				1.50%		1.50%
Level 3 | Separate Account Real Estate | Minimum | Discounted cash flow
Fair Value Reporting [Line Items]
Credit Risk				1.27%		1.17%
Level 3 | Separate Account Real Estate | Maximum | Market comparables
Fair Value Reporting [Line Items]
Cap Rate				10.00%		9.75%
Discount rate				15.00%		15.00%
Yield To Maturity				6.04%		6.76%
Market Spread Over Base Rate				4.20%		4.76%
Level 3 | Separate Account Real Estate | Maximum | Discounted cash flow
Fair Value Reporting [Line Items]
Credit Risk				8.41%		8.39%
Level 3 | Separate Account Real Estate | Weighted Average | Market comparables
Fair Value Reporting [Line Items]
Cap Rate				5.93%		6.05%
Discount rate				7.19%		7.36%
Yield To Maturity				3.94%		4.02%
Market Spread Over Base Rate				2.34%		2.67%
Level 3 | Separate Account Real Estate | Weighted Average | Discounted cash flow
Fair Value Reporting [Line Items]
Credit Risk				1.55%		1.44%
Level 3 | Fair Value, Measurements, Recurring
Fair Value Reporting [Line Items]
Total commercial mortgage and other loans		0		$ 0		$ 0
Other long-term investments		1,714,000,000		1,714,000,000		1,547,000,000
Level 3 | Internal | Fair Value, Measurements, Recurring
Fair Value Reporting [Line Items]
Other long-term investments		12,000,000		12,000,000		1,000,000
Level 3 | Separate Accounts Asset | Internal | Fair Value, Measurements, Recurring
Fair Value Reporting [Line Items]
Real Estate Investments, Net		23,435,000,000		23,435,000,000		22,641,000,000
Total commercial mortgage and other loans		$ 936,000,000		$ 936,000,000		$ 943,000,000

[1] See Note 5 for details of balances associated with variable interest entities.

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Earnings Per Share (Reconciliation of the Numerators and Denominators of the Basic and Diluted Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income
Less: Income (loss) attributable to noncontrolling interests		$ (53)	$ (23)	$ (63)	$ (34)
Basic earnings per share
Income (loss) from continuing operations, Basic (in dollars per share)	[1]	$ 3.07	$ 2.25	$ 7.52	$ 4.87
Diluted earnings per share
Income (loss) from continuing operations, Diluted (in dollars per share)	[1]	$ 3.03	$ 2.21	$ 7.40	$ 4.79
Common Stock
Income
Income (loss) from continuing operations		$ 1,459	$ 1,068	$ 3,505	$ 2,300
Direct equity adjustment			(3)		(5)
Less: Income (loss) attributable to noncontrolling interests		53	23	63	34
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards		15	10	34	21
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock		1,391	1,032	3,408	2,240
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic		15	10	34	21
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted		14	10	33	21
Exchangeable Surplus Notes		5	5	9	9
Income (loss) from continuing operations attributable to Prudential Financial available to holders of Common Stock		$ 1,397	$ 1,037	$ 3,418	$ 2,249
Weighted Average Shares
Weighted Average Shares Basic (in shares)		452.6	459.4	453.4	460.1
Stock options (in shares)		2.5	3.0	2.4	3.1
Deferred and long-term compensation programs (in shares)		0.8	0.7	0.9	0.8
Exchangeable Surplus Notes (in shares)		5.5	5.4	5.5	5.4
Weighted Average Shares Diluted (in shares)		461.4	468.5	462.2	469.4
Basic earnings per share
Income (loss) from continuing operations, Basic (in dollars per share)		$ 3.07	$ 2.25	$ 7.52	$ 4.87
Diluted earnings per share
Income (loss) from continuing operations, Diluted (in dollars per share)		$ 3.03	$ 2.21	$ 7.40	$ 4.79

[1] For the three and six months ended June 30, 2015, represents consolidated earnings per share of Common Stock. For the three and six months ended June 30, 2014, represents earnings of the Company’s former Financial Services Businesses per share of Common Stock. See Note 8 for additional information.

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Equity (Tables)

6 Months Ended

Jun. 30, 2015

Stockholders' Equity Note [Abstract]

Common Stock Disclosure

The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated:

	Common Stock
	Issued	Held In Treasury		Outstanding
	(in millions)
Balance, December 31, 2014	660.1	205.3		454.8
Common Stock issued	0.0	0.0		0.0
Common Stock acquired	0.0	6.0		(6.0	)
Stock-based compensation programs(1)	0.0	(3.1	)	3.1
Balance, June 30, 2015	660.1	208.2		451.9

__________ 

(1) Represents net shares issued from treasury pursuant to the Company’s stock-based compensation program.

Components of Accumulated Other Comprehensive Income

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Financial, Inc.” for the six months endedJune 30, 2015 and 2014 are as follows:

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2014	$	(975	)	$	19,251		$	(2,226	)	$	16,050
Change in other comprehensive income before reclassifications	(110		)	(2,965		)	10			(3,065		)
Amounts reclassified from AOCI	1			(1,247		)	96			(1,150		)
Income tax benefit (expense)	88			1,523			(42		)	1,569
Balance, June 30, 2015	$	(996	)	$	16,562		$	(2,162	)	$	13,404

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment			Net Unrealized Investment Gains (Losses)(1)			Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)			Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2013	$	(113	)	$	10,344		$	(1,550	)	$	8,681
Change in other comprehensive income before reclassifications	241			7,175			(3		)	7,413
Amounts reclassified from AOCI	(2		)	(856		)	46			(812		)
Income tax benefit (expense)	(47		)	(2,142		)	(16		)	(2,205		)
Balance, June 30, 2014	$	79		$	14,521		$	(1,523	)	$	13,077

 __________

(1) Includes cash flow hedges of $702 million and $206 million as of June 30, 2015 and December 31, 2014, respectively, and $(533) million and $(446) million as of June 30, 2014 and December 31, 2013, respectively.

Reclassification Out Of Accumulated Other Comprehensive Income

Reclassifications out of Accumulated Other Comprehensive Income (Loss)

	Three Months Ended June 30,						Six Months Ended June 30,						Affected line item in Consolidated Statement of Operations
	2015			2014			2015			2014
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	(2	)	$	1		$	(1	)	$	2		Realized investment gains (losses), net
Total foreign currency translation adjustment	(2		)	1			(1		)	2
Net unrealized investment gains (losses):
Cash flow hedges—Interest Rate	(2		)	(6		)	(3		)	(12		)	(3)
Cash flow hedges—Currency/Interest rate	(54		)	(6		)	62			(10		)	(3)
Net unrealized investment gains (losses) on available-for-sale securities	599			536			1,188			878
Total net unrealized investment gains (losses)	543			524			1,247			856			(4)
Amortization of defined benefit pension items:
Prior service cost	4			5			7			11			(5)
Actuarial gain (loss)	(51		)	(29		)	(103		)	(57		)	(5)
Total amortization of defined benefit pension items	(47		)	(24		)	(96		)	(46		)
Total reclassifications for the period	$	494		$	501		$	1,150		$	812

__________ 

(1) All amounts are shown before tax.

(2) Positive amounts indicate gains/benefits reclassified out of AOCI. Negative amounts indicate losses/costs reclassified out of AOCI.

(3) See Note 14 for additional information on cash flow hedges.

(4) See table below for additional information on unrealized investment gains (losses), including the impact on deferred policy acquisition and other costs, future policy benefits and policyholders’ dividends.

(5) See Note 10 for information on employee benefit plans.

Net Unrealized Investment Gain (Loss) AOCI Rollforward

The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) On Investments			Deferred Policy Acquisition Costs, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	349		$	(6	)	$	3	$	(32	)	$	(110	)	$	204
Net investment gains (losses) on investments arising during the period	24											(9		)	15
Reclassification adjustment for (gains) losses included in net income	(3		)									1			(2		)
Reclassification adjustment for OTTI losses excluded from net income(1)	(15		)									5			(10		)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				6								(2		)	4
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							8					(3		)	5
Impact of net unrealized investment (gains) losses on policyholders’ dividends									32			(11		)	21
Balance, June 30, 2015	$	355		$	0		$	11	$	0		$	(129	)	$	237

 __________

(1) Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

All Other Net Unrealized Investment Gain (Loss) AOCI Rollforward

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) on Investments(1)			Deferred Policy Acquisition Cost, Deferred Sales Inducements, and Value of Business Acquired			Future Policy Benefits and Policyholders’ Account Balances			Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit			Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2014	$	36,764		$	(1,455	)	$	(1,282	)	$	(5,036	)	$	(9,944	)	$	19,047
Net investment gains (losses) on investments arising during the period	(4,924		)										1,759			(3,165		)
Reclassification adjustment for (gains) losses included in net income	(1,244		)										444			(800		)
Reclassification adjustment for OTTI losses excluded from net income(2)	15												(5		)	10
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs, deferred sales inducements and value of business acquired				609									(208		)	401
Impact of net unrealized investment (gains) losses on future policy benefits and policyholders’ account balances							(26		)				9			(17		)
Impact of net unrealized investment (gains) losses on policyholders’ dividends										1,306			(457		)	849
Balance, June 30, 2015	$	30,611		$	(846	)	$	(1,308	)	$	(3,730	)	$	(8,402	)	$	16,325

__________ 

(1) Includes cash flow hedges. See Note 14 for information on cash flow hedges.

(2) Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

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Employee Benefit Plans (Narrative) (Details) - 6 months ended Jun. 30, 2015 - Other Postretirement Benefits - year	Total
Minimum
Defined Benefit Plan Disclosure [Line Items]
Deferred Compensation Arrangement with Individual, Requisite Age	50
Deferred Compensation Arrangement with Individual, Requisite Service Period	10 years
Maximum
Defined Benefit Plan Disclosure [Line Items]
Deferred Compensation Arrangement with Individual, Requisite Age	55
Deferred Compensation Arrangement with Individual, Requisite Service Period	20 years

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Investments (Amortized Cost and Fair Value of Fixed Maturities by Contractual Maturities) (Details) - USD ($) $ in Millions		Jun. 30, 2015	Dec. 31, 2014
Available for Sale Amortized Cost
Due in one year or less		$ 11,624
Due after one year through five years		44,963
Due after five years through ten years		56,728
Due after ten years		121,479
Total		262,820	$ 265,116
Available for Sale Securities Fair Value
Due in one year or less		12,378
Due after one year through five years		50,198
Due after five years through ten years		62,754
Due after ten years		135,802
Fair Value	[1]	290,063	299,090
Held to Maturity Securities Amortized Cost
Due in one year or less		0
Due after one year through five years		72
Due after five years through ten years		167
Due after ten years		1,261
Fair Value	[1]	2,396	2,575
Held to Maturity Securities Fair Value
Due in one year or less		0
Due after one year through five years		77
Due after five years through ten years		175
Due after ten years		1,466
Total		2,674	2,902
Prudential Netting Agreement
Held to Maturity Securities Amortized Cost
Fair Value		3,850	3,588
Held to Maturity Securities Fair Value
Total		4,069	$ 3,953
Commercial mortgage-backed securities
Available for Sale Amortized Cost
Debt Maturities, without single maturity date		11,918
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date		12,152
Held to Maturity Securities Amortized Cost
Debt Maturities, without Single Maturity Date		59
Held to Maturity Securities Fair Value
Debt Maturities, without Single Maturity Date		61
Residential mortgage-backed securities
Available for Sale Amortized Cost
Debt Maturities, without single maturity date		5,160
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date		5,544
Held to Maturity Securities Amortized Cost
Debt Maturities, without Single Maturity Date		837
Held to Maturity Securities Fair Value
Debt Maturities, without Single Maturity Date		895
Asset-backed securities
Available for Sale Amortized Cost
Debt Maturities, without single maturity date		10,948
Available for Sale Securities Fair Value
Debt Maturities, without Single Maturity Date		11,235
Held to Maturity Securities Amortized Cost
Debt Maturities, without Single Maturity Date		0
Held to Maturity Securities Fair Value
Debt Maturities, without Single Maturity Date		$ 0

[1] See Note 5 for details of balances associated with variable interest entities.

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Fair Value of Assets and Liabilities

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short term investments, equity securities and derivative contracts that trade on an active exchange market.

Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. The Company’s Level 2 assets and liabilities include: fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities (mutual funds, which do not actively trade and are priced based on a net asset value (“NAV”)), certain commercial mortgage loans, short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter (“OTC”) derivatives.

Level 3—Fair value is based on at least one or more significant unobservable inputs for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value. The Company’s Level 3 assets and liabilities primarily include: certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured OTC derivative contracts, certain commercial mortgage loans, certain consolidated real estate funds for which the Company is the general partner and embedded derivatives resulting from certain products with guaranteed benefits.

Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.

	As of June 30, 2015
	Level 1			Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0		$	17,811	$	0	$			$	17,811
Obligations of U.S. states and their political subdivisions	0			7,866		20					7,886
Foreign government bonds	0			78,710		151					78,861
Corporate securities	0			155,471		1,103					156,574
Asset-backed securities	0			7,418		3,817					11,235
Commercial mortgage-backed securities	0			12,111		41					12,152
Residential mortgage-backed securities	0			5,329		215					5,544
Subtotal	0			284,716		5,347					290,063
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0			170		0					170
Obligations of U.S. states and their political subdivisions	0			186		0					186
Foreign government bonds	0			683		25					708
Corporate securities	0			21,668		148					21,816
Asset-backed securities	0			873		607					1,480
Commercial mortgage-backed securities	0			2,087		2					2,089
Residential mortgage-backed securities	0			1,593		5					1,598
Equity securities	1,563			241		604					2,408
All other(3)	417			12,025		12		(9,893		)	2,561
Subtotal	1,980			39,526		1,403		(9,893		)	33,016
Equity securities, available-for-sale	6,592			3,050		259					9,901
Commercial mortgage and other loans	0			391		0					391
Other long-term investments	8			230		1,714		(8		)	1,944
Short-term investments	4,400			724		0					5,124
Cash equivalents	3,809			8,638		0					12,447
Other assets	3			110		2					115
Subtotal excluding separate account assets	16,792			337,385		8,725		(9,901		)	353,001
Separate account assets(4)	48,175			222,311		25,855					296,341
Total assets	$	64,967		$	559,696	$	34,580	$	(9,901	)	$	649,342
Future policy benefits(5)	$	0		$	0	$	5,478	$			$	5,478
Other liabilities	(2		)	5,883		2		(5,730		)	153
Notes Issued by consolidated VIEs	0			0		7,434					7,434
Total liabilities	$	(2	)	$	5,883	$	12,914	$	(5,730	)	$	13,065

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	20,123	$	0	$			$	20,123
Obligations of U.S. states and their political subdivisions	0		6,525		6					6,531
Foreign government bonds	0		80,939		2					80,941
Corporate securities	0		159,073		1,303					160,376
Asset-backed securities	0		7,126		4,059					11,185
Commercial mortgage-backed securities	0		13,834		43					13,877
Residential mortgage-backed securities	0		5,804		253					6,057
Subtotal	0		293,424		5,666					299,090
Trading account assets(2):
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		399		0					399
Obligations of U.S. states and their political subdivisions	0		199		0					199
Foreign government bonds	0		696		21					717
Corporate securities	0		20,146		124					20,270
Asset-backed securities	0		850		393					1,243
Commercial mortgage-backed securities	0		2,556		5					2,561
Residential mortgage-backed securities	0		1,767		7					1,774
Equity securities	1,396		232		663					2,291
All other(3)	194		13,803		7		(12,321		)	1,683
Subtotal	1,590		40,648		1,220		(12,321		)	31,137
Equity securities, available-for-sale	6,688		2,898		275					9,861
Commercial mortgage and other loans	0		380		0					380
Other long-term investments	12		224		1,547		(11		)	1,772
Short-term investments	5,263		2,472		0					7,735
Cash equivalents	2,657		9,188		0					11,845
Other assets	4		109		2					115
Subtotal excluding separate account assets	16,214		349,343		8,710		(12,332		)	361,935
Separate account assets(4)	48,063		223,710		24,662					296,435
Total assets	$	64,277	$	573,053	$	33,372	$	(12,332	)	$	658,370
Future policy benefits(5)	$	0	$	0	$	8,182	$			$	8,182
Other liabilities	1		6,883		5		(6,661		)	228
Notes Issued by consolidated VIEs	0		0		6,033					6,033
Total liabilities	$	1	$	6,883	$	14,220	$	(6,661	)	$	14,443

__________

(1) “Netting” amounts represent cash collateral of $4,171 million and $5,671 million as of June 30, 2015 and December 31, 2014, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting arrangements.

(2) Includes “Trading account assets supporting insurance liabilities” and “Other trading account assets.”

(3) Level 1 represents cash equivalents and short term investments. All other amounts primarily represent derivative assets.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

(5) As of June 30, 2015, the net embedded derivative liability position of $5.5 billion includes $0.8 billion of embedded derivatives in an asset position and $6.3 billion of embedded derivatives in a liability position. As of December 31, 2014, the net embedded derivative liability position of $8.2 billion includes $0.6 billion of embedded derivatives in an asset position and $8.8 billion of embedded derivatives in a liability position.

The methods and assumptions the Company uses to estimate the fair value of assets and liabilities measured at fair value on a recurring basis are summarized below.

Fixed Maturity Securities—The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices for each security are generally sourced from multiple pricing vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. The pricing hierarchy is updated for new financial products and recent pricing experience with various vendors. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2, as they are primarily based on observable pricing for similar assets and/or other market observable inputs. Typical inputs used by these pricing services include but are not limited to, reported trades, benchmark yields, issuer spreads, bids, offers, and/or estimated cash flow, prepayment speeds and default rates. If the pricing information received from third party pricing services is deemed not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service or classify the securities as Level 3. If the pricing service updates the price to be more consistent with the presented market observations, the security remains within Level 2.

Internally-developed valuations or indicative broker quotes are also used to determine fair value in circumstances where vendor pricing is not available, or where the Company ultimately concludes that pricing information received from the independent pricing services is not reflective of market activity. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may override the information with an internally-developed valuation. As of June 30, 2015 and December 31, 2014, overrides on a net basis were not material. Pricing service overrides, internally-developed valuations and indicative broker quotes are generally included in Level 3 in the fair value hierarchy.

The Company conducts several specific price monitoring activities. Daily analyses identify price changes over predetermined thresholds defined at the financial instrument level. Various pricing integrity reports are reviewed on a daily and monthly basis to determine if pricing is reflective of market activity or if it would warrant any adjustments. Other procedures performed include, but are not limited to, reviews of third-party pricing services methodologies, reviews of pricing trends and back testing.

The fair value of private fixed maturities, which are comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using discounted cash flow models. These models primarily use observable inputs that include Treasury or similar base rates plus estimated credit spreads to value each security. The credit spreads are obtained through a survey of private market intermediaries who are active in both primary and secondary transactions, and consider, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Since most private placements are valued using standard market observable inputs and inputs derived from, or corroborated by, market observable data including observed prices and spreads for similar publicly traded or privately traded issues, they have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs that market participants would use in pricing the asset. To the extent management determines that such unobservable inputs are significant to the price of a security, a Level 3 classification is made.

Trading Account Assets—Trading account assets consist primarily of fixed maturity securities, equity securities and derivatives whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and below under “Equity Securities” and “Derivative Instruments.”

Equity Securities—Equity securities consist principally of investments in common and preferred stock of publicly traded companies, perpetual preferred stock, privately traded securities, as well as mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using discounted cash flow, earnings multiple and other valuation models that require a substantial level of judgment around inputs and therefore are classified within Level 3. The fair values of mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of perpetual preferred stock are based on inputs obtained from independent pricing services that are primarily based on indicative broker quotes. As a result, the fair values of perpetual preferred stock are classified as Level 3.

Commercial Mortgage and Other Loans—The fair value of commercial mortgage loans held for investment and accounted for using the fair value option are determined based on the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the current market spread for similar quality loans. The quality ratings for these loans, a primary determinant of the appropriate credit spread and a significant component of the pricing input, are based on internally-developed estimates. As a result, these loans are included in Level 3 in the fair value hierarchy.

The fair value of other loans held and accounted for using the fair value option is determined utilizing pricing indicators from the whole loan market, where investors are committed to purchase these loans at a predetermined price, which is considered the principal exit market for these loans. The Company has evaluated the valuation inputs used for these assets, including the existence of predetermined exit prices, the terms of the loans, prevailing interest rates and credit risk, and deemed that the primary pricing inputs are Level 2 inputs in the fair value hierarchy.

Other Long-Term Investments—Other long-term investments include limited partnerships which are consolidated because the Company is either deemed to exercise control or considered the primary beneficiary of a variable interest entity. These entities are considered investment companies and follow specialized industry accounting whereby their assets are carried at fair value. The investments held by these entities include various feeder fund investments in underlying master funds (whose underlying holdings generally include public fixed maturities, equity securities and mutual funds), as well as wholly-owned real estate held within other investment funds. The fair value is determined by reference to the underlying direct investments, with publicly traded equity securities based on quoted prices in active markets reflected in Level 1, and public fixed maturities and mutual funds priced via quotes from pricing services or observable data reflected in Level 2. The fair value of investments in funds that are subject to significant liquidity restrictions are reflected in Level 3.

The fair value of real estate held in consolidated investment funds is determined through an independent appraisal process. The appraisals generally utilize a discounted cash flow model, supplemented with replacement cost estimates and comparable recent sales data when available. These appraisals and the related assumptions are updated at least annually. Since many of the assumptions utilized are unobservable and are considered to be significant inputs to the valuation, the real estate investments within other long-term investments have been reflected within Level 3 in the fair value hierarchy.

The fair value of fund investments, where the fair value option has been elected, is primarily determined by the fund managers and is measured at fair value using NAV as a practical expedient. Since the valuations may be based on unobservable market inputs and cannot be validated by the Company, these investments have been included within Level 3 in the fair value hierarchy.

Derivative Instruments—Derivatives are recorded at fair value either as assets, within “Other trading account assets,” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, commodity prices, credit spreads, market volatility, expected returns, NPR, liquidity and other factors. For derivative positions included within Level 3 of the fair value hierarchy, liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity and other specific attributes of the underlying derivative position.

The Company’s exchange-traded futures and options include Treasury futures, Eurodollar futures, commodity futures, Eurodollar options and commodity options. Exchange-traded futures and options are valued using quoted prices in active markets and are classified within Level 1 in the fair value hierarchy.

The majority of the Company’s derivative positions are traded in the OTC derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models that utilize actively quoted or observable market input values from external market data providers, third-party pricing vendors and/or recent trading activity. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value. The fair values of most OTC derivatives, including interest rate and cross currency swaps, currency forward contracts, commodity swaps, commodity forward contracts, single name credit default swaps, loan commitments held for sale and “to be announced” (“TBA”) forward contracts on highly rated mortgage-backed securities issued by U.S. government sponsored entities are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key inputs include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, NPR, volatility and other factors.

The Company’s cleared interest rate swaps and credit derivatives linked to an index are valued using models that utilize actively quoted or observable market inputs, including Overnight Indexed Swap discount rates, obtained from external market data providers, third-party pricing vendors and/or recent trading activity. These derivatives are classified as Level 2 in the fair value hierarchy.

The vast majority of the Company’s derivative agreements are with highly rated major international financial institutions. To reflect the market’s perception of its own and the counterparty’s NPR, the Company incorporates additional spreads over London Interbank Offered Rates (“LIBOR”) into the discount rate used in determining the fair value of OTC derivative assets and liabilities that are not otherwise collateralized.

Derivatives classified as Level 3 include look-back equity options and other structured products. These derivatives are valued based upon models, such as Monte Carlo simulation models and other techniques that utilize significant unobservable inputs. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to external broker-dealer values.

Cash Equivalents and Short-Term Investments—Cash equivalents and short-term investments include money market instruments, commercial paper and other highly liquid debt instruments. Certain money market instruments are valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in this category are generally fair valued based on market observable inputs and these investments have primarily been classified within Level 2.

Separate Account Assets—Separate account assets include fixed maturity securities, treasuries, equity securities, mutual funds and real estate investments for which values are determined consistent with similar instruments described above under “Fixed Maturity Securities,” “Equity Securities” and “Other Long-Term Investments.”

Notes issued by Consolidated VIEs—The fair values of these notes are based on indicative broker quotes and classified within Level 3. See Note 5 and “Fair Value Option” below for additional information.

Other Liabilities—Other liabilities include certain derivative instruments, the fair values of which are determined consistent with similar derivative instruments described above under “Derivative Instruments.”

Future Policy Benefits—The liability for future policy benefits is related to guarantees primarily associated with the living benefit features of certain variable annuity contracts offered by the Company’s Individual Annuities segment, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives. The fair values of these liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature. This methodology could result in either a liability or contra-liability balance, given changing capital market conditions and various actuarial assumptions. Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally-developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management’s judgment.

The significant inputs to the valuation models for these embedded derivatives include capital market assumptions, such as interest rate levels and volatility assumptions, the Company’s market-perceived NPR, as well as actuarially determined assumptions, including contractholder behavior, such as lapse rates, benefit utilization rates, withdrawal rates, and mortality rates. Since many of these assumptions are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

Capital market inputs and actual policyholders’ account values are updated each quarter based on capital market conditions as of the end of the quarter, including interest rates, equity markets and volatility. In the risk neutral valuation, the initial swap curve drives the total return used to grow the policyholders’ account values. The Company’s discount rate assumption is based on the LIBOR swap curve adjusted for an additional spread relative to LIBOR to reflect NPR.

Actuarial assumptions, including contractholder behavior and mortality, are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. These assumptions are generally updated annually unless a material change that the Company feels is indicative of a long term trend is observed in an interim period.

Transfers between Levels 1 and 2—Overall, transfers between levels are made to reflect changes in observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the quarter in which the transfers occur. Periodically there are transfers between Level 1 and Level 2 for assets held in the Company’s Separate Account. The fair value of foreign common stock held in the Company’s Separate Account may reflect differences in market levels between the close of foreign trading markets and the close of U.S. trading markets for the respective day. Dependent on the existence of such a timing difference, the assets may move between Level 1 and Level 2. During the three months ended June 30, 2015, $24 million were transferred from Level 1 to Level 2 and $36 million were transferred from Level 2 to Level 1. During the six months endedJune 30, 2015, $74 million were transferred from Level 1 to Level 2 and $53 million were transferred from Level 2 to Level 1. During the three months ended June 30, 2014, $17 million were transferred from Level 1 to Level 2 and $22 million were transferred from Level 2 to Level 1. During the six months endedJune 30, 2014, $150 million were transferred from Level 1 to Level 2 and $55 million were transferred from Level 2 to Level 1.

Level 3 Assets and Liabilities by Price Source—The table below presents the balances of Level 3 assets and liabilities measured at fair value with their corresponding pricing sources.

	As of June 30, 2015
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	14	$	20
Foreign government bonds	0		176		176
Corporate securities	774		477		1,251
Asset-backed securities	147		4,277		4,424
Commercial mortgage-backed securities	8		35		43
Residential mortgage-backed securities	53		167		220
Equity securities	121		742		863
Other long-term investments	12		1,702		1,714
Other assets	14		0		14
Subtotal excluding separate account assets(3)	1,135		7,590		8,725
Separate account assets	24,407		1,448		25,855
Total assets	$	25,542	$	9,038	$	34,580
Future policy benefits	$	5,478	$	0	$	5,478
Other liabilities	0		2		2
Notes Issued by consolidated VIEs	0		7,434		7,434
Total liabilities	$	5,478	$	7,436	$	12,914

	As of December 31, 2014
	Internal(1)		External(2)		Total
	(in millions)
Obligations of U.S. states and their political subdivisions	$	6	$	0	$	6
Foreign government bonds	0		23		23
Corporate securities	752		675		1,427
Asset-backed securities	150		4,302		4,452
Commercial mortgage-backed securities	10		38		48
Residential mortgage-backed securities	57		203		260
Equity securities	140		798		938
Other long-term investments	1		1,546		1,547
Other assets	9		0		9
Subtotal excluding separate account assets(3)	1,125		7,585		8,710
Separate account assets	23,632		1,030		24,662
Total assets	$	24,757	$	8,615	$	33,372
Future policy benefits	$	8,182	$	0	$	8,182
Other liabilities	2		3		5
Notes Issued by consolidated VIEs	0		6,033		6,033
Total liabilities	$	8,184	$	6,036	$	14,220

__________

(1) Represents valuations reflecting both internally-derived and market inputs as well as third-party pricing information or quotes. See below for additional information related to internally-developed valuation for significant items in the above table.

(2) Represents unadjusted prices from independent pricing services and independent indicative broker quotes where pricing inputs are not readily available.

(3) Includes assets classified as fixed maturities available-for-sale, trading account assets supporting insurance liabilities and other trading account assets.

Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information on significant internally-priced Level 3 assets and liabilities (see narrative below for quantitative information for separate account assets).

	As of June 30, 2015
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	774	Discounted cash flow	Discount rate	1.05%	-	25%	8.05%	Decrease
			Market comparables	EBITDA multiples(2)	5.0X	-	6.5X	6.2X	Increase
			Liquidation	Liquidation value	22.12%	-	64.83%	43.07%	Increase
Liabilities:
Future policy benefits(3)	$	5,478	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.68%		Decrease
				Utilization rate(6)	56%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

	As of December 31, 2014
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum		Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities	$	752	Discounted cash flow	Discount rate	0.84%	-	15%	7.73%	Decrease
			Market comparables	EBITDA multiples(2)	6.1X	-	7.0X	6.1X	Increase
			Liquidation	Liquidation value	22.12%	-	100%	82.92%	Increase
Liabilities:
Future policy benefits(3)	$	8,182	Discounted cash flow	Lapse rate(4)	0%	-	14%		Decrease
				NPR spread(5)	0%	-	1.30%		Decrease
				Utilization rate(6)	63%	-	96%		Increase
				Withdrawal rate(7)	74%	-	100%		Increase
				Mortality rate(8)	0%	-	14%		Decrease
				Equity volatility curve	17%	-	28%		Increase

__________ 

(1) Conversely, the impact of a decrease in input would have the opposite impact for the fair value as that presented in the table.

(2) Represents multiples of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the reporting entity has determined that market participants would use such multiples when pricing the investments.

(3) Future policy benefits primarily represent general account liabilities for the living benefit features of the Company’s variable annuity contracts which are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(4) Lapse rates are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates are also generally assumed to be lower for the period where surrender charges apply.

(5) To reflect NPR, the Company incorporates an additional spread over LIBOR into the discount rate used in the valuation of individual living benefit contracts in a liability position and generally not to those in a contra-liability position. The NPR spread reflects the financial strength ratings of the Company, as these are insurance liabilities and senior to debt. The additional spread over LIBOR is determined by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium.

(6) The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.

(7) The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions may vary based on the product type, contractholder age, tax status and withdrawal timing. The fair value of the liability will generally increase the closer the withdrawal rate is to 100%.

(8) Range reflects the mortality rate for the vast majority of business with living benefits, with policyholders ranging from 35 to 90 years old. While the majority of living benefits have a minimum age requirement, certain benefits do not have an age restriction. This results in contractholders for certain benefits with mortality rates approaching 0%. Based on historical experience, the Company applies a set of age and duration specific mortality rate adjustments compared to standard industry tables. A mortality improvement assumption is also incorporated into the overall mortality table.

Interrelationships Between Unobservable Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:

Corporate Securities—The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors.

Future Policy Benefits—The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.

Separate Account Assets—In addition to the significant internally-priced Level 3 assets and liabilities presented and described above, the Company also has internally-priced separate account assets reported within Level 3. Changes in the fair value of separate account assets are borne by customers and thus are offset by changes in separate account liabilities on the Company’s Unaudited Interim Consolidated Statements of Financial Position. As a result, changes in value associated with these investments do not impact the Company’s Unaudited Interim Consolidated Statements of Operations. In addition, fees earned by the Company related to the management of most separate account assets classified as Level 3 do not change due to changes in the fair value of these investments. Quantitative information about significant internally-priced Level 3 separate account assets is as follows:

Real Estate and Other Invested Assets—Separate account assets include $23,435 million and $22,641 million of investments in real estate as of June 30, 2015 and December 31, 2014, respectively, that are classified as Level 3 and reported at fair value. In general, these fair value estimates are based on property appraisal reports prepared by independent real estate appraisers. Key inputs and assumptions to the appraisal process include rental income and expense amounts, related growth rates, discount rates and capitalization rates. In cases where real estate investments are made through indirect investments, fair value is generally determined by the Company’s equity in net assets of the entities. The debt associated with real estate, other invested assets and the Company’s equity position in entities are externally valued. Because of the subjective nature of inputs and the judgment involved in the appraisal process, real estate investments and their corresponding debt are typically included in the Level 3 classification. Key unobservable inputs to real estate valuation include capitalization rates, which ranged from 4.50% to 10.00% (5.93% weighted average) as of June 30, 2015, and 4.50% to 9.75% (6.05% weighted average) as of December 31, 2014, and discount rates, which ranged from 6.00% to 15.00% (7.19% weighted average) as of June 30, 2015, and 6.00% to 15.00% (7.36% weighted average) as of December 31, 2014. Key unobservable inputs to real estate debt valuation include yield to maturity, which ranged from 0.76% to 6.04% (3.94% weighted average) as of June 30, 2015, and 0.77% to 6.76% (4.02% weighted average) as of December 31, 2014, and market spread over base rate, which ranged from 1.50% to 4.20% (2.34% weighted average) as of June 30, 2015, and 1.50% to 4.76% (2.67% weighted average) as of December 31, 2014.

Commercial Mortgage Loans—Separate account assets include $936 million and $943 million of commercial mortgage loans as of June 30, 2015 and December 31, 2014, respectively, that are classified as Level 3 and reported at fair value. Commercial mortgage loans are primarily valued internally using discounted cash flow techniques, as described further under “Fair Value of Financial Instruments.” The primary unobservable input used is the spread to discount cash flows, which ranged from 1.27% to 8.41% (1.55% weighted average) as of June 30, 2015, and 1.17% to 8.39% (1.44% weighted average) as of December 31, 2014. In isolation, an increase (decrease) in the value of this input would result in a lower (higher) fair value measurement.

Valuation Process for Fair Value Measurements Categorized within Level 3—The Company has established an internal control infrastructure over the valuation of financial instruments that requires ongoing oversight by its various business groups. These management control functions are segregated from the trading and investing functions. For invested assets, the Company has established oversight teams, often in the form of pricing committees within each asset management group. The teams, which typically include representation from investment, accounting, operations, legal and other disciplines are responsible for overseeing and monitoring the pricing of the Company’s investments and performing periodic due diligence reviews of independent pricing services. An actuarial valuation team oversees the valuation of living benefit features of the Company’s variable annuity contracts.

The Company has also established policies and guidelines that require the establishment of valuation methodologies and consistent application of such methodologies. These policies and guidelines govern the use of inputs and price source hierarchies and provide controls around the valuation processes. These controls include appropriate review and analysis of investment prices against market activity or indicators of reasonableness, analysis of portfolio returns to corresponding benchmark returns, back-testing, review of bid/ask spreads to assess activity, approval of price source changes, price overrides, methodology changes and classification of fair value hierarchy levels. For living benefit features of the Company’s variable annuity products, the actuarial valuation unit periodically tests contract input data and actuarial assumptions are reviewed at least annually, and updated based upon emerging experience, future expectations and other data, including any observable market data. The valuation policies and guidelines are reviewed and updated as appropriate.

Within the trading and investing functions, the Company has established policies and procedures that relate to the approval of all new transaction types, transaction pricing sources and fair value hierarchy coding within the financial reporting system. For variable annuity product changes or new launches of living benefit features, the actuarial valuation unit validates input logic and new product features and agrees new input data directly to source documents.

Changes in Level 3 assets and liabilities—The following tables provide summaries of the changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.

	Three Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	136		$	1,250		$	4,362		$	75		$	242
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(13		)	0			0			0
Included in other comprehensive income (loss)	0			(3		)	10			15			0			(1		)
Net investment income	0			0			(9		)	10			0			0
Purchases	15			20			208			615			2			0
Sales	(1		)	0			(154		)	(286		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(21		)	(39		)	(2		)	(16		)
Foreign currency translation	0			2			(9		)	(11		)	0			(7		)
Transfers into Level 3(2)	0			(4		)	0			293			0			0
Transfers out of Level 3(2)	0			0			(159		)	(1,142		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(13	)	$	4		$	0		$	0

	Three Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	22		$	144		$	376		$	3		$	6		$	634		$	8
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			1			0
Other income	0			(2		)	1			0			0			(6		)	4
Net Investment Income	0			1			1			0			0			0			0
Purchases	4			51			243			(1		)	0			1			0
Sales	0			(4		)	(2		)	0			0			(12		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(1		)	0			0			0			(1		)	0
Foreign currency translation	0			0			0			0			0			(13		)	0
Transfers into Level 3(2)	0			0			27			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(39		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	0		$	0
Other income	$	0		$	(2	)	$	1		$	0		$	0		$	(7	)	$	4

	Three Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	263		$	0	$	1,617		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			0		0			0
Other income	0			0		60			0
Included in other comprehensive income (loss)	(4		)	0		0			0
Net investment income	0			0		0			0
Purchases	8			0		92			0
Sales	(9		)	0		(1		)	0
Issuances	0			0		0			0
Settlements	0			0		(33		)	0
Foreign currency translation	(7		)	0		(14		)	0
Other(1)	0			0		(7		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		0			0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0	$	(1	)	$	0
Other income	$	0		$	0	$	58		$	0

	Three Months Ended June 30, 2015
	Separate Account Assets (4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	25,067		$	(9,473	)	$	(2	)	$	(6,810	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	8			4,236			0			(68		)
Other Income	0			0			0			(62		)
Interest credited to policyholders’ account balances	755			0			0			0
Net investment income	6			0			0			0
Purchases	1,052			0			0			0
Sales	(237		)	0			0			0
Issuances	0			(241		)	0			(494		)
Settlements	(513		)	0			0			0
Foreign currency translation	(1		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(283		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	4,167		$	0		$	(68	)
Other Income	$	0		$	0		$	0		$	(62	)
Interest credited to policyholders’ account	$	502		$	0		$	0		$	0

	Six Months Ended June 30, 2015
	Fixed Maturities Available-For-Sale
	U.S. States			Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	6		$	2		$	1,303		$	4,059		$	43		$	253
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			(14		)	6			0			0
Included in other comprehensive income (loss)	0			(3		)	2			17			0			(1		)
Net investment income	0			0			(15		)	13			0			0
Purchases	15			20			427			940			34			0
Sales	(1		)	0			(347		)	(390		)	0			(3		)
Issuances	0			0			0			0			0			0
Settlements	0			0			(56		)	(78		)	(4		)	(25		)
Foreign currency translation	0			(2		)	(11		)	(14		)	0			(9		)
Other(1)	0			0			(3		)	3			0			0
Transfers into Level 3(2)	0			134			16			803			2			0
Transfers out of Level 3(2)	0			0			(199		)	(1,542		)	(34		)	0
Fair Value, end of period	$	20		$	151		$	1,103		$	3,817		$	41		$	215
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	(16	)	$	4		$	0		$	0

	Six Months Ended June 30, 2015
	Trading Account Assets
	Foreign Government			Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	21		$	124		$	393		$	5		$	7		$	663		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0			0			0			0			0			(2		)	0
Other income	0			(7		)	3			0			0			(9		)	5
Net investment income	0			1			1			0			0			0			0
Purchases	5			71			247			0			0			8			0
Sales	0			(4		)	(2		)	(2		)	0			(16		)	0
Issuances	0			0			0			0			0			0			0
Settlements	(1		)	(3		)	(1		)	(1		)	(1		)	(16		)	0
Foreign currency translation	0			0			0			0			0			(17		)	0
Other(1)	0			0			0			0			0			(7		)	0
Transfers into Level 3(2)	0			7			73			0			0			0			0
Transfers out of Level 3(2)	0			(41		)	(107		)	0			(1		)	0			0
Fair Value, end of period	$	25		$	148		$	607		$	2		$	5		$	604		$	12
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	0		$	0		$	0		$	0		$	(2	)	$	0
Other income	$	0		$	(7	)	$	3		$	0		$	0		$	6		$	5

	Six Months Ended June 30, 2015
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	275		$	0	$	1,547		$	2
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	10			0		(2		)	0
Other income	0			0		99			0
Included in other comprehensive income (loss)	(1		)	0		0			0
Net investment income	0			0		(1		)	0
Purchases	12			0		201			0
Sales	(31		)	0		(2		)	0
Issuances	0			0		0			0
Settlements	0			0		(50		)	0
Foreign currency translation	(8		)	0		(52		)	0
Other(1)	0			0		(25		)	0
Transfers into Level 3(2)	2			0		0			0
Transfers out of Level 3(2)	0			0		(1		)	0
Fair Value, end of period	$	259		$	0	$	1,714		$	2
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(1	)	$	0	$	(2	)	$	0
Other income	$	0		$	0	$	98		$	0

	Six Months Ended June 30, 2015
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	24,662		$	(8,182	)	$	(5	)	$	(6,033	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	11			3,184			1			(53		)
Other Income	0			0			0			92
Interest credited to policyholders’ account balances	1,426			0			0			0
Net investment income	12			0			0			0
Purchases	1,965			0			0			0
Sales	(417		)	0			0			0
Issuances	0			(480		)	0			(1,440		)
Settlements	(1,026		)	0			2			0
Foreign currency translation	(2		)	0			0			0
Other(1)	(472		)	0			0			0
Transfers into Level 3(2)	1			0			0			0
Transfers out of Level 3(2)	(305		)	0			0			0
Fair Value, end of period	$	25,855		$	(5,478	)	$	(2	)	$	(7,434	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	3,062		$	1		$	(53	)
Other Income	$	0		$	0		$	0		$	(92	)
Interest credited to policyholders’ account	$	860		$	0		$	0		$	0

	Three Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	2	$	1,332		$	3,734		$	549		$	329
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		15			7			1			0
Included in other comprehensive income (loss)	0		0		20			3			3			0
Net investment income	0		0		3			5			0			(1		)
Purchases	0		0		203			674			0			0
Sales	0		0		(196		)	(45		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(117		)	(523		)	(1		)	(13		)
Foreign currency translation	0		0		2			0			0			2
Other(1)	0		0		4			(1		)	0			(1		)
Transfers into Level 3(2)	0		0		54			303			0			0
Transfers out of Level 3(2)	0		0		(25		)	(333		)	(497		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(12	)	$	2		$	0		$	0

	Three Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	121		$	390		$	52		$	9		$	771		$	7
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			3			0
Other income	0		2			2			0			1			12			(1		)
Net investment income	0		0			1			0			0			0			0
Purchases	12		53			89			(1		)	0			9			0
Sales	0		(46		)	(9		)	0			0			(26		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(1		)	(10		)	1			(1		)	(8		)	0
Foreign currency translation	0		0			(612		)	612			0			3			0
Transfers into Level 3(2)	0		0			18			2			0			0			0
Transfers out of Level 3(2)	0		0			577			(664		)	0			(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	1		$	3		$	0		$	0		$	8		$	0

	Three Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	310		$	0	$	1,368		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	2			0		9			0
Other income	0			0		39			0
Included in other comprehensive income (loss)	(15		)	0		0			0
Net investment income	0			0		(3		)	0
Purchases	15			0		85			0
Sales	(12		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(48		)	0
Foreign currency translation	0			0		2			0
Other(1)	0			0		(15		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(2		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	43		$	0

	Three Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,997		$	(2,443	)	$	(6	)	$	(4,062	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	3			(732		)	1			3
Interest credited to policyholders’ account balances	750			0			0			0
Net investment income	6			0			0			0
Purchases	524			0			0			0
Sales	(149		)	0			0			0
Issuances	0			(225		)	0			(480		)
Settlements	(387		)	0			0			0
Other(1)	57			0			0			0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(25		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(751	)	$	1		$	2
Interest credited to policyholders’ account	$	501		$	0		$	0		$	0

	Six Months Ended June 30, 2014
	Fixed Maturities Available-For-Sale(5)
	U.S. States		Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed
	(in millions)
Fair Value, beginning of period	$	0	$	1	$	1,329		$	3,112		$	165		$	338
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0		10			10			1			0
Included in other comprehensive income (loss)	0		0		67			6			2			0
Net investment income	0		0		4			10			0			(1		)
Purchases	0		1		309			1,092			496			0
Sales	0		0		(283		)	(49		)	(6		)	0
Issuances	0		0		0			0			0			0
Settlements	0		0		(149		)	(709		)	(4		)	(24		)
Foreign currency translation	0		0		6			0			0			3
Other(1)	0		0		4			(2		)	0			0
Transfers into Level 3(2)	0		0		58			979			0			0
Transfers out of Level 3(2)	0		0		(60		)	(625		)	(605		)	0
Fair Value, end of period	$	0	$	2	$	1,295		$	3,824		$	49		$	316
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0	$	(18	)	$	2		$	0		$	0

	Six Months Ended June 30, 2014
	Trading Account Assets(5)
	Foreign Government		Corporate			Asset- Backed			Commercial Mortgage- Backed			Residential Mortgage- Backed			Equity			All Other Activity
	(in millions)
Fair Value, beginning of period	$	0	$	115		$	395		$	1		$	9		$	842		$	6
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	0		0			0			0			0			2			0
Other income	0		6			3			0			1			11			0
Net investment income	0		0			1			0			0			0			0
Purchases	12		63			90			51			0			14			0
Sales	0		(51		)	(9		)	0			0			(34		)	0
Issuances	0		0			0			0			0			0			0
Settlements	0		(4		)	(23		)	0			(1		)	(79		)	0
Foreign currency translation	0		0			(659		)	612			47			8			0
Transfers into Level 3(2)	0		0			41			2			0			0			0
Transfers out of Level 3(2)	0		0			607			(664		)	(47		)	(1		)	0
Fair Value, end of period	$	12	$	129		$	446		$	2		$	9		$	763		$	6
Unrealized gains (losses) for assets still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0	$	0		$	0		$	0		$	0		$	2		$	0
Other income	$	0	$	5		$	4		$	0		$	0		$	12		$	0

	Six Months Ended June 30, 2014
	Equity Securities Available- For-Sale			Commercial Mortgage and Other Loans		Other Long-term Investments			Other Assets
	(in millions)
Fair Value, beginning of period	$	304		$	0	$	1,396		$	4
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	4			0		3			0
Other income	0			0		59			0
Included in other comprehensive income (loss)	1			0		0			0
Net investment income	0			0		(2		)	0
Purchases	18			0		94			0
Sales	(24		)	0		0			0
Issuances	0			0		0			0
Settlements	0			0		(65		)	0
Foreign currency translation	1			0		4			0
Other(1)	1			0		(52		)	0
Transfers into Level 3(2)	1			0		5			0
Transfers out of Level 3(2)	(7		)	0		0			0
Fair Value, end of period	$	299		$	0	$	1,442		$	4
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	0	$	1		$	0
Other income	$	0		$	0	$	54		$	0

	Six Months Ended June 30, 2014
	Separate Account Assets(4)			Future Policy Benefits			Other Liabilities			Notes Issued by consolidated VIEs
	(in millions)
Fair Value, beginning of period	$	22,603		$	(441	)	$	(5	)	$	(3,254	)
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	6			(2,514		)	2			(1		)
Interest credited to policyholders’ account balances	1,353			0			0			0
Net investment income	12			0			0			0
Purchases	832			0			0			0
Sales	(328		)	0			0			0
Issuances	0			(445		)	0			(1,284		)
Settlements	(664		)	0			0			0
Other(1)	57			0			(2		)	0
Transfers into Level 3(2)	3			0			0			0
Transfers out of Level 3(2)	(95		)	0			0			0
Fair Value, end of period	$	23,779		$	(3,400	)	$	(5	)	$	(4,539	)
Unrealized gains (losses) for assets/liabilities still held(3):
Included in earnings:
Realized investment gains (losses), net	$	0		$	(2,538	)	$	2		$	(1	)
Interest credited to policyholders’ account	$	872		$	0		$	0		$	0

__________

(1) Other primarily represents reclassifications of certain assets between reporting categories and eliminations of intercompany separate account investments.

(2) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(3) Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(4) Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.

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

Transfers—Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company is able to validate.

Derivative Fair Value Information

The following tables present the balance of derivative assets and liabilities measured at fair value on a recurring basis, as of the date indicated, by primary underlying. These tables include NPR and exclude embedded derivatives which are typically recorded with the associated host contract. The derivative assets and liabilities shown below are included in “Trading account assets-All Other,” “Other long-term investments” or “Other liabilities” in the tables presented previously in this note, under the headings “Assets and Liabilities by Hierarchy Level” and “Changes in Level 3 Assets and Liabilities.”

	As of June 30, 2015
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	1	$	8,562	$	7	$			$	8,570
Currency	0		366		0					366
Credit	0		4		0					4
Currency/Interest Rate	0		2,650		0					2,650
Equity	2		514		8					524
Commodity	0		0		0					0
Netting(1)							(9,901		)	(9,901		)
Total derivative assets	$	3	$	12,096	$	15	$	(9,901	)	$	2,213
Derivative liabilities:
Interest Rate	$	0	$	4,959	$	2	$			$	4,961
Currency	0		460		0					460
Credit	0		28		0					28
Currency/Interest Rate	0		269		0					269
Equity	0		114		0					114
Commodity	1		0		0					1
Netting(1)							(5,730		)	(5,730		)
Total derivative liabilities	$	1	$	5,830	$	2	$	(5,730	)	$	103

	As of December 31, 2014
	Level 1		Level 2		Level 3		Netting(1)			Total
	(in millions)
Derivative assets:
Interest Rate	$	5	$	10,584	$	6	$			$	10,595
Currency	0		865		0					865
Credit	0		7		0					7
Currency/Interest Rate	0		1,885		0					1,885
Equity	5		562		5					572
Commodity	1		0		0					1
Netting(1)							(12,332		)	(12,332		)
Total derivative assets	$	11	$	13,903	$	11	$	(12,332	)	$	1,593
Derivative liabilities:
Interest Rate	$	3	$	4,948	$	3	$			$	4,954
Currency	0		1,025		0					1,025
Credit	0		30		0					30
Currency/Interest Rate	0		307		0					307
Equity	0		503		0					503
Commodity	0		0		0					0
Netting(1)							(6,661		)	(6,661		)
Total derivative liabilities	$	3	$	6,813	$	3	$	(6,661	)	$	158

__________ 

(1) “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

Changes in Level 3 derivative assets and liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities for the three and six months endedJune 30, 2015, as well as the portion of gains or losses included in income for the three and six months endedJune 30, 2015, attributable to unrealized gains or losses related to those assets and liabilities still held at June 30, 2015.

	Three Months Ended June 30, 2015					Six Months Ended June 30, 2015
	Derivative Assets- Equity			Derivative Assets- Interest Rate		Derivative Assets- Equity			Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	5		$	4	$	6		$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	(2		)	2		(4		)	3
Other income	0			0		0			0
Purchases	4			0		6			0
Sales	0			0		0			0
Issuances	0			0		0			0
Settlements	0			0		0			0
Transfers into Level 3(1)	0			0		0			0
Transfers out of Level 3(1)	0			0		(1		)	0
Fair Value, end of period	$	7		$	6	$	7		$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	(2	)	$	2	$	(4	)	$	3
Other income	$	0		$	0	$	0		$	0

	Three Months Ended June 30, 2014				Six Months Ended June 30, 2014
	Derivative Assets- Equity		Derivative Assets- Interest Rate		Derivative Assets- Equity		Derivative Assets- Interest Rate
	(in millions)
Fair Value, beginning of period	$	0	$	5	$	0	$	3
Total gains (losses) (realized/unrealized):
Included in earnings:
Realized investment gains (losses), net	1		1		1		3
Other income	0		0		0		0
Purchases	0		0		0		0
Sales	0		0		0		0
Issuances	0		0		0		0
Settlements	0		0		0		0
Transfers into Level 3(1)	5		0		5		0
Transfers out of Level 3(1)	0		0		0		0
Fair Value, end of period	$	6	$	6	$	6	$	6
Unrealized gains (losses) for the period relating to those Level 3 assets that were still held at the end of the period:
Included in earnings:
Realized investment gains (losses), net	$	1	$	1	$	1	$	3
Other income	$	0	$	0	$	0	$	0

__________ 

(1) Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

Nonrecurring Fair Value Measurements—The following table represents information for assets measured at fair value on a nonrecurring basis. The estimated fair values were classified as Level 3 in the valuation hierarchy.

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	(in millions)
Commercial mortgage loans(1):
Carrying value	$	0		$	33		$	0		$	33
Gains (Losses)	$	0		$	(4	)	$	0		$	(4	)
Mortgage servicing rights (“MSR”)(2):
Carrying value	$	98		$	89		$	98		$	89
Gains (Losses)	$	2		$	4		$	(1	)	$	8
Cost method investments(3):
Carrying value	$	131		$	2		$	131		$	2
Gains (Losses)	$	(12	)	$	0		$	(36	)	$	(1	)

__________

(1) The reserve adjustments were based on discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral.

(2) Mortgage servicing rights are revalued based on internal models which utilize inputs. The fair value for mortgage servicing rights is determined using a discounted cash flow model incorporating assumptions for servicing revenues, adjusted for expected prepayments, delinquency rates, escrow deposit income and estimated loan servicing expenses.

(3) For cost method impairments, the methodologies utilized were primarily discounted cash flow and, where appropriate, valuations provided by the general partners taking into consideration investment-related expenses.

Fair Value Option

The fair value option provides the Company an option to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that results from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities.

The following table presents information regarding changes in fair values recorded in earnings for commercial mortgage and other loans, other long-term investments and notes issued by consolidated VIEs, where the fair value option has been elected.

	Three Months Ended June 30,					Six Months Ended June 30,
	2015		2014			2015			2014
	(in millions)
Assets:
Commercial mortgage and other loans:
Changes in instrument-specific credit risk	$	0	$	0		$	0		$	0
Other changes in fair value	$	0	$	0		$	0		$	0
Other long-term investments:
Changes in fair value	$	11	$	24		$	43		$	42
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	129	$	(3	)	$	(39	)	$	1

Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income” for other long-term investments and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated based on changes in credit spreads and quality ratings for the period reported.

Interest income on commercial mortgage and other loans is included in net investment income. The Company recorded $2 million and $1 million of interest income for the three months ended June 30, 2015 and 2014, respectively, and $5 million and $3 million for the six months endedJune 30, 2015 and 2014, respectively, on fair value option loans. Interest income on these loans is recorded based on the effective interest rates as determined at the closing of the loan.

The fair values and aggregate contractual principal amounts of commercial mortgage and other loans, for which the fair value option has been elected, were $391 million and $384 million, respectively, as of June 30, 2015, and $380 million and $372 million, respectively, as of December 31, 2014. As of June 30, 2015, there were no loans in non-accrual status and none of the loans are more than 90 days past due and still accruing.

The fair value of other long-term investments was $1,267 million as of June 30, 2015 and $1,082 million as of December 31, 2014.

The fair values and aggregate contractual principal amounts of limited recourse notes issued by consolidated VIEs, for which the fair value option has been elected at issuance, were $7,434 million and $7,654 million, respectively, as of June 30, 2015, and $6,033 million and $6,216 million, respectively as of December 31, 2014. Interest expense recorded for these liabilities was $86 million and $50 million for the three months ended June 30, 2015 and 2014, respectively, and $154 million and $90 million for the six months endedJune 30, 2015 and 2014, respectively.

Fair Value of Financial Instruments

The table below presents the carrying amount and fair value by fair value hierarchy level of certain financial instruments that are not reported at fair value. The financial instruments presented below are reported at carrying value on the Company’s Unaudited Interim Consolidated Statements of Financial Position; however, in some cases, as described below, the carrying amount equals or approximates fair value.

	June 30, 2015
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,570	$	1,105	$	2,675	$	2,396
Commercial mortgage and other loans	0		545		49,716		50,261		48,178
Policy loans	0		0		11,652		11,652		11,652
Other long-term investments	0		0		1,821		1,821		1,612
Short-term investments	0		545		0		545		545
Cash and cash equivalents	3,884		707		0		4,591		4,591
Accrued investment income	0		3,117		0		3,117		3,117
Other assets	204		2,624		718		3,546		3,546
Total assets	$	4,088	$	9,108	$	65,012	$	78,208	$	75,637
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	39,723	$	54,769	$	94,492	$	93,602
Securities sold under agreements to repurchase	0		7,863		0		7,863		7,863
Cash collateral for loaned securities	0		3,808		0		3,808		3,808
Short-term debt	0		3,551		100		3,651		3,621
Long-term debt	1,281		16,591		4,042		21,914		20,264
Notes issued by consolidated VIEs	0		0		15		15		21
Other liabilities	0		5,636		724		6,360		6,360
Separate account liabilities—investment contracts	0		74,894		30,535		105,429		105,429
Total liabilities	$	1,281	$	152,066	$	90,185	$	243,532	$	240,968

	December 31, 2014
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:
Fixed maturities, held-to-maturity	$	0	$	1,703	$	1,199	$	2,902	$	2,575
Commercial mortgage and other loans	0		559		48,158		48,717		46,052
Policy loans	0		0		11,712		11,712		11,712
Other long-term investments	0		0		1,917		1,917		1,712
Short-term investments	0		523		0		523		523
Cash and cash equivalents	2,230		843		0		3,073		3,073
Accrued investment income	0		3,130		0		3,130		3,130
Other assets	143		2,106		109		2,358		2,358
Total assets	$	2,373	$	8,864	$	63,095	$	74,332	$	71,135
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	40,264	$	56,111	$	96,375	$	95,069
Securities sold under agreements to repurchase	0		9,407		0		9,407		9,407
Cash collateral for loaned securities	0		4,241		0		4,241		4,241
Short-term debt	0		3,784		104		3,888		3,839
Long-term debt	1,285		16,718		4,083		22,086		19,831
Notes issued by consolidated VIEs	0		0		18		18		25
Other liabilities	0		6,254		120		6,374		6,374
Separate account liabilities—investment contracts	0		82,801		24,175		106,976		106,976
Total liabilities	$	1,285	$	163,469	$	84,611	$	249,365	$	245,762

__________ 

(1) Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments. Financial statement captions excluded from the above table are not considered financial instruments.

The fair values presented above have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

Fixed Maturities, Held-to-Maturity

The fair values of public fixed maturity securities are generally based on prices from third-party pricing services, which are reviewed for reasonableness; however, for certain public fixed maturity securities and investments in private placement fixed maturity securities, this information is either not available or not reliable. For these public fixed maturity securities, the fair value is based on indicative broker quotes, if available, or determined using a discounted cash flow model or other internally-developed models. For private fixed maturities, fair value is determined using a discounted cash flow model. In determining the fair value of certain fixed maturity securities, the discounted cash flow model may also use unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the security.

Commercial Mortgage and Other Loans

The fair value of most commercial mortgage loans is based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate or foreign government bond rate (for non-U.S. dollar-denominated loans) plus an appropriate credit spread for similar quality loans. The quality ratings for these loans, a primary determinant of the credit spreads and a significant component of the pricing process, are based on an internally-developed methodology.

Certain commercial mortgage loans are valued incorporating other factors, including the terms of the loans, the principal exit strategies for the loans, prevailing interest rates and credit risk. Other loan valuations are primarily based upon the present value of the expected future cash flows discounted at the appropriate local government bond rate and local market swap rates or credit default swap spreads, plus an appropriate credit spread and liquidity premium. The credit spread and liquidity premium are a significant component of the pricing inputs, and are based upon an internally-developed methodology, which takes into account, among other factors, the credit quality of the loans, the property type of the collateral, the weighted average coupon and the weighted average life of the loans.

Policy Loans

The Company’s valuation technique for policy loans is to discount cash flows at the current policy loan coupon rate. Policy loans are fully collateralized by the cash surrender value of underlying insurance policies. As a result, the carrying value of the policy loans approximates the fair value.

Other Long-term Investments

Other long-term investments include investments in joint ventures and limited partnerships. The estimated fair values of these cost method investments are generally based on the Company’s NAV as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. No such adjustments were made as of June 30, 2015 and December 31, 2014.

Short-Term Investments, Cash and Cash Equivalents, Accrued Investment Income and Other Assets

The Company believes that due to the short-term nature of certain assets, the carrying value approximates fair value. These assets include: certain short-term investments which are not securities, are recorded at amortized cost and include quality loans; cash and cash equivalent instruments; accrued investment income; and other assets that meet the definition of financial instruments, including receivables, such as reinsurance recoverables, unsettled trades, accounts receivable and restricted cash.

Policyholders’ Account Balances—Investment Contracts

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, single premium endowments, payout annuities and other similar contracts without life contingencies, fair values are generally derived using discounted projected cash flows based on interest rates that are representative of the Company’s financial strength ratings, and hence reflect the Company’s own NPR. For guaranteed investment contracts, funding agreements, structured settlements without life contingencies and other similar products, fair values are generally derived using discounted projected cash flows based on interest rates being offered for similar contracts with maturities consistent with those of the contracts being valued. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. For defined contribution and defined benefit contracts and certain other products, the fair value is the market value of the assets supporting the liabilities.

Securities Sold Under Agreements to Repurchase

The Company receives collateral for selling securities under agreements to repurchase, or pledges collateral under agreements to resell. Repurchase and resale agreements are also generally short-term in nature and, therefore, the carrying amounts of these instruments approximate fair value.

Cash Collateral for Loaned Securities

Cash collateral for loaned securities represents the collateral received or paid in connection with loaning or borrowing securities, similar to the securities sold under agreement to repurchase above. For these transactions, the carrying value of the related asset or liability approximates fair value, as they equal the amount of cash collateral received or paid.

Debt

The fair value of short-term and long-term debt, as well as notes issued by consolidated VIEs, is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. With the exception of the notes issued by consolidated VIEs for which recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company, the fair values of these instruments consider the Company’s own NPR. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.

Other Liabilities

Other liabilities are primarily payables, such as reinsurance payables, unsettled trades, drafts and accrued expense payables. Due to the short term until settlement of most of these liabilities, the Company believes that carrying value approximates fair value.

Separate Account Liabilities—Investment Contracts

Only the portion of separate account liabilities related to products that are investment contracts are reflected in the table above. Separate account liabilities are recorded at the amount credited to the contractholder, which reflects the change in fair value of the corresponding separate account assets including contractholder deposits less withdrawals and fees; therefore, carrying value approximates fair value.