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Schedule II - Condensed Financial Information of Registrant | 12 Months Ended
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Dec. 31, 2017
Condensed Financial Information of Parent Company Only Disclosure [Abstract] |
Schedule II - Condensed Financial Information of Registrant | PRUDENTIAL FINANCIAL, INC. Schedule II Condensed Financial Information of Registrant Condensed Statements of Financial Positions as of December 31, 2017 and 2016 (in millions)
|  | 2017 |  | 2016
ASSETS |  |  |  |
Investment contracts from subsidiaries |  | $ | 1 |  |  | $ | 1 |
Fixed maturities, available for sale, at fair value (amortized cost: 2017- $1,218; 2016- $1,105) |  | 1,250 |  |  | 1,071 |
Other investments |  | 2,330 |  |  | 3,215 |
Total investments |  | 3,581 |  |  | 4,287 |
Cash and cash equivalents |  | 1,665 |  |  | 1,116 |
Due from subsidiaries |  | 1,500 |  |  | 1,836 |
Loans receivable from subsidiaries |  | 7,846 |  |  | 6,719 |
Investment in subsidiaries |  | 63,241 |  |  | 54,422 |
Property, plant and equipment |  | 529 |  |  | 559 |
Other assets |  | 562 |  |  | 384 |
TOTAL ASSETS |  | $ | 78,924 |  |  | $ | 69,323 |
LIABILITIES AND EQUITY |  |  |  |
LIABILITIES |  |  |  |
Due to subsidiaries |  | $ | 2,205 |  |  | $ | 2,585 |
Loans payable to subsidiaries |  | 5,738 |  |  | 4,295 |
Short-term debt |  | 880 |  |  | 535 |
Long-term debt |  | 15,304 |  |  | 15,389 |
Income taxes payable |  | 5 |  |  | 0 |
Other liabilities |  | 723 |  |  | 656 |
Total liabilities |  | 24,855 |  |  | 23,460 |
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 as of both December 31, 2017 and 2016) |  | 6 |  |  | 6 |
Additional paid-in capital |  | 24,769 |  |  | 24,606 |
Common Stock held in treasury, at cost (237,559,118 and 230,537,166 shares as of December 31, 2017 and 2016, respectively) |  | (16,284 | ) |  | (15,316 | )
Accumulated other comprehensive income (loss) |  | 17,074 |  |  | 14,621 |
Retained earnings |  | 28,504 |  |  | 21,946 |
Total equity |  | 54,069 |  |  | 45,863 |
TOTAL LIABILITIES AND EQUITY |  | $ | 78,924 |  |  | $ | 69,323 |
See Notes to Condensed Financial Information of Registrant PRUDENTIAL FINANCIAL, INC. Schedule II Condensed Financial Information of Registrant Condensed Statements of Operations for the Years Ended December 31, 2017, 2016 and 2015 (in millions)
|  | 2017 |  | 2016 |  | 2015
REVENUES |  |  |  |  |  |
Net investment income |  | $ | 92 |  |  | $ | 61 |  |  | $ | 19 |
Realized investment gains (losses), net |  | (73 | ) |  | (126 | ) |  | (98 | )
Affiliated interest revenue |  | 379 |  |  | 353 |  |  | 353 |
Other income (loss) |  | (79 | ) |  | (2 | ) |  | 28 |
Total revenues |  | 319 |  |  | 286 |  |  | 302 |
EXPENSES |  |  |  |  |  |
General and administrative expenses |  | 126 |  |  | 101 |  |  | 170 |
Interest expense |  | 1,057 |  |  | 1,106 |  |  | 1,080 |
Total expenses |  | 1,183 |  |  | 1,207 |  |  | 1,250 |
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF SUBSIDIARIES |  | (864 | ) |  | (921 | ) |  | (948 | )
Total income tax expense (benefit) |  | (397 | ) |  | (320 | ) |  | (396 | )
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF SUBSIDIARIES |  | (467 | ) |  | (601 | ) |  | (552 | )
Equity in earnings of subsidiaries |  | 8,330 |  |  | 4,969 |  |  | 6,194 |
NET INCOME (LOSS) |  | $ | 7,863 |  |  | $ | 4,368 |  |  | $ | 5,642 |
Other Comprehensive Income (loss) |  | 2,453 |  |  | 2,336 |  |  | (3,765 | )
TOTAL COMPREHENSIVE INCOME (LOSS) |  | $ | 10,316 |  |  | $ | 6,704 |  |  | $ | 1,877 |
See Notes to Condensed Financial Information of Registrant PRUDENTIAL FINANCIAL, INC. Schedule II Condensed Financial Information of Registrant Condensed Statements of Cash Flows for the Years Ended December 31, 2017, 2016 and 2015 (in millions)
|  | 2017 |  | 2016 |  | 2015
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |  |  |  |
Net income (loss) |  | $ | 7,863 |  |  | $ | 4,368 |  |  | $ | 5,642 |
Adjustments to reconcile net income to cash provided by operating activities: |  |  |  |  |  |
Equity in earnings of subsidiaries |  | (8,330 | ) |  | (4,969 | ) |  | (6,194 | )
Realized investment (gains) losses, net |  | 73 |  |  | 126 |  |  | 98 |
Dividends received from subsidiaries |  | 1,975 |  |  | 2,828 |  |  | 4,557 |
Property, plant and equipment |  | (1 | ) |  | (13 | ) |  | (579 | )
Change in: |  |  |  |  |  |
Due to/from subsidiaries, net |  | 213 |  |  | (5,109 | ) |  | (493 | )
Other, operating(1) |  | (149 | ) |  | 204 |  |  | (333 | )
Cash flows from (used in) operating activities(1) |  | 1,644 |  |  | (2,565 | ) |  | 2,698 |
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |  |  |  |
Proceeds from the sale/maturity of: |  |  |  |  |  |
Fixed maturities, available-for-sale |  | 740 |  |  | 0 |  |  | 0 |
Short-term investments |  | 15,973 |  |  | 17,575 |  |  | 13,700 |
Payments for the purchase of: |  |  |  |  |  |
Fixed maturities, available for sale |  | (865 | ) |  | (1,106 | ) |  | 0 |
Short-term investments |  | (15,087 | ) |  | (19,111 | ) |  | (13,002 | )
Capital contributions to subsidiaries |  | (1,135 | ) |  | (2,018 | ) |  | (2,545 | )
Returns of capital contributions from subsidiaries |  | 1,150 |  |  | 2,755 |  |  | 75 |
Loans to subsidiaries, net of maturities |  | (1,127 | ) |  | (596 | ) |  | 2,056 |
Other, investing |  | 61 |  |  | 1 |  |  | 244 |
Cash flows from (used in) investing activities |  | (290 | ) |  | (2,500 | ) |  | 528 |
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |  |  |  |
Cash dividends paid on Common Stock |  | (1,296 | ) |  | (1,300 | ) |  | (1,117 | )
Common Stock acquired |  | (1,250 | ) |  | (2,000 | ) |  | (1,664 | )
Common Stock reissued for exercise of stock options |  | 246 |  |  | 426 |  |  | 209 |
Proceeds from the issuance of debt (maturities longer than 90 days) |  | 742 |  |  | 30 |  |  | 1,332 |
Repayments of debt (maturities longer than 90 days) |  | (480 | ) |  | (1,319 | ) |  | (2,404 | )
Repayments of loans from subsidiaries |  | (310 | ) |  | (390 | ) |  | (102 | )
Proceeds from loans payable to subsidiaries |  | 1,627 |  |  | 1,405 |  |  | 1,316 |
Net change in financing arrangements (maturities of 90 days or less) |  | (16 | ) |  | 14 |  |  | 8 |
Excess tax benefits from share-based payment arrangements |  | 0 |  |  | 10 |  |  | 3 |
Other, financing(1) |  | (68 | ) |  | (132 | ) |  | (62 | )
Cash flows from (used in) financing activities(1) |  | (805 | ) |  | (3,256 | ) |  | (2,481 | )
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |  | 549 |  |  | (8,321 | ) |  | 745 |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR |  | 1,116 |  |  | 9,437 |  |  | 8,692 |
CASH AND CASH EQUIVALENTS, END OF YEAR |  | $ | 1,665 |  |  | $ | 1,116 |  |  | $ | 9,437 |
SUPPLEMENTAL CASH FLOW INFORMATION |  |  |  |  |  |
Cash paid during the period for interest |  | $ | 1,019 |  |  | $ | 1,002 |  |  | $ | 1,048 |
Cash paid (refunds received) during the period for taxes |  | $ | (213 | ) |  | $ | (544 | ) |  | $ | 46 |
NON-CASH TRANSACTIONS DURING THE YEAR |  |  |  |  |  |
Non-cash capital contributions to subsidiaries |  | $ | (17 | ) |  | $ | (4,158 | ) |  | $ | 1,453 |
Non-cash dividends/returns of capital from subsidiaries |  | $ | 0 |  |  | $ | 4,142 |  |  | $ | 1,335 |
Treasury Stock shares issued for stock-based compensation programs |  | $ | 104 |  |  | $ | 115 |  |  | $ | 115 |
__________
(1) | Prior period amounts are presented on a basis consistent with current period presentation, reflecting the adoption of ASU 2016-09. See Note 2 to the Consolidated Financial Statements for additional information.
See Notes to Condensed Financial Information of Registrant PRUDENTIAL FINANCIAL, INC. Schedule II Condensed Financial Information of Registrant Notes to Condensed Financial Information of Registrant 1. ORGANIZATION AND PRESENTATION Prudential Financial, Inc. (“Prudential Financial”) was incorporated on December 28, 1999, as a wholly-owned subsidiary of The Prudential Insurance Company of America (“Prudential Insurance”). On December 18, 2001, Prudential Insurance converted from a mutual life insurance company to a stock life insurance company and became an indirect, wholly-owned subsidiary of Prudential Financial. The condensed financial statements of Prudential Financial reflect its direct wholly-owned subsidiaries using the equity method of accounting. Certain amounts in prior years have been reclassified to conform to the current year presentation. 2. OTHER INVESTMENTS Prudential Financial’s other investments as of December 31, 2017 and 2016 consisted primarily of highly liquid debt investments and intercompany enterprise liquidity account funds. 3. DEBT A summary of Prudential Financial’s short- and long-term debt is as follows:
|  |  |  |  | December 31,
| Maturity Dates |  | Rate(1) |  | 2017 |  | 2016
|  |  |  |  | ($ in millions)
Short-term debt: |  |  |  |  |  |  |
Commercial paper(2) |  |  |  |  | $ | 50 |  |  | $ | 65 |
Current portion of long-term debt |  |  |  |  | 830 |  |  | 470 |
Total short-term debt |  |  |  |  | $ | 880 |  |  | $ | 535 |
Long-term debt: |  |  |  |  |  |  |
Fixed rate senior notes | 2019-2049 |  | 2.35%-7.38% |  | $ | 8,709 |  |  | $ | 9,064 |
Floating rate senior notes | 2020 |  | 3.46%-5.49% |  | 29 |  |  | 508 |
Junior subordinated notes | 2042-2068 |  | 4.50%-8.88% |  | 6,566 |  |  | 5,817 |
Total long-term debt |  |  |  |  | $ | 15,304 |  |  | $ | 15,389 |
__________
(1) | Ranges of interest rates are for the year ended December 31, 2017.
(2) | The weighted average interest rate on outstanding commercial paper was 1.15% and 0.6% at December 31, 2017 and 2016, respectively.
Long-term Debt In order to modify exposure to interest rate movements, Prudential Financial utilizes derivative instruments, primarily interest rate swaps, in conjunction with some of its debt issues. The impact of these derivative instruments are not reflected in the rates presented in the table above. For those derivatives that qualify for hedge accounting treatment, interest expense increased by $1 million, $2 million, and $3 million for each of the years ended December 31, 2017, 2016 and 2015, respectively. Schedule of Long-term Debt Maturities The following table presents Prudential Financial’s contractual maturities for long-term debt as of December 31, 2017:
| Calendar Year |  |
| 2019 |  | 2020 |  | 2021 |  | 2022 |  | 2023 and thereafter |  | Total
| ($ in millions)
Long-term debt | $ | 1,100 |  |  | $ | 1,179 |  |  | $ | 400 |  |  | $ | 0 |  |  | $ | 12,625 |  |  | $ | 15,304 |
4. DIVIDENDS AND RETURNS OF CAPITAL For the years ended December 31, Prudential Financial received cash dividends and/or returns of capital from the following companies:
|  | 2017 |  | 2016 |  | 2015
|  | (in millions)
Pruco Reinsurance |  | $ | 0 |  |  | $ | 1,298 |  |  | $ | 0 |
Prudential Annuities Holding Company |  | 145 |  |  | 98 |  |  | 102 |
International Insurance and Investments Holding Companies |  | 546 |  |  | 1,171 |  |  | 1,818 |
Prudential Insurance Company of America |  | 1,000 |  |  | 900 |  |  | 1,950 |
Prudential Investment Management |  | 467 |  |  | 746 |  |  | 266 |
Prudential Annuities Life Assurance Corporation |  | 950 |  |  | 1,140 |  |  | 450 |
Other Holding Companies |  | 16 |  |  | 231 |  |  | 46 |
Total |  | $ | 3,124 |  |  | $ | 5,584 |  |  | $ | 4,632 |
5. COMMITMENTS AND GUARANTEES Prudential Financial has issued a subordinated guarantee covering a subsidiary’s domestic commercial paper program. As of December 31, 2017, there was $500 million outstanding under this commercial paper program. Prudential Financial has provided guarantees of the payment of principal and interest on intercompany loans between affiliates. As of December 31, 2017, Prudential Financial had issued guarantees of outstanding loans totaling $3.9 billion between International Insurance subsidiaries and other affiliates. In 2013, Prudential Financial entered into a $500 million indemnity and guarantee agreement with Wells Fargo Bank Northwest, N.A. Under this agreement, Prudential Financial guaranteed obligations with respect to an affiliated loan from PICA to an affiliate. The loan proceeds were utilized to construct Prudential’s new home office in Newark, New Jersey. Prudential Financial is also subject to other financial guarantees, net worth maintenance agreements and indemnity arrangements, including those made in the normal course of businesses guaranteeing the performance of, or representations made by, Prudential Financial subsidiaries. Prudential Financial has provided indemnities and guarantees related to acquisitions and dispositions, investments, debt issuances and other transactions, including those provided as part of its ongoing operations that are triggered by, among other things, breaches of representations, warranties or covenants provided by Prudential Financial or its subsidiaries. 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. Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. At December 31, 2017, Prudential Financial has no accrued liabilities associated with other financial guarantees and indemnity arrangements. 6. REDEMPTION OF CLASS B SHARES From demutualization through December 31, 2014, Prudential Financial 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, pursuant to a Share Repurchase Prudential Agreement entered into on December 1, 2014, between the Company and the holders of the Class B stock, the Company repurchased and canceled all of the shares of the Class B Stock for an aggregate cash purchase price of $651 million, resulting in the elimination of the Class B stock held in treasury, a $484 million decrease in “Retained Earnings” and a $167 million decrease in “Additional paid-in-capital.” In accordance with the terms of the Share Repurchase agreement, the holders of the Class B Stock subsequently exercised their right to dispute the calculation of the purchase price. This dispute was resolved during the first quarter of 2016, resulting in an increase to the cash purchase price of $119 million, bringing the total aggregate purchase price to $770 million. The increase to the cash purchase price resulted in a corresponding decrease in “Retained Earnings.”

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- Definition The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.7-05(c)(Schedule II)) -URI http://asc.fasb.org/extlink&oid=6879921&loc=d3e569147-122900 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 810 -SubTopic 10 -Section 45 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=96868048&loc=d3e5283-111683 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 235 -Section S99 -Paragraph 2 -Subparagraph (SX 210.9-06) -URI http://asc.fasb.org/extlink&oid=6882215&loc=d3e537971-122884 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 10 -Section S99 -Paragraph 6 -Subparagraph (SX 210.5-04(c)(Schedule I)) -URI http://asc.fasb.org/extlink&oid=27047687&loc=d3e5864-122674 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 3 -Subparagraph (SX 210.12-04) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e24072-122690 + Details
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