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”). For additional information, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Consolidated 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(1)				Other Consolidated VIEs
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
	(in millions)
Fixed maturities, available-for-sale	$	95	$	65	$	278	$	269
Fixed maturities, held-to-maturity	84		81		811		783
Trading account assets supporting insurance liabilities	0		0		9		9
Other trading account assets	1,637		2,140		0		0
Commercial mortgage and other loans	564		503		0		0
Other long-term investments	1,243		1,083		107		114
Cash and cash equivalents	149		618		0		1
Accrued investment income	7		10		3		4
Other assets	419		424		0		1
Total assets of consolidated VIEs	$	4,198	$	4,924	$	1,208	$	1,181
Notes issued by consolidated VIEs(2)	$	1,517	$	2,150	$	0	$	0
Other liabilities	429		611		0		7
Total liabilities of consolidated VIEs	$	1,946	$	2,761	$	0	$	7

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(1)	Total assets of consolidated VIEs reflects $1,631 million and $1,386 million as of September 30, 2017 and December 31, 2016, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.


(2)	Recourse is limited to the assets of the respective VIE and does not extend to the general credit of Prudential Financial. As of September 30, 2017 and December 31, 2016, the maturities of these obligations were greater than five years.

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. 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 $866 million and $515 million at September 30, 2017 and December 31, 2016, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Other trading account assets, at fair value” and “Other long-term investments.” 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 classifies these investments as “Other long-term investments” and its maximum exposure to loss associated with these entities was $8,454 million and $8,010 million as of September 30, 2017 and December 31, 2016, 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.