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

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			Page
Overview			124
Regulatory Developments			125
Impact of Changes in the Interest Rate Environment			125
Results of Operations			127
Consolidated Results of Operations			127
Segment Results of Operations			128
Segment Measures			130
Impact of Foreign Currency Exchange Rates			131
Accounting Policies & Pronouncements			133
Results of Operations by Segment			139
PGIM			139
U.S. Businesses			143
Retirement Strategies			144
Group Insurance			151
Individual Life			152
International Businesses			154
Corporate and Other			158
Divested and Run-off Businesses			160
Closed Block Division			160
Income Taxes			162
Valuation of Assets and Liabilities			162
General Account Investments			164
Liquidity and Capital Resources			184
Ratings			195

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) addresses the consolidated financial condition of Prudential Financial, Inc. (“Prudential,” “Prudential Financial,” “PFI,” or “the Company”) as of September 30, 2023, compared with December 31, 2022, and its consolidated results of operations for the three and nine months ended September 30, 2023 and 2022. 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, 2022, 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.

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Overview

Prudential Financial, a financial services leader with approximately $1.361 trillion of assets under management as of September 30, 2023, has operations primarily in the United States of America (“U.S.”), 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 solutions, 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.

Effective January 1, 2023, we made the following segment reporting changes, which do not impact our consolidated financial statements:

• Based on the write-down of Assurance IQ’s (“AIQ”) goodwill asset, and that its financial results and operations are not considered significant, AIQ no longer represents a separately reportable segment and is now included within our Corporate and Other operations.

• Since Prudential Advisors, our proprietary nationwide distribution business, is no longer managed through the Individual Life segment and its financial results and operations are not considered significant, it is now included within our Corporate and Other operations.

Historical segment results have been updated to conform to the current period presentation.

Our principal operations consist of PGIM (our global investment management business), our U.S. Businesses (consisting of our Retirement Strategies, Group Insurance and Individual Life businesses), our International Businesses, the Closed Block division, and our Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other. Divested and Run-off Businesses consist of 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 generally accepted accounting principles in the United States of America (“U.S. GAAP”). Our Corporate and Other operations include corporate items and initiatives that are not allocated to business segments as well as the Divested and Run-off Businesses described above.

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 our 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.

Management expects that results will continue to benefit from our differentiated mix of market-leading businesses that complement each other to provide competitive advantages, earnings diversification and capital benefits from a balanced risk profile. We believe we are well-positioned to tap into market opportunities to meet the evolving needs of individual customers, workplace clients, and society at large. Our mix of high-quality protection, retirement and investment management businesses enables us to offer solutions that cover a broad range of financial needs and to engage with our clients through multiple channels, including the ability to sell solutions across a broad socio-economic spectrum through Assurance IQ’s digital platform. We aim to expand our addressable market, build deeper and longer-lasting relationships with customers and clients, and meaningfully improve their financial wellness.

In September 2023, we, together with Warburg Pincus and a group of institutional investors, announced the launch of Prismic Life Re, a licensed Bermuda-based life and annuity reinsurance company. In conjunction with this announcement, we made an initial equity investment of approximately $200 million, equivalent to a 20% interest, in this limited partnership. We expect the increased reinsurance capacity that this partnership provides to support our vision of expanding access to investing, insurance, and retirement security for people around the world. Our initial transaction, effective September 2023, was to reinsure approximately $9 billion, or 70%, of reserves related to our structured settlement annuities business. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information regarding this transaction.

As part of our continuous improvement process, we are working to become a leaner and more agile company by simplifying our management structure, empowering our employees with faster decision-making processes and investing in technology and data platforms. As part of this, we are implementing changes to our organizational structure, and expect to record a restructuring charge of approximately $200 million in the fourth quarter of 2023. We expect these actions will create operating efficiencies, and provide reinvestment capacity to build capabilities, realize additional efficiencies, strengthen our competitiveness and fuel future growth.

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Regulatory Developments

Interest Maintenance Reserves. In August 2023, the National Association of Insurance Commissioners (“NAIC”) adopted a temporary change in the statutory accounting treatment of net negative interest maintenance reserves (“IMR”) that permits an insurer to admit net negative IMR up to 10% of their adjusted statutory surplus, provided such insurer’s risk-based capital (“RBC”) ratio remains above 300% of its Authorized Control Level RBC. This change is currently scheduled to expire on January 1, 2026.

Impact of Changes in the Interest Rate Environment

As a global financial services company, market interest rates are a key driver of our liquidity and capital positions, cash flows, results of operations and financial position. Changes in interest rates can affect these in several ways, including favorable or adverse impacts to:

• investment-related activity, including: investment income returns, net investment spread results, new money rates, mortgage loan prepayments and bond redemptions;

• the valuation of fixed income investments and derivative instruments;

• collateral posting requirements, hedging costs and other risk mitigation activities;

• customer account values and assets under management, including their impacts on fee-related income;

• insurance reserve levels, including market risk benefits (“MRB”), and market experience true-ups;

• policyholder behavior, including surrender or withdrawal activity;

• product offerings, design features, crediting rates and sales mix; and

• the fair value of, and possible impairments on, intangible assets such as goodwill.

For additional information regarding interest rate risks, see “Risk Factors—Market Risk” included in our Annual Report on Form 10-K for the year ended December 31, 2022.

See below for a discussion of the current interest rate environment and its impact to net investment spread in our U.S. and Japanese operations along with the composition of their insurance liabilities and policyholder account balances.

U.S. Operations excluding the Closed Block Division

While interest rates in the U.S. have experienced a sustained period of historically low levels in recent years, rates increased throughout 2022 and have risen further in 2023, and our average reinvestment yield is generally now exceeding our current average portfolio yield.

In order to manage the impacts that changes in interest rates have on our net investment spread, we employ a proactive asset/liability management program, which includes strategic asset allocation and hedging strategies within a disciplined risk management framework. These strategies seek to match the liability 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 the interest rate risk associated with our 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. We also regularly examine our product offerings and their profitability. As a result, we may reprice certain products and discontinue sales of other products that do not meet our profit expectations.

The portion of the general account supporting our U.S. Businesses and our Corporate and Other operations has approximately $176 billion of fixed maturity securities and commercial mortgage loans (based on net carrying value) as of September 30, 2023, with an average portfolio yield of approximately 4.6%. For this portion of the general account attributable to these operations, we estimate annual principal payments and prepayments that we would be required to reinvest to be approximately 7.4% of the fixed maturity security and commercial mortgage loan portfolios through 2024.

Included in the $176 billion of fixed maturity securities and commercial mortgage loans are approximately $148 billion that are subject to call or redemption features at the issuer’s option and have a weighted average interest rate of approximately 4%. Of this $148 billion, approximately 54% contain provisions for prepayment premiums. Future operating results will be impacted by (i) the reinvestment of scheduled payments or prepayments (not subject to a prepayment fee) at different rates compared to the current portfolio yield, including in some cases at rates below those guaranteed under our insurance contracts,

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and (ii) our utilization of other asset/liability management strategies, as described above, in order to maintain favorable net investment spread.

The following table sets forth the insurance liabilities and policyholder account balances of our U.S. operations excluding the Closed Block Division, by type, for the date indicated:

			As of September 30, 2023
			(in billions)
Long-duration insurance products with fixed and guaranteed terms			$	156
Contracts with adjustable crediting rates subject to guaranteed minimums			36
Participating contracts where investment income risk ultimately accrues to contractholders			1
Total			$	193

The $156 billion above relates to long-duration products such as group annuities, structured settlements and other insurance products that have fixed and guaranteed terms. We seek to manage the impact of changes in interest rates on these contracts through asset/liability management, as discussed above.

The $36 billion above relates to 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. For additional information regarding contracts with adjustable crediting rates subject to guaranteed minimums, see Note 10 to the Unaudited Interim Financial Statements.

The remaining $1 billion of insurance liabilities and policyholder account balances in these operations relates to 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 return earned on the related assets.

Closed Block Division

Substantially all of the $48 billion of general account assets in the Closed Block division support obligations and liabilities relating to the Closed Block policies only. See Note 13 to the Unaudited Interim Consolidated Financial Statements for additional information regarding the Closed Block.

Japanese Operations

Japan has experienced a low interest rate environment for many years, during which the Bank of Japan’s monetary policy has resulted in even lower and, at times, negative yields for certain tenors of government bonds; however, despite the easing of its monetary policy in the fourth quarter of 2022, Japan continues to experience a low interest rate environment.

In order to manage, to the extent possible, the impact that the current interest rate environment has on our net investment spread, our Japanese operations employ a proactive asset/liability management program. We continue to purchase long-term bonds with tenors of 10 years or greater. We also regularly examine our product offerings and their profitability. As a result, we may reprice certain products, adjust commissions for certain products and discontinue sales of other products that do not meet our profit expectations. Additionally, our diverse product portfolio in terms of currency mix and premium payment structure allows us to further manage any impacts from changes in the interest rate environment. For additional information regarding sales within these operations, see “—International Businesses—Sales Results,” below.

The portion of the general account supporting our Japanese operations has approximately $143 billion of fixed maturity securities and commercial mortgage loans (based on net carrying value) as of September 30, 2023, with an average portfolio yield of approximately 2.7%. Our Japanese operations have continued to invest in U.S. dollar-denominated assets supporting our U.S. dollar-denominated product portfolio, which has now driven average reinvestment rates to exceed current average portfolio rates. For this portion of the general account attributable to these operations, we estimate annual principal payments and prepayments that we would be required to reinvest to be approximately 6.6% of the fixed maturity security and commercial mortgage loan portfolios through 2024.

Included in the $143 billion of fixed maturity securities and commercial mortgage loans are approximately $15 billion that are subject to call or redemption features at the issuer’s option and have a weighted average interest rate of approximately 4%. Of this $15 billion, approximately 6% contain provisions for prepayment premiums. Future operating results will be impacted

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by (i) the reinvestment of scheduled payments or prepayments (not subject to a prepayment fee) at different rates compared to the current portfolio yield, including in some cases at rates below those guaranteed under our insurance contracts, and (ii) our utilization of other asset/liability management strategies, as described above, in order to maintain favorable net investment spread.

The following table sets forth the insurance liabilities and policyholder account balances of our Japanese operations, by type, for the date indicated:

			As of September 30, 2023
			(in billions)
Insurance products with fixed and guaranteed terms			$	111
Contracts with a market value adjustment if canceled before maturity			28
Contracts with adjustable crediting rates subject to guaranteed minimums			9
Total			$	148

The $111 billion is primarily 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 current portfolio yields. The remaining insurance liabilities and policyholder account balances include $28 billion related to contracts that impose a market value adjustment if the contracts are canceled before maturity and $9 billion related to contracts with crediting rates that may be adjusted over the life of the contract, subject to guaranteed minimums. Most of the current crediting rates on these contracts, however, are at or near contractual minimums. Although we have the ability in some cases to lower crediting rates for those contracts that are above guaranteed minimum crediting rates, the majority of this business has interest crediting rates that are determined by formula. See Note 10 to the Unaudited Interim Financial Statements for additional information regarding crediting rates on policyholder account balances.

Results of Operations

Consolidated Results of Operations

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Revenues			$	8,352					$	20,201					$	38,895					$	43,448
Benefits and expenses			9,410						20,327						37,485						45,300
Income (loss) before income taxes and equity in earnings of operating joint ventures			(1,058)						(126)						1,410						(1,852)
Income tax expense (benefit)			(251)						(11)						254						(274)
Income (loss) before equity in earnings of operating joint ventures			(807)						(115)						1,156						(1,578)
Equity in earnings of operating joint ventures, net of taxes			16						7						26						(53)
Net income (loss)			(791)						(108)						1,182						(1,631)
Less: Income attributable to noncontrolling interests			11						(16)						11						(36)
Net income (loss) attributable to Prudential Financial, Inc.			$	(802)					$	(92)					$	1,171					$	(1,595)

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Three Month Comparison. The $710 million decrease in “Net income (loss) attributable to Prudential Financial, Inc.” for the third quarter of 2023 compared to the third quarter of 2022 reflected the following notable items on a pre-tax basis:

• $1,248 million unfavorable variance from realized investment gains (losses), net, and related charges and adjustments; and

• $193 million unfavorable variance reflecting the change in value of market risk benefits, net of related hedging gains (losses).

Partially offsetting these decreases in “Net income (loss) attributable to Prudential Financial, Inc.” were the following items:

• $439 million favorable variance from higher adjusted operating income from our business segments (see “Segment Results of Operations” for additional information); and

• $240 million favorable variance from income taxes reflecting the decrease in pre-tax earnings.

Nine Month Comparison. The $2,766 million increase in “Net income (loss) attributable to Prudential Financial, Inc.” for the first nine months of 2023 compared to the first nine months of 2022 reflected the following notable items on a pre-tax basis:

• $2,515 million favorable variance from realized investment gains (losses), net, and related charges and adjustments;

• $912 million favorable variance reflecting the change in value of market risk benefits, net of related hedging gains (losses); and

• $411 million favorable variance from higher adjusted operating income from our business segments, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements, primarily reflecting a net charge from these updates in the prior year period in our Individual Life business. This increase was partially offset by the absence of a gain from the sale of Prudential Annuities Life Assurance Corporation (“PALAC”) in the prior year period (see “Segment Results of Operations” for additional information).

Partially offsetting these increases in “Net income (loss) attributable to Prudential Financial, Inc.” were the following items:

• $528 million unfavorable variance from income taxes reflecting the increase in pre-tax earnings;

• $429 million unfavorable variance driven by market experience updates, primarily within our Individual Life and International businesses; and

• $122 million unfavorable variance from our Divested and Run-off Businesses, reflecting lower results from our Closed Block division and the absence of a gain from the sale of the Full Service Retirement business in the prior year period, partially offset by higher results in the current year period.

Segment Results of Operations

We analyze the performance of our segments and Corporate and Other operations using a measure of segment profitability called adjusted operating income. See “—Segment Measures” below for a discussion of adjusted operating income and its use as a measure of segment operating performance.

Shown below are the adjusted operating income contributions of each segment and Corporate and Other operations for the periods indicated and a reconciliation of this segment measure of performance to “Income (loss) before income taxes and equity in earnings of operating joint ventures” as presented in the Unaudited Interim Consolidated Statements of Operations.

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			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Adjusted operating income before income taxes by segment:
PGIM			$	211					$	219					$	541					$	613
U.S. Businesses:
Retirement Strategies			941						655						2,654						3,782
Group Insurance			89						30						253						(31)
Individual Life			58						(70)						(103)						(1,750)
Total U.S. Businesses			1,088						615						2,804						2,001
International Businesses			811						748						2,435						2,391
Corporate and Other			(504)						(415)						(1,516)						(1,152)
Total segment adjusted operating income before income taxes			1,606						1,167						4,264						3,853
Reconciling items:
Realized investment gains (losses), net, and related adjustments(1)			(2,430)						(1,128)						(2,965)						(4,981)
Charges related to realized investment gains (losses), net(1)			(61)						(115)						78						(421)
Change in value of market risk benefits, net of related hedging gains (losses)			(251)						(58)						(160)						(1,072)
Market experience updates			143						125						188						617
Divested and Run-off Businesses(2):
Closed Block division			2						(21)						(50)						22
Other Divested and Run-off Businesses			(46)						(53)						125						175
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests(3)			(11)						(33)						(42)						(18)
Other adjustments(4)			(10)						(10)						(28)						(27)
Consolidated income (loss) before income taxes and equity in earnings of operating joint ventures			$	(1,058)					$	(126)					$	1,410					$	(1,852)

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(1)See “—General Account Investments” and Note 19 to the Unaudited Interim Consolidated Financial Statements for additional information.

(2)Represents the contribution to income (loss) of Divested and Run-off 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. See “—Divested and Run-off Businesses” for additional information.

(3)Equity in earnings of operating joint ventures is included in adjusted operating income but excluded from “Income (loss) before income taxes and equity in earnings of operating joint ventures” as it is reflected on an after-tax U.S. GAAP basis as a separate line in the Unaudited Interim Consolidated Statements of Operations. Earnings attributable to noncontrolling interests are excluded from adjusted operating income but included in “Income (loss) before income taxes and equity in earnings of operating joint ventures” as they are reflected on a U.S. GAAP basis as a separate line in the 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.

(4)Includes certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.

Segment results for the period presented above reflect the following:

PGIM. Results for the third quarter of 2023 decreased in comparison to the prior year period, primarily reflecting higher compensation expenses and lower net other related revenues, partially offset by higher service, distribution and other revenues. Results for the first nine months of 2023 decreased in comparison to the prior year period, primarily reflecting lower net asset management fees and higher compensation and operating expenses, partially offset by higher service, distribution and other revenues and net other related revenues.

Retirement Strategies. Results for the third quarter of 2023 increased in comparison to the prior year period, primarily driven by higher net investment spread results, partially offset by lower fee income, net of distribution expenses and other associated costs. Results for the first nine months of 2023 decreased in comparison to the prior year period, inclusive of a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results decreased, primarily reflecting the absence of a gain in the prior year period from the sale of PALAC and lower fee income, net of distribution expenses and other associated costs, partially offset by higher net investment spread results.

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Group Insurance. Results for the third quarter of 2023 increased in comparison to the prior year period, driven by higher underwriting results. Results for the first nine months of 2023 increased in comparison to the prior year period, inclusive of a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, driven by higher underwriting results, partially offset by higher expenses.

Individual Life. Results for the third quarter of 2023 increased in comparison to the prior year period, driven by higher net investment spread results and lower expenses, partially offset by lower underwriting results. Results for the first nine months of 2023 increased in comparison to the prior year period, inclusive of a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, primarily driven by lower expenses and higher net investment spread results, partially offset by lower underwriting results.

International Businesses. Results for the third quarter of 2023 increased in comparison to the prior year period, inclusive of an unfavorable net impact from foreign currency exchange rates, primarily driven by higher net investment spread results and higher underwriting results, partially offset by higher expenses. Results for the first nine months of 2023 decreased in comparison to the prior year period, inclusive of an unfavorable net impact from foreign currency exchange rates and a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding these items, results increased, primarily driven by higher earnings from our joint venture investments and higher underwriting results, partially offset by lower net investment spread results.

Corporate and Other. Results for both the third quarter and the first nine months of 2023 reflected increased losses in comparison to the prior year periods, primarily driven by higher net charges from other corporate activities.

Closed Block Division. Results for the third quarter of 2023 increased in comparison to the prior year period, while results for the first nine months of 2023 decreased in comparison to the prior year period, both reflecting changes in cumulative earnings and other factors, partially offset by changes in the policyholder dividend obligation.

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) 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 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.

See Note 19 to the Unaudited Interim Consolidated Financial Statements for additional information regarding the presentation of segment results and our definition of adjusted operating income.

Annualized New Business Premiums. In managing our Individual Life, Group Insurance and International Businesses segments, 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-payment products. No other adjustments are made for limited-payment contracts.

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 premium rates, changes in tax laws, changes in 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.

Assets Under Management. In managing our PGIM segment, we analyze assets under management (which do not correspond directly to U.S. GAAP assets) because the principal source of revenues is fees based on assets under management. Assets under management represent the fair market value or account value of assets that 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 Retirement Strategies segment, we analyze account values, which do not correspond directly to U.S. GAAP assets. Net additions (withdrawals) in our Institutional Retirement Strategies business and sales (redemptions) in our Individual Retirement Strategies business do not correspond to revenues under U.S. GAAP but are used as a relevant measure of business activity.

Impact of Foreign Currency Exchange Rates

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 (“USD”)-equivalent shareholder return on equity. We seek to mitigate this impact through various hedging strategies, including holding USD-denominated assets in certain of our foreign subsidiaries.

In order to reduce equity volatility from foreign currency exchange rate movements, we primarily 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 USD-denominated assets and dual currency and synthetic dual currency investments held locally in our Japanese insurance subsidiaries. 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 USD-equivalent shareholder return on equity from our Japanese insurance subsidiaries as of the dates indicated.

			September 30, 2023						December 31, 2022
			(in billions)
Foreign currency hedging instruments:
USD-denominated assets associated with yen-based entities(1)			$	6.5					$	7.8
Dual currency and synthetic dual currency investments(2)			0.3						0.4
Total foreign currency hedges			$	6.8					$	8.2

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(1)Includes USD-denominated fixed maturities at amortized cost plus any related accrued investment income, as well as USD notional amount of foreign currency derivative contracts outstanding. Note this amount represents only those USD assets serving to hedge the impact of foreign currency volatility on equity. Separate from this program, our Japanese operations also have $74.5 billion and $70.1 billion as of September 30, 2023 and December 31, 2022, respectively, of USD-denominated assets supporting USD-denominated liabilities related to USD-denominated products.

(2)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 USD-denominated interest income. The amounts shown represent the present value of future USD-denominated cash flows.

The USD-denominated investments that hedge the impact of foreign currency exchange rate movements on USD-equivalent shareholder return on equity from our Japanese insurance operations are reported within yen-based entities and, as a result, foreign currency exchange rate movements will impact their value reported within our yen-based Japanese insurance entities. We seek to mitigate the risk that future unfavorable foreign currency exchange rate movements will decrease the value of these USD-denominated investments reported within our yen-based Japanese insurance entities, and therefore negatively impact their equity and regulatory solvency margins, by having our Japanese insurance operations enter into currency hedging transactions with a subsidiary of Prudential Financial. These hedging strategies have the economic effect of moving the change in value of these USD-denominated investments due to foreign currency exchange rate movements from our Japanese yen-based entities to our USD-based entities.

These USD-denominated investments also pay a coupon which is generally higher than what a similar yen-denominated investment would pay. The incremental impact of this higher yield on our USD-denominated investments, as well as our dual currency and synthetic dual currency investments, will vary over time, and is dependent on the duration of the underlying investments as well as interest rate environments in both the U.S. and Japan at the time of the investments.

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Impact of intercompany foreign currency exchange rate arrangements on segment results of operations

The financial results of our International Businesses and PGIM reflect the impact of intercompany arrangements with our Corporate and Other operations pursuant to which these segments’ non-USD-denominated earnings are translated at fixed currency exchange rates that are predetermined during the third quarter of the prior year using forward currency exchange rates. Results of our Corporate and Other operations include differences between the translation adjustments recorded by the segments at the fixed currency exchange rate versus the actual average rate during the period.

In addition, specific to our International Businesses where we hedge certain currencies utilizing forward currency contracts with third-parties, the results of our Corporate and Other operations also include the impact of any gains or losses recorded from these 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 our International Businesses, PGIM and Corporate and Other operations, reflecting the impact of these intercompany arrangements.

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Segment impacts of intercompany arrangements:
International Businesses			$	(3)					$	(42)					$	(12)					$	(58)
PGIM			0						5						0						8
Impact of intercompany arrangements(1)			(3)						(37)						(12)						(50)
Corporate and Other:
Impact of intercompany arrangements(1)			3						37						12						50
Settlement gains (losses) on forward currency contracts(2)			(13)						6						(17)						28
Net benefit (detriment) to Corporate and Other			(10)						43						(5)						78
Net impact on consolidated revenues and adjusted operating income			$	(13)					$	6					$	(17)					$	28

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

(2)As of September 30, 2023 and 2022, the total notional amounts of these forward currency contracts within our Corporate and Other operations were $0.9 billion and $0.8 billion, respectively.

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

While our international insurance operations offer products denominated in local currency, several also offer products denominated in non-local currencies. This is most notable in our Japanese operations, which currently offer primarily USD-denominated products, but have also historically offered Australian dollar (“AUD”)-denominated products. The non-local currency-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-local currency-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.

As a result, we implemented a structure in Gibraltar Life’s operations that disaggregated the USD- and AUD-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The result of this alignment was to reduce differences in the accounting for changes in the value of these assets and liabilities that arise due to changes in foreign currency exchange rate movements. For the USD- and AUD-denominated assets that were transferred under this structure, the net cumulative unrealized investment gains associated with foreign exchange remeasurement that were recorded in “Accumulated other comprehensive income (loss)” (“AOCI”) totaled $1.5 billion and $1.6 billion as of September 30, 2023 and December 31, 2022, respectively, 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 2% of the $1.5 billion balance as of September 30, 2023 will be recognized throughout the remainder of 2023, approximately 9% will be recognized in 2024, and the remaining balance will be recognized from 2025 through 2051.

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Highly inflationary economy in Argentina

Our insurance operations in Argentina, Prudential of Argentina (“POA”), have historically utilized the Argentine peso as the functional currency given it is the currency of the primary economic environment in which the entity operates. During 2018, Argentina experienced a cumulative inflation rate that exceeded 100% over a 3-year period. As a result, Argentina’s economy was deemed to be highly inflationary, resulting in reporting changes effective July 1, 2018. Under U.S. GAAP, the financial statements of a foreign entity in a highly inflationary economy are to be remeasured as if its functional currency (formerly the Argentine peso) is the reporting currency of its parent reporting entity (the USD) on a prospective basis. While this changed how the results of POA are remeasured and/or translated into USD, the impact to our financial statements was not material nor is it expected to be material in future periods given the relative size of our POA operations. It should also be noted that due to the macroeconomic environment in Argentina, the majority of POA’s balance sheet consists of USD-denominated product liabilities supported by USD-denominated assets. As a result, this accounting change serves to reduce the remeasurement impact reflected in net income given that the functional currency and currency in which the assets and liabilities are denominated will be more closely aligned.

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 the estimates and assumptions used in the preparation of the Company’s financial statements. If management determines that modifications to 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.

The following sections discuss the accounting policies applied in preparing our financial statements that management believes are most dependent on the application of estimates and assumptions and require management’s most difficult, subjective, or complex judgments.

Insurance Liabilities

Future Policy Benefits

Future Policy Benefit Reserves, including Unpaid Claims and Claim Adjustment Expenses

We establish reserves for future policy benefits to, or on behalf of, policyholders using methodologies prescribed by U.S. GAAP. The reserving methodologies used include the following:

• For most long-duration contracts, we utilize a net premium valuation methodology in measuring the liability for future policy benefits. Under this methodology, the Company accrues a liability for future policy benefits when premium revenue is recognized. The liability represents the present value of expected future benefits to be paid to or on behalf of policyholders and related non-level claim settlement expenses less the present value of expected future net premiums (portion of the gross premium required to provide for all benefits and related non-level claim settlement expenses using current best estimate assumptions). A net-to-gross (“NTG”) ratio is calculated as the ratio of the present value of expected policy benefits and non-level claim settlement expenses divided by the present value of expected gross premiums. The NTG ratio is applied to gross premiums, as premium revenue is recognized, to determine net premiums that are subtracted from the present value of expected benefits and non-level claim settlement expenses to determine the liability for future policy benefits, which cannot be less than zero. The NTG ratio at the cohort measurement unit level cannot exceed 100%, and if it exceeds 100%, the excess benefit expenses are recorded as a charge to current period earnings. The result of the net premium valuation methodology is that the liability at any point in time represents an accumulation of the portion of premiums received to date expected to fund future benefits (i.e., net premiums received to date), less any benefits and expenses already paid. The liability does not necessarily reflect the full policyholder obligation the Company expects to pay at the conclusion of the contract since a portion of that obligation would be funded by net premiums received in the future and would be recognized in the liability at that time. The insurance cash flow assumptions are updated quarterly to reflect actual experience and are generally updated annually to reflect changes in best estimate future insurance cash flow assumptions using a retrospective unlocking method with the impact recorded through current period earnings. At the time of an experience or best estimate assumption unlocking, a revised NTG ratio is calculated using actual historical cash flow experience and updated, if any, best estimate future cash flow assumptions, discounted using the locked-in discount rate. The revised NTG ratio is

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then applied to prior period cash flows to derive a cumulative catch-up adjustment as of the beginning of the quarter. The revised NTG ratio is then used going forward to accrue the reserve, until the next unlocking. The liability is also remeasured each quarter using a current discount rate, based on an upper medium grade fixed-income instrument yield, with the impact recorded through accumulated other comprehensive income. Expense assumptions included in the liability only include claim related expenses and exclude acquisition costs and non-claim related costs such as costs relating to investments, general administration, policy maintenance, product development, market research, and general overhead. For limited-payment contracts, a deferred profit liability (“DPL”) is established for the amount of gross premiums received in excess of expected net premiums and is amortized into premium income in relation to the discounted amount of insurance in force for life insurance or expected benefit payments for annuity contracts. The DPL is subject to a retrospective unlocking adjustment consistent with the liability for future policy benefits.

• For certain contract features, such as no-lapse guarantees, a liability is established when associated assessments (which include investment margin on policyholders’ account balances in the general account and policy charges for administration, mortality, expense, surrender, and other charges) are recognized. This liability is established using current best estimate assumptions and is based on the ratio of the present value of total expected excess payments (e.g., payments in excess of account value) over the life of the contract divided by the present value of total expected assessments (i.e., benefit ratio). The liability equals the current benefit ratio multiplied by cumulative assessments recognized to date, plus interest, less cumulative excess payments to date. The liability does not necessarily reflect the full policyholder obligation the Company expects to pay at the conclusion of the contract since a portion of that excess payment would be funded by assessments received in the future and would be recognized in the liability at that time. The reserves are subject to adjustments based on annual reviews of assumptions and quarterly adjustments for experience as described below, including market performance. These adjustments reflect the impact on the benefit ratio of using actual historical experience from the issuance date to the balance sheet date plus updated estimates of future experience. The updated benefit ratio is then applied to all prior periods’ assessments to derive an adjustment to the reserve recognized through a benefit or charge to current period earnings.

• For universal life type contracts and participating contracts, the Company performs premium deficiency tests using best estimate assumptions, at a minimum, on an annual basis, and on a quarterly basis for business whose profitability is closely tied to equity market performance. If the current net reserves are less than the best estimate liability, the existing net reserves are adjusted by first reducing the associated deferred sales inducements (“DSI”) or value of business acquired (“VOBA”) by the amount of the deficiency or to zero through a charge to current period earnings. If the deficiency is more than the DSI or VOBA for insurance contracts, the net reserves are increased by the excess through a charge to current period earnings. Since investment yields are used as the discount rate, the premium deficiency test is also performed using a discount rate based on the market yield (i.e., assuming what would be the impact if any unrealized gains (losses) were realized as of the testing date). In the event that by using the market yield a deficiency occurs, an adjustment is established for the deficiency and is included in AOCI.

• In certain instances, the policyholder liability for a particular line of universal life type and participating contract business may not be deficient in the aggregate to trigger loss recognition, but the pattern of earnings may be such that profits are expected to be recognized in earlier years followed by losses in later years. In these situations, accounting standards require that an additional liability (Profits Followed by Losses or “PFL” liability) be recognized by an amount necessary to sufficiently offset the losses that would be recognized in later years. The PFL liability is based on our current estimate of the present value of the amount necessary to offset losses anticipated in future periods. Because the liability is measured on a discounted basis, there will also be accretion into future earnings through an interest charge, and the liability will ultimately be released into earnings as an offset to future losses. Historically, the Company’s PFL liabilities have been predominantly associated with certain universal life contracts that measure net GAAP reserves using current best estimate assumptions and accordingly, have been updated each quarter using current in-force and market data and as part of the annual assumption update. At the target accrual date (i.e., date of peak deficiency), the PFL liability transitions to a premium deficiency reserve and, for universal life type products, will continue to be updated each quarter using current in-force and market data and as part of the annual assumption update.

Annual assumptions review and quarterly adjustments

The assumptions used in establishing reserves are generally based on the Company’s experience, industry experience and/or other factors, as applicable. We update our actuarial assumptions, such as mortality, morbidity, retirement and policyholder behavior assumptions, annually unless a material change in our own experience or in industry experience made available to us is observed in an interim period that we feel is indicative of a long-term trend. Generally, we do not expect trends to change

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significantly in the short-term and, to the extent these trends may change, we expect such changes to be gradual over the long-term.

We perform an annual comprehensive review of the assumptions used for estimating future premiums, benefits, and other cash flows, including reviews related to mortality, morbidity, lapse, surrender, and other contractholder behavior assumptions, and economic assumptions, including expected future rates of returns on investments. The Company generally looks to relevant Company experience as the primary basis for these assumptions. If relevant Company experience is not available or does not have sufficient credibility, the Company may look to experience of similar blocks of business, either elsewhere within the Company or within the industry. As part of this review, we may update these assumptions and make refinements to our models based upon emerging experience, future expectations and other data, including any observable market data we feel is indicative of a long-term trend.. The impact on our results of operations of changes in these assumptions can be offsetting and we are unable to predict their movement or offsetting impact over time.

The quarterly adjustments for market performance referred to above reflect the impact of changes to our estimate of future rates of returns on investments to reflect actual fund performance and market conditions. A portion of returns on investments for our variable life contracts are dependent upon the total rate of return on assets held in separate account investment options. This rate of return influences the fees we earn and expected claims to be paid on variable life contracts, as well as other sources of profit. Returns that are higher than our expectations for a given period produce higher than expected account balances, which increase the future fees we expect to earn on variable life contracts and decrease expected claims to be paid on variable life contracts. The opposite occurs when returns are lower than our expectations.

The weighted average rate of return assumptions used in developing estimated market returns consider many factors specific to each product type, including asset durations, asset allocations and other factors. With regard to equity market assumptions, the near-term future rate of return assumption used in evaluating liabilities for future policy benefits for certain of our products, primarily our domestic and international variable life insurance products, is generally updated each quarter and 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 15.0%, we use our maximum future rate of return. If the near-term projected future rate of return is lower than our near-term minimum future rate of return of 0%, we use our minimum future rate of return. As of September 30, 2023, our domestic variable life insurance businesses assume an 8.0% long-term equity expected rate of return and a 5.4% near-term mean reversion equity expected rate of return, and our international variable life insurance business assumes a 5.0% long-term equity expected rate of return and a 1.4% near-term mean reversion equity expected rate of return.

With regard to interest rate assumptions used in evaluating liabilities for future policy benefits for certain of our products, we update the long-term and near-term future rates used to project fixed income returns annually and quarterly, respectively. As a result of our 2023 annual reviews and update of assumptions and other refinements, we kept our long-term expectation of the U.S. Treasury rate and Japanese Government Bond yield unchanged and continue to grade to rates of 3.25% and 1.00%, respectively, over ten years. As part of our quarterly market experience updates, we update our near-term projections of interest rates to reflect changes in current rates. For additional information regarding discount rates used to establish the liability for future policy benefits, see Note 2 to the Unaudited Interim Consolidated Financial Statements.

The following paragraphs provide additional details about the reserves we have established:

International Businesses. The reserves for future policy benefits of our International Businesses, which as of September 30, 2023, represented 40% of our total future policy benefit reserves, primarily relate to non-participating whole life and term life products and endowment contracts, and are generally calculated using the net premium valuation methodology, as described above. The primary assumptions used in determining expected future benefits and expenses include mortality, lapse, morbidity, and investment yield assumptions. Reserves also include claims reported but not yet paid, and claims incurred but not yet reported. In addition, future policy benefit reserves for certain contracts also include amounts related to our deferred profit liability, as described above.

Institutional Retirement Strategies. The reserves for future policy benefits of our Institutional Retirement Strategies segment, which as of September 30, 2023, represented 28% of our total future policy benefit reserves, primarily relate to our non-participating life contingent group annuity and structured settlement products and are generally calculated using the net premium valuation methodology, as described above. The primary assumptions used in establishing these reserves include mortality, retirement, and investment yield assumptions. In addition, future policy benefit reserves for certain contracts also include amounts related to our deferred profit liability, as described above.

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Individual Retirement Strategies. The reserves for future policy benefits of our Individual Retirement Strategies segment, which as of September 30, 2023, represented 1% of our total future policy benefit reserves, primarily relate to reserves for life contingent payout annuity contracts for which a deferred profit liability is established for the amount of gross premiums received in excess of net premiums, and are generally calculated using the net premium valuation methodology. The primary assumptions used in determining expected future benefits and expenses include mortality, lapse, morbidity, and investment yield assumptions.

Individual Life. The reserves for future policy benefits of our Individual Life segment, which as of September 30, 2023, represented 9% of our total future policy benefit reserves, primarily relate to term life, universal life and variable life products. For term life contracts, the future policy benefit reserves are generally calculated using the net premium valuation methodology, as described above. The primary assumptions used in determining expected future benefits and expenses include mortality, lapse, and investment yield assumptions. For variable and universal life products, which include universal life contracts that contain no-lapse guarantees, reserves for future policy benefits are established using current best estimate assumptions and are based on the benefit ratio, as described above. The primary assumptions used in establishing these reserves generally include mortality, lapse, and premium pattern, as well as interest rate and equity market return assumptions. Reserves also include claims reported but not yet paid, and claims incurred but not yet reported.

Group Insurance. The reserves for future policy benefits of our Group Insurance segment, which as of September 30, 2023, represented 2% of our total future policy benefit reserves, primarily relate to reserves for group life and disability benefits. For short-duration contracts, a liability is established when the claim is incurred. The reserves for group life and disability benefits also include a liability for unpaid claims and claim adjustment expenses, which relates primarily to the group long-term disability product. This liability represents our estimate of the present value of future disability claim payments and expenses as well as estimates of claims that have been incurred, but have not yet been reported, as of the balance sheet date. The primary assumptions used in determining expected future claim payments are claim termination factors, an assumed interest rate and expected Social Security offsets. The remaining reserves for future policy benefits for group life and disability benefits relate primarily to our group life business, and include reserves for waiver of premium, claims reported but not yet paid, and claims incurred but not yet reported. The waiver of premium reserve is calculated as the present value of future benefits and utilizes assumptions such as expected mortality and recovery rates. The reserve for claims reported but not yet paid is based on the inventory of claims that have been reported but not yet paid. The reserve for claims incurred but not yet reported is estimated using expected patterns of claims reporting.

Corporate and Other. The reserves for future policy benefits of our Corporate & Other operations, which as of September 30, 2023, represented 3% of our total future policy benefit reserves, primarily relate to our long-term care products and are generally calculated using the net premium valuation methodology, as described above. The primary assumptions used in establishing these reserves include inflation, interest rate, morbidity, mortality, lapse and premium rate increase assumptions.

Closed Block Division. The future policy benefit reserves for the traditional participating life insurance products of the Closed Block division, which as of September 30, 2023, represented 17% of our total future policy benefit reserves are determined using the net premium valuation methodology, as described above. In applying this method, we use mortality assumptions to determine our expected future benefits and expected future premiums, and apply an interest rate to determine the present value of both of these amounts. The mortality assumptions are based on standard industry mortality tables that were used to determine the cash surrender value of the policies, and the interest rates used are the interest rates used to calculate the cash surrender value of the policies.

Policyholders’ Account Balances

Policyholders’ account balances liability represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is primarily associated with the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance, as applicable. Policyholders’ account balances also include amounts representing the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products. The changes in the fair value of the embedded derivatives, including changes in non-performance risk (“NPR”), are recorded in net income. For additional information regarding the valuation of these embedded derivatives, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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Market Risk Benefits (“MRB”)

Market risk benefit liabilities (or assets) represent contracts or contract features that provide protection to the contractholder and expose the Company to other than nominal capital market risk. MRBs are primarily related to deferred annuities with guaranteed minimum benefits in the Individual Retirement Strategies segment including guaranteed minimum death benefits (“GMDB”), guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”). The liability (or asset) for MRBs is estimated using a fair value measurement methodology. The fair value of these MRBs is based on assumptions a market participant would use in valuing market risk benefits. On a quarterly basis, the fair value of these MRBs is calculated as the present value of expected future benefit payments to contractholders less the present value of expected future rider fees attributable to the market risk benefits. The changes in the fair value of market risk benefits are recorded in net income, net of related hedges, in “Change in value of market risk benefits, net of related hedging gains (losses)”, except for the portion of the change attributable to changes in the Company’s own NPR which is recorded in other comprehensive income (“OCI”). The Company estimates that a hypothetical change to its own credit risk of plus 50 and minus 50 basis points would result in an increase and a decrease to OCI of $1,015 million and $1,115 million, respectively. For additional information regarding the valuation of MRBs, see Note 6 to the Unaudited Interim Consolidated Financial Statements.

Sensitivities for Insurance Assets and Liabilities

The following table summarizes the aggregate impact that could result on each of the listed financial statement balances from changes in certain key assumptions. The figures below are presented in aggregate for the Company. The information below is for illustrative purposes and includes only the hypothetical direct impact on December 31, 2022, balances of changes in a single assumption and not changes in any combination of assumptions. Additionally, the illustration of the insurance assumption impacts below reflects a parallel shift in the insurance assumptions across the Company; however, these may be non-parallel in practice and only applicable to specific businesses. Changes in current assumptions could result in impacts to financial statement balances that are in excess of the amounts illustrated. A description of the estimates and assumptions used in the preparation of each of these financial statement balances is provided above. Changes to the insurance cash flow assumptions are reflected in net income through the retrospective unlocking method for traditional long duration, limited-payment and universal life type products.

The impacts presented within this table exclude the impacts of our asset liability management strategy, which seeks to offset the changes in the balances presented within this table and is primarily composed of investments and derivatives. See further below for a discussion of the estimates and assumptions involved with the application of U.S. GAAP accounting policies for these instruments and “Item 3. Quantitative and Qualitative Disclosures about Market Risk” for hypothetical impacts on related balances as a result of changes in certain significant assumptions.

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						Increase (Decrease) in Net Income due to changes in Future Policy Benefits, Market Risk Benefits(1), and Policyholders' Account Balances
						(in millions)
Hypothetical change in current assumptions:
Long-term interest rate:
Increase by 25 basis points						$	70
Decrease by 25 basis points						$	(70)
Long-term equity expected rate of return:
Increase by 50 basis points						$	50
Decrease by 50 basis points						$	(50)
Mortality:
Increase by 1%						$	105
Decrease by 1%						$	(110)
Lapse(2)(3):
Increase by 10%						$	570
Decrease by 10%						$	(595)
Long-Term Care Disability Claim Incidence:
Increase by 5%						$	(45)
Decrease by 5%						$	40

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(1)“Market risk benefits” reflects the net impact of market risk benefit assets and liabilities prior to hedging.

(2)Lapse sensitivity shocks applied for the post-level premium period for term products are capped at the level where the rates would equal 100% under an increased lapse scenario. These same capped shock levels are also applied for the decreased lapse scenario.

(3)Assumes the same shock across all products; however, we would not expect lapse rates of different products to move uniformly.

Other Accounting Policies

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

• Goodwill;

• Valuation of investments including derivatives, measurement of allowance for credit losses, and recognition of other-than-temporary impairments (“OTTI”);

• Pension and other postretirement benefits;

• Taxes on income; and

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

For further discussion of impacts that could result from changes in these key estimates and assumptions, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Accounting Policies and Pronouncements—Application of Critical Accounting Estimates—Other Accounting Policies” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Adoption of New Accounting Pronouncements

Effective January 1, 2023, the Company adopted ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. Adoption of this ASU impacted the accounting and disclosure

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requirements for long-duration insurance and investment contracts issued by the Company. See Note 1 to the Unaudited Interim Consolidated Financial Statements for additional information.

As of the January 1, 2021 transition date, the adoption of the standard resulted in a decrease to “Retained earnings” of $2.6 billion primarily from reclassifying the cumulative effect of changes in non-performance risk on market risk benefits from “Retained earnings” to “Accumulated other comprehensive income” (“AOCI”) as well as from a net increase in additional insurance reserves and other related balances primarily related to the no-lapse guarantee features on certain universal life contracts. AOCI decreased $42.4 billion as of the January 1, 2021 transition date largely from remeasuring in-force contract liabilities using upper-medium grade fixed income instrument yields as of the transition date. As of the January 1, 2023 adoption date, the impacts amounted to a decrease to “Retained earnings” of $1.7 billion and an increase to AOCI of $16.0 billion. The changes in the impacts from January 1, 2021 to January 1, 2023 primarily reflect the increase in interest rates during 2021 and 2022. See Note 2 to the Unaudited Interim Consolidated Financial Statements for a more detailed discussion of ASU 2018-12, as well as other accounting pronouncements issued but not yet adopted and newly adopted accounting pronouncements.

Results of Operations by Segment

PGIM

Business Update

• In May 2023, we agreed to acquire a majority stake in Deerpath Capital Management, LP, a leading U.S.-based private credit and direct lending manager with approximately $5 billion in assets under management. This planned acquisition is subject to regulatory approvals and customary closing conditions.

Operating Results

The following table sets forth PGIM’s operating results for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Operating results(1):
Revenues			$	976					$	907					$	2,723					$	2,662
Expenses			765						688						2,182						2,049
Adjusted operating income			211						219						541						613
Realized investment gains (losses), net, and related adjustments			1						(1)						0						(6)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			48						(6)						14						(13)
Other adjustments(2)			(8)						(7)						(24)						(15)
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	252					$	205					$	531					$	579

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(1)Certain of PGIM’s investment activities are based in currencies other than the U.S. dollar and are therefore subject to foreign currency exchange rate risk. The financial results of PGIM include the impact of an intercompany arrangement with our Corporate and Other operations designed to mitigate the impact of exchange rate changes on PGIM’s U.S. dollar-equivalent earnings. For additional information regarding this intercompany arrangement, see “—Results of Operations—Impact of Foreign Currency Exchange Rates,” above.

(2)Includes certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.

Adjusted Operating Income

Three Month Comparison. Adjusted operating income decreased $8 million, primarily reflecting higher compensation expenses and lower other related revenues, net of related expenses. These impacts were partially offset by higher service, distribution and other revenues.

Nine Month Comparison. Adjusted operating income decreased $72 million, primarily reflecting lower asset management fees, net of related expenses, and higher compensation and operating expenses. These impacts were partially offset by higher service, distribution and other revenues, and higher other related revenues, net of related expenses.

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Revenues and Expenses

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Revenues by type:
Asset management fees by source:
Institutional customers			$	363					$	364					$	1,082					$	1,084
Retail customers(1)			261						256						757						831
General account			114						122						345						392
Total asset management fees			738						742						2,184						2,307
Other related revenues by source:
Incentive fees			26						16						33						26
Transaction fees			3						2						10						11
Seed and co-investments			29						17						100						(22)
Commercial mortgage(2)			13						45						38						101
Total other related revenues			71						80						181						116
Service, distribution and other revenues			167						85						358						239
Total revenues			$	976					$	907					$	2,723					$	2,662

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(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 revenues from our commercial mortgage origination and servicing business.

Three Month Comparison. Revenues increased $69 million, primarily driven by higher service, distribution, and other revenues reflecting increased interest income from higher interest rates and higher revenues from certain consolidated funds (which were fully offset by higher expenses related to noncontrolling interests in these funds). The increase was partially offset by a decrease in other related revenues reflecting lower commercial mortgage origination revenues, partially offset by higher performance-based incentive fees, reflecting outperformance in a real estate fund. Asset management fees remained relatively flat as the impacts of higher net outflows and higher interest rates on average assets under management were offset by equity market appreciation and tightening credit spreads.

Expenses increased $77 million, primarily reflecting higher variable expenses corresponding to higher revenues from certain consolidated funds, as discussed above, and higher interest expense from higher interest rates, as well as higher compensation expenses driven by certain long-term employee compensation plans tied to investment performance and business growth.

Nine Month Comparison. Revenues increased $61 million, primarily driven by higher service, distribution and other revenues reflecting increased interest income from higher interest rates and higher revenues from certain consolidated funds (which were fully offset by higher expenses related to noncontrolling interests in these funds). Other related revenues were favorable primarily reflecting higher seed and co-investments results driven by improved investment performance, partially offset by lower commercial mortgage origination revenues. These impacts were partially offset by lower asset management fees primarily due to lower average assets under management reflecting higher interest rates, partially offset by equity market appreciation.

Expenses increased $133 million, primarily reflecting higher variable expenses corresponding to higher revenues from certain consolidated funds, as discussed above, and higher interest expense from higher interest rates, partially offset by lower expenses associated with a decrease in overall segment revenues. Compensation and operating expenses increased, driven by certain long-term employee compensation plans tied to investment performance and business growth.

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Assets Under Management

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

			September 30, 2023						December 31, 2022						September 30, 2022
			(in billions)
Assets Under Management(1) (at fair value):
Public equity			$	167.9					$	147.8					$	144.1
Public fixed income			747.4						776.8						762.5
Real estate			127.1						129.6						129.0
Private credit and other alternatives			105.2						103.4						99.7
Multi-asset			71.0						70.8						70.9
Total PGIM assets under management			$	1,218.6					$	1,228.4					$	1,206.2
Assets under management within other reporting segments(2)			142.7						148.9						143.3
Total PFI assets under management			$	1,361.3					$	1,377.3					$	1,349.5

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(1)“Public equity” represents stock ownership interest in a corporation or partnership (excluding hedge funds) or real estate investment trust. “Public fixed income” represents debt instruments that pay interest and usually have a maturity (excluding mortgages). “Real estate” includes direct real estate equity and real estate mortgages. “Private credit and other alternatives” includes private credit, private equity, hedge funds and other alternative strategies. “Multi-asset” includes funds or products that invest in more than one asset class, balancing equity and fixed income funds and target date funds.

(2)Primarily includes assets related to certain annuity, variable life, retirement and group life products in our U.S. Businesses and Corporate & Other operations, and certain general account assets in our International Businesses. These assets are not directly managed by PGIM, but rather are invested in non-proprietary funds or are managed by either the divisions themselves or by our Chief Investment Officer Organization.

The following table sets forth assets under management by source as of the dates indicated:

			September 30, 2023						December 31, 2022						September 30, 2022
			(in billions)
Assets Under Management(1) (at fair value):
Institutional customers			$	547.6					$	549.2					$	536.3
Retail customers			312.5						299.6						298.1
General account			358.5						379.6						371.8
Total PGIM assets under management			$	1,218.6					$	1,228.4					$	1,206.2
Assets under management within other reporting segments(2)			142.7						148.9						143.3
Total PFI assets under management			$	1,361.3					$	1,377.3					$	1,349.5

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(1)“Institutional customers” consist of third-party institutional assets and group insurance contracts. “Retail customers” consist 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. “General account” also includes fixed annuities and the fixed-rate accounts of variable annuities and variable life insurance.

(2)Primarily includes assets related to certain annuity, variable life, retirement and group life products in our U.S. Businesses and Corporate & Other operations, and certain general account assets in our International Businesses. These assets are not directly managed by PGIM, but rather are invested in non-proprietary funds or are managed by either the divisions themselves or by our Chief Investment Officer Organization.

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The following table sets forth the component changes in PGIM’s assets under management for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,												Twelve Months Ended September 30,
			2023						2022						2023						2022						2023
			(in billions)
Beginning assets under management			$	1,265.8					$	1,257.4					$	1,228.4					$	1,523.8					$	1,206.2
Institutional third-party flows			(3.8)						0.6						(17.0)						9.0						(23.0)
Retail third-party flows			(1.9)						(4.6)						(7.9)						(17.5)						(13.6)
Total third-party flows			(5.7)						(4.0)						(24.9)						(8.5)						(36.6)
Affiliated flows(1)			1.9						7.2						(0.1)						14.2						(1.1)
Market appreciation (depreciation)(2)			(37.8)						(50.9)						27.9						(272.7)						59.7
Foreign exchange rate impact			(3.2)						(7.2)						(9.6)						(23.9)						(1.7)
Net money market activity and other increases (decreases)(3)			(2.4)						3.7						(3.1)						(26.7)						(7.9)
Ending assets under management			$	1,218.6					$	1,206.2					$	1,218.6					$	1,206.2					$	1,218.6

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(1)Represents assets that PGIM manages for the benefit of other reporting segments within the Company. Additions and withdrawals of these assets are attributable to third-party product inflows and outflows in other reporting segments.

(2)Includes income reinvestment, where applicable.

(3)Results for the nine months ended September 30, 2022 include a reduction in assets under management from the sales of the Full Service Retirement business and PALAC.

PGIM’s assets under management as of September 30, 2023 increased $12 billion in comparison to the prior year quarter, primarily driven by equity market appreciation and tightening credit spreads, partially offset by net outflows and the impact of higher interest rates. PGIM’s assets under management as of September 30, 2023 decreased $10 billion in comparison to the prior year end, primarily driven by net outflows and the impact of higher interest rates, partially offset by equity market appreciation and credit spread tightening.

Private Capital Deployment

Private capital deployment is indicative of the pace and magnitude of capital that is invested and will result in future revenues that may include management fees, transaction fees, incentive fees and servicing revenues, as well as future costs to manage these assets.

Private capital deployment represents the gross value of private capital invested in real estate debt and equity, and private credit and equity asset classes. Assets under management resulting from private capital deployment are included in “Real estate” and “Private credit and other alternatives” in the “—Assets Under Management— by asset class table” above. As of September 30, 2023, these assets decreased approximately $0.9 billion compared to December 31, 2022, primarily reflecting market depreciation, partially offset by net private capital inflows.

Private capital deployment includes PGIM’s real estate agency debt business, which consists of agency commercial loans that are originated and sold to third party investors. PGIM continues to service these commercial loans; however, they are not included in assets under management.

The following table sets forth PGIM’s private capital deployed by asset class for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in billions)
Private capital deployed:
Real estate debt and equity			$	4.6					$	7.4					$	12.2					$	22.0
Private credit and equity			3.4						2.2						10.1						12.1
Total private capital deployed			$	8.0					$	9.6					$	22.3					$	34.1

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Seed and Co-Investments

As of September 30, 2023 and December 31, 2022, PGIM had approximately $1,142 million and $1,444 million of seed investments and $433 million and $497 million of co-investments at carrying value, respectively, primarily consisting of public fixed income, public equity, private credit and other alternatives, and real estate investments.

U.S. Businesses

Operating Results

The following table sets forth the operating results for our U.S. Businesses for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Adjusted operating income before income taxes:
U.S. Businesses:
Retirement Strategies			$	941					$	655					$	2,654					$	3,782
Group Insurance			89						30						253						(31)
Individual Life			58						(70)						(103)						(1,750)
Total U.S. Businesses			1,088						615						2,804						2,001
Reconciling items:
Realized investment gains (losses), net, and related adjustments			(1,759)						(686)						(2,392)						(3,028)
Charges related to realized investment gains (losses), net			(90)						(154)						13						(488)
Change in value of market risk benefits, net of related hedging gains (losses)			(262)						(64)						(174)						(1,091)
Market experience updates			50						74						163						426
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			1						(1)						1						1
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	(972)					$	(216)					$	415					$	(2,179)

Three Month Comparison. Adjusted operating income for our U.S. Businesses increased by $473 million primarily due to:

• Higher net investment spread results, primarily reflecting higher reinvestment and short-term rates, as well as business growth and higher income on non-coupon investments;

• Lower expenses, including a reduction in legal reserves in our Individual Life business; and

• Higher underwriting results, primarily reflecting favorable mortality experience in our Group Insurance business, partially offset by unfavorable mortality experience in our Individual Life business.

• Partially offsetting these increases was lower fee income, net of distribution expenses and other associated costs, primarily in our Individual Retirement Strategies business due to a reduction in account values resulting from net outflows and the impact of the Prudential Defined Income (“PDI”) reinsurance transaction.

Nine Month Comparison. Adjusted operating income for our U.S. Businesses increased by $803 million primarily due to:

• A favorable comparative net impact from our annual reviews and update of assumptions and other refinements, primarily reflecting a net charge from these updates in the second quarter of 2022 in our Individual Life business, mainly driven by unfavorable impacts related to assumptions for policyholder behavior and mortality;

• Higher net investment spread results, primarily reflecting higher reinvestment and short-term rates, as well as business growth, partially offset by lower income on non-coupon investments; and

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• Higher underwriting results, primarily reflecting improved mortality experience and more favorable disability results in our Group Insurance business, partially offset by unfavorable mortality experience in our Individual Life business.

• Partially offsetting these increases were the absence of a gain in our Individual Retirement Strategies business from the sale of PALAC in the second quarter of 2022; and

• Lower fee income, net of distribution expenses and other associated costs, primarily in our Individual Retirement Strategies business due to a reduction in account values resulting from net outflows, the impacts of the sale of PALAC and the PDI reinsurance transaction, and unfavorable equity markets.

Retirement Strategies

Business Update

*•*In May 2023, the Company entered into an agreement with The Ohio National Life Insurance Company (“Ohio National”), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits issued by Pruco Life Insurance Company, a wholly-owned subsidiary of Prudential Financial. The transaction was completed on June 30, 2023 with an effective date of April 1, 2023. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

*•*In September 2023, the Company entered into an agreement with Prismic Life Reinsurance, Ltd (“Prismic Re”) to reinsure approximately $9 billion of reserves for certain structured settlement annuity contracts issued by PICA, a wholly-owned subsidiary of Prudential Financial. These contracts represent approximately 70% of the Company’s in-force structured settlement annuities business. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

Operating Results

The following table sets forth Retirement Strategies’ operating results for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Operating results:
Revenues:
Institutional Retirement Strategies			$	221					$	11,468					$	7,847					$	16,637
Individual Retirement Strategies			1,153						971						3,367						4,493
Total revenues			1,374						12,439						11,214						21,130
Benefits and expenses:
Institutional Retirement Strategies			(218)						11,200						6,584						15,422
Individual Retirement Strategies			651						584						1,976						1,926
Total benefits and expenses			433						11,784						8,560						17,348
Adjusted operating income:
Institutional Retirement Strategies			439						268						1,263						1,215
Individual Retirement Strategies			502						387						1,391						2,567
Total adjusted operating income			941						655						2,654						3,782
Realized investment gains (losses), net, and related adjustments			(1,300)						(432)						(1,767)						(1,610)
Charges related to realized investment gains (losses), net			(66)						(160)						(4)						(415)
Change in value of market risk benefits, net of related hedging gains (losses)			(262)						(64)						(174)						(1,091)
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			1						(1)						1						1
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	(686)					$	(2)					$	710					$	667

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Adjusted Operating Income

Three Month Comparison. Adjusted operating income from our Institutional Retirement Strategies business increased $171 million, driven by higher net investment spread results, primarily reflecting higher income on non-coupon investments, business growth and higher reinvestment rates.

Adjusted operating income from our Individual Retirement Strategies business increased $115 million, primarily driven by higher net investment spread results due to more favorable short-term interest rates, higher reinvestment rates and growth in indexed variable annuities. This increase was partially offset by lower fee income, net of distribution expenses and other associated costs, resulting from lower average separate account values due to net outflows and the impact of the PDI reinsurance transaction, partially offset by favorable equity markets.

Nine Month Comparison. Adjusted operating income from our Institutional Retirement Strategies business increased $48 million, including a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2023 and 2022 included net benefits from this update of $6 million and $14 million, respectively. Excluding this item, adjusted operating income increased $56 million, driven by higher net investment spread results, primarily reflecting business growth and higher reinvestment rates, partially offset by lower income on non-coupon investments. Also contributing to the increase was higher fee income, net of distribution expenses and other associated costs, primarily driven by business growth.

Adjusted operating income from our Individual Retirement Strategies business decreased $1,176 million, including a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2023 had no net impact from our annual reviews and update of assumptions, while results for 2022 included a $7 million net benefit. Excluding this item, adjusted operating income decreased $1,169 million, primarily reflecting the absence of a gain in the prior year period from the sale of PALAC and lower fee income, net of distribution expenses and other associated costs, resulting from lower average separate account values due to net outflows, the impacts from the sale of PALAC and the PDI reinsurance transaction, and unfavorable equity markets. These decreases were partially offset by higher net investment spread results due to more favorable short-term interest rates, higher reinvestment rates and growth in indexed variable annuities, partially offset by lower income on non-coupon investments.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues from our Institutional Retirement Strategies business decreased $11,247 million. This decrease primarily reflected lower pension risk transfer premiums due to a significant sale in the prior period and the impact of the reinsurance of certain structured settlement annuity contracts, with corresponding offsets in policyholders’ benefits, as discussed below.

Benefits and expenses of our Institutional Retirement Strategies business decreased $11,418 million. Policyholders’ benefits, including changes in reserves, decreased primarily related to the lower pension risk transfer premiums and the impact of the reinsurance of certain structured settlement annuity contracts, as discussed above.

Revenues from our Individual Retirement Strategies business increased $182 million primarily driven by higher net investment income due to higher reinvestment rates and growth in indexed variable annuities, partially offset by lower income on non-coupon investments. Also contributing to the increase was higher other income primarily driven by more favorable short-term interest rates on collateral posted to counterparties, partially offset by lower asset management and service fees and lower policy charges and fee income resulting from lower separate average account values due to net outflows and the impact of the PDI reinsurance transaction.

Benefits and expenses of our Individual Retirement Strategies business increased $67 million primarily due to higher interest expense, partially offset by lower general and administrative expenses, net of capitalization.

Nine Month Comparison. Revenues from our Institutional Retirement Strategies business decreased $8,790 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $9,145 million. This decrease primarily reflected lower pension risk transfer premiums due to a significant sale in the prior period and the impact of the reinsurance of certain structured settlement annuity contracts, with corresponding offsets in policyholders’ benefits, as discussed below.

Benefits and expenses of our Institutional Retirement Strategies business decreased $8,838 million. Excluding the impact

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of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $9,201 million. Policyholders’ benefits, including changes in reserves, decreased primarily related to the lower pension risk transfer premiums and the impact of the reinsurance of certain structured settlement annuity contracts, as discussed above.

Revenues from our Individual Retirement Strategies business decreased $1,126 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $1,119 million primarily driven by the absence of a gain in the prior year period from the sale of PALAC and lower policy charges and fee income resulting from lower average separate account values due to net outflows, the impacts from the sale of PALAC and the PDI reinsurance transaction, and unfavorable equity markets. These decreases were partially offset by higher net investment income due to higher reinvestment rates and growth in indexed variable annuities, partially offset by lower income on non-coupon investments.

Benefits and expenses of our Individual Retirement Strategies business increased $50 million primarily driven by higher interest expense, partially offset by lower general and administrative expenses, net of capitalization.

Account Values

Institutional Retire**ment Strategies. 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 investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values. The income we earn on most of our fee-based products varies with the level of fee-based account values as many policy fees are determined by these values.

The following table shows the changes in the account values of Institutional Retirement Strategies’ products for the periods indicated. Account values include both internally- and externally-managed client balances as the total balances drive revenue for the Institutional Retirement Strategies business. For additional information regarding internally-managed balances, see “—PGIM.”

			Three Months Ended September 30,												Nine Months Ended September 30,												Twelve Months Ended September 30,
			2023						2022						2023						2022						2023
			(in millions)
Total Institutional Retirement Strategies:
Beginning total account value			$	258,533					$	234,594					$	251,818					$	245,720					$	238,313
Additions(1)			4,697						13,518						14,211						19,496						26,488
Withdrawals and benefits			(7,781)						(3,691)						(19,120)						(12,150)						(23,368)
Change in market value, interest credited and interest income			878						(553)						5,157						(4,512)						5,559
Other(2)			(1,394)						(5,555)						2,867						(10,241)						7,941
Ending total account value, gross			254,933						238,313						254,933						238,313						254,933
Reinsurance ceded			(9,273)						0						(9,273)						0						(9,273)
Ending total account value, net			$	245,660					$	238,313					$	245,660					$	238,313					$	245,660

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(1)Additions primarily include: group annuities and funded pension reinsurance calculated based on premiums received; international longevity reinsurance contracts calculated as the present value of future projected benefits; investment-only stable value contracts calculated as the fair value of customers’ funds held in a client-owned trust; and funding agreements issued calculated based on premiums received.

(2)“Other” activity includes the effect of foreign exchange rate changes associated with our British pounds sterling denominated international reinsurance business and changes in asset balances for externally-managed accounts. For the three months ended September 30, 2023 and 2022, “Other” activity also includes $1,109 million in receipts offset by $788 million in payments and $1,461 million in receipts offset by $958 million in payments, respectively, and for the nine months ended September 30, 2023 and 2022, includes $2,818 million in receipts offset by $2,559 million in payments and $3,172 million in receipts offset by $2,666 million in payments, respectively, related to funding agreements backed by commercial paper that typically have maturities of less than 90 days.

The decrease in Institutional Retirement Strategies net account values for the three months and nine months ended September 30, 2023 was primarily driven by the reinsurance of certain structured settlement annuity contracts and net withdrawals. The decrease in net account values for the nine months ended September 30, 2023 was partially offset by interest credited on customer funds and the positive impact of foreign exchange rate changes.

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The increase in Institutional Retirement Strategies net account values for the twelve months ended September 30, 2023 reflects the positive impact of foreign exchange rate changes, interest credited on customer funds and net additions primarily driven by significant pension risk transfer transactions, including funded pension risk transfer and international reinsurance sales, partially offset by the reinsurance of certain structured settlement annuity contracts.

Individual Retirement Strategies. 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 primarily based on the level of account values. Account values are driven by net flows from new business sales, surrenders, withdrawals and benefit payments, policy charges and the impact of positive or negative market value changes. The annuity industry’s competitive and regulatory landscapes may impact our net flows, including new business sales. The following table sets forth account value information of Individual Retirement Strategies’ products for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,												Twelve Months Ended September 30,
			2023						2022						2023						2022						2023
			(in millions)
Total Individual Retirement Strategies(1)(2):
Beginning total account value			$	126,297					$	123,138					$	120,022					$	182,305					$	115,790
Sales			1,950						1,389						5,526						4,530						7,023
Full surrenders and death benefits			(1,752)						(1,225)						(4,891)						(4,973)						(6,033)
Sales, net of full surrenders and death benefits			198						164						635						(443)						990
Partial withdrawals and other benefit payments			(1,062)						(976)						(3,239)						(3,437)						(4,472)
Net flows			(864)						(812)						(2,604)						(3,880)						(3,482)
Change in market value, interest credited and other activity(3)(4)			(3,792)						(5,921)						5,402						(60,548)						11,141
Policy charges(4)			(551)						(615)						(1,730)						(2,087)						(2,359)
Ending total account value, gross			121,090						115,790						121,090						115,790						121,090
Reinsurance ceded			(10,984)						(637)						(10,984)						(637)						(10,984)
Ending total account value, net			$	110,106					$	115,153					$	110,106					$	115,153					$	110,106

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(1)Includes net variable and fixed annuities sold as retail investment products. Variable annuity account values were $104.1 billion and $110.1 billion as of September 30, 2023 and 2022, respectively. Fixed annuity account values were $6.0 billion and $5.1 billion as of September 30, 2023 and 2022, respectively.

(2)Beginning total account value for the nine months ended September 30, 2022 includes approximately $30 billion of account values that were classified as “held-for-sale” as of December 31, 2021, in relation to the PALAC sale.

(3)Results for the nine months ended September 30, 2022 reflect the reduction in account value resulting from the sale of PALAC.

(4)Prior period amounts have been updated to conform to current period presentation.

Individual Retirement Strategies sales, net of full surrenders and death benefits, for the three months and nine months ended September 30, 2023 increased in comparison to the prior year periods driven by higher sales of fixed annuity products.

The decrease in Individual Retirement Strategies net account values for the three months ended September 30, 2023 was primarily driven by market value depreciation and net outflows. The decrease in Individual Retirement Strategies net account values for the nine months and twelve months ended September 30, 2023 was primarily driven by the reinsurance of PDI traditional variable annuity contracts, net outflows and policy charges on contractholder accounts, partially offset by market value appreciation.

Risks and Risk Mitigants

The following is a summary of certain risks associated with Individual Retirement Strategies’ products, certain strategies in mitigating those risks including any updates to those strategies since the previous year-end, and the related financial results.

Fixed Annuity Risks and Risk Mitigants. The primary risk exposure of our fixed annuity products relates to investment risks we bear for providing customers a minimum guaranteed interest rate or an index-linked interest rate required to be credited to the customer’s account value, which include interest rate fluctuations and/or sustained periods of low interest rates, and credit risk related to the underlying investments. We manage these risk exposures primarily through our investment strategies and

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product design features, which include credit rate resetting subject to the minimum guaranteed interest rate as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, a portion of our fixed products has a market value adjustment provision that affords protection of lapse in the case of rising interest rates. We also manage these risk exposures through external reinsurance for certain of our fixed annuity products. For additional information regarding our external reinsurance agreements, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

Indexed Variable Annuity Risks and Risk Mitigants. The primary risk exposure of our indexed variable annuity products relates to the investment risks we bear in order to credit to the customer’s account balance the required crediting rate based on the performance of the elected indices at the end of each term. We manage this risk primarily through our investment strategies and product design features, which include credit rate resetting subject to contractual minimums as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, our indexed variable annuity strategies have an interim value provision that provides some protection from lapse in the case of rising interest rates.

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 these risk exposures, achievement of our expected returns is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. We manage our exposure to certain risks driven by fluctuations in capital markets primarily through a combination of i) Product Design Features, and ii) our Asset Liability Management Strategy, as discussed below. We also manage these risk exposures through external reinsurance for certain of our variable annuity products.

Sales of traditional variable annuities with guaranteed living benefit riders were discontinued as of December 31, 2020, and, in April 2022, the sale of a portion of our in-force traditional variable annuity block was completed. Effective April 2023, the Company entered into an agreement with Ohio National to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits. For additional information regarding our external reinsurance agreements, see Note 12 to the Unaudited Interim Consolidated Financial Statements.

i.Product Design Features:

A portion of the variable annuity contracts that we offered include an automatic rebalancing feature, also referred to as an asset transfer feature. This feature is implemented 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 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 purchase payments, as well as a required minimum allocation to our general account for certain of our products. In addition, there is diversity in our fee arrangements, as certain fees are primarily based on the benefit guarantee amount, the contractholder account value and/or premiums, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

ii.Asset Liability Management (“ALM”) Strategy (including fixed income instruments and derivatives):

We employ an ALM strategy that utilizes a combination of both traditional fixed income instruments and derivatives to meet expected liabilities associated with our annuity guarantees that under U.S. GAAP are considered market risk benefits (“MRB”). The MRB liability that we hedge consists of expected living and death benefit claims under various market conditions, which are managed using fixed income instruments, derivatives, or a combination thereof. For our PDI variable annuity, we utilize fixed income instruments to meet expected liabilities. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded and over-the-counter (“OTC”) equity, interest rate and credit derivatives, including, but not limited to: equity and treasury futures; total return, credit default and interest rate swaps; and options including equity options, swaptions, and floors and caps. The intent of this strategy is to more efficiently manage the capital and liquidity associated with these products while continuing to mitigate fluctuations in net income due to movements in capital markets. To achieve this, we periodically review and recalibrate the ALM strategy by optimizing the mix of derivatives and fixed income instruments to achieve expected outcomes. As part of our periodic review of our variable annuities ALM strategy, and in accordance with our Risk Appetite Framework (“RAF”), the Company simplified its hedging approach in the first quarter of 2023 and collapsed the aggregate amount of equity hedging into one program.

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Under our ALM strategy, we expect differences in the U.S. GAAP net income impact between the changes in value of the fixed income instruments (either designated as available-for-sale or designated as trading) and derivatives as compared to the changes in the MRB liability these assets support. These differences can be primarily attributed to two distinct areas:

• Different accounting treatment between liabilities and assets supporting those liabilities. Under U.S. GAAP, changes in the fair value of the derivative instruments and fixed income instruments designated as trading, and MRB, excluding the changes in the Company’s NPR spreads, are immediately reflected in net income, while changes in the fair value of fixed income instruments that are designated as available-for-sale are recorded as unrealized gains (losses) in other comprehensive income.

• General hedge results. For the derivative portion of the ALM strategy, the net hedging impact (the extent to which the changes in value of the hedging instruments offset the change in value of the portion of the MRB we are hedging) may be impacted by a number of factors, including: cash flow timing differences between our hedging instruments and the corresponding portion of the MRB we are hedging, basis differences attributable to actual underlying contractholder funds to be hedged versus hedgeable indices, rebalancing costs related to dynamic rebalancing of hedging instruments as markets move, certain elements of the MRB that may not be hedged (including certain actuarial assumptions), and implied and realized market volatility on the hedge positions relative to the portion of the MRB we seek to hedge.

Product Specific Risks and Risk Mitigants

As noted above, the risks associated with our Individual Retirement Strategies’ products are mitigated through product design features, including automatic rebalancing, as well as through our ALM strategy and external reinsurance. The following table sets forth the risk management profile of our living benefit guarantees and guaranteed minimum death benefit (“GMDB”) features as of the periods indicated:

						September 30, 2023												December 31, 2022												September 30, 2022
						Account Value						% of Total						Account Value						% of Total						Account Value						% of Total
						($ in millions)
Living benefit/GMDB features(1):
Both ALM strategy and automatic rebalancing(2)(3)						$	66,483					59		%				$	69,282					61		%				$	67,570					62		%
ALM strategy only(3)						1,849						2		%				1,972						2		%				1,924						2		%
Automatic rebalancing only						79						0		%				83						0		%				84						0		%
External reinsurance(4)						11,701						10		%				2,482						2		%				2,446						2		%
PDI						1,430						1		%				11,988						11		%				11,893						11		%
Other products						1,499						1		%				1,561						1		%				1,519						1		%
Total living benefit/GMDB features						83,041												87,368												85,436
GMDB features and other(5)						30,495						27		%				26,573						23		%				24,594						22		%
Total variable annuity account value						$	113,536											$	113,941											$	110,030

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

(2)Contracts with living benefits that are included in our ALM strategy and that have an automatic rebalancing feature.

(3)Excludes PDI which is presented separately within this table.

(4)Represents contracts subject to reinsurance transactions with external counterparties. Includes approximately $9 billion of account values in relation to the PDI reinsurance transaction, as discussed above, and certain Highest Daily Lifetime Income (“HDI”) v.3.0 business for the period April 1, 2015 through December 31, 2016. The HDI contracts with living benefits also have an automatic rebalancing feature. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

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

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Results excluded from adjusted operating income

The following table provides the net impact to the Unaudited Interim Consolidated Statements of Operations from the portion of Retirement Strategies’ results excluded from adjusted operating income:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)(1)
Results excluded from adjusted operating income:
Change in MRBs, excluding changes in the NPR adjustment(2)			$	1,707					$	1,034					$	3,191					$	3,390
Change in the value of the non-MRB liabilities, excluding changes in the NPR adjustment(3)			(570)						(123)						(383)						(391)
Change in the NPR adjustment, excluding changes recognized in OCI			(17)						10						20						46
Change in the fair value of hedge assets(4)(5)			(2,000)						(944)						(3,658)						(3,612)
Other(6)			(48)						(250)						(122)						(963)
Total Individual Retirement Strategies results excluded from adjusted operating income			(928)						(273)						(952)						(1,530)
Total Institutional Retirement Strategies results excluded from adjusted operating income			(699)						(384)						(992)						(1,585)
Total results excluded from adjusted operating income			$	(1,627)					$	(657)					$	(1,944)					$	(3,115)

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(1)Positive amounts represent income; negative amounts represent a loss.

(2)Also excludes related hedging gains (losses), which are included within this table in “Change in the fair value of hedge assets”.

(3)Represents the change in the liability for our fixed and variable indexed annuities, which is measured utilizing a valuation methodology required under U.S. GAAP. The total GAAP liability includes the fair value of all index credits for the current term and all future projected renewals of the policy; however, only changes in the fair value of the current term elected by the policyholder are included in adjusted operating income, while changes in the fair value of all future projected renewals of the policy are excluded from adjusted operating income.

(4)Represents the change in fair value of the derivatives utilized to hedge potential claims associated with our variable annuity living and death benefit guarantees.

(5)Includes changes in the fair value of equity derivatives related to the capital hedge program of $0 million and $154 million for the three months ended September 30, 2023 and 2022, respectively, and $(225) million and $824 million for the nine months ended September 30, 2023 and 2022, respectively, that were intended to protect a portion of the overall capital position of the variable annuities business against its exposure to the equity markets. The capital hedge program was discontinued in the first quarter of 2023.

(6)Includes the changes in duration swaps, DAC amortization, trading gains or losses, and other activity.

For the three months ended September 30, 2023, the loss of $1,627 million was primarily driven by the impact of rising interest rates on fixed maturity securities and derivatives as well as unfavorable equity market performance. For the nine months ended September 30, 2023, the loss of $1,944 million was primarily driven by the impact of rising interest rates on fixed maturity securities and derivatives and an unfavorable impact from our annual reviews and update of assumptions and other refinements, partially offset by favorable equity market performance.

For the three months and nine months ended September 30, 2022, the losses of $657 million and $3,115 million, respectively, were primarily driven by the impact of rising interest rates on fixed maturity securities and derivatives, and unfavorable equity market performance. The loss for the nine months ended September 30, 2022 was partially offset by a favorable impact from our annual reviews and update of assumptions and other refinements.

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Group Insurance

Operating Results

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			($ in millions)
Operating results:
Revenues			$	1,576					$	1,525					$	4,738					$	4,560
Benefits and expenses			1,487						1,495						4,485						4,591
Adjusted operating income			89						30						253						(31)
Realized investment gains (losses), net, and related adjustments			(31)						15						(80)						(94)
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	58					$	45					$	173					$	(125)
Benefits ratio(1)(4):
Group life(2)			84.8		%				91.2		%				86.9		%				94.2		%
Group disability(2)			76.2		%				72.5		%				69.6		%				73.8		%
Total Group Insurance(2)			82.4		%				86.4		%				82.3		%				89.2		%
Administrative operating expense ratio(3)(4):
Group life			11.8		%				10.9		%				11.8		%				10.8		%
Group disability			24.1		%				30.3		%				24.9		%				31.2		%
Total Group Insurance			15.1		%				15.9		%				15.2		%				15.8		%

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

(2)Benefit ratios reflect the impact of our annual reviews and update of assumptions and other refinements. Excluding these impacts, the group life, group disability and total Group Insurance benefit ratios were 87.6%, 70.7% and 83.1% for the nine months ended September 30, 2023, respectively; and 94.4%, 73.0% and 89.2% for the nine months ended September 30, 2022, respectively.

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

(4)The benefits and administrative ratios are measures used to evaluate profitability and efficiency.

Adjusted Operating Income

Three Month Comparison. Adjusted operating income increased $59 million, primarily reflecting higher underwriting results in our group life business, driven by favorable mortality experience on non-experience-rated contracts. This increase was partially offset by higher variable expenses, largely driven by business growth.

Nine Month Comparison. Adjusted operating income increased $284 million, including a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2023 included a $36 million net benefit from these updates, while results for 2022 included a $3 million net charge from these updates. Excluding this item, adjusted operating income increased $245 million, primarily reflecting higher underwriting results in our group life business, driven by a decline in COVID-19 impacts and favorable mortality experience on non-experience-rated contracts, and higher underwriting results in our group disability business, driven by a favorable impact to reserves from higher interest rates on long-term disability contracts, as well as business growth. These increases were partially offset by higher variable expenses, largely driven by business growth.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues increased $51 million. The increase primarily reflected higher premiums and policy charges and fee income driven by business growth in our group disability business, including for supplemental health products. This increase also reflected higher net investment income driven by higher non-coupon income and higher reinvestment rates.

Benefits and expenses decreased $8 million. The decrease primarily reflected lower policyholders’ benefits and changes in reserves in our group life business driven by favorable mortality experience on non-experience-rated contracts. This decrease was partially offset by higher policyholders’ benefits and changes in reserves in our group disability business driven by less

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favorable claims experience on long-term disability contracts and business growth, as well as higher general and administrative expenses, largely driven by business growth.

Nine Month Comparison. Revenues increased $178 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues increased $175 million. The increase primarily reflected higher premiums and policy charges and fee income driven by business growth in our group disability business, including for supplemental health products, as well as growth in non-experience-rated contracts in our group life business. This increase also reflected higher net investment income driven by higher reinvestment rates.

Benefits and expenses decreased $106 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $70 million. The decrease primarily reflected lower policyholders’ benefits and changes in reserves in our group life business, driven by favorable mortality experience, including a decline in COVID-19 impacts on non-experience-rated contracts. This decrease was partially offset by higher policyholders’ benefits and changes in reserves in our group disability business driven by business growth, as well as higher general and administrative expenses, largely driven by business growth.

Sales Results

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Annualized new business premiums(1):
Group life			$	61					$	67					$	255					$	273
Group disability			34						36						216						183
Total			$	95					$	103					$	471					$	456

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(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.

Total annualized new business premiums for the three months ended September 30, 2023 decreased $8 million compared to the prior year period, driven by lower sales in both our group life and group disability businesses in the National segment, partially offset by higher sales in the Premier and Association segments.

Total annualized new business premiums for the nine months ended September 30, 2023 increased $15 million compared to the prior year period, driven by higher sales in our group disability business in the Premier segment, including an increase in supplemental health product sales. Sales were lower in our group life business, driven by a decrease in sales in the National segment, partially offset by higher sales in the Premier and Association segments.

Individual Life

Business Update

• Effective January 1, 2023, Prudential Advisors, the Company’s proprietary nationwide distribution business, which was previously part of the Individual Life segment, is now included within Corporate and Other operations. There are no impacts to the Company's consolidated financial statements from this change and historical results have been updated to conform to the current period presentation.

*•*In July 2023, the Company entered into an agreement with Somerset Re to reinsure certain guaranteed universal life policies issued by Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, both of which are wholly-owned subsidiaries of Prudential Financial. These policies represent approximately 30% of the Company’s reserves on its in-force guaranteed universal life block of business. This transaction, which is structured on a modified coinsurance basis and contains significant structural protections, including overcollateralization by the counterparty and agreed upon investment guidelines, is subject to regulatory approvals and customary closing conditions.

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Operating Results

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Operating results:
Revenues			$	1,589					$	1,457					$	4,680					$	4,301
Benefits and expenses			1,531						1,527						4,783						6,051
Adjusted operating income			58						(70)						(103)						(1,750)
Realized investment gains (losses), net, and related adjustments			(428)						(269)						(545)						(1,324)
Charges related to realized investment gains (losses), net			(24)						6						17						(73)
Market experience updates			50						74						163						426
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	(344)					$	(259)					$	(468)					$	(2,721)

Adjusted Operating Income

Three Month Comparison. Adjusted operating income increased $128 million, primarily reflecting higher net investment spread results, driven by higher income on non-coupon investments and the impact from higher reinvestment rates, partially offset by unfavorable derivative settlements. Also contributing to the increase were lower expenses, including a reduction in legal reserves. These increases were partially offset by lower underwriting results, driven by unfavorable mortality experience, net of reinsurance.

Nine Month Comparison. Adjusted operating income increased $1,647 million, primarily reflecting a less unfavorable net impact from our annual reviews and update of assumptions and other refinements. Results for 2023 included a $26 million net charge from these updates, compared to a $1,608 million net charge for 2022 which was mainly driven by unfavorable impacts related to assumptions for policyholder behavior and mortality. Excluding this item, adjusted operating income increased $65 million primarily driven by lower expenses, including a reduction in legal reserves, and higher net investment spread results reflecting the impact from higher reinvestment rates, partially offset by unfavorable derivative settlements, and lower income on non-coupon investments. These increases were partially offset by lower underwriting results, driven by unfavorable reserve experience versus expectations and unfavorable mortality experience, net of reinsurance.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues increased $132 million, primarily driven by higher net investment income reflecting higher income from non-coupon investments and higher reinvestment and short-term rates, partially offset by lower realized investment gains from unfavorable derivative settlements.

Benefits and expenses increased $4 million, primarily driven by higher policyholder benefits and changes in reserves, due to unfavorable mortality experience. These increases were partially offset by lower general and administrative expenses, including a reduction in legal reserves.

Nine Month Comparison. Revenues increased $379 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues increased $155 million, primarily driven by higher net investment income reflecting higher reinvestment and short-term rates, partially offset by lower realized investment gains from unfavorable derivative settlements.

Benefits and expenses decreased $1,268 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $90 million. This increase was primarily driven by unfavorable changes in estimates of the liability for future policy benefits reflecting unfavorable reserve experience, and higher interest expense due to higher reserve financing costs corresponding to higher net investment income, as discussed above. These increases were partially offset by lower general and administrative expenses, including a reduction in legal reserves.

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Sales Results

The following table sets forth Individual Life’s annualized new business premiums, as defined under “—Results of Operations—Segment Measures” above, by distribution channel and product, for the periods indicated:

			Three Months Ended September 30, 2023																		Three Months Ended September 30, 2022
			Prudential Advisors						Third- Party						Total						Prudential Advisors						Third- Party						Total
			(in millions)
Variable Life			$	29					$	107					$	136					$	27					$	76					$	103
Term Life			5						28						33						4						20						24
Universal Life			1						16						17						2						21						23
Total			$	35					$	151					$	186					$	33					$	117					$	150
			Nine Months Ended September 30, 2023																		Nine Months Ended September 30, 2022
			Prudential Advisors						Third- Party						Total						Prudential Advisors						Third- Party						Total
			(in millions)
Variable Life			$	88					$	303					$	391					$	83					$	234					$	317
Term Life			15						72						87						13						58						71
Universal Life			3						51						54						5						62						67
Total			$	106					$	426					$	532					$	101					$	354					$	455

Total annualized new business premiums for the third quarter and first nine months of 2023 increased $36 million and $77 million, respectively, primarily reflecting higher third-party sales across variable and term life products.

International Businesses

Operating Results

The results of our International Businesses’ operations are translated on the basis of weighted average monthly exchange rates, inclusive of the effects of the intercompany arrangement discussed in “—Results of Operations—Impact of Foreign Currency Exchange Rates” above. To provide a better understanding of operating performance within the International Businesses, 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 of foreign currency fluctuations, were derived by translating foreign currencies to USD at uniform exchange rates for all periods presented, including for constant dollar information discussed below. For our Japan operations, we used an exchange rate of 110 yen per USD. In addition, for constant dollar information discussed below, activity denominated in USD is generally reported based on the amounts as transacted in USD. 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.

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The following table sets forth the International Businesses’ operating results for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Operating results:
Revenues:
Life Planner			$	2,359					$	2,244					$	7,364					$	7,308
Gibraltar Life and Other			2,207						2,374						6,940						7,243
Total revenues			4,566						4,618						14,304						14,551
Benefits and expenses:
Life Planner			1,832						1,814						5,828						5,857
Gibraltar Life and Other			1,923						2,056						6,041						6,303
Total benefits and expenses			3,755						3,870						11,869						12,160
Adjusted operating income:
Life Planner			527						430						1,536						1,451
Gibraltar Life and Other			284						318						899						940
Total adjusted operating income			811						748						2,435						2,391
Realized investment gains (losses), net, and related adjustments			(834)						(451)						(545)						(2,005)
Charges related to realized investment gains (losses), net			29						38						63						66
Change in value of market risk benefits, net of related hedging gains (losses)			11						6						14						19
Market experience updates			97						48						32						180
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			(19)						(24)						(42)						31
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	95					$	365					$	1,957					$	682

Adjusted Operating Income

Three Month Comparison. Adjusted operating income from our Life Planner operations increased $97 million, including a net unfavorable impact of $9 million from currency fluctuations. Excluding this item, adjusted operating income from our Life Planner operations increased $106 million primarily reflecting higher net investment spread results driven by higher income on non-coupon investments and higher reinvestment rates, as well as higher underwriting results primarily due to the growth of business in force in our Brazil operations, and less unfavorable morbidity and mortality experience. These increases were partially offset by higher variable expenses, largely driven by business growth.

Adjusted operating income from our Gibraltar Life and Other operations decreased $34 million, including a net favorable impact of $5 million from currency fluctuations. Excluding this item, adjusted operating income from our Gibraltar Life and Other operations decreased $39 million primarily reflecting lower net investment spread results driven by unfavorable derivative settlements and the decline of business in force, partially offset by higher income on non-coupon investments, Also contributing to the decrease were lower surrender charges. These decreases were partially offset by higher underwriting results, primarily driven by less unfavorable morbidity and mortality experience, partially offset by the decline of business in force.

Nine Month Comparison. Adjusted operating income from our Life Planner operations increased $85 million, including a net unfavorable impact of $33 million from currency fluctuations. Both periods also include the impact of our annual reviews and update of assumptions and other refinements, which resulted in a $5 million net charge in 2023 compared to a $5 million net charge in 2022.

Excluding these items, adjusted operating income from our Life Planner operations increased $118 million primarily reflecting higher net investment spread results driven by higher reinvestment rates and higher income on non-coupon investments, as well as higher underwriting results primarily due to the growth of business in force in our Brazil operations, and less unfavorable morbidity and mortality experience.

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Adjusted operating income from our Gibraltar Life and Other operations decreased $41 million, including a net favorable impact of $11 million from currency fluctuations. Both periods also include the impact of our annual reviews and update of assumptions and other refinements, which resulted in a $18 million net benefit in 2023 compared to a $14 million net charge in 2022.

Excluding these items, adjusted operating income from our Gibraltar Life and Other operations decreased $84 million primarily reflecting lower net investment spread results driven by unfavorable derivative settlements and the decline in business in force, as well as lower underwriting results, primarily driven by the decline of business in force, partially offset by less unfavorable morbidity and mortality experience. These decreases were partially offset by higher earnings from our joint venture investments.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues from our Life Planner operations increased $115 million, including a net unfavorable impact of $3 million from currency fluctuations. Excluding this item, revenues increased $118 million, primarily reflecting higher net investment income driven by higher income on non-coupon investments and higher reinvestment yields.

Benefits and expenses of our Life Planner operations increased $18 million, including a net unfavorable impact of $6 million from currency fluctuations. Excluding this item, benefits and expenses increased $12 million, primarily reflecting higher interest credited on policyholders’ account balances and higher general and administrative expenses, largely driven by business growth, partially offset by lower policyholder benefits, including changes in reserves due to less unfavorable morbidity and mortality experience.

Revenues from our Gibraltar Life and Other operations decreased $167 million, including a net favorable impact of $52 million from currency fluctuations. Excluding this item, revenues decreased $219 million, primarily reflecting lower premiums and policy charges and fee income attributable to the decline of business in force and lower realized investment gains from unfavorable derivative settlements.

Benefits and expenses of our Gibraltar Life and Other operations decreased $133 million, including a net unfavorable impact of $47 million from currency fluctuations. Excluding this item, benefits and expenses decreased $180 million, primarily reflecting lower policyholder benefits, including changes in reserves due to the decline of business in force, as discussed above, and less unfavorable morbidity and mortality experience, partially offset by higher interest credited on policyholders’ account balances.

Nine Month Comparison. Revenues from our Life Planner operations increased $56 million, including a net unfavorable impact of $130 million from currency fluctuations and a net benefit of $82 million from our annual reviews and update of assumptions and other refinements. Excluding these items, revenues increased $104 million, primarily reflecting higher net investment income driven by higher reinvestment rates and higher income on non-coupon investments, partially offset by lower premiums and policy charges and fee income attributable to the decline of business in force in Japan.

Benefits and expenses of our Life Planner operations decreased $29 million, including a net favorable impact of $97 million from currency fluctuations and a net charge of $82 million from our annual reviews and update of assumptions and other refinements. Excluding these items, benefits and expenses decreased $14 million, primarily reflecting lower policyholder benefits, including changes in reserves, due to the decline of business in force, as discussed above, and less unfavorable morbidity and mortality experience, partially offset by higher interest credited on policyholders’ account balances and higher general and administrative expenses, largely driven by business growth.

Revenues from our Gibraltar Life and Other operations decreased $303 million, including a net unfavorable impact of $28 million from currency fluctuations and a net benefit of $214 million from our annual reviews and update of assumptions and other refinements. Excluding these items, revenues decreased $489 million, primarily reflecting lower premiums and policy charges and fee income attributable to the decline of business in force, and lower realized investment gains from unfavorable derivative settlements.

Benefits and expenses of our Gibraltar Life and Other operations decreased $262 million, including a net favorable impact of $39 million from currency fluctuations and a net charge of $182 million from our annual reviews and update of assumptions and other refinements. Excluding these items, benefits and expenses decreased $405 million, primarily reflecting lower policyholders’ benefits, including changes in reserves, due to the decline of business in force, as discussed above, and less unfavorable morbidity and mortality experience, partially offset by higher interest credited on policyholders’ account balances.

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Sales Results

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

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Annualized new business premiums:
On an actual exchange rate basis(1):
Life Planner			$	255					$	215					$	781					$	697
Gibraltar Life and Other			236						198						708						634
Total			$	491					$	413					$	1,489					$	1,331
On a constant exchange rate basis:
Life Planner			$	259					$	219					$	791					$	693
Gibraltar Life and Other			246						205						736						648
Total			$	505					$	424					$	1,527					$	1,341

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(1)The nine months ended September 30, 2023 includes the correction of first quarter sales amounts previously reported for both Life Planner and Gibraltar Life and Other.

The amount of annualized new business premiums and the sales mix in terms of types and currency denomination of products for any given period can be significantly impacted by several factors, including but not limited to: the addition of new products, discontinuation of existing products, changes in credited interest rates for certain products and other product modifications, changes in premium rates, changes in interest rates or fluctuations in currency markets, 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.

Our diverse product portfolio in Japan, in terms of currency mix and premium payment structure, allows us to adapt to changing market and competitive dynamics, including the extremely low interest rate environment. We regularly examine our product offerings and their related profitability and, as a result, we have repriced or discontinued sales of certain products that do not meet our profit expectations. The impact of these actions, coupled with the introduction of certain new products, has generally resulted in an increase in sales of products denominated in USD relative to products denominated in other currencies.

The table below presents annualized new business premiums on a constant exchange rate basis, by product category and distribution channel, for the periods indicated:

			Three Months Ended September 30, 2023																														Three Months Ended September 30, 2022
			Life						Accident & Health						Retirement (1)						Investment Contracts (2)						Total						Life						Accident & Health						Retirement (1)						Investment Contracts (2)						Total
			(in millions)
Life Planner			$	144					$	21					$	63					$	31					$	259					$	125					$	16					$	73					$	5					$	219
Gibraltar Life and Other:
Life Consultants			37						6						9						85						137						42						8						7						72						129
Banks			6						0						2						61						69						13						0						0						21						34
Independent Agency			15						6						19						0						40						19						1						22						0						42
Subtotal			58						12						30						146						246						74						9						29						93						205
Total			$	202					$	33					$	93					$	177					$	505					$	199					$	25					$	102					$	98					$	424

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

(2)Includes single-payment market value adjusted investment contracts and single-payment whole life products.

Three Month Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner operations increased $40 million, primarily driven by higher life product sales in Brazil. In Japan, higher USD-denominated

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single premium investment contract sales were partially offset by lower USD-denominated recurring premium life and retirement product sales.

Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life and Other operations increased $41 million. Bank channel and Life Consultants sales increased $35 million and $8 million, respectively, both reflecting higher USD-denominated single premium investment contract sales, partially offset by lower USD-denominated recurring premium life product sales. Independent Agency sales decreased $2 million reflecting lower life and retirement product sales, partially offset by higher accident and health product sales.

			Nine Months Ended September 30, 2023																														Nine Months Ended September 30, 2022
			Life						Accident & Health						Retirement (1)						Investment Contracts (2)						Total						Life						Accident & Health						Retirement (1)						Investment Contracts (2)						Total
			(in millions)
Life Planner			$	412					$	62					$	210					$	107					$	791					$	378					$	49					$	257					$	9					$	693
Gibraltar Life and Other:
Life Consultants			108						19						20						270						417						141						20						26						186						373
Banks			25						0						2						148						175						66						0						3						50						119
Independent Agency			49						30						65						0						144						64						8						84						0						156
Subtotal			182						49						87						418						736						271						28						113						236						648
Total			$	594					$	111					$	297					$	525					$	1,527					$	649					$	77					$	370					$	245					$	1,341

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

(2)Includes single-payment market value adjusted investment contracts and single-payment whole life products.

Nine Month Comparison. Annualized new business premiums, on a constant exchange rate basis, from our Life Planner operations increased $98 million, primarily driven by higher life product sales in Brazil. In Japan, higher USD-denominated single premium investment contract sales were partially offset by lower USD-denominated recurring premium life and retirement product sales.

Annualized new business premiums, on a constant exchange rate basis, from our Gibraltar Life and Other operations increased $88 million. Bank channel and Life Consultants sales increased $56 million and $44 million, respectively, both reflecting higher USD-denominated single premium investment contract sales, partially offset by lower USD-denominated recurring premium life product sales. Independent Agency sales decreased $12 million reflecting lower life and retirement product sales, partially offset by higher accident and health product sales.

Corporate and Other

Business Update

• Effective January 1, 2023, AIQ and Prudential Advisors are included within Corporate and Other operations. There are no impacts to the Company's consolidated financial statements from these reporting changes and historical results have been updated to conform to the current period presentation.

• In September 2023, the Company acquired a 20% interest as a limited partner in Prismic Life Holding Company, LP (“Prismic HoldCo”), a Bermuda exempted limited partnership that owns all of the outstanding capital stock of Prismic Re. Beginning with the fourth quarter of 2023, the operating results of Corporate and Other will reflect the Company’s share of earnings in Prismic HoldCo on a quarter lag. In connection with this transaction, the Company entered into an agreement with Prismic Re to reinsure approximately $9 billion of reserves for certain structured settlement annuities contracts issued by PICA, 90% of which is on a coinsurance with funds withheld basis and 10% of which is on a coinsurance basis. The invested assets supporting the contracts reinsured via coinsurance with funds withheld consist primarily of public fixed maturities available-for-sale, private fixed maturities available-for-sale and fixed maturities designated as trading. As the Company considers its relationship with Prismic to be an enterprise initiative that could span business segments, Corporate and Other will report these segregated assets along with the offsetting funds withheld payable. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

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Operating Results

Corporate and Other includes corporate operations, after allocations to our business segments, and Divested and Run-off Businesses other than those that qualify for “discontinued operations” accounting treatment under U.S. GAAP. The following table sets forth Corporate and Other’s operating results for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Operating results:
Investment income			$	55					$	38					$	147					$	115
Interest expense on debt			(201)						(213)						(628)						(620)
Pension and employee benefits			81						100						258						288
Other corporate activities			(439)						(340)						(1,293)						(935)
Adjusted operating income			(504)						(415)						(1,516)						(1,152)
Realized investment gains (losses), net, and related adjustments			162						10						(28)						58
Charges related to realized investment gains (losses), net			0						1						2						1
Market experience updates			(4)						3						(7)						11
Divested and Run-off Businesses			(46)						(53)						125						175
Equity in earnings of operating joint ventures and earnings attributable to noncontrolling interests			(41)						(2)						(15)						(37)
Other adjustments(1)			(2)						(3)						(4)						(12)
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	(435)					$	(459)					$	(1,443)					$	(956)

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(1)Includes certain components of consideration for a business acquisition, which are recognized as compensation expense over the requisite service periods.

Three Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, increased $89 million. Net charges from other corporate activities increased $99 million primarily driven by higher costs related to technology and other corporate initiatives, the absence of gains from the sales of certain home office properties in the prior year period, and less favorable foreign exchange rate impacts. Pension and employee benefits results were unfavorable by $19 million primarily driven by an increase in employee benefit plan costs. These impacts were partially offset by increased investment income results of $17 million, primarily driven by higher earnings on highly liquid assets due to higher interest rates and higher income on non-coupon investments, and decreased interest expense on debt of $12 million, primarily reflecting lower average debt balances.

Nine Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, increased $364 million. Net charges from other corporate activities increased $358 million primarily driven by higher costs related to technology and other corporate initiatives, less favorable foreign exchange rate impacts, and the absence of gains from the sales of certain home office properties in the prior year period, partially offset by less unfavorable Assurance IQ results. Pension and employee benefits were unfavorable by $30 million primarily driven by an increase in employee benefit plan costs. Interest expense on debt increased $8 million due to higher average debt balances. These impacts were partially offset by favorable investment income results of $32 million primarily reflecting an increase in earnings on highly liquid assets due to higher interest rates.

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Divested and Run-off Businesses

Divested and Run-off Businesses Included in Corporate and Other

Income from our Divested and Run-off Businesses 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 and Run-off Businesses are reflected in our Corporate and Other operations but are excluded from adjusted operating income. A summary of the results of the Divested and Run-off Businesses reflected in our Corporate and Other operations is as follows for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
Long-Term Care			$	(117)					$	(70)					$	(3)					$	(376)
Other			71						17						128						551
Total Divested and Run-off Businesses income (loss) excluded from adjusted operating income			$	(46)					$	(53)					$	125					$	175

Long-Term Care

Three Month Comparison. Results decreased $47 million compared to the prior year period primarily driven by unfavorable impacts from changes in the market value of derivatives used for duration management and lower underwriting results, partially offset by higher income on non-coupon investments and favorable impacts from changes in the market value of equity securities.

Nine Month Comparison. Results increased $373 million, including an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2023 and 2022 included net charges from these updates of $79 million and $3 million, respectively. Excluding this item, results increased $449 million compared to the prior year period primarily driven by favorable impacts from changes in the market value of equity securities and less unfavorable impacts from changes in the market value of derivatives used for duration management, partially offset by lower income on non-coupon investments.

Other Divested and Run-off Businesses

Results for the third quarter of 2023 increased $54 million primarily driven by accelerated amortization in the current quarter of the deferred gain related to the sale of the Full Service Retirement business as a result of the surrender of certain contracts. Results for the first nine months of 2023 decreased $423 million, primarily driven by the absence of a gain in the prior period from the sale of the Full Service Retirement business, which was completed in April 2022. See Note 1 to the Unaudited Interim Consolidated Financial Statements for additional information regarding this sale. Results for the first nine months of 2023 also reflect the absence of losses related to the Full Service Retirement business recorded in the first quarter of 2022, which were largely driven by the impact of rising interest rates on the market value of assets supporting experience-rated contractholder liabilities.

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 (collectively the “Closed Block”), as well as certain related assets and liabilities. We no longer offer these traditional domestic participating policies. See Note 13 to the Unaudited Interim Consolidated Financial Statements for additional information.

Each year, the Board of Directors of The Prudential Insurance Company of America (“PICA”) 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 (losses), mortality experience and other factors. Although the 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. 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

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Block policies. 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. Additionally, any accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block are reflected as a policyholder dividend obligation, with a corresponding amount reported in AOCI, while any accumulated net unrealized investment losses are reflected as a reduction of the policyholder dividend obligation, to the extent the overall policyholder dividend obligation is otherwise positive.

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 PICA. 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 the Closed Block division’s realized investment gains (losses), net, see “—General Account Investments.”

As of September 30, 2023, the excess of actual cumulative earnings over the expected cumulative earnings was $2,811 million; however, due to the accumulation of net unrealized investment losses in excess of this amount, the policyholder dividend obligation balance as of September 30, 2023 was reduced to zero.

Operating Results

The following table sets forth the Closed Block division’s results for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
U.S. GAAP results:
Revenues			$	615					$	710					$	2,541					$	2,204
Benefits and expenses			613						731						2,591						2,182
Income (loss) before income taxes and equity in earnings of operating joint ventures			$	2					$	(21)					$	(50)					$	22

Income (loss) Before Income Taxes and Equity in Earnings of Operating Joint Ventures

Three Month Comparison. Income (loss) before income taxes and equity in earnings of operating joint ventures increased $23 million. Net investment activity results decreased, primarily reflecting lower realized investment gains driven by unfavorable changes in the market value of derivatives, partially offset by higher other income driven by favorable changes in the market value of fixed income and equity securities, and higher net investment income driven by higher income on non-coupon investments and higher reinvestment rates. Net insurance activity results increased driven by a favorable comparative change in claims experience. As a result of these and other factors, a $334 million reduction in the policyholder dividend obligation was recorded in the third quarter of 2023, compared to a $233 million reduction in the third quarter of 2022.

Nine Month Comparison. Income (loss) before income taxes and equity in earnings of operating joint ventures decreased $72 million. Net investment activity results increased, primarily reflecting higher other income driven by favorable changes in the market value of equity and fixed income securities, partially offset by lower realized investment gains driven by unfavorable changes in the market value of derivatives and higher losses on the sale of fixed income investments, as well as lower net investment income driven by lower income on non-coupon investments, partially offset by higher reinvestment rates. Net insurance activity results increased driven by a favorable comparative change in claims experience. As a result of these and other factors, a $397 million reduction in the policyholder dividend obligation was recorded in the first nine months of 2023, compared to a $886 million reduction in the first nine months of 2022.

Revenues, Benefits and Expenses

Three Month Comparison. Revenues decreased $95 million primarily driven by a decrease in realized investment gains, partially offset by an increase in other income, and an increase in net investment income, as discussed above.

Benefits and expenses decreased $118 million primarily driven by a decrease in dividends to policyholders, reflecting a higher reduction in the policyholder dividend obligation due to changes in cumulative earnings and other factors, as discussed above.

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Nine Month Comparison. Revenues increased $337 million primarily driven by an increase in other income, partially offset by a decrease in realized investment gains and a decrease in net investment income, as discussed above.

Benefits and expenses increased $409 million primarily driven by an increase in dividends to policyholders, reflecting less of a reduction in the policyholder dividend obligation due to changes in cumulative earnings and other factors, as discussed above.

Income Taxes

For information regarding income taxes, see Note 14 to the Unaudited Interim Consolidated Financial Statements.

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 significant unobservable input in the measurement. See Note 6 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 13 to the Unaudited Interim Consolidated Financial Statements for additional information regarding the Closed Block.

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			As of September 30, 2023																								As of December 31, 2022
			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			$	266,580					$	5,188					$	28,738					$	824					$	277,648					$	4,345					$	30,071					$	817
Assets supporting experience-rated contractholder liabilities:
Fixed maturities			888						0						0						0						945						0						0						0
Equity securities			2,055						0						0						0						1,899						0						0						0
All other(2)			0						0						0						0						0						0						0						0
Subtotal			2,943						0						0						0						2,844						0						0						0
Market risk benefit assets			2,200						2,200						0						0						800						800						0						0
Fixed maturities, trading			6,314						283						815						14						5,051						289						900						15
Equity securities			5,260						605						1,779						136						5,416						528						1,734						99
Commercial mortgage and other loans			387						0						0						0						137						0						0						0
Other invested assets(3)			1,863						861						1						0						1,990						537						3						2
Short-term investments			3,593						14						101						10						3,637						18						150						0
Cash equivalents			7,694						0						280						0						6,398						0						1,076						0
Other assets			659						281						0						0						152						152						0						0
Separate account assets			162,625						1,160						0						0						171,805						1,081						0						0
Total assets			$	460,118					$	10,592					$	31,714					$	984					$	475,878					$	7,750					$	33,934					$	933
Market risk benefit liabilities			$	4,660					$	4,660					$	0					$	0					$	5,864					$	5,864					$	0					$	0
Policyholders’ account balances			6,108						6,108						0						0						3,492						3,492						0						0
Other liabilities(3)			4,987						1						0						0						2,682						1						0						0
Notes issued by consolidated variable interest entities (“VIEs”)			392						392						0						0						0						0						0						0
Total liabilities			$	16,147					$	11,161					$	0					$	0					$	12,038					$	9,357					$	0					$	0

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(1)Level 3 assets expressed 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 2.3% and 3.1%, respectively, as of September 30, 2023, and 1.6% and 2.7%, respectively, as of December 31, 2022.

(2)“All other” represents cash equivalents and short-term investments.

(3)“Other invested assets” and “Other liabilities” primarily include derivatives. The amounts include the impact of netting subject to master netting agreements.

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 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.

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 internal valuation models use 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 $1.2 billion of public fixed maturities as of September 30, 2023, with values primarily based on indicative broker quotes, and approximately $4.3 billion of private fixed maturities, with values primarily based on internally-developed models. Significant unobservable inputs used in their valuation included: issue specific spread 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. Separate account assets included in Level 3 in our fair value hierarchy primarily include corporate securities and commercial mortgage loans.

Contracts or contract features reported in “Market risk benefit assets” and “Market risk benefit liabilities” and embedded derivatives reported in “Policyholders’ account balances” that are included in Level 3 of our fair value hierarchy represent general account assets and liabilities pertaining to living benefit features of the Company’s variable annuity contracts and the

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index-linked interest credited features on certain life and annuity products. “Market risk benefit assets” and “Market risk benefit liabilities” are carried at fair value with changes in fair value included in “Change in value of market risk benefits, net of related hedging gains (losses)” except for the portion of the change attributable to changes in the Company’s NPR that is recorded in OCI. Embedded derivatives included in “Policyholder account balances” are carried at fair value with changes in fair value included in “Realized investment gains (losses), net.” These assets and liabilities are valued using internally-developed models that require significant estimates and assumptions developed by management. Changes in these estimates and assumptions can have a significant impact on the results of our operations. For additional information, see Note 6 to the Unaudited Interim Consolidated Financial Statements.

For additional information regarding the valuation techniques and the key estimates and assumptions used in our determination of fair value, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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 invested assets such as limited partnerships and limited liability companies (“LPs/LLCs”), real estate held through direct ownership, derivative instruments and seed money investments 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 PGIM 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 our general account investment portfolio apportioned between PFI excluding the Closed Block division and the Closed Block division, as of the dates indicated:

						September 30, 2023
						PFI Excluding Closed Block Division												Closed Block Division						Total
						($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value						$	206,813					58.5		%				$	19,563					$	226,376
Public, held-to-maturity, at amortized cost, net of allowance						0						0.0						0						0
Private, available-for-sale, at fair value						58,938						16.7						9,175						68,113
Private, held-to-maturity, at amortized cost, net of allowance						0						0.0						0						0
Fixed maturities, trading, at fair value						5,700						1.6						816						6,516
Assets supporting experience-rated contractholder liabilities, at fair value						2,943						0.8						0						2,943
Equity securities, at fair value						4,588						1.3						1,778						6,366
Commercial mortgage and other loans, at book value, net of allowance						49,685						14.0						7,836						57,521
Policy loans, at outstanding balance						6,439						1.8						3,520						9,959
Other invested assets, net of allowance(1)						13,995						4.0						4,679						18,674
Short-term investments, net of allowance						4,755						1.3						303						5,058
Total general account investments						353,856						100.0		%				47,670						401,526
Invested assets of other entities and operations(2)						5,710												0						5,710
Total investments						$	359,566											$	47,670					$	407,236

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						December 31, 2022
						PFI Excluding Closed Block Division												Closed Block Division						Total
						($ in millions)
Fixed maturities:
Public, available-for-sale, at fair value						$	221,106					60.8		%				$	21,140					$	242,246
Public, held-to-maturity, at amortized cost, net of allowance						1,229						0.3						0						1,229
Private, available-for-sale, at fair value						55,814						15.4						8,931						64,745
Private, held-to-maturity, at amortized cost, net of allowance						67						0.0						0						67
Fixed maturities, trading, at fair value						4,838						1.3						900						5,738
Assets supporting experience-rated contractholder liabilities, at fair value						2,844						0.8						0						2,844
Equity securities, at fair value						4,671						1.3						1,733						6,404
Commercial mortgage and other loans, at book value, net of allowance						48,682						13.4						7,926						56,608
Policy loans, at outstanding balance						6,409						1.8						3,637						10,046
Other invested assets, net of allowance(1)						13,277						3.7						4,254						17,531
Short-term investments, net of allowance						4,236						1.2						337						4,573
Total general account investments						363,173						100.0		%				48,858						412,031
Invested assets of other entities and operations(2)						5,410												0						5,410
Total investments						$	368,583											$	48,858					$	417,441

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(1) Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments and other miscellaneous investments. For additional information regarding these investments, see “—Other Invested Assets” below.

(2)Includes invested assets of our investment management and derivative operations. Excludes assets of our investment management operations that are managed for third-parties and those assets classified as “Separate account assets” on our balance sheet. 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 nine months of 2023 was primarily due to the translation impact of the U.S. dollar strengthening against the yen and an increase in U.S interest rates, partially offset by the reinvestment of net investment income and net business inflows. For information regarding the methodology used in determining the fair value of our fixed maturities, see Note 6 to the Unaudited Interim Consolidated Financial Statements.

As of September 30, 2023 and December 31, 2022, 44% and 45%, respectively, of our general account investments attributable to PFI excluding the Closed Block division related to our Japanese insurance operations. The following table sets forth the composition of the investments of our Japanese insurance operations’ general account, as of the dates indicated:

						September 30, 2023						December 31, 2022
						(in millions)
Fixed maturities:
Public, available-for-sale, at fair value						$	104,691					$	112,013
Public, held-to-maturity, at amortized cost, net of allowance						0						1,229
Private, available-for-sale, at fair value						19,497						19,268
Private, held-to-maturity, at amortized cost, net of allowance						0						67
Fixed maturities, trading, at fair value						516						612
Assets supporting experience-rated contractholder liabilities, at fair value						2,943						2,844
Equity securities, at fair value						1,669						1,806
Commercial mortgage and other loans, at book value, net of allowance						17,640						18,080
Policy loans, at outstanding balance						2,545						2,607
Other invested assets(1)						5,694						5,272
Short-term investments, net of allowance						196						100
Total Japanese general account investments						$	155,391					$	163,898

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

The decrease in general account investments related to our Japanese insurance operations in the first nine months of 2023 was primarily due to the translation impact of the U.S. dollar strengthening against the yen and an increase in U.S. interest rates, partially offset by net business inflows and the reinvestment of net investment income.

As of September 30, 2023, our Japanese insurance operations had $78.7 billion, at carrying value, of investments denominated in U.S. dollars, including $1.3 billion that were hedged to yen through third-party derivative contracts and $70.1 billion that support liabilities denominated in U.S. dollars, with the remainder constituting part of the hedging of foreign currency exchange rate exposure to U.S. dollar-equivalent equity. As of December 31, 2022, our Japanese insurance operations had $77.5 billion, at carrying value, of investments denominated in U.S. dollars, including $1.5 billion that were hedged to yen through third-party derivative contracts and $67.4 billion that support liabilities denominated in U.S. dollars, with the remainder constituting part of the hedging of foreign currency exchange rate exposure of U.S. dollar-equivalent equity. The $1.2 billion increase in the carrying value of U.S. dollar-denominated investments from December 31, 2022 was primarily attributable to reinvestment of net investment income and portfolio growth as a result of net business inflows, partially offset by an increase in U.S. interest rates.

Our Japanese insurance operations had $4.2 billion and $5.2 billion, at carrying value, of investments denominated in Australian dollars that support liabilities denominated in Australian dollars as of September 30, 2023 and December 31, 2022, respectively. The $1.0 billion decrease in the carrying value of Australian dollar-denominated investments from December 31, 2022 was primarily attributable to run-off of the portfolio. 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—Impact of Foreign Currency Exchange Rates” above.

Investment Results

The following tables set forth the investment results of our general account apportioned between PFI excluding the Closed Block division, and the Closed Block division, 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 investment gains (losses), net.”

			Three Months Ended September 30, 2023
			PFI Excluding Closed Block Division and Japanese Operations												Japanese Insurance Operations												PFI Excluding Closed Block Division												Closed Block Division						Total(5)
			Yield(1)						Amount						Yield(1)						Amount						Yield(1)						Amount						Amount						Amount
			($ in millions)
Fixed maturities(2)			5.22		%				$	2,089					2.96		%				$	1,009					4.18		%				$	3,098					$	390					$	3,488
Assets supporting experience-rated contractholder liabilities			0.00						0						1.04						8						1.04						8						0						8
Equity securities			2.92						25						1.12						5						2.32						30						8						38
Commercial mortgage and other loans			4.19						333						3.67						162						4.01						495						80						575
Policy loans			4.90						47						3.89						25						4.50						72						52						124
Short-term investments and cash equivalents			6.57						205						5.20						27						6.41						232						12						244
Gross investment income			5.09						2,699						3.05						1,236						4.21						3,935						542						4,477
Investment expenses			(0.13)						(132)						(0.12)						(79)						(0.13)						(211)						(64)						(275)
Investment income after investment expenses			4.96		%				2,567						2.93		%				1,157						4.08		%				3,724						478						4,202
Other invested assets(3)									215												76												291						33						324
Investment results of other entities and operations(4)									45												0												45						0						45
Total net investment income									$	2,827											$	1,233											$	4,060					$	511					$	4,571

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			Three Months Ended September 30, 2022
			PFI Excluding Closed Block Division and Japanese Operations												Japanese Insurance Operations												PFI Excluding Closed Block Division												Closed Block Division						Total(5)
			Yield(1)						Amount						Yield(1)						Amount						Yield(1)						Amount						Amount						Amount
			($ in millions)
Fixed maturities(2)			4.57		%				$	1,663					2.82		%				$	954					3.72		%				$	2,617					$	343					$	2,960
Assets supporting experience-rated contractholder liabilities			0.00						0						1.07						7						1.07						7						0						7
Equity securities			2.18						15						1.04						4						1.73						19						9						28
Commercial mortgage and other loans			3.82						277						3.63						169						3.75						446						82						528
Policy loans			4.88						46						3.94						24						4.51						70						54						124
Short-term investments and cash equivalents			3.24						118						3.07						12						3.23						130						7						137
Gross investment income			4.33						2,119						2.88						1,170						3.67						3,289						495						3,784
Investment expenses			(0.15)						(102)						(0.13)						(74)						(0.14)						(176)						(40)						(216)
Investment income after investment expenses			4.18		%				2,017						2.75		%				1,096						3.53		%				3,113						455						3,568
Other invested assets(3)									22												6												28						(21)						7
Investment results of other entities and operations(4)									56												0												56						0						56
Total net investment income									$	2,095											$	1,102											$	3,197					$	434					$	3,631

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(1)For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost, net of allowance. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for securities lending liabilities). A yield is not presented for other invested assets as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to other invested assets.

(2)Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in other invested assets.

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

(4)Includes net investment income of our investment management operations.

(5)The total yield was 4.11% and 3.62% for the three months ended September 30, 2023 and 2022, respectively.

Three Month Comparison. The increase in investment income after investment expenses yield attributable to our general account investments, excluding both the Closed Block division and the Japanese insurance operations’ portfolio, for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, was primarily the result of higher fixed income reinvestment rates and higher returns on short-term investments based on an increase in short-term rates.

The increase in investment income after investment expenses yield attributable to the Japanese insurance operations’ portfolio, for the three months ended September 30, 2023, compared to the three months ended September 30, 2022, was primarily the result of higher fixed income reinvestment rates and higher returns on short-term investments based on an increase in short-term rates.

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 $61.1 billion and $59.9 billion for the three months ended September 30, 2023 and 2022, 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 $4.3 billion and $5.4 billion for the three months ended September 30, 2023 and 2022, respectively. The majority of 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—Impact of Foreign Currency Exchange Rates” above.

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			Nine Months Ended September 30, 2023
			PFI Excluding Closed Block Division and Japanese Operations												Japanese Insurance Operations												PFI Excluding Closed Block Division												Closed Block Division						Total(5)
			Yield(1)						Amount						Yield(1)						Amount						Yield(1)						Amount						Amount						Amount
			($ in millions)
Fixed maturities(2)			5.14		%				$	6,144					2.88		%				$	2,981					4.09		%				$	9,125					$	1,118					$	10,243
Assets supporting experience-rated contractholder liabilities			0.00						0						1.14						25						1.14						25						0						25
Equity securities			2.98						72						2.84						37						2.93						109						34						143
Commercial mortgage and other loans			4.11						951						3.66						484						3.95						1,435						239						1,674
Policy loans			5.02						142						3.88						74						4.56						216						156						372
Short-term investments and cash equivalents			5.93						572						4.76						71						5.80						643						39						682
Gross investment income			4.99						7,881						3.00						3,672						4.12						11,553						1,586						13,139
Investment expenses			(0.13)						(392)						(0.13)						(241)						(0.13)						(633)						(186)						(819)
Investment income after investment expenses			4.86		%				7,489						2.87		%				3,431						3.99		%				10,920						1,400						12,320
Other invested assets(3)									542												213												755						91						846
Investment results of other entities and operations(4)									201												0												201						0						201
Total net investment income									$	8,232											$	3,644											$	11,876					$	1,491					$	13,367

			Nine Months Ended September 30, 2022
			PFI Excluding Closed Block Division and Japanese Operations												Japanese Insurance Operations												PFI Excluding Closed Block Division												Closed Block Division						Total(5)
			Yield(1)						Amount						Yield(1)						Amount						Yield(1)						Amount						Amount						Amount
			($ in millions)
Fixed maturities(2)			4.53		%				$	5,131					2.75		%				$	2,863					3.68		%				$	7,994					$	1,021					$	9,015
Assets supporting experience-rated contractholder liabilities			1.79						123						1.00						23						1.60						146						0						146
Equity securities			1.54						34						2.89						41						2.07						75						29						104
Commercial mortgage and other loans			3.62						870						3.65						521						3.64						1,391						242						1,633
Policy loans			4.94						139						3.92						75						4.53						214						162						376
Short-term investments and cash equivalents			1.82						184						2.08						18						1.83						202						10						212
Gross investment income			4.08						6,481						2.84						3,541						3.53						10,022						1,464						11,486
Investment expenses			(0.14)						(242)						(0.13)						(197)						(0.14)						(439)						(104)						(543)
Investment income after investment expenses			3.94		%				6,239						2.71		%				3,344						3.39		%				9,583						1,360						10,943
Other invested assets(3)									657												142												799						148						947
Investment results of other entities and operations(4)									37												0												37						0						37
Total net investment income									$	6,933											$	3,486											$	10,419					$	1,508					$	11,927

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(1)For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost, net of allowance. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for securities lending liabilities). A yield is not presented for other invested assets as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to other invested assets.

(2)Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in other invested assets.

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

(4)Includes net investment income of our investment management operations.

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(5)The total yield was 4.02% and 3.48% for the nine months ended September 30, 2023 and 2022, respectively.

Nine Month Comparison. The increase in investment income after investment expenses yield attributable to our general account investments, excluding both the Closed Block division and the Japanese insurance operations’ portfolio, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, was primarily the result of higher fixed income reinvestment rates and higher returns on short-term investments based on an increase in short-term rates.

The increase in investment income after investment expenses yield attributable to the Japanese insurance operations’ portfolio, for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, was primarily the result of higher fixed income reinvestment rates and higher returns on short-term investments based on an increase in short-term rates.

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 $60.1 billion and $59.4 billion for the nine months ended September 30, 2023 and 2022, 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 $4.5 billion and $6.2 billion for the nine months ended September 30, 2023 and 2022, respectively. The majority of 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—Impact of Foreign Currency Exchange Rates” above.

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Realized Investment Gains and Losses

The following table sets forth “Realized investment gains (losses), net” of our general account apportioned between PFI excluding Closed Block division, and the Closed Block division, by investment type as well as “Related adjustments” and “Charges related to realized investment gains (losses), net” for the periods indicated:

			Three Months Ended September 30,												Nine Months Ended September 30,
			2023						2022						2023						2022
			(in millions)
PFI excluding Closed Block Division:
Realized investment gains (losses), net:
(Addition to) release of allowance for credit losses on fixed maturities			$	25					$	(30)					$	(131)					$	(14)
Write-downs on fixed maturities(1)			(53)						(20)						(57)						(81)
Net gains (losses) on sales and maturities			(340)						76						(400)						(837)
Fixed maturity securities(2)			(368)						26						(588)						(932)
(Addition to) release of allowance for credit losses on loans			(68)						(16)						(105)						(79)
Net gains (losses) on sales and maturities			0						0						0						(10)
Commercial mortgage and other loans			(68)						(16)						(105)						(89)
Derivatives			(1,880)						(525)						(2,229)						(2,487)
OTTI losses on other invested assets recognized in earnings			(10)						(8)						(45)						(14)
(Addition to) release of allowance for credit losses on other invested assets			5						(2)						4						(3)
Other net gains (losses)			112						(11)						174						91
Other			107						(21)						133						74
Subtotal			(2,209)						(536)						(2,789)						(3,434)
Investment results of other entities and operations(3)			38						77						27						255
Total — PFI excluding Closed Block Division			(2,171)						(459)						(2,762)						(3,179)
Related adjustments			(259)						(669)						(203)						(1,802)
Realized investment gains (losses), net, and related adjustments			(2,430)						(1,128)						(2,965)						(4,981)
Charges related to realized investment gains (losses), net			(61)						(115)						78						(421)
Realized investment gains (losses), net, and charges related to realized investment gains (losses), net and related adjustments			$	(2,491)					$	(1,243)					$	(2,887)					$	(5,402)
Closed Block Division:
Realized investment gains (losses), net:
(Addition to) release of allowance for credit losses on fixed maturities			$	13					$	(13)					$	31					$	(23)
Write-downs on fixed maturities(1)			0						0						(6)						(31)
Net gains (losses) on sales and maturities			(99)						(124)						(311)						(180)
Fixed maturity securities(2)			(86)						(137)						(286)						(234)
(Addition to) release of allowance for credit losses on loans			(22)						(7)						(23)						(16)
Net gains (losses) on sales and maturities			0						0						0						0
Commercial mortgage and other loans			(22)						(7)						(23)						(16)
Derivatives			(123)						175						(53)						328
(Addition to) release of allowance for credit losses on other invested assets			2						(2)						2						(2)
Other net gains (losses)			(2)						0						(1)						(7)
Other			0						(2)						1						(9)
Subtotal — Closed Block Division			(231)						29						(361)						69
Consolidated PFI realized investment gains (losses), net			$	(2,402)					$	(430)					$	(3,123)					$	(3,110)

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(1)Amounts represent write-downs of credit adverse securities and securities actively marketed for sale.

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(2)Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading.

(3)Includes “realized investment gains (losses), net” of our investment management operations.

Three Month Comparison. Net losses on sales and maturities of fixed maturity securities were $340 million for the third quarter of 2023 primarily driven by net losses on sales in a higher interest rate environment, partially offset by the impact of foreign currency exchange rate movements on U.S. dollar-denominated securities that matured or were sold within our International Businesses. Net gains on sales and maturities of fixed maturity securities were $76 million for the third quarter of 2022 primarily driven by the impact of foreign currency exchange rate movements on non-U.S. dollar-denominated securities that matured or were sold within our International Businesses, partially offset by net losses on sales of fixed maturity securities in a higher interest rate environment.

Net realized losses on derivative instruments of $1,880 million, for the third quarter of 2023 primarily included:

• $2,041 million of losses on interest rate derivatives due to increases in swap and U.S. Treasury rates.

Partially offsetting these losses were:

• $102 million of gains on foreign currency hedges due to U.S. dollar appreciation versus foreign currencies.

Net realized losses on derivative instruments of $525 million, for the third quarter of 2022 primarily included:

• $955 million of losses on interest rate derivatives due to increases in swap and U.S. Treasury rates.

Partially offsetting these losses were:

• $364 million of gains on foreign currency hedges due to U.S. dollar appreciation versus the Euro, British Pound, and Australian dollar; and

• $117 million of gains on capital hedges due to decreases in equity indices.

For a discussion of living benefit guarantees and related hedge positions in our Individual Retirement Strategies business, see “—Results of Operations by Segment—U.S. Businesses—Retirement Strategies” above.

Included in the table above are “Related adjustments,” which include the portions of “Realized investment gains (losses), net” that are either (1) included in adjusted operating income or (2) included in other reconciling line items to adjusted operating income, such as “Divested and Run-off Businesses.” “Related adjustments” also includes the portions of “Other income (loss)”, “Net investment income”, and “Policyholders’ benefits” that are excluded from adjusted operating income. These adjustments are made to arrive at “Realized investment gains (losses), net, and related adjustments” which is excluded from adjusted operating income. See Note 19 to the Unaudited Interim Consolidated Financial Statements for additional information regarding adjusted operating income and its reconciliation to “Income (loss) before income taxes and equity in earnings of operating joint ventures.” Results for the third quarter of 2023 and 2022 reflect net related adjustments of $(259) million and $(669) million, respectively. Both periods include changes in the fair value of equity securities and fixed income securities that are designated as trading, settlements and changes in the value of derivatives, as well as the impact of foreign currency exchange rate movements on certain non-local currency denominated assets and liabilities.

Also included in the table above are “Charges related to realized investment gains (losses), net,” which are excluded from adjusted operating income and which may be reflected as either a net charge or net benefit. Results for the third quarter of 2023 and 2022 included net charges of $61 million and $115 million, respectively, and were primarily driven by the impact of changes in certain policyholder reserves and other costs.

Nine Month Comparison. Net losses on sales and maturities of fixed maturity securities were $400 million for the first nine months of 2023 primarily driven by net losses on sales in a higher interest rate environment, partially offset by the impact of foreign currency exchange rate movements on U.S. dollar-denominated securities that matured or were sold within our International Businesses. Net losses on sales and maturities of fixed maturity securities were $837 million for the first nine months of 2022 primarily driven by rotation sales of public securities into private securities and mortgage loans coupled with relative value trading in a higher interest rate environment, partially offset by the impact of foreign currency exchange rate movements on U.S. and Australian dollar-denominated securities that matured or were sold within our International Businesses.

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Net realized losses on derivative instruments of $2,229 million for the first nine months of 2023 primarily included:

• $1,931 million of losses on interest rate derivatives due to increases in swap and U.S. Treasury rates; and

• $252 million of losses on foreign currency hedges due to U.S. dollar depreciation versus the British Pound and Brazilian Real.

Partially offsetting these losses were:

• $80 million of gains on credit default swaps due to credit spreads tightening.

Net realized losses on derivative instruments of $2,487 million, for the first nine months of 2022 primarily included:

• $4,138 million of losses on interest rate derivatives due to increases in swap and U.S. Treasury rates; and

• $124 million of losses on credit default swaps due to credit spreads widening.

Partially offsetting these losses were:

• $660 million of gains on capital hedges due to decreases in equity indices;

• $629 million of gains on product-related embedded derivatives and related hedge positions associated with certain variable annuity contracts; and

• $608 million of gains on foreign currency hedges due to U.S. dollar appreciation versus the Euro, British Pound, and Australian dollar.

For a discussion of living benefit guarantees and related hedge positions in our Individual Retirement Strategies business, see “—Results of Operations by Segment—U.S. Businesses—Retirement Strategies” above.

Results for the first nine months of 2023 and 2022 reflect net related adjustments of $(203) million and $(1,802) million, respectively. Both periods include changes in the fair value of equity securities and fixed income securities that are designated as trading, settlements and changes in the value of derivatives, as well as the impact of foreign currency exchange rate movements on certain non-local currency denominated assets and liabilities.

Results for the first nine months of 2023 and 2022 included a net benefit of $78 million and a net charge of $421 million, respectively, and were primarily driven by the impact of changes in certain policyholder reserves and other costs, inclusive of impacts from our annual reviews and update of assumptions and other refinements.

Credit Losses

The level of credit losses generally reflects current and expected economic conditions and is expected to increase when economic conditions worsen and to decrease when economic conditions improve. Historically, the causes of credit losses have been specific to each individual issuer and have not directly resulted in credit losses 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.

We maintain separate monitoring processes for public and private fixed maturities and create watch lists to highlight securities that require special scrutiny and management. 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 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 public and private fixed maturity investment managers formally review all public and 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 LPs/LLCs accounted for using the equity method and for wholly-owned investment real estate, 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. For additional information regarding our OTTI policies, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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General Account Investments of PFI excluding Closed Block Division

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, Inc. because substantially all Closed Block division assets support obligations and liabilities relating to the Closed Block policies only. See Note 13 to the Unaudited Interim Consolidated Financial Statements for additional information regarding the Closed Block.

Fixed Maturity Securities

In the following sections, we provide details about our fixed maturity securities portfolio, which excludes fixed maturity securities classified as assets supporting experience-rated contractholder liabilities and classified as trading.

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Fixed Maturity Securities by Industry

The following table sets forth the composition of the portion of our fixed maturity, available-for-sale portfolio by industry category attributable to PFI excluding the Closed Block division and the associated gross unrealized gains and losses, as well as the allowance for credit losses (“ACL”), as of the dates indicated:

			September 30, 2023																														December 31, 2022
Industry(1)			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						ACL						Fair Value						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						ACL						Fair Value
			(in millions)
Corporate securities:
Finance			$	40,749					$	284					$	5,748					$	11					$	35,274					$	40,144					$	277					$	4,719					$	2					$	35,700
Consumer non-cyclical			33,531						373						5,293						12						28,599						31,546						387						4,219						16						27,698
Utility			27,688						303						4,520						15						23,456						25,871						350						3,443						27						22,751
Capital goods			17,556						178						2,307						2						15,425						16,612						196						2,100						36						14,672
Consumer cyclical			10,938						142						1,141						7						9,932						10,659						165						1,026						0						9,798
Foreign agencies			2,913						78						336						0						2,655						3,952						123						289						0						3,786
Energy			11,556						165						1,389						0						10,332						11,488						181						1,166						0						10,503
Communications			6,809						124						1,011						93						5,829						6,556						160						898						14						5,804
Basic industry			7,162						98						942						12						6,306						6,746						103						780						2						6,067
Transportation			10,967						149						1,436						0						9,680						9,894						175						1,183						4						8,882
Technology			5,150						40						610						17						4,563						4,460						32						523						0						3,969
Industrial other			5,054						29						1,131						1						3,951						4,544						35						953						0						3,626
Total corporate securities			180,073						1,963						25,864						170						156,002						172,472						2,184						21,299						101						153,256
Foreign government(2)			68,097						3,380						5,263						64						66,150						73,638						4,490						5,316						0						72,812
Residential mortgage-backed(3)			2,329						16						294						0						2,051						2,481						28						215						0						2,294
Asset-backed			10,446						203						138						0						10,511						10,060						151						206						0						10,005
Commercial mortgage-backed			6,486						5						630						0						5,861						7,331						18						521						0						6,828
U.S. Government			21,897						747						5,081						0						17,563						24,857						1,089						3,482						0						22,464
State & Municipal			8,484						151						1,022						0						7,613						9,725						226						690						0						9,261
Total fixed maturities, available-for-sale			$	297,812					$	6,465					$	38,292					$	234					$	265,751					$	300,564					$	8,186					$	31,729					$	101					$	276,920

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(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)As of September 30, 2023 and December 31, 2022, based on amortized cost, 88% and 89%, respectively, represent Japanese government bonds held by our Japanese insurance operations with no other individual country representing more than 5% of the balance.

(3)As of September 30, 2023 and December 31, 2022, based on amortized cost, 100% and 99% were rated A or higher, respectively.

The increase in net unrealized losses from December 31, 2022 to September 30, 2023 was primarily due to an increase in U.S. interest rates.

In the third quarter of 2023, the Company changed its intent to hold a portion of its held-to-maturity portfolio, which will be redeemed as part of a recently announced reinsurance transaction. As a result, the entire held-to-maturity portfolio (amortized cost, net of allowance of $1,212 million) was reclassified to fixed maturities, available-for-sale and recorded at fair

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value, while the $136 million net unrealized gain on the portfolio was recorded in “Accumulated other comprehensive income” as of September 30, 2023.

The following table sets forth the composition of the portion of our fixed maturity, held-to-maturity portfolio by industry category attributable to PFI excluding the Closed Block division and the associated gross unrealized gains and losses, as well as the allowance for credit losses, as of the dates indicated:

			September 30, 2023																														December 31, 2022
Industry(1)			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						ACL						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						ACL
			(in millions)
Corporate securities:
Finance			$	0					$	0					$	0					$	0					$	0					$	430					$	24					$	0					$	454					$	2
Total corporate securities			0						0						0						0						0						430						24						0						454						2
Foreign government(2)			0						0						0						0						0						725						128						0						853						0
Residential mortgage-backed(3)			0						0						0						0						0						143						5						0						148						0
Total fixed maturities, held-to-maturity			$	0					$	0					$	0					$	0					$	0					$	1,298					$	157					$	0					$	1,455					$	2

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(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)As of December 31, 2022, based on amortized cost, 97% represent Japanese government bonds held by our Japanese insurance operations.

(3)As of December 31, 2022, based on amortized cost, 94% were rated A or higher.

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 Investor Service, Inc. (“Moody’s”) or BBB- or higher by Standard & Poor’s Rating Services (“S&P”). 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 S&P. 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 includes certain securities that have not yet been designated by the SVO as of each balance sheet date. Pending receipt of SVO designations, 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 (“FSA”), an agency of the Japanese government. The FSA has its own investment quality criteria and risk control standards. Our Japanese insurance companies comply with the FSA’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 and S&P, or rating equivalents based on ratings assigned by Japanese credit rating agencies.

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The following table sets forth our fixed maturity, available-for-sale portfolio by NAIC Designation or equivalent rating attributable to PFI excluding the Closed Block division, as of the dates indicated:

			September 30, 2023																														December 31, 2022
NAIC Designation(1) (2)			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses(3)						ACL						Fair Value						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses(3)						ACL						Fair Value
			(in millions)
1			$	200,532					$	5,294					$	25,755					$	1					$	180,070					$	206,050					$	7,044					$	20,290					$	0					$	192,804
2			80,396						969						11,158						0						70,207						76,161						940						9,519						0						67,582
Subtotal High or Highest Quality Securities(4)			280,928						6,263						36,913						1						250,277						282,211						7,984						29,809						0						260,386
3			10,177						118						903						5						9,387						10,938						104						1,163						0						9,879
4			5,151						41						329						65						4,798						5,016						50						435						1						4,630
5			1,162						24						122						40						1,024						1,921						17						258						24						1,656
6			394						19						25						123						265						478						31						64						76						369
Subtotal Other Securities(5) (6)			16,884						202						1,379						233						15,474						18,353						202						1,920						101						16,534
Total fixed maturities, available-for-sale			$	297,812					$	6,465					$	38,292					$	234					$	265,751					$	300,564					$	8,186					$	31,729					$	101					$	276,920

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(1)Reflects equivalent ratings for investments of the international insurance operations.

(2)Includes, as of September 30, 2023 and December 31, 2022, 781 securities with amortized cost of $8,710 million (fair value, $8,318 million) and 422 securities with amortized cost of $4,836 million (fair value, $4,610 million), respectively, that have been categorized based on expected NAIC Designations pending receipt of SVO ratings.

(3)As of September 30, 2023, includes gross unrealized losses of $678 million on public fixed maturities and $701 million on private fixed maturities considered to be other than high or highest quality and, as of December 31, 2022, includes gross unrealized losses of $1,116 million on public fixed maturities and $804 million on private fixed maturities considered to be other than high or highest quality.

(4)On an amortized cost basis, as of September 30, 2023, includes $224,043 million of public fixed maturities and $56,885 million of private fixed maturities and, as of December 31, 2022, includes $229,327 million of public fixed maturities and $52,884 million of private fixed maturities.

(5)On an amortized cost basis, as of September 30, 2023, includes $7,582 million of public fixed maturities and $9,302 million of private fixed maturities and, as of December 31, 2022, includes $8,710 million of public fixed maturities and $9,643 million of private fixed maturities.

(6)On an amortized cost basis, as of September 30, 2023, securities considered below investment grade based on low issue composite ratings total $14,624 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.

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The following table sets forth our fixed maturity, held-to-maturity portfolio by NAIC Designation or equivalent rating attributable to PFI excluding the Closed Block division, as of the dates indicated:

			September 30, 2023																														December 31, 2022
NAIC Designation(1)			Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses(2)						Fair Value						ACL						Amortized Cost						Gross Unrealized Gains						Gross Unrealized Losses(2)						Fair Value						ACL
			(in millions)
1			$	0					$	0					$	0					$	0					$	0					$	1,217					$	153					$	0					$	1,370					$	1
2			0						0						0						0						0						81						4						0						85						1
Subtotal High or Highest Quality Securities(3)			0						0						0						0						0						1,298						157						0						1,455						2
3			0						0						0						0						0						0						0						0						0						0
4			0						0						0						0						0						0						0						0						0						0
5			0						0						0						0						0						0						0						0						0						0
6			0						0						0						0						0						0						0						0						0						0
Subtotal Other Securities			0						0						0						0						0						0						0						0						0						0
Total fixed maturities, held-to-maturity			$	0					$	0					$	0					$	0					$	0					$	1,298					$	157					$	0					$	1,455					$	2

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(1)Reflects equivalent ratings for investments of the international insurance operations.

(2)As of December 31, 2022, there were less than $1 million gross unrealized losses on public and private fixed maturities considered to be other than high or highest quality, respectively.

(3)On an amortized cost basis, as of December 31, 2022, there were $1,231 million of public fixed maturities and $67 million of private fixed maturities.

Asset-Backed and Commercial Mortgage-Backed Securities

The following table sets forth the amortized cost and fair value of asset-backed and commercial mortgage-backed securities within our fixed maturity, available-for-sale portfolio attributable to PFI excluding the Closed Block division by credit quality, as of the dates indicated:

			September 30, 2023																								December 31, 2022
			Asset-Backed Securities(2)												Commercial Mortgage-Backed Securities(3)												Asset-Backed Securities(2)												Commercial Mortgage-Backed Securities(3)
Low Issue Composite Rating(1)			Amortized Cost						Fair Value						Amortized Cost						Fair Value						Amortized Cost						Fair Value						Amortized Cost						Fair Value
			(in millions)
AAA			$	6,153					$	6,231					$	4,996					$	4,577					$	7,078					$	7,070					$	7,320					$	6,817
AA			3,400						3,370						1,489						1,283						2,741						2,660						0						0
A			721						696						1						1						162						151						2						2
BBB			90						90						0						0						20						20						9						9
BB and below			82						124						0						0						59						104						0						0
Total(4)			$	10,446					$	10,511					$	6,486					$	5,861					$	10,060					$	10,005					$	7,331					$	6,828

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(1)The table above provides ratings as assigned by nationally recognized rating agencies as of September 30, 2023, including S&P, Moody’s, Fitch Ratings, Inc. (“Fitch”) and Morningstar, Inc. (“Morningstar”). Low issue composite rating uses ratings from the major credit rating agencies or if these are not available an equivalent internal rating. For securities where the ratings assigned are not equivalent, the second lowest rating is utilized.

(2)Includes collateralized loan obligations (“CLOs”), credit-tranched securities collateralized by auto loans, education loans and other asset types.

(3)As of September 30, 2023 and December 31, 2022, based on amortized cost, 100% and 99% were securities with vintages of 2013 or later, respectively.

(4)Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading.”

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Included in “Asset-backed securities” above are investments in CLOs. The following table sets forth information pertaining to these investments in CLOs within our fixed maturity, available-for-sale portfolio attributable to PFI excluding the Closed Block division, as of the dates indicated:

			September 30, 2023												December 31, 2022
			Collateralized Loan Obligations
Low Issue Composite Rating(1)			Amortized Cost						Fair Value						Amortized Cost						Fair Value
			(in millions)
AAA			$	5,429					$	5,531					$	6,132					$	6,143
AA			3,170						3,153						2,687						2,606
A			13						13						13						12
BBB			15						14						15						13
BB and below			11						10						11						9
Total(2)(3)			$	8,638					$	8,721					$	8,858					$	8,783

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(1)The table above provides ratings as assigned by nationally recognized rating agencies as of September 30, 2023, including S&P, Moody’s, Fitch and Morningstar. Low issue composite rating uses ratings from the major credit rating agencies or if these are not available an equivalent internal rating. For securities where the ratings assigned are not equivalent, the second lowest rating is utilized.

(2)There was no allowance for credit losses as of both September 30, 2023 and December 31, 2022.

(3)Excludes fixed maturity securities classified as “Assets supporting experience-rated contractholder liabilities” and “Fixed maturities, trading.”

Assets Supporting Experience-Rated Contractholder Liabilities

For information regarding the composition of “Assets supporting experience-rated contractholder liabilities”, see Note 3 to the Unaudited Interim Consolidated Financial Statements.

Commercial Mortgage and Other Loans

Investment Mix

The following table sets forth the composition of our commercial mortgage and other loans portfolio attributable to PFI excluding the Closed Block division, as of the dates indicated:

						September 30, 2023						December 31, 2022
						(in millions)
Commercial mortgage and agricultural property loans						$	49,427					$	48,240
Uncollateralized loans						406						463
Residential property loans						30						43
Other collateralized loans						100						108
Total recorded investment gross of allowance(1)						49,963						48,854
Allowance for credit losses						(278)						(172)
Total commercial mortgage and other loans, net						$	49,685					$	48,682

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(1)As a percentage of recorded investment gross of allowance, 99% of these assets were current as of both September 30, 2023 and December 31, 2022.

We originate commercial mortgage and agricultural property loans using a dedicated sales and underwriting staff through our various regional offices in the U.S. and international offices primarily in London and Tokyo. All loans are underwritten consistently to our standards using a proprietary quality rating system that has been developed from our industry experience in real estate and mortgage lending.

Uncollateralized loans primarily represent corporate loans held by the Company’s international insurance operations.

Residential property loans primarily include Japanese recourse loans. To the extent there is a default on 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.

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Other collateralized loans include mezzanine real estate debt investments and consumer loans.

Composition of Commercial Mortgage and Agricultural Property Loans

Our commercial mortgage and agricultural property loan portfolio strategy emphasizes diversification by property type and geographic location. The following tables set forth the breakdown of the gross carrying values of commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by geographic region and property type, as of the dates indicated:

						September 30, 2023												December 31, 2022
						Gross Carrying Value						% of Total						Gross Carrying Value						% of Total
						($ in millions)
Commercial mortgage and agricultural property loans by region:
U.S. Regions(1):
Pacific						$	18,311					37.0		%				$	17,509					36.3		%
South Atlantic						7,288						14.7						7,642						15.8
Middle Atlantic						5,652						11.4						5,364						11.1
East North Central						2,622						5.3						2,587						5.4
West South Central						5,506						11.1						5,091						10.6
Mountain						2,162						4.4						2,025						4.2
New England						1,251						2.5						1,286						2.7
West North Central						485						1.0						485						1.0
East South Central						1,232						2.5						1,247						2.6
Subtotal-U.S.						44,509						89.9						43,236						89.7
Europe						3,199						6.6						3,157						6.5
Asia						676						1.4						789						1.6
Other						1,043						2.1						1,058						2.2
Total commercial mortgage and agricultural property loans						$	49,427					100.0		%				$	48,240					100.0		%

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(1)Regions as defined by the United States Census Bureau.

						September 30, 2023												December 31, 2022
						Gross Carrying Value						% of Total						Gross Carrying Value						% of Total
						($ in millions)
Commercial mortgage and agricultural property loans by property type:
Industrial						$	12,969					26.2		%				$	11,853					24.6		%
Retail						4,620						9.3						4,800						10.0
Office						7,062						14.3						7,568						15.7
Apartments/Multi-Family						13,891						28.1						13,503						28.0
Agricultural properties						5,638						11.4						5,587						11.5
Hospitality						1,855						3.8						1,733						3.6
Other						3,392						6.9						3,196						6.6
Total commercial mortgage and agricultural property loans						$	49,427					100.0		%				$	48,240					100.0		%

Loan-to-value and debt service coverage ratios are measures commonly used to assess the quality of commercial mortgage and agricultural property 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. A loan-to-value ratio less than 100% indicates an excess of collateral value over the loan amount. Loan-to-value ratios greater than 100% indicate that the loan amount exceeds

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the collateral value. 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 debt service coverage ratio greater than 1.0 times indicates an excess of net operating income over the debt service payments.

As of September 30, 2023, our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division had a weighted-average debt service coverage ratio of 2.48 times and a weighted-average loan-to-value ratio of 59%. As of September 30, 2023, 96% of commercial mortgage and agricultural property loans were fixed rate loans. For those commercial mortgage and agricultural property loans that were originated in 2023, the weighted-average debt service coverage ratio was 1.73 times, and the weighted-average loan-to-value ratio was 64%.

The values utilized in calculating these loan-to-value ratios are developed as part of our periodic reviews of the commercial mortgage and agricultural property loan portfolio, which include internal evaluations of the underlying collateral values. Our periodic reviews also include a credit quality re-rating process, whereby we update the internal quality ratings originally assigned at underwriting based on the proprietary quality rating system mentioned above. As discussed below, the internal credit quality rating is a key input in determining our allowance for credit losses.

For loans with collateral under construction, renovation or lease-up, projected stabilized values and net operating income are used in the calculation of the loan-to-value and debt service coverage ratios. Our commercial mortgage and agricultural property loan portfolio included $1.6 billion and $2.4 billion of such loans as of September 30, 2023 and December 31, 2022, respectively. All else being equal, these loans are inherently riskier than those collateralized by properties that have already stabilized. As of both September 30, 2023 and December 31, 2022, there was less than $1 million of allowance related to these loans. In addition, these unstabilized loans are included in the calculation of our portfolio reserve, as discussed below.

The following table sets forth the gross carrying value of our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by loan-to-value and debt service coverage ratios, as of the date indicated:

						September 30, 2023
						Debt Service Coverage Ratio
						> 1.2x						1.0x to < 1.2x						< 1.0x						Total Commercial Mortgage and Agricultural Property Loans
Loan-to-Value Ratio						(in millions)
0%-59.99%						$	28,308					$	574					$	145					$	29,027
60%-69.99%						11,797						699						272						12,768
70%-79.99%						3,897						330						671						4,898
80% or greater						1,219						706						809						2,734
Total commercial mortgage and agricultural property loans						$	45,221					$	2,309					$	1,897					$	49,427

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The following table sets forth the breakdown of our commercial mortgage and agricultural property loans attributable to PFI excluding the Closed Block division by year of origination, as of the date indicated:

						September 30, 2023
						Gross Carrying Value						% of Total
Year of Origination						($ in millions)
2023						$	3,374					6.8		%
2022						4,611						9.3
2021						7,319						14.8
2020						3,567						7.2
2019						6,584						13.3
2018						6,280						12.7
2017						4,211						8.5
2016 & Prior						13,443						27.3
Revolving Loans						38						0.1
Total commercial mortgage and agricultural property loans						$	49,427					100.0		%

Commercial Mortgage and Other Loans Quality

The commercial mortgage and other loans portfolio is monitored on an ongoing basis. If certain criteria are met, loans are assigned to either of the following “watch list” categories:

(1) “Closely Monitored,” which includes a variety of considerations, such as when loan metrics fall below acceptable levels, the borrower is not cooperative or has requested a material modification, or the portfolio manager has directed a change in category; or

(2) “Not in Good Standing,” which includes loans in default or with 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.

The current expected credit loss (“CECL”) allowance represents the Company’s best estimate of expected credit losses over the remaining life of the assets. The determination of the allowance considers historical credit loss experience, current conditions, and reasonable and supportable forecasts. The allowance is calculated separately for commercial mortgage loans, agricultural mortgage loans, uncollateralized loans, other collateralized loans and residential property loans.

For commercial mortgage and agricultural mortgage loans, the allowance is calculated using an internally developed CECL model.

Key inputs to the CECL model include unpaid principal balances, internal credit ratings, annual expected loss factors, average lives of the loans adjusted for prepayment considerations, current and historical interest rate assumptions and other factors influencing the Company’s view of the current stage of the economic cycle and future economic conditions. Subjective considerations include a review of whether historical loss experience is representative of current market conditions and the Company’s view of the credit cycle. Model assumptions and factors are reviewed and updated as appropriate.

When individual loans no longer have the credit risk characteristics of the commercial or agricultural mortgage loan pools, they are removed from the pools and are evaluated individually for an allowance. The allowance is determined based on the outstanding loan balance less the present value of expected future cash flows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan is collateral dependent.

The CECL allowance for other collateralized and uncollateralized loans carried at amortized cost is determined based on probability of default and loss given default assumptions by sector, credit quality and average lives of the loans.

The following table sets forth the change in allowance for credit losses for our commercial mortgage and other loans portfolio, as of the dates indicated:

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						September 30, 2023						December 31, 2022
						(in millions)
Allowance, beginning of year						$	172					$	102
Addition to (release of) allowance for credit losses						104						66
Other						2						4
Allowance, end of period						$	278					$	172

The allowance for credit losses as of September 30, 2023 increased compared to December 31, 2022 primarily related to increases in loan-specific reserves and increases in the portfolio reserve to reflect declining market conditions.

Equity Securities

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:

						September 30, 2023																								December 31, 2022
						Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value						Cost						Gross Unrealized Gains						Gross Unrealized Losses						Fair Value
						(in millions)
Mutual funds						$	968					$	553					$	33					$	1,488					$	759					$	433					$	2					$	1,190
Other Common Stocks						2,108						1,022						93						3,037						2,581						921						87						3,415
Non-redeemable Preferred Stocks						39						41						17						63						30						41						5						66
Total equity securities, at fair value						$	3,115					$	1,616					$	143					$	4,588					$	3,370					$	1,395					$	94					$	4,671

The net change in unrealized gains (losses) from equity securities attributable to PFI excluding Closed Block division, still held at period end, recorded within “Other income (loss),” was $(163) million and $(282) million during the three months ended September 30, 2023 and 2022, respectively, and $172 million and $(696) million during the nine months ended September 30, 2023 and 2022, respectively.

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Other Invested Assets

The following table sets forth the composition of “Other invested assets” attributable to PFI excluding the Closed Block division, as of the dates indicated:

						September 30, 2023						December 31, 2022
						(in millions)
LPs/LLCs:
Equity method:
Private equity						$	6,929					$	5,760
Hedge funds						2,373						2,420
Real estate-related						1,722						1,763
Subtotal equity method						11,024						9,943
Fair value:
Private equity						831						909
Hedge funds						1,052						1,000
Real estate-related						33						37
Subtotal fair value						1,916						1,946
Total LPs/LLCs						12,940						11,889
Real estate held through direct ownership(1)						621						705
Derivative instruments						(240)						21
Other(2)						674						662
Total other invested assets						$	13,995					$	13,277

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(1)As of September 30, 2023 and December 31, 2022, real estate held through direct ownership had mortgage debt of $181 million and $208 million, respectively.

(2)Primarily includes equity investments accounted for under the measurement alternative, leveraged leases and member and activity stock held in the Federal Home Loan Bank of New York. For additional information regarding our holdings in the Federal Home Loan Bank of New York, see Note 17 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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 investment management operations and derivative operations. Our derivative operations act on behalf of affiliates primarily to manage interest rate, foreign currency, credit and equity exposures. Assets within our investment management operations that are managed for third-parties and those assets classified as “Separate account assets” on our balance sheet are not included.

						September 30, 2023						December 31, 2022
						(in millions)
Fixed maturities:
Public, available-for-sale, at fair value(1)						$	554					$	523
Private, available-for-sale, at fair value						275						205
Fixed maturities, trading, at fair value(1)						613						213
Equity securities, at fair value						673						746
Commercial mortgage and other loans, at book value(2)						387						137
Other invested assets						3,194						3,568
Short-term investments						14						18
Total investments						$	5,710					$	5,410

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(1)As of September 30, 2023 and December 31, 2022, balances include investments in CLOs with fair value of $308 million and $294 million, respectively.

(2)Book value is generally based on unpaid principal balance, net of any allowance for credit losses, or at fair value, when the fair value option has been elected.

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Fixed Maturities, Trading

“Fixed maturities, trading, at fair value” are primarily related to assets associated with consolidated VIEs for which the Company is the investment manager. The assets of the consolidated VIEs are generally offset by liabilities for which the fair value option has been elected. For additional information regarding these consolidated VIEs, see Note 4 to the Unaudited Interim Consolidated Financial Statements.

Commercial Mortgage and Other Loans

Our investment management operations include our commercial mortgage operations, which provide mortgage origination, investment management and servicing for our general account, institutional clients, the Federal Housing Administration and government-sponsored entities such as Fannie Mae and Freddie Mac.

The mortgage loans of our commercial mortgage operations are included in “Commercial mortgage and other loans.” Derivatives and other hedging instruments related to our commercial mortgage operations are primarily included in “Other invested assets.”

Other Invested Assets

“Other invested assets” primarily include assets of our derivative operations used to manage interest rate, foreign currency, credit, and equity exposures.

Furthermore, other invested assets include strategic investments made as part of our investment 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 investment management operations, we also make loans to our managed funds that are secured by equity commitments from investors or assets of the funds. “Other invested assets” also include certain assets in consolidated investment funds where the Company is deemed to exercise control over the funds.

Liquidity and Capital Resources

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 Company. 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. We use a Risk Appetite Framework (“RAF”) to ensure that all risks taken across the Company align with our capacity and willingness to take those risks. The RAF provides a dynamic assessment of capital and liquidity stress impacts and is intended to ensure that sufficient resources are available to absorb those impacts. We believe that our capital and liquidity resources are sufficient to satisfy the capital and liquidity requirements of Prudential Financial and its subsidiaries.

Our businesses are subject to comprehensive regulation and supervision by domestic and international regulators. These regulations currently include requirements (many of which are the subject of ongoing rule-making) relating to capital and liquidity management. For information regarding these regulatory initiatives and their potential impact on us, see “Business—Regulation” and “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022.

From the beginning of 2023 through the date of this report, we took the following significant actions that have impacted, or are expected to impact, our liquidity and capital positions:

• In February, we issued $500 million of junior subordinated notes. We intend to use these proceeds for general corporate purposes, which may include the redemption or repurchase of our $500 million of junior subordinated notes due in 2044.

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• In March, we augmented our alternative sources of liquidity by entering into facility agreements with two Delaware trusts, pursuant to which Prudential Financial may issue and sell to the trusts at any time over a pre-determined period up to $1.5 billion of senior notes and receive in exchange a corresponding amount of U.S. Treasury securities. The first facility agreement expires in 2033 and the second facility agreement expires in 2053. These facility agreements are similar to our two existing agreements, consisting of a put option agreement for up to $1.5 billion that expires in 2023 and a facility agreement for up to $1.5 billion that expires in 2030.

• In May, we entered into an agreement with Ohio National to reinsure approximately $10 billion of account values of our PDI traditional variable annuity contracts issued by Pruco Life Insurance Company, a wholly-owned subsidiary of Prudential Financial, resulting in proceeds of approximately $650 million, which includes a statutory capital release, release of reserves, and ceding commission received, net of taxes. The transaction was completed on June 30, 2023 with an effective date of April 1, 2023. See Note 12 to the Unaudited Interim Consolidated Financial Statements for additional information.

• In May, Prudential Financial received $900 million resulting from a policy loan transaction through our irrevocable trust, commonly referred to as a “rabbi trust,” that was created to support certain non-qualified retirement plans. For additional information regarding the rabbi trust, see Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

• In June, we redeemed $1.5 billion of 5.625% junior subordinated notes due in 2043.

• In July, we entered into an agreement with Somerset Re to reinsure certain guaranteed universal life policies issued by Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, both of which are wholly-owned subsidiaries of Prudential Financial. These policies represent approximately 30% of the Company’s reserves on its in-force guaranteed universal life block of business. We will continue to manage financing related to Guideline AXXX reserves for the business reinsured to Somerset Re; as a result, we anticipate changes to our current captive financing arrangements upon closing of the reinsurance transaction, including an increase in the amount of financing related to Guideline AXXX reserves. See “—Individual Life” above for additional information regarding this reinsurance agreement.

• In September, we entered into an agreement with the Federal Agricultural Mortgage Corporation (“Farmer Mac”) under which we can borrow up to $750 million by issuing funding agreements to a subsidiary of Farmer Mac, with borrowings secured by a pledge of certain eligible agricultural mortgage loans.

• In September, we acquired a 20% interest in Prismic HoldCo, a newly-launched Bermuda limited partnership, and entered into an agreement with its subsidiary, Prismic Re, to reinsure approximately $9 billion of reserves for structured settlement annuities contracts issued by PICA.

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 September 30, 2023, the Company had $46.6 billion in capital, all of which was available to support the aggregate capital requirements of its businesses 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.

			September 30, 2023						December 31, 2022
			(in millions)
Equity(1)			$	33,645					$	34,399
Junior subordinated debt (including hybrid securities)			8,090						9,094
Other capital debt			4,871						4,977
Total capital			$	46,606					$	48,470

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(1)Amounts attributable to Prudential Financial, excluding AOCI.

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We manage PICA, The Prudential Life Insurance Company, Ltd. (“Prudential of Japan”), Gibraltar Life, and other significant 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.

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.

PICA’s RBC ratio as of December 31, 2022, its most recent statutory fiscal year-end and RBC reporting date, was 383%. PICA’s RBC ratio is calculated on a consolidated basis and included Pruco Life Insurance Company (“Pruco Life”), Pruco Life Insurance Company of New Jersey (“PLNJ”), which is a subsidiary of Pruco Life, and Prudential Legacy Insurance Company of New Jersey (“PLIC”).

Similar to the RBC ratios that are employed by U.S. insurance regulators, regulatory authorities in the international jurisdictions in which we operate generally establish some form of minimum solvency margin requirements for insurance companies based on local statutory accounting practices. These solvency margins are a primary measure of the capital adequacy of our international insurance operations. Maintenance of our solvency margins at certain levels is also important to our competitive positioning, as in certain jurisdictions, such as Japan, these solvency margins are required to be disclosed to the public and therefore impact the public perception of an insurer’s financial strength.

The table below presents the solvency margin ratios of our most significant international insurance subsidiaries as of June 30, 2023, the most recent date for which this information is available.

			Ratio
Prudential of Japan consolidated(1)			772		%
Gibraltar Life consolidated(2)			894		%

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(1)Includes Prudential Trust Co., Ltd., a subsidiary of Prudential of Japan.

(2)Includes Prudential Gibraltar Financial Life Insurance Co., Ltd. (“PGFL”), a subsidiary of Gibraltar Life.

All of our domestic and significant international insurance subsidiaries have capital levels that substantially exceed the minimum level required by applicable insurance regulations. The statutory capital of our insurance companies and our overall capital flexibility could be impacted by, among other things, market conditions and changes in insurance reserves, including those stemming from updates to our actuarial assumptions. Our regulatory capital levels also may be affected in the future by changes to the applicable regulations, proposals for which are currently under consideration by both domestic and international insurance regulators. For information regarding the NAIC’s August 2023 adoption of changes to the treatment of negative interest maintenance reserves, see “—Regulatory Developments” above. For additional information regarding the calculation of RBC and solvency margin ratios, as well as regulatory minimums, see Note 19 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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, 2022, for a discussion of our use of captive reinsurance companies.

Shareholder Distributions

Share Repurchase Program and Shareholder Dividends

In February 2023, 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 January 1, 2023 through December 31, 2023. In general, the timing and amount of share repurchases are determined by management based on market conditions and other considerations, including compliance with applicable laws and any increased capital needs of our businesses due to, among other things, credit migration and losses in our investment portfolio, changes in regulatory capital requirements and opportunities for growth and acquisitions. Repurchases may be executed 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 Securities Exchange Act of 1934.

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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 nine months ended September 30, 2023.

			Dividend Amount												Shares Repurchased
Three months ended:			Per Share						Aggregate						Shares						Total Cost
			(in millions, except per share data)
March 31, 2023			$	1.25					$	468					2.7						$	250
June 30, 2023			$	1.25					$	463					3.0						$	250
September 30, 2023			$	1.25					$	461					2.6						$	250

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. We seek to maintain a minimum balance of highly liquid assets 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 at a time when access to capital markets is also not available.

We seek to mitigate the risk of having limited or no access to financing due to stressed market conditions by generally pre-funding 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 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, returns of capital and loans from subsidiaries, and proceeds from debt issuances and certain stock-based compensation activity. 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, making capital contributions and loans to subsidiaries, making acquisitions, paying declared shareholder dividends and repurchasing outstanding shares of Common Stock executed under authority from the Board.

As of September 30, 2023, Prudential Financial had highly liquid assets with a carrying value totaling $5,043 million, a decrease of $370 million from December 31, 2022. Highly liquid assets predominantly include cash, short-term investments, U.S. Treasury securities, obligations of other U.S. government authorities and agencies, and/or foreign government bonds. 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 the net borrowings from this intercompany liquidity account, Prudential Financial had highly liquid assets of $4,305 million as of September 30, 2023, a decrease of $230 million from December 31, 2022.

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The following table sets forth Prudential Financial’s principal sources and uses of highly liquid assets, excluding net borrowings from our intercompany liquidity account, for the periods indicated.

						Nine Months Ended September 30,
						2023						2022
						(in millions)
Highly Liquid Assets, beginning of period						$	4,535					$	3,553
Dividends and/or returns of capital from subsidiaries(1)						3,154						1,171
Affiliated (borrowings)/loans - (capital activities)						604						(403)
Capital contributions to subsidiaries(2)						(751)						(2,527)
Total Business Capital Activity						3,007						(1,759)
Share repurchases(3)						(754)						(1,113)
Common Stock dividends(4)						(1,391)						(1,371)
Business dispositions(5)						0						4,481
Total Share Repurchases, Dividends and Business Disposition Activity						(2,145)						1,997
Proceeds from the issuance of debt						495						2,474
Repayments of debt						(1,510)						(1,002)
Total Debt Activity						(1,015)						1,472
Net interest expense						(786)						(676)
Affiliated (borrowings)/loans - (operating activities)(6)						362						420
Other, net(7)						347						109
Total Other Activity						(77)						(147)
Net increase/(decrease) in highly liquid assets						(230)						1,563
Highly Liquid Assets, end of period						$	4,305					$	5,116

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(1)2023 includes $1,750 million from PICA, $900 million from a rabbi trust, $433 million from international insurance subsidiaries (including $332 million in the form of in-kind dividends), $45 million from PGIM subsidiaries, $18 million from Prudential Annuities Holding Company, and $8 million from other subsidiaries. 2022 includes $998 million from international insurance subsidiaries, $136 million from PGIM subsidiaries, $32 million from Prudential Annuities Holding Company, and $5 million from other subsidiaries.

(2)2023 includes capital contributions of $394 million to PGIM subsidiaries (of which $324 million is offset in “Affiliated (borrowings)/loans - (operating activities)” within this table), $244 million to international insurance subsidiaries and $113 million to other subsidiaries. 2022 includes capital contributions of $1,000 million to PICA, $780 million to an international reinsurance subsidiary, $487 million to international insurance subsidiaries, and $260 million to other subsidiaries. The majority of the capital contribution to our international reinsurance subsidiary was to fund the payment of ceding commissions to our domestic insurance subsidiaries.

(3)Excludes cash payments made on trades that settled in the subsequent period.

(4)Includes cash payments made on dividends declared in prior periods.

(5)2022 includes proceeds and capital releases related to the sales of the Full Service Retirement business and PALAC.

(6)Represent loans to and from subsidiaries to support business operating needs.

(7)2023 includes $199 million of proceeds from stock-based compensation and exercise of stock options, $146 million of income on investments and $119 million of net income tax receipts, partially offset by a payment of $205 million for the equity investment in Prismic HoldCo. 2022 includes $201 million of proceeds from stock-based compensation and exercise of stock options.

Dividends and Returns of Capital from Subsidiaries

Domestic insurance subsidiaries. During the first nine months of 2023, Prudential Financial received dividends of $1,750 million from PICA and $18 million from Prudential Annuities Holding Company. In addition to paying Common Stock dividends, our domestic insurance operations may return capital to Prudential Financial by other means, such as affiliated lending, and reinsurance with Bermuda-based affiliates.

International insurance subsidiaries. During the first nine months of 2023, Prudential Financial received dividends of $433 million from its international insurance subsidiaries, which included $332 million of in-kind dividends in the form of the extinguishment of debt held by international insurance subsidiaries. In addition to paying Common Stock dividends, our international insurance operations may return capital to Prudential Financial by other means, such as the repayment of preferred stock obligations held by Prudential Financial or other affiliates, affiliated lending, affiliated derivatives and reinsurance with U.S.- and Bermuda-based affiliates.

Other subsidiaries. During the first nine months of 2023, Prudential Financial received dividends and returns of capital of $900 million from a rabbi trust, $45 million from PGIM subsidiaries and $8 million from other subsidiaries.

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Restriction 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. Further, market conditions could negatively impact capital positions of our insurance companies, which could further restrict their ability to pay dividends. 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.

With respect to our domestic insurance subsidiaries, PICA is permitted to pay ordinary dividends based on calculations specified under New Jersey insurance law, subject to prior notification to the New Jersey Department of Banking and Insurance (“NJDOBI”). Any distributions above this amount in any twelve-month period are considered to be “extraordinary” dividends, and the approval of the NJDOBI is required prior to payment. The laws regulating dividends of the states where our other domestic insurance companies are domiciled are similar, but not identical, to those of New Jersey.

Capital redeployment from our international insurance subsidiaries is subject to local regulatory requirements in the international jurisdictions in which they operate. Our most significant international insurance subsidiaries, Prudential of Japan and Gibraltar Life, are permitted to pay Common Stock dividends based on calculations specified by Japanese insurance business law. Dividends in excess of these amounts and other forms of capital distribution may require the prior approval of the FSA. The regulatory fiscal year end for both Prudential of Japan and Gibraltar Life is March 31, after which time the Common Stock dividend amount permitted to be paid without prior approval from the FSA can be determined.

The ability of our PGIM subsidiaries and the majority of our other operating subsidiaries to pay dividends is largely unrestricted from a regulatory standpoint.

See Note 19 to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022, for information regarding specific dividend restrictions.

Liquidity of Insurance Subsidiaries

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.

Liquidity is measured against internally-developed benchmarks that take into account the characteristics of both the asset portfolio and the liabilities that they support. We consider attributes of the various categories of liquid assets (for example, type of asset and credit quality) in calculating internal liquidity measures to evaluate our insurance operations’ liquidity under various stress scenarios, including company-specific and market-wide events. We continue to believe that cash generated by ongoing operations and the 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, investment and fee income, investment maturities, sales of investments, and sales associated with our insurance and annuity operations, as well as internal and external borrowings. The principal uses of 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 may include commissions, general and administrative expenses, purchases of investments, the payment of dividends to the parent holding company, hedging and reinsurance activity and payments in connection with financing activities.

The following table sets forth the fair value of certain of our domestic insurance operations’ portfolio of liquid assets, as of the dates indicated.

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			September 30, 2023
			Prudential Insurance(1)						PLIC						Pruco Life						Total						December 31, 2022
			(in billions)
Cash and short-term investments			$	6.0					$	0.7					$	2.1					$	8.8					$	8.3
Fixed maturity investments(2):
High or highest quality			102.9						25.9						24.2						153.0						155.9
Other than high or highest quality			7.2						2.6						2.1						11.9						12.2
Subtotal			110.1						28.5						26.3						164.9						168.1
Public equity securities, at fair value			0.9						1.7						0.2						2.8						3.0
Total			$	117.0					$	30.9					$	28.6					$	176.5					$	179.4

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(1)Represents legal entity view and as such includes both domestic and international activity.

(2)Excludes fixed maturities designated as held to maturity. Credit quality is based on NAIC or equivalent rating.

The following table sets forth the fair value of our international insurance operations’ portfolio of liquid assets, as of the dates indicated.

			September 30, 2023
			Prudential of Japan						Gibraltar Life(1)						All Other(2)						Total						December 31, 2022
			(in billions)
Cash and short-term investments			$	0.6					$	3.2					$	1.9					$	5.7					$	1.1
Fixed maturity investments(3):
High or highest quality(4)			30.1						58.1						14.5						102.7						108.8
Other than high or highest quality			0.3						0.6						3.0						3.9						4.0
Subtotal			30.4						58.7						17.5						106.6						112.8
Public equity securities			2.4						1.3						0.1						3.8						3.8
Total			$	33.4					$	63.2					$	19.5					$	116.1					$	117.7

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(1)Includes PGFL.

(2)Represents our international insurance operations, excluding Japan.

(3)Excludes fixed maturities designated as held-to-maturity. Credit quality is based on NAIC or equivalent rating.

(4)As of September 30, 2023, $71.2 billion, or 69%, were invested in government or government agency bonds.

Liquidity associated with other activities

Hedging activities associated with Individual Retirement Strategies

For the portion of our Individual Retirement Strategies’ ALM strategy executed through hedging, we enter into a range of exchange-traded, cleared and other OTC equity and interest rate derivatives in order to hedge certain capital market risks related to more severe market conditions. For a full discussion of our Individual Retirement Strategies’ risk management strategy, see “—Results of Operations by Segment—U.S. Businesses—Retirement Strategies.” This portion of our Individual Retirement Strategies’ ALM strategy requires access to liquidity to meet payment obligations relating to these derivatives, such as payments for periodic settlements, purchases, maturities and terminations. These liquidity needs can vary materially due to, among other items, changes in interest rates, equity markets, mortality and policyholder behavior.

The hedging portion of our Individual Retirement Strategies’ ALM strategy may also result in derivative related collateral postings to (when we are in a net post position) or from (when we are in a net receive position) 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 when we are in a net post position. As of September 30, 2023, the derivatives comprising the hedging portion of our Individual Retirement Strategies’ ALM strategy were in a net post position of $13.3 billion compared to a net post position of $11.8 billion as of December 31, 2022. The change in collateral position was primarily driven by the impact of equity market appreciation, and increasing interest rates.

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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.

We hold both internal and external hedges primarily to hedge our USD-equivalent equity. These hedges also mitigate volatility in the solvency margins of yen-based subsidiaries resulting from changes in the market value of their USD-denominated investments hedging our USD-equivalent equity attributable to changes in the yen-USD exchange rate.

For additional information regarding our hedging strategy, see “—Results of Operations—Impact of Foreign Currency Exchange Rates.”

Cash settlements from these hedging activities result in cash flows between subsidiaries of Prudential Financial and either international-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. For example, 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 related to the yen and other currencies for the periods indicated.

			Nine Months Ended September 30,
Cash Settlements Received (Paid):			2023						2022
			(in millions)
Internal Hedges(1)			$	964					$	610
External Hedges(2)(5)			(531)						(191)
Total Cash Settlements			$	433					$	419
Assets (Liabilities):			September 30, 2023						December 31, 2022
			(in millions)
Internal Hedges(1)			$	1,210					$	1,229
External Hedges(3)(5)			134						(132)
Total Assets (Liabilities)(4)			$	1,344					$	1,097

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(1)Represents internal transactions between international-based and U.S.-based entities. Amounts noted are from the U.S.-based entities’ perspectives.

(2)Includes non-yen related cash settlements received (paid) of $(26) million, primarily denominated in Brazilian real, Australian dollar and Chilean peso, and $12 million, primarily denominated in Chilean peso, Brazilian real and Australian dollar for the nine months ended September 30, 2023 and 2022, respectively.

(3)Includes non-yen related assets (liabilities) of $(50) million, primarily denominated in Brazilian real, Australian dollar and Chilean peso, as of September 30, 2023 and $(19) million, primarily denominated in Brazilian real, Australian dollar and Chilean peso, as of December 31, 2022.

(4)As of September 30, 2023, approximately $200 million, $500 million, $357 million and $287 million of the net market values are scheduled to settle in 2023, 2024, 2025, 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.

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

PGIM operations

The principal sources of liquidity for our fee-based PGIM businesses include cash flows from asset management, commercial mortgage origination and servicing activities, and internal and external funding facilities. The principal uses of liquidity for our fee-based PGIM businesses include general and administrative expenses, facilitating our commercial mortgage loan business, funding needs of our seed and co-investment portfolio and distributions of dividends and returns of capital to Prudential Financial. The primary liquidity risks for our fee-based PGIM businesses relate to their profitability, which is impacted by market conditions, our investment management performance and client redemptions. We believe the cash flows from our fee-based PGIM 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.

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The principal sources of liquidity for our seed and co-investments held in our PGIM businesses are cash flows from investments, cash flows from our fee-based businesses, as described above, borrowing lines from internal sources, including Prudential Financial and Prudential Funding, LLC (“Prudential Funding”), a wholly-owned subsidiary of PICA, and external sources, including PGIM’s limited-recourse credit facility. The principal uses of liquidity for our seed and co-investments include making investments to support business growth and paying interest expense from the internal and external borrowings used to fund those investments. 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 PGIM operations since December 31, 2022.

Alternative Sources of Liquidity

In addition to asset-based financing as discussed below, Prudential Financial and certain subsidiaries have access to other sources of liquidity, including syndicated, unsecured committed credit facilities, membership in the Federal Home Loan Bank of New York, commercial paper programs, and contingent financing facilities in the form of a put option agreement and facility agreements. Beginning in September 2023, as an additional source of liquidity, the Company has entered into an agreement with Farmer Mac, under which the Company can borrow up to $750 million by issuing funding agreements to a subsidiary of Farmer Mac, with borrowings secured by a pledge of certain eligible agricultural mortgage loans. For additional information regarding these sources of liquidity, see Note 15 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 17 to the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2022.

Asset-based Financing

We conduct asset-based or secured financing within our insurance and other subsidiaries, including transactions such as securities lending, committed and uncommitted 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 (primarily corporate bonds), mortgage loans and fixed maturities (primarily collateralized loan obligations and other structured 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.

			September 30, 2023																		December 31, 2022
			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			$	3,496					$	2,051					$	5,547					$	3,548					$	3,041					$	6,589
Cash collateral for loaned securities			5,065						1,002						6,067						5,847						253						6,100
Securities sold but not yet purchased			0						0						0						0						0						0
Total(1)(2)			$	8,561					$	3,053					$	11,614					$	9,395					$	3,294					$	12,689
Portion of above securities that may be returned to the Company overnight requiring immediate return of the cash collateral			$	7,704					$	2,919					$	10,623					$	8,622					$	3,189					$	11,811
Weighted average maturity, in days(3)			6						4												17						5

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(1)The daily average outstanding balance for the three and nine months ended September 30, 2023 was $8,523 million and $9,080 million, respectively, for PFI excluding the Closed Block division, and $3,043 million and $3,103 million, respectively, for the Closed Block division.

(2)Includes utilization of external funding facilities for PGIM’s commercial mortgage origination business.

(3)Excludes securities that may be returned to the Company overnight.

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As of September 30, 2023, our domestic insurance entities had assets eligible for the asset-based or secured financing programs of $81.2 billion, of which $11 billion were on loan. Taking into account market conditions and outstanding loan balances as of September 30, 2023, we believe approximately $9.9 billion of the remaining eligible assets are readily lendable, including approximately $8.1 billion relating to PFI excluding the Closed Block division, of which $2.9 billion relates to certain separate accounts and may only be used for financing activities related to those accounts, and the remaining $1.8 billion relating to the Closed Block division.

Financing Activities

As of September 30, 2023, total short-term and long-term debt of the Company on a consolidated basis was $19.5 billion, a decrease of $1.2 billion from December 31, 2022. 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 actions will depend on prevailing market conditions, our liquidity position, and other factors.

			September 30, 2023																		December 31, 2022
Borrowings:			Prudential Financial						Subsidiaries						Consolidated						Prudential Financial						Subsidiaries						Consolidated
			(in millions)
General obligation short-term debt:
Commercial paper			$	25					$	508					$	533					$	25					$	413					$	438
Current portion of long-term debt			0						0						0						0						173						173
Other short-term debt			0						0						0						0						0						0
Subtotal			25						508						533						25						586						611
General obligation long-term debt:
Senior debt			10,113						0						10,113						10,115						0						10,115
Junior subordinated debt			8,048						42						8,090						9,047						47						9,094
Surplus notes(1)			0						346						346						0						345						345
Subtotal			18,161						388						18,549						19,162						392						19,554
Total general obligations			18,186						896						19,082						19,187						978						20,165
Limited and non-recourse borrowings(2):
Short-term debt			0						0						0						0						9						9
Current portion of long-term debt			0						82						82						0						155						155
Long-term debt			0						328						328						0						354						354
Total limited and non-recourse borrowings			0						410						410						0						518						518
Total borrowings			$	18,186					$	1,306					$	19,492					$	19,187					$	1,496					$	20,683

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(1)Amounts are net of assets under set-off arrangements of $12,290 million as of both September 30, 2023 and December 31, 2022, respectively.

(2)Limited and non-recourse borrowing primarily represents mortgage debt of our subsidiaries that has recourse only to real estate investment property of $180 million and $208 million as of September 30, 2023 and December 31, 2022, respectively, and a draw on a credit facility that has recourse only to collateral pledged by the Company of $230 million and $300 million as of September 30, 2023 and December 31, 2022, respectively.

As of September 30, 2023, and December 31, 2022, the Company was in compliance with all debt covenants related to the borrowings in the table above. For additional information regarding the Company’s short- and long-term debt obligations, see Note 15 to the Unaudited Interim Consolidated Financial Statements contained herein and Note 17 to the Company’s Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2022.

Prudential Financial’s consolidated borrowings decreased $1.2 billion from December 31, 2022. In February 2023, the Company issued $500 million in aggregate principal amount of 6.750% junior subordinated notes due in March 2053. In June 2023, the Company redeemed, in full, $1.5 billion in aggregate principal amount of 5.625% junior subordinated notes due in 2043. In September 2023, $173 million of 6.750% medium-term notes within subsidiary borrowings matured.

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

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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. These surplus notes are subordinated to policyholder obligations, and the payment of principal and interest on the surplus notes can only be made with prior insurance regulatory approval.

We have entered into agreements with external counterparties providing for the issuance of surplus notes by our captive reinsurers in return for the receipt of credit-linked notes (“Credit-Linked Note Structures”). We had Credit-Linked Note Structures with an aggregate issuance capacity of $16,050 million as of both September 30, 2023 and December 31, 2022, of which $14,070 million was outstanding. 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. For additional information regarding 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, 2022.

The following table summarizes our Credit-Linked Note Structures, which are reported on a net basis, as of September 30, 2023.

			Surplus Notes												Outstanding as of September 30, 2023
Credit-Linked Note Structures:			Original Issue Dates						Maturity Dates									Facility Size
			($ in millions)
XXX			2012-2021						2023-2036						$	1,600		(1)						$	1,750
AXXX			2013						2033						3,500									3,500
XXX			2014-2018						2023-2034						2,080			(2)						2,100
XXX			2014-2017						2024-2037						2,330									2,400
AXXX			2017						2037						1,540									2,000
XXX			2018						2038						920									1,600
AXXX			2020						2032						2,100									2,700
Total Credit-Linked Note Structures															$	14,070								$	16,050

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(1)Prudential Financial has agreed to reimburse amounts paid under the credit-linked notes issued in this structure up to $250 million.

(2)The $2,080 million of surplus notes represents an intercompany transaction that eliminates upon consolidation. Prudential Financial has agreed to reimburse amounts paid under credit-linked notes issued in this structure up to $1,000 million.

As of September 30, 2023, we also had outstanding an aggregate of $2,800 million of debt issued for the purpose of financing $700 million of Regulation XXX and $2,100 million of Guideline AXXX non-economic reserves. In addition, as of September 30, 2023, for purposes of financing Guideline AXXX non-economic reserves, one captive had $3,982 million of surplus notes outstanding that were issued to affiliates.

The Company introduced updated versions of its individual life products in conjunction with the requirement to adopt principle-based reserving by January 1, 2020. These updated products are currently priced to support the principle-based statutory reserve level without the need for reserve financing.

Off-Balance Sheet Arrangements

See additional information regarding off-balance sheet arrangements in Note 15 and other commitments in Note 20 to the Unaudited Interim Consolidated Financial Statements.

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, 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.

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Ratings

See “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, 2022, for a discussion of our financial strength and credit ratings and their impact on our business.

There have been no significant changes or actions in ratings or ratings outlooks for the Company that have occurred since the filing of our Form 10-K for the year ended December 31, 2022.