Item 1. Financial Statements

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Item 1. Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Financial Position

March 31, 2025 and December 31, 2024 (in millions, except share amounts)


	March 31, 2025		December 31, 2024
ASSETS
Fixed maturities, available-for-sale, at fair value (allowance for credit losses: 2025-$251; 2024-$331) (amortized cost: 2025-$344,734; 2024-$341,004)(1)	$	315,914	$	311,570

Fixed maturities, trading, at fair value (amortized cost: 2025-$14,186; 2024-$13,631)(1)	13,278		12,530
Assets supporting experience-rated contractholder liabilities, at fair value	3,769		3,707
Equity securities, at fair value (cost: 2025-$6,690; 2024-$7,043)(1)	8,720		9,417
Commercial mortgage and other loans (net of $632 and $574 allowance for credit losses; includes $757 and $702 of loans measured at fair value under the fair value option at March 31, 2025 and December 31, 2024, respectively)(1)	62,694		62,341
Policy loans	9,876		9,795
Other invested assets (net of $2 and $2 allowance for credit losses; includes $7,760 and $7,574 of assets measured at fair value at March 31, 2025 and December 31, 2024, respectively)(1)	26,739		26,351
Short-term investments (net of allowance for credit losses: 2025-$0; 2024-$0)	8,716		9,069
Total investments	449,706		444,780
Cash and cash equivalents(1)	16,063		18,497
Accrued investment income(1)	3,383		3,441
Deferred policy acquisition costs	20,790		20,448
Value of business acquired	446		435
Market risk benefit assets	2,139		2,331
Reinsurance recoverables and deposit receivables (net of $14 and $12 allowance for credit losses; includes $587 and $849 of embedded derivatives at fair value at March 31, 2025 and December 31, 2024, respectively)(2)	43,982		37,680
Income tax assets	300		866
Other assets (net of $2 and $2 allowance for credit losses; includes $0 and $0 of assets at fair value at March 31, 2025 and December 31, 2024, respectively)(1)(2)	14,262		13,737
Separate account assets	188,191		193,372
TOTAL ASSETS	$	739,262	$	735,587
LIABILITIES, MEZZANINE EQUITY AND EQUITY
LIABILITIES
Future policy benefits	$	269,969	$	268,912
Policyholders’ account balances	170,278		166,254
Market risk benefit liabilities	5,021		4,455
Policyholders’ dividends	916		718
Securities sold under agreements to repurchase	7,549		6,796
Cash collateral for loaned securities	9,507		9,621
Reinsurance and funds withheld payables (includes $31 and $(118) of embedded derivatives at fair value at March 31, 2025 and December 31, 2024, respectively)(2)	17,347		17,084

Short-term debt	1,406		953
Long-term debt	19,540		19,187
Other liabilities (includes $13 and $14 allowance for credit losses and $5,182 and $4,751 of derivatives at fair value at March 31, 2025 and December 31, 2024, respectively)(1)	15,873		16,679
Notes issued by consolidated variable interest entities (includes $67 and $60 measured at fair value under the fair value option at March 31, 2025 and December 31, 2024, respectively)(1)	1,443		1,430
Separate account liabilities	188,191		193,372
Total liabilities	707,040		705,461
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 21)
MEZZANINE EQUITY
Redeemable noncontrolling interests	2,019		1,939
Total mezzanine equity	2,019		1,939
EQUITY
Preferred Stock $0.01 par value; 10,000,000 shares authorized; none issued)	0		0
Common Stock ($0.01 par value; 1,500,000,000 shares authorized; 666,305,189 shares issued as of both March 31, 2025 and December 31, 2024)	6		6
Additional paid-in capital	25,871		25,901
Common Stock held in treasury, at cost (312,298,491 and 311,738,187 shares at March 31, 2025 and December 31, 2024, respectively)	(24,661)		(24,511)
Accumulated other comprehensive income (loss)(2)	(4,741)		(6,711)
Retained earnings	33,408		33,187
Total Prudential Financial, Inc. equity	29,883		27,872
Noncontrolling interests	320		315
Total equity	30,203		28,187
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	739,262	$	735,587

(1)See Note 4 for details of balances associated with variable interest entities.

(2)See Note 20 for additional information regarding related party transactions.

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Operations

Three Months Ended March 31, 2025 and 2024 (in millions, except per share amounts)


	Three Months Ended March 31,
		2025		2024
REVENUES
Premiums (includes $1 and $5 of gains (losses) from changes in estimates on deferred profit liability amortization for the three months ended March 31, 2025 and 2024, respectively)(1)		$	7,000	$	15,537
Policy charges and fee income		1,157		1,056
Net investment income		5,130		4,764
Asset management and service fees(1)		984		999
Other income (loss)(1)		280		1,338
Realized investment gains (losses), net(1)		(730)		(308)
Change in value of market risk benefits, net of related hedging gains (losses)		(351)		123
Total revenues		13,470		23,509
BENEFITS AND EXPENSES
Policyholders’ benefits(1)		8,140		16,594
Change in estimates of liability for future policy benefits(1)		(50)		(17)
Interest credited to policyholders’ account balances		825		1,283
Dividends to policyholders		145		290
Amortization of deferred policy acquisition costs(1)		407		375

General and administrative expenses(1)		3,083		3,594
Total benefits and expenses		12,550		22,119
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES		920		1,390
Total income tax expense (benefit)		207		289
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES		713		1,101
Equity in earnings of joint ventures and other operating entities, net of taxes		29		50


NET INCOME (LOSS)		742		1,151
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests		35		13
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.		$	707	$	1,138
EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.		$	1.97	$	3.13
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.		$	1.96	$	3.12

(1)See Note 20 for additional information regarding related party transactions.

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Comprehensive Income

Three Months Ended March 31, 2025 and 2024 (in millions)


	Three Months Ended March 31,
		2025		2024
NET INCOME (LOSS)		$	742	$	1,151
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period		386		(494)
Net unrealized investment gains (losses)		(227)		(4,774)
Interest rate remeasurement of future policy benefits(1)		2,036		4,213
Gain (loss) from changes in non-performance risk on market risk benefits		167		(252)
Defined benefit pension and postretirement unrecognized periodic benefit (cost)		3		13
Total		2,365		(1,294)
Less: Income tax expense (benefit) related to other comprehensive income (loss)		395		(137)
Other comprehensive income (loss), net of taxes		1,970		(1,157)
Comprehensive income (loss)		2,712		(6)
Less: Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests		35		13
Comprehensive income (loss) attributable to Prudential Financial, Inc.		$	2,677	$	(19)

(1)See Note 20 for additional information regarding related party transactions.

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Equity

Three Months Ended March 31, 2025 and 2024 (in millions)


	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held In Treasury		Accumulated Other Comprehensive Income (Loss)		Total Prudential Financial, Inc. Equity		Noncontrolling Interests		Total Equity
Balance, December 31, 2024	$	6	$	25,901	$	33,187	$	(24,511)	$	(6,711)	$	27,872	$	315	$	28,187

Common Stock acquired							(251)				(251)				(251)
Contributions from noncontrolling interests													4		4
Distributions to noncontrolling interests													(21)		(21)
Consolidations (deconsolidations) of noncontrolling interests													13		13
Stock-based compensation programs			(30)				101				71				71
Dividends declared on Common Stock					(486)						(486)				(486)
Comprehensive income:
Net income (loss)					707						707		9		716
Other comprehensive income (loss), net of tax									1,970		1,970		0		1,970
Total comprehensive income (loss)					707				1,970		2,677		9		2,686
Balance, March 31, 2025	$	6	$	25,871	$	33,408	$	(24,661)	$	(4,741)	$	29,883	$	320	$	30,203


	Prudential Financial, Inc. Equity
	Common Stock		Additional Paid-in Capital		Retained Earnings		Common Stock Held In Treasury		Accumulated Other Comprehensive Income (Loss)		Total Prudential Financial, Inc. Equity		Noncontrolling Interests(1)		Total Equity
Balance, December 31, 2023	$	6	$	25,746	$	32,352	$	(23,780)	$	(6,504)	$	27,820	$	290	$	28,110

Common Stock acquired							(250)				(250)				(250)

Distributions to noncontrolling interests													(2)		(2)

Stock-based compensation programs			(5)				139				134				134
Dividends declared on Common Stock					(476)						(476)				(476)
Comprehensive income:
Net income (loss)					1,138						1,138		1		1,139
Other comprehensive income (loss), net of tax									(1,157)		(1,157)		0		(1,157)
Total comprehensive income (loss)					1,138				(1,157)		(19)		1		(18)
Balance, March 31, 2024	$	6	$	25,741	$	33,014	$	(23,891)	$	(7,661)	$	27,209	$	289	$	27,498

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

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Three Months Ended March 31, 2025 and 2024 (in millions)


	Three Months Ended March 31,
	2025		2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	742	$	1,151
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Realized investment (gains) losses, net(1)	730		308
Change in value of market risk benefits, net of related hedging (gains) losses	351		(123)
Policy charges and fee income	(507)		(571)
Interest credited to policyholders’ account balances	825		1,283
Depreciation and amortization	(161)		397
(Gains) losses on assets supporting experience-rated contractholder liabilities, net	256		(356)
Change in:
Deferred policy acquisition costs	(375)		(273)
Future policy benefits and other insurance liabilities	(205)		4,175
Reinsurance related-balances(1)(2)	(601)		(305)
Income taxes	133		203
Derivatives, net	(1,336)		267
Other, net(1)(2)	(2,358)		(935)
Cash flows from (used in) operating activities	(2,506)		5,221
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	10,959		10,794

Fixed maturities, trading	1,123		570
Assets supporting experience-rated contractholder liabilities	486		361
Equity securities	2,344		2,266
Commercial mortgage and other loans	1,947		1,339
Policy loans	461		438
Other invested assets	876		511
Short-term investments	5,258		7,937
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(16,975)		(19,280)

Fixed maturities, trading	(1,637)		(1,534)
Assets supporting experience-rated contractholder liabilities	(615)		(421)
Equity securities	(1,862)		(1,061)
Commercial mortgage and other loans	(2,172)		(1,457)
Policy loans	(370)		(432)
Other invested assets	(834)		(820)
Short-term investments	(4,887)		(8,947)


Derivatives, net	325		(448)
Other, net	108		(60)
Cash flows from (used in) investing activities	(5,465)		(10,244)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits	8,993		8,569
Policyholders’ account withdrawals	(4,600)		(4,664)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	639		1,008
Cash dividends paid on Common Stock	(491)		(483)
Net change in financing arrangements (maturities 90 days or less)	266		(511)
Common Stock acquired	(246)		(242)
Common Stock reissued for exercise of stock options	28		47
Proceeds from the issuance of debt (maturities longer than 90 days)	841		1,019
Repayments of debt (maturities longer than 90 days)	(191)		(539)
Proceeds from notes issued by consolidated VIEs	7		159
Repayments of notes issued by consolidated VIEs	0		(1)


Other, net(1)	253		181
Cash flows from (used in) financing activities	5,499		4,543
Effect of foreign exchange rate changes on cash balances	56		(227)
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS	(2,416)		(707)
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF YEAR	18,520		19,463
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD	$	16,104	$	18,756

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Three Months Ended March 31, 2025 and 2024 (in millions)


	Three Months Ended March 31,
	2025		2024

NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs	$	172	$	207


Significant pension risk transfer transactions:
Assets received, excluding Cash and cash equivalents	$	0	$	4,587
Liabilities assumed	0		8,714
Net cash received	$	0	$	4,127












Somerset Re reinsurance transaction(3):
Reinsurance recoverables under modified coinsurance, net	$	0	$	(548)
Unwind of Deferred policy acquisition costs ceded	0		284
Deferred reinsurance gain	0		411
Net cash received	$	0	$	147








Prismic Re International reinsurance transaction(3):
Net assets transferred, excluding Cash and cash equivalents	$	6,069	$	0
Deposit assets established for Policyholders’ account balances ceded	(6,288)		0
Unwind of Deferred policy acquisition costs ceded	219		0
Net cash impact	$	0	$	0
RECONCILIATION TO THE UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Cash and cash equivalents	$	16,063	$	18,735
Restricted cash and restricted cash equivalents (included in “Other assets”)	41		21
Total cash, cash equivalents, restricted cash and restricted cash equivalents	$	16,104	$	18,756

(1)See Note 20 for additional information regarding related party transactions.

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

(3)See Note 12 for additional information regarding the reinsurance agreements with Somerset Reinsurance Ltd. (“Somerset Re”) and Prismic Life Reinsurance International, Ltd. (“Prismic Re International”).

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements

1. BUSINESS AND BASIS OF PRESENTATION

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

The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance and Individual Life businesses), the International Businesses, the Closed Block division, and the Company’s 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 within Corporate and Other operations. 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 U.S. GAAP. The Company’s 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.

Effective in the first quarter of 2025, consistent with changes to the Company’s internal management structure, the Company’s International Businesses are reflected as a single operating and reportable segment, which is how the chief operating decision maker (“CODM”) now assesses its performance and allocates resources. Prior to the first quarter of 2025, International Businesses consisted of the Life Planner and Gibraltar Life and Other operating segments, each of which was a reportable segment under U.S. GAAP. The change has been applied retrospectively and did not have any impact on the Company’s Unaudited Interim Consolidated Financial Statements contained herein or to any previously issued financial statements. See Note 19 for additional information regarding the Company’s segments.

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for additional information regarding the Company’s consolidated variable interest entities. Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Use of Estimates

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

The most significant estimates include those used in determining future policy benefits; policyholders’ account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits; the measurement of goodwill and any related impairment; the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments (“OTTI”); pension and other postretirement benefits; any provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Out of Period Adjustments

The Company recorded out of period adjustments resulting in a net charge of $150 million to “Income (loss) from operations before income taxes and equity in earnings of joint ventures and other operating entities” for the three months ended March 31, 2025. The adjustments included an overstatement of “Reinsurance recoverables and deposit receivables” and an understatement of “Deferred policy acquisition costs.”

The impact of these adjustments, individually and in the aggregate, was not material to any previously reported quarterly or annual financial statements and is not expected to be material to the 2025 annual financial statements.

Revision of Previously Issued Financial Statements

The Company reclassified certain amounts in prior periods to conform to the current period presentation and recorded other adjustments, including the following:

As previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, during the fourth quarter of 2024, the Company identified an immaterial error in the application of adjusted operating income, which resulted in an overstatement thereof for indexed variable and fixed annuity products within the Retirement Strategies segment in the first three quarters of 2024. As a result, the Company voluntarily revised its historical adjusted operating income for the relevant periods, resulting in a decrease in pre-tax adjusted operating income of $34 million for the three months ended March 31, 2024. See Note 19 for additional information regarding adjusted operating income.

2. SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of March 31, 2025, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASUs issued but not yet adopted as of March 31, 2025


Standard	Description	Effective date and method of adoption	Effect on the financial statements or other significant matters
ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (DISE)	This ASU requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.	Effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and applied either prospectively or retrospectively.	The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures	This ASU requires entities to provide additional information primarily related to the effective tax rate reconciliation and income taxes paid.	Effective for fiscal years beginning after December 15, 2024, and permits early adoption.	The ASU has no impact on the Company’s Consolidated Financial Statements but will result in expanded disclosures in the Notes to the Consolidated Financial Statements.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

3. INVESTMENTS

Fixed Maturity Securities

The following tables set forth the composition of fixed maturity securities (excluding investments classified as trading), as of the dates indicated:


	March 31, 2025
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	23,987	$	695	$	4,490	$	0	$	20,192
Obligations of U.S. states and their political subdivisions	6,186		132		600		0		5,718
Foreign government securities	66,218		1,145		9,404		0		57,959
U.S. public corporate securities	108,302		1,365		10,588		14		99,065
U.S. private corporate securities(1)	46,703		773		2,571		58		44,847
Foreign public corporate securities	24,116		287		1,362		9		23,032
Foreign private corporate securities	39,723		403		3,870		169		36,087
Asset-backed securities(2)	17,016		157		67		1		17,105
Commercial mortgage-backed securities	9,817		46		448		0		9,415
Residential mortgage-backed securities(3)	2,666		18		190		0		2,494
Total fixed maturities, available-for-sale(1)	$	344,734	$	5,021	$	33,590	$	251	$	315,914

(1)Excludes notes with amortized cost of $15,044 million (fair value, $15,044 million), which have been offset with the associated debt under a netting agreement.

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

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


	December 31, 2024
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Allowance for Credit Losses		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	24,869	$	584	$	5,105	$	0	$	20,348
Obligations of U.S. states and their political subdivisions	6,590		132		618		0		6,104
Foreign government securities	63,523		1,837		7,881		0		57,479
U.S. public corporate securities	108,883		1,226		11,529		72		98,508
U.S. private corporate securities(1)	45,854		918		2,926		57		43,789
Foreign public corporate securities	23,165		248		1,421		10		21,982
Foreign private corporate securities	38,652		314		4,311		192		34,463
Asset-backed securities(2)	16,979		214		59		0		17,134
Commercial mortgage-backed securities	9,791		29		547		0		9,273
Residential mortgage-backed securities(3)	2,698		15		223		0		2,490
Total fixed maturities, available-for-sale(1)	$	341,004	$	5,517	$	34,620	$	331	$	311,570

(1)Excludes notes with amortized cost of $14,748 million (fair value, $14,748 million), which have been offset with the associated debt under a netting agreement.

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

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the fair value and gross unrealized losses on available-for-sale fixed maturity securities without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:


	March 31, 2025
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	3,889	$	122	$	10,286	$	4,368	$	14,175	$	4,490
Obligations of U.S. states and their political subdivisions	1,234		48		3,280		552		4,514		600
Foreign government securities	9,666		504		22,082		8,900		31,748		9,404
U.S. public corporate securities	22,638		813		48,223		9,765		70,861		10,578
U.S. private corporate securities	7,170		127		24,700		2,444		31,870		2,571
Foreign public corporate securities	4,999		142		8,313		1,218		13,312		1,360
Foreign private corporate securities	7,334		189		18,941		3,673		26,275		3,862
Asset-backed securities	6,648		32		828		35		7,476		67
Commercial mortgage-backed securities	539		3		6,296		445		6,835		448
Residential mortgage-backed securities	184		2		1,372		188		1,556		190
Total fixed maturities, available-for-sale	$	64,301	$	1,982	$	144,321	$	31,588	$	208,622	$	33,570


	December 31, 2024
	Less Than Twelve Months				Twelve Months or More				Total
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	6,667	$	334	$	10,161	$	4,771	$	16,828	$	5,105
Obligations of U.S. states and their political subdivisions	1,592		53		3,288		565		4,880		618
Foreign government securities	8,280		349		20,780		7,532		29,060		7,881
U.S. public corporate securities	25,420		1,036		48,152		10,485		73,572		11,521
U.S. private corporate securities	7,581		183		24,846		2,743		32,427		2,926
Foreign public corporate securities	5,751		170		8,084		1,246		13,835		1,416
Foreign private corporate securities	8,702		282		18,862		4,010		27,564		4,292
Asset-backed securities	1,488		11		1,015		48		2,503		59
Commercial mortgage-backed securities	1,092		8		6,432		539		7,524		547
Residential mortgage-backed securities	361		4		1,377		219		1,738		223
Total fixed maturities, available-for-sale	$	66,934	$	2,430	$	142,997	$	32,158	$	209,931	$	34,588

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2025 and December 31, 2024, the gross unrealized losses on fixed maturity available-for-sale securities without an allowance of $32,441 million and $33,437 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $1,129 million and $1,151 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of March 31, 2025, the $31,588 million of gross unrealized losses of twelve months or more were concentrated in the finance, consumer non-cyclical and utility sectors within corporate securities, as well as in foreign government securities. As of December 31, 2024, the $32,158 million of gross unrealized losses of twelve months or more were concentrated in the finance, consumer non-cyclical and utility sectors within corporate securities, as well as in foreign government securities.

In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at March 31, 2025. This conclusion was based on detailed analysis of the underlying credit and cash flows for each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening and foreign currency exchange rate movements. As of March 31, 2025, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities by contractual maturities, as of the date indicated:


	March 31, 2025
	Amortized Cost		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
Due in one year or less	$	17,378	$	17,127
Due after one year through five years	64,173		63,739
Due after five years through ten years(1)	58,768		57,507
Due after ten years(1)	174,916		148,527
Asset-backed securities	17,016		17,105
Commercial mortgage-backed securities	9,817		9,415
Residential mortgage-backed securities	2,666		2,494
Total	$	344,734	$	315,914

(1)Excludes notes with amortized cost of $15,044 million (fair value, $15,044 million), which have been offset with the associated debt under a netting agreement.

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

The following table sets forth the sources of fixed maturity proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses of fixed maturities, for the periods indicated:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	4,912	$	5,751
Proceeds from maturities/prepayments	5,761		4,932
Gross investment gains from sales and maturities	282		394
Gross investment losses from sales and maturities	(307)		(360)
Write-downs recognized in earnings(2)	(119)		(5)
(Addition to) release of allowance for credit losses	80		(11)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(1)Excludes activity from non-cash related proceeds due to the timing of trade settlements of $286 million and $111 million for the three months ended March 31, 2025 and 2024, respectively.

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

The following tables set forth the balance of and changes in the allowance for credit losses for fixed maturity securities, as of and for the periods indicated:


	Three Months Ended March 31, 2025
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	0	$	331	$	0	$	0	$	0	$	331
Additions to allowance for credit losses not previously recorded	0		0		16		1		0		0		17
Reductions for securities sold during the period	0		0		(6)		0		0		0		(6)
Additions (reductions) on securities with previous allowance	0		0		3		0		0		0		3
Write-downs charged against the allowance	0		0		(94)		0		0		0		(94)
Balance, end of period	$	0	$	0	$	250	$	1	$	0	$	0	$	251


	Three Months Ended March 31, 2024
	U.S. Treasury Securities and Obligations of U.S. States		Foreign Government Securities		U.S. and Foreign Corporate Securities		Asset-Backed Securities		Commercial Mortgage-Backed Securities		Residential Mortgage-Backed Securities		Total
	(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period	$	0	$	53	$	105	$	2	$	0	$	0	$	160
Additions to allowance for credit losses not previously recorded	0		0		46		0		0		0		46
Reductions for securities sold during the period	0		0		(12)		0		0		0		(12)
Additions (reductions) on securities with previous allowance	0		(22)		0		(1)		0		0		(23)
Balance, end of period	$	0	$	31	$	139	$	1	$	0	$	0	$	171

For additional information regarding the Company’s methodology for developing its allowance and expected losses, 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, 2024.

For the three months ended March 31, 2025, the net decrease in the allowance for credit losses on available-for-sale securities was related to net releases within the communications, capital goods, and consumer non-cyclical within corporate securities primarily due to security restructures. For the three months ended March 31, 2024, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the consumer cyclical and communications sectors within corporate securities due to adverse projected cash flows. Partially offsetting these additions, was a net release within foreign government securities.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company did not have any fixed maturity securities purchased with credit deterioration as of both March 31, 2025 and December 31, 2024.

Assets Supporting Experience-Rated Contractholder Liabilities

The following table sets forth the composition of “Assets supporting experience-rated contractholder liabilities,” as of the dates indicated:


	March 31, 2025				December 31, 2024
	Amortized Cost or Cost		Fair Value		Amortized Cost or Cost		Fair Value
	(in millions)
Fixed maturities:
Corporate securities	$	72	$	69	$	68	$	67
Foreign government securities	604		592		544		539
Obligations of U.S. government authorities and agencies and obligations of U.S. states	223		227		207		220
Total fixed maturities(1)	899		888		819		826
Equity securities	1,955		2,881		1,763		2,881
Total assets supporting experience-rated contractholder liabilities(2)	$	2,854	$	3,769	$	2,582	$	3,707

(1)As a percentage of amortized cost, 99% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings as of both March 31, 2025 and December 31, 2024.

(2)As a percentage of amortized cost, 100% of the portfolio consisted of public securities as of both March 31, 2025 and December 31, 2024.

The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $(199) million and $299 million during the three months ended March 31, 2025 and 2024, respectively.

Fixed Maturities, Trading

The net change in unrealized gains (losses) from fixed maturities, trading still held at period end, recorded within “Other income (loss),” was $187 million and $(181) million during the three months ended March 31, 2025 and 2024, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $(229) million and $431 million during the three months ended March 31, 2025 and 2024, respectively.

Concentrations of Financial Instruments

The Company monitors its concentrations of financial instruments and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any single issuer.

As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	March 31, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	58,748	$	51,252	$	56,457	$	51,177
Fixed maturities, trading	18		18		18		18
Assets supporting experience-rated contractholder liabilities	529		513		472		462
Total	$	59,295	$	51,783	$	56,947	$	51,657


	March 31, 2025				December 31, 2024
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Brazilian government and government agency securities:
Fixed maturities, available-for-sale	$	3,201	$	2,662	$	2,753	$	2,251
Fixed maturities, trading	69		64		44		40
Short-term investments	5		5		2		2
Cash equivalents	167		167		228		228
Total	$	3,442	$	2,898	$	3,027	$	2,521

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Commercial Mortgage and Other Loans

The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated:


	March 31, 2025				December 31, 2024
	Amount		% of Total		Amount		% of Total
	($ in millions)
Commercial mortgage and agricultural property loans by property type:
Office	$	7,504	12.0	%	$	7,867	12.7	%
Retail	5,465		8.8		5,552		9.0
Apartments/Multi-Family	18,210		29.2		17,522		28.3
Industrial	17,017		27.3		16,900		27.3
Hospitality	1,675		2.7		1,831		3.0
Self-Storage(1)	2,180		3.5		2,194		3.5
Health Care Senior Living(1)	1,853		3.0		1,858		3.0
Other(1)	559		0.9		334		0.6
Total commercial mortgage loans	54,463		87.4		54,058		87.4
Agricultural property loans	7,869		12.6		7,775		12.6
Total commercial mortgage and agricultural property loans	62,332		100.0	%	61,833		100.0	%
Allowance for credit losses	(583)				(528)
Total net commercial mortgage and agricultural property loans	61,749				61,305
Other loans:
Uncollateralized loans	497				595
Residential property loans	19				19
Other collateralized loans	478				468
Total other loans	994				1,082
Allowance for credit losses	(49)				(46)
Total net other loans	945				1,036
Total net commercial mortgage and other loans(2)	$	62,694			$	62,341

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

(2)Includes loans which are carried at fair value under the fair value option and are collateralized primarily by apartment complexes. As of March 31, 2025 and December 31, 2024, the net carrying value of these loans was $757 million and $702 million, respectively.

As of March 31, 2025, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California (28%), Texas (7%) and Florida (5%) and included loans secured by properties in Europe (7%), Mexico (2%), Japan (1%) and Australia (1%).

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth the balance of and changes in the allowance for credit losses for commercial mortgage and other loans, as of and for the periods ended:


	Three Months Ended March 31, 2025
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance, beginning of period	$	407	$	121	$	0	$	32	$	14	$	574
Addition to (release of) allowance for expected losses	53		2		0		2		1		58



Allowance, end of period	$	460	$	123	$	0	$	34	$	15	$	632


	Three Months Ended March 31, 2024
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Property Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance, beginning of period	$	443	$	16	$	0	$	0	$	1	$	460
Addition to (release of) allowance for expected losses	47		5		0		0		0		52

Change in foreign exchange	2		0		0		0		0		2
Allowance, end of period	$	492	$	21	$	0	$	0	$	1	$	514

For the three months ended March 31, 2025, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to an increase in loan-specific reserves within the retail sector. For the three months ended March 31, 2024, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to an increase in loan-specific reserves within the office sector.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following tables set forth key credit quality indicators based upon the recorded investment gross of allowance for credit losses, as of the dates indicated:


	March 31, 2025
	Amortized Cost by Origination Year
	2025		2024		2023		2022		2021		Prior		Revolving Loans		Total
	(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	662	$	2,004	$	1,823	$	1,187	$	2,128	$	17,552	$	47	$	25,403
60%-69.99%	1,482		4,512		1,954		1,037		2,203		5,541		0		16,729
70%-79.99%	6		813		1,328		1,014		1,333		2,634		0		7,128
80% or greater	1		49		134		382		218		4,419		0		5,203
Total	$	2,151	$	7,378	$	5,239	$	3,620	$	5,882	$	30,146	$	47	$	54,463
Debt Service Coverage Ratio:
Greater than 1.2x	$	2,070	$	6,447	$	4,558	$	3,229	$	5,781	$	27,227	$	0	$	49,312
1.0 - 1.2x	81		742		531		356		43		1,308		47		3,108
Less than 1.0x	0		189		150		35		58		1,611		0		2,043
Total	$	2,151	$	7,378	$	5,239	$	3,620	$	5,882	$	30,146	$	47	$	54,463
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	115	$	657	$	302	$	903	$	1,996	$	2,113	$	137	$	6,223
60%-69.99%	0		111		361		89		10		90		0		661
70%-79.99%	61		0		0		0		6		14		0		81
80% or greater	3		0		200		529		0		119		53		904
Total	$	179	$	768	$	863	$	1,521	$	2,012	$	2,336	$	190	$	7,869
Debt Service Coverage Ratio:
Greater than 1.2x	$	179	$	712	$	833	$	896	$	1,955	$	1,984	$	137	$	6,696
1.0 - 1.2x	0		56		25		567		43		215		53		959
Less than 1.0x	0		0		5		58		14		137		0		214
Total	$	179	$	768	$	863	$	1,521	$	2,012	$	2,336	$	190	$	7,869

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2024
	Amortized Cost by Origination Year
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
	(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	2,122	$	1,492	$	1,183	$	2,295	$	1,378	$	16,652	$	36	$	25,158
60%-69.99%	4,726		2,287		1,013		2,192		846		5,113		0		16,177
70%-79.99%	809		1,326		953		1,327		446		2,293		0		7,154
80% or greater	48		135		482		216		281		4,407		0		5,569
Total	$	7,705	$	5,240	$	3,631	$	6,030	$	2,951	$	28,465	$	36	$	54,058
Debt Service Coverage Ratio:
Greater than 1.2x	$	6,771	$	4,563	$	3,283	$	5,929	$	2,795	$	25,790	$	0	$	49,131
1.0 - 1.2x	745		527		313		43		102		1,279		36		3,045
Less than 1.0x	189		150		35		58		54		1,396		0		1,882
Total	$	7,705	$	5,240	$	3,631	$	6,030	$	2,951	$	28,465	$	36	$	54,058
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	657	$	371	$	877	$	2,004	$	679	$	1,491	$	122	$	6,201
60%-69.99%	87		555		125		10		53		43		0		873
70%-79.99%	0		0		0		6		0		3		0		9
80% or greater	0		6		521		0		71		42		52		692
Total	$	744	$	932	$	1,523	$	2,020	$	803	$	1,579	$	174	$	7,775
Debt Service Coverage Ratio:
Greater than 1.2x	$	688	$	864	$	932	$	1,967	$	739	$	1,384	$	122	$	6,696
1.0 - 1.2x	56		63		530		45		23		98		52		867
Less than 1.0x	0		5		61		8		41		97		0		212
Total	$	744	$	932	$	1,523	$	2,020	$	803	$	1,579	$	174	$	7,775

For additional information regarding the Company’s commercial mortgage and other loans credit quality monitoring process, 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, 2024.

The Company may grant loan modifications in its commercial mortgage and other loan portfolios to borrowers experiencing financial difficulties. These loan modifications may be in the form of principal forgiveness, interest rate reduction, other-than-insignificant payment delay, term extension or some combination thereof. The amount, timing and extent of modifications granted and subsequent performance are considered in determining any allowance for credit losses.

The following table sets forth the amortized cost basis of loan modifications made to borrowers experiencing financial difficulties during the periods indicated:


	Three Months Ended March 31,
	2025						2024
	Term Extension		Other Than Insignificant Delay in Payment		% of Amortized Cost		Term Extension		Other Than Insignificant Delay in Payment		% of Amortized Cost
	($ in millions)
Commercial mortgage loans	$	0	$	0	0.0	%	$	162	$	0	0.3	%
Agricultural property loans	$	0	$	0	0.0	%	$	0	$	0	0.0	%

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For the three months ended March 31, 2024, the modifications added less than one year to the weighted average life in both the commercial mortgage and agricultural property loan portfolios.

The Company did not have any commitments to lend additional funds to borrowers experiencing financial difficulties on modified loans as of both March 31, 2025 and December 31, 2024.

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:


	March 31, 2025
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)(2)		Total Past Due		Total Loans		Non-Accrual Status(3)
	(in millions)
Commercial mortgage loans	$	54,194	$	36	$	1	$	232	$	269	$	54,463	$	267
Agricultural property loans	6,880		63		171		755		989		7,869		802
Residential property loans	19		0		0		0		0		19		0
Other collateralized loans	478		0		0		0		0		478		0
Uncollateralized loans	497		0		0		0		0		497		25
Total	$	62,068	$	99	$	172	$	987	$	1,258	$	63,326	$	1,094

(1)As of March 31, 2025, there were no loans in this category accruing interest.

(2)Includes loans for which no credit losses are expected due to U.S. agency guarantees.

(3)For additional information regarding the Company’s policies for accruing interest on loans, 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, 2024.


	December 31, 2024
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due(1)(2)		Total Past Due		Total Loans		Non-Accrual Status(3)
	(in millions)
Commercial mortgage loans	$	53,873	$	0	$	3	$	182	$	185	$	54,058	$	220
Agricultural property loans	7,012		0		21		742		763		7,775		767
Residential property loans	19		0		0		0		0		19		0
Other collateralized loans	468		0		0		0		0		468		0
Uncollateralized loans	595		0		0		0		0		595		25
Total	$	61,967	$	0	$	24	$	924	$	948	$	62,915	$	1,012

(1)As of December 31, 2024, there were no loans in this category accruing interest.

(2)Primarily includes loans for which no credit losses are expected due to U.S. agency guarantees.

Loans on non-accrual status recognized interest of $4 million and less than $1 million for the three months ended March 31, 2025 and 2024, respectively. Loans on non-accrual status that did not have a related allowance for credit losses were $274 million and $207 million as of March 31, 2025 and December 31, 2024, respectively.

The Company did not have any commercial mortgage and other loans purchased with credit deterioration as of both March 31, 2025 and December 31, 2024.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Other Invested Assets

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


	March 31, 2025		December 31, 2024
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	10,689	$	10,615
Hedge funds	3,131		3,143
Real estate-related	2,700		2,661
Subtotal equity method	16,520		16,419
Fair value:
Private equity	1,007		1,076
Hedge funds	2,064		2,080
Real estate-related	929		951
Subtotal fair value	4,000		4,107
Total LPs/LLCs	20,520		20,526
Real estate held through direct ownership(1)	1,750		1,743
Total alternative assets	22,270		22,269
Credit-like instruments(2)	1,070		933
Derivative instruments	1,744		1,597
Other(3)	1,655		1,552
Total other invested assets	$	26,739	$	26,351

(1)As of March 31, 2025 and December 31, 2024, real estate held through direct ownership had mortgage debt of $187 million and $185 million, respectively.

(2)Includes structured debt investments in feeder funds that are consolidated, resulting in the Company reporting the consolidated feeder funds’ proportionate share of the net assets of the master fund within “Other invested assets”.

(3)Primarily includes equity investments accounted for under the measurement alternative, tax advantaged investments, strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Bank of New York. For additional information regarding the Company’s holdings in the Federal Home Loan Bank of New York, 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, 2024.

Accrued Investment Income

The following table sets forth the composition of “Accrued investment income,” as of the dates indicated:


	March 31, 2025		December 31, 2024
	(in millions)
Fixed maturities	$	2,839	$	2,892
Equity securities	9		8
Commercial mortgage and other loans	232		228
Policy loans	240		236
Other invested assets	12		12
Short-term investments and cash equivalents	51		65
Total accrued investment income	$	3,383	$	3,441

Write-downs on accrued investment income were $1 million and less than $1 million for the three months ended March 31, 2025 and 2024, respectively.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

The following table sets forth “Net investment income” by investment type, for the periods indicated:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Fixed maturities, available-for-sale(1)	$	3,773	$	3,592
Fixed maturities, trading	167		116
Assets supporting experience-rated contractholder liabilities	14		14
Equity securities	44		38
Commercial mortgage and other loans	692		611
Policy loans	124		122
Other invested assets	396		321
Short-term investments and cash equivalents	267		298
Gross investment income	5,477		5,112
Less: investment expenses	(347)		(348)
Net investment income	$	5,130	$	4,764

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

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Fixed maturities(1)	$	(64)	$	18
Commercial mortgage and other loans	(58)		(51)
Investment real estate	(10)		2
LPs/LLCs	(1)		19
Derivatives(2)	(449)		(148)
Ceded income on modified coinsurance assets(2)(3)	(163)		(149)
Other(2)	15		1
Realized investment gains (losses), net	$	(730)	$	(308)

(1)Excludes fixed maturity securities classified as trading.

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

(3)Includes changes in the value of reinsurance payables and funds withheld payables, primarily reflecting the impact of net investment income on withheld assets that are ceded to certain reinsurance counterparties.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Gains (Losses) on Investments within AOCI

The following table sets forth net unrealized gains (losses) on investments, as of the dates indicated:


	March 31, 2025		December 31, 2024
	(in millions)
Fixed maturity securities, available-for-sale with an allowance	$	4	$	6
Fixed maturity securities, available-for-sale without an allowance	(28,573)		(29,109)
Derivatives designated as cash flow hedges(1)	1,659		1,780
Derivatives designated as fair value hedges(1)	(134)		(64)
Other investments(2)	60		106
Net unrealized gains (losses) on investments	$	(26,984)	$	(27,281)

(1)For additional information regarding cash flow and fair value hedges, see Note 5.

(2)Includes net unrealized gains (losses) on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending

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


	March 31, 2025								December 31, 2024
	Remaining Contractual Maturities of the Agreements								Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		30 to 90 Days		Total		Overnight & Continuous		Up to 30 Days		30 to 90 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	7,154	$	0	$	0	$	7,154	$	6,450	$	0	$	0	$	6,450
U.S. public corporate securities	0		356		0		356		0		327		0		327
Foreign public corporate securities	0		39		0		39		0		19		0		19
Commercial mortgage-backed securities	0		0		0		0		0		0		0		0
Total securities sold under agreements to repurchase	$	7,154	$	395	$	0	$	7,549	$	6,450	$	346	$	0	$	6,796

The following table sets forth the composition of “Cash collateral for loaned securities” which represents the liability to return cash collateral received for the following types of securities loaned, as of the dates indicated:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	March 31, 2025						December 31, 2024
	Remaining Contractual Maturities of the Agreements						Remaining Contractual Maturities of the Agreements
	Overnight & Continuous		Up to 30 Days		Total		Overnight & Continuous		Up to 30 Days		Total
	(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	0	$	0	$	1	$	0	$	1
Obligations of U.S. states and their political subdivisions	69		0		69		46		0		46
Foreign government securities	137		0		137		122		6		128
U.S. public corporate securities	7,469		274		7,743		7,506		403		7,909
Foreign public corporate securities	1,193		49		1,242		1,181		118		1,299
Equity securities	316		0		316		238		0		238
Total cash collateral for loaned securities(1)	$	9,184	$	323	$	9,507	$	9,094	$	527	$	9,621

(1)The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated.

4. VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). For additional information, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Consolidated Variable Interest Entities

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


	Consolidated VIEs for which the Company is the Investment Manager(1)				Other Consolidated VIEs
	March 31, 2025		December 31, 2024		March 31, 2025		December 31, 2024
	(in millions)
Fixed maturities, available-for-sale	$	1,260	$	1,250	$	728	$	716

Fixed maturities, trading	175		166		0		0
Equity securities	80		80		0		0
Commercial mortgage and other loans	699		681		441		490
Other invested assets	6,733		6,379		511		500
Cash and cash equivalents	328		308		0		0
Accrued investment income	7		6		3		3
Other assets	677		644		790		613
Total assets of consolidated VIEs	$	9,959	$	9,514	$	2,473	$	2,322
Other liabilities	$	293	$	218	$	109	$	1
Notes issued by consolidated VIEs(2)	1,409		1,392		34		38
Total liabilities of consolidated VIEs	$	1,702	$	1,610	$	143	$	39

(1)Total assets of consolidated VIEs reflect $4,029 million and $3,835 million as of March 31, 2025 and December 31, 2024, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(2)Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of March 31, 2025, the maturities of these obligations were between 5 and 13 years.

Unconsolidated Variable Interest Entities

The Company has determined that it is not the primary beneficiary of certain VIEs for which it may or may not be the investment manager. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs is limited to its investment in the VIEs, which was $1,565 million and $1,529 million as of March 31, 2025 and December 31, 2024, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Fixed maturities, trading,” “Equity securities” and “Other invested assets.” There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs for which it is not the investment manager. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. See Note 3 for details regarding the carrying amounts and classification of these assets. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to the fact that it does not control these entities.

Limited Partnerships and Limited Liability Companies

In the normal course of its activities, the Company will invest in limited partnerships and limited liability companies (“LPs/LLCs”), which include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company classifies these investments as “Other invested assets” and its maximum exposure to loss associated with these VIE and non-VIE entities is limited to the amount of its investment, which was $20,941 million and $21,847 million as of March 31, 2025 and December 31, 2024, respectively.

5. DERIVATIVES AND HEDGING

Types of Derivative and Hedging Instruments

The Company utilizes various derivatives and hedging instruments to manage certain of its risks. Commonly used derivative and non-derivative hedging instruments include, but are not necessarily limited to:

Interest rate contracts: futures, swaps, forwards, options, caps and floors
Equity contracts: futures, options and total return swaps
Foreign exchange contracts: futures, options, forwards, swaps, and foreign currency debt instruments
Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives are:

To-be-announced (“TBA”) forward contracts, loan commitments, embedded derivatives and synthetic guaranteed investment contracts (“GICs”).

For detailed information regarding these contracts and the related strategies, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Primary Risks Managed by Derivatives

The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks they are utilized to manage, excluding embedded derivatives. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. These netting impacts resulted in total derivative assets of $1,747 million and $1,601 million as of March 31, 2025 and December 31, 2024, respectively, and total derivative liabilities of $5,182 million and $4,751 million as of March 31, 2025 and December 31, 2024, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


Primary Underlying Risk /Instrument Type	March 31, 2025									December 31, 2024
			Fair Value									Fair Value
Gross Notional			Assets			Liabilities			Gross Notional			Assets			Liabilities
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	4,732		$	26		$	(343)		$	4,260		$	11		$	(404)
Interest Rate Forwards	10			0			0			10			0			0
Foreign Currency
Foreign Currency Forwards	4,835			60			(237)			4,771			92			(197)
Currency/Interest Rate
Foreign Currency Swaps	32,145			2,425			(399)			31,301			2,652			(368)
Total Derivatives Designated as Hedge Accounting Instruments	$	41,722		$	2,511		$	(979)		$	40,342		$	2,755		$	(969)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	243,918		$	10,049		$	(23,061)		$	228,392		$	11,272		$	(24,802)
Interest Rate Futures	9,427			19			(3)			9,773			6			(21)
Interest Rate Options	31,680			176			(1,280)			34,005			430			(1,583)
Interest Rate Forwards	2,403			21			(18)			2,544			9			(80)
Interest Rate Total Return Swaps	657			2			(1)			485			4			(2)
Foreign Currency
Foreign Currency Forwards	27,572			1,060			(960)			27,819			1,625			(1,181)
Currency/Interest Rate
Foreign Currency Swaps	7,593			615			(112)			7,525			658			(129)
Credit
Credit Default Swaps	4,339			55			(3)			4,027			90			0
Equity
Equity Futures	2,521			13			(2)			2,019			6			(7)
Equity Options	119,054			3,198			(4,240)			104,438			4,507			(3,790)
Equity Total Return Swaps	11,677			416			(152)			9,796			331			(327)
Other
Other(1)	1,250			0			0			1,250			0			0
Synthetic GICs	76,944			1			(13)			76,416			1			(1)
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	539,035		$	15,625		$	(29,845)		$	508,489		$	18,939		$	(31,923)
Total Derivatives(2)(3)	$	580,757		$	18,136		$	(30,824)		$	548,831		$	21,694		$	(32,892)

(1)“Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.

(2)Excludes embedded derivatives which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $11,386 million (including the Prismic funds withheld related embedded derivative net liability of $56 million) and $11,783 million (including the Prismic funds withheld related embedded derivative net liability of $(91) million) as of March 31, 2025 and December 31, 2024, respectively, primarily included in “Policyholders’ account balances” and “Reinsurance and funds withheld payables.”

(3)Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2025, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.


	March 31, 2025				December 31, 2024
Balance Sheet Line Item in which Hedged Item is Recorded	Carrying Amount of the Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)		Carrying Amount of the Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1)

	(in millions)
Fixed maturities, available-for-sale, at fair value	$	219	$	14	$	216	$	11

Policyholders’ account balances	$	(1,562)	$	266	$	(1,510)	$	327
Future policy benefits	$	(2,364)	$	339	$	(2,280)	$	423

(1)There were no material fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

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

Offsetting Assets and Liabilities

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


	March 31, 2025
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	18,005	$	(16,389)	$	1,616	$	(418)	$	1,198
Securities purchased under agreement to resell	15		0		15		(15)		0
Total Assets	$	18,020	$	(16,389)	$	1,631	$	(433)	$	1,198
Offsetting of Financial Liabilities:
Derivatives	$	30,811	$	(25,642)	$	5,169	$	(4,884)	$	285
Securities sold under agreement to repurchase	7,549		0		7,549		(7,549)		0
Total Liabilities	$	38,360	$	(25,642)	$	12,718	$	(12,433)	$	285

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2024
	Gross Amounts of Recognized Financial Instruments		Gross Amounts Offset in the Statements of Financial Position		Net Amounts Presented in the Statements of Financial Position		Financial Instruments/ Collateral(1)		Net Amount
	(in millions)
Offsetting of Financial Assets:
Derivatives	$	21,574	$	(20,093)	$	1,481	$	(696)	$	785
Securities purchased under agreement to resell	277		0		277		(277)		0
Total Assets	$	21,851	$	(20,093)	$	1,758	$	(973)	$	785
Offsetting of Financial Liabilities:
Derivatives	$	32,891	$	(28,141)	$	4,750	$	(4,403)	$	347
Securities sold under agreement to repurchase	6,796		0		6,796		(6,796)		0
Total Liabilities	$	39,687	$	(28,141)	$	11,546	$	(11,199)	$	347

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

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information regarding the Company’s accounting policy for securities repurchase and resale agreements, 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, 2024.

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative and non-derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps, currency forwards, and foreign currency denominated debts. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, or equity derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

The following tables provide the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, including the offset of the hedged item in fair value hedge relationships.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income (Loss)		Interest Expense		Interest Credited to Policyholders’ Account Balances		Policyholders’ Benefits		Change in AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	(3)	$	0	$	0	$	0	$	0	$	35	$	30	$	0
Currency	0		0		0		0		0		0		53		0
Total gains (losses) on derivatives designated as hedge instruments	(3)		0		0		0		0		35		83		0
Gains (losses) on the hedged item:
Interest Rate	3		0		5		0		0		(49)		(32)		0
Currency	0		0		0		0		0		0		(53)		0
Total gains (losses) on hedged item	3		0		5		0		0		(49)		(85)		0
Amortization for gains (losses) excluded from assessment of the effectiveness

Currency	0		0		0		0		0		0		(3)		(69)
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(3)		(69)
Total gains (losses) on fair value hedges net of hedged item	0		0		5		0		0		(14)		(5)		(69)
Cash flow hedges
Interest Rate	0		0		(3)		0		0		0		0		8
Currency	0		0		0		0		0		0		0		(26)
Currency/Interest Rate	22		0		96		(147)		0		0		0		(103)
Total gains (losses) on cash flow hedges	22		0		93		(147)		0		0		0		(121)
Net investment hedges
Currency	0		0		0		0		0		0		0		(15)
Currency/Interest Rate	0		0		0		0		0		0		0		0
Total gains (losses) on net investment hedges	0		0		0		0		0		0		0		(15)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	189		141		0		0		0		0		0		0
Currency	(174)		0		0		(1)		0		0		0		0
Currency/Interest Rate	(28)		0		0		0		0		0		0		0
Credit	(11)		0		0		0		0		0		0		0
Equity	(1,469)		202		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0
Embedded Derivatives(2)	1,257		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(236)		343		0		(1)		0		0		0		0
Total	$	(214)	$	343	$	98	$	(148)	$	0	$	(14)	$	(5)	$	(205)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
	Realized Investment Gains (Losses)		Change in Value of Market Risk Benefits, Net of Related Hedging Gain (Loss)		Net Investment Income		Other Income (Loss)		Interest Expense		Interest Credited to Policyholders’ Account Balances		Policyholders’ Benefits		Change in AOCI(1)
	(in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate	$	4	$	0	$	0	$	0	$	0	$	(50)	$	(59)	$	0
Currency	0		0		0		0		0		0		(16)		0
Total gains (losses) on derivatives designated as hedge instruments	4		0		0		0		0		(50)		(75)		0
Gains (losses) on the hedged item:
Interest Rate	(4)		0		3		0		0		62		48		0
Currency	0		0		0		0		0		0		14		0
Total gains (losses) on hedged item	(4)		0		3		0		0		62		62		0

Amortization for gains (losses) excluded from assessment of the effectiveness
Currency	0		0		0		0		0		0		(2)		10
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(2)		10
Total gains (losses) on fair value hedges net of hedged item	0		0		3		0		0		12		(15)		10
Cash flow hedges
Interest Rate	0		0		(3)		0		0		0		0		(10)
Currency	0		0		0		0		0		0		0		15
Currency/Interest Rate	3		0		76		78		0		0		0		325
Total gains (losses) on cash flow hedges	3		0		73		78		0		0		0		330
Net investment hedges
Currency	0		0		0		0		0		0		0		11
Currency/Interest Rate	0		0		0		0		0		0		0		0
Total gains (losses) on net investment hedges	0		0		0		0		0		0		0		11
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(662)		(961)		0		0		0		0		0		0
Currency	(26)		0		0		2		0		0		0		0
Currency/Interest Rate	106		0		0		1		0		0		0		0
Credit	52		0		0		0		0		0		0		0
Equity	1,449		(493)		0		0		0		0		0		0
Other	0		0		0		0		0		0		0		0
Embedded Derivatives	(1,070)		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(151)		(1,454)		0		3		0		0		0		0
Total	$	(148)	$	(1,454)	$	76	$	81	$	0	$	12	$	(15)	$	351

(1)Excludes changes related to net investment hedges using non-derivative instruments of $(51) million and $39 million for the three months ended March 31, 2025 and 2024, respectively.

(2)Includes the Prismic funds withheld related embedded derivative realized gain (loss) of $(147) million and $283 million for the three months ended March 31, 2025 and 2024, respectively.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:


	(in millions)
Balance, December 31, 2024	$	1,780
Amount recorded in AOCI:
Interest Rate	4
Currency	(25)
Currency/Interest Rate	(131)
Total amount recorded in AOCI	(152)
Amount reclassified from AOCI to income:
Interest Rate	3
Currency	(1)
Currency/Interest Rate	29
Total amount reclassified from AOCI to income	31
Balance, March 31, 2025	$	1,659

The changes in fair value of cash flow hedges are deferred in AOCI and are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income; these amounts are then reclassified to earnings when the hedged item affects earnings. Using March 31, 2025 values, it is estimated that a pre-tax gain of $372 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending March 31, 2026.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of future cash flows from forecasted transactions denominated in foreign currencies, the purchases of invested assets, and the receipt or payment of variable interest on existing financial instruments. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 27 years.

There were no material amounts reclassified from AOCI into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

For net investment hedges, in addition to derivatives, the Company uses foreign currency denominated debt to hedge the risk of change in the net investment in a foreign subsidiary due to changes in exchange rates. For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment within AOCI were $(66) million for the three months ended March 31, 2025 and $49 million for the three months ended March 31, 2024, respectively.

Credit Derivatives

The following tables provide a summary of the notional and fair value of written credit protection, presented as assets (liabilities). The Company’s maximum amount at risk under these credit derivatives, assuming the value of the underlying referenced securities become worthless, is equal to the notional amounts. These credit derivatives have maturities of less than 11 years for index reference.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	March 31, 2025
	NAIC Rating Designation of Underlying Credit Obligation(1)
	NAIC 1				NAIC 2				NAIC 3				NAIC 4				NAIC 5				NAIC 6(2)				Total
	Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value
	(in millions)
Single name reference(3)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Index reference(3)	0		0		0		0		3,367		18		0		0		0		0		791		37		4,158		55
Total	$	0	$	0	$	0	$	0	$	3,367	$	18	$	0	$	0	$	0	$	0	$	791	$	37	$	4,158	$	55


	December 31, 2024
	NAIC Rating Designation of Underlying Credit Obligation(1)
	NAIC 1				NAIC 2				NAIC 3				NAIC 4				NAIC 5				NAIC 6(2)				Total
	Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value		Gross Notional		Fair Value
	(in millions)
Single name reference(3)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Index reference(3)	0		0		0		0		3,365		40		0		0		0		0		662		50		4,027		90
Total	$	0	$	0	$	0	$	0	$	3,365	$	40	$	0	$	0	$	0	$	0	$	662	$	50	$	4,027	$	90

(1)The NAIC rating designations are based on availability and the lowest ratings among Moody's Investors Service, Inc. (“Moody's”), Standard & Poor’s Rating Services (“S&P”) and Fitch Ratings Inc. (“Fitch”). If no rating is available from a rating agency, a NAIC 6 rating is used.

(2)The NAIC rating designation is due to approximately 4% and 4% of the index reference name rated as NAIC 6 as of March 31, 2025 and December 31, 2024, respectively.

(3)Single name credit default swaps may make reference to the credit of corporate debt, sovereign debt, and structured finance. Index reference NAIC designations are based on the lowest rated single name reference included in the index.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of March 31, 2025 and December 31, 2024, the Company had $181 million and $0 million of outstanding notional amounts and reported at fair value as a liability of $3 million and an asset of $0 million, respectively.

Counterparty Credit Risk

The Company is exposed to losses in the event of non-performance by counterparties to financial derivative transactions with a positive fair value. The Company manages credit risk by: (i) entering into derivative transactions with highly rated major financial institutions and other creditworthy counterparties governed by master netting agreements, as applicable; (ii) trading through central clearing and over-the-counter (“OTC”) parties; (iii) obtaining collateral, such as cash and securities, when appropriate; and (iv) setting limits on single party credit exposures which are subject to periodic management review.

Substantially all of the Company’s derivative agreements have zero thresholds which require daily full collateralization by the party in a liability position. In addition, certain of the Company’s derivative agreements contain credit-risk related contingent features; if the credit rating of one of the parties to the derivative agreement is to fall below a certain level, the party with positive fair value could request termination at the then fair value or demand immediate full collateralization from the party whose credit rating fell and is in a net liability position.

As of March 31, 2025, there were no net liability derivative positions with counterparties with credit risk-related contingent features. All derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

6. FAIR VALUE OF ASSETS AND LIABILITIES

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

Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.

Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.

For a discussion of the Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, 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, 2024. There have been no material changes in our valuation techniques during the period represented by these Unaudited Interim Consolidated Financial Statements.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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


	March 31, 2025
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	20,192	$	0	$		$	20,192
Obligations of U.S. states and their political subdivisions	0		5,713		5				5,718
Foreign government securities	0		57,954		5				57,959
U.S. corporate public securities	0		98,999		66				99,065
U.S. corporate private securities(2)	0		40,436		4,411				44,847
Foreign corporate public securities	0		22,994		38				23,032
Foreign corporate private securities	0		34,323		1,764				36,087
Asset-backed securities(3)	0		14,752		2,353				17,105
Commercial mortgage-backed securities	0		8,551		864				9,415
Residential mortgage-backed securities	0		2,494		0				2,494
Subtotal	0		306,408		9,506				315,914
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		227		0				227

Foreign government securities	0		592		0				592
Corporate securities	0		69		0				69



Equity securities	1,542		1,339		0				2,881

Subtotal	1,542		2,227		0				3,769
Market risk benefit assets	0		0		2,139				2,139
Fixed maturities, trading	0		11,140		2,138				13,278
Equity securities	6,388		1,599		733				8,720
Commercial mortgage and other loans	0		494		263				757
Other invested assets(4)	32		18,102		965		(16,389)		2,710
Short-term investments	1,926		6,178		462				8,566
Cash equivalents	584		8,094		1				8,679
Reinsurance recoverables and deposit receivables	0		206		381				587

Separate account assets(5)(6)	8,706		152,181		253				161,140
Total assets	$	19,178	$	506,629	$	16,841	$	(16,389)	$	526,259
Market risk benefit liabilities	$	0	$	0	$	5,021	$		$	5,021
Policyholders’ account balances	0		0		11,938				11,938
Reinsurance and funds withheld payables	0		31		0				31
Other liabilities	11		30,800		13		(25,642)		5,182
Notes issued by consolidated VIEs	0		0		67				67
Total liabilities	$	11	$	30,831	$	17,039	$	(25,642)	$	22,239

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2024
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	0	$	20,348	$	0	$		$	20,348
Obligations of U.S. states and their political subdivisions	0		6,098		6				6,104
Foreign government securities	0		57,472		7				57,479
U.S. corporate public securities	0		98,442		66				98,508
U.S. corporate private securities(2)	0		39,848		3,941				43,789
Foreign corporate public securities	0		21,946		36				21,982
Foreign corporate private securities	0		32,675		1,788				34,463
Asset-backed securities(3)	0		15,654		1,480				17,134
Commercial mortgage-backed securities	0		8,420		853				9,273
Residential mortgage-backed securities	0		2,490		0				2,490
Subtotal	0		303,393		8,177				311,570
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		220		0				220

Foreign government securities	0		539		0				539
Corporate securities	0		67		0				67



Equity securities	1,522		1,359		0				2,881

Subtotal	1,522		2,185		0				3,707
Market risk benefit assets	0		0		2,331				2,331
Fixed maturities, trading	0		10,544		1,986				12,530
Equity securities	7,154		1,745		518				9,417
Commercial mortgage and other loans	0		469		233				702
Other invested assets(4)	10		21,683		953		(20,093)		2,553
Short-term investments	1,896		6,238		461				8,595
Cash equivalents	326		10,365		0				10,691
Reinsurance recoverables and deposit receivables	0		236		613				849

Separate account assets(5)(6)	8,441		157,999		232				166,672
Total assets	$	19,349	$	514,857	$	15,504	$	(20,093)	$	529,617
Market risk benefit liabilities	$	0	$	0	$	4,455	$		$	4,455
Policyholders’ account balances	0		0		12,746				12,746
Reinsurance and funds withheld payables	0		(118)		0				(118)
Other liabilities	28		32,863		1		(28,141)		4,751
Notes issued by consolidated VIEs	0		0		60				60
Total liabilities	$	28	$	32,745	$	17,262	$	(28,141)	$	21,894

(1)“Netting” amounts represent cash collateral of $(9,253) million and $(8,049) million as of March 31, 2025 and December 31, 2024, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.

(2)Excludes notes with fair value of $15,044 million (carrying amount of $15,044 million) and $14,748 million (carrying amount of $14,748 million) as of March 31, 2025 and December 31, 2024, respectively, which have been offset with the associated debt under a netting agreement.

(3)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.

(4)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of March 31, 2025 and December 31, 2024, the fair value of such investments was $5,050 million and $5,021 million, respectively.

(5)Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of March 31, 2025 and December 31, 2024, the fair value of such investments was $27,051 million and $26,700 million, respectively.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information regarding significant internally-priced Level 3 assets and liabilities.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	As of March 31, 2025
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)(3)	$	6,995	Discounted cash flow	Discount rate	1.13%	21.50%	10.32%	Decrease
			Market comparables	EBITDA multiple(4)	0.1X	9.4X	7.4X	Increase
			Liquidation	Liquidation value	29.66%	84.21%	65.40%	Increase
Asset backed securities	$	614	Discounted cash flow	Discount rate	2.43%	10.10%	4.72%	Decrease
				Liquidity premium	1.90%	1.90%	1.90%	Decrease
Commercial mortgage-backed securities	$	864	Discounted cash flow	Liquidity premium	0.90%	0.90%	0.90%	Decrease
Market risk benefit assets(6)	$	2,139	Discounted cash flow	Lapse rate(8)	1%	20%		Increase
				Spread over SOFR(9)	0.41%	1.83%		Increase
				Utilization rate(10)	37%	94%		Decrease
				Withdrawal rate	See table footnote (11) below.
				Mortality rate(12)	0%	16%		Increase
				Equity volatility curve	16%	25%		Decrease
Equity securities	$	191	Discounted cash flow	Discount rate(5)	0.16%	40%		Decrease
			Market comparables	EBITDA multiple(4)	5.5X	12.2X	7.0X	Increase
			Net Asset Value	Share price	$3	$1,810	$759	Increase
Reinsurance recoverables and deposit receivables	$	381	Discounted cash flow	Lapse rate(8)	1%	50%		Increase
				Spread over SOFR(9)	0.41%	1.83%		Increase
				Option Budget(13)	0%	6%		Decrease
Liabilities:
Market risk benefit liabilities(6)	$	5,021	Discounted cash flow	Lapse rate(8)	1%	20%		Decrease
				Spread over SOFR(9)	0.41%	1.83%		Decrease
				Utilization rate(10)	37%	94%		Increase
				Withdrawal rate	See table footnote (11) below.
				Mortality rate(12)	0%	16%		Decrease
				Equity volatility curve	16%	25%		Increase
Policyholders’ account balances(7)	$	11,931	Discounted cash flow	Lapse rate(8)	0%	80%		Decrease
				Spread over SOFR(9)	0.41%	1.83%		Decrease
				Mortality rate(12)	0%	23%		Decrease

				Option Budget(13)	(1)%	7%		Increase

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	As of December 31, 2024
	Fair Value		Valuation Techniques	Unobservable Inputs	Minimum	Maximum	Weighted Average	Impact of Increase in Input on Fair Value(1)
	(in millions)
Assets:
Corporate securities(2)(3)	$	6,763	Discounted cash flow	Discount rate	0.95%	20.00%	10.36%	Decrease
			Market comparables	EBITDA multiple(4)	3.0X	8.8X	7.6X	Increase
			Liquidation	Liquidation value	75.00%	75.00%	75.00%	Increase
Asset backed securities	$	529	Discounted cash flow	Discount rate	2.30%	10.70%	6.08%	Decrease
Commercial mortgage-backed securities	$	853	Discounted cash flow	Liquidity premium	1.00%	1.00%	1.00%	Decrease
Market risk benefit assets(6)	$	2,331	Discounted cash flow	Lapse rate(8)	1%	20%		Increase
				Spread over SOFR(9)	0.29%	1.71%		Increase
				Utilization rate(10)	37%	94%		Decrease
				Withdrawal rate	See table footnote (11) below.
				Mortality rate(12)	0%	16%		Increase
				Equity volatility curve	16%	25%		Decrease
Equity securities	$	209	Discounted cash flow	Discount rate(5)	0.16%	40%		Decrease
			Market comparables	EBITDA multiple(4)	5.5X	12.2X	6.0X	Increase
			Net Asset Value	Share price	$3	$1,810	$779	Increase
Reinsurance recoverables and deposit receivables	$	613	Discounted cash flow	Lapse rate(8)	1%	50%		Increase
				Spread over SOFR(9)	0.29%	1.71%		Increase
				Option Budget(13)	0%	6%		Decrease
Liabilities:
Market risk benefit liabilities(6)	$	4,455	Discounted cash flow	Lapse rate(8)	1%	20%		Decrease
				Spread over SOFR(9)	0.29%	1.71%		Decrease
				Utilization rate(10)	37%	94%		Increase
				Withdrawal rate	See table footnote (11) below.
				Mortality rate(12)	0%	16%		Decrease
				Equity volatility curve	16%	25%		Increase
Policyholders’ account balances(7)	$	12,741	Discounted cash flow	Lapse rate(8)	0%	80%		Decrease
				Spread over SOFR(9)	0.29%	1.73%		Decrease
				Mortality rate(12)	0%	23%		Decrease

				Option Budget(13)	(1)%	7%		Increase

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

(2)Includes assets classified as fixed maturities, available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities, trading.

(3)Excludes notes which have been offset with the associated debt under a netting agreement.

(4)Represents multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.

(5)For these investments, a range of discount rates is typically used (10% to 20%) and is therefore a more meaningful representation of the unobservable inputs used in the valuation rather than weighted average.

(6)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(7)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.

(8)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.

(9)The spread over the secured overnight financing rate (“SOFR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of March 31, 2025 and December 31, 2024, respectively. This spread includes an estimate of non-performance risk (“NPR”), which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements are insurance liabilities and are therefore senior to debt. Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar Life Insurance Company (“AuguStar”), 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. See Note 12 for additional information regarding this transaction. As a result of this transaction, a ceded MRB asset balance was established to fair value the reinsurance reimbursements to the Company. The establishment of the fair value also required an estimate of NPR for AuguStar, which may differ from the Company’s; however, the NPR spreads for AuguStar were developed using a methodology similar to that of the Company.

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

(11)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of both March 31, 2025 and December 31, 2024, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.

(12)The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table.

(13)Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price and interest rate changes. The level of option budget determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives.

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

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

*Commercial Mortgage-backed Securities—*Interrelationships may exist between the prepayment rate, the default rate and/or loss severity, depending on specific market conditions. In stronger economic cycles, prepayment rates are generally driven by underlying property appreciation and subsequent cash-out refinances, while default rates and loss severity may be lower. During weaker economic cycles, prepayment rates may decline, while default rates and loss severity increase. Generally, a change in the assumption used for the probability of default would be accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The impact of these factors on average life and economics varies with the deal structure and tranche subordination.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

Changes in Level 3 Assets and Liabilities—The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods (excluding MRBs disclosed in Note 11). When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.


	Three Months Ended March 31, 2025(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	6	$	0	$	0	$	0	$	0	$	(1)	$	0	$	0	$	0	$	5	$	0
Foreign government	7		0		0		0		0		(2)		0		0		0		5		0
Corporate securities(3)	5,831		(68)		868		(350)		0		(194)		(41)		234		(1)		6,279		(71)
Structured securities(4)	2,333		18		826		(323)		0		(65)		(362)		865		(75)		3,217		19






Other assets:
Fixed maturities, trading	1,986		(21)		423		(261)		0		(252)		366		3		(106)		2,138		(7)
Equity securities	518		(17)		154		(23)		0		0		0		119		(18)		733		(23)
Commercial mortgage and other loans	233		0		0		0		30		0		0		0		0		263		0
Other invested assets	953		(1)		14		(1)		0		0		0		0		0		965		(1)
Short-term investments	461		0		8		(3)		0		(4)		0		0		0		462		0
Cash equivalents	0		0		1		0		0		0		0		0		0		1		0
Reinsurance recoverables and deposit receivables	613		(4)		23		0		0		(18)		(233)		0		0		381		(21)
Other assets	0		0		0		0		0		0		0		0		0		0		0
Separate account assets	232		(8)		60		(34)		0		(1)		0		4		0		253		(8)
Liabilities:
Policyholders’ account balances(5)	(12,746)		1,435		0		0		0		(625)		(2)		0		0		(11,938)		407
Other liabilities	(1)		(12)		0		0		0		0		0		0		0		(13)		(12)
Notes issued by consolidated VIEs	(60)		0		0		0		(7)		0		0		0		0		(67)		0

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)
	(in millions)
Fixed maturities, available-for-sale	$	(19)	$	0	$	0	$	(28)	$	(3)	$	(22)	$	0	$	0	$	(30)

Other assets:
Fixed maturities, trading	0		(6)		0		0		(15)		0		(7)		0		0
Equity securities	0		(17)		0		0		0		0		(23)		0		0
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0
Other invested assets	0		(1)		0		0		0		0		(1)		0		0
Short-term investments	0		0		0		0		0		0		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	(4)		0		0		0		0		(21)		0		0		0
Other assets	0		0		0		0		0		0		0		0		0
Separate account assets	0		0		(8)		0		0		0		0		(8)		0
Liabilities:
Policyholders’ account balances	1,435		0		0		0		0		407		0		0		0
Other liabilities	(12)		0		0		0		0		(12)		0		0		0
Notes issued by consolidated VIEs	0		0		0		0		0		0		0		0		0


	Three Months Ended March 31, 2024(6)
	Fair Value, beginning of period		Total realized and unrealized gains (losses)		Purchases		Sales		Issuances		Settlements		Other(1)		Transfers into Level 3(7)		Transfers out of Level 3(7)		Fair Value, end of period		Unrealized gains (losses) for assets still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	7	$	(1)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	6	$	(1)
Foreign government	8		0		0		0		0		(1)		0		0		0		7		0
Corporate securities(3)	4,806		(46)		402		(5)		0		(287)		(13)		108		0		4,965		(50)
Structured securities(4)	1,297		3		1,265		0		0		(12)		(1)		60		0		2,612		(1)






Other assets:
Fixed maturities, trading	429		2		564		(22)		0		(46)		(1)		404		0		1,330		7
Equity securities	512		(19)		21		(4)		0		(4)		9		0		(9)		506		(22)
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0		0		0
Other invested assets	846		(8)		29		(2)		0		0		0		0		0		865		(8)
Short-term investments	29		(2)		5		0		0		0		0		0		0		32		(2)
Cash equivalents	4		0		0		0		0		0		(4)		0		0		0		0
Reinsurance recoverables and deposit receivables	224		37		55		0		0		(13)		0		0		0		303		24
Other assets	11		0		8		0		0		0		0		0		0		19		0
Separate account assets	1,094		(46)		56		(763)		0		(2)		0		0		(1)		338		(7)
Liabilities:
Policyholders’ account balances(5)	(7,752)		(1,495)		0		0		(618)		0		1		0		0		(9,864)		(216)
Other liabilities	(1)		0		0		0		0		0		0		0		0		(1)		0
Notes issued by consolidated VIEs	(778)		(8)		0		0		(10)		0		391		0		0		(405)		(8)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets still held(2)
	Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)		Net investment income		Realized investment gains (losses), net		Other income (loss)		Interest credited to policyholders’ account balances		Included in other comprehensive income (losses)
	(in millions)
Fixed maturities, available-for-sale	$	(33)	$	0	$	0	$	(16)	$	5	$	(28)	$	0	$	0	$	(24)






Other assets:
Fixed maturities, trading	0		1		0		0		1		0		7		0		0
Equity securities	0		(19)		0		0		0		0		(22)		0		0
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0
Other invested assets	(1)		(7)		0		0		0		(1)		(7)		0		0
Short-term investments	(3)		0		0		0		1		(2)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	37		0		0		0		0		24		0		0		0
Other assets	0		0		0		0		0		0		0		0		0
Separate account assets	0		0		(46)		0		0		0		0		(7)		0
Liabilities:
Policyholders’ account balances	(1,495)		0		0		0		0		(216)		0		0		0
Other liabilities	0		0		0		0		0		0		0		0		0
Notes issued by consolidated VIEs	0		(8)		0		0		0		0		(8)		0		0

(1)“Other” includes additional activity not allocated to the specific categories within the rollforward of Level 3 Assets and Liabilities.

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

(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.

(4)Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.

(5)Issuances and settlements for Policyholders’ account balances are presented net in the rollforward.

(6)Excludes MRB assets of $2,139 million and $2,225 million and MRB liabilities of $5,021 million and $4,624 million for the periods ended March 31, 2025 and 2024, respectively. See Note 11 for additional information.

(7)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

Derivative Fair Value Information

The following tables present the balances of certain derivative assets and liabilities measured at fair value on a recurring basis, as of the dates indicated, by the primary underlying risks they are used to manage. These tables include NPR and exclude embedded derivatives. The derivative assets and liabilities shown below are included in “Other invested assets” or “Other liabilities” in the tables contained within the sections “—Assets and Liabilities by Hierarchy Level” and “—Changes in Level 3 Assets and Liabilities,” above.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	As of March 31, 2025
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Derivative Assets:
Interest Rate	$	19	$	10,274	$	1	$		$	10,294
Currency	0		1,120		0				1,120
Credit	0		55		0				55
Currency/Interest Rate	0		3,040		0				3,040
Equity	13		3,613		1				3,627
Netting(1)							(16,389)		(16,389)
Total derivative assets	$	32	$	18,102	$	2	$	(16,389)	$	1,747
Derivative Liabilities:
Interest Rate	$	3	$	24,703	$	13	$		$	24,719
Currency	0		1,197		0				1,197
Credit	0		3		0				3
Currency/Interest Rate	0		511		0				511
Equity	8		4,386		0				4,394
Netting(1)							(25,642)		(25,642)
Total derivative liabilities	$	11	$	30,800	$	13	$	(25,642)	$	5,182


	As of December 31, 2024
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Derivative Assets:
Interest Rate	$	7	$	11,725	$	1	$		$	11,733
Currency	0		1,717		0				1,717
Credit	0		90		0				90
Currency/Interest Rate	0		3,310		0				3,310
Equity	3		4,841		0				4,844
Netting(1)							(20,093)		(20,093)
Total derivative assets	$	10	$	21,683	$	1	$	(20,093)	$	1,601
Derivative Liabilities:
Interest Rate	$	21	$	26,871	$	1	$		$	26,893
Currency	0		1,378		0				1,378
Credit	0		0		0				0
Currency/Interest Rate	0		497		0				497
Equity	7		4,117		0				4,124
Netting(1)							(28,141)		(28,141)
Total derivative liabilities	$	28	$	32,863	$	1	$	(28,141)	$	4,751

(1)“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	0	$	1	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1	$	1
Net Derivative - Interest Rate	0		(13)		0		0		0		0		0		0		0		(13)		-13


	Three Months Ended March 31, 2024
	Fair Value, beginning of period		Total realized and unrealized gains (losses)(1)		Purchases		Sales		Issuances		Settlements		Other		Transfers into Level 3(2)		Transfers out of Level 3(2)		Fair Value, end of period		Unrealized gains (losses) for assets still held(1)
	(in millions)
Net Derivative - Equity	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Net Derivative - Interest Rate	0		0		0		0		0		0		0		0		0		0		0

(1)Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”

(2)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the quarter in which the transfers occur for any such positions still held at the end of the quarter.

Nonrecurring Fair Value Measurements—The following tables represent information for assets measured at fair value on a nonrecurring basis. The fair value measurement is nonrecurring as these assets are measured at fair value only when there is a triggering event (e.g., an evidence of impairment). Assets included in the table are those that were impaired during the respective reporting periods and that are still held as of the reporting date. The estimated fair values for these amounts were determined using significant unobservable inputs (Level 3).


	Three Months Ended March 31,
	2025		2024
	(in millions)
Gains (Losses):


Investment real estate	$	(12)	$	0
Investment in JV/LP and Other	$	0	$	(7)


	March 31, 2025		December 31, 2024
	(in millions)
Carrying value after measurement as of period end:


Investment real estate(1)	$	47	$	73
Investment in JV/LP and Other(1)	$	0	$	128

(1)Reported carrying values for 2025 include values as of the measurement periods of March 31, 2025 for “Investment real estate.” Reported carrying values for 2024 include values as of the measurement periods of March 31, 2024 for “Investment in JV/LP and Other” and June 30, 2024 and September 30, 2024 for “Investment real estate.”

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Fair Value Option

The fair value option allows the Company to elect fair value as an alternative measurement for selected financial assets and financial liabilities not otherwise reported at fair value. Such elections have been made by the Company to help mitigate volatility in earnings that result from different measurement attributes. Electing the fair value option also allows the Company to achieve consistent accounting for certain assets and liabilities. Changes in fair value are reflected in “Realized investment gains (losses), net” for commercial mortgage and other loans and “Other income (loss)” for other assets and notes issued by consolidated VIEs. Changes in fair value due to instrument-specific credit risk are estimated using changes in credit spreads and quality ratings for the period reported. Interest income on commercial mortgage and other loans is included in “Net investment income.” Interest income on these loans is recorded based on the effective interest rate as determined at the closing of the loan.

The following tables present information regarding assets and liabilities where the fair value option has been elected.


	Three Months Ended March 31,
	2025		2024
	(in millions)
Liabilities:
Notes issued by consolidated VIEs:
Changes in fair value	$	0	$	8


	Three Months Ended March 31,
	2025		2024
	(in millions)
Commercial mortgage and other loans:
Interest income	$	8	$	2
Notes issued by consolidated VIEs:
Interest expense	$	0	$	7


	March 31, 2025		December 31, 2024
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	757	$	702
Aggregate contractual principal as of period end	$	752	$	697
Other invested assets:
Fair value as of period end	$	21	$	19


Notes issued by consolidated VIEs:
Fair value as of period end	$	67	$	60
Aggregate contractual principal as of period end	$	67	$	60

(1)As of March 31, 2025, for loans for which the fair value option has been elected, none of the loans were 90 days or more past due.

Fair Value of Financial Instruments

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	March 31, 2025
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:


Commercial mortgage and other loans	$	0	$	16	$	59,635	$	59,651	$	61,937
Policy loans	9		0		9,867		9,876		9,876
Other invested assets	0		95		0		95		95
Short-term investments	3		147		0		150		150
Cash and cash equivalents	6,590		794		0		7,384		7,384
Accrued investment income	0		3,383		0		3,383		3,383
Reinsurance recoverables and deposit receivables	0		8		5,715		5,723		5,723
Other assets	41		2,981		2		3,024		3,024
Total assets	$	6,643	$	7,424	$	75,219	$	89,286	$	91,572
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,991	$	45,711	$	77,702	$	81,962
Securities sold under agreements to repurchase	0		7,549		0		7,549		7,549
Cash collateral for loaned securities	0		9,507		0		9,507		9,507
Reinsurance and funds withheld payables(2)	0		10,467		(20)		10,447		10,447
Short-term debt	0		1,012		385		1,397		1,406
Long-term debt(3)	528		17,581		485		18,594		19,540
Notes issued by consolidated VIEs	0		0		1,376		1,376		1,376
Other liabilities	0		6,044		32		6,076		6,076
Separate account liabilities—investment contracts	0		21,211		18,480		39,691		39,691
Total liabilities	$	528	$	105,362	$	66,449	$	172,339	$	177,554

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2024
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:


Commercial mortgage and other loans	$	0	$	17	$	58,446	$	58,463	$	61,639
Policy loans	8		0		9,787		9,795		9,795
Other invested assets	0		95		0		95		95
Short-term investments	453		21		0		474		474
Cash and cash equivalents	7,352		454		0		7,806		7,806
Accrued investment income	0		3,441		0		3,441		3,441
Reinsurance recoverables and deposit receivables	0		8		5,782		5,790		5,790
Other assets	23		3,062		1		3,086		3,086
Total assets	$	7,836	$	7,098	$	74,016	$	88,950	$	92,126
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	31,405	$	43,466	$	74,871	$	79,571
Securities sold under agreements to repurchase	0		6,796		0		6,796		6,796
Cash collateral for loaned securities	0		9,621		0		9,621		9,621
Reinsurance and funds withheld payables(2)	0		10,489		(35)		10,454		10,454
Short-term debt	0		521		439		960		953
Long-term debt(3)	524		17,185		423		18,132		19,187
Notes issued by consolidated VIEs	0		0		1,370		1,370		1,370
Other liabilities	0		6,886		32		6,918		6,918
Separate account liabilities—investment contracts	0		21,144		18,677		39,821		39,821
Total liabilities	$	524	$	104,047	$	64,372	$	168,943	$	174,691

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

(2)Includes contracts reinsured through coinsurance with funds withheld agreement with Prismic Re with a fair value of $7,823 million (carrying amount of $7,823 million) and $7,887 million (carrying amount of $7,887 million), a portion of which relates to insurance contracts as of March 31, 2025 and December 31, 2024, respectively. See Note 12 for additional information regarding the reinsurance arrangement with Prismic Re.

(3)Excludes debt with fair value of $15,044 million (carrying amount of $15,044 million) and $14,748 million (carrying amount of $14,748 million) as of March 31, 2025 and December 31, 2024, respectively, which have been offset with the associated notes under a netting agreement.

7. DEFERRED POLICY ACQUISITION COSTS, DEFERRED SALES INDUCEMENTS AND VALUE OF BUSINESS ACQUIRED

Deferred Policy Acquisition Costs (“DAC”)

The following tables show a rollforward for the lines of business that contain material DAC balances, along with a reconciliation to the Company’s total DAC balance:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
	Retirement Strategies		Individual Life				International Businesses		Total
	Individual Variable		Term Life		Variable/ Universal Life
	(in millions)
Balance, BOP	$	3,713	$	2,215	$	4,878	$	9,304	$	20,110
Capitalization	229		46		157		305		737
Amortization expense	(124)		(52)		(59)		(169)		(404)
Other adjustments(1)	0		0		0		(214)		(214)
Foreign currency adjustment	0		0		0		184		184
Balance, EOP	$	3,818	$	2,209	$	4,976	$	9,410	20,413
Other businesses									377
Total DAC balance									$	20,790

(1)Includes the impact of the reinsurance transaction with Prismic Re International in International Businesses. See Note 12 for additional information.


	Three Months Ended March 31, 2024
	Retirement Strategies		Individual Life				International Businesses (1)		Total
	Individual Variable		Term Life		Variable/ Universal Life
	(in millions)
Balance, BOP	$	3,676	$	2,237	$	5,364	$	9,351	$	20,628
Capitalization	85		44		151		293		573
Amortization expense	(94)		(52)		(61)		(164)		(371)
Other adjustments(2)	0		(2)		(285)		5		(282)
Foreign currency adjustment	0		0		0		(232)		(232)
Balance, EOP	$	3,667	$	2,227	$	5,169	$	9,253	20,316
Other businesses									297
Total DAC balance									$	20,613

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

(2)Includes the impact of the reinsurance transaction with Somerset Re in Individual Life (Universal Life). See Note 12 for additional information.

Deferred Sales Inducements (“DSI”)

The following table shows a rollforward of DSI balances for variable annuity products within Individual Retirement Strategies, which is the only line of business that contains a material DSI balance, along with a reconciliation to the Company’s total DSI balance:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Balance, BOP	$	376	$	410
Capitalization	1		2
Amortization expense	(8)		(9)


Balance, EOP	369		403
Other businesses	29		31
Total DSI balance	$	398	$	434

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Value of Business Acquired (“VOBA”)

The following table shows a rollforward of VOBA balances for the acquisition of the Star and Edison Businesses for International Businesses, along with a reconciliation to the Company’s total VOBA balance:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Balance, BOP	$	421	$	511

Amortization expense	(10)		(11)

Foreign currency adjustment	20		(33)
Balance, EOP	431		467
Other businesses(1)	15		17
Total VOBA balance	$	446	$	484

(1)Represents Aoba Life business.

The following table provides estimated future amortization for the periods indicated:


	2025 (April - December)		2026		2027		2028		2029		Thereafter		Total
	(in millions)
Estimated future VOBA amortization	$	31	$	38	$	34	$	31	$	28	$	284	$	446

8. SEPARATE ACCOUNTS

The Company issues variable annuity and variable life insurance contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. Most variable annuity and variable life insurance contracts are offered with both separate and general account options. See Note 10 for additional information.

The assets supporting the variable portion of variable annuity and variable life insurance contracts are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” The liabilities related to the net amount at risk are reflected within “Future policy benefits” or “Market risk benefit liabilities” (or “assets,” if applicable). Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits” or “Change in value of market risk benefits, net of related hedging gains (losses).”

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Assets

The aggregate fair value of assets, by major investment asset category, supporting separate accounts is as follows:


	March 31, 2025		December 31, 2024
	(in millions)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	4,463	$	4,674
Obligations of U.S. states and their political subdivisions	2,431		2,224
Foreign government bonds	108		93
U.S. corporate securities	11,791		11,440
Foreign corporate securities	2,978		3,010
Asset-backed securities	1,853		1,283
Mortgage-backed securities	13,459		14,144
Mutual funds:
Equity	85,154		90,180
Fixed Income	32,508		33,828
Other	5,822		5,439
Equity securities	4,759		4,845
Commercial mortgage and other loans	55		54
Other invested assets	19,590		19,352
Short-term investments	1,176		1,137
Cash and cash equivalents	2,044		1,669
Total	$	188,191	$	193,372

For the periods ended March 31, 2025 and December 31, 2024, there were no transfers of assets, other than cash, from the general account to a separate account; therefore, no gains or losses were recorded.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Liabilities

The balances of and changes in separate account liabilities as of and for the periods ended are as follows:


	Three Months Ended March 31, 2025
			Retirement Strategies
	PGIM		Institutional		Individual		Group Insurance		Individual Life		Total
	(in millions)
Balance, BOP	$	28,645	$	9,308	$	86,974	$	25,126	$	46,891	$	196,944
Deposits	2,211		147		154		11		924		3,447
Investment performance	569		241		(234)		511		(1,220)		(133)

Policy charges	(16)		(2)		(514)		(38)		(309)		(879)
Surrenders and withdrawals	(1,695)		(258)		(3,662)		(9)		(280)		(5,904)
Benefit payments	(910)		(128)		(28)		(60)		(153)		(1,279)
Net transfers (to) from general account	(83)		(126)		(24)		13		(109)		(329)
Other	(118)		78		2		(7)		44		(1)

Balance, EOP	$	28,603	$	9,260	$	82,668	$	25,547	$	45,788	$	191,866
Other businesses(1)											(3,675)
Total separate account liabilities											$	188,191

Cash surrender value(2)	$	28,603	$	9,260	$	81,803	$	25,452	$	42,169	$	187,287

(1)Primarily represents activity from the Company’s Divested and Run-off Businesses as well as the impact of intercompany eliminations. There are no associated cash surrender charges.

(2)“Cash surrender value” represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. There are no cash surrender charges for the PGIM and Institutional Retirement Strategies segments.


	Three Months Ended March 31, 2024
			Retirement Strategies
	PGIM		Institutional		Individual		Group Insurance		Individual Life		Total
	(in millions)
Balance, BOP	$	32,648	$	11,011	$	94,130	$	25,021	$	39,223	$	202,033
Deposits	8,411		51		151		160		752		9,525
Investment performance	(537)		(60)		4,308		265		3,155		7,131

Policy charges	(18)		(2)		(563)		(31)		(280)		(894)
Surrenders and withdrawals	(8,270)		(716)		(3,354)		(8)		(240)		(12,588)
Benefit payments	(858)		(137)		(20)		(56)		(116)		(1,187)
Net transfers (to) from general account	(35)		(24)		6		0		(123)		(176)
Other	(456)		(49)		1		(137)		48		(593)

Balance, EOP	$	30,885	$	10,074	$	94,659	$	25,214	$	42,419	203,251
Other businesses(1)											(3,187)
Total separate account liabilities											$	200,064

Cash surrender value(2)	$	30,885	$	10,074	$	93,526	$	25,157	$	38,958	$	198,600

(1)Primarily represents activity from the Company’s Divested and Run-off Businesses as well as the impact of intercompany eliminations. There are no associated cash surrender charges.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

9. LIABILITY FOR FUTURE POLICY BENEFITS

Liability for Future Policy Benefits primarily consists of the following sub-components, which are discussed in greater detail below:

Benefit Reserves;
Deferred Profit Liability (“DPL”); and
Additional Insurance Reserves (“AIR”)

Benefit Reserves

The balances of and changes in Benefit Reserves as of and for the periods indicated consist of the three tables presented below: Present Value of Expected Net Premiums rollforward, Present Value of Expected Future Policy Benefits rollforward, and Net Liability for Future Policy Benefits.


	Three Months Ended March 31, 2025
	Present Value of Expected Net Premiums
	Retirement Strategies		Individual Life		International Businesses			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, BOP	$	72,526	$	10,724	$	45,851		$	2,854		$	131,955
Effect of cumulative changes in discount rate assumptions, BOP	14,545		578		2,599			132			17,854
Balance at original discount rate, BOP	87,071		11,302		48,450			2,986			149,809
Effect of assumption update	0		0		0			0			0
Effect of actual variances from expected experience and other activity	22		(62)		(303)			19			(324)
Adjusted balance, BOP	87,093		11,240		48,147			3,005			149,485
Issuances	4,147		201		768			0			5,116
Net premiums / considerations collected	(1,558)		(340)		(1,893)			(80)			(3,871)
Interest accrual	824		133		368			36			1,361
Foreign currency adjustment	2,777		0		1,264			0			4,041
Other adjustments	0		1		43			0			44
Balance at original discount rate, EOP	93,283		11,235		48,697			2,961			156,176
Effect of cumulative changes in discount rate assumptions, EOP	(16,053)		(460)		(3,029)			(102)			(19,644)
Balance, EOP	$	77,230	$	10,775	$	45,668		$	2,859		$	136,532
Other businesses, EOP											93
Total balance, EOP											$	136,625

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
	Present Value of Expected Future Policy Benefits
	Retirement Strategies		Individual Life		International Businesses			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, BOP	$	151,484	$	18,996	$	135,485		$	11,178		$	317,143
Effect of cumulative changes in discount rate assumptions, BOP	20,182		1,134		17,834			1,548			40,698
Balance at original discount rate, BOP	171,666		20,130		153,319			12,726			357,841
Effect of assumption update	0		0		0			0			0
Effect of actual variances from expected experience and other activity	0		(70)		(337)			19			(388)
Adjusted balance, BOP	171,666		20,060		152,982			12,745			357,453
Issuances	4,147		201		768			0			5,116
Interest accrual	1,725		238		1,173			153			3,289
Benefit payments	(3,640)		(392)		(2,208)			(87)			(6,327)
Foreign currency adjustment	2,806		0		4,169			0			6,975
Other adjustments	33		0		105			0			138
Balance at original discount rate, EOP	176,737		20,107		156,989			12,811			366,644
Effect of cumulative changes in discount rate assumptions, EOP	(20,902)		(920)		(21,001)			(1,525)			(44,348)
Balance, EOP	$	155,835	$	19,187	$	135,988		$	11,286		$	322,296
Other businesses, EOP											1,686
Total balance, EOP											$	323,982


	Three Months Ended March 31, 2025
	Net Liability for Future Policy Benefits - Benefit Reserves
	Retirement Strategies		Individual Life		International Businesses			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, EOP, pre-flooring	$	78,605	$	8,411	$	90,320		$	8,427		$	185,763
Flooring impact, EOP	75		0		41			0			116
Balance, EOP, post-flooring	78,680		8,411		90,361			8,427			185,879
Less: Reinsurance recoverables	5,050		655		353			0			6,058
Balance after reinsurance recoverables, EOP, post-flooring	$	73,630	$	7,756	$	90,008		$	8,427		$	179,821
Other businesses, EOP(1)											1,534
Total balance after reinsurance recoverables, EOP											$	181,355

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
	Present Value of Expected Net Premiums
	Retirement Strategies		Individual Life		International Businesses(2)			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, BOP	$	71,407	$	11,274	$	55,431		$	3,286		$	141,398
Effect of cumulative changes in discount rate assumptions, BOP	11,869		228		1,218			16			13,331
Balance at original discount rate, BOP	83,276		11,502		56,649			3,302			154,729
Effect of assumption update	0		0		0			0			0
Effect of actual variances from expected experience and other activity	176		(57)		(543)			49			(375)
Adjusted balance, BOP	83,452		11,445		56,106			3,351			154,354
Issuances	8,799		199		956			0			9,954
Net premiums / considerations collected	(10,124)		(345)		(2,029)			(86)			(12,584)
Interest accrual	708		134		400			40			1,282
Foreign currency adjustment	(875)		0		(1,844)			0			(2,719)
Other adjustments	0		(1)		39			0			38
Balance at original discount rate, EOP	81,960		11,432		53,628			3,305			150,325
Effect of cumulative changes in discount rate assumptions, EOP	(13,442)		(443)		(1,737)			(87)			(15,709)
Balance, EOP	$	68,518	$	10,989	$	51,891		$	3,218		$	134,616
Other businesses, EOP											88
Total balance, EOP											$	134,704


	Three Months Ended March 31, 2024
	Present Value of Expected Future Policy Benefits
	Retirement Strategies		Individual Life		International Businesses(2)			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, BOP	$	141,135	$	19,852	$	158,858		$	12,139		$	331,984
Effect of cumulative changes in discount rate assumptions, BOP	14,751		334		7,918			603			23,606
Balance at original discount rate, BOP	155,886		20,186		166,776			12,742			355,590
Effect of assumption update	0		0		0			0			0
Effect of actual variances from expected experience and other activity	162		(65)		(539)			42			(400)
Adjusted balance, BOP	156,048		20,121		166,237			12,784			355,190
Issuances	8,799		199		956			0			9,954
Interest accrual	1,493		237		1,200			153			3,083
Benefit payments	(3,114)		(404)		(2,577)			(77)			(6,172)
Foreign currency adjustment	(886)		0		(5,977)			0			(6,863)
Other adjustments	(48)		(4)		91			0			39
Balance at original discount rate, EOP	162,292		20,149		159,930			12,860			355,231
Effect of cumulative changes in discount rate assumptions, EOP	(17,715)		(769)		(10,925)			(1,033)			(30,442)
Balance, EOP	$	144,577	$	19,380	$	149,005		$	11,827		$	324,789
Other businesses, EOP											1,701
Total balance, EOP											$	326,490

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
	Net Liability for Future Policy Benefits - Benefit Reserves
	Retirement Strategies		Individual Life		International Businesses(2)			Corporate and Other
	Institutional		Term Life				Long-Term Care			Total
	(in millions)
Balance, EOP, pre-flooring	$	76,060	$	8,391	$	97,115		$	8,608		$	190,174
Flooring impact, EOP	56		0		26			0			82
Balance, EOP, post-flooring	76,116		8,391		97,141			8,608			190,256
Less: Reinsurance recoverables	5,340		690		383			0			6,413
Balance after reinsurance recoverables, EOP, post-flooring	$	70,776	$	7,701	$	96,758		$	8,608		$	183,843
Other businesses, EOP(1)											1,547
Total balance after reinsurance recoverables, EOP											$	185,390

(1)Reflects balance after reinsurance recoverables of $59 million and $65 million at March 31, 2025 and 2024, respectively.

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

The following tables provide supplemental information related to the balances of and changes in Benefit Reserves included in the disaggregated tables above, on a gross (direct and assumed) basis, as of and for the period indicated:


	Three Months Ended March 31, 2025

	Retirement Strategies			Individual Life			International Businesses				Corporate and Other
	Institutional			Term Life						Long-Term Care
	($ in millions)
Undiscounted expected future gross premiums	$	158,816		$	22,905		$	109,182			$	6,725
Discounted expected future gross premiums (at original discount rate)	$	100,852		$	15,602		$	85,647			$	4,494
Discounted expected future gross premiums (at current discount rate)	$	83,236		$	15,008		$	80,722			$	4,349
Undiscounted expected future benefits and expenses	$	284,711		$	31,022		$	258,029			$	29,618
Weighted-average duration of the liability in years (at original discount rate)	8			10			17				17
Weighted-average duration of the liability in years (at current discount rate)	8			9			15				15
Weighted-average interest rate (at original discount rate)	4.75		%	5.13		%	3.00		%		4.91		%
Weighted-average interest rate (at current discount rate)	5.49		%	5.44		%	3.89		%		5.84		%


	Three Months Ended March 31, 2024

	Retirement Strategies			Individual Life			International Businesses(1)				Corporate and Other
	Institutional			Term Life						Long-Term Care
	($ in millions)
Undiscounted expected future gross premiums	$	131,869		$	23,001		$	119,608			$	6,858
Discounted expected future gross premiums (at original discount rate)	$	89,183		$	15,258		$	93,880			$	4,525
Discounted expected future gross premiums (at current discount rate)	$	72,848		$	14,693		$	91,485			$	4,410
Undiscounted expected future benefits and expenses	$	253,981		$	31,039		$	270,217			$	30,755
Weighted-average duration of the liability in years (at original discount rate)	9			10			19				18
Weighted-average duration of the liability in years (at current discount rate)	8			9			18				17
Weighted-average interest rate (at original discount rate)	4.70		%	5.16		%	2.99		%		4.91		%
Weighted-average interest rate (at current discount rate)	5.31		%	5.29		%	3.18		%		5.50		%

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

For additional information regarding observable market information and the techniques used to determine the interest rate assumptions seen above, 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, 2024.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For non-participating traditional and limited-payment products, if a cohort is in a loss position where the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for the present value of expected future policy benefits and non-level claim settlement expenses, then the liability for future policy benefits is adjusted at that time, and thereafter, such that all changes, both favorable and unfavorable, in expected benefits resulting from both actual experience deviations and changes in future assumptions are recognized immediately as a gain or loss respectively.

For both the first three months of 2025 and 2024, there was an immaterial impact to net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Deferred Profit Liability

The balances of and changes in DPL as of and for the period indicated are as follows:


	Three Months Ended March 31, 2025
	Deferred Profit Liability
	Retirement Strategies		International Businesses
	Institutional				Total
	(in millions)
Balance, BOP, post-flooring	$	5,670	$	9,354		$	15,024
Less: Flooring impact, BOP	0		2			2
Balance, BOP, pre-flooring	5,670		9,352			15,022
Effect of assumption update	0		0			0
Effect of actual variances from expected experience and other activity	12		(11)			1
Adjusted balance, BOP	5,682		9,341			15,023
Profits deferred	31		666			697
Interest accrual	58		84			142
Amortization	(146)		(522)			(668)
Foreign currency adjustment	9		202			211
Other adjustments	0		13			13
Balance, EOP, pre-flooring	5,634		9,784			15,418
Flooring impact, EOP	0		2			2
Balance, EOP, post-flooring	5,634		9,786			15,420
Less: Reinsurance recoverables	389		41			430
Balance after reinsurance recoverables, EOP, post-flooring	$	5,245	$	9,745		14,990
Other businesses						161
Total balance after reinsurance recoverables, EOP						$	15,151


	Three Months Ended March 31, 2024
	Deferred Profit Liability
	Retirement Strategies		International Businesses(1)
	Institutional				Total
	(in millions)
Balance, BOP, post-flooring	$	5,615	$	9,259		$	14,874
Less: Flooring impact, BOP	0		2			2
Balance, BOP, pre-flooring	5,615		9,257			14,872
Effect of assumption update	0		0			0
Effect of actual variances from expected experience and other activity	26		(23)			3
Adjusted balance, BOP	5,641		9,234			14,875
Profits deferred	38		732			770
Interest accrual	57		80			137
Amortization	(142)		(537)			(679)
Foreign currency adjustment	(3)		(248)			(251)
Other adjustments	0		11			11
Balance, EOP, pre-flooring	5,591		9,272			14,863
Flooring impact, EOP	0		2			2
Balance, EOP, post-flooring	5,591		9,274			14,865
Less: Reinsurance recoverables	382		40			422
Balance after reinsurance recoverables, EOP, post-flooring	$	5,209	$	9,234		14,443
Other businesses						142
Total balance after reinsurance recoverables, EOP						$	14,585

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Additional Insurance Reserves

AIR represents the additional liability for annuitization, death, or other insurance benefits, including guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) contract features, that are above and beyond the contractholder's account balance for certain long-duration life contracts.

The following table shows a rollforward of AIR balances for variable and universal life products within Individual Life, which is the only line of business that contains a material AIR balance, for the period indicated, along with a reconciliation to the Company’s total AIR balance:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Balance, including amounts in AOCI, BOP, post-flooring	$	16,376	$	14,308
Flooring impact and amounts in AOCI	632		843
Balance, excluding amounts in AOCI, BOP, pre-flooring	17,008		15,151
Effect of assumption update	0		0
Effect of actual variances from expected experience and other activity	18		144
Adjusted balance, BOP	17,026		15,295
Assessments collected(1)	273		292
Interest accrual	143		129
Benefits paid	(99)		(72)
Other adjustments	(5)		0
Balance, excluding amounts in AOCI, EOP, pre-flooring	17,338		15,644
Flooring impact and amounts in AOCI	(527)		(1,029)
Balance, including amounts in AOCI, EOP, post-flooring	16,811		14,615
Less: Reinsurance recoverables	9,806		7,198
Balance after reinsurance recoverables, including amounts in AOCI, EOP	7,005		7,417
Other businesses	63		117
Total balance after reinsurance recoverables	$	7,068	$	7,534

(1)Represents the portion of gross assessments required to fund the future policy benefits.


	Three Months Ended March 31,
	2025		2024
Weighted-average duration of the liability in years (at original discount rate)	21		22
Weighted-average interest rate (at original discount rate)	3.38	%	3.39	%

Future Policy Benefits Reconciliation

The following table presents the reconciliation of the ending balances from above rollforwards, Benefit Reserves, DPL, and AIR including other liabilities, gross of related reinsurance recoverable, to the total liability for Future Policy Benefits on the Company's Consolidated Statement of Financial Position as of the periods indicated:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Benefit reserves, EOP, post-flooring	$	187,472	$	191,868
Deferred Profit Liability EOP, post-flooring	15,581		15,007
Additional insurance reserves, including amounts in AOCI, EOP, post-flooring	16,874		14,732
Subtotal of amounts disclosed above	219,927		221,607
Other Future Policy Benefits reserves(1)	50,042		51,183
Total Future Policy Benefits	$	269,969	$	272,790

(1)Primarily represents balances for which disaggregated rollforward disclosures are not required, including Closed Block liabilities, unpaid claims and claims expenses, and incurred but not reported and in course of settlement claim liabilities.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Revenue and Interest Expense

The following tables present revenue and interest expense related to Benefit Reserves, DPL, and AIR in the Company's Consolidated Statement of Operations as of the periods indicated:


	Three Months Ended March 31, 2025
	Revenues(1)
	Retirement Strategies		Individual Life				International Businesses		Other Businesses		Total
	Institutional		Term Life		Variable/Universal Life
	(in millions)
Benefit reserves	$	1,678	$	468	$	0	$	2,970	$	142	$	5,258
Deferred profit liability	45		0		0		(230)		0		(185)
Additional insurance reserves	0		0		835		0		0		835
Total	$	1,723	$	468	$	835	$	2,740	$	142	$	5,908


	Three Months Ended March 31, 2024
	Revenues(1)
	Retirement Strategies		Individual Life				International Businesses(2)		Other Businesses		Total
	Institutional		Term Life		Variable/Universal Life
	(in millions)
Benefit reserves	$	10,277	$	458	$	0	$	3,200	$	140	$	14,075
Deferred profit liability	20		0		0		(263)		7		(236)
Additional insurance reserves	0		0		788		0		0		788
Total	$	10,297	$	458	$	788	$	2,937	$	147	$	14,627


	Three Months Ended March 31, 2025
	Interest Expense
	Retirement Strategies		Individual Life				International Businesses		Other Businesses		Total
	Institutional		Term Life		Variable/Universal Life
	(in millions)
Benefit reserves	$	901	$	105	$	0	$	805	$	130	$	1,941
Deferred profit liability	58		0		0		84		2		144
Additional insurance reserves	0		0		143		0		1		144
Total	$	959	$	105	$	143	$	889	$	133	$	2,229


	Three Months Ended March 31, 2024
	Interest Expense
	Retirement Strategies		Individual Life				International Businesses(2)		Other Businesses		Total
	Institutional		Term Life		Variable/Universal Life
	(in millions)
Benefit reserves	$	786	$	103	$	0	$	800	$	127	$	1,816
Deferred profit liability	57		0		0		80		1		138
Additional insurance reserves	0		0		129		0		0		129
Total	$	843	$	103	$	129	$	880	$	128	$	2,083

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(1)Represents gross premiums for benefit reserves, gross premiums, excluding impact of foreign currency adjustments for DPL and gross assessments for AIR

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

10. POLICYHOLDERS’ ACCOUNT BALANCES

The balances of and changes in policyholders' account balances as of and for the periods ended are as follows:


	Three Months Ended March 31, 2025
	Retirement Strategies									Group Insurance			Individual Life			International Businesses			Total
	Institutional			Individual Variable			Individual Fixed			Life/Disability			Variable/Universal Life
	($ in millions)
Balance, beginning of period	$	19,088		$	34,085		$	12,020		$	4,974		$	27,596		$	54,270		$	152,033
Deposits	1,686			2,230			1,132			120			691			2,357			8,216
Interest credited	197			157			77			35			198			92			756
Acquisitions and dispositions	0			0			0			0			0			0			0
Policy charges	(3)			(16)			(11)			(89)			(514)			(149)			(782)
Surrenders and withdrawals	(1,363)			(285)			(199)			(452)			(446)			(382)			(3,127)
Benefit payments	(169)			(20)			(33)			0			(53)			(496)			(771)
Net transfers (to) from separate account	0			33			0			(13)			143			0			163
Change in market value and other adjustments(1)	0			(1,411)			(50)			0			11			(4)			(1,454)
Foreign currency adjustment	0			0			0			0			0			857			857
Balance, end of period	$	19,436		$	34,773		$	12,936		$	4,575		$	27,626		$	56,545		$	155,891


Closed Block Division																			4,324
Unearned revenue reserve, unearned expense credit, and additional interest reserve																			6,220
Other(2)																			3,843
Total Policyholders' account balance																			$	170,278
Weighted-average crediting rate	4.10		%	1.83		%	2.47		%	2.94		%	2.87		%	0.66		%	1.96		%
Net amount at risk(3)	$	0		$	0		$	1		$	74,477		$	405,184		$	29,251		$	508,913
Cash surrender value(4)	$	19,436		$	33,286		$	11,317		$	3,658		$	23,973		$	50,581		$	142,251

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
	Retirement Strategies									Group Insurance			Individual Life			International Businesses(5)			Total
	Institutional			Individual Variable			Individual Fixed			Life/Disability			Variable/Universal Life
	($ in millions)
Balance, beginning of period	$	17,738		$	23,765		$	7,095		$	5,293		$	27,439		$	51,399		$	132,729
Deposits	1,919			1,626			1,570			138			612			2,052			7,917
Interest credited	175			108			50			40			189			637			1,199
Acquisitions and Dispositions	0			0			0			0			0			0			0
Policy charges	(3)			(4)			0			(80)			(513)			(156)			(756)
Surrenders and withdrawals	(1,231)			(231)			(150)			(434)			(420)			(515)			(2,981)
Benefit payments	(149)			(18)			(19)			0			(37)			(526)			(749)
Net transfers (to) from separate account	0			(3)			0			0			139			0			136
Change in market value and other adjustments(1)	1			1,360			88			0			37			(9)			1,477
Foreign currency adjustment	0			0			0			0			0			(1,386)			(1,386)
Balance, end of period	$	18,450		$	26,603		$	8,634		$	4,957		$	27,446		$	51,496		$	137,586


Closed Block Division																			4,464
Unearned revenue reserve, unearned expense credit, and additional interest reserve																			5,501
Other(2)																			4,259
Total Policyholders' account balance																			$	151,810
Weighted-average crediting rate	3.87		%	1.71		%	2.54		%	3.08		%	2.76		%	4.95		%	3.55		%
Net amount at risk(3)	$	0		$	0		$	0		$	74,075		$	384,991		$	24,734		$	483,800
Cash surrender value(4)	$	18,450		$	24,376		$	7,174		$	3,812		$	23,439		$	45,403		$	122,654

(1)Primarily relates to changes in the value of embedded derivative instruments associated with the indexed options of certain products.

(2)Includes $5,040 million and $5,352 million of Full Service account balances reinsured to Great-West as of March 31, 2025 and 2024, respectively.

(3)The net amount at risk calculation includes both general account and separate account balances.

(4)Cash surrender value represents the amount of the contractholder's account balances distributable at the balance sheet date less certain surrender charges. There are no cash surrender charges for the Institutional Retirement Strategies segment.

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

“Policyholders’ account balances” for Institutional Retirement Strategies, International Businesses and Corporate and Other includes the Company’s Funding Agreement Notes Issuance Program (“FANIP”), which totaled $5,639 million and $5,722 million at March 31, 2025 and 2024, respectively. Under this program, which has a maximum authorized amount of $15 billion of medium-term notes and $6 billion of commercial paper, Delaware statutory trusts issue short-term commercial paper and/or medium-term notes to investors that are secured by funding agreements issued to the trusts by PICA. The outstanding commercial paper and notes have fixed or floating interest rates that range from 0.0% to 5.6% and original maturities ranging from three months to seven years. Included in the amounts at March 31, 2025 and 2024 are funding agreements that secure the medium-term note liability, which are carried at amortized cost, of $3,467 million and $3,465 million, respectively, and short-term note liability of $2,008 million and $2,297 million, respectively, and Retail Note liability of $187 million and $0 million, respectively.

“Policyholders’ account balances” for Institutional Retirement Strategies also includes collateralized funding agreements issued to the Federal Home Loan Bank of New York (“FHLBNY”) totaling $2,628 million as of both March 31, 2025 and 2024. These obligations, which are carried at amortized cost, have fixed interest rates that range from 1.925% to 4.510% and original maturities of seven years.

The Company issues variable life and universal life insurance contracts which may also include a “no-lapse guarantee” where the Company contractually guarantees to the contractholder a death benefit even when the account value drops to zero, as long as the “no-lapse guarantee” premium is paid.

The net amount at risk is generally defined as the current death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to,

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

the assumptions used in the original pricing of these products, including contractholder mortality, contract lapses, and premium pattern, as well as interest rate and equity market returns.

The Company also issues annuity contracts that provide certain death benefit and/or living benefit guarantees and are accounted for as MRBs. See Note 11 for additional information, including the net amount at risk associated with these guarantees.

The balance of account values by range of guaranteed minimum crediting rates and the related range of difference, in basis points (“bps”), between rates being credited to policyholders and the respective guaranteed minimums are as follows:


	March 31, 2025
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 - 50 bps above guaranteed minimum		51 - 150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in millions)
Retirement Strategies - Institutional
Less than 1.00%	$	400	$	0	$	0	$	0	$	400
1.00% - 1.99%	1,551		0		0		0		1,551
2.00% - 2.99%	78		0		0		0		78
3.00% - 4.00%	3,973		0		0		0		3,973
Greater than 4.00%	3,238		0		0		0		3,238
Total	$	9,240	$	0	$	0	$	0	$	9,240
Retirement Strategies - Individual Variable
Less than 1.00%	$	232	$	337	$	604	$	0	$	1,173
1.00% - 1.99%	103		349		3		0		455
2.00% - 2.99%	21		4		4		0		29
3.00% - 4.00%	1,657		1		8		0		1,666
Greater than 4.00%	81		0		0		0		81
Total	$	2,094	$	691	$	619	$	0	$	3,404
Retirement Strategies - Individual Fixed
Less than 1.00%	$	0	$	3	$	13	$	1,062	$	1,078
1.00% - 1.99%	444		74		203		70		791
2.00% - 2.99%	536		461		553		15		1,565
3.00% - 4.00%	2,587		58		11		3		2,659
Greater than 4.00%	81		0		0		0		81
Total	$	3,648	$	596	$	780	$	1,150	$	6,174
Group Insurance - Life / Disability
Less than 1.00%	$	0	$	0	$	0	$	800	$	800
1.00% - 1.99%	0		0		0		2		2
2.00% - 2.99%	45		0		0		0		45
3.00% - 4.00%	1,453		0		50		9		1,512
Greater than 4.00%	3		0		0		0		3
Total	$	1,501	$	0	$	50	$	811	$	2,362
Individual Life - Variable / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	347	$	347
1.00% - 1.99%	310		0		2,082		1,578		3,970
2.00% - 2.99%	298		1,547		2,746		420		5,011
3.00% - 4.00%	5,974		1,724		1,310		41		9,049
Greater than 4.00%	5,343		0		0		0		5,343
Total	$	11,925	$	3,271	$	6,138	$	2,386	$	23,720
International Businesses
Less than 1.00%	$	16,363	$	43	$	78	$	3,282	$	19,766
1.00% - 1.99%	10,725		30		0		0		10,755
2.00% - 2.99%	4,615		268		27		0		4,910
3.00% - 4.00%	6,807		0		0		0		6,807
Greater than 4.00%	9,727		0		0		0		9,727
Total	$	48,237	$	341	$	105	$	3,282	$	51,965

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	March 31, 2024
Range of Guaranteed Minimum Crediting Rate (1)	At guaranteed minimum		1 - 50 bps above guaranteed minimum		51 - 150 bps above guaranteed minimum		Greater than 150 bps above guaranteed minimum		Total
	(in millions)
Retirement Strategies - Institutional
Less than 1.00%	$	400	$	0	$	0	$	0	$	400
1.00% - 1.99%	1,551		0		0		0		1,551
2.00% - 2.99%	593		0		0		0		593
3.00% - 4.00%	4,926		0		0		0		4,926
Greater than 4.00%	2,099		0		0		0		2,099
Total	$	9,569	$	0	$	0	$	0	$	9,569
Retirement Strategies - Individual Variable
Less than 1.00%	$	866	$	727	$	70	$	0	$	1,663
1.00% - 1.99%	219		24		1		0		244
2.00% - 2.99%	26		5		4		0		35
3.00% - 4.00%	1,867		9		9		0		1,885
Greater than 4.00%	91		0		0		0		91
Total	$	3,069	$	765	$	84	$	0	$	3,918
Retirement Strategies - Individual Fixed
Less than 1.00%	$	0	$	2	$	6	$	621	$	629
1.00% - 1.99%	510		108		244		80		942
2.00% - 2.99%	548		466		564		16		1,594
3.00% - 4.00%	573		46		2		0		621
Greater than 4.00%	92		0		0		0		92
Total	$	1,723	$	622	$	816	$	717	$	3,878
Group Insurance - Life / Disability
Less than 1.00%	$	0	$	0	$	0	$	1,021	$	1,021
1.00% - 1.99%	0		0		0		0		0
2.00% - 2.99%	28		0		0		0		28
3.00% - 4.00%	1,471		0		0		61		1,532
Greater than 4.00%	72		0		0		0		72
Total	$	1,571	$	0	$	0	$	1,082	$	2,653
Individual Life - Variable / Universal Life
Less than 1.00%	$	0	$	0	$	0	$	346	$	346
1.00% - 1.99%	226		0		1,662		1,789		3,677
2.00% - 2.99%	32		1,462		3,004		280		4,778
3.00% - 4.00%	4,366		4,177		1,144		24		9,711
Greater than 4.00%	5,460		0		0		0		5,460
Total	$	10,084	$	5,639	$	5,810	$	2,439	$	23,972
International Businesses(2)
Less than 1.00%	$	15,961	$	43	$	86	$	2,311	$	18,401
1.00% - 1.99%	11,112		86		0		0		11,198
2.00% - 2.99%	4,975		290		35		0		5,300
3.00% - 4.00%	5,643		0		0		0		5,643
Greater than 4.00%	6,045		0		0		0		6,045
Total	$	43,736	$	419	$	121	$	2,311	$	46,587

(1)Excludes contracts without minimum guaranteed crediting rates, such as funds with indexed-linked crediting options and Japan variable products.

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Unearned Revenue Reserve (“URR”)

The balance of and changes in URR as of and for the periods ended are as follows:


	Three Months Ended March 31, 2025
	Individual Life		International Businesses
	Variable/ Universal Life				Total
	(in millions)
Balance, beginning of period	$	5,245	$	505		$	5,750
Unearned revenue	215		50			265
Amortization expense	(64)		(7)			(71)
Other adjustments	0		0			0
FX adjustment	0		17			17
Balance, end of period	$	5,396	$	565		5,961
Other						62
Total unearned revenue reserve balance						$	6,023


	Three Months Ended March 31, 2024
	Individual Life		International Businesses(1)
	Variable/ Universal Life				Total
	(in millions)
Balance, beginning of period	$	4,613	$	454		$	5,067
Unearned revenue	215		42			257
Amortization expense	(58)		(5)			(63)
Other adjustments	0		0			0
FX adjustment	0		(18)			(18)
Balance, end of period	$	4,770	$	473		5,243
Other						51
Total unearned revenue reserve balance						$	5,294

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

11. MARKET RISK BENEFITS

The following table shows a rollforward of MRB balances for variable annuity products within Individual Retirement Strategies, which is the only line of business that contains a material MRB balance, along with a reconciliation to the Company’s total net MRB positions as of the following dates:


	Three Months Ended March 31,
	2025		2024
	(in millions)
Balance, BOP	$	2,740	$	4,038
Effect of cumulative changes in NPR	672		1,137
Balance, BOP, before effect of changes in NPR	3,412		5,175
Attributed fees collected	265		288
Claims paid	(21)		(22)
Interest accrual	41		74
Actual in force different from expected	18		2
Effect of changes in interest rates	433		(868)
Effect of changes in equity markets	241		(888)

Issuances	24		13


Other adjustments	0		14
Balance, EOP, before effect of changes in NPR	4,413		3,788
Effect of cumulative changes in NPR	(839)		(886)
Balance, EOP	3,574		2,902
Less: Reinsured MRBs	736		560
Balance, EOP, net of reinsurance	2,838		2,342
Other businesses	44		57
Total net MRB balance	$	2,882	$	2,399

The Company issues certain variable annuity insurance contracts where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract adjusted for any partial withdrawals plus a minimum return, and/or (2) the highest anniversary contract value on a specified date adjusted for any withdrawals. These guarantees include benefits that are payable in the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues indexed variable annuity contracts for which the return is tied to the return of specific indices where the Company contractually guarantees to the contractholder a return of no less than total deposits made to the contract adjusted for any partial withdrawals upon death. In certain of these indexed variable annuity contracts, the Company also contractually guarantees to the contractholder withdrawal benefits payable during specific periods.

For guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including fixed income and equity market returns, timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility and contractholder behavior.

The following table presents accompanying information to the rollforward table above.


	March 31, 2025		March 31, 2024
	($ in millions)
Net amount at risk(1)	$	9,715	$	8,970
Weighted-average attained age of contractholders	71		70

(1)For contracts with multiple benefit features, the highest net amount at risk for each contract is included.

The tables below reconcile MRB asset and liability positions as of the following dates:


	March 31, 2025
	Retirement Strategies
	Individual Variable		Other Businesses		Total
	(in millions)
Direct and assumed	$	1,275	$	1	$	1,276
Ceded	862		1		863
Total MRB assets	$	2,137	$	2	$	2,139

Direct and assumed	$	4,849	$	46	$	4,895
Ceded	126		0		126
Total MRB liabilities	$	4,975	$	46	$	5,021

Net liability	$	2,838	$	44	$	2,882


	March 31, 2024
	Retirement Strategies
	Individual Variable		Other Businesses		Total
	(in millions)
Direct and assumed	$	1,497	$	10	$	1,507
Ceded	715		3		718
Total MRB assets	$	2,212	$	13	$	2,225

Direct and assumed	$	4,399	$	70	$	4,469
Ceded	155		0		155
Total MRB liabilities	$	4,554	$	70	$	4,624

Net liability	$	2,342	$	57	$	2,399

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

12. REINSURANCE

The Company participates in reinsurance with third parties primarily to provide additional capacity for future growth, limit the maximum net loss potential arising from large risks and acquire or dispose of businesses.

Effective October 2024, the Company entered into an agreement with Wilton Reassurance Company and Wilton Reinsurance Bermuda Limited (collectively, “Wilton Re”) to reinsure certain guaranteed universal life policies issued by Pruco Life Insurance Company (“Pruco Life”) and Pruco Life Insurance Company of New Jersey (“PLNJ”), both of which are wholly-owned subsidiaries of Prudential Financial. These policies represented approximately 40% of the Company’s remaining statutory reserves on its in-force guaranteed universal life block of business as of September 30, 2024, following the close of the reinsurance transaction with Somerset Reinsurance Ltd. (“Somerset Re”), as discussed below. The transaction is structured on a coinsurance basis and follows reinsurance accounting. As a result of the transaction, the Company recognized a $980 million deferred reinsurance loss at inception that is amortized into income over the estimated remaining life of the reinsured policies.

Effective January 2024, the Company entered into an agreement with Somerset Re to reinsure certain guaranteed universal life policies issued by Pruco Life and PLNJ, both of which are wholly-owned subsidiaries of Prudential Financial. These policies represented approximately 30% of the Company’s statutory reserves on its in-force guaranteed universal life block of business as of December 31, 2023. This transaction is structured on a modified coinsurance basis and follows reinsurance accounting. As a result of the transaction, the Company recognized a $363 million deferred reinsurance gain at inception that is amortized into income over the estimated remaining life of the reinsured policies. The reinsurance payables, which represent the Company’s obligations under the modified coinsurance arrangement, are netted with the reinsurance recoverables in the Unaudited Interim Consolidated Statements of Financial Position. Separately, effective September 2019, Prudential Annuities Life Assurance Corporation (“PALAC”), a previously wholly-owned subsidiary of Prudential Financial, entered into an agreement with Somerset Re, to coinsure business, on a quota share funds withheld basis, related to fixed indexed annuities. This agreement was subsequently novated from PALAC to Pruco Life effective October 2021, in connection with the sale of PALAC effective April 2022. Under this reinsurance agreement, which is accounted for under the deposit method of accounting, the Company cedes to Somerset Re its quota share of the insurance liabilities with respect to the reinsured contracts. The deposit receivables were $2,582 million and $2,795 million as of March 31, 2025 and December 31, 2024, respectively, and the funds withheld payables were $2,627 million and $2,595 million as of March 31, 2025 and December 31, 2024, respectively.

Effective September 2023, the Company entered into an agreement with Prismic Life Reinsurance, Ltd. (“Prismic Re”), a wholly-owned subsidiary of Prismic Life Holding Company LP (“Prismic”), to reinsure approximately $9 billion of reserves, representing approximately 70% of the in-force structured settlement annuities business previously issued by PICA, 90% of which is on a coinsurance with funds withheld basis and 10% of which is on a coinsurance basis. The reinsurance of the structured settlement annuities that provide periodic payments for the lifetime of the annuitant follows reinsurance accounting. The reinsurance of structured settlement annuities that provide payments for a guaranteed period of time and do not include life contingency risk follows deposit accounting. Separately, effective March 2025, the Company entered into an agreement with Prismic Life Reinsurance International, Ltd. (“Prismic Re International”), a wholly-owned subsidiary of Prismic, to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies originated by the Company’s Japanese affiliates. The transaction is structured on a coinsurance basis and is accounted for under the deposit method of accounting as the reinsured policies do not include life contingency risk and are accounted for as investment contracts.

Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar, 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, a wholly-owned subsidiary of Prudential Financial. This block represents approximately 10% of the Company’s remaining legacy in-force traditional variable annuity block by account value. The Company ceded 100% of separate account liabilities under modified coinsurance and 100% of general account liabilities under coinsurance of its Pruco Life issued PDI traditional variable annuity contracts. The general account liabilities associated with PDI’s guaranteed living and death benefits and the corresponding reinsurance of those liabilities are accounted for as market risk benefits.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Effective April 2022, in connection with the sale of the Full Service Retirement business, the Company entered into separate agreements with external counterparties, Great-West and Great-West Life & Annuity Insurance Company of New York, now known as Empower Annuity Insurance Company of America and Empower Life & Annuity Insurance Company of New York, respectively, to reinsure a portion of its Full Service Retirement business. The Company ceded 100% of separate account liabilities under modified coinsurance and 100% of general account liabilities under coinsurance of its Full Service Retirement business. The Company’s Full Service Retirement business consists of market value and stable value separate accounts as well as general account products, including stable value accumulation funds and a stable value wrap product known as a synthetic guaranteed investment contract. The majority of these products are considered investment contracts as they do not contain significant insurance risk; therefore, the reinsurance of such products are accounted for under the deposit method of accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from the Company to Empower and any such novated contracts shall cease to be reinsured under this agreement.

Effective April 2022, in connection with the sale of the PALAC legal entity, now known as Fortitude Life Insurance and Annuity Company (“FLIAC”), the Company entered into a reinsurance agreement with FLIAC under which the Company assumed all of FLIAC’s indexed variable annuities under modified coinsurance. The reinsurance of the indexed variable annuities transfers all significant risks, including mortality risk, embedded in the reinsured contracts. As a result of the agreement, reinsurance recoverables includes the assumed modified coinsurance receivable, which reflects the value of the invested assets retained by FLIAC and the associated asset returns. The Company also assumed via coinsurance all of FLIAC’s fixed indexed annuities with a guaranteed lifetime withdrawal income feature, which are accounted for under the deposit method of accounting. The reinsurance agreement offers the policyholders the opportunity to novate their contracts from FLIAC to the Company and any such novated contracts shall cease to be reinsured under this agreement.

Effective April 2015, the Company entered into an agreement with Union Hamilton Reinsurance, Ltd. (“Union Hamilton”) an external counterparty, to reinsure approximately 50% of the Prudential Premier® Retirement Variable Annuity with Highest Daily Lifetime Income (“HDI”) v.3.0 business, a guaranteed benefit feature. This reinsurance agreement covered most new HDI v.3.0 variable annuity business issued between April 1, 2015 and December 31, 2016 on a quota share basis, with Union Hamilton’s cumulative quota share amounting to $2.9 billion of new rider premiums as of December 31, 2016. Reinsurance on business subject to this agreement remains in force for the duration of the underlying annuity contracts. New sales subsequent to December 31, 2016 are not covered by this external reinsurance agreement. This reinsurance agreement is accounted for as market risk benefits.

In January 2013, the Company acquired the Hartford Life Business through reinsurance transactions with three subsidiaries of Hartford Financial Services Group, Inc. (“Hartford Financial”). Under the related agreements, the Company provided reinsurance for approximately 700,000 life insurance policies with net retained face amount in force of approximately $141 billion. The Company acquired the general account business through a coinsurance arrangement and, for certain types of general account policies, a modified coinsurance arrangement. The Company acquired the separate account business through a modified coinsurance arrangement. In May 2018, Hartford Financial sold a group of operating subsidiaries, which included two of the Company’s counterparties to these reinsurance arrangements, to Talcott Resolution Life Insurance Company (“Talcott Resolution”). Talcott Resolution was acquired by Sixth Street in July 2021. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of these changes in control of such counterparties.

Since 2011, the Company has entered into a number of reinsurance agreements to assume pension liabilities in the United Kingdom. Under these arrangements, the Company assumes the longevity risk, and in some arrangements, also the investment risk associated with the pension benefits of certain specified beneficiaries. The Company also obtains collateral from its counterparties to mitigate counterparty default risk.

In 2006, the Company acquired the variable annuity business of The Allstate Corporation (“Allstate”) through a reinsurance transaction. The reinsurance arrangements with Allstate include a coinsurance arrangement associated with the general account liabilities assumed and a modified coinsurance arrangement associated with the separate account liabilities assumed. The reinsurance payables, which represent the Company’s obligations under the modified coinsurance arrangement, are netted with the reinsurance recoverables in the Unaudited Interim Consolidated Statements of Financial Position. During the fourth quarter of 2021, Allstate sold the two counterparties to the aforementioned variable annuity reinsurance transaction to third parties. There was no impact to the terms, rights or obligations of the Company, or operation of these reinsurance arrangements, as a result of this change in control of such counterparties.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

For the domestic business, life and disability reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term, per person excess, excess of loss, and coinsurance. On policies sold since 2000, the Company has reinsured a significant portion of the individual life mortality risk. Placement of reinsurance is accomplished primarily on an automatic basis with some specific risks reinsured on a facultative basis. The Company is authorized and has historically retained up to $30 million per life, but reduced its operating retention limit to $20 million per life in 2013 and then down to $10 million per life for new business starting in 2020. Retention in excess of the operating limit is on an exception basis.

The international business primarily uses reinsurance to obtain experience with respect to certain new product offerings and to a lesser extent, to mitigate mortality risk for certain protection products and for capital management purposes.

Reinsurance amounts included in the Unaudited Interim Consolidated Statements of Operations for “Premiums,” “Policy charges and fee income,” “Change in value of market risk benefits, net of related hedging gains (losses),” “Policyholders’ benefits” and “Change in estimates of liability for future policy benefits,” are as follows:


	Three Months Ended March 31,
		2025		2024
		(in millions)
Direct premiums		$	6,022	$	14,822
Reinsurance assumed		1,594		1,451
Reinsurance ceded		(616)		(736)
Premiums		$	7,000	$	15,537

Direct policy charges and fee income		$	1,183	$	864
Reinsurance assumed		289		300
Reinsurance ceded		(315)		(108)
Policy charges and fee income		$	1,157	$	1,056

Direct change in value of market risk benefits, net of related hedging gains (losses)		$	(367)	$	150
Reinsurance assumed		(28)		71
Reinsurance ceded		44		(98)
Change in value of market risk benefits, net of related hedging gains (losses)		$	(351)	$	123

Direct policyholders’ benefits		$	7,260	$	15,865
Reinsurance assumed		1,970		1,843
Reinsurance ceded		(1,090)		(1,114)
Policyholders’ benefits		$	8,140	$	16,594

Direct change in estimates of liability for future policy benefits		$	(47)	$	146
Reinsurance assumed		0		(5)
Reinsurance ceded		(3)		(158)
Change in estimates of liability for future policy benefits		$	(50)	$	(17)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance recoverables are as follows:


	March 31, 2025		December 31, 2024
	(in millions)
Prismic Re(1)	$	5,465	$	5,506
FLIAC	1,444		1,442
Other	39		39
Individual and group annuities	6,948		6,987
Wilton Re	7,584		7,478
Somerset Re(2)	1,647		1,591
Hartford Life Business(3)	2,027		2,033
Other	8,158		7,996
Life insurance	19,416		19,098
Other reinsurance	416		401
Total reinsurance recoverables(4)(5)	$	26,780	$	26,486

(1)Excludes deposit receivables related to the reinsurance agreement with Prismic Re of $3,544 million and $3,578 million as of March 31, 2025 and December 31, 2024, respectively. The Company has also recorded funds withheld payables related to the reinsurance agreement with Prismic Re of $7,880 million and $7,796 million as of March 31, 2025 and December 31, 2024, respectively. Additionally, excludes deposit receivables related to the reinsurance agreement with Prismic Re International of $6,304 million as of March 31, 2025.

(2)Represents reinsurance recoverables of $8,027 million and $7,979 million as of March 31, 2025 and December 31, 2024, respectively that are netted with reinsurance payables of $6,380 million and $6,388 million as of March 31, 2025 and December 31, 2024, respectively, related to the reinsurance agreement with Somerset Re in which the Company reinsured a portion of its in-force guaranteed universal life block of business under modified coinsurance.

(3)The Company has also recorded reinsurance payables related to the Hartford Life Business acquisition of $1,447 million and $1,387 million as of March 31, 2025 and December 31, 2024, respectively.

(4)Net of $14 million and $12 million of allowance for credit losses as of March 31, 2025 and December 31, 2024, respectively.

(5)Excludes deposit receivables of arrangements that are accounted for under the deposit method of accounting of $17,202 million and $11,194 million as of March 31, 2025 and December 31, 2024, respectively.

Excluding the reinsurance recoverables associated with the counterparties separately identified within the reinsurance recoverables table above, four major reinsurance companies account for approximately 60% of the Company’s remaining reinsurance recoverables as of March 31, 2025. The Company periodically reviews the financial condition of its reinsurers, amounts recoverable therefrom, and unearned reinsurance premium, in order to reduce its exposure to loss from reinsurer insolvencies. Any expected credit losses are reflected in the current expected credit loss (“CECL”) allowance, after considering any collateral the Company obtained in the form of a trust, letter of credit, or funds withheld arrangement. 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, 2024 for additional details regarding CECL.

13. CLOSED BLOCK

On December 18, 2001, the date of demutualization, The Prudential Insurance Company of America (“PICA”) established a closed block for certain in-force participating insurance policies and annuity products, along with corresponding assets used for the payment of benefits and policyholders’ dividends on these products, (collectively the “Closed Block”), and ceased offering these participating products. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block division. For additional information regarding the Closed Block, see Note 16 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

As of March 31, 2025 and December 31, 2024, the Company recognized a policyholder dividend obligation of $1,851 million and $2,096 million, respectively, to Closed Block policyholders for the excess of actual cumulative earnings over expected cumulative earnings. Additionally, accumulated net unrealized investment gains (losses) were reflected as a policyholder dividend obligation of $(1,684) million and $(2,096) million at March 31, 2025 and December 31, 2024, respectively, with a corresponding amount reported in AOCI.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2025, the Closed Block has sufficient funds to make guaranteed policy benefit payments and there is no expectation that assets outside of the Closed Block will be needed to fund future payments. The excess of Closed Block liabilities over Closed Block assets as of the end of the reporting period shown in the table below is a reasonable measure of the margin in the reported liabilities compared to best estimate liabilities assuming the current dividend scale. Closed Block liabilities and assets designated to the Closed Block, as well as maximum future earnings to be recognized from these liabilities and assets, are as follows:


	March 31, 2025		December 31, 2024
	(in millions)
Closed Block liabilities
Future policy benefits	$	42,173	$	42,464
Policyholders’ dividends payable	709		688
Policyholders’ dividend obligation	167		0
Policyholders’ account balances	4,324		4,359
Other Closed Block liabilities	3,120		3,346
Total Closed Block liabilities	50,493		50,857
Closed Block assets
Fixed maturities, available-for-sale, at fair value	28,671		28,570
Fixed maturities, trading, at fair value	654		647
Equity securities, at fair value	1,468		1,642
Commercial mortgage and other loans	7,769		7,652
Policy loans	3,315		3,348
Other invested assets	4,940		4,929
Short-term investments	257		520
Total investments	47,074		47,308
Cash and cash equivalents	392		400
Accrued investment income	417		403
Other Closed Block assets	291		367
Total Closed Block assets	48,174		48,478
Excess of reported Closed Block liabilities over Closed Block assets	2,319		2,379
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	(1,851)		(2,299)
Allocated to policyholder dividend obligation	1,684		2,096
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,152	$	2,176

Information regarding the policyholder dividend obligation is as follows:


	Three Months Ended March 31, 2025
	(in millions)
Balance, December 31, 2024	$	0

Impact from earnings allocable to policyholder dividend obligation	(245)
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	412
Balance, March 31, 2025	$	167

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Closed Block revenues and benefits and expenses are as follows for the periods indicated:


	Three Months Ended March 31,
			2025		2024
		(in millions)
Revenues
Premiums			$	417	$	409
Net investment income			493		513
Realized investment gains (losses), net			(57)		(125)
Other income (loss)			(34)		164
Total Closed Block revenues			819		961
Benefits and Expenses
Policyholders’ benefits			601		584
Interest credited to policyholders’ account balances			28		30
Dividends to policyholders			127		275
General and administrative expenses			78		67
Total Closed Block benefits and expenses			834		956
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes			(15)		5
Income tax expense (benefit)			(36)		(15)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes			$	21	$	20

14. INCOME TAXES

The Company uses a full-year projected effective tax rate approach to calculate year-to-date taxes. The projected effective tax rate is the ratio of projected “Total income tax expense” divided by projected “Income before income taxes and equity in earnings of joint ventures and other operating entities.” In addition, certain items impacting total income tax expense are recorded in the periods in which they occur. In determining the year-to-date income tax provision, the Company considers the realizability of deferred tax assets, including those associated with unrealized investment losses, and has determined based upon the weight of available evidence that no valuation allowance is necessary related to unrealized investment losses. Taxes attributable to joint ventures and other operating entities are recorded within “Equity in earnings of joint ventures and other operating entities, net of taxes.” The interim period tax expense (or benefit) is the difference between the year-to-date income tax provision and the amounts reported for the previous interim periods of the fiscal year.

The Company’s income tax provision, on a consolidated basis, amounted to an income tax expense of $207 million, or 22.5% of income (loss) before income taxes and equity in earnings of joint ventures and other operating entities, in the first three months of 2025, compared to an income tax expense of $289 million, or 20.8%, in the first three months of 2024. The Company’s current and prior effective tax rates differ from the U.S. statutory rate of 21% primarily due to non-taxable investment income, tax credits, foreign earnings taxed at higher rates than the U.S. statutory rate, and the items discussed below.

Foreign Tax Credit Regulations. The Treasury Department and the IRS published Final Regulations in the Federal Register (Treasury Decision 9959) on January 4, 2022, which affect the creditability of certain foreign taxes for U.S. federal income tax purposes. The Final Regulations created uncertainty as to whether a U.S. foreign tax credit could be claimed for taxes paid to Brazil. The ability to claim a foreign tax credit for taxes paid to Brazil impacted the benefit of the election made pursuant to Internal Revenue Code Section 952 to subject earnings from the Company’s insurance operations in Brazil to tax in the U.S. in the tax year earned, net of related foreign tax credits. The Company continues to assume that the election does not apply in tax years post 2021.

On August 7, 2023, the IRS issued Notice 2023-55 which provides temporary relief to taxpayers in determining whether a foreign tax is eligible for a U.S. foreign tax credit for tax years 2022 and 2023. Subsequently, on December 11, 2023 the IRS issued Notice 2023-80 which extended that relief to taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued and abolished certain changes that the Final Regulations had made to

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

the creditability of a tax paid in lieu of a generally imposed foreign income tax. As a result of this guidance, the Company claimed a U.S. foreign tax credit for taxes paid to Brazil both in 2024 and 2025 for its 2023 tax year and will claim a U.S. foreign tax credit for taxes paid to Brazil in future tax years. This contributed to the Company’s Brazil operations not being subject to Global Intangible Low Taxed Income (GILTI) in 2024 and 2025.

GILTI. The GILTI provision applies a minimum U.S. tax to earnings of consolidated foreign subsidiaries in excess of a 10% deemed return on tangible assets of foreign subsidiaries by imposing the U.S. tax rate to 50% of earnings of such foreign affiliates and provides for a partial foreign tax credit for foreign income taxes. In years that the PFI consolidated federal income tax return reports a net operating loss or has a loss attributable to U.S. sources of operations, including as a result of loss carrybacks, the GILTI provision would limit the amount of deductions or credits permissible against GILTI. These limitations did not have a material impact in 2023 or 2024.

On July 20, 2020, the U.S. Treasury and the Internal Revenue Service issued Final Regulations (Treasury Decision 9902) pursuant to Internal Revenue Code Section 951A which allow an annual election to exclude from the U.S. tax return certain GILTI amounts when the taxes paid by a foreign affiliate exceed 18.9% (90% of U.S. statutory rate of 21%) of the GILTI amount for that foreign affiliate (the “high-tax exception”). These regulations are effective for the 2021 taxable year with an election to apply to any taxable year beginning after 2017. In many of the countries in which the Company operates, including Japan and Brazil, there are differences between local tax rules used to determine the tax base and the U.S. tax principles used to determine GILTI. Also, the Company’s Japan affiliates have a different tax year than the U.S. calendar tax year used to determine GILTI. Therefore, while many of the countries, including Japan and Brazil, have a statutory tax rate above the 18.9% threshold, separate affiliates may not meet the 18.9% threshold each year and, as such, may not qualify for this annual exclusion. The Company made the high-tax exception election for the 2024 tax year and anticipates to make the high-tax exception election for the 2025 tax year for its foreign affiliates that meet the 18.9% threshold. The Company reflected the impact of the election in its full year projected effective tax rate used to calculate year-to-date taxes for the first three months of 2024 and 2025, respectively.

Tax Law Change. In March 2025, Japan enacted a 4% Special Defense Corporation Tax, effective for tax years beginning on or after April 1, 2026, which raises the corporate income tax rate for the Company’s Japan insurance companies from 28% to 28.93%. A tax expense of approximately $36 million resulting from this tax rate change is reflected in the financial statements for the first quarter of 2025, while the Company continues to assess any additional potential impact of this tax rate change.

Tax Audit and Unrecognized Tax Benefits. It is possible the Company will pay the unrecognized tax benefit attributable to the Section 952 election of approximately $86 million for prior period audit cycles within the next 12 months as it pursues resolution of the matter. The payment will have no impact on the effective tax rate. The Company cannot predict with reasonable accuracy whether there will be any significant changes within the next twelve months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

15. SHORT-TERM AND LONG-TERM DEBT

Short-term Debt

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


	March 31, 2025			December 31, 2024
	($ in millions)
Commercial paper:
Prudential Financial	$	25		$	25
Prudential Funding, LLC	500			496
Subtotal commercial paper	525			521

Current portion of long-term debt:
Senior Notes	499			0
Surplus notes	347			347
Mortgage debt	35			85

Subtotal current portion of long-term debt	881			432

Subtotal	1,406			953
Less: assets under set-off arrangements(1)	0			0
Total short-term debt(2)	$	1,406		$	953
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	250		$	310
Daily average commercial paper outstanding for the quarter ended	$	1,692		$	1,823
Weighted average maturity of outstanding commercial paper, in days	4			15
Weighted average interest rate on outstanding commercial paper	4.33		%	4.61		%

(1)The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in short-term debt.

(2)Includes Prudential Financial debt of $524 million and $25 million at March 31, 2025 and December 31, 2024, respectively.

Prudential Financial and certain subsidiaries have access to external sources of liquidity, including membership in the FHLBNY, a funding agreement facility with the Federal Agricultural Mortgage Company (“Farmer Mac”), commercial paper programs and contingent financing facilities in the form of facility agreements. The Company also maintains syndicated, unsecured committed credit facilities as an alternative source of liquidity. At March 31, 2025, no amounts were drawn on these syndicated, unsecured committed credit facilities. For additional information regarding these sources of liquidity, 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, 2024.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Long-term Debt

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


	March 31, 2025		December 31, 2024
	(in millions)
Fixed-rate obligations:
Surplus notes	$	0	$	0
Surplus notes subject to set-off arrangements(1)(2)	15,044		14,748
Senior notes	10,541		10,245
Mortgage debt(3)	121		69
Floating-rate obligations:
Line of credit	255		255
Surplus notes subject to set-off arrangements(1)	0		0

Mortgage debt(3)	32		31
Junior subordinated notes(4)	8,591		8,587
Subtotal	34,584		33,935
Less: assets under set-off arrangements(1)	15,044		14,748
Total long-term debt(5)	$	19,540	$	19,187

(1)The surplus notes have corresponding assets where rights to set-off exist, thereby reducing the amount of surplus notes included in long-term debt.

(2)Amount includes $7.0 billion of surplus notes used to finance Guideline AXXX reserves for business reinsured to Somerset Re in March 2024. See Note 12 for additional information.

(3)Includes $153 million and $100 million of debt denominated in foreign currency at March 31, 2025 and December 31, 2024, respectively.

(4)Includes Prudential Financial debt of $8,550 million and $8,548 million at March 31, 2025, and December 31, 2024, respectively. Also includes subsidiary debt of $41 million and $39 million denominated in foreign currency at March 31, 2025, and December 31, 2024, respectively.

(5)Includes Prudential Financial debt of $19,091 million and $18,793 million at March 31, 2025 and December 31, 2024, respectively.

At March 31, 2025 and December 31, 2024, the Company was in compliance with all debt covenants related to the borrowings in the table above.

Senior Notes

In August 2024, the Company recommenced sales of InterNotes® Retail Notes under its shelf registration statement. These notes support the Company’s Institutional Retirement Strategies business through the purchase of funding agreements on which the segment will earn investment spread. As of March 31, 2025, the outstanding balance of the InterNotes® Retail Notes was $418 million of which $183 million was utilized for Institutional Retirement Strategies, as described above.

In March 2025, the Company issued $750 million in aggregate principal amount of 5.20% medium-term notes due in March 2035.

Junior Subordinated Notes

In April, the Company announced that it will redeem, in full, $1.0 billion in aggregate principal amount of 5.375% junior subordinated notes due in 2045.

16. EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (“Other Postretirement Benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive certain other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service.

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


	Three Months Ended March 31,
	Pension Benefits				Other Postretirement Benefits
	2025		2024		2025		2024
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	47	$	52	$	1	$	2
Interest cost	141		135		14		13
Expected return on plan assets	(249)		(238)		(18)		(19)
Amortization of prior service cost	0		0		(17)		(17)
Amortization of actuarial (gain) loss, net	21		22		3		2
Settlements	(1)		0		0		0


Net periodic (benefit) cost	$	(41)	$	(29)	$	(17)	$	(19)

17. EQUITY

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


	Common Stock
	Issued	Held In Treasury	Outstanding
	(in millions)
Balance, December 31, 2024	666.3	311.7	354.6
Common Stock issued	0.0	0.0	0.0
Common Stock acquired	0.0	2.2	(2.2)
Stock-based compensation programs(1)	0.0	(1.6)	1.6
Balance, March 31, 2025	666.3	312.3	354.0

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

In December 2024, Prudential Financial’s Board of Directors (the “Board”) 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, 2025 through December 31, 2025. As of March 31, 2025, 2.2 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $250 million.

The timing and amount of share repurchases are determined by management based upon market conditions and other considerations, and such repurchases may be executed in the open market, through derivative, accelerated repurchase and other negotiated transactions and through plans complying with Rule 10b5-1(c) under the Securities Exchange Act of 1934 (the “Exchange Act”), as amended. Numerous factors could affect the timing and amount of any future repurchases under the share repurchase authorization, including, but not limited to: compliance with laws, increased capital needs of the Company due to changes in regulatory capital requirements, opportunities for growth and acquisitions, and the effect of adverse market conditions.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Dividends declared per share of Common Stock are as follows for the periods indicated:


	Three Months Ended March 31,
		2025		2024
Dividends declared per share of Common Stock		$	1.35	$	1.30

Accumulated Other Comprehensive Income (Loss)

AOCI represents the cumulative OCI items that are reported separate from net income and detailed on the Unaudited Interim Consolidated Statements of Comprehensive Income. The balance of and changes in each component of AOCI as of and for the three months ended March 31, 2025 and 2024, are as follows:


	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest rate remeasurement of Liability for Future Policy Benefits		Gains (Losses) from Changes in Non-performance Risk on Market Risk Benefits		Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2024	$	(3,615)	$	(18,687)	$	17,306	$	532	$	(2,247)	$	(6,711)
Change in OCI before reclassifications	398		(325)		2,036		167		(4)		2,272
Amounts reclassified from AOCI	(12)		98		0		0		7		93
Income tax benefit (expense)	58		170		(588)		(35)		0		(395)
Balance, March 31, 2025	$	(3,171)	$	(18,744)	$	18,754	$	664	$	(2,244)	$	(4,741)


	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Financial, Inc.
	Foreign Currency Translation Adjustment		Net Unrealized Investment Gains (Losses)(1)		Interest rate remeasurement of Liability for Future Policy Benefits		Gains (Losses) from Changes in Non-performance Risk on Market Risk Benefits		Pension and Postretirement Unrecognized Net Periodic Benefit (Cost)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2023	$	(2,686)	$	(11,213)	$	8,547	$	900	$	(2,052)	$	(6,504)
Change in OCI before reclassifications	(481)		(4,602)		4,213		(252)		6		(1,116)
Amounts reclassified from AOCI	(13)		(172)		0		0		7		(178)
Income tax benefit (expense)	(36)		1,131		(1,006)		53		(5)		137
Balance, March 31, 2024	$	(3,216)	$	(14,856)	$	11,754	$	701	$	(2,044)	$	(7,661)

(1)Includes cash flow hedges of $1,659 million and $1,780 million as of March 31, 2025 and December 31, 2024, respectively, and $1,199 million and $869 million as of March 31, 2024 and December 31, 2023, respectively, and fair value hedges of $(134) million and $(64) million as of March 31, 2025 and December 31, 2024, respectively, and $(51) million and $(60) million as of March 31, 2024 and December 31, 2023, respectively.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reclassifications out of Accumulated Other Comprehensive Income (Loss)


	Three Months Ended March 31,				Affected line item in Unaudited Interim Consolidated Statements of Operations
	2025		2024
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	12	$	13		Realized investment gains (losses), net


Net unrealized investment gains (losses):
Cash flow hedges—Interest rate	(3)		(3)			(3)
Cash flow hedges—Currency	1		2			(3)
Cash flow hedges—Currency/Interest rate	(29)		157			(3)
Fair value hedges—Currency	(3)		(2)			(3)
Net unrealized investment gains (losses) on available-for-sale securities	(64)		18			Realized investment gains (losses), net
Total net unrealized investment gains (losses)	(98)		172			(4)
Amortization of defined benefit items:
Prior service cost	17		17			(5)
Actuarial gain (loss)	(24)		(24)			(5)
Total amortization of defined benefit items	(7)		(7)
Total reclassifications for the period	$	(93)	$	178

(1)All amounts are shown before tax.

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

(3)See Note 5 for additional information regarding cash flow and fair value hedges.

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

(5)See Note 16 for additional information regarding employee benefit plans.

Net Unrealized Investment Gains (Losses)

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Net Unrealized Investment Gains (Losses) on Available-for-Sale Fixed Maturity Securities on Which an Allowance for Credit Losses has been Recorded		Net Unrealized Gains (Losses) on All Other Investments(1)		Reinsurance Recoverables		Future Policy Benefits, Policyholders’ Account Balances and Reinsurance Payables		Policyholders’ Dividends		Income Tax Benefit (Expense)		Accumulated Other Comprehensive Income (Loss) Related to Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2024	$	6	$	(27,287)	$	(269)	$	981	$	2,096	$	5,786	$	(18,687)
Net investment gains (losses) on investments arising during the period	2		197								40		239
Reclassification adjustment for (gains) losses included in net income	(1)		99								20		118
Reclassification due to allowance for credit losses recorded during the period	(3)		3								0		0
Impact of net unrealized investment (gains) losses					45		(157)		(412)		110		(414)
Balance, March 31, 2025	$	4	$	(26,988)	$	(224)	$	824	$	1,684	$	5,956	$	(18,744)

(1)Includes cash flow and fair value hedges. See Note 5 for additional information.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

18. EARNINGS PER SHARE

A reconciliation of the numerators and denominators of the basic and diluted per share computations of Common Stock based on the consolidated earnings of Prudential Financial for the periods indicated is as follows:


	Three Months Ended March 31,
	2025					2024
	Income		Weighted Average Shares	Per Share Amount		Income		Weighted Average Shares	Per Share Amount
	(in millions, except per share amounts)
Basic earnings per share
Net income (loss)	$	742				$	1,151
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests	35					13
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	10					15
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	697	354.3	$	1.97	$	1,123	359.0	$	3.13
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	10				$	15
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	10					15
Stock options			0.1					0.3
Deferred and long-term compensation programs			1.7					1.2
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	697	356.1	$	1.96	$	1,123	360.5	$	3.12

Unvested share-based payment awards that contain nonforfeitable rights to dividends are participating securities and included in the computation of earnings per share pursuant to the two-class method. Under this method, earnings attributable to Prudential Financial are allocated between Common Stock and the participating awards, as if the awards were a second class of stock. During periods of net income available to holders of Common Stock, the calculation of earnings per share excludes the income attributable to participating securities in the numerator and the dilutive impact of these securities from the denominator. In the event of a net loss available to holders of Common Stock, undistributed earnings are not allocated to participating securities and the denominator excludes the dilutive impact of these securities as they do not share in the losses of the Company. Undistributed earnings allocated to participating unvested share-based payment awards for the three months ended March 31, 2025 and 2024, as applicable, were based on 4.0 million and 4.1 million of such awards, respectively, weighted for the period they were outstanding.

Stock options and shares related to deferred and long-term compensation programs that are considered antidilutive are excluded from the computation of diluted earnings per share. Stock options are considered antidilutive based on application of the treasury stock method or in the event of a net loss available to holders of Common Stock. Shares related to deferred and long-term compensation programs are considered antidilutive in the event of a net loss available to holders of Common Stock. For the periods indicated, the number of stock options and shares related to deferred and long-term compensation programs that were considered antidilutive and were excluded from the computation of diluted earnings per share, weighted for the portion of the period they were outstanding, are as follows:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31,
	2025		2024
	Shares	Exercise Price Per Share	Shares	Exercise Price Per Share
	(in millions, except per share amounts, based on weighted average)
Antidilutive stock options based on application of the treasury stock method	0.0	N/A	0.3	$	110.42
Antidilutive stock options due to net loss available to holders of Common Stock	0.0		0.0
Antidilutive shares based on application of the treasury stock method	0.0		0.0
Antidilutive shares due to net loss available to holders of Common Stock	0.0		0.0
Total antidilutive stock options and shares	0.0		0.3

19. SEGMENT INFORMATION

Segments

The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance and Individual Life businesses), the International Businesses, the Closed Block division, and the Company’s 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 operations. 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 U.S. GAAP. The Company’s 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. For additional information regarding these segments, see Note 23 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Effective in the first quarter of 2025, consistent with changes to the Company’s internal management structure, the Company’s International Businesses are reflected as a single operating and reportable segment, which is consistent with how the CODM now assesses its performance and allocates resources. Prior to the first quarter of 2025, International Businesses consisted of the Life Planner and Gibraltar Life and Other operating segments, each of which was a reportable segment under U.S. GAAP. The change has been applied retrospectively and did not have any impact on the Company’s Unaudited Interim Consolidated Financial Statements contained herein or to any previously issued financial statements.

Segment Accounting Policies. The accounting policies of the segments are the same as those described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Results for each segment include earnings on attributed equity established at a level which management considers necessary to support each segment’s risks. Operating expenses specifically identifiable to a particular segment are allocated to that segment as incurred.

Following an annual review of its internal expense allocations, the Company implemented an allocation update that will impact segment results; however, there will be no impact to the Company’s consolidated results. Effective in the first quarter of 2025, operating expenses not identifiable to a specific segment that are incurred in connection with the generation of segment revenues are generally allocated using a proportional allocation measure such as headcount, segment-level support or other financial measures. Prior to the first quarter of 2025, these expenses were generally allocated based upon the segment’s historical percentage of general and administrative expenses.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Adjusted Operating Income

The Company analyzes the operating performance of each segment using “adjusted operating income.” Adjusted operating income does not equate to “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” or “Net income (loss)” as determined in accordance with U.S. GAAP but is the measure of segment profit or loss used by the chief executive officer, who is the Company’s CODM, and is the measure of segment performance presented below. The CODM uses adjusted operating income to (1) evaluate segment performance; (2) allocate resources and capital, predominantly during the annual budgeting and planning processes; and (3) consider variances to pre-established targets during the compensation process. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and the Company’s definition of adjusted operating income may differ from that used by other companies. The Company, however, believes that the presentation of adjusted operating income as measured for management purposes enhances the understanding of results of operations by highlighting the results from ongoing operations and the underlying profitability factors of its businesses.

Adjusted operating income is calculated by adjusting each segment’s “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” for the following items which are important to an understanding of overall results of operations, and are described in greater detail below:

Realized investment gains (losses), net, and related charges and adjustments;
Change in value of market risk benefits, net of related hedging gains (losses);
Market experience updates;
Divested and Run-off Businesses;
Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling interests; and
Other adjustments.

For additional information regarding these reconciling items, see Note 23 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Reconciliation of select financial information

The tables below present certain financial information that is regularly provided to the CODM for the Company’s segments, including revenues and significant benefits and expenses, on an adjusted operating income basis, as well as assets by segment, and the reconciliation of the segment totals to amounts reported in the Unaudited Interim Consolidated Financial Statements. Prior periods have been updated to reflect the adoption of ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2025
			Retirement Strategies
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Institutional Retirement Strategies		Individual Retirement Strategies (1)(2)		Group Insurance		Individual Life(1)		International Businesses		Corporate and Other(3)		Total Adjusted Operating Income		Total Reconciling Items		Total GAAP Revenues and Pre-tax Income
(in millions)
Revenues:
Premiums	$	0	$	1,745	$	20	$	1,396	$	237	$	3,057	$	(9)	$	6,446	$	554	$	7,000
Policy charges and fee income	0		7		290		197		541		88		(15)		1,108		49		1,157
Net investment income	20		1,243		629		134		694		1,469		330		4,519		611		5,130
Asset management fees, commissions and other income	965		110		399		21		43		124		(323)		1,339		(1,156)		183
Total revenues	985		3,105		1,338		1,748		1,515		4,738		(17)		13,412		58		13,470
Benefits and expenses:
Policyholders' benefits	0		2,437		30		1,296		791		2,781		(8)		7,327
Interest credited to policyholders' account balances	0		182		325		35		182		347		12		1,083
Interest expense	21		17		13		5		260		(1)		207		522
Deferral of acquisition costs	0		(27)		(182)		0		(202)		(306)		33		(684)
Amortization of DAC	0		6		109		2		110		165		(16)		376
Operating expenses(4)	504		71		144		194		120		436		155		1,624
Variable expenses(4)	304		32		429		127		271		463		15		1,641
Other benefits and expenses(5)	0		(25)		6		0		17		5		0		3
Total benefits and expenses	829		2,693		874		1,659		1,549		3,890		398		11,892
Total pre-tax income	$	156	$	412	$	464	$	89	$	(34)	$	848	$	(415)	$	1,520	$	(600)	$	920

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(246)
Change in value of market risk benefits, net of related hedging gains (losses)															(351)
Market experience updates															39
Divested and Run-off Businesses:
Closed Block division															(22)
Other Divested and Run-off Businesses															(51)
Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling interests															3
Other adjustments															28
Total reconciling items															(600)
Total GAAP pre-tax income															$	920

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended March 31, 2024
			Retirement Strategies
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Institutional Retirement Strategies		Individual Retirement Strategies (1)(2)		Group Insurance		Individual Life(1)		International Businesses		Corporate and Other(3)		Total Adjusted Operating Income		Total Reconciling Items		Total GAAP Revenues and Pre-tax Income
(in millions)
Revenues:
Premiums	$	0	$	10,297	$	28	$	1,298	$	246	$	3,139	$	(2)	$	15,006	$	531	$	15,537
Policy charges and fee income	0		6		306		175		503		80		(14)		1,056		0		1,056
Net investment income	(43)		1,092		444		136		806		1,412		273		4,120		644		4,764
Asset management fees, commissions and other income	1,033		143		443		25		25		82		(227)		1,524		628		2,152
Total revenues	990		11,538		1,221		1,634		1,580		4,713		30		21,706		1,803		23,509
Benefits and expenses:
Policyholders' benefits	0		10,858		40		1,249		850		2,767		(5)		15,759
Interest credited to policyholders' account balances	0		154		201		40		206		279		22		902
Interest expense	24		17		14		2		300		(1)		173		529
Deferral of acquisition costs	(1)		(19)		(150)		(6)		(195)		(293)		17		(647)
Amortization of DAC	1		2		93		1		116		159		(10)		362
Operating expenses(4)	494		63		145		186		183		456		305		1,832
Variable expenses(4)	303		25		424		117		251		421		(37)		1,504
Other benefits and expenses(5)	0		(3)		14		0		(10)		29		0		30
Total benefits and expenses	821		11,097		781		1,589		1,701		3,817		465		20,271
Total pre-tax income	$	169	$	441	$	440	$	45	$	(121)	$	896	$	(435)	$	1,435	$	(45)	$	1,390

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(63)
Change in value of market risk benefits, net of related hedging gains (losses)															123
Market experience updates															(32)
Divested and Run-off Businesses:
Closed Block division															(3)
Other Divested and Run-off Businesses															(35)
Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling interests															(27)
Other adjustments															(8)
Total reconciling items															(45)
Total GAAP pre-tax income															$	1,390

(1)The Individual Retirement Strategies and Individual Life segments’ results reflect DAC as if the business is a stand-alone operation. The elimination of intersegment costs capitalized in accordance with this policy is included in consolidating adjustments within Corporate and Other operations.

(2)The amount for the first quarter of 2024 reflects the correction of an error related to indexed variable and fixed annuity products within the Individual Retirement Strategies segment. See “—Adjusted Operating Income” above for additional information. Prior period amounts have been updated to conform to current period presentation.

(3)Corporate and Other operations, through Prudential Advisors, generates fee revenues from the sale and distribution of certain insurance, annuity and investment products offered by Prudential and third parties.

(4)“Operating expenses” includes amounts related to salaries, employee benefits, occupancy, technology, consulting, external and contracted services, legal, corporate charges, costs for initiatives, and other miscellaneous expenses. “Variable expenses” includes commissions, certain compensation related to levels of investment performance, premium taxes and other fees related to sales of certain insurance and investment products.

(5)“Other benefits and expenses” primarily includes: (i) the change in estimates of liability for future policy benefits, which can be either positive or negative, for Retirement Strategies, Individual Life and International Businesses; (ii) dividends to policyholders for Individual Life and International Businesses, which are included in adjusted operating income; and (iii) dividends to policyholders in the Closed Block Division, which are not included in adjusted operating income.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



	March 31, 2025		December 31, 2024
	(in millions)
Assets by segment:
PGIM	$	35,907	$	36,044
U.S. Businesses:
Institutional Retirement Strategies	127,376		126,842
Individual Retirement Strategies	149,191		150,151
Retirement Strategies	276,567		276,993
Group Insurance	39,660		39,340
Individual Life	120,652		122,590
Total U.S. Businesses	436,879		438,923
International Businesses	186,532		180,038
Corporate and Other	31,435		31,767
Closed Block division	48,509		48,815
Total assets per Unaudited Interim Consolidated Financial Statements	$	739,262	$	735,587

Intersegment revenues

Management has determined the intersegment revenues with reference to market rates. Intersegment revenues are eliminated within consolidation in Corporate and Other operations. The PGIM segment revenues include intersegment revenues, primarily consisting of asset-based management and administration fees, as follows:


	Three Months Ended March 31,
		2025		2024
		(in millions)
PGIM segment intersegment revenues		$	224	$	207

Segments may also enter into internal derivative contracts with other segments. For adjusted operating income, each segment accounts for the internal derivative results consistent with the manner in which that segment accounts for other similar external derivatives.

Asset management and service fees

The table below presents asset management and service fees, predominantly related to investment management activities, for the periods indicated:


	Three Months Ended March 31,
		2025		2024
		(in millions)
Asset-based management fees		$	854	$	833
Performance-based incentive fees		7		41
Other fees		123		125
Total asset management and service fees		$	984	$	999

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

20. RELATED PARTY TRANSACTIONS

In September 2023, the Company invested approximately $200 million, and acquired a 20% equity interest as a limited partner, in Prismic, a Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Re, a licensed Bermuda-based life and annuity reinsurance company. Also in September 2023, the Company entered into an agreement with Prismic Re to reinsure approximately $9 billion of reserves for certain structured settlement annuity contracts issued by PICA, a wholly-owned subsidiary of the Company. These contracts represent approximately 70% of the Company’s in-force structured settlement annuities business. Separately, the Company, through PGIM, entered into an investment management agreement with Prismic to manage a large portion of Prismic Re's assets.

In March 2025, the Company entered into an agreement with Prismic Re International, a wholly-owned subsidiary of Prismic, to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies originated by the Company’s Japanese affiliates. In connection with this transaction, the Company invested an additional $134 million in Prismic to maintain its 20% equity interest in Prismic. PGIM also provides investment management services on a large portion of Prismic Re International’s assets.

As the investment in Prismic is accounted for under the equity method, Prismic, Prismic Re and Prismic Re International are considered related parties. The following tables summarize the impacts to the Company’s financial statements related to the agreements that the Company entered with Prismic, Prismic Re and Prismic Re International.

The related party balances with Prismic, Prismic Re and Prismic Re International impacted the Company’s balance sheet as of the periods indicated as follows:


	March 31, 2025		December 31, 2024
	(in millions)
Reinsurance recoverables and deposit receivables	$	15,313	$	9,084
Other assets	$	186	$	187
Reinsurance and funds withheld payables (includes $56 and $(91) of embedded derivatives at fair value at March 31, 2025 and December 31, 2024, respectively)	$	7,880	$	7,796
Accumulated other comprehensive income (loss)	$	(148)	$	(139)

The Company has agreed to guarantee Prismic Re's reimbursement obligations on letters of credit that may be obtained by Prismic Re from third-party financial institutions to support Prismic Re’s obligations under the reinsurance agreement with the Company for a total amount up to $2.0 billion as of both March 31, 2025 and December 31, 2024. As part of the transaction with Prismic Re International, the Company provided an $80 million, 10-year contingent debt facility, where the Company may be required to purchase subordinated debt from certain subsidiaries of Prismic in the event their capital ratio falls below a predetermined level. See Note 21 for additional information on the Company’s guarantees and commitments.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The related party activity with Prismic, Prismic Re and Prismic Re International impacted the Company’s results of operations and cash flows for the periods indicated as follows:


	Three Months Ended March 31,
		2025		2024
		(in millions)
Premiums		$	(3)	$	(4)
Asset management and service fees		13		9
Other income (loss)		61		39
Realized investment gains(losses), net		(237)		204
Policyholders’ benefits		(71)		(71)
Change in estimates of liability for future policy benefits		(3)		(4)
Amortization of deferred policy acquisition costs		(1)		0
General and administrative expenses		3		11
Income (loss) from related parties, before income taxes		(94)		312
Other comprehensive income (loss), before tax		(9)		132
Total comprehensive income (loss), before tax		$	(103)	$	444


	Three Months Ended March 31,
	2025		2024
	(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Realized investment (gains) losses, net	$	237	$	(204)
Change in:
Deferred policy acquisition costs	$	(1)	$	0
Reinsurance related-balances	$	(192)	$	(186)
Other, net	$	(3)	$	3
CASH FLOWS FROM FINANCING ACTIVITIES
Other, net	$	91	$	92

21. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments and Guarantees

Commercial Mortgage Loan Commitments


	March 31, 2025		December 31, 2024
	(in millions)
Total outstanding mortgage loan commitments	$	1,640	$	2,552
Portion of commitment where prearrangement to sell to investor exists	$	553	$	578

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company originates commercial mortgage loans as part of its commercial mortgage operations. Commitments for loans that will be held for sale are recognized as derivatives and recorded at fair value. In certain of these transactions, the Company prearranges that it will sell the loan to an investor, including to government sponsored entities as discussed below, after the Company funds the loan. The above amount includes unfunded commitments that are not unconditionally cancellable. For related credit exposure, there was an allowance for credit losses of $2 million as of both March 31, 2025 and December 31, 2024. The change in allowance is $0 million for both the three months ended March 31, 2025 and 2024.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)


	March 31, 2025		December 31, 2024
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts	$	11,727	$	11,664
Expected to be funded from separate accounts	$	81	$	0

The Company has other commitments to purchase or fund investments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. The Company anticipates a portion of these commitments will ultimately be funded from its separate accounts. The above amount includes unfunded commitments that are not unconditionally cancellable. There were no related charges for credit losses for either the three months ended March 31, 2025 or 2024.

Indemnification of Securities Lending and Securities Repurchase Transactions


	March 31, 2025		December 31, 2024
	(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)	$	5,677	$	5,015
Fair value of related collateral associated with above indemnifications(1)	$	5,794	$	5,119
Accrued liability associated with guarantee	$	0	$	0

(1)Includes $361 million and $240 million related to securities repurchase transactions as of March 31, 2025 and December 31, 2024, respectively.

In the normal course of business, the Company may facilitate securities lending or securities repurchase transactions on behalf of certain client accounts (collectively, “the accounts”). In certain of these arrangements, the Company has provided an indemnification to the accounts to hold them harmless against losses caused by counterparty (i.e., borrower) defaults associated with such transactions facilitated by the Company. In securities lending transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 102% of the fair value of the loaned securities and the collateral is maintained daily to equal at least 102% of the fair value of the loaned securities. In securities repurchase transactions, collateral is provided by the counterparty to the accounts at the inception of the transaction in an amount at least equal to 95% of the fair value of the securities subject to repurchase and the collateral is maintained daily to equal at least 95% of the fair value of the securities subject to repurchase. The Company is only at risk if the counterparty to the transaction defaults and the value of the collateral held is less than the value of the securities loaned to, or subject to repurchase from, such counterparty. The Company believes the possibility of any payments under these indemnities is remote.

Credit Derivatives Written

As discussed further in Note 5, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Guarantees of Asset Values


	March 31, 2025		December 31, 2024
	(in millions)
Guaranteed value of third-parties’ assets	$	76,944	$	76,416
Fair value of collateral supporting these assets	$	73,013	$	71,423
Asset (liability) associated with guarantee, carried at fair value	$	(14)	$	(1)

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

Indemnification of Serviced Mortgage Loans


	March 31, 2025		December 31, 2024
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	3,322	$	3,272
First-loss exposure portion of above	$	956	$	942
Accrued liability associated with guarantees(1)	$	24	$	25

(1)The accrued liability associated with guarantees includes an allowance for credit losses of $11 million and $12 million as of March 31, 2025 and December 31, 2024, respectively. The change in allowance was $0 million and a reduction of $1 million for the three months ended March 31, 2025 and 2024, respectively.

As part of the commercial mortgage activities of the Company’s PGIM segment, the Company provides commercial mortgage origination, underwriting and servicing for certain government sponsored entities, such as Fannie Mae and Freddie Mac. The Company has agreed to indemnify the government sponsored entities for a portion of the credit risk associated with certain of the mortgages it services through a delegated authority arrangement. Under these arrangements, the Company originates multi-family mortgages for sale to the government sponsored entities based on underwriting standards they specify, and makes payments to them for a specified percentage share of losses they incur on certain loans serviced by the Company. The Company’s percentage share of losses incurred generally varies from 4% to 20% of the loan balance, and is typically based on a first-loss exposure for a stated percentage of the loan balance, plus a shared exposure with the government sponsored entity for any losses in excess of the stated first-loss percentage, subject to a contractually specified maximum percentage. The Company determines the liability related to this exposure using historical loss experience, and the size and remaining life of the asset. The Company serviced $26,097 million and $25,763 million of mortgages subject to these loss-sharing arrangements as of March 31, 2025 and December 31, 2024, respectively, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of March 31, 2025, these mortgages had a weighted-average debt service coverage ratio of 2.00 times and a weighted-average loan-to-value ratio of 62%. As of December 31, 2024, these mortgages had a weighted-average debt service coverage ratio of 1.95 times and a weighted-average loan-to-value ratio of 62%. The Company had no losses related to indemnifications that were settled for either the three months ended March 31, 2025 or 2024.

Other Guarantees


	March 31, 2025		December 31, 2024
	(in millions)
Other guarantees where amount can be determined	$	295	$	289
Accrued liability for other guarantees and indemnifications	$	32	$	32

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. This includes guarantees issued on $1.5 billion of standby committed letters of credit and $0.5 billion of standby uncommitted letters of credit that may be obtained by Prismic Re from third-party financial institutions, for the benefit of PICA as beneficiary, to support U.S. statutory reserve credit related to a reinsurance agreement with PICA. As of March 31, 2025, no letters of credit have been issued to PICA under the facility, and the likelihood of PICA drawing upon them is remote. The guarantees are renewable on an annual basis. The current value of the guarantees is estimated to be immaterial. See Note 20 for additional information on the related party relationship between the Company and Prismic Re and Note 12 for additional information on the Company’s reinsurance transactions.

Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. The accrued liability identified above relates to the sale of The Prudential Life Insurance Company of Taiwan Inc. (“POT”) and represents a financial guarantee of certain insurance obligations of POT.

Contingent Liabilities

On an ongoing basis, the Company and its regulators review its operations including, but not limited to, sales and other customer interface procedures and practices, and procedures for meeting obligations to its customers and other parties. These reviews may result in the modification or enhancement of processes or the imposition of other action plans, including concerning management oversight, sales and other customer interface procedures and practices, and the timing or computation of payments to customers and other parties. In certain cases, if appropriate, the Company may offer customers or other parties remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

The Company is subject to the laws and regulations of states and other jurisdictions concerning the identification, reporting and escheatment of unclaimed or abandoned funds, and is subject to audit and examination for compliance with these requirements.

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

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. Pending legal and regulatory actions include proceedings relating to aspects of the Company’s businesses and operations that are specific to it and proceedings that are typical of the businesses in which it operates, including in both cases businesses that have been either divested or placed in wind-down status. Some of these proceedings have been brought on behalf of various alleged classes of complainants. In certain of these matters, the plaintiffs are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of litigation or a regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.

The Company establishes accruals for litigation and regulatory matters when it is probable that a loss has been incurred and the amount of that loss can be reasonably estimated. For litigation and regulatory matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed, including matters discussed below. The Company estimates that as of March 31, 2025, the aggregate range of reasonably possible losses in excess of accruals established for those litigation and regulatory matters for which such an estimate currently can be made is less than $250 million. Any estimate is not an indication of expected loss, if any, or the Company’s maximum possible loss exposure on such matters. The Company reviews relevant information with respect to its litigation and regulatory matters on a quarterly and annual basis and updates its accruals, disclosures and estimates of reasonably possible loss based on such reviews.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following discussion of litigation and regulatory matters provides an update of those matters discussed in Note 25 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and should be read in conjunction with the complete descriptions provided in the Form 10-K.

Individual Annuities, Individual Life and Group Insurance

California Advocates for Nursing Home Reform v. The Prudential Insurance Company of America and Pruco Life Insurance Company, et al.

In April 2025, Plaintiff filed a First Amended Complaint removing allegations related to the Unclaimed Life Insurance and Annuities Act, and the Defendant filed a demurrer seeking to dismiss the Amended Complaint.

Securities Litigation

Donel Davidson v. Charles F. Lowrey, et al.

In March 2025, plaintiffs filed a motion seeking preliminary approval of the settlement notice and preliminary approval of the proposed settlement of the derivative litigation (“the Settlement”). In April 2025, the court issued an order granting the motion for preliminary approval of the Settlement.

Summary

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

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