Item 1. Financial Statements

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Item 1. Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Financial Position

June 30, 2026 and December 31, 2025 (in millions, except share amounts)


	June 30, 2026		December 31, 2025
ASSETS
Fixed maturities, available-for-sale, at fair value (allowance for credit losses: 2026-$196; 2025-$183) (amortized cost: 2026-$364,941; 2025-$357,996)(1)	$	333,526	$	331,455

Fixed maturities, trading, at fair value (amortized cost: 2026-$17,658; 2025-$15,536)(1)	16,758		14,869
Assets supporting experience-rated contractholder liabilities, at fair value	5,405		4,842
Equity securities, at fair value (cost: 2026-$11,503; 2025-$8,303)(1)	14,389		10,972
Commercial mortgage and other loans (net of $505 and $469 allowance for credit losses; includes $959 and $1,056 of loans measured at fair value under the fair value option at June 30, 2026 and December 31, 2025, respectively)(1)	65,985		64,715
Policy loans	9,984		9,958
Other invested assets (net of $2 and $2 allowance for credit losses; includes $9,114 and $8,286 of assets measured at fair value at June 30, 2026 and December 31, 2025, respectively)(1)	28,574		27,294
Short-term investments (net of allowance for credit losses: 2026-$10; 2025-$0)	7,216		6,414
Total investments	481,837		470,519
Cash and cash equivalents(1)	15,162		19,712
Accrued investment income(1)	3,758		3,636
Deferred policy acquisition costs	21,880		21,530
Value of business acquired	366		397
Market risk benefit assets	2,430		2,330
Reinsurance recoverables and deposit receivables (net of $14 and $14 allowance for credit losses; includes $709 and $573 of embedded derivatives at fair value at June 30, 2026 and December 31, 2025, respectively)(2)	44,218		44,077
Income tax assets	37		279
Other assets (net of $4 and $1 allowance for credit losses; includes $0 and $0 of assets at fair value at June 30, 2026 and December 31, 2025, respectively)(1)(2)	14,916		15,009
Separate account assets	198,950		196,251
TOTAL ASSETS	$	783,554	$	773,740
LIABILITIES, MEZZANINE EQUITY AND EQUITY
LIABILITIES
Future policy benefits	$	260,944	$	266,914
Policyholders’ account balances	202,223		191,307
Market risk benefit liabilities	4,731		4,623
Policyholders’ dividends	1,002		1,272
Securities sold under agreements to repurchase	10,069		9,598
Cash collateral for loaned securities	9,236		8,700
Reinsurance and funds withheld payables (includes $166 and $174 of embedded derivatives at fair value at June 30, 2026 and December 31, 2025, respectively)(2)	19,864		18,844

Short-term debt	955		1,443
Long-term debt	19,663		18,856
Other liabilities (includes $16 and $16 allowance for credit losses and $5,759 and $6,215 of derivatives at fair value at June 30, 2026 and December 31, 2025, respectively)(1)	17,313		17,692
Notes issued by consolidated variable interest entities (includes $1,807 and $767 measured at fair value under the fair value option at June 30, 2026 and December 31, 2025, respectively)(1)	4,017		2,659
Separate account liabilities	198,950		196,251
Total liabilities	748,967		738,159
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 21)
MEZZANINE EQUITY
Redeemable noncontrolling interests	2,652		2,794
Total mezzanine equity	2,652		2,794
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 June 30, 2026 and December 31, 2025)	6		6
Additional paid-in capital	25,892		26,013
Common Stock held in treasury, at cost (321,092,506 and 318,361,498 shares at June 30, 2026 and December 31, 2025, respectively)	(25,685)		(25,335)
Accumulated other comprehensive income (loss)(2)	(4,060)		(3,077)
Retained earnings	35,424		34,831
Total Prudential Financial, Inc. equity	31,577		32,438
Noncontrolling interests	358		349
Total equity	31,935		32,787
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	783,554	$	773,740

(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 and Six Months Ended June 30, 2026 and 2025 (in millions, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
REVENUES
Premiums (includes $290 and $97, $295 and $98 of gains (losses) from changes in estimates on deferred profit liability amortization for the three months ended June 30, 2026 and 2025 and the six months ended June 30, 2026 and 2025, respectively)(1)	$	6,880	$	6,982	$	15,242	$	13,982
Policy charges and fee income	1,247		1,249		2,379		2,406
Net investment income	5,783		5,226		11,448		10,356
Asset management and service fees(1)	1,019		982		2,015		1,966
Other income (loss)(1)	2,369		1,412		2,399		1,692
Realized investment gains (losses), net(1)	(1,566)		(1,699)		(1,930)		(2,429)
Change in value of market risk benefits, net of related hedging gains (losses)	(71)		(426)		(366)		(777)
Total revenues	15,661		13,726		31,187		27,196
BENEFITS AND EXPENSES
Policyholders’ benefits(1)	7,751		8,181		17,284		16,321
Change in estimates of liability for future policy benefits(1)	513		(175)		552		(225)
Interest credited to policyholders’ account balances	1,974		1,138		3,083		1,963
Dividends to policyholders	478		259		710		404
Amortization of deferred policy acquisition costs(1)	430		407		841		814

General and administrative expenses(1)	3,337		3,176		6,806		6,259
Total benefits and expenses	14,483		12,986		29,276		25,536
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES	1,178		740		1,911		1,660
Total income tax expense (benefit)	218		195		347		402
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES	960		545		1,564		1,258
Equity in earnings of joint ventures and other operating entities, net of taxes	76		21		78		50


NET INCOME (LOSS)	1,036		566		1,642		1,308
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests	51		33		60		68
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$	985	$	533	$	1,582	$	1,240
EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	2.81	$	1.49	$	4.50	$	3.46
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	2.80	$	1.48	$	4.48	$	3.44

(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 and Six Months Ended June 30, 2026 and 2025 (in millions)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
NET INCOME (LOSS)	$	1,036	$	566	$	1,642	$	1,308
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(101)		400		(170)		786
Net unrealized investment gains (losses)	454		(1,394)		(4,282)		(1,621)
Interest rate remeasurement of future policy benefits(1)	(890)		1,947		3,545		3,983
Gain (loss) from changes in non-performance risk on market risk benefits	(193)		5		15		172
Defined benefit pension and postretirement unrecognized periodic benefit (cost)	17		5		35		8
Total	(713)		963		(857)		3,328
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(103)		143		127		538
Other comprehensive income (loss), net of taxes	(610)		820		(984)		2,790
Comprehensive income (loss)	426		1,386		658		4,098
Less: Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests	51		33		59		68
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$	375	$	1,353	$	599	$	4,030

(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 and Six Months Ended June 30, 2026 (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		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interests
Balance, December 31, 2025	$	6	$	26,013	$	34,831	$	(25,335)	$	(3,077)	$	32,438	$	349	$	32,787	$	2,794
Common Stock acquired							(251)				(251)				(251)
Contributions from noncontrolling interests													12		12		213
Distributions to noncontrolling interests													(17)		(17)		(62)
Consolidations (deconsolidations) of noncontrolling interests															0		(345)
Stock-based compensation programs			(65)				125				60				60
Dividends declared on Common Stock					(496)						(496)				(496)
Comprehensive income:
Net income (loss)					597						597		1		598		8
Other comprehensive income (loss), net of tax									(373)		(373)		(1)		(374)
Total comprehensive income (loss)					597				(373)		224		0		224		8
Balance, March 31, 2026	$	6	$	25,948	$	34,932	$	(25,461)	$	(3,450)	$	31,975	$	344	$	32,319	$	2,608
Common Stock acquired							(252)				(252)				(252)
Contributions from noncontrolling interests													24		24		179
Distributions to noncontrolling interests													(15)		(15)		(36)
Consolidations (deconsolidations) of noncontrolling interests															0		(251)
Remeasurement of redeemable noncontrolling interests			(106)								(106)				(106)		106
Stock-based compensation programs			50				28				78				78
Dividends declared on Common Stock					(493)						(493)				(493)
Comprehensive income:
Net income (loss)					985						985		5		990		46
Other comprehensive income (loss), net of tax									(610)		(610)				(610)
Total comprehensive income (loss)					985				(610)		375		5		380		46
Balance, June 30, 2026	$	6	$	25,892	$	35,424	$	(25,685)	$	(4,060)	$	31,577	$	358	$	31,935	$	2,652

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Equity—Continued

Three and Six Months Ended June 30, 2025 (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		Non-controlling Interests		Total Equity		Redeemable Non-controlling Interests
Balance, December 31, 2024	$	6	$	25,901	$	33,187	$	(24,511)	$	(6,711)	$	27,872	$	315	$	28,187	$	1,939
							(251)				(251)				(251)
Contributions from noncontrolling interests													4		4		64
Distributions to noncontrolling interests													(21)		(21)		(18)
Consolidations (deconsolidations) of noncontrolling interests													13		13		8
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		26
Other comprehensive income (loss), net of tax									1,970		1,970				1,970
Total comprehensive income (loss)					707				1,970		2,677		9		2,686		26
Balance, March 31, 2025	$	6	$	25,871	$	33,408	$	(24,661)	$	(4,741)	$	29,883	$	320	$	30,203	$	2,019
Common Stock acquired							(252)				(252)				(252)
Contributions from noncontrolling interests													1		1		73
Distributions to noncontrolling interests													(10)		(10)		(19)
Consolidations (deconsolidations) of noncontrolling interests													21		21		96
Stock-based compensation programs			56				27				83				83
Dividends declared on Common Stock					(485)						(485)				(485)
Comprehensive income:
Net income (loss)					533						533		(11)		522		44
Other comprehensive income (loss), net of tax									820		820				820
Total comprehensive income (loss)					533				820		1,353		(11)		1,342		44
Balance, June 30, 2025	$	6	$	25,927	$	33,456	$	(24,886)	$	(3,921)	$	30,582	$	321	$	30,903	$	2,213

See Notes to Unaudited Interim Consolidated Financial Statements

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Six Months Ended June 30, 2026 and 2025 (in millions)


	Six Months Ended June 30,
	2026		2025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	1,642	$	1,308
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Realized investment (gains) losses, net(1)	1,930		2,429
Change in value of market risk benefits, net of related hedging (gains) losses	366		777
Policy charges and fee income	(1,185)		(1,009)
Interest credited to policyholders’ account balances	3,083		1,963
Depreciation and amortization	33		321
(Gains) losses on assets supporting experience-rated contractholder liabilities, net	(531)		38
Change in:
Deferred policy acquisition costs(1)	(417)		(657)
Future policy benefits and other insurance liabilities	(301)		89
Reinsurance related-balances(1)	(1,167)		(1,253)
Income taxes	314		(635)
Derivatives, net	2,544		(1,590)
Other, net(1)	(2,957)		(3,125)
Cash flows from (used in) operating activities	3,354		(1,344)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale	31,081		20,299

Fixed maturities, trading	2,548		1,445
Assets supporting experience-rated contractholder liabilities	671		733
Equity securities	3,671		4,621
Commercial mortgage and other loans	3,325		3,662
Policy loans	901		956
Other invested assets	1,460		1,519
Short-term investments	20,782		13,632
Payments for the purchase/origination of:
Fixed maturities, available-for-sale	(40,567)		(34,918)

Fixed maturities, trading	(4,615)		(2,693)
Assets supporting experience-rated contractholder liabilities	(898)		(1,024)
Equity securities	(6,507)		(2,470)
Commercial mortgage and other loans	(4,974)		(3,809)
Policy loans	(773)		(789)
Other invested assets	(1,652)		(1,586)
Short-term investments	(21,360)		(10,910)


Derivatives, net	(450)		113
Other, net(1)	(90)		(74)
Cash flows from (used in) investing activities	(17,447)		(11,293)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits	19,213		19,940
Policyholders’ account withdrawals	(11,105)		(9,446)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities	1,007		955
Cash dividends paid on Common Stock	(992)		(972)
Net change in financing arrangements (maturities 90 days or less)	20		156
Common Stock acquired	(496)		(496)
Common Stock reissued for exercise of stock options	56		57
Proceeds from the issuance of debt (maturities longer than 90 days)	927		910
Repayments of debt (maturities longer than 90 days)	(612)		(1,194)
Proceeds from notes issued by consolidated VIEs	2,093		192
Repayments of notes issued by consolidated VIEs	(733)		0


Other, net(1)	259		546
Cash flows from (used in) financing activities	9,637		10,648
Effect of foreign exchange rate changes on cash balances	(76)		170
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS	(4,532)		(1,819)
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF YEAR	19,749		18,520
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD	$	15,217	$	16,701

PRUDENTIAL FINANCIAL, INC.

Unaudited Interim Consolidated Statements of Cash Flows

Six Months Ended June 30, 2026 and 2025 (in millions)


	Six Months Ended June 30,
	2026		2025

NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs	$	195	$	176

Novation of investment contracts(2)	$	1,659	$	0






























Prismic Re International reinsurance transaction(3):
Net assets transferred, excluding Cash and cash equivalents	$	0	$	6,069
Deposit assets established for Policyholders’ account balances ceded	0		(6,366)
Unwind of Deferred policy acquisition costs ceded	0		219
Net cash received (paid)	$	0	$	(78)
RECONCILIATION TO THE UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Cash and cash equivalents	$	15,162	$	16,638
Restricted cash and restricted cash equivalents (included in “Other assets”)	55		63
Total cash, cash equivalents, restricted cash and restricted cash equivalents	$	15,217	$	16,701

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

(2)“Cash flows from (used in) operating activities” exclude certain non-cash activities related to the novation of certain investment contracts from the Company to Empower Annuity Insurance Company of America and Empower Life & Annuity Insurance Company of New York (collectively, “Empower”). See note 12 for additional information regarding the reinsurance agreement with Empower.

(3)See Note 12 for additional information regarding the reinsurance agreement with 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-related services, mutual funds and investment management.

Effective January 1, 2026, the Company made the following segment reporting changes to isolate the impacts of certain discontinued products that were previously commingled with the results of actively sold products that more closely reflect the Company’s strategic focus. These changes are consistent with the Company’s recent organizational changes and strategy and reflect how the Chief Operating Decision Maker (“CODM”) assesses performance and allocates resources:

“U.S. Legacy Products” segment: (i) traditional variable annuities with guaranteed living benefit riders and certain other annuity products, previously included in the former Individual Retirement Strategies segment, and (ii) guaranteed universal life policies, previously included in the Individual Life segment, have been combined into a new reportable segment named “U.S. Legacy Products.” This segment represents run-off blocks of business consisting of products that are no longer being sold in U.S. markets and will be managed with a focus on reducing risk and optimizing value.
“Retirement” segment: The blocks of business in the former Individual Retirement Strategies segment that were not moved into the U.S. Legacy Products segment, discussed above, consisting primarily of registered index-linked annuity and fixed annuity products, and the products previously included in the former Institutional Retirement Strategies segment have been combined into a new reportable segment named “Retirement.” This combined segment better represents the Company’s strategic management, growth trajectory, and resource allocation policies.
“Individual Life” segment: There were no other impacts to this segment other than the transfer of the guaranteed universal life policies, discussed above. The remaining blocks of business contained within this segment primarily consist of term, indexed universal life, and variable universal life products.

These segment reporting changes are being applied retrospectively and do not have an impact on any of the Company’s previously issued Consolidated Financial Statements. See Note 19 for additional information regarding the Company’s segments.

The Company’s principal operations now consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of Retirement, Group Insurance, Individual Life and U.S. Legacy Products), 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.

As previously disclosed, in January 2026, The Prudential Life Insurance Company, Ltd. (“Prudential of Japan”), a Japanese insurance subsidiary of the Company, reported the findings of its internal investigation into incidents of misconduct involving certain employees of Prudential of Japan. In response to these findings, Prudential of Japan is implementing a series of actions which include strengthening oversight of sales practices, governance and risk management, as well as leadership changes. Moreover, in February 2026, following discussions with the Japanese regulator, the Company voluntarily suspended new sales activity at Prudential of Japan for a 90-day period commencing February 9, 2026. In April 2026, the Company announced the voluntary extension of the suspension of new sales for an additional 180 days through November 5, 2026. See “—Litigation and Regulatory Matters—Regulatory” within Note 21 for additional information.

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,

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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, 2025.

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 (“MRBs”); 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.

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 first quarter of 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.

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 June 30, 2026, 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 June 30, 2026


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.

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 maturities, available-for-sale, as of the dates indicated:


	June 30, 2026
	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	$	26,516	$	449	$	4,752	$	0	$	22,213
Obligations of U.S. states and their political subdivisions	5,357		98		514		0		4,941
Foreign government securities	58,818		242		13,914		0		45,146
U.S. public corporate securities	116,555		1,370		9,809		35		108,081
U.S. private corporate securities(1)	46,227		922		2,236		37		44,876
Foreign public corporate securities	25,729		251		1,308		21		24,651
Foreign private corporate securities	41,596		1,093		2,832		102		39,755
Asset-backed securities(2)	26,560		243		70		1		26,732
Commercial mortgage-backed securities	9,445		35		306		0		9,174
Residential mortgage-backed securities(3)	8,138		21		202		0		7,957
Total fixed maturities, available-for-sale(1)	$	364,941	$	4,724	$	35,943	$	196	$	333,526

(1)Excludes notes with amortized cost of $16,372 million (fair value, $16,372 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, 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	$	26,334	$	668	$	4,823	$	0	$	22,179
Obligations of U.S. states and their political subdivisions	5,881		138		554		0		5,465
Foreign government securities	62,469		497		12,352		0		50,614
U.S. public corporate securities	115,160		1,977		9,345		11		107,781
U.S. private corporate securities(1)	47,976		1,177		1,964		88		47,101
Foreign public corporate securities	24,496		413		1,178		28		23,703
Foreign private corporate securities	41,099		1,638		2,523		55		40,159
Asset-backed securities(2)	19,130		226		26		1		19,329
Commercial mortgage-backed securities	9,958		87		302		0		9,743
Residential mortgage-backed securities(3)	5,493		43		155		0		5,381
Total fixed maturities, available-for-sale(1)	$	357,996	$	6,864	$	33,222	$	183	$	331,455

(1)Excludes notes with amortized cost of $15,744 million (fair value, $15,744 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 fixed maturities, available-for-sale 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:


	June 30, 2026
	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	$	7,060	$	174	$	10,859	$	4,578	$	17,919	$	4,752
Obligations of U.S. states and their political subdivisions	563		11		3,248		503		3,811		514
Foreign government securities	12,682		392		23,453		13,522		36,135		13,914
U.S. public corporate securities	27,605		494		47,707		9,315		75,312		9,809
U.S. private corporate securities	8,086		157		21,759		2,078		29,845		2,235
Foreign public corporate securities	6,066		93		8,038		1,212		14,104		1,305
Foreign private corporate securities	6,937		199		14,406		2,632		21,343		2,831
Asset-backed securities	6,809		35		687		34		7,496		69
Commercial mortgage-backed securities	1,669		13		4,264		293		5,933		306
Residential mortgage-backed securities	4,715		35		1,151		167		5,866		202
Total fixed maturities, available-for-sale	$	82,192	$	1,603	$	135,572	$	34,334	$	217,764	$	35,937


	December 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	$	3,644	$	83	$	12,075	$	4,740	$	15,719	$	4,823
Obligations of U.S. states and their political subdivisions	399		9		3,631		545		4,030		554
Foreign government securities	9,886		510		23,570		11,842		33,456		12,352
U.S. public corporate securities	9,789		218		52,459		9,114		62,248		9,332
U.S. private corporate securities	3,297		68		24,064		1,895		27,361		1,963
Foreign public corporate securities	2,253		35		8,586		1,142		10,839		1,177
Foreign private corporate securities	849		44		16,286		2,473		17,135		2,517
Asset-backed securities	2,979		6		626		20		3,605		26
Commercial mortgage-backed securities	249		1		5,435		301		5,684		302
Residential mortgage-backed securities	353		2		1,210		153		1,563		155
Total fixed maturities, available-for-sale	$	33,698	$	976	$	147,942	$	32,225	$	181,640	$	33,201

As of June 30, 2026 and December 31, 2025, the gross unrealized losses on fixed maturities, available-for-sale securities without an allowance of $34,854 million and $32,392 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 $1,083 million and $809 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

June 30, 2026, the $34,334 million of gross unrealized losses of twelve months or more were concentrated in the consumer non-cyclical, finance and utility sectors within corporate securities, as well as in foreign government securities. As of December 31, 2025, the $32,225 million of gross unrealized losses of twelve months or more were concentrated in the consumer non-cyclical, finance 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, 2025, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at June 30, 2026. 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 June 30, 2026, 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, available-for-sale by contractual maturities, as of the date indicated:


	June 30, 2026
	Amortized Cost		Fair Value
	(in millions)
Fixed maturities, available-for-sale:
Due in one year or less	$	19,811	$	19,897
Due after one year through five years	66,075		65,889
Due after five years through ten years	58,431		57,654
Due after ten years(1)	176,481		146,223
Asset-backed securities	26,560		26,732
Commercial mortgage-backed securities	9,445		9,174
Residential mortgage-backed securities	8,138		7,957
Total	$	364,941	$	333,526

(1)Excludes notes with amortized cost of $16,372 million (fair value, $16,372 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 maturities, available-for-sale proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses, for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)	$	8,091	$	4,191	$	16,572	$	9,103
Proceeds from maturities/prepayments	7,767		5,252		14,561		11,013
Gross investment gains from sales and maturities	155		126		514		408
Gross investment losses from sales and maturities	(598)		(233)		(1,470)		(540)
Write-downs recognized in earnings(2)	(86)		(57)		(251)		(176)
(Addition to) release of allowance for credit losses	53		27		(13)		107

(1)Excludes activity from non-cash related proceeds due to the timing of trade settlements of $(52) million and $183 million for the six months ended June 30, 2026 and 2025, respectively.

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

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 fixed maturities, available-for-sale, as of and for the periods indicated:


	Three Months Ended June 30, 2026
	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	$	247	$	2	$	0	$	0	$	249
Additions to allowance for credit losses not previously recorded	0		0		20		0		0		0		20
Reductions for securities sold during the period	0		0		(13)		0		0		0		(13)
Additions (reductions) on securities with previous allowance	0		0		33		(1)		0		0		32
Write-downs charged against the allowance	0		0		(92)		0		0		0		(92)
Balance, end of period	$	0	$	0	$	195	$	1	$	0	$	0	$	196


	Three Months Ended June 30, 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	$	250	$	1	$	0	$	0	$	251
Additions to allowance for credit losses not previously recorded	0		0		1		0		0		0		1
Reductions for securities sold during the period	0		0		(6)		0		0		0		(6)
Additions (reductions) on securities with previous allowance	0		0		28		0		0		0		28
Write-downs charged against the allowance	0		0		(50)		0		0		0		(50)
Balance, end of period	$	0	$	0	$	223	$	1	$	0	$	0	$	224

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
	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	$	182	$	1	$	0	$	0	$	183
Additions to allowance for credit losses not previously recorded	0		0		75		1		0		0		76
Reductions for securities sold during the period	0		0		(15)		0		0		0		(15)
Additions (reductions) on securities with previous allowance	0		0		68		(1)		0		0		67
Write-downs charged against the allowance	0		0		(115)		0		0		0		(115)
Balance, end of period	$	0	$	0	$	195	$	1	$	0	$	0	$	196


	Six Months Ended June 30, 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		17		1		0		0		18
Reductions for securities sold during the period	0		0		(12)		0		0		0		(12)
Additions (reductions) on securities with previous allowance	0		0		31		0		0		0		31
Write-downs charged against the allowance	0		0		(144)		0		0		0		(144)
Balance, end of period	$	0	$	0	$	223	$	1	$	0	$	0	$	224

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, 2025.

For the three months ended June 30, 2026, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to write-downs charged against the allowance of distressed securities within the transportation, technology and energy sectors, partially offset by net additions in the industrial other and utility sectors within corporate securities, due to adverse projected cash flows. For the three months ended June 30, 2025, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to write-downs charged against the allowance due to settlements and security restructures in the consumer cyclical and consumer non-cyclical sectors within corporate securities, partially offset by net additions within the technology sector within corporate securities due to adverse projected cash flows.

For the six months ended June 30, 2026, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the consumer cyclical, energy and industrial other sectors within corporate securities, due to adverse projected cash flows, partially offset by write-downs charged against the allowance of distressed securities within the transportation and technology sectors. For the six months ended June 30, 2025, the net decrease in the allowance for credit losses on available-for-sale securities was primarily related to write-downs charged against the allowance due to security

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

restructures and settlements in the communications, capital goods and consumer non-cyclical sectors within corporate securities, partially offset by net additions in the technology sector within corporate securities due to adverse projected cash flows.

The Company did not have any fixed maturity securities purchased with credit deterioration as of both June 30, 2026 and December 31, 2025.

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:


	June 30, 2026				December 31, 2025
	Amortized Cost or Cost		Fair Value		Amortized Cost or Cost		Fair Value
	(in millions)
Fixed maturities:
Corporate securities	$	61	$	58	$	57	$	55
Foreign government securities	614		597		611		596
Obligations of U.S. government authorities and agencies and obligations of U.S. states	233		251		227		245
Total fixed maturities(1)	908		906		895		896
Equity securities	2,372		4,499		2,234		3,946
Total assets supporting experience-rated contractholder liabilities	$	3,280	$	5,405	$	3,129	$	4,842

(1)As a percentage of amortized cost, 100% and 99% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of June 30, 2026 and December 31, 2025, respectively.

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 $602 million and $253 million during the three months ended June 30, 2026 and 2025, respectively, and $452 million and $54 million during the six months ended June 30, 2026 and 2025, 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 $92 million and $229 million during the three months ended June 30, 2026 and 2025, respectively, and $(216) million and $416 million during the six months ended June 30, 2026 and 2025, respectively.

Equity Securities

The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $883 million and $374 million during the three months ended June 30, 2026 and 2025, respectively, and $555 million and $145 million during the six months ended June 30, 2026 and 2025, 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)


	June 30, 2026				December 31, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale	$	50,988	$	38,107	$	54,863	$	43,554
Fixed maturities, trading	18		17		19		18
Assets supporting experience-rated contractholder liabilities	537		509		536		510
Total	$	51,543	$	38,633	$	55,418	$	44,082


	June 30, 2026				December 31, 2025
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)
Investments in Brazilian government and government agency securities:
Fixed maturities, available-for-sale	$	4,329	$	3,630	$	3,651	$	3,152
Short-term investments	0		0		1		1
Cash equivalents	291		291		260		260
Total	$	4,620	$	3,921	$	3,912	$	3,413

Commercial Mortgage and Other Loans

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


	June 30, 2026				December 31, 2025
	Amount		% of Total		Amount		% of Total
	($ in millions)
Commercial mortgage and agricultural property loans by property type:
Office	$	6,584	10.5	%	$	6,517	10.4	%
Retail	5,534		8.9		5,680		9.0
Apartments/Multi-Family	18,601		29.8		18,522		29.5
Industrial	17,575		28.0		17,280		27.5
Hospitality	1,615		2.6		1,738		2.8
Self-Storage	2,228		3.6		2,245		3.6
Health Care Senior Living	1,691		2.7		1,832		2.9
Other	537		0.9		689		1.1
Total commercial mortgage loans	54,365		87.0		54,503		86.8
Agricultural property loans	8,130		13.0		8,275		13.2
Total commercial mortgage and agricultural property loans	62,495		100.0	%	62,778		100.0	%
Allowance for credit losses	(423)				(414)
Total net commercial mortgage and agricultural property loans	62,072				62,364
Other loans:
Residential mortgage loans	3,106				1,632
Other collateralized loans	727				603
Uncollateralized loans	162				171
Total other loans	3,995				2,406
Allowance for credit losses	(82)				(55)
Total net other loans	3,913				2,351
Total net commercial mortgage and other loans(1)	$	65,985			$	64,715

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(1)Includes loans which are carried at fair value under the fair value option and are collateralized primarily by apartment complexes. As of June 30, 2026 and December 31, 2025, the net carrying value of these loans was $959 million and $1,056 million, respectively.

As of June 30, 2026, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California (27%), Florida (7%) and Texas (6%) and included loans secured by properties in Europe (6%), Mexico (2%), Australia (1%) and Japan (1%).

As of June 30, 2026, the residential mortgage loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in Florida (13%), California (12%) and New York (9%).

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 indicated:


	Three Months Ended June 30, 2026
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Mortgage Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance, beginning of period	$	350	$	59	$	22	$	31	$	25	$	487
Addition to (release of) allowance for expected losses	30		(17)		6		(2)		0		17
Write-downs charged against the allowance	0		0		0		0		0		0
Other	1		0		0		0		0		1
Allowance, end of period	$	381	$	42	$	28	$	29	$	25	$	505


	Three Months Ended June 30, 2025
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Mortgage Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance, beginning of period	$	460	$	123	$	0	$	34	$	15	$	632
Addition to (release of) allowance for expected losses	(11)		85		0		(2)		(1)		71
Write-downs charged against the allowance	0		(150)		0		0		0		(150)
Other	1		0		0		0		0		1
Allowance, end of period	$	450	$	58	$	0	$	32	$	14	$	554


	Six Months Ended June 30, 2026
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Mortgage Loans		Other Collateralized Loans		Uncollateralized Loans		Total
	(in millions)
Allowance, beginning of period	$	366	$	48	$	15	$	40	$	0	$	469
Addition to (release of) allowance for expected losses	13		(6)		13		(11)		25		34
Write-downs charged against the allowance	0		0		0		0		0		0
Other	2		0		0		0		0		2
Allowance, end of period	$	381	$	42	$	28	$	29	$	25	$	505

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Commercial Mortgage Loans		Agricultural Property Loans		Residential Mortgage 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	42		87		0		0		0		129
Write-downs charged against the allowance	0		(150)		0		0		0		(150)
Other	1		0		0		0		0		1
Allowance, end of period	$	450	$	58	$	0	$	32	$	14	$	554

For the three months ended June 30, 2026, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to increases in loan-specific reserves on commercial mortgage loans within the office and retail sectors, partially offset by a decrease in loan-specific reserves on an agricultural property loan and a decrease in the general reserve. For the three months ended June 30, 2025, the net decrease to the allowance for credit losses on commercial mortgage and other loans was primarily related to a write-down against a loan-specific reserve within agricultural property loans.

For the six months ended June 30, 2026, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to increases in loan-specific reserves on commercial mortgage loans within the office and retail sectors, agricultural property loans and an uncollateralized loan, partially offset by a decrease in the general reserve and a decrease in loan-specific reserves on an agricultural property loan. For the six months ended June 30, 2025, the net decrease to the allowance for credit losses on commercial mortgage and other loans was primarily related to a write-down against a loan-specific reserve within agricultural property loans, partially offset by increases in loan-specific reserves within the retail sector.

The following table sets forth the write-downs of agricultural property loans by origination year for both the three and six months ended June 30, 2025:


	June 30, 2025
	2025		2024		2023		2022		2021		Prior		Total
	(in millions)
Agricultural property loans	$	0	$	0	$	13	$	117	$	1	$	19	$	150



Total	$	0	$	0	$	13	$	117	$	1	$	19	$	150

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:


	June 30, 2026
	Amortized Cost by Origination Year
	2026		2025		2024		2023		2022		Prior		Revolving Loans		Total
	(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%	$	1,621	$	2,456	$	2,782	$	2,221	$	1,407	$	17,585	$	57	$	28,129
60%-69.99%	1,196		3,211		3,847		1,682		990		4,112		0		15,038
70%-79.99%	804		615		507		963		476		2,953		0		6,318
80% or greater	55		48		35		89		197		4,456		0		4,880
Total	$	3,676	$	6,330	$	7,171	$	4,955	$	3,070	$	29,106	$	57	$	54,365
Debt Service Coverage Ratio:
Greater than 1.2x	$	2,605	$	5,771	$	6,686	$	4,660	$	2,777	$	26,688	$	45	$	49,232
1.0 - 1.2x	921		461		458		161		236		681		12		2,930
Less than 1.0x	150		98		27		134		57		1,737		0		2,203
Total	$	3,676	$	6,330	$	7,171	$	4,955	$	3,070	$	29,106	$	57	$	54,365
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	115	$	813	$	605	$	268	$	906	$	3,653	$	137	$	6,497
60%-69.99%	0		62		139		554		38		113		0		906
70%-79.99%	0		24		0		0		0		0		56		80
80% or greater	2		4		0		27		419		188		7		647
Total	$	117	$	903	$	744	$	849	$	1,363	$	3,954	$	200	$	8,130
Debt Service Coverage Ratio:
Greater than 1.2x	$	112	$	903	$	703	$	794	$	732	$	3,455	$	193	$	6,892
1.0 - 1.2x	5		0		22		41		64		235		0		367
Less than 1.0x	0		0		19		14		567		264		7		871
Total	$	117	$	903	$	744	$	849	$	1,363	$	3,954	$	200	$	8,130

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 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%	$	2,816	$	2,088	$	2,057	$	1,270	$	2,570	$	16,546	$	62	$	27,409
60%-69.99%	3,670		4,506		1,873		1,250		1,581		3,048		0		15,928
70%-79.99%	677		711		1,242		506		901		1,948		0		5,985
80% or greater	0		36		0		258		454		4,433		0		5,181
Total	$	7,163	$	7,341	$	5,172	$	3,284	$	5,506	$	25,975	$	62	$	54,503
Debt Service Coverage Ratio:
Greater than 1.2x	$	6,602	$	6,779	$	4,673	$	2,963	$	5,333	$	23,384	$	45	$	49,779
1.0 - 1.2x	463		534		499		238		82		885		17		2,718
Less than 1.0x	98		28		0		83		91		1,706		0		2,006
Total	$	7,163	$	7,341	$	5,172	$	3,284	$	5,506	$	25,975	$	62	$	54,503
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%	$	813	$	624	$	296	$	977	$	1,944	$	1,927	$	143	$	6,724
60%-69.99%	76		140		554		8		15		85		58		936
70%-79.99%	0		0		0		0		0		16		0		16
80% or greater	4		0		5		433		10		104		43		599
Total	$	893	$	764	$	855	$	1,418	$	1,969	$	2,132	$	244	$	8,275
Debt Service Coverage Ratio:
Greater than 1.2x	$	893	$	741	$	799	$	741	$	1,849	$	1,756	$	201	$	6,980
1.0 - 1.2x	0		19		40		65		62		148		0		334
Less than 1.0x	0		4		16		612		58		228		43		961
Total	$	893	$	764	$	855	$	1,418	$	1,969	$	2,132	$	244	$	8,275

Residential mortgage loans primarily include fixed-rate, amortizing mortgage loans on rental properties owned by borrowers with FICO scores typically considered prime or above. The primary credit quality indicator is whether a loan is performing or nonperforming. The Company defines nonperforming residential mortgage loans as those that are 90 days or more past due and/or in nonaccrual status.


	June 30, 2026
	Amortized Cost by Origination Year
	2026		2025		2024		2023		2022		Prior		Total
	(in millions)
Residential mortgage loans
Performing	$	534	$	2,487	$	58	$	0	$	0	$	12	$	3,091
Nonperforming	0		15		0		0		0		0		15
Total	$	534	$	2,502	$	58	$	0	$	0	$	12	$	3,106

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 31, 2025
	Amortized Cost by Origination Year
	2025		2024		2023		2022		2021		Prior		Total
	(in millions)
Residential mortgage loans
Performing	$	1,561	$	57	$	0	$	0	$	0	$	14	$	1,632
Nonperforming	0		0		0		0		0		0		0
Total	$	1,561	$	57	$	0	$	0	$	0	$	14	$	1,632

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, 2025.

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 June 30,
	2026						2025
	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	%	$	0	$	0	0.0	%
Agricultural property loans	$	0	$	0	0.0	%	$	0	$	0	0.0	%


	Six Months Ended June 30,
	2026						2025
	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	$	44	$	0	0.0	%	$	0	$	0	0.0	%
Agricultural property loans	$	0	$	0	0.0	%	$	0	$	0	0.0	%

For the six months ended June 30, 2026, the modifications added less than one year to the weighted average life in the commercial mortgage loan portfolio.

The Company did not have any commitments to lend additional funds to borrowers experiencing financial difficulties on modified loans as of both June 30, 2026 and December 31, 2025.

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:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	June 30, 2026
	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	$	54,064	$	0	$	48	$	253	$	301	$	54,365	$	289
Agricultural property loans	7,446		0		0		684		684		8,130		718
Residential mortgage loans	3,042		0		49		15		64		3,106		15
Other collateralized loans	727		0		0		0		0		727		0
Uncollateralized loans	162		0		0		0		0		162		25
Total	$	65,441	$	0	$	97	$	952	$	1,049	$	66,490	$	1,047

(1)As of June 30, 2026, 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, 2025.


	December 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	$	54,349	$	0	$	0	$	154	$	154	$	54,503	$	190
Agricultural property loans	7,443		8		0		824		832		8,275		875
Residential mortgage loans	1,630		2		0		0		2		1,632		0
Other collateralized loans	603		0		0		0		0		603		0
Uncollateralized loans	171		0		0		0		0		171		25
Total	$	64,196	$	10	$	0	$	978	$	988	$	65,184	$	1,090

(1)As of December 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.

Loans on non-accrual status recognized interest of $0 million and $1 million for the three months ended June 30, 2026 and 2025, and $0 million and $6 million for the six months ended June 30, 2026 and 2025, respectively. Loans on non-accrual status that did not have a related allowance for credit losses were $757 million and $442 million as of June 30, 2026 and December 31, 2025, respectively.

For the three months ended June 30, 2026 and 2025, there were $1 million and $0 million, respectively, of commercial mortgage loans acquired, other than those through direct origination. For the six months ended June 30, 2026 and 2025, there were $31 million and $0 million, respectively, of commercial mortgage loans acquired, other than those through direct origination.

For both the three and six months ended June 30, 2026 and 2025, there were no commercial mortgage loans sold.

For the three months ended June 30, 2026 and 2025, there were $713 million and $0 million, respectively, of residential mortgage loans acquired. For the six months ended June 30, 2026 and 2025, there were $1,557 million and $0 million, respectively, of residential mortgage loans acquired.

For the three months ended June 30, 2026 and 2025, there were $7 million and $0 million, respectively, of residential mortgage loans sold. For the six months ended June 30, 2026 and 2025, there were $11 million and $0 million, respectively, of residential mortgage loans sold.

The Company did not have any commercial mortgage and other loans purchased with credit deterioration as of both June 30, 2026 and December 31, 2025.

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:


	June 30, 2026		December 31, 2025
	(in millions)
LPs/LLCs:
Equity method:
Private equity	$	10,920	$	10,832
Hedge funds	3,151		2,909
Real estate-related(1)	2,988		2,761
Subtotal equity method	17,059		16,502
Fair value:
Private equity	713		848
Hedge funds	2,048		1,964
Real estate-related	765		810
Subtotal fair value	3,526		3,622
Total LPs/LLCs	20,585		20,124
Real estate held through direct ownership(1)	1,965		1,888
Total alternative assets	22,550		22,012
Credit-like instruments(2)	2,738		1,929
Derivative instruments	1,721		1,667
Other(3)	1,565		1,686
Total other invested assets	$	28,574	$	27,294

(1)As of June 30, 2026 and December 31, 2025, real estate held through direct ownership had mortgage debt of $226 million and $217 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, 2025.

Accrued Investment Income

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


	June 30, 2026		December 31, 2025
	(in millions)
Fixed maturities	$	3,188	$	3,089
Equity securities	20		11
Commercial mortgage and other loans	267		250
Policy loans	236		230
Other invested assets	10		10
Short-term investments and cash equivalents	37		46
Total accrued investment income	$	3,758	$	3,636

Write-downs on accrued investment income were less than $1 million for both the three months ended June 30, 2026 and 2025, and $1 million for both the six months ended June 30, 2026 and 2025.

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Fixed maturities, available-for-sale(1)	$	4,290	$	3,885	$	8,474	$	7,658
Fixed maturities, trading	201		177		417		344
Assets supporting experience-rated contractholder liabilities	13		14		28		28
Equity securities	97		49		162		93
Commercial mortgage and other loans	771		691		1,511		1,383
Policy loans	121		123		243		247
Other invested assets	463		418		914		814
Short-term investments and cash equivalents	213		230		445		497
Gross investment income	6,169		5,587		12,194		11,064
Less: investment expenses	(386)		(361)		(746)		(708)
Net investment income	$	5,783	$	5,226	$	11,448	$	10,356

(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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Fixed maturities(1)	$	(476)	$	(137)	$	(1,220)	$	(201)
Commercial mortgage and other loans	(8)		(66)		(14)		(124)
Investment real estate	0		(1)		14		(11)
LPs/LLCs	39		6		39		5
Derivatives	(962)		(1,345)		(403)		(1,794)
Ceded (income) loss on funds withheld assets(2)	(158)		(156)		(353)		(319)
Other	(1)		0		7		15
Realized investment gains (losses), net	$	(1,566)	$	(1,699)	$	(1,930)	$	(2,429)

(1)Excludes fixed maturity securities classified as trading.

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

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:


	June 30, 2026		December 31, 2025
	(in millions)
Fixed maturity securities, available-for-sale with an allowance	$	14	$	(4)
Fixed maturity securities, available-for-sale without an allowance	(31,233)		(26,354)
Derivatives designated as cash flow hedges(1)	141		(231)
Derivatives designated as fair value hedges(1)	(136)		(123)
Other investments(2)	89		67
Net unrealized gains (losses) on investments	$	(31,125)	$	(26,645)

(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:


	June 30, 2026								December 31, 2025
	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	$	9,451	$	0	$	0	$	9,451	$	7,277	$	1,701	$	0	$	8,978
U.S. public corporate securities	0		539		0		539		0		527		0		527
Foreign public corporate securities	0		18		0		18		0		18		0		18
Commercial mortgage-backed securities	61		0		0		61		75		0		0		75
Total securities sold under agreements to repurchase	$	9,512	$	557	$	0	$	10,069	$	7,352	$	2,246	$	0	$	9,598

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)


	June 30, 2026						December 31, 2025
	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)

Obligations of U.S. states and their political subdivisions	$	25	$	0	$	25	$	45	$	0	$	45
Foreign government securities	183		0		183		226		0		226
U.S. public corporate securities	6,820		108		6,928		7,068		152		7,220
Foreign public corporate securities	1,085		14		1,099		1,157		16		1,173
Equity securities	1,001		0		1,001		36		0		36
Total cash collateral for loaned securities(1)	$	9,114	$	122	$	9,236	$	8,532	$	168	$	8,700

(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, 2025.

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
	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
	(in millions)
Fixed maturities, available-for-sale	$	2,160	$	1,870	$	615	$	663

Fixed maturities, trading	1,348		442		0		0
Equity securities	54		106		0		0
Commercial mortgage and other loans	563		583		241		244
Other invested assets	9,282		8,227		474		477
Cash and cash equivalents	523		654		0		0
Accrued investment income	17		12		1		1
Other assets	1,235		1,594		726		716
Total assets of consolidated VIEs	$	15,182	$	13,488	$	2,057	$	2,101
Other liabilities	$	709	$	603	$	4	$	3
Notes issued by consolidated VIEs(2)	4,003		2,644		14		15
Total liabilities of consolidated VIEs	$	4,712	$	3,247	$	18	$	18

(1)Total assets of consolidated VIEs reflect $4,972 million and $4,801 million as of June 30, 2026 and December 31, 2025, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.

(2)Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of June 30, 2026, the maturities of these obligations were between 0 and 13 years.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 $1,584 million and $1,484 million as of June 30, 2026 and December 31, 2025, 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 $20,981 million and $20,509 million as of June 30, 2026 and December 31, 2025, 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, 2025.

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 $1,725 million and $1,671 million as of June 30, 2026 and December 31, 2025, respectively, and total derivative liabilities of $5,759 million and $6,215 million as of June 30, 2026 and December 31, 2025, 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	June 30, 2026									December 31, 2025
			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	$	5,229		$	24		$	(363)		$	5,083		$	23		$	(344)
Interest Rate Forwards	351			1			0			10			0			0
Foreign Currency
Foreign Currency Forwards	4,883			48			(223)			4,912			28			(208)
Currency/Interest Rate
Foreign Currency Swaps	34,542			1,365			(1,123)			33,823			1,286			(1,440)
Total Derivatives Designated as Hedge Accounting Instruments	$	45,005		$	1,438		$	(1,709)		$	43,828		$	1,337		$	(1,992)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps	$	251,182		$	11,216		$	(23,546)		$	244,336		$	10,825		$	(23,617)
Interest Rate Futures	9,800			9			(36)			12,079			7			(22)
Interest Rate Options	28,105			58			(1,217)			30,025			134			(1,382)
Interest Rate Forwards	6,412			21			(41)			3,658			11			(7)
Interest Rate Total Return Swaps	2,557			432			(438)			1,434			217			(221)
Foreign Currency
Foreign Currency Forwards	38,323			1,836			(1,611)			34,149			1,356			(1,383)
Currency/Interest Rate
Foreign Currency Swaps	7,216			394			(185)			7,318			370			(179)
Credit
Credit Default Swaps	5,833			97			(8)			5,784			112			0
Equity
Equity Futures	1,822			8			(1)			1,033			3			(6)
Equity Options	261,847			15,328			(12,825)			200,661			10,378			(9,189)
Equity Total Return Swaps	19,794			2,307			(2,168)			14,973			1,366			(1,159)
Other
Other(1)	1,250			0			0			1,250			0			0
Synthetic GICs	75,552			0			0			75,883			0			0
Total Derivatives Not Qualifying as Hedge Accounting Instruments	$	709,693		$	31,706		$	(42,076)		$	632,583		$	24,779		$	(37,165)
Total Derivatives(2)(3)	$	754,698		$	33,144		$	(43,785)		$	676,411		$	26,116		$	(39,157)

(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 $22,270 million (including the Prismic funds withheld related embedded derivative net liability of $189 million) and $18,404 million (including the Prismic funds withheld related embedded derivative net liability of $194 million) as of June 30, 2026 and December 31, 2025, 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 June 30, 2026, 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.


	June 30, 2026				December 31, 2025
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	$	355	$	8	$	594	$	11

Policyholders’ account balances	$	(1,598)	$	314	$	(1,588)	$	299
Future policy benefits	$	(2,384)	$	325	$	(2,405)	$	300

(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.


	June 30, 2026
	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	$	33,002	$	(31,419)	$	1,583	$	(669)	$	914
Securities purchased under agreement to resell	0		0		0		0		0
Total Assets	$	33,002	$	(31,419)	$	1,583	$	(669)	$	914
Offsetting of Financial Liabilities:
Derivatives	$	43,785	$	(38,026)	$	5,759	$	(5,691)	$	68
Securities sold under agreement to repurchase	10,069		0		10,069		(10,069)		0
Total Liabilities	$	53,854	$	(38,026)	$	15,828	$	(15,760)	$	68

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 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	$	25,990	$	(24,445)	$	1,545	$	(637)	$	908
Securities purchased under agreement to resell	0		0		0		0		0
Total Assets	$	25,990	$	(24,445)	$	1,545	$	(637)	$	908
Offsetting of Financial Liabilities:
Derivatives	$	39,157	$	(32,942)	$	6,215	$	(6,011)	$	204
Securities sold under agreement to repurchase	9,598		0		9,598		(9,523)		75
Total Liabilities	$	48,755	$	(32,942)	$	15,813	$	(15,534)	$	279

(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, 2025.

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.


	Three Months Ended June 30, 2026
	Realized Investment Gains (Losses)		Change in Value of MRBs, Net of Related Hedging Gains (Losses)		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	$	(17)	$	(11)	$	0
Currency	0		0		0		0		0		0		11		0
Total gains (losses) on derivatives designated as hedge instruments	4		0		0		0		0		(17)		0		0
Gains (losses) on the hedged item:
Interest Rate	(3)		0		7		0		0		12		7		0
Currency	0		0		0		0		0		0		(12)		0
Total gains (losses) on hedged item	(3)		0		7		0		0		12		(5)		0
Amortization for gains (losses) excluded from assessment of the effectiveness

Currency	0		0		0		0		0		0		(4)		3
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(4)		3
Total gains (losses) on fair value hedges net of hedged item	1		0		7		0		0		(5)		(9)		3
Cash flow hedges
Interest Rate	0		0		(2)		0		0		0		0		0
Currency	0		0		0		0		0		0		0		(34)
Currency/Interest Rate	(22)		0		76		4		0		0		0		(361)
Total gains (losses) on cash flow hedges	(22)		0		74		4		0		0		0		(395)
Net investment hedges
Currency	0		0		0		0		0		0		0		6
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		6
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	172		(221)		0		0		0		0		0		0
Currency	(57)		0		0		0		0		0		0		0
Currency/Interest Rate	(78)		0		0		0		0		0		0		0
Credit	59		0		0		0		0		0		0		0
Equity	4,270		(824)		0		0		0		0		0		0
Embedded Derivatives(2)	(5,307)		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(941)		(1,045)		0		0		0		0		0		0
Total	$	(962)	$	(1,045)	$	81	$	4	$	0	$	(5)	$	(9)	$	(386)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
	Realized Investment Gains (Losses)		Change in Value of MRBs, Net of Related Hedging Gains (Losses)		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	$	6	$	0	$	(1)	$	0	$	0	$	(25)	$	(12)	$	0
Currency	0		0		0		0		0		0		(24)		0
Total gains (losses) on derivatives designated as hedge instruments	6		0		(1)		0		0		(25)		(36)		0
Gains (losses) on the hedged item:
Interest Rate	(6)		0		14		0		0		14		1		0
Currency	0		0		0		0		0		0		24		0
Total gains (losses) on hedged item	(6)		0		14		0		0		14		25		0
Amortization for gains (losses) excluded from assessment of the effectiveness

Currency	0		0		0		0		0		0		(8)		(13)
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(8)		(13)
Total gains (losses) on fair value hedges net of hedged item	0		0		13		0		0		(11)		(19)		(13)
Cash flow hedges
Interest Rate	0		0		(4)		0		0		0		0		1
Currency	0		0		0		0		0		0		0		30
Currency/Interest Rate	1		0		149		58		0		0		0		341
Total gains (losses) on cash flow hedges	1		0		145		58		0		0		0		372
Net investment hedges
Currency	0		0		0		0		0		0		0		16
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		16
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	187		(298)		0		0		0		0		0		0
Currency	(57)		0		0		0		0		0		0		0
Currency/Interest Rate	31		0		0		0		0		0		0		0
Credit	30		0		0		0		0		0		0		0
Equity	2,883		(554)		0		0		0		0		0		0
Embedded Derivatives(2)	(3,478)		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(404)		(852)		0		0		0		0		0		0
Total	$	(403)	$	(852)	$	158	$	58	$	0	$	(11)	$	(19)	$	375

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2025
	Realized Investment Gains (Losses)		Change in Value of MRBs, Net of Related Hedging Gains (Losses)		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	$	7	$	(2)	$	0
Currency	0		0		0		0		0		0		109		0
Total gains (losses) on derivatives designated as hedge instruments	(3)		0		0		0		0		7		107		0
Gains (losses) on the hedged item:
Interest Rate	2		0		2		0		0		5		3		0
Currency	0		0		0		0		0		0		(110)		0
Total gains (losses) on hedged item	2		0		2		0		0		5		(107)		0
Amortization for gains (losses) excluded from assessment of the effectiveness

Currency	0		0		0		0		0		0		(3)		(34)
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(3)		(34)
Total gains (losses) on fair value hedges net of hedged item	(1)		0		2		0		0		12		(3)		(34)
Cash flow hedges
Interest Rate	0		0		(4)		0		0		0		0		2
Currency	0		0		0		0		0		0		0		(116)
Currency/Interest Rate	(14)		0		93		(344)		0		0		0		(2,142)
Total gains (losses) on cash flow hedges	(14)		0		89		(344)		0		0		0		(2,256)
Net investment hedges
Currency	0		0		0		0		0		0		0		(39)
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		(39)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(215)		(271)		0		0		0		0		0		0
Currency	(413)		0		0		0		0		0		0		0
Currency/Interest Rate	(343)		0		0		(5)		0		0		0		0
Credit	52		0		0		0		0		0		0		0
Equity	2,484		(592)		0		0		0		0		0		0
Embedded Derivatives(2)	(2,908)		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(1,343)		(863)		0		(5)		0		0		0		0
Total	$	(1,358)	$	(863)	$	91	$	(349)	$	0	$	12	$	(3)	$	(2,329)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Realized Investment Gains (Losses)		Change in Value of MRBs, Net of Related Hedging Gains (Losses)		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	$	(6)	$	0	$	0	$	0	$	0	$	41	$	28	$	0
Currency	0		0		0		0		0		0		162		0
Total gains (losses) on derivatives designated as hedge instruments	(6)		0		0		0		0		41		190		0
Gains (losses) on the hedged item:
Interest Rate	4		0		7		0		0		(43)		(29)		0
Currency	0		0		0		0		0		0		(162)		0
Total gains (losses) on hedged item	4		0		7		0		0		(43)		(191)		0

Amortization for gains (losses) excluded from assessment of the effectiveness
Currency	0		0		0		0		0		0		(7)		(103)
Total amortization for gains (losses) excluded from assessment of the effectiveness	0		0		0		0		0		0		(7)		(103)
Total gains (losses) on fair value hedges net of hedged item	(2)		0		7		0		0		(2)		(8)		(103)
Cash flow hedges
Interest Rate	0		0		(7)		0		0		0		0		10
Currency	0		0		0		0		0		0		0		(142)
Currency/Interest Rate	8		0		189		(491)		0		0		0		(2,245)
Total gains (losses) on cash flow hedges	8		0		182		(491)		0		0		0		(2,377)
Net investment hedges
Currency	0		0		0		0		0		0		0		(55)
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		(55)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate	(26)		(130)		0		0		0		0		0		0
Currency	(587)		0		0		(1)		0		0		0		0
Currency/Interest Rate	(370)		0		0		(5)		0		0		0		0
Credit	41		0		0		0		0		0		0		0
Equity	1,015		(390)		0		0		0		0		0		0
Embedded Derivatives(2)	(1,651)		0		0		0		0		0		0		0
Total gains (losses) on derivatives not qualifying as hedge accounting instruments	(1,578)		(520)		0		(6)		0		0		0		0
Total	$	(1,572)	$	(520)	$	189	$	(497)	$	0	$	(2)	$	(8)	$	(2,535)

(1)Excludes changes related to net investment hedges using non-derivative instruments of $23 million and $37 million for the three and six months ended June 30, 2026, respectively, and $(37) million and $(88) million for the three and six months ended June 30, 2025, respectively.

(2)Includes the Prismic funds withheld related embedded derivative realized gain (loss) of $(84) million and $4 million for the three and six months ended June 30, 2026, respectively, and $11 million and $(136) million for the three and six months ended June 30, 2025, 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, 2025	$	(231)
Amount recorded in AOCI:
Interest Rate	(3)
Currency	24
Currency/Interest Rate	549
Total amount recorded in AOCI	570
Amount reclassified from AOCI to income:
Interest Rate	4
Currency	6
Currency/Interest Rate	(208)
Total amount reclassified from AOCI to income	(198)
Balance, June 30, 2026	$	141

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 June 30, 2026 values, it is estimated that a pre-tax gain of $314 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending June 30, 2027.

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 25 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 $29 million and $53 million for the three and six months ended June 30, 2026, respectively, and $(76) million and $(142) million for the three and six months ended June 30, 2025, 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 10 years for index reference and 5 years for single name reference.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	June 30, 2026
	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	$	9	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	9	$	0
Index reference(3)	0		0		0		0		4,711		53		0		0		0		0		697		44		5,408		97
Total	$	0	$	0	$	9	$	0	$	4,711	$	53	$	0	$	0	$	0	$	0	$	697	$	44	$	5,417	$	97


	December 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		5,043		61		0		0		0		0		741		51		5,784		112
Total	$	0	$	0	$	0	$	0	$	5,043	$	61	$	0	$	0	$	0	$	0	$	741	$	51	$	5,784	$	112

(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, an NAIC 6 rating is used.

(2)The NAIC rating designation is due to approximately 4% and 3% of the index reference name rated as NAIC 6 as of June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, the Company had $415 million and $0 million of outstanding notional amounts, respectively, and reported at fair value as a liability of $8 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 June 30, 2026, 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, 2025. There have been no material changes in the Company’s 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.


	June 30, 2026
	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	$	22,213	$	0	$		$	22,213
Obligations of U.S. states and their political subdivisions	0		4,936		5				4,941
Foreign government securities	0		45,141		5				45,146
U.S. corporate public securities	0		108,041		40				108,081
U.S. corporate private securities(2)	0		40,519		4,357				44,876
Foreign corporate public securities	0		24,613		38				24,651
Foreign corporate private securities	0		38,030		1,725				39,755
Asset-backed securities(3)	0		19,858		6,874				26,732
Commercial mortgage-backed securities	0		8,329		845				9,174
Residential mortgage-backed securities	0		7,876		81				7,957
Subtotal	0		319,556		13,970				333,526
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		251		0				251

Foreign government securities	0		597		0				597
Corporate securities	0		58		0				58



Equity securities	2,550		1,949		0				4,499

Subtotal	2,550		2,855		0				5,405
Market risk benefit assets	0		0		2,430				2,430
Fixed maturities, trading	0		14,129		2,629				16,758
Equity securities	11,186		2,575		628				14,389
Commercial mortgage and other loans	0		685		274				959
Other invested assets(4)	309		32,835		1,151		(31,419)		2,876
Short-term investments	1,757		4,899		21				6,677
Cash equivalents	1,247		7,914		0				9,161
Reinsurance recoverables and deposit receivables	0		231		478				709

Separate account assets(5)(6)	10,493		160,574		170				171,237
Total assets	$	27,542	$	546,253	$	21,751	$	(31,419)	$	564,127
Market risk benefit liabilities	$	0	$	0	$	4,731	$		$	4,731
Policyholders’ account balances	0		0		22,809				22,809
Reinsurance and funds withheld payables	0		166		0				166
Other liabilities	293		43,492		0		(38,026)		5,759
Notes issued by consolidated VIEs	0		0		1,807				1,807
Total liabilities	$	293	$	43,658	$	29,347	$	(38,026)	$	35,272

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	December 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	$	22,179	$	0	$		$	22,179
Obligations of U.S. states and their political subdivisions	0		5,460		5				5,465
Foreign government securities	0		50,609		5				50,614
U.S. corporate public securities	0		107,718		63				107,781
U.S. corporate private securities(2)	0		42,007		5,094				47,101
Foreign corporate public securities	0		23,661		42				23,703
Foreign corporate private securities	0		38,425		1,734				40,159
Asset-backed securities(3)	0		15,227		4,102				19,329
Commercial mortgage-backed securities	0		8,890		853				9,743
Residential mortgage-backed securities	0		5,281		100				5,381
Subtotal	0		319,457		11,998				331,455
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	0		245		0				245

Foreign government securities	0		596		0				596
Corporate securities	0		55		0				55



Equity securities	2,225		1,721		0				3,946

Subtotal	2,225		2,617		0				4,842
Market risk benefit assets	0		0		2,330				2,330
Fixed maturities, trading	0		12,556		2,313				14,869
Equity securities	8,052		2,294		626				10,972
Commercial mortgage and other loans	0		793		263				1,056
Other invested assets(4)	301		25,816		1,088		(24,445)		2,760
Short-term investments	116		5,664		1				5,781
Cash equivalents	1,466		11,372		0				12,838
Reinsurance recoverables and deposit receivables	0		206		367				573

Separate account assets(5)(6)	9,419		159,115		211				168,745
Total assets	$	21,579	$	539,890	$	19,197	$	(24,445)	$	556,221
Market risk benefit liabilities	$	0	$	0	$	4,623	$		$	4,623
Policyholders’ account balances	0		0		18,799				18,799
Reinsurance and funds withheld payables	0		174		0				174
Other liabilities	280		38,877		0		(32,942)		6,215
Notes issued by consolidated VIEs	0		0		767				767
Total liabilities	$	280	$	39,051	$	24,189	$	(32,942)	$	30,578

(1)“Netting” amounts represent cash collateral of $(6,607) million and $(8,497) million as of June 30, 2026 and December 31, 2025, 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 $16,372 million (carrying amount of $16,372 million) and $15,744 million (carrying amount of $15,744 million) as of June 30, 2026 and December 31, 2025, 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 June 30, 2026 and December 31, 2025, the fair value of such investments was $6,238 million and $5,526 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 June 30, 2026 and December 31, 2025, the fair value of such investments was $27,713 million and $27,506 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 June 30, 2026
	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)	$	6,824	Discounted cash flow	Discount rate	1.17%	31.61%	9.96%	Decrease
			Market comparables	EBITDA multiple(4)	5.5X	8.5X	6.9X	Increase
			Liquidation	Liquidation value	16.56%	72.50%	33.59%	Increase
Asset backed securities	$	3,166	Discounted cash flow	Discount rate	1.90%	10.56%	4.87%	Decrease
				Liquidity premium	1.50%	2.60%	2.02%	Decrease
Commercial mortgage-backed securities	$	844	Discounted cash flow	Liquidity premium	0.90%	0.90%	0.90%	Decrease
Market risk benefit assets(6)	$	2,430	Discounted cash flow	Lapse rate(8)	0%	40%		Increase
				Spread over SOFR(9)(10)	0.41%	1.70%		Increase
				Utilization rate(11)	37%	96%		Decrease
				Withdrawal rate	See table footnote (12) below.
				Mortality rate(13)	0%	16%		Increase
				Equity volatility curve	17%	25%		Decrease
Equity securities	$	184	Discounted cash flow	Discount rate(5)	40%	40%		Decrease
			Market comparables	EBITDA multiple(4)	6.0X	8.0X	7.4X	Increase
			Net Asset Value	Share price	$3	$1,432	$521	Increase
Commercial mortgage and other loans	$	274	Discounted cash flow	Spread	2.00%	4.05%	2.50%	Decrease
Reinsurance recoverables and deposit receivables	$	478	Discounted cash flow	Lapse rate(8)	0%	65%		Increase
				Spread over SOFR(9)	0.41%	1.70%		Increase
				Option Budget(14)	0%	7%		Decrease
Liabilities:
Market risk benefit liabilities(6)	$	4,731	Discounted cash flow	Lapse rate(8)	0%	40%		Decrease
				Spread over SOFR(9)(10)	0.41%	1.70%		Decrease
				Utilization rate(11)	37%	96%		Increase
				Withdrawal rate	See table footnote (12) below.
				Mortality rate(13)	0%	16%		Decrease
				Equity volatility curve	17%	25%		Increase
Policyholders’ account balances(7)	$	22,700	Discounted cash flow	Lapse rate(8)	0%	96%		Decrease
				Spread over SOFR(9)	0.41%	1.70%		Decrease
				Mortality rate(13)	0%	22%		Decrease

				Option Budget(14)	(1)%	9%		Increase
Notes issued by consolidated VIEs	$	598	Liquidation	Liquidation value	100%	100%	100%	Increase

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	As of December 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)	$	7,702	Discounted cash flow	Discount rate	1.10%	25.50%	8.47%	Decrease
			Market comparables	EBITDA multiple(4)	5.5X	8.5X	7.5X	Increase
			Liquidation	Liquidation value	12.01%	39.00%	30.18%	Increase
Asset backed securities	$	1,767	Discounted cash flow	Discount rate	2.10%	10.05%	6.10%	Decrease
				Liquidity premium	1.50%	2.60%	1.89%	Decrease
Commercial mortgage-backed securities	$	853	Discounted cash flow	Liquidity premium	0.90%	0.90%	0.90%	Decrease
Market risk benefit assets(6)	$	2,330	Discounted cash flow	Lapse rate(8)	1%	20%		Increase
				Spread over SOFR(9)(10)	0.38%	1.61%		Increase
				Utilization rate(11)	37%	94%		Decrease
				Withdrawal rate	See table footnote (12) below.
				Mortality rate(13)	0%	16%		Increase
				Equity volatility curve	15%	25%		Decrease
Equity securities	$	214	Discounted cash flow	Discount rate(5)	40%	40%		Decrease
			Market comparables	EBITDA multiple(4)	7.0X	7.0X	7.0X	Increase
			Net Asset Value	Share price	$3	$1,809	$778	Increase
Commercial mortgage and other loans	$	263	Discounted cash flow	Spread	2.15%	3.10%	2.63%	Decrease
Reinsurance recoverables and deposit receivables	$	367	Discounted cash flow	Lapse rate(8)	1%	50%		Increase
				Spread over SOFR(9)	0.38%	1.61%		Increase
				Option Budget(14)	0%	6%		Decrease
Liabilities:
Market risk benefit liabilities(6)	$	4,623	Discounted cash flow	Lapse rate(8)	1%	20%		Decrease
				Spread over SOFR(9)(10)	0.38%	1.61%		Decrease
				Utilization rate(11)	37%	94%		Increase
				Withdrawal rate	See table footnote (12) below.
				Mortality rate(13)	0%	16%		Decrease
				Equity volatility curve	15%	25%		Increase
Policyholders’ account balances(7)	$	18,716	Discounted cash flow	Lapse rate(8)	0%	80%		Decrease
				Spread over SOFR(9)	0.38%	1.61%		Decrease
				Mortality rate(13)	0%	23%		Decrease

				Option Budget(14)	(2)%	9%		Increase
Notes issued by consolidated VIEs	$	382	Liquidation	Liquidation value	100%	100%	100%	Increase

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(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 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 June 30, 2026 and December 31, 2025, 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.

(10)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 Prudential Defined Income (“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.

(11)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.

(12)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 June 30, 2026 and December 31, 2025, the minimum withdrawal rate assumption is 80% and 78%, respectively. As of June 30, 2026 and December 31, 2025, 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%.

(13)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.

(14)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 June 30, 2026(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 and liabilities still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	5	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	5	$	0
Foreign government	5		0		0		0		0		0		0		0		0		5		0
Corporate securities(3)	7,465		(16)		435		(193)		0		(352)		(1,205)		26		0		6,160		(22)
Structured securities(4)	5,896		1		1,505		(104)		0		(220)		1,223		41		(542)		7,800		(1)






Other assets:
Fixed maturities, trading	2,915		2		527		(210)		0		(96)		(11)		22		(520)		2,629		(5)
Equity securities	568		(22)		65		(5)		0		0		20		2		0		628		(23)
Commercial mortgage and other loans	270		0		5		0		0		(1)		0		0		0		274		0
Other invested assets	1,134		(6)		32		0		0		(9)		0		0		0		1,151		(6)
Short-term investments	44		(3)		1		0		0		0		(21)		0		0		21		(2)
Cash equivalents	0		0		0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	452		(12)		54		0		0		(16)		0		0		0		478		(12)

Separate account assets	210		2		22		(7)		0		(5)		0		0		(52)		170		2
Liabilities:
Policyholders’ account balances(5)	(17,590)		(5,142)		0		0		(74)		0		(3)		0		0		(22,809)		(480)
Other liabilities	0		0		0		0		0		0		0		0		0		0		0
Notes issued by consolidated VIEs	(1,330)		(8)		0		0		(950)		54		427		0		0		(1,807)		(9)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2026
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets and liabilities 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	$	(22)	$	0	$	0	$	6	$	1	$	(26)	$	0	$	0	$	3

Other assets:
Fixed maturities, trading	0		1		0		0		1		0		(5)		0		0
Equity securities	0		(22)		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		(6)		0		0		0		0		(6)		0		0
Short-term investments	(3)		0		0		0		0		(2)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	(12)		0		0		0		0		(12)		0		0		0

Separate account assets	0		0		2		0		0		0		0		2		0
Liabilities:
Policyholders’ account balances	(5,142)		0		0		0		0		(480)		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		(9)		0		0


	Six Months Ended June 30, 2026(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 and liabilities still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	5	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	5	$	0
Foreign government	5		0		0		0		0		0		0		0		0		5		0
Corporate securities(3)	6,933		(170)		1,121		(287)		0		(712)		(1,192)		495		(28)		6,160		(187)
Structured securities(4)	5,055		(31)		2,803		(158)		0		(370)		1,222		41		(762)		7,800		(33)






Other assets:
Fixed maturities, trading	2,313		(42)		1,251		(234)		0		(137)		(12)		38		(548)		2,629		(54)
Equity securities	626		(54)		88		(7)		0		(14)		20		2		(33)		628		(51)
Commercial mortgage and other loans	263		0		44		0		26		(59)		0		0		0		274		0
Other invested assets	1,088		(7)		91		(12)		0		(9)		0		0		0		1,151		(7)
Short-term investments	1		(14)		27		0		0		28		(21)		0		0		21		(14)
Cash equivalents	0		0		0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	367		48		98		0		0		(37)		2		0		0		478		11

Separate account assets	211		(2)		28		(8)		0		(13)		0		6		(52)		170		(2)
Liabilities:
Policyholders’ account balances(5)	(18,799)		(3,553)		0		0		(455)		0		(2)		0		0		(22,809)		(3)
Other liabilities	0		0		0		0		0		0		0		0		0		0		0
Notes issued by consolidated VIEs	(767)		(10)		0		0		(1,088)		54		4		0		0		(1,807)		(9)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets and liabilities 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	$	(99)	$	0	$	0	$	(105)	$	3	$	(115)	$	0	$	0	$	(105)

Other assets:
Fixed maturities, trading	0		(43)		0		0		1		0		(54)		0		0
Equity securities	0		(54)		0		0		0		0		(51)		0		0
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0
Other invested assets	0		(7)		0		0		0		0		(7)		0		0
Short-term investments	(14)		0		0		0		0		(14)		0		0		0
Cash equivalents	0		0		0		0		0		0		0		0		0
Reinsurance recoverables and deposit receivables	48		0		0		0		0		11		0		0		0

Separate account assets	0		0		(2)		0		0		0		0		(2)		0
Liabilities:
Policyholders’ account balances	(3,553)		0		0		0		0		(3)		0		0		0
Other liabilities	0		0		0		0		0		0		0		0		0
Notes issued by consolidated VIEs	0		(10)		0		0		0		0		(9)		0		0


	Three Months Ended June 30, 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 and liabilities still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	5	$	0	$	(1)	$	0	$	0	$	1	$	0	$	0	$	0	$	5	$	0
Foreign government	5		0		0		0		0		0		0		0		0		5		0
Corporate securities(3)	6,279		42		839		(121)		0		(408)		11		18		0		6,660		38
Structured securities(4)	3,217		(9)		1,502		(446)		0		(168)		191		199		(158)		4,328		(6)






Other assets:
Fixed maturities, trading	2,138		(14)		289		(10)		0		(86)		(183)		0		(44)		2,090		(31)
Equity securities	733		4		62		(35)		0		(1)		0		1		(163)		601		4
Commercial mortgage and other loans	263		0		0		0		0		0		0		0		0		263		0
Other invested assets	965		(3)		44		(30)		0		0		1		0		1		978		(3)
Short-term investments	462		0		15		(452)		0		(7)		(2)		1		1		18		0
Cash equivalents	1		0		1		0		0		(1)		0		0		0		1		0
Reinsurance recoverables and deposit receivables	381		5		(2)		0		0		(16)		(1)		0		0		367		(12)

Separate account assets	253		16		25		(3)		0		(30)		0		1		(10)		252		15
Liabilities:
Policyholders’ account balances(5)	(11,938)		(2,978)		0		0		(371)		0		(2)		0		0		(15,289)		(169)
Other liabilities	(13)		(2)		0		0		0		0		0		0		0		(15)		(2)
Notes issued by consolidated VIEs	(67)		0		0		0		(124)		0		(4)		0		0		(195)		0

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2025
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets and liabilities 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	$	(12)	$	0	$	0	$	46	$	(1)	$	(11)	$	0	$	0	$	43






Other assets:
Fixed maturities, trading	0		(28)		0		0		14		0		(31)		0		0
Equity securities	0		4		0		0		0		0		4		0		0
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0
Other invested assets	0		(2)		(1)		0		0		(1)		(2)		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	5		0		0		0		0		(12)		0		0		0

Separate account assets	0		0		16		0		0		0		0		15		0
Liabilities:
Policyholders’ account balances	(2,978)		0		0		0		0		(169)		0		0		0
Other liabilities	(2)		0		0		0		0		(2)		0		0		0
Notes issued by consolidated VIEs	0		0		0		0		0		0		0		0		0


	Six Months Ended June 30, 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 and liabilities still held(2)
	(in millions)
Fixed maturities, available-for-sale:

U.S. states	$	6	$	0	$	(1)	$	0	$	0	$	0	$	0	$	0	$	0	$	5	$	0
Foreign government	7		0		0		0		0		(2)		0		0		0		5		0
Corporate securities(3)	5,831		(26)		1,707		(471)		0		(602)		(30)		252		(1)		6,660		(32)
Structured securities(4)	2,333		9		2,328		(769)		0		(233)		(171)		1,064		(233)		4,328		12






Other assets:
Fixed maturities, trading	1,986		(35)		712		(271)		0		(338)		183		3		(150)		2,090		(39)
Equity securities	518		(13)		216		(58)		0		(1)		0		120		(181)		601		(19)
Commercial mortgage and other loans	233		0		0		0		30		0		0		0		0		263		0
Other invested assets	953		(4)		58		(31)		0		0		1		0		1		978		(3)
Short-term investments	461		0		23		(455)		0		(11)		(2)		1		1		18		0
Cash equivalents	0		0		2		0		0		(1)		0		0		0		1		0
Reinsurance recoverables and deposit receivables	613		1		21		0		0		(34)		(234)		0		0		367		(33)

Separate account assets	232		8		85		(37)		0		(31)		0		5		(10)		252		5
Liabilities:
Policyholders’ account balances(5)	(12,746)		(1,543)		0		0		(996)		0		(4)		0		0		(15,289)		238
Other liabilities	(1)		(14)		0		0		0		0		0		0		0		(15)		(14)
Notes issued by consolidated VIEs	(60)		0		0		0		(131)		0		(4)		0		0		(195)		0

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Total realized and unrealized gains (losses)										Unrealized gains (losses) for assets and liabilities 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	$	(31)	$	0	$	0	$	18	$	(4)	$	(33)	$	0	$	0	$	13






Other assets:
Fixed maturities, trading	0		(34)		0		0		(1)		0		(39)		0		0
Equity securities	0		(13)		0		0		0		0		(19)		0		0
Commercial mortgage and other loans	0		0		0		0		0		0		0		0		0
Other invested assets	0		(3)		(1)		0		0		0		(3)		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	1		0		0		0		0		(33)		0		0		0

Separate account assets	0		0		8		0		0		0		0		5		0
Liabilities:
Policyholders’ account balances	(1,543)		0		0		0		0		238		0		0		0
Other liabilities	(14)		0		0		0		0		(14)		0		0		0
Notes issued by consolidated VIEs	0		0		0		0		0		0		0		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 and liabilities 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 $2,430 million and $2,188 million and MRB liabilities of $4,731 million and $4,859 million for the periods ended June 30, 2026 and 2025, 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 period in which the transfers occur for any such positions still held at the end of the period.

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 June 30, 2026
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Derivative Assets:
Interest Rate	$	10	$	11,751	$	0	$		$	11,761
Currency	0		1,884		0				1,884
Credit	0		97		0				97
Currency/Interest Rate	0		1,759		0				1,759
Equity	299		17,344		0				17,643
Netting(1)							(31,419)		(31,419)
Total derivative assets	$	309	$	32,835	$	0	$	(31,419)	$	1,725
Derivative Liabilities:
Interest Rate	$	36	$	25,605	$	0	$		$	25,641
Currency	0		1,834		0				1,834
Credit	0		8		0				8
Currency/Interest Rate	0		1,308		0				1,308
Equity	257		14,737		0				14,994
Netting(1)							(38,026)		(38,026)
Total derivative liabilities	$	293	$	43,492	$	0	$	(38,026)	$	5,759


	As of December 31, 2025
	Level 1		Level 2		Level 3		Netting(1)		Total
	(in millions)
Derivative Assets:
Interest Rate	$	7	$	11,210	$	0	$		$	11,217
Currency	0		1,384		0				1,384
Credit	0		112		0				112
Currency/Interest Rate	0		1,656		0				1,656
Equity	293		11,454		0				11,747
Netting(1)							(24,445)		(24,445)
Total derivative assets	$	300	$	25,816	$	0	$	(24,445)	$	1,671
Derivative Liabilities:
Interest Rate	$	22	$	25,571	$	0	$		$	25,593
Currency	0		1,591		0				1,591
Credit	0		0		0				0
Currency/Interest Rate	0		1,619		0				1,619
Equity	258		10,096		0				10,354
Netting(1)							(32,942)		(32,942)
Total derivative liabilities	$	280	$	38,877	$	0	$	(32,942)	$	6,215

(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 June 30, 2026
	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


	Six Months Ended June 30, 2026
	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


	Three Months Ended June 30, 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	$	1	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	1	$	0
Net Derivative - Interest Rate	(13)		(2)		0		0		0		0		0		0		0		(15)		(2)


	Six Months Ended June 30, 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		(15)		0		0		0		0		0		0		0		(15)		(15)

(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 period in which the transfers occur for any such positions still held at the end of the period.

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 adjusted to fair value 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).

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)				(in millions)
Gains (Losses):


Investment real estate	$	0	$	0	$	0	$	(12)
Investment in JV/LP and Other	$	0	$	0	$	(5)	$	0
Equity securities	$	0	$	0	$	9	$	0


	June 30, 2026		December 31, 2025
	(in millions)
Carrying value after measurement as of period end:


Investment real estate(1)	$	2	$	45
Investment in JV/LP and Other(1)	$	61	$	61
Equity securities(1)	$	32	$	92

(1)Reported carrying values for 2026 include values as of the measurement dates of June 30, 2026 for “Investment real estate,” March 31, 2026 for “Investment in JV/LP and Other” and “Equity securities.” Reported carrying values for 2025 include values as of the measurement dates of March 31, 2025 for “Investment real estate,” December 31, 2025 for “Investment in JV/LP and Other” and September 30, 2025 and December 31, 2025 for “Equity securities.”

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)				(in millions)
Commercial mortgage and other loans:
Interest income	$	13	$	9	$	21	$	17
Changes in fair value	$	0	$	0	$	0	$	0
Notes issued by consolidated VIEs:
Interest expense	$	5	$	2	$	13	$	2
Changes in fair value	$	8	$	0	$	10	$	0

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	June 30, 2026		December 31, 2025
	(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end	$	959	$	1,056
Aggregate contractual principal as of period end	$	951	$	1,048
Other invested assets:
Fair value as of period end	$	26	$	26


Notes issued by consolidated VIEs:
Fair value as of period end	$	1,807	$	767
Aggregate contractual principal as of period end	$	1,807	$	767

(1)As of June 30, 2026, 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, the carrying amount equals or approximates fair value.


	June 30, 2026
	Fair Value								Carrying Amount(1)
	Level 1		Level 2		Level 3		Total		Total
	(in millions)
Assets:


Commercial mortgage and other loans	$	0	$	12	$	63,303	$	63,315	$	65,026
Policy loans	14		0		9,970		9,984		9,984
Other invested assets	0		94		0		94		94
Short-term investments	539		0		0		539		539
Cash and cash equivalents	5,736		265		0		6,001		6,001
Accrued investment income	0		3,758		0		3,758		3,758
Reinsurance recoverables and deposit receivables	0		8		7,496		7,504		7,504
Other assets	55		3,408		2		3,465		3,465
Total assets	$	6,344	$	7,545	$	80,771	$	94,660	$	96,371
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	36,085	$	50,718	$	86,803	$	92,271
Securities sold under agreements to repurchase	0		10,069		0		10,069		10,069
Cash collateral for loaned securities	0		9,236		0		9,236		9,236
Reinsurance and funds withheld payables(2)	0		10,952		(42)		10,910		10,910
Short-term debt	0		923		32		955		955
Long-term debt(3)	8,086		10,173		475		18,734		19,663
Notes issued by consolidated VIEs	0		0		2,210		2,210		2,210
Other liabilities	0		7,608		30		7,638		7,638
Separate account liabilities—investment contracts	0		22,900		17,903		40,803		40,803
Total liabilities	$	8,086	$	107,946	$	71,326	$	187,358	$	193,755

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


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


Commercial mortgage and other loans	$	0	$	14	$	63,164	$	63,178	$	63,659
Policy loans	12		0		9,946		9,958		9,958
Other invested assets	0		93		0		93		93
Short-term investments	632		1		0		633		633
Cash and cash equivalents	6,652		222		0		6,874		6,874
Accrued investment income	0		3,636		0		3,636		3,636
Reinsurance recoverables and deposit receivables	0		8		6,710		6,718		6,718
Other assets	37		3,142		2		3,181		3,181
Total assets	$	7,333	$	7,116	$	79,822	$	94,271	$	94,752
Liabilities:
Policyholders’ account balances—investment contracts	$	0	$	35,175	$	49,931	$	85,106	$	89,970
Securities sold under agreements to repurchase	0		9,598		0		9,598		9,598
Cash collateral for loaned securities	0		8,700		0		8,700		8,700
Reinsurance and funds withheld payables(2)	0		10,639		(32)		10,607		10,607
Short-term debt	0		1,408		33		1,441		1,443
Long-term debt(3)	7,507		10,324		522		18,353		18,856
Notes issued by consolidated VIEs	0		0		1,892		1,892		1,892
Other liabilities	0		6,993		31		7,024		7,024
Separate account liabilities—investment contracts	0		22,548		17,663		40,211		40,211
Total liabilities	$	7,507	$	105,385	$	70,040	$	182,932	$	188,301

(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 Life Reinsurance, Ltd (“Prismic Re”) with a fair value of $7,350 million (carrying amount of $7,350 million) and $7,513 million (carrying amount of $7,513 million), a portion of which relates to insurance contracts as of June 30, 2026 and December 31, 2025, respectively. See Note 12 for additional information regarding the reinsurance arrangement with Prismic Re.

(3)Excludes debt with fair value of $16,372 million (carrying amount of $16,372 million) and $15,744 million (carrying amount of $15,744 million) as of June 30, 2026 and December 31, 2025, respectively, which have been offset with the associated notes under a netting agreement.

7. DEFERRED POLICY ACQUISITION COSTS, DEFERRED REINSURANCE, 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)


	Six Months Ended June 30, 2026
			Individual Life				U.S. Legacy Products				International Businesses		Total
	Retirement		Term Life		Variable/ Universal Life		Annuities		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	2,304	$	2,203	$	4,845	$	2,308	$	545	$	9,678	$	21,883
Capitalization	352		100		338		2		10		505		1,307
Amortization expense	(172)		(105)		(114)		(118)		(10)		(360)		(879)
Other adjustments	0		1		(3)		0		0		6		4
Foreign currency adjustment	(1)		0		0		0		0		(66)		(67)
Balance, EOP	$	2,483	$	2,199	$	5,066	$	2,192	$	545	$	9,763	22,248
Other businesses													(368)
Total DAC balance													$	21,880


	Six Months Ended June 30, 2025
			Individual Life				U.S. Legacy Products(1)				International Businesses		Total(1)
	Retirement(1)		Term Life		Variable/ Universal Life(1)		Annuities		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	1,744	$	2,215	$	4,369	$	2,556	$	509	$	9,304	$	20,697
Capitalization	491		95		301		2		25		603		1,517
Amortization expense	(150)		(104)		(104)		(123)		(13)		(344)		(838)
Other adjustments(2)	19		0		1		0		4		(214)		(190)
Foreign currency adjustment	5		0		0		0		0		330		335
Balance, EOP	$	2,109	$	2,206	$	4,567	$	2,435	$	525	$	9,679	21,521
Other businesses													(299)
Total DAC balance													$	21,222

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

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

Deferred Reinsurance Losses (“DRL”)

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


	Six Months Ended June 30, 2026
			U.S. Legacy Products		Total
	Retirement		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	248	$	932	$	1,180

Amortization	(15)		(19)		(34)


Balance, EOP	$	233	$	913	1,146
Other businesses					63
Total DRL balance					$	1,209

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
			U.S. Legacy Products		Total
	Retirement		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	280	$	969	$	1,249

Amortization	(16)		(18)		(34)


Balance, EOP	$	264	$	951	1,215
Other businesses					63
Total DRL balance					$	1,278

Deferred Reinsurance Gains (“DRG”)

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


	Six Months Ended June 30, 2026
			U.S. Legacy Products				Total
	Retirement		Annuities		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	67	$	263	$	333	$	663
Deferred reinsurance gain	7		0		0		7
Amortization	(2)		(11)		(8)		(21)

Foreign currency adjustment	1		0		0		1
Balance, EOP	$	73	$	252	$	325	650
Other businesses							39
Total DRG balance							$	689


	Six Months Ended June 30, 2025
			U.S. Legacy Products				Total
	Retirement		Annuities		Guaranteed Universal Life
	(in millions)
Balance, BOP	$	62	$	287	$	348	$	697
Deferred reinsurance gain	2		0		0		2
Amortization	(2)		(12)		(8)		(22)

Foreign currency adjustment	6		0		0		6
Balance, EOP	$	68	$	275	$	340	683
Other businesses							43
Total DRG balance							$	726

Deferred Sales Inducements (“DSI”)

The following table shows a rollforward of DSI balances for annuity products within U.S. Legacy Products, which is the only line of business that contains a material DSI balance, along with a reconciliation to the Company’s total DSI balance:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30,
	2026		2025(1)
	(in millions)
Balance, BOP	$	348	$	378
Capitalization	1		1
Amortization expense	(16)		(17)


Balance, EOP	333		362
Other businesses	25		27
Total DSI balance	$	358	$	389

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

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:


	Six Months Ended June 30,
	2026		2025
	(in millions)
Balance, BOP	$	384	$	421

Amortization expense	(17)		(20)

Foreign currency adjustment	(12)		35
Balance, EOP	355		436
Other businesses(1)	11		14
Total VOBA balance	$	366	$	450

(1)Represents Aoba Life business.

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:


	June 30, 2026		December 31, 2025
	(in millions)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	4,964	$	4,753
Obligations of U.S. states and their political subdivisions	2,552		2,514
Foreign government bonds	125		109
U.S. corporate securities	12,905		13,783
Foreign corporate securities	3,497		4,282
Asset-backed securities	2,281		3,445
Mortgage-backed securities	13,562		10,154
Mutual funds:
Equity	93,759		92,137
Fixed Income	29,311		30,602
Other	6,573		6,315
Equity securities	5,853		5,459
Commercial mortgage and other loans	51		53
Other invested assets	19,802		19,749
Short-term investments	1,606		1,276
Cash and cash equivalents	2,109		1,620
Total	$	198,950	$	196,251

For the periods ended June 30, 2026 and December 31, 2025, 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:


	Six Months Ended June 30, 2026
	PGIM		Retirement		Group Insurance		Individual Life		U.S. Legacy Products		Total
	(in millions)
Balance, BOP	$	29,278	$	12,154	$	26,916	$	54,073	$	77,880	$	200,301
Deposits	4,244		296		1,128		2,217		32		7,917
Investment performance	537		475		737		4,312		4,124		10,185

Policy charges	(31)		(11)		(187)		(645)		(917)		(1,791)
Surrenders and withdrawals	(2,692)		(808)		(21)		(650)		(6,756)		(10,927)
Benefit payments	(1,919)		(242)		(215)		(268)		(53)		(2,697)
Net transfers (to) from general account	157		53		(4)		(431)		8		(217)
Other	99		417		(296)		25		1		246

Balance, EOP	$	29,673	$	12,334	$	28,058	$	58,633	$	74,319	$	203,017
Other businesses(1)											(4,067)
Total separate account liabilities											$	198,950

Cash surrender value(2)	$	29,673	$	12,021	$	27,977	$	56,748	$	74,117	$	200,536

(1)Primarily represents activity from the Company’s intercompany eliminations as well as Divested and Run-off Businesses. 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 is no cash surrender charges for the PGIM segment.


	Six Months Ended June 30, 2025
	PGIM		Retirement		Group Insurance		Individual Life		U.S. Legacy Products		Total
	(in millions)
Balance, BOP	$	28,645	$	12,664	$	25,126	$	46,891	$	83,618	$	196,944
Deposits	5,132		453		126		1,968		28		7,707
Investment performance	1,148		522		1,163		2,644		4,325		9,802

Policy charges	(33)		(5)		(137)		(615)		(1,006)		(1,796)
Surrenders and withdrawals	(3,499)		(946)		(25)		(549)		(6,316)		(11,335)
Benefit payments	(1,827)		(255)		(145)		(270)		(51)		(2,548)
Net transfers (to) from general account	(110)		(185)		13		(259)		14		(527)
Other	(172)		147		243		66		3		287

Balance, EOP	$	29,284	$	12,395	$	26,364	$	49,876	$	80,615	198,534
Other businesses(1)											(3,773)
Total separate account liabilities											$	194,761

Cash surrender value(2)	$	29,284	$	12,253	$	26,271	$	46,195	$	79,949	$	193,952

(1)Primarily represents activity from the Company’s intercompany eliminations as well as Divested and Run-off Businesses. 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”)

In 2026, the Company recognized an unfavorable impact to net income attributable to its annual reviews and update of assumptions and other refinements for Liability for Future Policy Benefits. The impact was unfavorable for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort, primarily due to updates to mortality and morbidity assumptions in Long-Term Care and updates to mortality assumptions in Retirement. Additionally, there was a favorable impact for direct and assumed AIR, primarily due to impacts from updated economic assumptions, partially offset by impacts from updated policyholder behavior assumptions on universal life policies.

In 2025, the Company recognized a favorable impact to net income attributable to its annual reviews and update of assumptions and other refinements for Liability for Future Policy Benefits. The impact was favorable for direct and assumed Benefit Reserves and DPL, net of the impact of flooring these liabilities at zero for each issue year cohort, primarily due to updates to mortality assumptions in Individual Life Insurance, partially offset by unfavorable updates for morbidity in Long-Term Care and mortality in Retirement. Additionally, there was a favorable impact for direct and assumed AIR, primarily due to offsetting impacts from updated policyholder behavior assumptions and mortality assumptions on universal life policies.

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.


	Six Months Ended June 30, 2026
	Present Value of Expected Net Premiums
			Individual Life		International Businesses			Corporate and Other		Total
	Retirement		Term Life				Long-Term Care
	(in millions)
Balance, BOP	$	87,431	$	10,637	$	41,359		$	2,868	$	142,295
Effect of cumulative changes in discount rate assumptions, BOP	14,178		280		3,431			64		17,953
Balance at original discount rate, BOP	101,609		10,917		44,790			2,932		160,248
Effect of assumption update	19		(67)		(794)			260		(582)
Effect of actual variances from expected experience and other activity	143		(150)		(596)			58		(545)
Adjusted balance, BOP	101,771		10,700		43,400			3,250		159,121
Issuances	2,643		427		940			0		4,010
Net premiums / considerations collected	(4,891)		(676)		(3,174)			(163)		(8,904)
Interest accrual	1,856		260		686			73		2,875
Foreign currency adjustment	(1,516)		0		(530)			0		(2,046)
Other adjustments	0		(17)		74			0		57
Balance at original discount rate, EOP	99,863		10,694		41,396			3,160		155,113
Effect of cumulative changes in discount rate assumptions, EOP	(15,445)		(377)		(4,122)			(110)		(20,054)
Balance, EOP	$	84,418	$	10,317	$	37,274		$	3,050	135,059
Other businesses, EOP										113
Total balance, EOP										$	135,172

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
	Present Value of Expected Future Policy Benefits
			Individual Life		International Businesses			Corporate and Other		Total
	Retirement		Term Life				Long-Term Care
	(in millions)
Balance, BOP	$	167,704	$	19,166	$	125,543		$	11,660	$	324,073
Effect of cumulative changes in discount rate assumptions, BOP	17,769		602		26,267			1,435		46,073
Balance at original discount rate, BOP	185,473		19,768		151,810			13,095		370,146
Effect of assumption update	127		(67)		(595)			394		(141)
Effect of actual variances from expected experience and other activity	199		(203)		(579)			70		(513)
Adjusted balance, BOP	185,799		19,498		150,636			13,559		369,492
Issuances	2,643		427		940			0		4,010
Interest accrual	3,693		474		2,335			320		6,822
Benefit payments	(7,657)		(738)		(5,241)			(201)		(13,837)
Foreign currency adjustment	(1,524)		0		(2,202)			0		(3,726)
Other adjustments	84		(14)		212			0		282
Balance at original discount rate, EOP	183,038		19,647		146,680			13,678		363,043
Effect of cumulative changes in discount rate assumptions, EOP	(19,863)		(795)		(29,551)			(1,614)		(51,823)
Balance, EOP	$	163,175	$	18,852	$	117,129		$	12,064	311,220
Other businesses, EOP										1,472
Total balance, EOP										$	312,692


	Six Months Ended June 30, 2026
	Net Liability for Future Policy Benefits - Benefit Reserves
			Individual Life		International Businesses			Corporate and Other		Total
	Retirement		Term Life				Long-Term Care
	(in millions)
Balance, EOP, pre-flooring	$	78,757	$	8,535	$	79,855		$	9,013	$	176,160
Flooring impact, EOP	205		2		87			0		294
Balance, EOP, post-flooring	78,962		8,537		79,942			9,013		176,454
Less: Reinsurance recoverables	5,228		638		281			0		6,147
Balance after reinsurance recoverables, EOP, post-flooring	$	73,734	$	7,899	$	79,661		$	9,013	170,307
Other businesses, EOP(1)										1,307
Total balance after reinsurance recoverables, EOP										$	171,614

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Present Value of Expected Net Premiums
			Individual Life		International Businesses			Corporate and Other		Total(2)
	Retirement(2)		Term Life				Long-Term Care
	(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	169		(241)		(1,072)			8		(1,136)
Effect of actual variances from expected experience and other activity	(79)		(100)		(467)			41		(605)
Adjusted balance, BOP	87,161		10,961		46,911			3,035		148,068
Issuances	8,993		406		1,477			0		10,876
Net premiums / considerations collected	(3,447)		(692)		(3,455)			(155)		(7,749)
Interest accrual	1,745		264		730			71		2,810
Foreign currency adjustment	8,819		0		2,193			0		11,012
Other adjustments	0		3		73			0		76
Balance at original discount rate, EOP	103,271		10,942		47,929			2,951		165,093
Effect of cumulative changes in discount rate assumptions, EOP	(15,153)		(384)		(2,984)			(86)		(18,607)
Balance, EOP	$	88,118	$	10,558	$	44,945		$	2,865	146,486
Other businesses, EOP										109
Total balance, EOP										$	146,595


	Six Months Ended June 30, 2025
	Present Value of Expected Future Policy Benefits
			Individual Life		International Businesses			Corporate and Other		Total(2)
	Retirement(2)		Term Life				Long-Term Care
	(in millions)
Balance, BOP	$	151,679	$	18,996	$	135,485		$	11,178	$	317,338
Effect of cumulative changes in discount rate assumptions, BOP	20,199		1,134		17,834			1,548		40,715
Balance at original discount rate, BOP	171,878		20,130		153,319			12,726		358,053
Effect of assumption update	322		(392)		(1,013)			14		(1,069)
Effect of actual variances from expected experience and other activity	(120)		(137)		(563)			18		(802)
Adjusted balance, BOP	172,080		19,601		151,743			12,758		356,182
Issuances	8,993		406		1,477			0		10,876
Interest accrual	3,545		470		2,365			306		6,686
Benefit payments	(7,440)		(784)		(4,208)			(176)		(12,608)
Foreign currency adjustment	8,902		0		7,245			0		16,147
Other adjustments	29		(1)		171			0		199
Balance at original discount rate, EOP	186,109		19,692		158,793			12,888		377,482
Effect of cumulative changes in discount rate assumptions, EOP	(19,591)		(797)		(23,521)			(1,572)		(45,481)
Balance, EOP	$	166,518	$	18,895	$	135,272		$	11,316	332,001
Other businesses, EOP(1)										1,514
Total balance, EOP										$	333,515

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Net Liability for Future Policy Benefits - Benefit Reserves
			Individual Life		International Businesses			Corporate and Other		Total(2)
	Retirement(2)		Term Life				Long-Term Care
	(in millions)
Balance, EOP, pre-flooring	$	78,400	$	8,337	$	90,326		$	8,450	$	185,513
Flooring impact, EOP	106		0		80			0		186
Balance, EOP, post-flooring	78,506		8,337		90,406			8,450		185,699
Less: Reinsurance recoverables	5,038		576		341			0		5,955
Balance after reinsurance recoverables, EOP, post-flooring	$	73,468	$	7,761	$	90,065		$	8,450	179,744
Other businesses, EOP(1)										1,347
Total balance after reinsurance recoverables, EOP										$	181,091

(1)Reflects balance after reinsurance recoverables of $53 million and $59 million at June 30, 2026 and 2025, 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:


	Six Months Ended June 30, 2026

				Individual Life			International Businesses				Corporate and Other
	Retirement			Term Life						Long-Term Care
	($ in millions)
Undiscounted expected future gross premiums	$	172,541		$	22,836		$	95,546			$	6,366
Discounted expected future gross premiums (at original discount rate)	$	107,481		$	15,415		$	74,326			$	4,316
Discounted expected future gross premiums (at current discount rate)	$	90,584		$	14,928		$	67,213			$	4,174
Undiscounted expected future benefits and expenses	$	298,653		$	30,406		$	238,949			$	30,490
Weighted-average duration of the liability in years (at original discount rate)	8			9			16				16
Weighted-average duration of the liability in years (at current discount rate)	8			9			13				15
Weighted-average interest rate (at original discount rate)	4.84		%	5.10		%	3.09		%		4.91		%
Weighted-average interest rate (at current discount rate)	5.54		%	5.46		%	4.91		%		5.87		%


	Six Months Ended June 30, 2025

				Individual Life			International Businesses				Corporate and Other
	Retirement(1)			Term Life						Long-Term Care
	($ in millions)
Undiscounted expected future gross premiums	$	178,217		$	22,958		$	107,923			$	6,588
Discounted expected future gross premiums (at original discount rate)	$	111,292		$	15,586		$	84,598			$	4,427
Discounted expected future gross premiums (at current discount rate)	$	94,675		$	15,086		$	79,680			$	4,308
Undiscounted expected future benefits and expenses	$	302,651		$	30,430		$	260,920			$	29,531
Weighted-average duration of the liability in years (at original discount rate)	8			10			17				16
Weighted-average duration of the liability in years (at current discount rate)	8			9			14				15
Weighted-average interest rate (at original discount rate)	4.76		%	5.12		%	2.99		%		4.91		%
Weighted-average interest rate (at current discount rate)	5.45		%	5.37		%	4.05		%		5.87		%

(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, 2025.

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.

In the first six months of 2026, there was a $115 million charge to net income for non-participating traditional and limited-payment products, where net premiums exceeded gross premiums for certain issue-year cohorts, furthered by a $4 million charge reflecting the impact of ceded reinsurance. The unfavorable impact in the first six months of 2026 is primarily due to new business and annual update to assumptions and other refinements applicable to US Pension Risk Transfer, for which the Present Value of Expected Benefits at the required discount rate exceeds the premium paid.

For the first six months of 2025, 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.

Deferred Profit Liability

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


	Six Months Ended June 30, 2026
	Deferred Profit Liability
			International Businesses		Total
	Retirement
	(in millions)
Balance, BOP, post-flooring	$	5,419	$	10,225	$	15,644
Less: Flooring impact, BOP	0		2		2
Balance, BOP, pre-flooring	5,419		10,223		15,642
Effect of assumption update	(18)		(255)		(273)
Effect of actual variances from expected experience and other activity	27		(39)		(12)
Adjusted balance, BOP	5,428		9,929		15,357
Profits deferred	28		1,220		1,248
Interest accrual	112		187		299
Amortization	(275)		(1,075)		(1,350)
Foreign currency adjustment	(4)		(70)		(74)
Other adjustments	0		33		33
Balance, EOP, pre-flooring	5,289		10,224		15,513
Flooring impact, EOP	0		2		2
Balance, EOP, post-flooring	5,289		10,226		15,515
Less: Reinsurance recoverables	414		42		456
Balance after reinsurance recoverables, EOP, post-flooring	$	4,875	$	10,184	15,059
Other businesses					146
Total balance after reinsurance recoverables, EOP					$	15,205

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
	Deferred Profit Liability
			International Businesses
	Retirement(1)				Total(1)
	(in millions)
Balance, BOP, post-flooring	$	5,683	$	9,354		$	15,037
Less: Flooring impact, BOP	0		2			2
Balance, BOP, pre-flooring	5,683		9,352			15,035
Effect of assumption update	(73)		(58)			(131)
Effect of actual variances from expected experience and other activity	30		2			32
Adjusted balance, BOP	5,640		9,296			14,936
Profits deferred	85		1,265			1,350
Interest accrual	116		172			288
Amortization	(289)		(1,055)			(1,344)
Foreign currency adjustment	26		353			379
Other adjustments	0		25			25
Balance, EOP, pre-flooring	5,578		10,056			15,634
Flooring impact, EOP	0		3			3
Balance, EOP, post-flooring	5,578		10,059			15,637
Less: Reinsurance recoverables	376		45			421
Balance after reinsurance recoverables, EOP, post-flooring	$	5,202	$	10,014		15,216
Other businesses						153
Total balance after reinsurance recoverables, EOP						$	15,369

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

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

The following table shows a rollforward of AIR balances for guaranteed universal life products within the U.S. Legacy Products segment, which is the only line of business that contains a material AIR balance, for the periods indicated, along with a reconciliation to the Company’s total AIR balance:


	Six Months Ended June 30,
	2026		2025(1)
	(in millions)
Balance, including amounts in AOCI, BOP, post-flooring	$	17,904	$	16,205
Flooring impact and amounts in AOCI	315		460
Balance, excluding amounts in AOCI, BOP, pre-flooring	18,219		16,665
Effect of assumption update	(51)		81
Effect of actual variances from expected experience and other activity	(39)		(12)
Adjusted balance, BOP	18,129		16,734
Assessments collected(2)	621		486
Interest accrual	305		282
Benefits paid	(117)		(121)
Other adjustments	(6)		0
Balance, excluding amounts in AOCI, EOP, pre-flooring	18,932		17,381
Flooring impact and amounts in AOCI	(298)		(379)
Balance, including amounts in AOCI, EOP, post-flooring	18,634		17,002
Less: Reinsurance recoverables	11,020		9,963
Balance after reinsurance recoverables, including amounts in AOCI, EOP	7,614		7,039
Other businesses(3)	223		146
Total balance after reinsurance recoverables	$	7,837	$	7,185

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

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

(3)Reflects balance after reinsurance recoverables of $156 million and $134 million at June 30, 2026 and 2025, respectively.


	Six Months Ended June 30,
	2026		2025
Weighted-average duration of the liability in years (at original discount rate)	20		21
Weighted-average interest rate (at original discount rate)	3.33	%	3.41	%

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:


	Six Months Ended June 30,
	2026		2025
	(in millions)
Benefit reserves, EOP, post-flooring	$	177,814	$	187,106
Deferred Profit Liability EOP, post-flooring	15,661		15,790
Additional insurance reserves, including amounts in AOCI, EOP, post-flooring	19,013		17,282
Subtotal of amounts disclosed above	212,488		220,178
Other Future Policy Benefits reserves(1)	48,456		49,955
Total Future Policy Benefits	$	260,944	$	270,133

(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:


	Six Months Ended June 30, 2026
	Revenues(1)
			Individual Life		U.S. Legacy Products		International Businesses		Other Businesses		Total
	Retirement		Term Life		Guaranteed Universal Life
	(in millions)
Benefit reserves	$	5,209	$	972	$	0	$	4,896	$	288	$	11,365
Deferred profit liability	127		0		0		(71)		8		64
Additional insurance reserves	96		0		869		102		682		1,749
Total	$	5,432	$	972	$	869	$	4,927	$	978	$	13,178


	Six Months Ended June 30, 2025
	Revenues(1)
			Individual Life		U.S. Legacy Products(2)		International Businesses		Other Businesses(2)		Total
	Retirement(2)		Term Life		Guaranteed Universal Life
	(in millions)
Benefit reserves	$	3,727	$	964	$	0	$	5,441	$	274	$	10,406
Deferred profit liability	132		0		0		(352)		(3)		(223)
Additional insurance reserves	34		0		687		0		635		1,356
Total	$	3,893	$	964	$	687	$	5,089	$	906	$	11,539


	Six Months Ended June 30, 2026
	Interest Expense
			Individual Life		U.S. Legacy Products		International Businesses		Other Businesses		Total
	Retirement		Term Life		Guaranteed Universal Life
	(in millions)
Benefit reserves	$	1,837	$	213	$	0	$	1,648	$	269	$	3,967
Deferred profit liability	112		0		0		187		2		301
Additional insurance reserves	3		0		305		1		6		315
Total	$	1,952	$	213	$	305	$	1,836	$	277	$	4,583


	Six Months Ended June 30, 2025
	Interest Expense
			Individual Life		U.S. Legacy Products(2)		International Businesses		Other Businesses(2)		Total
	Retirement(2)		Term Life		Guaranteed Universal Life
	(in millions)
Benefit reserves	$	1,800	$	205	$	0	$	1,635	$	255	$	3,895
Deferred profit liability	116		0		0		172		2		290
Additional insurance reserves	1		0		282		1		8		292
Total	$	1,917	$	205	$	282	$	1,808	$	265	$	4,477

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(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:


	Six Months Ended June 30, 2026
				Group Insurance			Individual Life			U.S. Legacy Products						International Businesses			Total
	Retirement			Life/Disability			Variable/Universal Life			Annuities			Guaranteed Universal Life
	($ in millions)
Balance, beginning of period	$	80,975		$	4,763		$	15,480		$	3,715		$	12,788		$	60,946		$	178,667
Deposits	11,179			446			728			65			649			3,859			16,926
Interest credited	1,044			65			200			136			188			1,359			2,992

Policy charges	(93)			(161)			(264)			(1)			(764)			(352)			(1,635)
Surrenders and withdrawals	(4,441)			(491)			(903)			(346)			(51)			(1,188)			(7,420)
Benefit payments	(416)			0			(21)			(66)			(63)			(1,234)			(1,800)
Net transfers (to) from separate account	(85)			4			458			14			0			0			391
Change in market value and other adjustments(1)	3,131			0			303			0			0			(17)			3,417
Foreign currency adjustment	(16)			0			0			0			0			(546)			(562)
Balance, end of period	$	91,278		$	4,626		$	15,981		$	3,517		$	12,747		$	62,827		190,976


Closed Block Division																			4,212
Unearned revenue reserve, unearned expense credit, and additional interest reserve																			7,141
Other(2)																			(106)
Total Policyholders’ account balance																			$	202,223
Weighted-average crediting rate	2.42		%	2.77		%	2.55		%	7.51		%	2.95		%	4.39		%	3.24		%
Net amount at risk(3)	$	0		$	75,147		$	275,980		$	0		$	147,794		$	28,945		$	527,866
Cash surrender value(4)	$	87,930		$	3,628		$	14,399		$	3,168		$	11,611		$	56,313		$	177,049

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
				Group Insurance			Individual Life(5)			U.S. Legacy Products(5)						International Businesses			Total
	Retirement(5)			Life/Disability			Variable/Universal Life			Annuities			Guaranteed Universal Life
	($ in millions)
Balance, beginning of period	$	60,869		$	4,974		$	14,902		$	4,324		$	12,694		$	54,270		$	152,033
Deposits	11,154			483			681			59			692			4,971			18,040
Interest credited	888			67			16			48			183			686			1,888

Policy charges	(62)			(168)			(257)			(1)			(767)			(296)			(1,551)
Surrenders and withdrawals	(3,500)			(842)			(874)			(366)			(59)			(672)			(6,313)
Benefit payments	(379)			0			(36)			(51)			(73)			(1,159)			(1,698)
Net transfers (to) from separate account	44			(13)			307			(3)			0			0			335
Change in market value and other adjustments(1)	977			0			495			0			0			(10)			1,462
Foreign currency adjustment	0			0			0			0			0			1,585			1,585
Balance, end of period	$	69,991		$	4,501		$	15,234		$	4,010		$	12,670		$	59,375		165,781


Closed Block Division																			4,293
Unearned revenue reserve, unearned expense credit, and additional interest reserve																			6,429
Other(2)																			4,428
Total Policyholders’ account balance																			$	180,931
Weighted-average crediting rate	2.71		%	2.81		%	0.22		%	2.34		%	2.89		%	2.42		%	2.38		%
Net amount at risk(3)	$	0		$	74,475		$	259,722		$	0		$	148,612		$	30,967		$	513,776
Cash surrender value(4)	$	67,199		$	3,668		$	12,627		$	3,676		$	11,426		$	52,544		$	151,140

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

(2)Includes $994 million and $5,004 million of the Full Service Retirement business’s account balances reinsured to Empower for June 30, 2026 and 2025, 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.

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

“Policyholders’ account balances” for Retirement, International Businesses and Corporate and Other includes the Company’s Funding Agreement-Backed Notes (“FABN”) and Funding Agreement-Backed Commercial Paper (“FACP”) programs, which totaled $10,086 million and $7,801 million at June 30, 2026 and 2025, respectively. Under this program, which have 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 The Prudential Insurance Company of America (“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 two months to ten years. Included in the amounts at June 30, 2026 and 2025 are funding agreements which secure the medium-term note liability, which are carried at amortized cost, of $6,650 million and $4,742 million, respectively, and short-term note liability of $2,836 million and $2,834 million, respectively, and Retail Note liability of $631 million and $257 million, respectively.

“Policyholders’ account balances” for Retirement also includes collateralized funding agreements issued to the Federal Home Loan Bank of New York (“FHLBNY”) totaling $2,628 million as of both June 30, 2026 and 2025. 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, 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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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:


	June 30, 2026
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
Less than 1.00%	$	230	$	20	$	43	$	1,881	$	2,174
1.00% - 1.99%	1,870		34		137		46		2,087
2.00% - 2.99%	184		2,178		636		10		3,008
3.00% - 4.00%	6,182		5		11		2		6,200
Greater than 4.00%	7,359		0		0		0		7,359
Total	$	15,825	$	2,237	$	827	$	1,939	$	20,828
Group Insurance - Life / Disability
Less than 1.00%	$	0	$	0	$	0	$	877	$	877
1.00% - 1.99%	3		0		0		2		5
2.00% - 2.99%	38		0		0		0		38
3.00% - 4.00%	1,400		4		74		4		1,482
Greater than 4.00%	3		0		0		0		3
Total	$	1,444	$	4	$	74	$	883	$	2,405
Individual Life - Variable / Universal Life
Less than 1.00%	$	0	$	0	$	356	$	0	$	356
1.00% - 1.99%	521		264		0		414		1,199
2.00% - 2.99%	224		151		42		356		773
3.00% - 4.00%	2,057		319		1,001		254		3,631
Greater than 4.00%	4,765		0		0		0		4,765
Total	$	7,567	$	734	$	1,399	$	1,024	$	10,724
U.S. Legacy Products - Annuities
Less than 1.00%	$	15	$	60	$	606	$	0	$	681
1.00% - 1.99%	69		485		46		0		600
2.00% - 2.99%	443		31		8		0		482
3.00% - 4.00%	1,595		22		8		0		1,625
Greater than 4.00%	134		0		0		0		134
Total	$	2,256	$	598	$	668	$	0	$	3,522
U.S. Legacy Products - Guaranteed Universal Life
Less than 1.00%	$	0	$	0	$	0	$	0	$	0
1.00% - 1.99%	19		0		0		3,239		3,258
2.00% - 2.99%	27		0		4,036		291		4,354
3.00% - 4.00%	2,915		1,101		662		0		4,678
Greater than 4.00%	457		0		0		0		457
Total	$	3,418	$	1,101	$	4,698	$	3,530	$	12,747
International Businesses
Less than 1.00%	$	3,308	$	23	$	0	$	0	$	3,331
1.00% - 1.99%	13,613		117		0		0		13,730
2.00% - 2.99%	7,585		277		67		0		7,929
3.00% - 4.00%	10,652		0		0		0		10,652
Greater than 4.00%	21,009		0		0		0		21,009
Total	$	56,167	$	417	$	67	$	0	$	56,651

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	June 30, 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(2)
Less than 1.00%	$	640	$	4	$	18	$	1,118	$	1,780
1.00% - 1.99%	1,948		55		178		52		2,233
2.00% - 2.99%	174		449		550		15		1,188
3.00% - 4.00%	6,389		6		11		3		6,409
Greater than 4.00%	4,732		0		0		0		4,732
Total	$	13,883	$	514	$	757	$	1,188	$	16,342
Group Insurance - Life / Disability
Less than 1.00%	$	0	$	0	$	0	$	712	$	712
1.00% - 1.99%	0		0		0		2		2
2.00% - 2.99%	44		0		0		0		44
3.00% - 4.00%	1,442		6		51		7		1,506
Greater than 4.00%	3		0		0		0		3
Total	$	1,489	$	6	$	51	$	721	$	2,267
Individual Life - Variable / Universal Life(2)
Less than 1.00%	$	0	$	0	$	0	$	354	$	354
1.00% - 1.99%	325		0		340		348		1,013
2.00% - 2.99%	258		136		163		265		822
3.00% - 4.00%	2,414		314		1,140		45		3,913
Greater than 4.00%	4,830		0		0		0		4,830
Total	$	7,827	$	450	$	1,643	$	1,012	$	10,932
U.S. Legacy Products - Annuities(2)
Less than 1.00%	$	422	$	204	$	407	$	0	$	1,033
1.00% - 1.99%	136		387		38		0		561
2.00% - 2.99%	457		9		4		0		470
3.00% - 4.00%	1,842		24		9		0		1,875
Greater than 4.00%	155		0		0		0		155
Total	$	3,012	$	624	$	458	$	0	$	4,094
U.S. Legacy Products - Guaranteed Universal Life(2)
Less than 1.00%	$	0	$	0	$	0	$	0	$	0
1.00% - 1.99%	16		0		1,732		1,254		3,002
2.00% - 2.99%	26		1,429		2,574		167		4,196
3.00% - 4.00%	3,197		1,639		165		0		5,001
Greater than 4.00%	472		0		0		0		472
Total	$	3,711	$	3,068	$	4,471	$	1,421	$	12,671
International Businesses
Less than 1.00%	$	3,932	$	23	$	0	$	0	$	3,955
1.00% - 1.99%	16,450		32		0		0		16,482
2.00% - 2.99%	7,926		280		26		0		8,232
3.00% - 4.00%	8,743		0		0		0		8,743
Greater than 4.00%	16,833		0		0		0		16,833
Total	$	53,884	$	335	$	26	$	0	$	54,245

(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:


	Six Months Ended June 30, 2026
	Individual Life		U.S. Legacy Products		International Businesses
	Variable/ Universal Life		Guaranteed Universal Life				Total
	(in millions)
Balance, beginning of period	$	3,809	$	2,047	$	666		$	6,522
Unearned revenue	302		123		80			505
Amortization expense	(95)		(42)		(18)			(155)

Foreign currency adjustment	0		0		(17)			(17)
Balance, end of period	$	4,016	$	2,128	$	711		6,855
Other								100
Total unearned revenue reserve balance								$	6,955


	Six Months Ended June 30, 2025
	Individual Life(1)		U.S. Legacy Products(1)		International Businesses
	Variable/ Universal Life		Guaranteed Universal Life				Total
	(in millions)
Balance, beginning of period	$	3,389	$	1,856	$	505		$	5,750
Unearned revenue	297		135		98			530
Amortization expense	(88)		(38)		(14)			(140)

Foreign currency adjustment	0		0		30			30
Balance, end of period	$	3,598	$	1,953	$	619		6,170
Other								64
Total unearned revenue reserve balance								$	6,234

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

11. MARKET RISK BENEFITS

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
			U.S. Legacy Products		Total
	Retirement		Annuities
	(in millions)
Balance, BOP	$	290	$	2,794	$	3,084
Effect of cumulative changes in NPR	(29)		506		477
Balance, BOP, before effect of changes in NPR	261		3,300		3,561
Attributed fees collected	53		449		502
Claims paid	(2)		(35)		(37)
Interest accrual	6		75		81
Actual in force different from expected	1		15		16
Effect of changes in interest rates	1		(74)		(73)
Effect of changes in equity markets	11		(598)		(587)
Effect of assumption update and other refinements	29		96		125
Issuances	77		6		83



Other adjustments	2		(1)		1
Balance, EOP, before effect of changes in NPR	439		3,233		3,672
Effect of cumulative changes in NPR	15		(508)		(493)
Balance, EOP	454		2,725		3,179
Less: Reinsured MRBs	0		885		885
Balance, EOP, net of reinsurance	$	454	$	1,840	2,294
Other businesses					7
Total net MRB balance					$	2,301


	Six Months Ended June 30, 2025(1)
			U.S. Legacy Products		Total
	Retirement		Annuities
	(in millions)
Balance, BOP	$	91	$	2,657	$	2,748
Effect of cumulative changes in NPR	(16)		689		673
Balance, BOP, before effect of changes in NPR	75		3,346		3,421
Attributed fees collected	31		500		531
Claims paid	(1)		(40)		(41)
Interest accrual	2		91		93
Actual in force different from expected	6		35		41
Effect of changes in interest rates	(30)		413		383
Effect of changes in equity markets	(12)		(485)		(497)
Effect of assumption update and other refinements	137		126		263
Issuances	46		6		52



Other adjustments	24		0		24
Balance, EOP, before effect of changes in NPR	278		3,992		4,270
Effect of cumulative changes in NPR	(14)		(832)		(846)
Balance, EOP	264		3,160		3,424
Less: Reinsured MRBs	0		777		777
Balance, EOP, net of reinsurance	$	264	$	2,383	2,647
Other businesses					24
Total net MRB balance					$	2,671

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

In both 2026 and 2025, the Company recognized an unfavorable impact to net income attributable to the actuarial assumption update for direct and assumed MRBs, primarily due to updates to policyholder behavior assumptions.

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 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 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.

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 tables present accompanying information to the rollforward tables above.


	June 30, 2026
			U.S. Legacy Products
	Retirement		Annuities
	($ in millions)
Net amount at risk(2)	$	752	$	7,913
Weighted-average attained age of contractholders	73		73


	June 30, 2025(1)
			U.S. Legacy Products
	Retirement		Annuities
	($ in millions)
Net amount at risk(2)	$	401	$	8,736
Weighted-average attained age of contractholders	69		71

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

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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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


	June 30, 2026
			U.S. Legacy Products		Other Businesses		Total
	Retirement		Annuities
	(in millions)


MRB Assets	$	28	$	2,402	$	0	$	2,430



MRB Liabilities	482		4,242		7		4,731

Net Liability	$	454	$	1,840	$	7	$	2,301


	June 30, 2025(1)
			U.S. Legacy Products		Other Businesses		Total
	Retirement		Annuities
	(in millions)


MRB Assets	$	41	$	2,146	$	1	$	2,188



MRB Liabilities	305		4,529		25		4,859

Net Liability	$	264	$	2,383	$	24	$	2,671

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

12. REINSURANCE

The Company regularly enters into third-party reinsurance agreements as either the ceding entity or the assuming entity. The Company also enters into affiliated reinsurance agreements as both the ceding and assuming entity for capital management purposes. As a ceding entity, exposure to the risks reinsured is reduced by transferring certain rights and obligations of the underlying insurance product to a counterparty. Conversely, as an assuming entity, exposure to the risks reinsured is increased by assuming certain rights and obligations of the underlying insurance products from a counterparty.

The Company enters into reinsurance agreements as the ceding entity for a variety of reasons, but primarily to reduce exposure to loss, reduce risk volatility, provide additional capacity for future growth, facilitate the disposition of a block of business, and for capital management purposes. Under ceded reinsurance, the Company remains liable to the underlying policyholder if a third-party reinsurer is unable to meet its obligations. To mitigate this exposure, the Company evaluates the financial condition of reinsurers, monitors the concentration of counterparty risk and maintains collateral, as appropriate.

The Company enters into reinsurance agreements as the assuming entity as part of the normal product offering process (e.g., certain pension risk transfer products in the Retirement business) or in order to facilitate an acquisition of a block of business.

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. The transaction is structured on a coinsurance basis and follows reinsurance accounting.

Effective January 2024, the Company entered into an agreement with Somerset Reinsurance Ltd. (“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. This transaction is structured on a modified coinsurance basis and follows reinsurance accounting. 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

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.

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 certain 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. See Note 20 for additional information regarding the Company’s transactions with Prismic.

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 a portion of the PDI traditional variable annuity contracts with guaranteed living benefits issued by Pruco Life, a wholly-owned subsidiary of Prudential Financial. 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.

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 (collectively, “Empower”), 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.

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.

For the domestic businesses, life and disability reinsurance is accomplished through various types of reinsurance, primarily yearly renewable term, per person excess, excess of loss, and coinsurance. On individual life policies sold since 2000, the Company has reinsured a significant portion of the 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 Company also uses ceded reinsurance on certain annuity contracts to reduce market sensitivity and mitigate mortality and longevity risks.

The international businesses primarily use reinsurance to obtain experience with respect to certain new product offerings, provide additional capacity for growth and, to a lesser extent, 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:

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Direct premiums	$	5,808	$	5,824	$	12,990	$	11,846
Reinsurance assumed	1,773		1,757		3,609		3,351
Reinsurance ceded	(701)		(599)		(1,357)		(1,215)
Premiums	$	6,880	$	6,982	$	15,242	$	13,982

Direct policy charges and fee income	$	1,213	$	1,146	$	2,428	$	2,329
Reinsurance assumed	285		290		573		579
Reinsurance ceded	(251)		(187)		(622)		(502)
Policy charges and fee income	$	1,247	$	1,249	$	2,379	$	2,406

Direct change in value of market risk benefits, net of related hedging gains (losses)	$	(100)	$	(471)	$	(412)	$	(838)
Reinsurance assumed	46		39		29		11
Reinsurance ceded	(17)		6		17		50
Change in value of market risk benefits, net of related hedging gains (losses)	$	(71)	$	(426)	$	(366)	$	(777)

Direct policyholders’ benefits	$	6,826	$	7,034	$	15,324	$	14,294
Reinsurance assumed	2,133		2,074		4,356		4,044
Reinsurance ceded	(1,208)		(927)		(2,396)		(2,017)
Policyholders’ benefits	$	7,751	$	8,181	$	17,284	$	16,321

Direct change in estimates of liability for future policy benefits	$	315	$	(17)	$	326	$	(64)
Reinsurance assumed	61		(10)		71		(10)
Reinsurance ceded	137		(148)		155		(151)
Change in estimates of liability for future policy benefits	$	513	$	(175)	$	552	$	(225)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Reinsurance recoverables and deposit receivables are as follows:


	June 30, 2026		December 31, 2025
	(in millions)
Reinsurance recoverables:
FLIAC	$	1,333	$	1,381
Prismic Re(1)	5,402		5,475
Other	301		171
Individual and group annuities	7,036		7,027
Hartford Life Business(2)	2,054		2,022
Somerset Re(3)	1,675		1,667
Wilton Re	8,179		8,013
Other	9,180		8,887
Life insurance	21,088		20,589
Other reinsurance	414		415
Total reinsurance recoverables	28,538		28,031
Deposit receivables:
Somerset Re(4)	2,524		2,491
Empower	856		2,471
Prismic Re(1)	3,629		3,684
Prismic Re International	6,723		6,422
Resolution Re(5)	1,599		849
Other	349		129
Total deposit receivables	15,680		16,046
Total reinsurance recoverables and deposit receivables(6)	$	44,218	$	44,077

(1)The Company has also recorded funds withheld and other payables related to the reinsurance agreement with Prismic Re of $7,876 million and $7,980 million as of June 30, 2026 and December 31, 2025, respectively.

(2)The Company has also recorded reinsurance payables related to the Hartford Life Business acquisition of $1,371 million and $1,366 million as of June 30, 2026 and December 31, 2025, respectively.

(3)Represents reinsurance recoverables of $8,296 million and $8,192 million as of June 30, 2026 and December 31, 2025, respectively that are netted with reinsurance payables of $6,621 million and $6,525 million as of June 30, 2026 and December 31, 2025, 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.

(4)The Company has also recorded funds withheld and other payables related to the reinsurance agreement with Somerset Re of $2,629 million and $2,602 million as of June 30, 2026 and December 31, 2025, respectively.

(5)The Company has also recorded funds withheld and other payables related to the reinsurance of annuity contracts in the Retirement business with Resolution Re, Ltd. (“Resolution Re”) of $1,572 million and $851 million as of June 30, 2026 and December 31, 2025, respectively.

(6)Net of $14 million of allowance for credit losses as of both June 30, 2026 and December 31, 2025, respectively.

Excluding the reinsurance recoverables associated with the counterparties separately identified within the reinsurance recoverables table above, four major reinsurance companies account for approximately 61% of the Company’s remaining reinsurance recoverables as of June 30, 2026. 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, 2025 for additional details regarding CECL.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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, 2025.

As of June 30, 2026 and December 31, 2025, the Company recognized a policyholder dividend obligation of $1,585 million and $1,635 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 $(1,308) million and $(1,064) million at June 30, 2026 and December 31, 2025, respectively, with a corresponding amount reported in AOCI.

As of June 30, 2026, 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:


	June 30, 2026		December 31, 2025
	(in millions)
Closed Block liabilities
Future policy benefits	$	40,582	$	41,484
Policyholders’ dividends payable	677		669
Policyholders’ dividend obligation	277		571
Policyholders’ account balances	4,212		4,273
Other Closed Block liabilities	2,923		3,030
Total Closed Block liabilities	48,671		50,027
Closed Block assets
Fixed maturities, available-for-sale, at fair value	27,793		28,721
Fixed maturities, trading, at fair value	550		581
Equity securities, at fair value	1,630		1,593
Commercial mortgage and other loans	7,475		7,464
Policy loans	3,157		3,217
Other invested assets	4,621		4,538
Short-term investments	282		255
Total investments	45,508		46,369
Cash and cash equivalents	286		726
Accrued investment income	386		388
Other Closed Block assets	264		279
Total Closed Block assets	46,444		47,762
Excess of reported Closed Block liabilities over Closed Block assets	2,227		2,265
Portion of above representing accumulated other comprehensive income (loss):
Net unrealized investment gains (losses)	(1,475)		(1,230)
Allocated to policyholder dividend obligation	1,308		1,064
Future earnings to be recognized from Closed Block assets and Closed Block liabilities	$	2,060	$	2,099

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Information regarding the policyholder dividend obligation is as follows:


	Six Months Ended June 30, 2026
	(in millions)
Balance, December 31, 2025	$	571

Impact from earnings allocable to policyholder dividend obligation	(50)
Change in net unrealized investment gains (losses) allocated to policyholder dividend obligation	(244)
Balance, June 30, 2026	$	277

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Revenues
Premiums	$	426	$	444	$	829	$	862
Net investment income	515		511		1,046		1,003
Realized investment gains (losses), net	(37)		(199)		(65)		(255)
Other income (loss)	230		190		204		156
Total Closed Block revenues	1,134		946		2,014		1,766
Benefits and Expenses
Policyholders’ benefits	587		616		1,159		1,217
Interest credited to policyholders’ account balances	28		28		55		56
Dividends to policyholders	464		249		679		377
General and administrative expenses	60		64		121		142
Total Closed Block benefits and expenses	1,139		957		2,014		1,792
Closed Block revenues, net of Closed Block benefits and expenses, before income taxes	(5)		(11)		0		(26)
Income tax expense (benefit)	(24)		(31)		(39)		(66)
Closed Block revenues, net of Closed Block benefits and expenses and income taxes	$	19	$	20	$	39	$	40

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, where appropriate, reduced the deferred tax asset to that which is, more likely than not, expected to be realized. The Company has determined based upon the weight of available evidence that no valuation allowance is necessary related to unrealized investment losses. 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. 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 Company’s income tax provision, on a consolidated basis, amounted to an income tax expense of $347 million, or 18.1% of income (loss) before income taxes and equity in earnings of joint ventures and other operating entities, in the first six months of 2026, compared to an income tax expense of $402 million, or 24.2%, in the first six months of 2025. The Company’s

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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.

Tax Law Change. In December 2023, the Government of Bermuda enacted a corporate income tax, which imposes a 15% income tax, less applicable foreign tax credits, on companies that are organized or operate within Bermuda that are within the scope of the Organization of Economic Cooperation and Development (“OECD”) Pillar Two rules. The Bermuda corporate income tax is effective for tax years beginning on January 1, 2025. The Company intends to make an election to exclude the income of a Bermuda entity that is a controlled foreign corporation within the meaning of the U.S. tax rules from the Bermuda corporate income tax for fiscal years ending prior to January 1, 2027. Certain changes enacted in 2025 to the Bermuda corporate income tax provide for both foreign tax credits for controlled foreign company regime taxes imposed in respect of the income of Bermuda entities which may be claimed against Bermuda income tax liability as well as certain other tax credits. There is no impact on full-year projected effective tax rate in 2026 and 2025.

H.R.1, also referred to as the “One Big Beautiful Bill Act” (the “Tax Act of 2025”), was enacted into law on July 4, 2025. The legislation introduces changes to the U.S. international tax regime, including a reduction in the Section 250 deduction for Net Controlled Foreign Corporation Tested Income (“NCTI” previously referred to as “GILTI”) from 50% to 40% beginning in 2026, resulting in an increase to the corporate tax rate on NCTI from 10.5% to 12.6%. The legislation also reduces the foreign tax credit haircut related to NCTI from 20% to 10% and makes changes to the related expense allocation.

In March 2025, Japan enacted a 4% Special Defense Corporation Tax, effective for tax years beginning on or after April 1, 2026, that raises the corporate income tax rate for the Company’s Japan insurance companies from 28.00% to 28.93%. As a result, a tax expense of approximately $36 million was reflected in the financial statements for the first quarter of 2025.

NCTI. The NCTI provision applies a minimum U.S. tax to earnings of consolidated foreign subsidiaries by imposing the U.S. tax rate to 50% of earnings in 2025 and of earnings beginning in 2026 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 NCTI provision would limit the amount of deductions or credits permissible against NCTI.

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 NCTI amounts when the taxes paid by a foreign affiliate exceed 18.9% (90% of U.S. statutory rate of 21%) of the NCTI 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 NCTI. Also, the Company’s Japan affiliates have a different tax year than the U.S. calendar tax year used to determine NCTI. 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 2025 tax year and anticipates to not make the high-tax exception election for the 2026 tax year.

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:


	June 30, 2026			December 31, 2025
	($ in millions)
Commercial paper:
Prudential Financial	$	25		$	25
Prudential Funding, LLC	850			849
Subtotal commercial paper	875			874

Current portion of long-term debt:
Senior notes	48			536

Mortgage debt	32			33

Subtotal current portion of long-term debt	80			569

Subtotal	955			1,443
Less: assets under set-off arrangements	0			0
Total short-term debt(1)	$	955		$	1,443
Supplemental short-term debt information:
Portion of commercial paper borrowings due overnight	$	466		$	175
Daily average commercial paper outstanding for the quarter ended	$	2,234		$	2,389
Weighted average maturity of outstanding commercial paper, in days	5			11
Weighted average interest rate on outstanding commercial paper	3.64		%	3.72		%

(1)Includes Prudential Financial debt of $73 million and $561 million at June 30, 2026 and December 31, 2025, 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 Corporation (“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 June 30, 2026, 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, 2025.

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:


	June 30, 2026		December 31, 2025
	(in millions)
Fixed-rate obligations:

Surplus notes subject to set-off arrangements(1)(2)	$	16,372	$	15,744
Senior notes	10,929		10,823
Mortgage debt(3)	159		134
Floating-rate obligations:
Line of credit	200		255


Mortgage debt(3)	36		49
Junior subordinated notes(4)	8,339		7,595
Subtotal	36,035		34,600
Less: assets under set-off arrangements(1)	16,372		15,744
Total long-term debt(5)	$	19,663	$	18,856

(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 $7.8 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 $195 million and $184 million of debt denominated in foreign currency at June 30, 2026 and December 31, 2025, respectively.

(4)Includes Prudential Financial debt of $8,301 million and $7,555 million at June 30, 2026, and December 31, 2025, respectively. Also includes subsidiary debt of $38 million and $40 million denominated in foreign currency at June 30, 2026, and December 31, 2025, respectively.

(5)Includes Prudential Financial debt of $19,230 million and $18,378 million at June 30, 2026 and December 31, 2025, respectively.

At June 30, 2026 and December 31, 2025, the Company was in compliance with all debt covenants related to the borrowings in the table above.

In December 2025, the Company entered into an agreement with an external counterparty that allows for the issuance by PICA of up to $750 million in principal amount of surplus notes in return for a corresponding amount of credit-linked notes issued by a special-purpose wholly-owned subsidiary of the Company. As of June 30, 2026, $212 million in principal amount of these surplus notes and credit-linked notes were outstanding. The surplus notes and credit-linked notes eliminate upon consolidation and are not reflected in the Company’s financial statements nor in the table above.

PICA holds these credit-linked notes as assets supporting statutory requirements and can redeem the principal amount of these outstanding credit-linked notes for cash upon the occurrence of specified liquidity stress events affecting PICA. Under the agreement, the external counterparty has agreed to fund any such payments under these credit-linked notes in return for the receipt of fees. To date, no such payments under these credit-linked notes have been required.

Senior Notes

In August 2024, the Company recommenced sales of InterNotes® Retail Notes under its shelf registration statement. These notes support the Company’s Retirement business through the purchase of funding agreements on which the segment will earn investment spread. As of June 30, 2026, the outstanding balance of the InterNotes® Retail Notes was $839 million of which $619 million was utilized for Retirement, as described above and $220 million were used for general corporate purposes.

Junior Subordinated Notes

In June 2026, the Company issued $750 million in aggregate principal amount of 6.25% junior subordinated notes due June 2056.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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”).

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 June 30,
	Pension Benefits				Other Postretirement Benefits
	2026		2025		2026		2025
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	49	$	47	$	2	$	2
Interest cost	141		141		13		14
Expected return on plan assets	(245)		(249)		(18)		(18)
Amortization of prior service cost	0		0		(17)		(17)
Amortization of actuarial (gain) loss, net	33		21		1		2
Settlements	(1)		0		0		0


Net periodic (benefit) cost	$	(23)	$	(40)	$	(19)	$	(17)

	Six Months Ended June 30,
	Pension Benefits				Other Postretirement Benefits
	2026		2025		2026		2025
	(in millions)
Components of net periodic (benefit) cost:
Service cost	$	98	$	94	$	4	$	3
Interest cost	281		282		26		28
Expected return on plan assets	(490)		(498)		(37)		(36)
Amortization of prior service cost	0		0		(34)		(34)
Amortization of actuarial (gain) loss, net	66		42		3		5
Settlements	(1)		(1)		0		0


Net periodic (benefit) cost	$	(46)	$	(81)	$	(38)	$	(34)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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, 2025	666.3	318.3	348.0
Common Stock issued	0.0	0.0	0.0
Common Stock acquired	0.0	4.9	(4.9)
Stock-based compensation programs(1)	0.0	(2.1)	2.1
Balance, June 30, 2026	666.3	321.1	345.2

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

In December 2025, 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, 2026 through December 31, 2026. As of June 30, 2026, 4.9 million shares of the Company’s Common Stock were repurchased under this authorization at a total cost of $500 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.

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Dividends declared per share of Common Stock	$	1.40	$	1.35	$	2.80	$	2.70

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 six months ended June 30, 2026 and 2025, 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, 2025	$	(3,183)	$	(18,789)	$	21,039	$	378	$	(2,522)	$	(3,077)
Change in OCI before reclassifications	(157)		(5,312)		3,545		15		0		(1,909)
Amounts reclassified from AOCI	(12)		1,030		0		0		35		1,053
Income tax benefit (expense)	(50)		903		(969)		(3)		(8)		(127)
Balance, June 30, 2026	$	(3,402)	$	(22,168)	$	23,615	$	390	$	(2,495)	$	(4,060)

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	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	806		(2,132)		3,983		172		(5)		2,824
Amounts reclassified from AOCI	(20)		511		0		0		13		504
Income tax benefit (expense)	80		604		(1,187)		(36)		1		(538)
Balance, June 30, 2025	$	(2,749)	$	(19,704)	$	20,102	$	668	$	(2,238)	$	(3,921)

(1)Includes cash flow hedges of $141 million and $(231) million as of June 30, 2026 and December 31, 2025, respectively, and $(597) million and $1,780 million as of June 30, 2025 and December 31, 2024, respectively, and fair value hedges of $(136) million and $(123) million as of June 30, 2026 and December 31, 2025, respectively, and $(168) million and $(64) million as of June 30, 2025 and December 31, 2024, respectively.

Reclassifications out of Accumulated Other Comprehensive Income (Loss)


	Three Months Ended June 30,				Six Months Ended June 30,				Affected line item in Unaudited Interim Consolidated Statements of Operations
	2026		2025		2026		2025
	(in millions)
Amounts reclassified from AOCI(1)(2):
Foreign currency translation adjustment:
Foreign currency translation adjustments	$	2	$	8	$	12	$	20	Realized investment gains (losses), net
Foreign currency translation adjustments	0		0		0		0		Other income (loss)
Total foreign currency translation adjustment	2		8		12		20
Net unrealized investment gains (losses):
Cash flow hedges—Interest rate	(2)		(4)		(4)		(7)		(3)
Cash flow hedges—Currency	(3)		(4)		(6)		(3)		(3)
Cash flow hedges—Currency/Interest rate	58		(265)		208		(294)		(3)
Fair value hedges—Currency	(4)		(3)		(8)		(7)		(3)
Net unrealized investment gains (losses) on available-for-sale securities	(476)		(137)		(1,220)		(200)		Realized investment gains (losses), net
Total net unrealized investment gains (losses)	(427)		(413)		(1,030)		(511)		(4)
Amortization of defined benefit items:
Prior service cost	17		17		34		34		(5)
Actuarial gain (loss)	(34)		(23)		(69)		(47)		(5)
Total amortization of defined benefit items	(17)		(6)		(35)		(13)
Total reclassifications for the period	$	(442)	$	(411)	$	(1,053)	$	(504)

(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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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:


	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, 2025	$	(4)	$	(26,641)	$	(168)	$	623	$	1,064	$	6,337	$	(18,789)
Net investment gains (losses) on investments arising during the period	21		(5,531)								1,162		(4,348)
Reclassification adjustment for (gains) losses included in net income	(5)		1,035								(217)		813
Reclassification due to allowance for credit losses recorded during the period	2		(2)								0		0
Impact of net unrealized investment (gains) losses					64		(110)		244		(42)		156
Balance, June 30, 2026	$	14	$	(31,139)	$	(104)	$	513	$	1,308	$	7,240	$	(22,168)

(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 June 30,
	2026					2025
	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)	$	1,036				$	566
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests	51					33
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	12					6
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	973	346.4	$	2.81	$	527	353.1	$	1.49
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	12				$	6
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	12					6
Stock options			0.0					0.1
Deferred and long-term compensation programs			1.7					1.7
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	973	348.1	$	2.80	$	527	354.9	$	1.48


	Six Months Ended June 30,
	2026					2025
	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)	$	1,642				$	1,308
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests	60					68
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards	21					16
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	1,561	347.0	$	4.50	$	1,224	353.7	$	3.46
Effect of dilutive securities and compensation programs
Add: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Basic	$	21				$	16
Less: Dividends and undistributed earnings allocated to participating unvested share-based payment awards—Diluted	21					16
Stock options			0.1					0.1
Deferred and long-term compensation programs			1.7					1.7
Diluted earnings per share
Net income (loss) attributable to Prudential Financial available to holders of Common Stock	$	1,561	348.8	$	4.48	$	1,224	355.5	$	3.44

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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 June 30, 2026 and 2025, as applicable, were based on 4.1 million and 3.9 million of such awards, respectively, and for the six months ended June 30, 2026 and 2025, as applicable, were based on 4.1 million and 3.9 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:


	Three Months Ended June 30,
	2026			2025
	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	0.2	$	108.67	0.2	$	108.68
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	0.2			0.2


	Six Months Ended June 30,
	2026			2025
	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	0.2	$	108.68	0.1	$	108.68
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	0.2			0.1

19. SEGMENT INFORMATION

Segments

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

“U.S. Legacy Products” segment: (i) traditional variable annuities with guaranteed living benefit riders and certain other annuity products, previously included in the former Individual Retirement Strategies segment, and (ii) guaranteed universal life policies, previously included in the Individual Life segment, have been combined into a new reportable segment named “U.S. Legacy Products.” This segment represents run-off blocks of business consisting of products that are no longer being sold in U.S. markets and will be managed with a focus on reducing risk and optimizing value.
“Retirement” segment: The blocks of business in the former Individual Retirement Strategies segment that were not moved into the U.S. Legacy Products segment, discussed above, consisting primarily of registered index-linked annuity and fixed annuity products, and the products previously included in the former Institutional Retirement Strategies segment have been combined into a new reportable segment named “Retirement.” This combined segment better represents the Company’s strategic management, growth trajectory, and resource allocation policies.
“Individual Life” segment: There were no other impacts to this segment other than the transfer of the guaranteed universal life policies, discussed above. The remaining blocks of business contained within this segment primarily consist of term, indexed universal life, and variable universal life products.

These segment reporting changes are being applied retrospectively and do not have an impact on any of the Company’s previously issued Consolidated Financial Statements.

The Company’s principal operations now consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of Retirement, Group Insurance, Individual Life and U.S. Legacy Products), 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, 2025.

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, 2025. 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. 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.

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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:

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.

In addition, under U.S. GAAP, policyholder liabilities associated with fixed and variable indexed annuity products included in the Company’s Retirement segment are recorded in “Policyholders’ account balances,” and include both the contract value that has accrued to the benefit of the policyholder and the fair value of embedded derivative instruments associated with the index-linked features for these products. The change in the liability for these products is measured utilizing a valuation methodology required under U.S GAAP and includes the fair value of all index credits for the current term and future projected renewals of the policy. For the purpose of measuring segment performance, however, adjusted operating income reflects only the change in the liability associated with the current term elected by the policyholder, which is the component of the liability the Company hedges based on current contractual index-crediting terms, and which is offset by the change in the value of the corresponding hedge assets. Adjusted operating income excludes the change in the liability associated with all future projected renewals the Company does not hedge, consistent with the Company and policyholder optionality that exists at renewal. This adjustment is included in “Realized investment gains (losses), net, and related charges and adjustments,” as listed above.

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, 2025.

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.

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2026
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Retirement (1)		Group Insurance		Individual Life(1)		U.S. Legacy Products (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	$	1,952	$	1,360	$	232	$	31	$	2,755	$	(5)	$	6,325	$	555	$	6,880
Policy charges and fee income	0		33		178		460		370		114		(17)		1,138		109		1,247
Net investment income	73		2,096		146		377		472		1,643		345		5,152		631		5,783
Asset management fees, commissions and other income	1,034		92		24		92		297		179		(178)		1,540		211		1,751
Total revenues	1,107		4,173		1,708		1,161		1,170		4,691		145		14,155		1,506		15,661
Benefits and expenses:
Policyholders' benefits	0		2,642		1,208		448		322		2,362		(4)		6,978
Interest credited to policyholders' account balances	0		690		32		163		68		425		2		1,380
Interest expense	24		7		4		104		179		6		217		541
Deferral of acquisition costs	0		(177)		(25)		(222)		(4)		(240)		33		(635)
Amortization of DAC	0		89		2		111		53		179		(16)		418
Operating expenses(4)	469		145		199		110		88		535		188		1,734
Variable expenses(4)	320		232		136		269		213		376		4		1,550
Other benefits and expenses(5)	0		153		(3)		2		17		193		0		362
Total benefits and expenses	813		3,781		1,553		985		936		3,836		424		12,328
Total pre-tax income	$	294	$	392	$	155	$	176	$	234	$	855	$	(279)	$	1,827	$	(649)	$	1,178

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(655)
Change in value of market risk benefits, net of related hedging gains (losses)															(71)
Market experience updates															(20)
Divested and Run-off Businesses:
Closed Block division															(12)
Other Divested and Run-off Businesses															135
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests and redeemable noncontrolling interests															(25)
Other adjustments															(1)
Total reconciling items															(649)
Total GAAP pre-tax income															$	1,178

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Three Months Ended June 30, 2025
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Retirement (1)		Group Insurance		Individual Life(1)(2)		U.S. Legacy Products (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	$	2,127	$	1,349	$	232	$	16	$	2,709	$	(7)	$	6,426	$	556	$	6,982
Policy charges and fee income	0		25		184		354		430		92		(15)		1,070		179		1,249
Net investment income	59		1,819		133		348		460		1,451		330		4,600		626		5,226
Asset management fees, commissions and other income	984		105		21		80		325		147		(252)		1,410		(1,141)		269
Total revenues	1,043		4,076		1,687		1,014		1,231		4,399		56		13,506		220		13,726
Benefits and expenses:
Policyholders' benefits	0		2,809		1,230		418		284		2,445		(1)		7,185
Interest credited to policyholders' account balances	0		512		32		143		67		369		12		1,135
Interest expense	24		9		5		102		170		1		215		526
Deferral of acquisition costs	0		(206)		(4)		(209)		(12)		(297)		39		(689)
Amortization of DAC	0		68		4		104		57		174		(15)		392
Operating expenses(4)	477		138		186		156		103		467		107		1,634
Variable expenses(4)	313		226		109		247		228		446		(21)		1,548
Other benefits and expenses(5)	0		123		0		(29)		(17)		33		0		110
Total benefits and expenses	814		3,679		1,562		932		880		3,638		336		11,841
Total pre-tax income	$	229	$	397	$	125	$	82	$	351	$	761	$	(280)	$	1,665	$	(925)	$	740

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(516)
Change in value of market risk benefits, net of related hedging gains (losses)															(426)
Market experience updates															42
Divested and Run-off Businesses:
Closed Block division															(18)
Other Divested and Run-off Businesses															12
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests and redeemable noncontrolling interests															(18)
Other adjustments															(1)
Total reconciling items															(925)
Total GAAP pre-tax income															$	740

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2026
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Retirement (1)		Group Insurance		Individual Life(1)		U.S. Legacy Products (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	$	5,197	$	2,750	$	466	$	56	$	5,704	$	(10)	$	14,163	$	1,079	$	15,242
Policy charges and fee income	0		64		364		891		728		231		(32)		2,246		133		2,379
Net investment income	107		4,181		284		745		947		3,250		646		10,160		1,288		11,448
Asset management fees, commissions and other income	2,040		188		44		180		577		293		(502)		2,820		(702)		2,118
Total revenues	2,147		9,630		3,442		2,282		2,308		9,478		102		29,389		1,798		31,187
Benefits and expenses:
Policyholders’ benefits	0		6,577		2,526		901		656		5,022		(7)		15,675
Interest credited to policyholders’ account balances	0		1,338		65		310		126		839		6		2,684
Interest expense	49		18		9		209		353		9		433		1,080
Deferral of acquisition costs	0		(351)		(25)		(438)		(7)		(503)		65		(1,259)
Amortization of DAC	0		168		4		219		105		352		(33)		815
Operating expenses(4)	994		290		405		225		177		1,098		274		3,463
Variable expenses(4)	620		448		268		538		436		776		(27)		3,059
Other benefits and expenses(5)	0		178		(3)		3		21		220		0		419
Total benefits and expenses	1,663		8,666		3,249		1,967		1,867		7,813		711		25,936
Total pre-tax income	$	484	$	964	$	193	$	315	$	441	$	1,665	$	(609)	$	3,453	$	(1,542)	$	1,911

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(1,276)
Change in value of market risk benefits, net of related hedging gains (losses)															(366)
Market experience updates															(5)
Divested and Run-off Businesses:
Closed Block division															(23)
Other Divested and Run-off Businesses															199
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests and redeemable noncontrolling interests															(67)
Other adjustments															(4)
Total reconciling items															(1,542)
Total GAAP pre-tax income(6)															$	1,911

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


	Six Months Ended June 30, 2025
Select revenues and significant benefits and expenses, on an adjusted operating income basis, by segment	PGIM		Retirement (1)(2)		Group Insurance		Individual Life(1)(2)		U.S. Legacy Products (1)(2)		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	$	3,873	$	2,745	$	469	$	35	$	5,766	$	(16)	$	12,872	$	1,110	$	13,982
Policy charges and fee income	0		55		381		784		808		180		(30)		2,178		228		2,406
Net investment income	79		3,577		267		708		908		2,920		660		9,119		1,237		10,356
Asset management fees, commissions and other income	1,949		236		42		164		662		271		(575)		2,749		(2,297)		452
Total revenues	2,028		7,741		3,435		2,125		2,413		9,137		39		26,918		278		27,196
Benefits and expenses:
Policyholders’ benefits	0		5,249		2,526		931		589		5,226		(9)		14,512
Interest credited to policyholders’ account balances	0		986		67		289		136		716		24		2,218
Interest expense	45		24		10		213		334		0		422		1,048
Deferral of acquisition costs	0		(414)		(4)		(399)		(25)		(603)		72		(1,373)
Amortization of DAC	0		132		6		210		112		339		(31)		768
Operating expenses(4)	981		275		380		265		192		903		262		3,258
Variable expenses(4)	617		468		236		495		470		909		(6)		3,189
Other benefits and expenses(5)	0		98		0		(13)		(10)		38		0		113
Total benefits and expenses	1,643		6,818		3,221		1,991		1,798		7,528		734		23,733
Total pre-tax income	$	385	$	923	$	214	$	134	$	615	$	1,609	$	(695)	$	3,185	$	(1,525)	$	1,660

Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments															(762)
Change in value of market risk benefits, net of related hedging gains (losses)															(777)
Market experience updates															81
Divested and Run-off Businesses:
Closed Block division															(40)
Other Divested and Run-off Businesses															(39)
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests and redeemable noncontrolling interests															(15)
Other adjustments															27
Total reconciling items															(1,525)
Total GAAP pre-tax income(6)															$	1,660

(1)The Retirement, Individual Life and U.S. Legacy Products 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)Reflects the segment reporting changes effective in the first quarter of 2026, as discussed above. 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, Individual Life, U.S. Legacy Products 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.

(6)Reflects “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities.”

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)



	June 30, 2026		December 31, 2025
	(in millions)
Assets by segment:
PGIM	$	39,708	$	39,103
U.S. Businesses:
Retirement(1)	227,007		213,222
Group Insurance	42,226		41,292
Individual Life(1)	92,174		87,898
U.S. Legacy Products(1)	135,263		136,383
Total U.S. Businesses(1)	496,670		478,795
International Businesses	185,969		187,770
Corporate and Other(1)	14,437		19,977
Closed Block division	46,770		48,095
Total Assets per Unaudited Interim Consolidated Financial Statements	$	783,554	$	773,740

(1)Reflects the segment reporting changes effective in the first quarter of 2026, as discussed above. Prior period amounts have been updated to conform to current period presentation.

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
PGIM segment intersegment revenues	$	240	$	222	$	476	$	446

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 June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Asset-based management fees	$	879	$	841	$	1,739	$	1,695
Performance-based incentive fees	24		25		37		32
Other fees	116		116		239		239
Total asset management and service fees	$	1,019	$	982	$	2,015	$	1,966

PRUDENTIAL FINANCIAL, INC.

Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

20. RELATED PARTY TRANSACTIONS

In September 2023, the Company invested approximately $200 million 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 Prudential Financial. 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 $103 million in Prismic. PGIM also provides investment management services on a large portion of Prismic Re International’s assets.

In October 2025, the Company entered into an agreement with Prismic Re, to reinsure certain fixed annuity new business contracts issued by Pruco Life, a wholly-owned subsidiary of Prudential Financial, on or after October 1, 2025.

In April 2026, the Company entered into an agreement with Prismic Re International, to reinsure certain USD-denominated and Multi-Currency Japanese whole life policies originated by the Company’s Japanese affiliates, on or after April 1, 2026.

As of June 30, 2026, the Company’s ownership in Prismic is approximately 20% and the carrying value of the Company’s investment is approximately $200 million. 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 and its subsidiaries.

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


	June 30, 2026		December 31, 2025
	(in millions)
Reinsurance recoverables and deposit receivables	$	15,754	$	15,581
Other assets	$	160	$	162
Reinsurance and funds withheld payables (includes $189 and $194 of embedded derivatives at fair value at June 30, 2026 and December 31, 2025, respectively)	$	7,876	$	7,980
Accumulated other comprehensive income (loss)	$	(196)	$	(128)

The Company has guaranteed the obligations of Prismic and its subsidiaries on letters of credit they may obtain from third-party financial institutions to support their contractual obligations for a total amount up to $1.9 billion and $2.0 billion as of June 30, 2026 and December 31, 2025, respectively. Additionally, the Company has 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. As of June 30, 2026, the Company has an unfunded capital commitment of approximately $300 million, intended to fund future transactions executed by Prismic, that is expected to be fully funded by the end of the second quarter of 2028. This commitment is part of a broader capital commitment, involving third-party investors in Prismic, and will allow the Company to retain its approximately 20% equity ownership in Prismic. 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 and its subsidiaries impacted the Company’s results of operations and cash flows for the periods indicated as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in millions)
Premiums	$	7	$	(13)	$	5	$	(16)
Asset management and service fees	17		15		34		28
Other income (loss)	100		99		196		160
Realized investment gains(losses), net	(146)		(33)		(132)		(270)
Policyholders’ benefits	(70)		(70)		(140)		(141)
Change in estimates of liability for future policy benefits	8		(14)		5		(17)
Amortization of deferred policy acquisition costs	(5)		(3)		(8)		(4)
General and administrative expenses	8		14		15		17
Income (loss) from related parties, before income taxes	37		141		231		47
Other comprehensive income (loss), before tax	56		(24)		(68)		(33)
Total comprehensive income (loss), before tax	$	93	$	117	$	163	$	14


	Six Months Ended June 30,
	2026		2025
	(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	$	132	$	270
Change in:
Deferred policy acquisition costs	$	(8)	$	(4)
Reinsurance-related balances	$	(480)	$	(404)
Other, net	$	(63)	$	21
CASH FLOWS FROM INVESTING ACTIVITIES
Other, net	$	17	$	(64)
CASH FLOWS FROM FINANCING ACTIVITIES
Other, net	$	20	$	167

See the Unaudited Interim Consolidated Statements of Cash Flows for information regarding significant non-cash transactions with Prismic and its subsidiaries.

21. COMMITMENTS AND CONTINGENT LIABILITIES

Commitments and Guarantees

Commercial Mortgage Loan Commitments


	June 30, 2026		December 31, 2025
	(in millions)
Total outstanding mortgage loan commitments	$	2,891	$	1,851
Portion of commitment where prearrangement to sell to investor exists	$	849	$	352

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 $6 million and $5 million as of June 30, 2026 and December 31, 2025, respectively. The change in allowance was $1 million for both the three and six months ended June 30, 2026 and $2 million for both the three and six months ended June 30, 2025.

Commitments to Purchase Investments (excluding Commercial Mortgage Loans)


	June 30, 2026		December 31, 2025
	(in millions)
Expected to be funded from the general account and other operations outside the separate accounts	$	14,811	$	13,205
Expected to be funded from separate accounts	$	622	$	339

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 or six months ended June 30, 2026 or 2025. Additionally, the above amount includes an unfunded commitment of $300 million to Prismic Re, intended to fund future transactions executed by Prismic, that is required to be fully funded by the end of the second quarter of 2027. See Note 20 for additional information regarding the related party relationship between the Company and Prismic Re.

Indemnification of Securities Lending and Securities Repurchase Transactions


	June 30, 2026		December 31, 2025
	(in millions)
Indemnification provided to certain clients for securities lending and securities repurchase transactions(1)	$	7,609	$	4,459
Fair value of related collateral associated with above indemnifications(1)	$	7,778	$	4,558
Accrued liability associated with guarantee	$	0	$	0

(1)Includes $0 million related to securities repurchase transactions as of June 30, 2026 and December 31, 2025.

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


	June 30, 2026		December 31, 2025
	(in millions)
Guaranteed value of third-parties’ assets	$	75,552	$	75,883
Fair value of collateral supporting these assets	$	72,661	$	73,511
Asset (liability) associated with guarantee, carried at fair value	$	0	$	0

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

Indemnification of Serviced Mortgage Loans


	June 30, 2026		December 31, 2025
	(in millions)
Maximum exposure under indemnification agreements for mortgage loans serviced by the Company	$	3,885	$	3,717
First-loss exposure portion of above	$	1,115	$	1,068
Accrued liability associated with guarantees(1)	$	25	$	24

(1)The accrued liability associated with guarantees includes an allowance for credit losses of $10 million and $11 million as of June 30, 2026 and December 31, 2025, respectively. The change in allowance was $1 million and $0 million for the three months ended June 30, 2026 and 2025, respectively, and $1 million and a reduction of $1 million for the six months ended June 30, 2026 and 2025, 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 $29,051 million and $28,275 million of mortgages subject to these loss-sharing arrangements as of June 30, 2026 and December 31, 2025, respectively, all of which are collateralized by first priority liens on the underlying multi-family residential properties. As of June 30, 2026, these mortgages had a weighted-average debt service coverage ratio of 1.91 times and a weighted-average loan-to-value ratio of 64%. As of December 31, 2025, these mortgages had a weighted-average debt service coverage ratio of 1.93 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 six months ended June 30, 2026 or 2025.

Other Guarantees


	June 30, 2026		December 31, 2025
	(in millions)
Other guarantees where amount can be determined	$	289	$	290
Accrued liability for other guarantees and indemnifications	$	30	$	31

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 $1.4 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 to support collateral requirements under certain reinsurance arrangements. As of June 30, 2026, no letters of credit have been issued, and the likelihood of them being drawn upon 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 June 30, 2026, 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, 2025, 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 November 2025, Defendants filed an answer to the Amended Complaint. In July 2026, Defendants filed a motion for summary judgment.

Other Matters

Cho v. PICA, et al.

This matter is now closed.

Optimum Communications, Inc., et al. v. Apollo Capital Management, L.P., et al.

In February 2026, plaintiff filed an amended complaint adding a claim for tortious interference with contract against all defendants. In March 2026, defendants filed a motion to dismiss the amended complaint.

Regulatory

Prudential of Japan Matter

In April 2026, the Company voluntarily extended the new sales suspension for an additional 180 days through November 5, 2026. The Japan Financial Services Agency (“FSA”) is conducting onsite inspections of Prudential of Japan and Prudential Holdings of Japan. The Company is continuing to engage with the FSA and is reporting progress to the FSA on an ongoing basis.

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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