2025 Annual Report Annual Report

Annual Report

Dear Fellow Shareholders,

2025 marked the beginning of a pivotal new chapter for Prudential. As we celebrated our 150th anniversary, a milestone that reflects our commitment to improving the financial lives of people around the world, we also

laid the groundwork to help us lead and grow in a rapidly changing environment.

The actions we took were guided by the three initial priorities I set in my first year as Chief Executive Officer: evolving and delivering on our strategy, improving our execution,

and fostering a high-performance culture. I'm encouraged

by the progress we have made in each area and the momentum beginning to generate across our businesses.

Evolving our strategy

We conducted a strategic review to ensure we're executing effectively today while positioning the company for tomorrow.

As part of this work, we began prioritizing markets and geographies where we're positioned to win and stepped back where potential was more limited, as seen with our decision to exit our PGIM Taiwan business. We will continue to assess our global footprint to ensure resources are deployed where our scale and capabilities create the greatest long-term value.

With this foundation in place, we are concentrating on the areas where our strengths enable us to lead: retirement and asset management. These businesses are critical to Prudential's future, supported by a simplified operating model, faster decision-making, and a performance-driven culture.

Andrew F. Sullivan

Executing with discipline

Greater accountability and consistency strengthened our competitiveness, reinforced our expense discipline,

and enhanced how we serve our customers and shareholders.

PGIM's transformation is a clear example. By unifying our public and private fixed income capabilities and integrating our asset management operations into a single platform, we reduced costs, improved the client experience, and created a $1 trillion global credit platform that better meets evolving client needs. These actions are setting the stage for margin expansion

and increased value creation.

Our evolving retirement product suite and global distribution network equip us to meet rising demand for lifetime income. In the U.S., our Retirement

Strategies business generated $40 billion in sales for the year, and in Japan, strong demand for retirement and savings-oriented solutions accounted for a majority of our sales in that country.

Fueling growth through a high-performance culture

Our review also underscored the need to evolve our operating model for Prudential to become a higher-growth,

more highly valued company. To reinforce accountability across the organization,

we updated our performance rating system for senior leaders to emphasize business and leadership outcomes, reinforcing our focus on results and supporting long-term shareholder value.

We also refined our leadership model to accelerate decision-making, bringing

me closer to the businesses and ensuring leaders have the mandate to drive our strategy forward.

Grounded in our financial strength Prudential's financial strength provides us with the flexibility to navigate a dynamic macroeconomic environment, invest confidently for growth, and fulfill our commitments to customers and shareholders. Our balance sheet strength, ample liquidity, and regulatory capital ratios in excess of our targets also continue to support our AA financial ratings.

We ended the year with $3.8 billion in cash and liquid assets, well above our $3 billion minimum, along with

substantial off-balance sheet resources. We returned nearly $3 billion to shareholders through dividends and share buybacks in 2025. Additionally, our Board

authorized up to $1 billion in buybacks for 2026, along with a 4% increase to the first quarter dividend, marking our 18th consecutive annual increase.

Strengthening communities and forging paths to financial security Prudential is a purpose-driven company, grounded in making lives better by solving the financial challenges of our changing world. That purpose also extends to the communities where we live and work, including our hometown of Newark, New Jersey.

In 2025, we provided more than

$41 million in grants and over

$20 million in corporate contributions to nonprofit organizations around the world, developing innovative solutions that empower people to secure and grow

their financial futures. Through our nearly

$1 billion impact-investing portfolio, we also supported efforts to expand economic opportunity, strengthen communities, and build long-term resilience.

Looking forward with clarity and confidence

In 2025, we took meaningful steps

to advance a broader reimagining of the company that positions us to lead and win in the markets where we choose to

compete. While we are still early on this journey, the momentum we've built gives us confidence in the road ahead.

Moving forward, we will execute with even greater speed and discipline to deliver the value our customers and shareholders expect and deserve from Prudential.

I'll close by recognizing our employees around the world for their dedication and commitment. Their work drives our progress, and, together, we will shape Prudential's future through the value we deliver to the people and communities who depend on us.

Andrew F. Sullivan

Chairman and Chief Executive Officer, Prudential Financial, Inc.

EXECUTIVE OFFICERS

Andrew F. Sullivan Chairman and Chief Executive Officer

Scott E. Case

Executive Vice President and Chief Technology and Process Officer

Jacques Chappuis Executive Vice President and Head of Global Asset Management

Yanela C. Frias

Executive Vice President and Chief Financial Officer

Ann M. Kappler

Executive Vice President, General Counsel and Head of Corporate Affairs

George P. Waldeck

Executive Vice President

and Head of U.S. Businesses

Vicki Walia

Executive Vice President and Chief People and Experience Officer

BOARD OF DIRECTORS

Gilbert F. Casellas

Former Chairman, OMNITRU

Carmine Di Sibio

Former Global Chairman and Chief Executive Officer, EY

Martina T. Hund-Mejean Former Chief Financial Officer, Mastercard Worldwide

Wendy E. Jones

Former Senior Vice President, Global Operations, eBay, Inc.

Sandra Pianalto Former President and Chief Executive Officer, Federal Reserve Bank of Cleveland

Christine A. Poon

Former Dean and

John W. Berry, Sr. Chair in Business at The Fisher College of Business at The Ohio State University

Thomas D. Stoddard Former Vice Chairman of Global Investment Banking, Bank of America Corporation

Andrew F. Sullivan Chairman and Chief Executive Officer, Prudential Financial, Inc.

Michael A. Todman Former Vice Chairman, Whirlpool Corporation

Joseph J. Wolk

Executive Vice President and Chief Financial Officer, Johnson & Johnson

Corporate Headquarters

Prudential Financial, Inc.

751 Broad Street, Newark, NJ 07102

973-802-6000

Stock Exchange Listing

The Common Stock of Prudential Financial, Inc. is traded on the New York Stock Exchange under the symbol "PRU."

Shareholder Services at Computershare

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P.O. Box 43078, Providence, RI 02940-3078

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Annual Meeting

Shareholders are invited to attend Prudential Financial, Inc.'s annual meeting, which will be held on May 12, 2026, beginning at 2:00 p.m. at our offices located at 751 Broad Street, Newark, New Jersey.

Additional information about the meeting can be found in the proxy statement.

Information about Prudential Financial, Inc.

You may access our news releases, financial information and reports filed with the Securities and Exchange Commission (for example, our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our Current Reports on Form 8-K and any amendments to those forms) online at https://www.investor.prudential.com. Copies of current documents on our website are available without charge, and reports filed with or furnished to the Securities and Exchange Commission will be available as soon as reasonably practicable after they are filed with or furnished to the Commission.

Investor Relations

Institutional investors, analysts and other members of the professional financial community can contact our Investor Relations department via e-mail at investor.relations@prudential.com, or by visiting the Investor Relations website at https://www.investor.prudential.com.

Visit Prudential Financial, Inc. Online

For more information about our corporate governance, as well as to access information for shareholders and information about our company, visit our website at https://www.prudential.com/governance.

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Adjusted Operating Income(A) and Income (Loss) from Operations

(pre-tax, in millions)

Assets Under Management

(in billions)

Adjusted Operating Revenues(A)

and GAAP Revenues

(in billions)

Operating Return on Average Equity (B) and Return on Average Equity (B)

Consolidated adjusted operating income and adjusted book value, as well as operating return on average equity, which is based on adjusted operating income and adjusted book value, are non-GAAP measures. Reconciliations of these measures to the most directly comparable GAAP measures are included in this Annual Report.

We believe that our use of these non-GAAP measures helps investors understand and evaluate the Company's performance and financial position. The presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of the items described below. Adjusted book value augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations, separate from the portion that is affected by capital and currency market conditions including the removal of the associated accounting impacts of the remeasurement of certain insurance liabilities and investments that are marked to market through accumulated other comprehensive income under GAAP, and the cumulative change in fair value of funds withheld embedded derivatives related to unrealized gains and losses on available-for-sale securities and certain derivatives associated with customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements. Operating return on average equity, which is based on adjusted operating income and adjusted book value, is a useful measure of the operating return the Company achieves in relation to the capital available to our businesses. However, these non-GAAP measures are not substitutes for income, equity, and return on average equity determined in accordance with GAAP, and the adjustments made to derive these measures are important to an understanding of our overall results of operations and financial position.

1. Adjusted operating income is a non-GAAP measure used by the Company to evaluate segment performance and to allocate resources. Adjusted operating income excludes "Realized investment gains (losses), net, and related charges and adjustments." A significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains and losses. Impairments and losses from sales of credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market opportunities as well as capital and other factors. Realized investment gains (losses) within certain businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating income generally excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset-liability management program related to the risk of those products. Adjusted operating income also excludes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are designated as trading. Adjusted operating income also excludes investment gains and losses on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes, because these recorded changes in asset and liability values are expected to ultimately accrue to contractholders. Adjusted operating income excludes the changes in fair value of equity securities that are recorded in net income. Additionally, adjusted operating income excludes the impact of annual assumption updates and other refinements included in the above items. Adjusted operating income excludes "Change in value of market risk benefits, net of related hedging gains (losses)," which reflects the impact from changes in current market conditions, and market experience updates, reflecting the immediate impacts in current period results from changes in current market conditions on estimates of profitability, which we believe enhances the understanding of underlying performance trends. Adjusted operating income also excludes the results of Divested and Run-off Businesses, which are not relevant to our ongoing operations and discontinued operations and earnings attributable to noncontrolling interests and redeemable noncontrolling interests, each of which is presented as a separate component of net income under GAAP. Additionally, adjusted operating income excludes other items, such as certain components of the consideration for acquisitions, which are recognized as compensation expense over the requisite service periods, and goodwill impairments. Earnings attributable to noncontrolling interests and redeemable noncontrolling interests is presented as a separate component of net income under GAAP and excluded from adjusted operating income. The tax effect associated with pre-tax adjusted operating income is based on applicable IRS and foreign tax regulations inclusive of pertinent adjustments.

   See Management's Discussion and Analysis of Financial Condition and Results of Operations for a discussion of results based on adjusted operating income, and the Consolidated Financial Statements for a reconciliation of results based on adjusted operating income to GAAP results.

2. Operating return on average equity (based on adjusted operating income) is a non-GAAP measure and represents adjusted operating income after-tax divided by average adjusted book value. Adjusted book value is calculated as total equity (GAAP book value) excluding accumulated other comprehensive income (loss), the cumulative effect of foreign currency exchange rate remeasurements and currency translation adjustments corresponding to realized investment gains and losses, and the cumulative change in fair value of funds withheld and modified coinsurance embedded derivatives. This non-GAAP measure augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations, separate from the portion that is affected by capital and currency market conditions. The comparable GAAP measure to operating return on average equity is return on average equity which is based on net income and GAAP book value. See chart below for a reconciliation between adjusted book value and GAAP book value.

   As of December 31,	2025	2024	2023
   		(in millions)
   GAAP book value at end of period	$32,438	$27,872	$27,820
   Less: Accumulated other
   comprehensive income	(3,077)	(6,711)	(6,504)
   Less: Cumulative change in fair value of funds withheld embedded derivatives (1)	(24)	141	(181)
   Less: Cumulative effect of foreign exchange rate
   remeasurement and currency translation
   adjustments corresponding to realized gains (losses) (2)	238	34	(518)
   Adjusted book value	$35,301	$34,408	$35,023

   1. Amount represents the cumulative change in fair value of funds withheld embedded derivatives related to unrealized gains and losses on available-for-sale securities and certain derivatives associated with customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.

   2. Includes the cumulative impact of net gains and losses resulting from foreign currency exchange rate remeasurement and associated realized investment gains and losses included in net income (loss) and currency translation adjustments corresponding to realized investment gains and losses.

Annuities and Life Insurance are issued by Prudential Financial companies; The Prudential Insurance Company of America ("PICA") or Pruco Life Insurance Company ("PLAZ") (in New York, by Pruco Life Insurance Company of New Jersey ("PLNJ")), all located in Newark, NJ (main office), or an unaffiliated third-party issuer: Fortitude Life Insurance & Annuity Company ("FLIAC"), located in Jersey City, NJ. Fortitude Re has retained PICA as an unaffiliated Third-Party Administrator. Variable Annuities and Variable Life Insurance are distributed by Prudential Annuities Distributors, Inc. ("PAD"), Shelton, CT (main office). Each company (PICA, PLAZ, PLNJ, FLIAC, PAD) is solely responsible for its own financial condition and contractual obligations.

Fortitude Re is the marketing name for FGH Parent, L.P. and its subsidiaries, including FLIAC. Each subsidiary is responsible for its own financial condition and contractual obligations.

Securities products and services are offered through: Pruco Securities, LLC or Prudential Investment Management Services LLC, both members SIPC and located in Newark, NJ, or Prudential Annuities Distributors, Inc., located in Shelton, CT. All are Prudential Financial companies.

"World's Most Ethical Companies" and "Ethisphere" names and marks are registered trademarks of Ethisphere LLC.

From Fortune, © 2026 Fortune Media IP Limited. All rights reserved. Used under license. Fortune is a registered trademark and Fortune World's Most Admired Companies™ is a trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and does not endorse products or services of, Prudential Financial, Inc.

© 2026 Prudential Financial, Inc. and its related entities. Prudential, PGIM, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.

TABLE OF CONTENTS

Page Number

Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Management's Discussion and Analysis of Financial Condition and Results of Operations 10

Quantitative and Qualitative Disclosures About Market Risk 75

Consolidated Financial Statements:

Management's Annual Report on Internal Control Over Financial Reporting 80

Report of Independent Registered Public Accounting Firm 81

Consolidated Statements of Financial Position as of December 31, 2025 and 2024 84

Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 85

Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 86

Consolidated Statements of Equity for the years ended December 31, 2025, 2024 and 2023 87

Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 88

Notes to Consolidated Financial Statements 91

Market for Registrant's Common Equity and Related Stockholder Matters 228

Throughout this Annual Report, "Prudential Financial" refers to Prudential Financial, Inc., the ultimate holding company for all of our companies. "Prudential Insurance" refers to The Prudential Insurance Company of America. "Prudential," the "Company," "we" and "our" refer to our consolidated operations.

FORWARD-LOOKING STATEMENTS

Certain of the statements included in this Annual Report constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as "expects," "believes," "anticipates," "includes," "plans," "assumes," "estimates," "projects," "intends," "should," "will," "shall" or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management's current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. There can be no assurance that future developments affecting Prudential Financial, Inc. and its subsidiaries will be those anticipated by management. These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (1) losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; (2) losses on insurance products due to mortality experience, morbidity experience or policyholder behavior experience that differs significantly from our expectations when we price our products; (3) changes in interest rates, equity prices and foreign currency exchange rates that may (a) adversely impact the profitability of our products, the value of separate accounts supporting these products or the value of assets we manage, (b) result in losses on derivatives we use to hedge risk or increase collateral posting requirements and (c) limit opportunities to invest at appropriate returns; (4) guarantees within certain of our products which are market sensitive and may decrease our earnings or increase the volatility of our results of operations or financial position; (5) liquidity needs resulting from (a) derivative collateral market exposure, (b) asset/liability mismatches, (c) the lack of available funding in the financial markets or (d) unexpected cash demands due to severe mortality calamity or lapse events;

(6) financial or customer losses, or regulatory and legal actions, due to inadequate or failed processes or systems, external events, and human error or misconduct such as (a) disruption of our systems and data, (b) an information security breach, (c) a failure to protect the privacy of sensitive data, (d) reliance on third parties or (e) labor and employment matters; (7) changes in the regulatory landscape, including related to (a) financial sector regulatory reform, (b) changes in tax laws, (c) fiduciary rules and other standards of care, (d) U.S. state insurance laws and developments regarding group-wide supervision, capital and reserves, (e) insurer capital standards outside the U.S. and (f) privacy and cybersecurity regulation; (8) technological changes which may adversely impact companies in our investment portfolio or cause insurance experience to deviate from our assumptions; (9) an inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (10) ratings downgrades; (11) market conditions that may adversely affect the sales or persistency of our products;(12) competition; (13) reputational damage; (14) the costs, effects, timing, or success of our plans to execute our strategy; (15) the economic conditions, and impacts on the Company thereof, caused by the imposition of tariffs and retaliatory actions; and (16) uncertainty regarding the outcome and consequences of the investigation into and remediation of employee misconduct in Japan (see "Management's Discussion and Analysis-Results of Operations by Segment-International Businesses" for more information). Prudential Financial, Inc. does not undertake to update any particular forward-looking statement included in this document. See "Risk Factors" included in Prudential Financial's 2025 Annual Report on Form 10-K for discussion of certain risks relating to our businesses and investment in our securities.

‌MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Certain of the statements included in this section constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are made based on management's current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. Prudential Financial, Inc.'s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements can be found in the "Forward-Looking Statements" included in this Annual Report, as well as the "Risk Factors" included in Prudential Financial's 2025 Annual Report on Form 10-K.

Pursuant to the FAST Act Modernization and Simplification of Regulation S-K, discussions related to the results of operations for the year ended December 31, 2024 in comparison to the year ended December 31, 2023 have been omitted. For such omitted discussions, refer to Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Introduction

The purpose of this Management's Discussion and Analysis of Financial Condition and Results of Operations is to provide readers with a foundational understanding of our Company, our consolidated financial statements, and the significant internal and external drivers of our results. The discussion of financial results within is focused on adjusted operating income, which is the Company's segment-level measure of performance, and provides readers with period-over-period analysis of operating results and significant drivers. In addition to discussing our detailed segment results of operations, we have also provided supplemental information that we believe assists with a greater understanding of our overall financial results.

A brief description of these key informational sections follows:

• "Executive Summary" provides an overview of the Company and its operations, along with recent significant events that have impacted our organizational structure or financial results. This section also provides management's outlook for each respective business segment.

• "External and Economic Factors" discusses industry trends, including the economic environment and demographics for each of our businesses, and includes a discussion of how the impact of potential changes in either interest rates or foreign currency exchange rates may impact our overall operations and financial position.

• "Accounting Policies & Pronouncements" discusses the accounting policies applied in preparing our consolidated financial statements that management believes are most dependent on the application of estimates and assumptions and which require management's most difficult, subjective, or complex judgments. This section should be read in conjunction with Note 2 to the Consolidated Financial Statements.

• "Liquidity and Capital Resources" provides information about our liquidity and capital positions, including any significant actions that have impacted, or are expected to impact, these positions. Information is also provided on our insurance companies' regulatory capital requirements, the sources and uses of our holding company's cash, and additional information about financing activities of the Company.

• "Ratings" provides information on the ratings for Prudential Financial and certain of its subsidiaries as February 12, 2026.

• "General Account Investments" provides information about the investment objectives, strategies and overall portfolio composition of the general account that supports the liabilities of our insurance companies. Investment results are presented separately for our U.S.-based and Japanese-based operations, our Closed Block division, and our Funds Withheld portfolios, which support liabilities relating to reinsurance agreements where the economic benefits and associated investment risk ultimately inure to the reinsurer. This section should be read in conjunction with Note 3 to the Consolidated Financial Statements.

• "Valuation of Assets and Liabilities" provides additional breakout of the fair value of assets and liabilities for Prudential Financial Inc., excluding those held in the Closed Block division and Funds Withheld portfolios, and separately for the Closed Block division and Funds Withheld portfolios. This section should be read in conjunction with Note 6 to the Consolidated Financial Statements.

• "Income Taxes" provides information about our effective tax rate and unrecognized tax benefits. This section should be read in conjunction with Note 17 to the Consolidated Financial Statements.

• "Risk Management" provides detail about our risk governance structure and the framework for evaluating the risks across the Company. This section should be read in conjunction with "Risk Factors" included in Prudential Financial's 2025 Annual Report on Form 10-K.

Executive Summary

Company Overview

Our operations are primarily in the United States of America ("U.S."), Asia, Europe and Latin America. Through our subsidiaries and affiliates, we offer a wide array of financial products and services, including life insurance, annuities, retirement solutions, mutual funds and investment management. We offer these products and services to individual and institutional customers through one of the largest distribution networks in the financial services industry.

Our principal operations consist of PGIM (our global investment management business), our U.S. Businesses (consisting of our Retirement Strategies, Group Insurance and Individual Life businesses), our International Businesses, the Closed Block division, and our Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other. Divested and Run-off Businesses are composed of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for "discontinued operations" accounting treatment under generally accepted accounting principles in the United States of America ("U.S. GAAP"). Our Corporate and Other operations include corporate items and initiatives that are not allocated to business segments as well as the Divested and Run-off Businesses described above. See "Business-" included in Prudential Financial's 2025 Annual Report on Form 10-K for a description of our sources of revenue and details on how our profitability is impacted. In addition, our profitability is impacted by our ability to effectively deploy capital, utilize our tax capacity and manage expenses.

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

Management expects that results will continue to benefit from our mutually-reinforcing business system, which includes a mix of businesses that complement each other to provide competitive advantages, earnings diversification and capital benefits from a balanced risk profile. We believe we are well-positioned to tap into market opportunities to meet the evolving needs of our clients and society at large. Our mix of high-quality protection, retirement and investment management businesses enables us to offer solutions that cover a broad range of financial needs and to engage with our clients through multiple channels.

In September 2023, we, together with Warburg Pincus and a group of institutional investors, launched Prismic Life Reinsurance, Ltd. ("Prismic Re"), a licensed Bermuda-based life and annuity reinsurance company. Through our Corporate and Other operations, we own an approximate 20% equity interest in Prismic Life Holding Company LP ("Prismic"), the Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Re and Prismic Life Reinsurance International, Ltd. ("Prismic Re International"). We expect the increased reinsurance capacity that this partnership provides to support our vision of expanding access to investing, insurance, and retirement security for people around the world. See Note 15 to the Consolidated Financial Statements for additional information regarding our transactions with Prismic Re and Prismic Re International.

As part of our continuous improvement process, we are working to become a leaner and more agile company by simplifying our management structure, empowering our employees with faster decision-making processes and investing in technology and data platforms. As part of this, we recorded charges of $135 million in the fourth quarter of 2025 and $200 million in the fourth quarter of 2023. These charges, primarily related to our domestic operations and PGIM, were recorded within our Corporate and Other operations and reflect management's ongoing efforts in evaluating the optimal workforce structure required to deliver on our long-term growth strategy. We expect these continued actions will create operating efficiencies, and provide reinvestment capacity to build capabilities, realize additional efficiencies, strengthen our competitiveness and fuel future growth.

In February 2026, in conjunction with our previously announced internal investigation into employee misconduct in Japan, we voluntarily suspended new sales activity at Prudential of Japan for a 90-day period, commencing February 9, 2026. See "-Litigation and Regulatory Matters-Regulatory" within Note 25 to the Consolidated Financial Statements and "Results of Operations by Segment-International Businesses" below for additional information.

Business Outlook

We feel confident about our prospects for the future based on the foundation of our integrated and complementary businesses. We are focused on evolving our strategy to transform our market-leading businesses to become a higher growth, more capital efficient company. We plan to continue investing in growth businesses and markets around the world, delivering industry-leading customer and client experiences, and creating the next generation of financial solutions. The businesses drive our company's performance, value and growth, and are organized around the markets we serve with solutions in investing, insurance, and retirement security.

Specific outlook considerations for each of our businesses include the following:

• PGIM. Our global investment management business, PGIM, is focused on maintaining strong investment performance while leveraging the scale of its approximately $1.466 trillion of assets under management and diversified global operations. We are currently centralizing our distribution channels and unifying our asset management capabilities to better serve our clients and support sustainable growth. In addition, we remain focused on broadening our market share through acquisitions and organic initiatives, including providing asset management services to third-party reinsurers. In addition to serving third-party institutional and retail clients, we provide our U.S. and International businesses with a competitive advantage through our investment expertise across a broad array of asset classes, including public and private asset class capabilities. Underpinning our growth strategy is our ability to continue to deliver robust investment performance and to attract and retain high-caliber investment talent.

• Retirement Strategies. We remain focused on helping customers meet their investment and retirement needs by expanding access to retirement security and broadening distribution through new relationships, platforms and advisors. Our Institutional Retirement Strategies business continues to be focused on providing products that respond to the needs of plan sponsors, retirees, and annuitants while maintaining appropriate pricing and return expectations under changing market conditions. We expect our differentiated capabilities and execution to drive our business momentum in the pension risk transfer and international reinsurance markets; however, we expect that growth will not be linear due to the episodic nature of these transactions. In Individual Retirement Strategies, we continue to execute on our strategic pivot of replacing the intentional run-off of legacy variable annuities with new indexed and fixed annuity products that generate less volatile, and more capital efficient earnings. We continue to focus on expanding our diverse product portfolio and distribution channels to meet more of the growing demand among retail investors for protected growth and lifetime income.

• Group Insurance. We are a leading group benefits provider with a focus on further diversifying our portfolio by expanding our Premier Market and Association segments and growing voluntary supplemental health, including entering the medical stop loss market with coverage effective dates starting from January 1, 2025, while maintaining leadership in the National Market segment. We also continue to focus on deepening employer and participant relationships and investing in a best-in-class customer experience.

• Individual Life. We continue to focus on making life insurance solutions more accessible to financial professionals, partners and customers by providing a broad product portfolio, including growing the amount of accumulation and simplified protection product options, coupled with our multi-channel distribution capabilities. We have taken pricing and product actions to ensure we realize appropriate returns for the current economic environment and to diversify our product mix to further limit our sensitivity to interest rates.

• International Businesses. We remain focused on meeting customers' evolving protection, retirement, and savings needs as well as maintaining the underlying strength of our distribution channels. Our strategy is to strengthen our position in Japan and we remain committed to optimizing our existing operations.

  External and Economic Factors

  Industry Trends

  Our businesses are impacted by financial markets, economic conditions, regulatory oversight, and a variety of trends that affect the industries in which we compete.

  Financial and Economic Environment:

• PGIM. After a period of significantly increased interest rates and volatile economic conditions in 2022 and 2023, we experienced a modest decline in rates during 2024 and 2025, combined with improved equity market conditions and a slight rebound in the commercial real estate industry. While the economic outlook has improved, interest rate movements remain uncertain and the real estate market is in a modest recovery. We expect that a stabilized or declining rate environment over time will positively impact PGIM, particularly as investors reallocate record-high money market assets to fixed income, real estate, and other higher-yielding asset classes. Conversely, a deterioration in market conditions (e.g., equity market declines, higher interest rates, credit spread widening or real estate value declines) could lead to lower fee-based revenues, incentive fees taking longer to be realized and losses in our seed and co-investments. An economic downturn could also have impacts on real estate prices as well as transaction volumes in certain private asset classes. In addition, the continued shift from active strategies to passive index products, particularly in equities, could present additional headwinds for active managers such as PGIM. We believe PGIM's uniquely diversified global platform is well positioned to be resilient in the face of market and industry headwinds.

• U.S. Businesses. Through 2021, interest rates in the U.S. had experienced a prolonged period of historically low levels. This was followed by significant increases in 2022 through 2023. While there have been modest declines in 2024 and 2025, rates have sustained higher levels relative to historical periods. We expect that a continued level of relative higher interest rates will benefit our results over time. We continue to monitor current market conditions and the potential impact to our businesses in the event of slowing or negative economic growth. In addition, we are subject to financial impacts associated with movements in equity markets and the evolution of the credit cycle as discussed in "Risk Factors" included in Prudential Financial's 2025 Annual Report on Form 10-K.

• International Businesses. Interest rates in Japan experienced a prolonged period of historically low levels, negatively impacting our net investment spread results and reinvestment yields; however, beginning in 2024, the Bank of Japan began raising its key short-term interest rates, marking their highest levels since September 1995. We expect that a continued level of higher interest rates will benefit our results over time. In addition, we are subject to financial impacts associated with movements in foreign currency rates, particularly the Japanese yen. Fluctuations in the value of the yen can impact the relative attractiveness to customers of both yen-denominated and non-yen denominated products thereby impacting both sales and surrenders. In addition, we are subject to financial impacts associated with movements in equity markets and the evolution of the credit cycle as discussed in "Risk Factors" included in Prudential Financial's 2025 Annual Report on Form 10-K. Brazil's life insurance industry is supported by a stable economic outlook and its long-term growth prospects remain strong as economic conditions show sustained growth.

  Demographics:

  • PGIM. An aging global population has led to more de-risking across institutional and individual investor portfolios as well as increased demand for higher-yielding investments that deliver income to meet retirement needs. As a result, investors are increasing their allocations to public and private fixed income assets, where PGIM is a global market leader. As employers, particularly in the U.S. and the U.K., continue to transition from defined benefit pensions to defined contribution plans as their primary retirement vehicles, there is a growing need for personalized retirement solutions that can help improve individual retirement security. Asset managers, such as PGIM, will play a critical role in partnering with governments, corporations, and individuals globally to deliver the investment and advice capabilities required to address this challenge.

  • U.S. Businesses. Individual customer demographics continue to evolve and new opportunities present themselves in different consumer segments such as the millennial and multicultural markets. Consumer expectations and preferences are changing. We believe existing and potential customers are increasingly looking for cost-effective solutions that they can easily understand and access through technology-enabled devices. At the same time, income protection, wealth accumulation and the needs of retiring baby boomers are continuing to shape the insurance industry. A persistent retirement security gap exists in terms of both savings and protection.

  • International Businesses. Japan has an aging population as well as a large pool of household assets invested in low-yielding deposit and savings vehicles. The aging of Japan's population, along with strains on government pension and healthcare programs, have led to a growing demand for products that provide financial solutions for retirement, investment and wealth transfer, as well as for health-related products. Brazil, the largest country by population in South America, is experiencing rising life expectancy and an expanding middle class, along with increasing disposable income and greater financial awareness. These trends drive demand for life insurance products that prioritize financial security, wealth preservation, and retirement planning, and underscore the need for diversified solutions, including protection-oriented, savings, and health related policies.

    Regulatory Environment. See "Business-Regulation" included in Prudential Financial's 2025 Annual Report on Form 10-K for a discussion of regulatory developments that may impact the Company and the associated risks.

    Competitive Environment. See "Business-" included in Prudential Financial's 2025 Annual Report on Form 10-K for a discussion of the competitive environment and the basis on which we compete in each of our segments.

    Impact of Changes in the Interest Rate Environment

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

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

  • the valuation of fixed income investments and derivative instruments;

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

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

  • insurance reserve levels, including market risk benefits ("MRBs"), and market experience true-ups;

  • policyholder behavior, including surrender or withdrawal activity;

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

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

In order to manage the impacts that changes in interest rates have on our net investment spread, we employ a proactive asset/ liability management program, which includes strategic asset allocation and hedging strategies within a disciplined risk management framework. These strategies seek to match the liability characteristics of our products and to closely approximate the interest rate sensitivity of assets with that of product liabilities. We also manage duration gaps, currency and other risks between assets and liabilities through the use of derivatives, and adjust these strategies as products, customer behavior, and market conditions evolve. Our interest rate exposure is also mitigated by our business mix, which includes lines of business where fee-based and insurance underwriting earnings play a more prominent role in product profitability. We also regularly examine our product offerings and may reprice or discontinue sales of certain products that do not meet our profit expectations. Additionally, in our Japanese operations, our diverse product portfolio in terms of currency mix and premium payment structure allows us to further manage any impacts from changes in the interest rate environment. For additional information regarding sales within our Japanese operations, see "-International Businesses-Sales Results," below.

For additional information regarding interest rate risks, see "Risk Factors-Market Risk" included in Prudential Financial's 2025 Annual Report on Form 10-K and "Quantitative and Qualitative Disclosure About Market Risk."

Impact of Foreign Currency Exchange Rates

Foreign currency exchange rate movements and related hedging strategies

As a U.S.-based company with significant business operations outside the U.S., particularly in Japan, we are subject to foreign currency exchange rate movements that could impact our United States dollar ("USD")-equivalent shareholder return on equity. We seek to mitigate this impact through various hedging strategies, including holding USD-denominated assets in certain of our foreign subsidiaries.

In order to reduce equity volatility from foreign currency exchange rate movements, we primarily utilize a yen hedging strategy that calibrates the hedge level to preserve the relative contribution of our yen-based business to the Company's overall return on equity on a leverage neutral basis. We implement this hedging strategy utilizing a variety of instruments, including USD-denominated assets and dual currency and synthetic dual currency investments held locally in our Japanese insurance subsidiaries. The total hedge level may vary based on our periodic assessment of the relative contribution of our yen-based business to the Company's overall return on equity.

The table below presents the aggregate amount of instruments that serve to hedge the impact of foreign currency exchange movements on our USD-equivalent shareholder return on equity from our Japanese insurance subsidiaries as of the dates indicated.

December 31,

2025 2024

(in billions)

Foreign currency hedging instruments:

USD-denominated assets associated with yen-based entities(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7.5 $6.1

Dual currency and synthetic dual currency investments(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 0.3 Total foreign currency hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7.8 $6.4

1. Includes USD-denominated fixed maturities at amortized cost plus any related accrued investment income, as well as USD notional amount of foreign currency derivative contracts outstanding. Note this amount represents only those USD assets serving to hedge the impact of foreign currency volatility on equity. Separate from this program, our Japanese operations also have $90.0 billion and $83.2 billion as of December 31, 2025 and 2024, respectively, of USD-denominated assets supporting USD-denominated liabilities related to USD-denominated products.

2. Dual currency and synthetic dual currency investments are held by our yen-based entities in the form of fixed maturities and loans with a yen-denominated principal component and USD-denominated interest income. The amounts shown represent the present value of future USD-denominated cash flows.

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

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

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

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

   In addition, specific to our International Businesses where we hedge certain currencies utilizing forward currency contracts with third parties, the results of our Corporate and Other operations also include the impact of any gains or losses recorded from these contracts that settled during the period, which include the impact of any over or under hedging of actual earnings that differ from projected earnings.

   The table below presents, for the periods indicated, the increase (decrease) to revenues and adjusted operating income for our International Businesses, PGIM and Corporate and Other operations, reflecting the impact of these intercompany arrangements.

   Year Ended December 31, 2025 2024 2023

   (in millions)

   Segment impacts of intercompany arrangements:

   International Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$(16)	$ (8)	$(28)
   PGIM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(2)	3	1
   Impact of intercompany arrangements(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(18)	(5)	(27)
   Corporate and Other:
   Impact of intercompany arrangements(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18	5	27
   Settlement gains (losses) on forward currency contracts(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(11)	(11)	(31)
   Net benefit (detriment) to Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7	(6)	(4)
   Net impact on consolidated revenues and adjusted operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$(11)	$(11)	$(31)

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

   2. The total notional amount of these forward currency contracts within our Corporate and Other operations was $0.8 billion as of December 31, 2025, 2024, and 2023.

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

While our international insurance operations offer products denominated in local currency, several also offer products denominated in non-local currencies. This is most notable in our Japanese operations, which currently offer primarily USD-denominated products, but have also historically offered Australian dollar ("AUD")-denominated products. The non-local currency-denominated insurance liabilities related to these products are supported by investments denominated in corresponding currencies, including a significant portion designated as available-for-sale. While the impact from foreign currency exchange rate movements on these non-local currency-denominated assets and liabilities is economically matched, differences in the accounting for changes in the value of these assets and liabilities due to changes in foreign currency exchange rate movements have historically resulted in volatility in U.S. GAAP earnings.

As a result, we implemented a structure in certain of our Japanese operations that disaggregated the USD- and AUD-denominated businesses into separate divisions, each with its own functional currency that aligns with the underlying products and investments. The result of this alignment was to reduce differences in the accounting for changes in the value of these assets and liabilities that arise due to changes in foreign currency exchange rate movements. For the USD- and AUD-denominated assets that were transferred under this structure, the net cumulative unrealized investment gains associated with foreign exchange remeasurement that were recorded in "Accumulated other comprehensive income (loss)" ("AOCI") totaled $1.0 billion and $1.1 billion as of December 31, 2025 and 2024, respectively, and will be recognized in earnings within "Realized investment gains (losses), net" over time as these assets mature or are sold. Absent the sale of any of these assets prior to their stated maturity, approximately 5% of the $1.0 billion balance as of December 31, 2025 will be recognized in 2026, approximately 3% will be recognized in 2027, and the remaining balance will be recognized from 2028 through 2051.

Highly inflationary economy

Enterprise Group, our strategic investment in Ghana, has historically utilized the Ghanaian cedi as its functional currency given it is the currency of the primary economic environment in which the entity operates. In the fourth quarter of 2023, Ghana experienced a cumulative inflation rate that exceeded 100% over a 3-year period. As a result, Ghana's economy was deemed to be highly inflationary, resulting in reporting changes effective January 1, 2024. Under U.S. GAAP, the financial statements of a foreign entity in a highly inflationary economy are to be remeasured as if its functional currency (formerly the Ghanaian cedi) is the reporting currency of its parent reporting entity (the USD) on a prospective basis. While this changed how the results of Enterprise Group were remeasured and/or translated into USD, the impact to our financial statements was not material nor is it expected to have a material impact to our financial statements in future periods given the relative size of the investment.

Results of Operations

Consolidated Results of Operations

The following section provides a comparative discussion of our consolidated results of operations on a U.S. GAAP basis for the periods indicated.

Year Ended December 31,

2025 to 2024 Annual Comparison

"Net income (loss) attributable to Prudential Financial, Inc." increased $849 million, inclusive of a $546 million unfavorable variance from income taxes, primarily driven by the increase in pre-tax earnings, as described below, and the impact of certain tax law and rate changes in the current year. See "-Income Taxes" for additional information.

On a pre-tax basis, "Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities" increased $1,447 million, reflecting the following notable items:

"Total revenues" decreased $9,631 million, primarily due to the following:

• "Premiums"-$12,100 million unfavorable variance, primarily reflecting lower pension risk transfer premiums due to lower sales in the current year, with corresponding offsets in "Policyholders' benefits," as discussed below; and

• "Realized investment gains (losses), net"-$703 million unfavorable variance, primarily reflecting unfavorable derivative results, excluding Funds Withheld portfolios, as well as unfavorable impacts from Funds Withheld related embedded derivatives, which are offset by changes in the value of the investments in these portfolios that are primarily recorded in "Other income (loss)" or through "Other comprehensive income." These variances were partially offset by lower losses from the sales of fixed income securities, and less unfavorable impacts from net credit losses and impairments. See "-General Account Investments-Realized Investment Gains and Losses" for additional information.

  These variances were partially offset by:

• "Net investment income"-$1,564 million favorable variance, primarily reflecting business growth and higher reinvestment rates. See "-General Account Investments-Investment Results" for additional information; and

• "Other income (loss)"-$1,389 million favorable variance, primarily reflecting favorable changes in the market value of fixed income securities designated as trading, including those within our Funds Withheld portfolios, as discussed above.

  "Total benefits and expenses" decreased $11,078 million, primarily due to the following:

• "Policyholders' benefits"-$11,895 million favorable variance, primarily reflecting lower pension risk transfer premiums, as discussed above; and

• "General and administrative expenses"-$330 million favorable variance, net of deferrals, primarily reflecting lower operating expenses, partially offset by higher variable expenses supporting business growth.

  These variances were partially offset by:

• "Interest credited to policyholders' account balances"-$486 million unfavorable variance, primarily reflecting business growth.

Segment Results of Operations

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

Annual Reviews and Update of Assumptions and Other Refinements

During the second quarter of each year, we perform an annual comprehensive review of the assumptions used for estimating future premiums, benefits, and other cash flows, including reviews related to mortality, morbidity, lapse, surrender, and other contractholder behavior assumptions, and economic assumptions, including expected future rates of returns on investments. The Company generally looks to relevant Company experience as the primary basis for these assumptions; however, if relevant Company experience is not available or does not have sufficient credibility, the Company may look to experience of similar blocks of business, either elsewhere within the Company or within the industry. As part of this review, we may update these assumptions and make refinements to our models based upon emerging experience, future expectations and other data, including any observable market data we feel is indicative of a long-term trend. These assumptions are generally reviewed annually unless a material change in our own experience or in industry experience made available to us is observed in an interim period that we feel is also indicative of a long-term trend. Generally, we do not expect trends to change significantly in the short-term and, to the extent these trends may change, we expect such changes to be gradual over the long-term. The impact on our results of operations of changes in these assumptions can be offsetting and we are unable to predict their movement or offsetting impact over time.

Shown below are the impacts on our adjusted operating income from updates of actuarial assumptions and other refinements as discussed above. The information below is presented by each segment and Corporate and Other operations and includes a reconciliation of these impacts to the impacts within income (loss) before income taxes and equity in earnings of joint ventures and other operating entities.

Year Ended December 31, 2025 2024 2023

(in millions)

Favorable (unfavorable) impact to adjusted operating income before income taxes by segment:

U.S. Businesses:

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

Year Ended December 31, 2025 2024 2023

(in millions)

Adjusted operating income before income taxes by segment:

1. See "-General Account Investments" and Note 23 to the Consolidated Financial Statements for additional information.

2. Represents the contribution to income (loss) of Divested and Run-off Businesses that have been or will be sold or exited, including businesses that have been placed in wind-down, but did not qualify for "discontinued operations" accounting treatment under U.S. GAAP. See "-Divested and Run-off Businesses" and "-Closed Block Division" for additional information.

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

   U.S. GAAP basis as a separate line in the Consolidated Statements of Operations. Earnings attributable to noncontrolling interests represent the portion of earnings from consolidated entities that relates to the equity interests of minority investors.

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

   Segment results for 2025 presented above reflect the following:

   PGIM. Results for 2025 increased in comparison to 2024, primarily reflecting higher net asset management fees and higher net service, distribution and other revenues, driven by a gain on sale of our asset management business in Taiwan, largely offset by higher expenses, including charges resulting from a business reorganization, and lower net other related revenues.

   Retirement Strategies. Results for 2025 decreased in comparison to 2024, inclusive of an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, primarily reflecting higher net investment spread results, partially offset by higher expenses and lower net fee income.

   Group Insurance. Results for 2025 increased in comparison to 2024, inclusive of a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, primarily reflecting higher net underwriting results, partially offset by higher expenses.

   Individual Life. Results for 2025 increased in comparison to 2024, inclusive of a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, primarily reflecting higher underwriting results and lower expenses, partially offset by lower net investment spread results.

   International Businesses. Results for 2025 increased in comparison to 2024, inclusive of an unfavorable comparative net impact from foreign currency exchange rates and a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding these items, results increased, primarily reflecting higher net investment spread results and higher underwriting results, partially offset by higher expenses.

   Corporate and Other. Results for 2025 were less unfavorable in comparison to 2024, primarily reflecting lower net charges from other corporate activities.

   Closed Block Division. Results for 2025 increased in comparison to 2024, primarily reflecting higher net investment activity results, partially offset by changes in the policyholder dividend obligation.

   Segment Measures

   Adjusted Operating Income. In managing our business, we analyze the operating performance of our segments and our Corporate and Other operations 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 we use to evaluate segment performance and allocate resources and, consistent with authoritative guidance, is our measure of segment performance. The adjustments to derive adjusted operating income are important to an understanding of our overall results of operations. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies; however, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses.

   See Note 23 to the Consolidated Financial Statements for additional information regarding the presentation of segment results and our definition of adjusted operating income.

   Annualized New Business Premiums. In managing our Individual Life, Group Insurance and International Businesses segments, we analyze annualized new business premiums, which do not correspond to revenues under U.S. GAAP. Annualized new business premiums measure the current sales performance of the business, while revenues primarily reflect the renewal persistency of policies written in prior years and net investment income, in addition to current sales. Annualized new business premiums include 10% of first year premiums or deposits from single-payment products in our Individual Life and International Businesses segments. No other adjustments are made for limited-payment contracts.

   The amount of annualized new business premiums for any given period can be significantly impacted by several factors, including but not limited to: addition of new products, discontinuation of existing products, changes in credited interest rates for certain products and other product modifications, changes in premium rates, changes in tax laws, changes in regulations or changes in the competitive environment. Sales volume may increase or decrease prior to certain of these changes becoming effective, and then fluctuate in the other direction following such changes.

   Assets Under Management. In managing our PGIM segment, we analyze assets under management (which do not correspond directly to U.S. GAAP assets) because the principal source of revenues is fees based on assets under management. Assets under management represent the fair market value or account value of assets that we manage directly for institutional clients, retail clients, and for our general account, as well as assets invested in our products that are managed by third-party managers.

   Account Values. In managing our Retirement Strategies segment, we analyze account values, which do not correspond directly to

   U.S. GAAP assets. Net additions (withdrawals) in our Institutional Retirement Strategies business and sales (redemptions) in our Individual Retirement Strategies business do not correspond to revenues under U.S. GAAP but are used as a relevant measure of business activity.

   Results of Operations by Segment

   PGIM

   Business Update

   • In July 2024, the Company exited PGIM Wadhwani LLP ("PGIMW"), our London-based managed futures investment management firm. The results of PGIMW, beginning in the second quarter of 2024, are reflected in Divested and Run-off Businesses included within our Corporate and Other operations.

   Operating Results

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

   Year Ended December 31, 2025 2024 2023

   (in millions)

   Operating results(1):

   Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$4,231	$4,092	$3,638
   Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,353	3,217	2,925
   Adjusted operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	878	875	713
   Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling
   interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	107	132	16
   Other adjustments(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25	(19)	(36)
   Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities . . . . . . .	$1,010	$ 988	$ 693

   1. Certain of PGIM's investment activities are based in currencies other than the USD and are therefore subject to foreign currency exchange rate risk. The financial results of PGIM include the impact of an intercompany arrangement with our Corporate and Other operations designed to mitigate the impact of exchange rate changes on PGIM's USD-equivalent earnings. For additional information regarding this intercompany arrangement, see "-External and Economic Factors-Impact of Foreign Currency Exchange Rates," above.

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

   2025 to 2024 Annual Comparison

   Adjusted operating income increased $3 million, primarily reflecting:

   • higher net asset management fees; and

   • higher net service, distribution and other revenues driven by a gain on the sale of our asset management business in Taiwan. These variances were largely offset by:

   • higher operating expenses, primarily driven by charges resulting from a business reorganization and to support business growth; and

   • lower net other related revenues. The following table sets forth PGIM's revenues, presented on a basis consistent with the table above under "-Operating Results,"

by type:

Year Ended December 31, 2025 2024 2023

(in millions)

Revenues by type:

Asset management fees by source:

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

2. Includes revenues from the Company's general account assets, as well as certain separate account assets of the Company's insurance and retirement businesses managed by PGIM.

3. Includes mortgage origination revenues from our commercial mortgage origination and servicing business.

   Revenues increased $139 million, primarily reflecting:

   • higher asset management fees, driven by higher average assets under management from the impact of equity market and fixed income appreciation, net inflows and strong investment performance; and

   • higher service, distribution and other revenues, primarily reflecting the gain on sale of our asset management business in Taiwan and higher revenues from certain consolidated funds (which were fully offset by higher expenses related to noncontrolling interests in these funds).

     These variances were partially offset by:

   • lower other related revenues, primarily reflecting lower incentive fees and lower seed and co-investments earnings, driven by less favorable investment performance, partially offset by higher commercial mortgage origination revenues from higher loan production.

     Expenses increased $136 million, primarily reflecting:

   • higher operating expenses, primarily driven by charges resulting from a business reorganization and to support business growth; and

   • higher variable expenses, primarily driven by higher fee-based earnings, and higher revenues from certain consolidated funds, as discussed above, partially offset by lower expenses related to performance-based incentive fees.

     Assets Under Management
     The following table sets forth assets under management by asset class as of the dates indicated:
     		December 31,
     	2025	2024	2023
     		(in billions)
     Assets Under Management(1) (at fair value):
     Public equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$ 223.1	$ 215.7	$ 183.6
     Public fixed income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	902.7	832.2	799.8
     Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	134.4	127.2	129.2
     Private credit and other alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	127.4	118.0	112.1
     Multi-asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	78.5	82.1	73.4
     Total PGIM assets under management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,466.1	$1,375.2	$1,298.1
     Assets under management within other reporting segments(2) . . . . . . . . . . . . . . . . . . . . . . . . . .	143.0	137.2	151.5
     Total PFI assets under management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,609.1	$1,512.4	$1,449.6

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

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

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

December 31,

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

2. Includes the Company's general account assets, as well as certain separate account assets of the Company's insurance and retirement businesses managed by PGIM.

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

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

December 31,

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

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

3. Realizations reflect proceeds from the disposition or monetization of assets from closed end funds and from collateralized loan obligations ("CLOs"). Distributions reflect income and dividend distributions related to certain closed and open ended private alternative funds and CLOs.

4. Includes income reinvestment, where applicable.

   2025 to 2024 Annual Comparison

   PGIM's assets under management increased $91 billion in 2025, primarily driven by fixed income and equity market appreciation, partially offset by realizations and distributions.

   Private Capital Deployment

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

   Private capital deployment represents the gross value of private capital invested in real estate debt and equity, and private credit and equity asset classes. Assets under management resulting from private capital deployment are primarily included in "Real estate" and "Private credit and other alternatives" in the "-Assets Under Management-by asset class table" above. As of December 31, 2025, these assets increased approximately $16.6 billion compared to December 31, 2024, primarily reflecting private capital net inflows, market appreciation and favorable foreign exchange rate impacts, partially offset by realizations and distributions.

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

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

   December 31,

   	2025	2024	2023
   Private capital deployed:		(in billions)
   Real estate debt and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$26.8	$20.9	$17.6
   Private credit and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28.1	22.4	14.0
   Total private capital deployed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$54.9	$43.3	$31.6

   Seed and Co-Investments

   As of December 31, 2025 and 2024, PGIM had approximately $1,155 million and $1,079 million of seed investments and

   $375 million and $415 million of co-investments at carrying value, respectively, primarily consisting of public fixed income, public equity, real estate investments, and private credit and other alternatives.

   Retirement Strategies

   Operating Results

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

   Year Ended December 31,

   	2025	2024	2023
   Operating results:		(in millions)
   Revenues:
   Institutional Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$16,657	$28,195	$11,030
   Individual Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5,541	5,125	4,532
   Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22,198	33,320	15,562
   Benefits and expenses:
   Institutional Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14,944	26,339	9,335
   Individual Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,809	3,362	2,714
   Total benefits and expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18,753	29,701	12,049
   Adjusted operating income:
   Institutional Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,713	1,856	1,695
   Individual Retirement Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1,732	1,763	1,818
   Total adjusted operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3,445	3,619	3,513
   Realized investment gains (losses), net, and related charges and adjustments . . . . . . . . . . . . . . . . .	(893)	(594)	(1,665)
   Change in value of market risk benefits, net of related hedging gains (losses) . . . . . . . . . . . . . . . . .	(493)	(414)	42
   Market experience updates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	(16)	0	0
   Equity in earnings of joint ventures and other operating entities and earnings attributable to
   noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3	1	0
   Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities . . . . .	$ 2,046	$ 2,612	$ 1,890

   Our Individual Retirement Strategies business includes both fixed and variable annuities that may include optional guaranteed living benefit riders (e.g., guaranteed minimum income benefits ("GMIB"), guaranteed minimum accumulation benefits ("GMAB"), guaranteed minimum withdrawal benefits ("GMWB") and guaranteed minimum income and withdrawal benefits ("GMIWB")), and/or optional death benefit riders (e.g., guaranteed minimum death benefits ("GMDB")). We also offer fixed annuities that provide a guarantee of principal and interest credited at rates we determine (subject to certain contractual minimums) or at rates based upon the performance of an index (subject to caps or participation rates), as well as indexed variable annuities that provide several index crediting strategies and varying levels of downside protection at predetermined levels and durations. The results of our business are generally included in adjusted operating income, with exceptions related to certain guarantees, as discussed below.

   Under U.S. GAAP, our guaranteed living and death benefit riders on variable annuities (e.g., GMAB, GMIB, GMWB, GMIWB and GMDB) are accounted for as MRBs and reported at fair value. For purposes of measuring segment performance, adjusted operating income excludes the changes in fair value of MRBs and instead reflects the performance of these riders in net income, net of related hedges, in "Change in value of market risk benefits, net of related hedging gains (losses)," except for the portion of the change attributable to changes in the Company's non-performance risk ("NPR") which is recorded in OCI.

   Under U.S. GAAP, policyholder liabilities associated with our fixed and variable indexed annuity products 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, which the Company does not hedge, consistent with the Company and policyholder optionality that exists at renewal.

   2025 to 2024 Annual Comparison

   Adjusted operating income from our Institutional Retirement Strategies business decreased $143 million, including an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2025 included a net charge from this update of $32 million, while the results for 2024 included a net benefit of $132 million driven by favorable impacts related to assumptions for mortality.

   Excluding this item, adjusted operating income increased $21 million, primarily reflecting:

   • higher net investment spread results, driven by an increase in account values due to business growth, partially offset by lower income from derivatives; and

   • higher fee income, due to business growth of longevity reinsurance transactions.

   These variances were partially offset by:

   • higher operating expenses, driven by an update of internal expense allocations.

     Adjusted operating income from our Individual Retirement Strategies business decreased $31 million, including an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Results for 2025 included a net charge from this update of $81 million, mainly due to the establishment of reserves for certain fixed annuity products, while the results for 2024 included a net benefit of $8 million.

     Excluding this item, adjusted operating income increased $58 million, primarily reflecting:

   • higher net investment spread results, due to growth in indexed variable and fixed annuities and higher income from non-coupon investments, partially offset by the impact of lower short-term interest rates.

     This variance was partially offset by:

   • lower fee income, net of distribution expenses, due to lower average separate account values driven by net outflows from the run-off of the traditional variable annuity block, partially offset by favorable equity markets; and

   • higher amortization costs.

     Revenues from our Institutional Retirement Strategies business decreased $11,538 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues decreased $11,926 million, primarily reflecting:

   • lower pension risk transfer premiums due to the absence of significant sales that occurred in the prior year, with corresponding offsets in policyholders' benefits, as discussed below.

     Benefits and expenses of our Institutional Retirement Strategies business decreased $11,395 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses decreased $11,947 million, primarily reflecting:

   • lower policyholders' benefits, including changes in reserves, related to the lower pension risk transfer premiums discussed above.

     Revenues from our Individual Retirement Strategies business increased $416 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, revenues increased $408 million, primarily reflecting:

   • higher net investment income, from growth in indexed variable and fixed annuities and higher income from non-coupon investments.

     This variance was partially offset by:

   • lower asset management and service fees, as well as lower policy charges and fee income due to lower average separate account values, driven by net outflows from the run-off of the traditional variable annuity block, partially offset by favorable equity markets; and

   • lower other income, driven by the impact of less favorable short-term interest rates on collateral posted to counterparties.

     Benefits and expenses of our Individual Retirement Strategies business increased $447 million. Excluding the impact of our annual reviews and update of assumptions and other refinements, as discussed above, benefits and expenses increased $350 million, primarily reflecting:

   • higher interest credited to policyholders' account balances and higher amortization of deferred policy acquisition costs, reflecting business growth.

     This variance was partially offset by:

   • lower general and administrative expenses.

Account Values

Institutional Retirement Strategies. Account values are a significant driver of our operating results and are primarily driven by net additions (withdrawals) and the impact of market changes. The investment income and interest we credit to policyholders on our spread-based products varies with the level of general account values. The income we earn on most of our fee-based products varies with the level of fee-based account values as many policy fees are determined by these values.

The following tables set forth account value information of Institutional Retirement Strategies' products for the periods indicated. Account values include both internally- and externally-managed client balances as the total balances drive revenue for the Institutional Retirement Strategies business. For additional information regarding internally-managed balances, see "-PGIM."

Year Ended December 31,

1. Beginning total account values, net of reinsurance ceded, were $279,191 million, $258,417 million and $251,818 million for the years ended December 31, 2025, 2024 and 2023, respectively.

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

3. "Other" activity includes the effect of foreign exchange rate changes associated with our international reinsurance business and changes in asset balances for externally-managed accounts. For the years ended December 31, 2025, 2024 and 2023, "Other" activity also includes $3,648 million in receipts offset by $3,698 million in payments, $3,148 million in receipts offset by $3,231 million in payments, and $3,557 million in receipts offset by

   $3,533 million in payments, respectively, related to funding agreements backed by commercial paper that typically have maturities of less than 90 days.

4. Represents notional amounts based on present value of future benefits under international reinsurance contracts.

   2025 to 2024 Annual Comparison

   The increase in Institutional Retirement Strategies net account values primarily reflects:

   • interest credited on customer funds and an increase in the market value of assets; and

   • the positive impact of foreign exchange rate changes.

Individual Retirement Strategies. Account values are a significant driver of our operating results. Since most fees are determined by the level of separate account assets, fee income varies primarily based on the level of account values. Account values are driven by net flows from new business sales, surrenders, withdrawals and benefit payments, policy charges and the impact of positive or negative market value changes.

The following tables set forth account value information of Individual Retirement Strategies' products for the periods indicated:

Year Ended December 31,

1. Beginning total account values, net of reinsurance ceded, were $127,120 million, $117,911 million, and $119,205 million for the years ended December 31, 2025, 2024 and 2023, respectively.

2. Includes Prudential FlexGuard and FlexGuard Income index variable annuities.

3. Includes Prudential Premier Investment, MyRock and other variable contracts with and without guaranteed minimum income and withdrawal benefits.

   2025 to 2024 Annual Comparison

   The decrease in Individual Retirement Strategies sales, net of full surrenders and death benefits, primarily reflects:

   • higher full surrenders; and

   • lower sales of indexed variable annuities products.

     The increase in Individual Retirement Strategies net account values primarily reflects:

   • market value appreciation.

     This variance was partially offset by:

   • lower net flows driven by net outflows from the run-off of the traditional variable annuity block, partially offset by net indexed variable and fixed annuity inflows.

     Risks and Risk Mitigants

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

     Fixed Annuity Risks and Risk Mitigants. The primary risk exposure of our fixed annuity products relates to investment risks we bear for providing customers a minimum guaranteed interest rate or an index-linked interest rate required to be credited to the customer's account value, which include interest rate fluctuations and/or sustained periods of low interest rates, and credit risk related to the underlying investments. We manage these risk exposures primarily through our investment strategies, inclusive of derivatives, and product design features, which include credit rate resetting subject to the minimum guaranteed interest rate as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, a portion of our fixed products has a market value adjustment provision that affords protection of lapse in the case of rising interest rates. We also manage these risk exposures through external reinsurance for certain of our fixed annuity products. For additional information regarding our external reinsurance agreements, see Note 15 to the Consolidated Financial Statements.

     Indexed Variable Annuity Risks and Risk Mitigants. The primary risk exposure of our indexed variable annuity products relates to the investment risks we bear in order to credit to the customer's account balance the required crediting rate based on the performance of the elected indices at the end of each term. We manage this risk primarily through our investment strategies, inclusive of derivatives,

     and product design features, which include credit rate resetting subject to contractual minimums as well as surrender charges applied during the early years of the contract that help to provide protection for premature withdrawals. In addition, our indexed variable annuity strategies have an interim value provision that provides some protection from lapse in the case of rising interest rates.

     Variable Annuity Risks and Risk Mitigants. The primary risk exposures of our variable annuity contracts relate to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including capital markets assumptions such as equity market returns, interest rates and market volatility, along with actuarial assumptions such as contractholder mortality, the timing and amount of annuitization and withdrawals, and contract lapses. For these risk exposures, achievement of our expected returns is subject to the risk that actual experience will differ from the assumptions used in the original pricing of these products. We manage our exposure to certain risks driven by fluctuations in capital markets primarily through a combination of (i) Product Design Features, and (ii) our Asset Liability Management Strategy, as discussed below. We also manage these risk exposures through external reinsurance for certain of our variable annuity products. For additional information regarding our external reinsurance agreements, see Note 15 to the Consolidated Financial Statements.

     1. Product Design Features:

        A portion of the variable annuity contracts that we offered include an automatic rebalancing feature, also referred to as an asset transfer feature. This feature is implemented at the contract level, and transfers assets between certain variable investment sub-accounts selected by the annuity contractholder and, depending on the benefit feature, a fixed-rate account in the general account or a bond fund sub-account within the separate accounts. The objective of the automatic rebalancing feature is to reduce our exposure to equity market risk and market volatility. Other product design features we utilize include, among others, asset allocation restrictions, minimum issuance age requirements and certain limitations on the amount of purchase payments, as well as a required minimum allocation to our general account for certain of our products. In addition, there is diversity in our fee arrangements, as certain fees are primarily based on the benefit guarantee amount, the contractholder account value and/or premiums, which helps preserve certain revenue streams when market fluctuations cause account values to decline.

     2. Asset Liability Management ("ALM") Strategy (including fixed income instruments and derivatives):

     We employ an ALM strategy that utilizes a combination of both traditional fixed income instruments and derivatives to meet expected liabilities associated with our annuity guarantees that under U.S. GAAP are considered MRBs. The MRB liability that we hedge consists of expected living and death benefit claims under various market conditions, which are managed using fixed income instruments, derivatives, or a combination thereof. For our Prudential Defined Income ("PDI") variable annuity, we utilize fixed income instruments to meet expected liabilities. For the portion of our ALM strategy executed with derivatives, we enter into a range of exchange-traded and over-the-counter ("OTC") equity, interest rate and credit derivatives, including, but not limited to: equity and treasury futures; total return, credit default and interest rate swaps; and options including equity options, swaptions, and floors and caps. The intent of this strategy is to more efficiently manage the capital and liquidity associated with these products while continuing to mitigate fluctuations in net income due to movements in capital markets. To achieve this, we periodically review and recalibrate the ALM strategy by optimizing the mix of derivatives and fixed income instruments to achieve expected outcomes.

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

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

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

Product Specific Risks and Risk Mitigants

For certain living benefit guarantees, claims will primarily represent the funding of contractholder lifetime withdrawals after the cumulative withdrawals have first exhausted the contractholder account value. Due to the age of the in-force block, limited claim payments have occurred to date, and they are not expected to increase significantly within the next five years, based upon current assumptions. The timing and amount of future claims will depend on actual returns on contractholder account value and actual contractholder behavior relative to our assumptions. The majority of our current living benefit guarantees provide for guaranteed lifetime contractholder withdrawal payments inclusive of a "highest daily" contract value guarantee. Our PDI variable annuity complements our variable annuity products with the highest daily benefit and provides for guaranteed lifetime contractholder withdrawal payments but restricts contractholder asset allocation to a single bond fund sub-account within the separate accounts.

The majority of our traditional variable annuity contracts with living benefit guarantees, and contracts with our highest daily living benefit features, include risk mitigants in the form of an automatic rebalancing feature and/or inclusion in our ALM strategy. We may also utilize external reinsurance as a form of additional risk mitigation. The risks associated with the guaranteed benefits of certain legacy products that were sold prior to our development of the automatic rebalancing feature are also managed through our ALM strategy. Certain legacy products with GMAB rider options include the automatic rebalancing feature but are not included in the ALM strategy. For additional information regarding our external reinsurance agreements, see Note 15 to the Consolidated Financial Statements.

For our GMDBs, we provide a benefit payable in the event of death. Our base GMDB is generally equal to a return of cumulative deposits adjusted for any partial withdrawals. Certain products include an optional enhanced GMDB based on the greater of a minimum return on the contract value or an enhanced value. We have retained the risk that the total amount of death benefit payable may be greater than the contractholder account value; however, a substantial portion of the account values associated with GMDBs are subject to an automatic rebalancing feature because the contractholder also selected a living benefit guarantee which includes an automatic rebalancing feature. All of the variable annuity account values with living benefit guarantees also contain GMDBs. The living and death benefit features for these contracts cover the same insured life and, consequently, we have insured both the longevity and mortality risk on these contracts.

The following table sets forth the risk management profile of our living benefit guarantees and GMDB features as of the periods indicated:

December 31,

2025 2024 2023

Account % of Account % of Account % of Value Total Value Total Value Total

($ in millions)

Living benefit/GMDB features(1):

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

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

3. Excludes retained PDI which is presented separately within this table.

4. Represents contracts subject to reinsurance transactions with external counterparties. Includes approximately $8 billion of account values in relation to the PDI reinsurance transaction, and certain Highest Daily Lifetime Income ("HDI") v.3.0 business for the period April 1, 2015 through December 31, 2016. The HDI contracts with living benefits also have an automatic rebalancing feature. See Note 15 to the Consolidated Financial Statements for additional information.

5. Includes Prudential FlexGuard, FlexGuard Income and other variable contracts that have a GMDB feature and do not have an automatic rebalancing feature.

Results Excluded from Adjusted Operating Income

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

Year Ended December 31, 2025 2024 2023

(in millions)(1)

Results excluded from adjusted operating income:

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

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

3. Represents the change in the liability for our fixed and variable indexed annuities, including the fair value of embedded derivative instruments