Financial Analysis

SHORT-TERM AND LONG-TERM DEBT Short-term Debt The table below presents the Companys short-term debt at December 31, for the years indicated as follows: 2025 2024 ($ in millions) Commercial paper: Prudential Financial $ 25 $ 25 Prudential Funding, LLC 849 496 Subtotal commercial paper 874 521 Current portion of long-term debt: Senior Notes 536 0 Surplus Notes 0 347 Mortgage Debt 33 85 Subtotal Current portion of long-term debt 569 432 Subtotal 1,443 953 Less: Assets under set-off arrangements 0 0 Total short-term debt(1) $ 1,443 $ 953 Supplemental short-term debt information: Portion of commercial paper borrowings due overnight $ 175 $ 310 Daily average commercial paper outstanding for the quarter ended $ 2,389 $ 1,823 Weighted average maturity of outstanding commercial paper, in days 11 15 Weighted average interest rate on outstanding commercial paper 3.72 % 4.61 % __________ (1) Includes Prudential Financial debt of $561 million and $25 million as of December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the Company was in compliance with all covenants related to the above debt. Commercial Paper Prudential Financial has a commercial paper program with an authorized capacity of $3.0 billion. Prudential Financials commercial paper borrowings have generally been used to fund the working capital needs of its subsidiaries and provide short-term liquidity at Prudential Financial. Prudential Funding, LLC (Prudential Funding), a wholly-owned subsidiary of PICA, has …

DebtDisclosureTextBlock · excerpt; the full note is in the filing

SHARE-BASED PAYMENTS Omnibus Incentive Plan Prudential Financial, Inc.s Omnibus Incentive Plan provides stock-based awards including stock options, stock appreciation rights, restricted stock shares, restricted stock units, stock settled performance shares, and cash settled performance units. Dividend equivalents are generally provided on restricted stock shares and restricted stock units outstanding as of the record date. Dividend equivalents are generally accrued on target performance shares and units outstanding as of the record date. These dividend equivalents are paid only on the performance shares and units released up to a maximum of the target number of shares and units awarded. Generally, the requisite service period is the vesting period. There were 12,496,717 authorized shares available for grant under the Omnibus Incentive Plan as of December 31, 2025. Assurance IQ (AIQ) Acquisition The Company acquired AIQ on October 10, 2019. The terms of the acquisition included compensation awards that involved share-based payment arrangements that are linked to retention and therefore fall under the reporting requirements of ASC 718, Stock Compensation. These compensation awards include stock options, restricted stock units and performance shares. Compensation Costs Compensation cost for restricted stock units and performance shares granted to employees is measured by the share price of the underlying Common Stock at the date of grant. Compensation cost for employee stock opt …

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FAIR VALUE OF ASSETS AND LIABILITIES Fair Value Measurement Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows: Level 1Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. The Companys Level 1 assets and liabilities primarily include certain cash equivalents and short-term investments, equity securities and derivative contracts that trade on an active exchange market. Level 2Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs. Th …

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GOODWILL AND OTHER INTANGIBLES The changes in the carrying value of goodwill by reportable segment are as follows: PGIM International Businesses Corporate and Other Other Total (in millions) Goodwill balance, December 31, 2022: $ 549 $ 115 $ 202 $ 10 $ 876 Acquisitions(1) 373 0 0 0 373 Impairments(2) 0 0 (177) 0 (177) Divestitures(3) 0 0 (23) 0 (23) Foreign currency translation 30 (7) (1) 0 22 Goodwill balance, December 31, 2023: 952 108 1 10 1,071 Foreign currency translation and other (6) (12) 0 0 (18) Goodwill balance, December 31, 2024: 946 96 1 10 1,053 Foreign currency translation and other 47 1 (1) (10) 37 Goodwill balance, December 31, 2025: $ 993 $ 97 $ 0 $ 0 $ 1,090 __________ (1) During 2023, PGIM acquired a majority stake in Deerpath Capital Management, LP, a leading U.S.-based private credit and direct lending manager. The goodwill associated with that acquisition includes a measurement period adjustment made during 2024. (2) Corporate and Other includes the impairment of the remaining goodwill allocated with Assurance IQ. (3) Corporate and Other includes a sale of a foreign operation classified as a divested business. The Company tests goodwill for impairment annually, as of December 31, and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount, as discussed in further detail in Note 2. The Company performed the annual goodwill impairment test using the quant …

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INCOME TAXES The following schedule discloses significant components of income tax expense (benefit) for each year presented: Year Ended December 31, 2025 2024 2023 (in millions) Current tax expense (benefit): U.S. $ 60 $ 495 $ (4) State and local 16 35 25 Foreign 579 755 667 Total current tax expense (benefit) 655 1,285 688 Deferred tax expense (benefit): U.S.(1) (125) (545) 323 State and local 2 (1) 0 Foreign(1) 521 (232) (398) Total deferred tax expense (benefit) 398 (778) (75) Total income tax expense (benefit) on income (loss) before equity in earnings of joint ventures and other operating entities 1,053 507 613 Income tax expense (benefit) on equity in earnings of joint ventures and other operating entities 40 41 34 Income tax expense (benefit) on discontinued operations 0 0 0 Income tax expense (benefit) reported in equity related to: Other comprehensive income (loss) 1,003 364 (837) Total income taxes $ 2,096 $ 912 $ (190) __________ (1) The U.S. deferred tax includes a benefit of $318 million, which is fully offset by a corresponding charge in foreign deferred taxes related to one of the Companys Bermuda operating insurance companies. These amounts are due to changes in Bermuda tax law in 2025. Overall, there is no impact on total taxes, as all earnings of the Bermuda entity are subject to U.S. taxation at a rate of 21% Reconciliation of Expected Tax at Statutory Rates to Reported Income Tax Expense (Benefit) The differences between income taxes expected at the U.S. …

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LEASES The Company occupies leased office space and other facilities in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. The leases, depending on their specific terms, are classified as either operating or finance with the vast majority of leases falling under the operating classification. The leases in the Companys portfolio have remaining lease terms from less than one year to 23 years, some of which include options to extend the leases for up to 15 years, and some of which include options to terminate the leases within 12 years. An analysis of all economic and non-economic factors associated with leases containing certain options, including factors such as the existence of cancellation penalties, leasehold improvements made to the underlying assets and location of the underlying assets, is conducted to determine whether those leases are reasonably certain to renew, and hence, should be included in the lease term that is used to establish the right-of-use assets and lease liabilities for those arrangements. The Company does not have residual guarantees associated with its lessee arrangements, nor are there any restrictions or covenants associated with its lease arrangements. Lessee Supplemental balance sheet information related to leases where the Company is the lessee is included below. Right-of-use assets and lease liabilities are included within Other assets and Other liabiliti …

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ASUs adopted during the year ended December 31, 2025 Standard Description Effective date and method of adoption Effect on the financial statements or other significant matters ASU 202309 Income Taxes (Topic 740) Improvements to Income Tax Disclosures This ASU requires entities to provide additional information primarily related to the effective tax rate reconciliation and income taxes paid. January 1, 2025 using the prospective method. Adoption of the ASU did not have an impact on the Companys Consolidated Financial Statements but resulted in expanded disclosures in the Notes to the Consolidated Financial Statements. …

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EMPLOYEE BENEFIT PLANS Pension and Other Postretirement Plans The Company has funded and non-funded non-contributory defined benefit pension plans (Pension Benefits), which cover substantially all of its employees. For some employees, benefits are based on final average earnings and length of service (the traditional formula), while benefits for other employees are based on an account balance that takes into consideration age, length of service and earnings during their career (the cash balance formula). At December 31, 2025, approximately 81% of the Companys Pension Benefits relate to its domestic qualified pension plan, which initially determined benefits based on the traditional formula. Effective January 1, 2001, active domestic employees covered under this plan were given the option to convert from the traditional formula to the cash balance formula, and all new domestic employees began accruing benefits under the cash balance formula. As of December 31, 2025, approximately 64% and 36% of the benefit obligation under this plan relates to participants under the traditional formula (including all retirees who are receiving an annuity payment) and cash balance formula, respectively. At December 31, 2025, the vast majority of active employees under this plan are accruing benefits under the cash balance formula. The Company provides certain health care and life insurance benefits for its retired employees, their beneficiaries and covered dependents (Other Postretirement Benef …

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RELATED PARTY TRANSACTIONS In September 2023, the Company invested approximately $200 million in Prismic, a Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Re, a licensed Bermuda-based life and annuity reinsurance company. Also in September 2023, the Company entered into an agreement with Prismic Re, to reinsure approximately $9 billion of reserves for certain structured settlement annuity contracts issued by PICA, a wholly-owned subsidiary of Prudential Financial. Separately, the Company, through PGIM, entered into an investment management agreement with Prismic to manage a large portion of Prismic Re's assets. In March 2025, the Company entered into an agreement with Prismic Re International, a wholly-owned subsidiary of Prismic, to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies originated by the Companys Japanese affiliates. In connection with this transaction, the Company invested an additional $103 million in Prismic. PGIM also provides investment management services on a large portion of Prismic Re Internationals assets. In October 2025, the Company entered into an agreement with Prismic Re, to reinsure certain fixed annuity new business contracts issued by Pruco Life, a wholly-owned subsidiary of Prudential Financial, on or after October 1, 2025. As of December 31, 2025 and 2024, the Companys ownership in Prismic is approximately 20% and the carrying value of the Comp …

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SEGMENT INFORMATION Segments The Companys principal operations consist of PGIM (the Companys global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance, and Individual Life businesses), the International Businesses, the Closed Block division, and the Companys Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included in Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for discontinued operations accounting treatment under U.S. GAAP. The Companys 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. The PGIM segment provides a comprehensive array of investment management solutions across a variety of asset classes, including public fixed income, public equity, real estate, private credit and other alternatives, and multi-asset class strategies, to institutional and retail clients, as well as the Companys affiliated insurance and retirement businesses. The U.S. Businesses offer a broad range of products and solutions that cover protection, retirement, savings, income and investment needs. The U.S. Businesses are …

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SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS ASSETS Fixed maturities, available-for-sale, at fair value (AFS debt securities) includes bonds, notes and redeemable preferred stock that are carried at fair value. See Note 6 for additional information regarding the determination of fair value. The purchased cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity or, if applicable, call date. AFS debt securities, where fair value is below amortized cost, are reviewed quarterly to determine whether the amortized cost basis of the security is recoverable. For mortgage-backed and asset-backed AFS debt securities, a credit impairment will be recognized in earnings as an allowance for credit losses and reported in Realized investment gains (losses), net, to the extent the amortized cost exceeds the net present value of projected future cash flows (the net present value) for the security. For all other AFS debt securities, qualitative factors are first considered including, but not limited to, the extent of the decline and the reasons for the decline in value (e.g., credit events, currency or interest-rate related, including general credit spread widening), and the financial condition of the issuer. If analysis of these qualitative factors results in the security needing to be impaired, a credit impairment will be recognized in earnings as an allowance for credit losses and reported in Realized investment gains (losses), net, to th …

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EQUITY Preferred Stock As of December 31, 2025, 2024 and 2023, the Company had 10,000,000 shares of preferred stock authorized but none issued or outstanding. Common Stock On the date of demutualization in December 2001, Prudential Financial completed an initial public offering of its Common Stock. The shares of Common Stock issued were in addition to shares of Common Stock the Company distributed to policyholders as part of the demutualization. The Common Stock is traded on the New York Stock Exchange under the symbol PRU. In the event of a liquidation, dissolution or winding-up of the Company, holders of Common Stock would be entitled to receive a proportionate share of the net assets of the Company that remain after paying all liabilities and the liquidation preferences of any preferred stock. The changes in the number of shares of Common Stock issued, held in treasury and outstanding, are as follows for the periods indicated: Common Stock Issued Held In Treasury Outstanding (in millions) Balance, December 31, 2022 666.3 300.3 366.0 Common Stock issued 0.0 0.0 0.0 Common Stock acquired 0.0 10.9 (10.9) Stock-based compensation programs(1) 0.0 (4.1) 4.1 Balance, December 31, 2023 666.3 307.1 359.2 Common Stock issued 0.0 0.0 0.0 Common Stock acquired 0.0 8.6 (8.6) Stock-based compensation programs(1) 0.0 (4.0) 4.0 Balance, December 31, 2024 666.3 311.7 354.6 Common Stock issued 0.0 0.0 0.0 Common Stock acquired 0.0 9.3 (9.3) Stock-based compensation programs(1) 0.0 (2.7) 2.7 …

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SUBSEQUENT EVENTS Common Stock Dividend On February 3, 2026, Prudential Financials Board of Directors declared a cash dividend of $1.40 per share of Common Stock, payable on March 12, 2026 to shareholders of record as of February 17, 2026. …

SubsequentEventsTextBlock · excerpt; the full note is in the filing