Form: 10-Q

Quarterly report [Sections 13 or 15(d)]

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2026
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the Transition Period from              to             
 
Commission File Number 001-16707
Prudential Financial, Inc.
(Exact Name of Registrant as Specified in its Charter) 
New Jersey22-3703799
(State or Other Jurisdiction of
Incorporation or Organization)
(I.R.S. Employer
Identification Number)
751 Broad Street
Newark, NJ 07102
(973) 802-6000
(Address and Telephone Number of Registrant’s Principal Executive Offices)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
Title of Each Class Trading Symbols(s)Name of Each Exchange on Which Registered
Common Stock, Par Value $.01PRUNew York Stock Exchange
5.950% Junior Subordinated NotesPRHNew York Stock Exchange
5.625% Junior Subordinated NotesPRSNew York Stock Exchange
4.125% Junior Subordinated NotesPFHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of the Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerxAccelerated Filer
Non-accelerated FilerSmaller Reporting Company
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐  No  x

As of April 30, 2026, 347 million shares of the registrant’s Common Stock (par value $0.01) were outstanding.


Table of Contents
TABLE OF CONTENTS
 
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.



Table of Contents
Forward-Looking Statements

Certain of the statements included in this Quarterly Report on Form 10-Q 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 estimated financial impacts, outcome and consequences of the investigation into and remediation of employee misconduct in Japan, including the duration of the suspension of sales (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 the Annual Report on Form 10-K for the year ended December 31, 2025 for discussion of certain risks relating to our businesses and investment in our securities.











































i

Table of Contents
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Financial Position
March 31, 2026 and December 31, 2025 (in millions, except share amounts)

March 31,
2026
December 31,
2025
ASSETS
Fixed maturities, available-for-sale, at fair value (allowance for credit losses: 2026-$249; 2025-$183) (amortized cost: 2026-$363,246; 2025-$357,996)(1)
$330,851 $331,455 
Fixed maturities, trading, at fair value (amortized cost: 2026-$16,814; 2025-$15,536)(1)
15,831 14,869 
Assets supporting experience-rated contractholder liabilities, at fair value4,781 4,842 
Equity securities, at fair value (cost: 2026-$10,333; 2025-$8,303)(1)
12,552 10,972 
Commercial mortgage and other loans (net of $487 and $469 allowance for credit losses; includes $1,495 and $1,056 of loans measured at fair value under the fair value option at March 31, 2026 and December 31, 2025, respectively)(1)
65,412 64,715 
Policy loans9,988 9,958 
Other invested assets (net of $2 and $2 allowance for credit losses; includes $8,527 and $8,286 of assets measured at fair value at March 31, 2026 and December 31, 2025, respectively)(1)
27,792 27,294 
Short-term investments (net of allowance for credit losses: 2026-$11; 2025-$0)
6,917 6,414 
Total investments474,124 470,519 
Cash and cash equivalents(1)
15,936 19,712 
Accrued investment income(1)3,633 3,636 
Deferred policy acquisition costs
21,730 21,530 
Value of business acquired
382 397 
Market risk benefit assets
2,166 2,330 
Reinsurance recoverables and deposit receivables (net of $14 and $14 allowance for credit losses; includes $745 and $573 of embedded derivatives at fair value at March 31, 2026 and December 31, 2025, respectively)(2)
43,213 44,077 
Income tax assets0 279 
Other assets (net of $1 and $1 allowance for credit losses; includes $0 and $0 of assets at fair value at March 31, 2026 and December 31, 2025, respectively)(1)(2)
15,176 15,009 
Separate account assets189,036 196,251 
TOTAL ASSETS$765,396 $773,740 
LIABILITIES, MEZZANINE EQUITY AND EQUITY
LIABILITIES
Future policy benefits
$262,470 $266,914 
Policyholders’ account balances
192,131 191,307 
Market risk benefit liabilities
5,000 4,623 
Policyholders’ dividends809 1,272 
Securities sold under agreements to repurchase10,975 9,598 
Cash collateral for loaned securities8,905 8,700 
Reinsurance and funds withheld payables (includes $78 and $174 of embedded derivatives at fair value at March 31, 2026 and December 31, 2025, respectively)(2)
19,270 18,844 
Income tax liabilities
255 0 
Short-term debt946 1,443 
Long-term debt18,882 18,856 
Other liabilities (includes $15 and $16 allowance for credit losses and $6,401 and $6,215 of derivatives at fair value at March 31, 2026 and December 31, 2025, respectively)(1)
18,507 17,692 
Notes issued by consolidated variable interest entities (includes $1,330 and $767 measured at fair value under the fair value option at March 31, 2026 and December 31, 2025, respectively)(1)
3,283 2,659 
Separate account liabilities189,036 196,251 
Total liabilities730,469 738,159 
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 21)
MEZZANINE EQUITY
Redeemable noncontrolling interests
2,608 2,794 
Total mezzanine equity2,608 2,794 
EQUITY
Preferred Stock ($0.01 par value; 10,000,000 shares authorized; none issued)
0 0 
Common Stock ($0.01 par value; 1,500,000,000 shares authorized; 666,305,189 shares issued as of both March 31, 2026 and December 31, 2025)
6 6 
Additional paid-in capital25,948 26,013 
Common Stock held in treasury, at cost (318,980,082 and 318,361,498 shares at March 31, 2026 and December 31, 2025, respectively)
(25,461)(25,335)
Accumulated other comprehensive income (loss)(2)(3,450)(3,077)
Retained earnings
34,932 34,831 
Total Prudential Financial, Inc. equity31,975 32,438 
Noncontrolling interests344 349 
Total equity32,319 32,787 
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY
$765,396 $773,740 
__________
(1)See Note 4 for details of balances associated with variable interest entities.
(2)See Note 20 for additional information regarding related party transactions.

See Notes to Unaudited Interim Consolidated Financial Statements
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PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Operations
Three Months Ended March 31, 2026 and 2025 (in millions, except per share amounts)
 
 Three Months Ended
March 31,
 20262025
REVENUES
Premiums (includes $5 and $1 of gains (losses) from changes in estimates on deferred profit liability amortization for the three months ended March 31, 2026 and 2025, respectively)(1)
$8,362 $7,000 
Policy charges and fee income
1,132 1,157 
Net investment income
5,665 5,130 
Asset management and service fees(1)
996 984 
Other income (loss)(1)
30 280 
Realized investment gains (losses), net(1)(364)(730)
Change in value of market risk benefits, net of related hedging gains (losses)
(295)(351)
Total revenues15,526 13,470 
BENEFITS AND EXPENSES
Policyholders’ benefits(1)9,533 8,140 
Change in estimates of liability for future policy benefits(1)39 (50)
Interest credited to policyholders’ account balances
1,109 825 
Dividends to policyholders232 145 
Amortization of deferred policy acquisition costs(1)
411 407 
General and administrative expenses(1)3,469 3,083 
Total benefits and expenses14,793 12,550 
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES
733 920 
Total income tax expense (benefit)
129 207 
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT VENTURES AND OTHER OPERATING ENTITIES
604 713 
Equity in earnings of joint ventures and other operating entities, net of taxes
2 29 
NET INCOME (LOSS)606 742 
Less: Income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests
9 35 
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.$597 $707 
EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.$1.69 $1.97 
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.$1.68 $1.96 
__________
(1)See Note 20 for additional information regarding related party transactions.














See Notes to Unaudited Interim Consolidated Financial Statements
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PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Comprehensive Income
Three Months Ended March 31, 2026 and 2025 (in millions)
 
 Three Months Ended
March 31,
 20262025
NET INCOME (LOSS)$606 $742 
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period
(69)386 
Net unrealized investment gains (losses)
(4,736)(227)
Interest rate remeasurement of future policy benefits(1)4,435 2,036 
Gain (loss) from changes in non-performance risk on market risk benefits
208 167 
Defined benefit pension and postretirement unrecognized periodic benefit (cost)18 3 
Total(144)2,365 
Less: Income tax expense (benefit) related to other comprehensive income (loss)
230 395 
Other comprehensive income (loss), net of taxes(374)1,970 
Comprehensive income (loss)232 2,712 
Less: Comprehensive income (loss) attributable to noncontrolling interests and redeemable noncontrolling interests8 35 
Comprehensive income (loss) attributable to Prudential Financial, Inc.$224 $2,677 
__________
(1)See Note 20 for additional information regarding related party transactions.
































See Notes to Unaudited Interim Consolidated Financial Statements
 
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PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Equity
Three Months Ended March 31, 2026 and 2025(in millions)
 
 Prudential Financial, Inc. Equity  

Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held In
Treasury
Accumulated
Other
Comprehensive
Income (Loss)
Total
Prudential
Financial, Inc.
Equity
Non-controlling
Interests
Total
Equity
Redeemable Non-controlling Interests
Balance, December 31, 2025$6 $26,013 $34,831 $(25,335)$(3,077)$32,438 $349 $32,787 $2,794 
Common Stock acquired(251)(251)(251)
Contributions from noncontrolling interests12 12 213 
Distributions to noncontrolling interests(17)(17)(62)
Consolidations (deconsolidations) of noncontrolling interests0 (345)
Stock-based compensation programs(65)125 60 60 
Dividends declared on Common Stock(496)(496)(496)
Comprehensive income:
Net income (loss)597 597 1 598 8 
Other comprehensive income (loss), net of tax(373)(373)(1)(374)
Total comprehensive income (loss)597 (373)224 0 224 8 
Balance, March 31, 2026$6 $25,948 $34,932 $(25,461)$(3,450)$31,975 $344 $32,319 $2,608 

 Prudential Financial, Inc. Equity  
 Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Common
Stock
Held In
Treasury
Accumulated
Other
Comprehensive
Income (Loss)
Total
Prudential
Financial, Inc.
Equity
Non-controlling
Interests
Total
Equity
Redeemable Non-controlling Interests
Balance, December 31, 2024
$6 $25,901 $33,187 $(24,511)$(6,711)$27,872 $315 $28,187 $1,939 
Common Stock acquired(251)(251)(251)
Contributions from noncontrolling interests4 4 64 
Distributions to noncontrolling interests(21)(21)(18)
Consolidations (deconsolidations) of noncontrolling interests13 13 8 
Stock-based compensation programs(30)101 71 71 
Dividends declared on Common Stock(486)(486)(486)
Comprehensive income:
Net income (loss)707 707 9 716 26 
Other comprehensive income (loss), net of tax1,970 1,970 1,970 
Total comprehensive income (loss)707 1,970 2,677 9 2,686 26 
Balance, March 31, 2025
$6 $25,871 $33,408 $(24,661)$(4,741)$29,883 $320 $30,203 $2,019 









See Notes to Unaudited Interim Consolidated Financial Statements
4

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PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Cash Flows
Three Months Ended March 31, 2026 and 2025 (in millions)

Three Months Ended
March 31,
20262025
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)
$606 $742 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Realized investment (gains) losses, net(1)
364 730 
Change in value of market risk benefits, net of related hedging (gains) losses
295 351 
Policy charges and fee income
(620)(507)
Interest credited to policyholders’ account balances
1,109 825 
Depreciation and amortization
143 (161)
(Gains) losses on assets supporting experience-rated contractholder liabilities, net119 256 
Change in:
Deferred policy acquisition costs(1)
(213)(375)
Future policy benefits and other insurance liabilities
525 (205)
Reinsurance related-balances(1)
(609)(601)
Income taxes
490 133 
Derivatives, net
240 (1,336)
Other, net(1)
(1,441)(2,358)
Cash flows from (used in) operating activities1,008 (2,506)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
Fixed maturities, available-for-sale15,183 10,959 
Fixed maturities, trading876 1,123 
Assets supporting experience-rated contractholder liabilities336 486 
Equity securities1,778 2,344 
Commercial mortgage and other loans1,709 1,947 
Policy loans456 461 
Other invested assets995 876 
Short-term investments9,596 5,258 
Payments for the purchase/origination of:
Fixed maturities, available-for-sale(21,147)(16,975)
Fixed maturities, trading(1,929)(1,637)
Assets supporting experience-rated contractholder liabilities(470)(615)
Equity securities(3,703)(1,862)
Commercial mortgage and other loans(2,051)(2,172)
Policy loans(396)(370)
Other invested assets(1,100)(834)
Short-term investments(10,113)(4,887)
Derivatives, net(274)325 
Other, net
78 108 
Cash flows from (used in) investing activities(10,176)(5,465)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders’ account deposits9,869 8,993 
Policyholders’ account withdrawals(5,712)(4,600)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities1,583 639 
Cash dividends paid on Common Stock(502)(491)
Net change in financing arrangements (maturities 90 days or less)1 266 
Common Stock acquired(246)(246)
Common Stock reissued for exercise of stock options29 28 
Proceeds from the issuance of debt (maturities longer than 90 days)105 841 
Repayments of debt (maturities longer than 90 days)(560)(191)
Proceeds from notes issued by consolidated VIEs627 7 
Other, net(1)
246 253 
Cash flows from (used in) financing activities5,440 5,499 
Effect of foreign exchange rate changes on cash balances(28)56 
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS(3,756)(2,416)
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, BEGINNING OF YEAR19,749 18,520 
CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD$15,993 $16,104 



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PRUDENTIAL FINANCIAL, INC.
Unaudited Interim Consolidated Statements of Cash Flows
Three Months Ended March 31, 2026 and 2025 (in millions)

Three Months Ended
March 31,
20262025
NON-CASH TRANSACTIONS DURING THE PERIOD
Treasury Stock shares issued for stock-based compensation programs$192 $172 
Novation of investment contracts(2)
$1,659 $0 
Prismic Re International reinsurance transaction(3):
Net assets transferred, excluding Cash and cash equivalents
$0 $6,069 
Deposit assets established for Policyholders’ account balances ceded
0 (6,288)
Unwind of Deferred policy acquisition costs ceded
0 219 
Net cash received (paid)
$0 $0 
RECONCILIATION TO THE UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Cash and cash equivalents$15,936 $16,063 
Restricted cash and restricted cash equivalents (included in “Other assets”)57 41 
Total cash, cash equivalents, restricted cash and restricted cash equivalents$15,993 $16,104 
__________
(1)See Note 20 for additional information regarding related party transactions.
(2)“Cash flows from (used in) operating activities” exclude certain non-cash activities related to the novation of certain investment contracts from the Company to Empower Annuity Insurance Company of America and Empower Life & Annuity Insurance Company of New York (collectively, “Empower”). See note 12 for additional information regarding the reinsurance agreement with Empower.
(3)See Note 12 for additional information regarding the reinsurance agreement with Prismic Life Reinsurance International, Ltd. (“Prismic Re International”).































See Notes to Unaudited Interim Consolidated Financial Statements
6

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements

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

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

U.S. Legacy Products” segment: (i) traditional variable annuities with guaranteed living benefit riders and certain other annuity products, previously included in the former Individual Retirement Strategies segment, and (ii) guaranteed universal life policies, previously included in the Individual Life segment, have been combined into a new reportable segment named “U.S. Legacy Products.” This segment represents run-off blocks of business consisting of products that are no longer being sold in U.S. markets and will be managed with a focus on reducing risk and optimizing value.

Retirement” segment: The blocks of business in the former Individual Retirement Strategies segment that were not moved into the U.S. Legacy Products segment, discussed above, consisting primarily of registered index-linked annuity and fixed annuity products, and the products previously included in the former Institutional Retirement Strategies segment have been combined into a new reportable segment named “Retirement.” This combined segment better represents the Company’s strategic management, growth trajectory, and resource allocation policies.

Individual Life” segment: There were no other impacts to this segment other than the transfer of the guaranteed universal life policies, discussed above. The remaining blocks of business contained within this segment primarily consist of term, indexed universal life, and variable universal life products.

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

The Company’s principal operations now consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of Retirement, Group Insurance, Individual Life and U.S. Legacy Products), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included within Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, as well as the Divested and Run-off Businesses described above.

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

Basis of Presentation

The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial,
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for additional information regarding the Company’s consolidated variable interest entities. Intercompany balances and transactions have been eliminated.

In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Use of Estimates

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

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

Out of Period Adjustments

The Company recorded out of period adjustments resulting in a net charge of $150 million to “Income (loss) from operations before income taxes and equity in earnings of joint ventures and other operating entities” for the three months ended March 31, 2025. The adjustments included an overstatement of “Reinsurance recoverables and deposit receivables” and an understatement of “Deferred policy acquisition costs.” The impact of these adjustments, individually and in the aggregate, was not material to any previously reported quarterly or annual financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES AND PRONOUNCEMENTS

Recent Accounting Pronouncements

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of Accounting Standards Updates (“ASUs”) to the FASB Accounting Standards Codification (“ASC”). The Company considers the applicability and impact of all ASUs. ASUs listed below include those that have been adopted during the current fiscal year and/or those that have been issued but not yet adopted as of March 31, 2026, and as of the date of this filing. ASUs not listed below were assessed and determined to be either not applicable or not material.

ASUs issued but not yet adopted as of March 31, 2026
Standard
Description
Effective date and method
of adoption
Effect on the financial statements or other significant matters
ASU 2024-03—Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (DISE)
This ASU requires public companies to disclose, in interim and annual reporting periods, additional information about certain expenses in the notes to financial statements.
Effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted and applied either prospectively or retrospectively.
The Company is currently assessing the impact of the ASU on the Company’s Consolidated Financial Statements and Notes to the Consolidated Financial Statements.
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


3. INVESTMENTS
 
Fixed Maturity Securities
 
The following tables set forth the composition of fixed maturities, available-for-sale, as of the dates indicated:
 
 March 31, 2026
 Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Allowance for Credit LossesFair
Value
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$26,854 $475 $4,747 $0 $22,582 
Obligations of U.S. states and their political subdivisions5,540 103 584 0 5,059 
Foreign government securities
60,717 284 13,326 0 47,675 
U.S. public corporate securities117,124 1,316 10,685 20 107,735 
U.S. private corporate securities(1)47,818 912 2,303 109 46,318 
Foreign public corporate securities25,217 260 1,406 27 24,044 
Foreign private corporate securities41,638 961 3,104 91 39,404 
Asset-backed securities(2)21,482 200 66 2 21,614 
Commercial mortgage-backed securities10,154 50 328 0 9,876 
Residential mortgage-backed securities(3)6,702 23 181 0 6,544 
Total fixed maturities, available-for-sale(1)
$363,246 $4,584 $36,730 $249 $330,851 
__________
(1)Excludes notes with amortized cost of $15,844 million (fair value, $15,844 million), which have been offset with the associated debt under a netting agreement.
(2)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.
(3)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.

 December 31, 2025
 Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Allowance for Credit LossesFair
Value
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$26,334 $668 $4,823 $0 $22,179 
Obligations of U.S. states and their political subdivisions5,881 138 554 0 5,465 
Foreign government securities
62,469 497 12,352 0 50,614 
U.S. public corporate securities115,160 1,977 9,345 11 107,781 
U.S. private corporate securities(1)47,976 1,177 1,964 88 47,101 
Foreign public corporate securities24,496 413 1,178 28 23,703 
Foreign private corporate securities41,099 1,638 2,523 55 40,159 
Asset-backed securities(2)19,130 226 26 1 19,329 
Commercial mortgage-backed securities9,958 87 302 0 9,743 
Residential mortgage-backed securities(3)5,493 43 155 0 5,381 
Total fixed maturities, available-for-sale(1)
$357,996 $6,864 $33,222 $183 $331,455 
__________
(1)Excludes notes with amortized cost of $15,744 million (fair value, $15,744 million), which have been offset with the associated debt under a netting agreement.
(2)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.
(3)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


The following tables set forth the fair value and gross unrealized losses on fixed maturities, available-for-sale without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:
 
 March 31, 2026
 Less Than
Twelve Months
Twelve Months
or More
Total
 Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$7,022 $162 $11,075 $4,585 $18,097 $4,747 
Obligations of U.S. states and their political subdivisions669 18 3,310 566 3,979 584 
Foreign government securities
12,741 489 22,948 12,837 35,689 13,326 
U.S. public corporate securities27,994 672 48,859 9,998 76,853 10,670 
U.S. private corporate securities8,355 157 22,438 2,144 30,793 2,301 
Foreign public corporate securities6,319 132 8,098 1,272 14,417 1,404 
Foreign private corporate securities7,471 267 14,577 2,835 22,048 3,102 
Asset-backed securities9,533 30 655 36 10,188 66 
Commercial mortgage-backed securities1,323 8 5,014 320 6,337 328 
Residential mortgage-backed securities3,092 20 1,174 161 4,266 181 
Total fixed maturities, available-for-sale$84,519 $1,955 $138,148 $34,754 $222,667 $36,709 

 December 31, 2025
 Less Than
Twelve Months
Twelve Months
or More
Total
 Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
Fair
Value
Gross
Unrealized
Losses
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$3,644 $83 $12,075 $4,740 $15,719 $4,823 
Obligations of U.S. states and their political subdivisions399 9 3,631 545 4,030 554 
Foreign government securities
9,886 510 23,570 11,842 33,456 12,352 
U.S. public corporate securities9,789 218 52,459 9,114 62,248 9,332 
U.S. private corporate securities3,297 68 24,064 1,895 27,361 1,963 
Foreign public corporate securities2,253 35 8,586 1,142 10,839 1,177 
Foreign private corporate securities849 44 16,286 2,473 17,135 2,517 
Asset-backed securities2,979 6 626 20 3,605 26 
Commercial mortgage-backed securities249 1 5,435 301 5,684 302 
Residential mortgage-backed securities353 2 1,210 153 1,563 155 
Total fixed maturities, available-for-sale$33,698 $976 $147,942 $32,225 $181,640 $33,201 

As of March 31, 2026 and December 31, 2025, the gross unrealized losses on fixed maturities, available-for-sale securities without an allowance of $35,694 million and $32,392 million, respectively, related to “1” highest quality or “2” high quality securities based on the National Association of Insurance Commissioners (“NAIC”) or equivalent rating and $1,015 million and $809 million, respectively, related to other than high or highest quality securities based on NAIC or equivalent rating. As of
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

March 31, 2026, the $34,754 million of gross unrealized losses of twelve months or more were concentrated in the finance, consumer non-cyclical and utility sectors within corporate securities, as well as in foreign government securities. As of December 31, 2025, the $32,225 million of gross unrealized losses of twelve months or more were concentrated in the consumer non-cyclical, finance and utility sectors within corporate securities, as well as in foreign government securities.

In accordance with its policy described in Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, the Company concluded that an adjustment to earnings for credit losses related to these fixed maturity securities was not warranted at March 31, 2026. This conclusion was based on detailed analysis of the underlying credit and cash flows for each security. Gross unrealized losses are primarily attributable to increases in interest rates, general credit spread widening and foreign currency exchange rate movements. As of March 31, 2026, the Company did not intend to sell these securities, and it was not more likely than not that the Company would be required to sell these securities before the anticipated recovery of the amortized cost basis.

The following table sets forth the amortized cost and fair value of fixed maturities, available-for-sale by contractual maturities, as of the date indicated: 
March 31, 2026
 Amortized CostFair Value
(in millions)
Fixed maturities, available-for-sale:
Due in one year or less$22,569 $22,605 
Due after one year through five years66,157 65,912 
Due after five years through ten years
57,697 56,908 
Due after ten years(1)178,485 147,392 
Asset-backed securities21,482 21,614 
Commercial mortgage-backed securities10,154 9,876 
Residential mortgage-backed securities6,702 6,544 
Total$363,246 $330,851 
__________
(1)Excludes notes with amortized cost of $15,844 million (fair value, $15,844 million), which have been offset with the associated debt under a netting agreement.

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed and residential mortgage-backed securities are shown separately in the table above, as they do not have a single maturity date.
 
The following table sets forth the sources of fixed maturities, available-for-sale proceeds and related investment gains (losses), as well as losses on write-downs and the allowance for credit losses, for the periods indicated:

 Three Months Ended
March 31,
 20262025
 (in millions)
Fixed maturities, available-for-sale:
Proceeds from sales(1)$8,481 $4,912 
Proceeds from maturities/prepayments6,794 5,761 
Gross investment gains from sales and maturities359 282 
Gross investment losses from sales and maturities(872)(307)
Write-downs recognized in earnings(2)(165)(119)
(Addition to) release of allowance for credit losses(66)80 
__________ 
(1)Excludes activity from non-cash related proceeds due to the timing of trade settlements of $(92) million and $286 million for the three months ended March 31, 2026 and 2025, respectively.
(2)Amounts represent write-downs on credit adverse securities and securities actively marketed for sale.
11

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)


The following tables set forth the balance of and changes in the allowance for credit losses for fixed maturities, available-for-sale, as of and for the periods indicated:

Three Months Ended March 31, 2026
U.S. Treasury Securities and Obligations of U.S. States
Foreign Government Securities
U.S. and Foreign Corporate SecuritiesAsset-Backed SecuritiesCommercial Mortgage-Backed SecuritiesResidential Mortgage-Backed SecuritiesTotal
(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period$0 $0 $182 $1 $0 $0 $183 
Additions to allowance for credit losses not previously recorded0 0 55 1 0 0 56 
Reductions for securities sold during the period0 0 (2)0 0 0 (2)
Additions (reductions) on securities with previous allowance0 0 35 0 0 0 35 
Write-downs charged against the allowance0 0 (23)0 0 0 (23)
Balance, end of period$0 $0 $247 $2 $0 $0 $249 

Three Months Ended March 31, 2025
U.S. Treasury Securities and Obligations of U.S. States
Foreign Government Securities
U.S. and Foreign Corporate SecuritiesAsset-Backed SecuritiesCommercial Mortgage-Backed SecuritiesResidential Mortgage-Backed SecuritiesTotal
(in millions)
Fixed maturities, available-for-sale:
Balance, beginning of period$0 $0 $331 $0 $0 $0 $331 
Additions to allowance for credit losses not previously recorded0 0 16 1 0 0 17 
Reductions for securities sold during the period0 0 (6)0 0 0 (6)
Additions (reductions) on securities with previous allowance0 0 3 0 0 0 3 
Write-downs charged against the allowance0 0 (94)0 0 0 (94)
Balance, end of period$0 $0 $250 $1 $0 $0 $251 

For additional information regarding the Company’s methodology for developing its allowance and expected losses, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

For the three months ended March 31, 2026, the net increase in the allowance for credit losses on available-for-sale securities was primarily related to net additions in the consumer cyclical, energy and transportation sectors within corporate securities, due to adverse projected cash flows, partially offset by write-downs of distressed securities within the consumer cyclical sector. For the three months ended March 31, 2025, the net decrease in the allowance for credit losses on available-for-sale securities was related to write-downs within the communications, capital goods and consumer non-cyclical sectors within corporate securities, primarily due to security restructures.

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

 March 31, 2026December 31, 2025
 Amortized
Cost or Cost
Fair
Value
Amortized
Cost or Cost
Fair
Value
 (in millions)
Fixed maturities:
Corporate securities$60 $57 $57 $55 
Foreign government securities
633 612 611 596 
Obligations of U.S. government authorities and agencies and obligations of U.S. states
229 246 227 245 
Total fixed maturities(1)922 915 895 896 
Equity securities2,327 3,866 2,234 3,946 
Total assets supporting experience-rated contractholder liabilities(2)$3,249 $4,781 $3,129 $4,842 
__________ 
(1)As a percentage of amortized cost, 99% of the portfolio was considered high or highest quality based on NAIC or equivalent ratings, as of both March 31, 2026 and December 31, 2025.
(2)The portfolio consisted of public securities as of both March 31, 2026 and December 31, 2025.

The net change in unrealized gains (losses) from assets supporting experience-rated contractholder liabilities still held at period end, recorded within “Other income (loss),” was $(150) million and $(199) million during the three months ended March 31, 2026 and 2025, respectively.

Fixed Maturities, Trading
 
The net change in unrealized gains (losses) from fixed maturities, trading still held at period end, recorded within “Other income (loss),” was $(309) million and $187 million during the three months ended March 31, 2026 and 2025, respectively.

Equity Securities
 
The net change in unrealized gains (losses) from equity securities still held at period end, recorded within “Other income (loss),” was $(328) million and $(229) million during the three months ended March 31, 2026 and 2025, respectively.

Concentrations of Financial Instruments
 
The Company monitors its concentrations of financial instruments and mitigates credit risk by maintaining a diversified investment portfolio which limits exposure to any single issuer.
 
As of the dates indicated, the Company’s exposure to concentrations of credit risk of single issuers greater than 10% of the Company’s equity included securities of the U.S. government and certain U.S. government agencies and securities guaranteed by the U.S. government, as well as the securities disclosed below:
 
 March 31, 2026December 31, 2025
 Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
 (in millions)
Investments in Japanese government and government agency securities:
Fixed maturities, available-for-sale$52,952 $40,625 $54,863 $43,554 
Fixed maturities, trading19 18 19 18 
Assets supporting experience-rated contractholder liabilities558 529 536 510 
Total$53,529 $41,172 $55,418 $44,082 
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 March 31, 2026December 31, 2025
 Amortized
Cost
Fair
Value
Amortized
Cost
Fair
Value
 (in millions)
Investments in Brazilian government and government agency securities:
Fixed maturities, available-for-sale$4,039 $3,480 $3,651 $3,152 
Short-term investments1 1 1 1 
Cash equivalents306 306 260 260 
Total$4,346 $3,787 $3,912 $3,413 
Commercial Mortgage and Other Loans
 
The following table sets forth the composition of “Commercial mortgage and other loans,” as of the dates indicated: 

 March 31, 2026December 31, 2025
 
Amount
% of
Total
Amount
% of
Total
($ in millions)
Commercial mortgage and agricultural property loans by property type:
Office$6,455 10.3 %$6,517 10.4 %
Retail5,511 8.8 5,680 9.0 
Apartments/Multi-Family18,995 30.3 18,522 29.5 
Industrial16,900 27.0 17,280 27.5 
Hospitality1,627 2.6 1,738 2.8 
Self-Storage
2,126 3.5 2,245 3.6 
Health Care Senior Living
1,795 2.9 1,832 2.9 
Other
1,074 1.7 689 1.1 
Total commercial mortgage loans54,483 87.1 54,503 86.8 
Agricultural property loans8,105 12.9 8,275 13.2 
Total commercial mortgage and agricultural property loans62,588 100.0 %62,778 100.0 %
Allowance for credit losses(409)(414)
Total net commercial mortgage and agricultural property loans62,179 62,364 
Other loans:
Residential mortgage loans
2,454 1,632 
Uncollateralized loans165 171 
Other collateralized loans692 603 
Total other loans3,311 2,406 
Allowance for credit losses(78)(55)
Total net other loans3,233 2,351 
Total net commercial mortgage and other loans(1)
$65,412 $64,715 
__________ 
(1)Includes loans which are carried at fair value under the fair value option and are collateralized primarily by apartment complexes. As of March 31, 2026 and December 31, 2025, the net carrying value of these loans was $1,495 million and $1,056 million, respectively.

As of March 31, 2026, the commercial mortgage and agricultural property loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in California (29%), Florida (6%) and Texas (6%) and included loans secured by properties in Europe (6%), Mexico (2%), Japan (1%) and Australia (1%).

As of March 31, 2026, the residential mortgage loans were secured by properties geographically dispersed throughout the United States with the largest concentrations in Florida (12%), California (12%) and New York (9%).

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

Three Months Ended March 31, 2026
 Commercial
Mortgage
Loans
Agricultural
Property
Loans
Residential
Mortgage
Loans
Other
Collateralized
Loans
Uncollateralized
Loans
Total
(in millions)
Allowance, beginning of period$366 $48 $15 $40 $0 $469 
Addition to (release of) allowance for expected losses(17)11 7 (9)25 17 
Other
1 0 0 0 0 1 
Allowance, end of period$350 $59 $22 $31 $25 $487 

Three Months Ended March 31, 2025
 Commercial
Mortgage
Loans
Agricultural
Property
Loans
Residential
Mortgage
Loans
Other
Collateralized
Loans
Uncollateralized
Loans
Total
(in millions)
Allowance, beginning of period$407 $121 $0 $32 $14 $574 
Addition to (release of) allowance for expected losses53 2 0 2 1 58 
Allowance, end of period$460 $123 $0 $34 $15 $632 

For additional information regarding the Company’s methodology for developing its allowance and expected losses, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

For the three months ended March 31, 2026, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to increases in loan-specific reserves on commercial mortgage loans within the retail sector, agricultural property loans and an uncollateralized loan, partially offset by a decrease in the general reserve. For the three months ended March 31, 2025, the net addition to the allowance for credit losses on commercial mortgage and other loans was primarily due to increases in the loan-specific reserves on commercial mortgage loans within the retail sector.

There were no write-downs of commercial mortgage and agricultural property loans for both the three months ended March 31, 2026 and 2025.


15

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

March 31, 2026
Amortized Cost by Origination Year
20262025202420232022PriorRevolving LoansTotal
(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%$520 $2,367 $2,423 $1,995 $1,198 $18,296 $58 $26,857 
60%-69.99%1,511 3,321 4,175 1,926 1,245 4,366 0 16,544 
70%-79.99%332 613 591 1,155 501 2,976 0 6,168 
80% or greater0 0 36 13 264 4,601 0 4,914 
Total$2,363 $6,301 $7,225 $5,089 $3,208 $30,239 $58 $54,483 
Debt Service Coverage Ratio:
Greater than 1.2x
$2,005 $5,701 $6,781 $4,591 $2,880 $27,535 $47 $49,540 
1.0 - 1.2x358 502 416 498 207 972 11 2,964 
Less than 1.0x0 98 28 0 121 1,732 0 1,979 
Total$2,363 $6,301 $7,225 $5,089 $3,208 $30,239 $58 $54,483 
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%$20 $813 $619 $269 $937 $3,690 $123 $6,471 
60%-69.99%0 81 140 554 9 113 57 954 
70%-79.99%0 0 0 0 0 0 0 0 
80% or greater0 4 0 27 419 187 43 680 
Total$20 $898 $759 $850 $1,365 $3,990 $223 $8,105 
Debt Service Coverage Ratio:
Greater than 1.2x
$15 $898 $714 $796 $733 $3,489 $180 $6,825 
1.0 - 1.2x5 0 26 41 64 235 0 371 
Less than 1.0x0 0 19 13 568 266 43 909 
Total$20 $898 $759 $850 $1,365 $3,990 $223 $8,105 
16

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

December 31, 2025
Amortized Cost by Origination Year
2025
2024
2023
20222021PriorRevolving LoansTotal
(in millions)
Commercial mortgage loans
Loan-to-Value Ratio:
0%-59.99%$2,816 $2,088 $2,057 $1,270 $2,570 $16,546 $62 $27,409 
60%-69.99%3,670 4,506 1,873 1,250 1,581 3,048 0 15,928 
70%-79.99%677 711 1,242 506 901 1,948 0 5,985 
80% or greater0 36 0 258 454 4,433 0 5,181 
Total$7,163 $7,341 $5,172 $3,284 $5,506 $25,975 $62 $54,503 
Debt Service Coverage Ratio:
Greater than 1.2x
$6,602 $6,779 $4,673 $2,963 $5,333 $23,384 $45 $49,779 
1.0 - 1.2x463 534 499 238 82 885 17 2,718 
Less than 1.0x98 28 0 83 91 1,706 0 2,006 
Total$7,163 $7,341 $5,172 $3,284 $5,506 $25,975 $62 $54,503 
Agricultural property loans
Loan-to-Value Ratio:
0%-59.99%$813 $624 $296 $977 $1,944 $1,927 $143 $6,724 
60%-69.99%76 140 554 8 15 85 58 936 
70%-79.99%0 0 0 0 0 16 0 16 
80% or greater4 0 5 433 10 104 43 599 
Total$893 $764 $855 $1,418 $1,969 $2,132 $244 $8,275 
Debt Service Coverage Ratio:
Greater than 1.2x
$893 $741 $799 $741 $1,849 $1,756 $201 $6,980 
1.0 - 1.2x0 19 40 65 62 148 0 334 
Less than 1.0x0 4 16 612 58 228 43 961 
Total$893 $764 $855 $1,418 $1,969 $2,132 $244 $8,275 

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

March 31, 2026
Amortized Cost by Origination Year
2026
2025
2024
2023
2022
Prior
Total
(in millions)
Residential mortgage loans
Performance indicators:
Performing
$25 $2,355 $59 $0 $0 $13 $2,452 
Nonperforming
0 2 0 0 0 0 2 
Total
$25 $2,357 $59 $0 $0 $13 $2,454 

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

For additional information regarding the Company’s commercial mortgage and other loans credit quality monitoring process, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

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

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

Three Months Ended March 31,
20262025
Term
Extension
Other Than Insignificant Delay in Payment
% of
Amortized Cost
Term
Extension
Other Than Insignificant Delay in Payment
% of
Amortized Cost
($ in millions)
Commercial mortgage loans
$44 $0 0.0 %$0 $0 0.0 %
Agricultural property loans$0 $0 0.0 %$0 $0 0.0 %

For the three months ended March 31, 2026, the modifications added less than one year to the weighted average life in the commercial mortgage loan portfolio.

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

The following tables set forth an aging of past due commercial mortgage and other loans based upon the recorded investment gross of allowance for credit losses, as well as the amount of commercial mortgage and other loans on non-accrual status, as of the dates indicated:
 
 March 31, 2026
 Current30-59 Days
Past Due
60-89 Days
Past Due
90 Days or More Past Due(1)(2)Total Past
Due
Total
Loans
Non-Accrual
Status(3)
 (in millions)
Commercial mortgage loans$54,249 $89 $0 $145 $234 $54,483 $225 
Agricultural property loans7,350 23 11 721 755 8,105 754 
Residential mortgage loans
2,413 33 6 2 41 2,454 2 
Other collateralized loans692 0 0 0 0 692 0 
Uncollateralized loans165 0 0 0 0 165 25 
Total$64,869 $145 $17 $868 $1,030 $65,899 $1,006 

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Table of Contents
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

__________
(1)As of March 31, 2026, there were no loans in this category accruing interest.
(2)Includes loans for which no credit losses are expected due to U.S. agency guarantees.
(3)For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

 December 31, 2025
 Current30-59 Days
Past Due
60-89 Days
Past Due
90 Days or More Past Due(1)(2)
Total Past
Due
Total
Loans
Non-Accrual
Status(3)
 (in millions)
Commercial mortgage loans$54,349 $0 $0 $154 $154 $54,503 $190 
Agricultural property loans7,443 8 0 824 832 8,275 875 
Residential mortgage loans
1,630 2 0 0 2 1,632 0 
Other collateralized loans603 0 0 0 0 603 0 
Uncollateralized loans171 0 0 0 0 171 25 
Total$64,196 $10 $0 $978 $988 $65,184 $1,090 
__________
(1)As of December 31, 2025, there were no loans in this category accruing interest.
(2)Includes loans for which no credit losses are expected due to U.S. agency guarantees.
(3)For additional information regarding the Company’s policies for accruing interest on loans, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Loans on non-accrual status recognized interest of $0 million and $4 million for the three months ended March 31, 2026 and 2025, respectively. Loans on non-accrual status that did not have a related allowance for credit losses were $250 million and $442 million as of March 31, 2026 and December 31, 2025, respectively.

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

For both the three months ended March 31, 2026 and 2025, there were no commercial mortgage loans sold.

For the three months ended March 31, 2026 and 2025, there were $844 million and $0 million, respectively, of residential mortgage loans acquired.

For both the three months ended March 31, 2026 and 2025, there were $4 million and $0 million, respectively, of residential mortgage loans sold.

The Company did not have any commercial mortgage and other loans purchased with credit deterioration as of both March 31, 2026 and December 31, 2025.
19

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

March 31, 2026December 31, 2025
 (in millions)
LPs/LLCs:
Equity method:
Private equity$10,897 $10,832 
Hedge funds2,976 2,909 
Real estate-related(1)
2,948 2,761 
Subtotal equity method16,821 16,502 
Fair value:
Private equity780 848 
Hedge funds1,913 1,964 
Real estate-related804 810 
Subtotal fair value3,497 3,622 
Total LPs/LLCs20,318 20,124 
Real estate held through direct ownership(1)
1,927 1,888 
Total alternative assets22,245 22,012 
Credit-like instruments(2)
2,460 1,929 
Derivative instruments1,459 1,667 
Other(3)
1,628 1,686 
Total other invested assets$27,792 $27,294 
_________ 
(1)As of March 31, 2026 and December 31, 2025, real estate held through direct ownership had mortgage debt of $218 million and $217 million, respectively.
(2)Includes structured debt investments in feeder funds that are consolidated, resulting in the Company reporting the consolidated feeder funds’ proportionate share of the net assets of the master fund within “Other invested assets.”
(3)Primarily includes equity investments accounted for under the measurement alternative, tax advantaged investments, strategic investments made by investment management operations, leveraged leases and member and activity stock held in the Federal Home Loan Bank of New York. For additional information regarding the Company’s holdings in the Federal Home Loan Bank of New York, see Note 18 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Accrued Investment Income

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

 March 31, 2026December 31, 2025
 (in millions)
Fixed maturities$3,070 $3,089 
Equity securities19 11 
Commercial mortgage and other loans263 250 
Policy loans233 230 
Other invested assets10 10 
Short-term investments and cash equivalents38 46 
Total accrued investment income$3,633 $3,636 

Write-downs on accrued investment income were $1 million for both the three months ended March 31, 2026 and 2025.

20

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Investment Income

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

 Three Months Ended
March 31,
 20262025
 (in millions)
Fixed maturities, available-for-sale(1)$4,184 $3,773 
Fixed maturities, trading216 167 
Assets supporting experience-rated contractholder liabilities15 14 
Equity securities65 44 
Commercial mortgage and other loans740 692 
Policy loans122 124 
Other invested assets
451 396 
Short-term investments and cash equivalents232 267 
Gross investment income6,025 5,477 
Less: investment expenses
(360)(347)
Net investment income$5,665 $5,130 
__________ 
(1)Includes income on credit-linked notes which are reported on the same financial statement line as related surplus notes, as conditions are met for right to offset.

Realized Investment Gains (Losses), Net

The following table sets forth “Realized investment gains (losses), net” by investment type, for the periods indicated:
 
 Three Months Ended
March 31,
 20262025
 (in millions)
Fixed maturities(1)$(744)$(64)
Commercial mortgage and other loans(6)(58)
Investment real estate14 (10)
LPs/LLCs0 (1)
Derivatives
559 (449)
Ceded (income) loss on funds withheld assets(2)
(195)(163)
Other
8 15 
Realized investment gains (losses), net$(364)$(730)
__________ 
(1)Excludes fixed maturity securities classified as trading.
(2)Includes changes in the value of reinsurance and funds withheld payables, primarily reflecting the impact of net investment income on withheld assets that are ceded to certain reinsurance counterparties under modified coinsurance and funds withheld coinsurance arrangements.

21

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Net Unrealized Gains (Losses) on Investments within AOCI

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

March 31, 2026December 31, 2025
 (in millions)
Fixed maturity securities, available-for-sale with an allowance$(4)$(4)
Fixed maturity securities, available-for-sale without an allowance
(32,142)(26,354)
Derivatives designated as cash flow hedges(1)
536 (231)
Derivatives designated as fair value hedges(1)
(139)(123)
Other investments(2)
60 67 
Net unrealized gains (losses) on investments$(31,689)$(26,645)
__________ 
(1)For additional information regarding cash flow and fair value hedges, see Note 5.
(2)Includes net unrealized gains (losses) on certain joint ventures that are strategic in nature and are included in “Other assets.”

Repurchase Agreements and Securities Lending

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

March 31, 2026December 31, 2025
Remaining Contractual Maturities of the AgreementsRemaining Contractual Maturities of the Agreements
 Overnight & ContinuousUp to 30 Days30 to 90 DaysTotal  Overnight & ContinuousUp to 30 Days30 to 90 DaysTotal
(in millions)
U.S. Treasury securities and obligations of U.S. government authorities and agencies$9,776 $0 $0 $9,776 $7,277 $1,701 $0 $8,978 
U.S. public corporate securities
0 530 0 530 0 527 0 527 
Foreign public corporate securities
0 18 0 18 0 18 0 18 
Commercial mortgage-backed securities651 0 0 651 75 0 0 75 
Total securities sold under agreements to repurchase$10,427 $548 $0 $10,975 $7,352 $2,246 $0 $9,598 

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

March 31, 2026December 31, 2025
Remaining Contractual Maturities of the AgreementsRemaining Contractual Maturities of the Agreements
 Overnight & ContinuousUp to 30 DaysTotal  Overnight & ContinuousUp to 30 DaysTotal
(in millions)
Obligations of U.S. states and their political
subdivisions
$40 $0 $40 $45 $0 $45 
Foreign government securities
179 0 179 226 0 226 
U.S. public corporate securities6,331 64 6,395 7,068 152 7,220 
Foreign public corporate securities1,065 4 1,069 1,157 16 1,173 
Equity securities1,216 6 1,222 36 0 36 
Total cash collateral for loaned securities(1)$8,831 $74 $8,905 $8,532 $168 $8,700 
__________ 
(1)The Company did not have any agreements with remaining contractual maturities greater than thirty days, as of the dates indicated.

4. VARIABLE INTEREST ENTITIES
 
In the normal course of its activities, the Company enters into relationships with various special-purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). For additional information, see Note 4 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Consolidated Variable Interest Entities

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

Consolidated VIEs for which the
Company is the Investment
Manager(1)
Other Consolidated VIEs

March 31,
2026
December 31,
2025
March 31,
2026
December 31,
2025
 (in millions)
Fixed maturities, available-for-sale$1,973 $1,870 $640 $663 
Fixed maturities, trading926 442 0 0 
Equity securities66 106 0 0 
Commercial mortgage and other loans576 583 247 244 
Other invested assets8,814 8,227 474 477 
Cash and cash equivalents686 654 0 0 
Accrued investment income13 12 1 1 
Other assets1,344 1,594 720 716 
Total assets of consolidated VIEs$14,398 $13,488 $2,082 $2,101 
Other liabilities$872 $603 $3 $3 
Notes issued by consolidated VIEs(2)3,269 2,644 14 15 
Total liabilities of consolidated VIEs$4,141 $3,247 $17 $18 
__________
(1)Total assets of consolidated VIEs reflect $4,871 million and $4,801 million as of March 31, 2026 and December 31, 2025, respectively, related to VIEs whose beneficial interests are wholly-owned by consolidated subsidiaries.
(2)Recourse is limited to the assets of the respective VIE and does not extend to the general credit of the Company. As of March 31, 2026, the maturities of these obligations were between 0 and 14 years.
 
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Unconsolidated Variable Interest Entities
 
The Company has determined that it is not the primary beneficiary of certain VIEs for which it may or may not be the investment manager. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated VIEs is limited to its investment in the VIEs, which was $1,478 million and $1,484 million as of March 31, 2026 and December 31, 2025, respectively. These investments are reflected in “Fixed maturities, available-for-sale,” “Fixed maturities, trading,” “Equity securities” and “Other invested assets.” There are no liabilities associated with these unconsolidated VIEs on the Company’s Unaudited Interim Consolidated Statements of Financial Position.

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

Limited Partnerships and Limited Liability Companies
 
In the normal course of its activities, the Company will invest in limited partnerships and limited liability companies (“LPs/LLCs”), which include hedge funds, private equity funds and real estate-related funds and may or may not be VIEs. The Company classifies these investments as “Other invested assets” and its maximum exposure to loss associated with these VIE and non-VIE entities is limited to the amount of its investment, which was $20,714 million and $20,509 million as of March 31, 2026 and December 31, 2025, respectively.
 

5. DERIVATIVES AND HEDGING
 
Types of Derivative and Hedging Instruments

The Company utilizes various derivatives and hedging instruments to manage certain of its risks. Commonly used derivative and non-derivative hedging instruments include, but are not necessarily limited to:
Interest rate contracts: futures, swaps, forwards, options, caps and floors
Equity contracts: futures, options and total return swaps
Foreign exchange contracts: futures, options, forwards, swaps, and foreign currency debt instruments
Credit contracts: single and index reference credit default swaps

Other types of financial contracts that the Company accounts for as derivatives are:
To-be-announced (“TBA”) forward contracts, loan commitments, embedded derivatives and synthetic guaranteed investment contracts (“GICs”).

For detailed information regarding these contracts and the related strategies, see Note 5 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

Primary Risks Managed by Derivatives
 
The table below provides a summary of the gross notional amount and fair value of derivative contracts by the primary underlying risks they are utilized to manage, excluding embedded derivatives. Many derivative instruments contain multiple underlying risks. The fair value amounts below represent the value of derivative contracts prior to taking into account the netting effects of master netting agreements and cash collateral. These netting impacts resulted in total derivative assets of $1,462 million and $1,671 million as of March 31, 2026 and December 31, 2025, respectively, and total derivative liabilities of $6,401 million and $6,215 million as of March 31, 2026 and December 31, 2025, respectively, reflected in the Unaudited Interim Consolidated Statements of Financial Position.

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Primary Underlying Risk /Instrument TypeMarch 31, 2026December 31, 2025
 Fair Value Fair Value
Gross NotionalAssetsLiabilitiesGross NotionalAssetsLiabilities
 (in millions)
Derivatives Designated as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps$5,117 $21 $(334)$5,083 $23 $(344)
Interest Rate Forwards351 0 0 10 0 0 
Foreign Currency
Foreign Currency Forwards4,929 59 (219)4,912 28 (208)
Currency/Interest Rate
Foreign Currency Swaps33,551 1,581 (963)33,823 1,286 (1,440)
Total Derivatives Designated as Hedge Accounting Instruments$43,948 $1,661 $(1,516)$43,828 $1,337 $(1,992)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate
Interest Rate Swaps$249,491 $10,733 $(23,332)$244,336 $10,825 $(23,617)
Interest Rate Futures9,955 15 (6)12,079 7 (22)
Interest Rate Options27,105 53 (1,211)30,025 134 (1,382)
Interest Rate Forwards6,404 12 (67)3,658 11 (7)
Interest Rate Total Return Swaps
1,514 222 (221)1,434 217 (221)
Foreign Currency
Foreign Currency Forwards35,545 1,626 (1,402)34,149 1,356 (1,383)
Currency/Interest Rate
Foreign Currency Swaps7,140 435 (142)7,318 370 (179)
Credit
Credit Default Swaps5,756 56 0 5,784 112 0 
Equity
Equity Futures1,256 12 (19)1,033 3 (6)
Equity Options225,676 8,333 (9,049)200,661 10,378 (9,189)
Equity Total Return Swaps
19,606 1,325 (895)14,973 1,366 (1,159)
Other
Other(1)1,250 0 0 1,250 0 0 
Synthetic GICs75,016 0 0 75,883 0 0 
Total Derivatives Not Qualifying as Hedge Accounting Instruments$665,714 $22,822 $(36,344)$632,583 $24,779 $(37,165)
Total Derivatives(2)(3)$709,662 $24,483 $(37,860)$676,411 $26,116 $(39,157)
__________
(1)“Other” primarily includes derivative contracts used to improve the balance of the Company’s tail longevity and mortality risk. Under these contracts, the Company’s gains (losses) are capped at the notional amount.
(2)Excludes embedded derivatives which contain multiple underlying risks. The fair value of these embedded derivatives was a net liability of $16,927 million (including the Prismic funds withheld related embedded derivative net liability of $105 million) and $18,404 million (including the Prismic funds withheld related embedded derivative net liability of $194 million) as of March 31, 2026 and December 31, 2025, respectively, primarily included in “Policyholders’ account balances” and “Reinsurance and funds withheld payables.”    
(3)Recorded in “Other invested assets” and “Other liabilities” on the Unaudited Interim Consolidated Statements of Financial Position.


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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

As of March 31, 2026, the following amounts were recorded on the Unaudited Interim Consolidated Statements of Financial Position related to the carrying amount of the hedged assets (liabilities) and cumulative basis adjustments included in the carrying amount for fair value hedges.

March 31, 2026December 31, 2025
Balance Sheet Line Item in which Hedged Item is RecordedCarrying Amount of the Hedged Assets (Liabilities)Cumulative Amount of
Fair Value Hedging Adjustment Included in the
Carrying Amount of the Hedged
Assets (Liabilities)(1)
Carrying Amount of the Hedged Assets (Liabilities)Cumulative Amount of
Fair Value Hedging Adjustment Included in the
Carrying Amount of the Hedged
Assets (Liabilities)(1)
(in millions)
Fixed maturities, available-for-sale, at fair value$563 $8 $594 $11 
Policyholders’ account balances$(1,589)$302 $(1,588)$299 
Future policy benefits$(2,379)$329 $(2,405)$300 
__________
(1)There were no material fair value hedging adjustments for hedged assets and liabilities for which hedge accounting has been discontinued.

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

Offsetting Assets and Liabilities
 
The following tables present recognized derivative instruments (excluding embedded derivatives), and repurchase and reverse repurchase agreements that are offset in the Unaudited Interim Consolidated Statements of Financial Position, and/or are subject to an enforceable master netting arrangement or similar agreement, irrespective of whether they are offset in the Unaudited Interim Consolidated Statements of Financial Position.
 
 March 31, 2026
 Gross
Amounts of
Recognized
Financial
Instruments
Gross
Amounts
Offset in the
Statements
of Financial
Position
Net
Amounts
Presented in
the Statements
of Financial
Position
Financial
Instruments/
Collateral(1)
Net
Amount
 (in millions)
Offsetting of Financial Assets:
Derivatives$24,347 $(23,021)$1,326 $(326)$1,000 
Securities purchased under agreement to resell
0 0 0 0 0 
Total Assets
$24,347 $(23,021)$1,326 $(326)$1,000 
Offsetting of Financial Liabilities:
Derivatives$37,860 $(31,459)$6,401 $(6,401)$0 
Securities sold under agreement to repurchase
10,975 0 10,975 (10,975)0 
Total Liabilities
$48,835 $(31,459)$17,376 $(17,376)$0 
 
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 December 31, 2025
 Gross
Amounts of
Recognized
Financial
Instruments
Gross
Amounts
Offset in the
Statements
of Financial
Position
Net
Amounts
Presented in
the Statements
of Financial
Position
Financial
Instruments/
Collateral(1)
Net
Amount
 (in millions)
Offsetting of Financial Assets:
Derivatives$25,990 $(24,445)$1,545 $(637)$908 
Securities purchased under agreement to resell
0 0 0 0 0 
Total Assets
$25,990 $(24,445)$1,545 $(637)$908 
Offsetting of Financial Liabilities:
Derivatives$39,157 $(32,942)$6,215 $(6,011)$204 
Securities sold under agreement to repurchase
9,598 0 9,598 (9,523)75 
Total Liabilities
$48,755 $(32,942)$15,813 $(15,534)$279 
__________
(1)Amounts exclude the excess of collateral received/pledged from/to the counterparty.

For information regarding the rights of offset associated with the derivative assets and liabilities in the table above, see “—Counterparty Credit Risk” below. For securities purchased under agreements to resell and securities sold under agreements to repurchase, the Company monitors the value of the securities and maintains collateral, as appropriate, to protect against credit exposure. Where the Company has entered into repurchase and resale agreements with the same counterparty, in the event of default, the Company would generally be permitted to exercise rights of offset. For additional information regarding the Company’s accounting policy for securities repurchase and resale agreements, see Note 2 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
 
Cash Flow, Fair Value and Net Investment Hedges
 
The primary derivative and non-derivative instruments used by the Company in its fair value, cash flow and net investment hedge accounting relationships are interest rate swaps, currency swaps, currency forwards, and foreign currency denominated debts. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, or equity derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

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


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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 Three Months Ended March 31, 2026
 Realized
Investment
Gains
(Losses)
Change in Value of MRBs, Net of Related Hedging Gains (Losses)Net
Investment
Income
Other
Income (Loss)
Interest
Expense
Interest
Credited to
Policyholders’
Account
Balances
Policyholders’ BenefitsChange in AOCI(1)
 (in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate$2 $0 $0 $0 $0 $(8)$0 $0 
Currency0 0 0 0 0 0 (36)0 
Total gains (losses) on derivatives designated as hedge instruments2 0 0 0 0 (8)(36)0 
Gains (losses) on the hedged item:
Interest Rate(3)0 7 0 0 3 (5)0 
Currency0 0 0 0 0 0 35 0 
Total gains (losses) on hedged item(3)0 7 0 0 3 30 0 
Amortization for gains (losses) excluded from assessment of the effectiveness
Currency0 0 0 0 0 0 (4)(16)
Total amortization for gains (losses) excluded from assessment of the effectiveness
0 0 0 0 0 0 (4)(16)
Total gains (losses) on fair value hedges net of hedged item(1)0 7 0 0 (5)(10)(16)
Cash flow hedges
Interest Rate0 0 (2)0 0 0 0 1 
Currency0 0 0 0 0 0 0 63 
Currency/Interest Rate23 0 73 54 0 0 0 703 
Total gains (losses) on cash flow hedges23 0 71 54 0 0 0 767 
Net investment hedges
Currency0 0 0 0 0 0 0 10 
Currency/Interest Rate0 0 0 0 0 0 0 0 
Total gains (losses) on net investment hedges0 0 0 0 0 0 0 10 
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate15 (77)0 0 0 0 0 0 
Currency0 0 0 0 0 0 0 0 
Currency/Interest Rate109 0 0 0 0 0 0 0 
Credit(29)0 0 0 0 0 0 0 
Equity(1,387)271 0 0 0 0 0 0 
Embedded Derivatives(2)
1,829 0 0 0 0 0 0 0 
Total gains (losses) on derivatives not qualifying as hedge accounting instruments537 194 0 0 0 0 0 0 
Total$559 $194 $78 $54 $0 $(5)$(10)$761 

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Table of Contents
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 Three Months Ended March 31, 2025
 Realized
Investment
Gains
(Losses)
Change in Value of MRBs, Net of Related Hedging Gains (Losses)Net
Investment
Income
Other
Income (Loss)
Interest
Expense
Interest
Credited to
Policyholders’
Account
Balances
Policyholders’ BenefitsChange in AOCI(1)
 (in millions)
Derivatives Designated as Hedge Accounting Instruments:
Fair value hedges
Gains (losses) on derivatives designated as hedge instruments:
Interest Rate$(3)$0 $0 $0 $0 $35 $30 $0 
Currency0 0 0 0 0 0 53 0 
Total gains (losses) on derivatives designated as hedge instruments(3)0 0 0 0 35 83 0 
Gains (losses) on the hedged item:
Interest Rate3 0 5 0 0 (49)(32)0 
Currency0 0 0 0 0 0 (53)0 
Total gains (losses) on hedged item3 0 5 0 0 (49)(85)0 
Amortization for gains (losses) excluded from assessment of the effectiveness
Currency0 0 0 0 0 0 (3)(69)
Total amortization for gains (losses) excluded from assessment of the effectiveness
0 0 0 0 0 0 (3)(69)
Total gains (losses) on fair value hedges net of hedged item0 0 5 0 0 (14)(5)(69)
Cash flow hedges
Interest Rate0 0 (3)0 0 0 0 8 
Currency0 0 0 0 0 0 0 (26)
Currency/Interest Rate22 0 96 (147)0 0 0 (103)
Total gains (losses) on cash flow hedges22 0 93 (147)0 0 0 (121)
Net investment hedges
Currency0 0 0 0 0 0 0 (15)
Currency/Interest Rate0 0 0 0 0 0 0 0 
Total gains (losses) on net investment hedges0 0 0 0 0 0 0 (15)
Derivatives Not Qualifying as Hedge Accounting Instruments:
Interest Rate189 141 0 0 0 0 0 0 
Currency(174)0 0 (1)0 0 0 0 
Currency/Interest Rate(28)0 0 0 0 0 0 0 
Credit(11)0 0 0 0 0 0 0 
Equity(1,469)202 0 0 0 0 0 0 
Embedded Derivatives(2)
1,257 0 0 0 0 0 0 0 
Total gains (losses) on derivatives not qualifying as hedge accounting instruments(236)343 0 (1)0 0 0 0 
Total$(214)$343 $98 $(148)$0 $(14)$(5)$(205)
__________
(1)Excludes changes related to net investment hedges using non-derivative instruments of $14 million and $(51) million for the three months ended March 31, 2026, and 2025 respectively.
(2)Includes the Prismic funds withheld related embedded derivative realized gain (loss) of $88 million and $(147) million for the three months ended March 31, 2026 and 2025 respectively.

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Table of Contents
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Presented below is a rollforward of current period cash flow hedges in AOCI before taxes:
 (in millions)
Balance, December 31, 2025$(231)
Amount recorded in AOCI:
Interest Rate(1)
Currency60 
Currency/Interest Rate853 
Total amount recorded in AOCI912 
Amount reclassified from AOCI to income:
Interest Rate2 
Currency3 
Currency/Interest Rate(150)
Total amount reclassified from AOCI to income(145)
Balance, March 31, 2026$536 

The changes in fair value of cash flow hedges are deferred in AOCI and are included in “Net unrealized investment gains (losses)” in the Unaudited Interim Consolidated Statements of Comprehensive Income; these amounts are then reclassified to earnings when the hedged item affects earnings. Using March 31, 2026 values, it is estimated that a pre-tax gain of $304 million is expected to be reclassified from AOCI to earnings during the subsequent twelve months ending March 31, 2027.

The exposures the Company is hedging with these qualifying cash flow hedges include the variability of future cash flows from forecasted transactions denominated in foreign currencies, the purchases of invested assets, and the receipt or payment of variable interest on existing financial instruments. The maximum length of time over which the Company is hedging its exposure to the variability in future cash flows for forecasted transactions is 25 years.

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

For net investment hedges, in addition to derivatives, the Company uses foreign currency denominated debt to hedge the risk of change in the net investment in a foreign subsidiary due to changes in exchange rates. For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment within AOCI were $24 million and $(66) million for the three months ended March 31, 2026 and 2025, respectively.

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

March 31, 2026
NAIC Rating Designation of Underlying Credit Obligation(1)
NAIC 1NAIC 2NAIC 3NAIC 4NAIC 5
NAIC 6(2)
Total
Gross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair Value
(in millions)
Single name reference(3)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 
Index reference(3)
0 0 0 0 5,024 22 0 0 0 0 732 34 5,756 56 
Total$0 $0 $0 $0 $5,024 $22 $0 $0 $0 $0 $732 $34 $5,756 $56 

December 31, 2025
NAIC Rating Designation of Underlying Credit Obligation(1)
NAIC 1NAIC 2NAIC 3NAIC 4NAIC 5
NAIC 6(2)
Total
Gross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair ValueGross NotionalFair Value
(in millions)
Single name reference(3)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 
Index reference(3)
0 0 0 0 5,043 61 0 0 0 0 741 51 5,784 112 
Total$0 $0 $0 $0 $5,043 $61 $0 $0 $0 $0 $741 $51 $5,784 $112 
_________
(1)The NAIC rating designations are based on availability and the lowest ratings among Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Rating Services (“S&P”) and Fitch Ratings Inc. (“Fitch”). If no rating is available from a rating agency, an NAIC 6 rating is used.
(2)The NAIC rating designation is due to approximately 4% and 3% of the index reference name rated as NAIC 6 as of March 31, 2026 and December 31, 2025, respectively.
(3)Single name credit default swaps may make reference to the credit of corporate debt, sovereign debt, and structured finance. Index reference NAIC designations are based on the lowest rated single name reference included in the index.

The Company had no exposure on purchased credit protection as of March 31, 2026 or December 31, 2025.

Counterparty Credit Risk

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

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

As of March 31, 2026, there were no net liability derivative positions with counterparties with credit risk-related contingent features. All derivatives have been appropriately collateralized by the Company or the counterparty in accordance with the terms of the derivative agreements.



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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

6. FAIR VALUE OF ASSETS AND LIABILITIES

Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:
 
Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.

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

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

For a discussion of the Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company’s valuation techniques during the period represented by these Unaudited Interim Consolidated Financial Statements.




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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

 March 31, 2026
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$0 $22,582 $0 $$22,582 
Obligations of U.S. states and their political subdivisions0 5,054 5 5,059 
Foreign government securities
0 47,670 5 47,675 
U.S. corporate public securities0 107,671 64 107,735 
U.S. corporate private securities(2)0 40,781 5,537 46,318 
Foreign corporate public securities0 24,005 39 24,044 
Foreign corporate private securities0 37,579 1,825 39,404 
Asset-backed securities(3)0 16,672 4,942 21,614 
Commercial mortgage-backed securities0 9,031 845 9,876 
Residential mortgage-backed securities0 6,435 109 6,544 
Subtotal0 317,480 13,371 330,851 
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies0 246 0 246 
Foreign government securities
0 612 0 612 
Corporate securities0 57 0 57 
Equity securities2,156 1,710 0 3,866 
Subtotal2,156 2,625 0 4,781 
Market risk benefit assets0 0 2,166 2,166 
Fixed maturities, trading0 12,916 2,915 15,831 
Equity securities
9,732 2,252 568 12,552 
Commercial mortgage and other loans0 1,225 270 1,495 
Other invested assets(4)37 24,446 1,134 (23,021)2,596 
Short-term investments2,496 3,751 44 6,291 
Cash equivalents620 8,646 0 9,266 
Reinsurance recoverables and deposit receivables0 293 452 745 
Separate account assets(5)(6)9,426 151,769 210 161,405 
Total assets$24,467 $525,403 $21,130 $(23,021)$547,979 
Market risk benefit liabilities$0 $0 $5,000 $$5,000 
Policyholders’ account balances0 0 17,590 17,590 
Reinsurance and funds withheld payables0 78 0 78 
Other liabilities35 37,825 0 (31,459)6,401 
Notes issued by consolidated VIEs0 0 1,330 1,330 
Total liabilities$35 $37,903 $23,920 $(31,459)$30,399 
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 December 31, 2025
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Fixed maturities, available-for-sale:
U.S. Treasury securities and obligations of U.S. government authorities and agencies$0 $22,179 $0 $$22,179 
Obligations of U.S. states and their political subdivisions0 5,460 5 5,465 
Foreign government securities
0 50,609 5 50,614 
U.S. corporate public securities0 107,718 63 107,781 
U.S. corporate private securities(2)0 42,007 5,094 47,101 
Foreign corporate public securities0 23,661 42 23,703 
Foreign corporate private securities0 38,425 1,734 40,159 
Asset-backed securities(3)0 15,227 4,102 19,329 
Commercial mortgage-backed securities0 8,890 853 9,743 
Residential mortgage-backed securities0 5,281 100 5,381 
Subtotal0 319,457 11,998 331,455 
Assets supporting experience-rated contractholder liabilities:
U.S. Treasury securities and obligations of U.S. government authorities and agencies0 245 0 245 
Foreign government securities
0 596 0 596 
Corporate securities0 55 0 55 
Equity securities2,225 1,721 0 3,946 
Subtotal2,225 2,617 0 4,842 
Market risk benefit assets0 0 2,330 2,330 
Fixed maturities, trading0 12,556 2,313 14,869 
Equity securities8,052 2,294 626 10,972 
Commercial mortgage and other loans0 793 263 1,056 
Other invested assets(4)301 25,816 1,088 (24,445)2,760 
Short-term investments116 5,664 1 5,781 
Cash equivalents1,466 11,372 0 12,838 
Reinsurance recoverables and deposit receivables0 206 367 573 
Separate account assets(5)(6)9,419 159,115 211 168,745 
Total assets$21,579 $539,890 $19,197 $(24,445)$556,221 
Market risk benefit liabilities$0 $0 $4,623 $$4,623 
Policyholders’ account balances0 0 18,799 18,799 
Reinsurance and funds withheld payables0 174 0 174 
Other liabilities280 38,877 0 (32,942)6,215 
Notes issued by consolidated VIEs0 0 767 767 
Total liabilities$280 $39,051 $24,189 $(32,942)$30,578 
__________
(1)“Netting” amounts represent cash collateral of $(8,438) million and $(8,497) million as of March 31, 2026 and December 31, 2025, respectively, and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.
(2)Excludes notes with fair value of $15,844 million (carrying amount of $15,844 million) and $15,744 million (carrying amount of $15,744 million) as of March 31, 2026 and December 31, 2025, respectively, which have been offset with the associated debt under a netting agreement.
(3)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.
(4)Other invested assets excluded from the fair value hierarchy include certain hedge funds, private equity funds and other funds for which fair value is measured at net asset value (“NAV”) per share (or its equivalent) as a practical expedient. As of March 31, 2026 and December 31, 2025, the fair value of such investments was $5,931 million and $5,526 million, respectively.
(5)Separate account assets included in the fair value hierarchy exclude investments in entities that calculate NAV per share (or its equivalent) as a practical expedient. Such investments excluded from the fair value hierarchy include investments in real estate, hedge funds and other invested assets. As of March 31, 2026 and December 31, 2025, the fair value of such investments was $27,631 million and $27,506 million, respectively.
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

Quantitative Information Regarding Internally-Priced Level 3 Assets and LiabilitiesThe tables below present quantitative information regarding significant internally-priced Level 3 assets and liabilities.
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 As of March 31, 2026
Fair ValueValuation
Techniques
Unobservable InputsMinimumMaximumWeighted
Average
Impact of
Increase in
Input on
Fair
Value(1)
 (in millions)
Assets:
Corporate securities(2)(3)$8,331 Discounted
cash flow
Discount rate1.20%31.61%9.14%Decrease
Market comparables
EBITDA multiple(4)
5.5X8.5X6.9XIncrease
LiquidationLiquidation value12.01%77.35%36.82%Increase
Asset backed securities$783 Discounted
cash flow
Discount rate
1.98%10.24%3.88%Decrease
Liquidity premium
2.55%2.60%2.56%Decrease
Commercial mortgage-backed securities$845 Discounted
cash flow
Liquidity premium0.90%0.90%0.90%Decrease
Market risk benefit assets(6)$2,166 Discounted
cash flow
Lapse rate(8)1%20%Increase
Spread over SOFR(9)0.44%1.85%Increase
Utilization rate(10)37%94%Decrease
Withdrawal rateSee table footnote (11) below.
Mortality rate(12)0%16%Increase
Equity volatility curve18%26%Decrease
Equity securities$181 Market comparables
EBITDA multiple(4)
6.0X7.0X6.2XIncrease
Net Asset ValueShare price$3$1,809$750Increase
Commercial mortgage and other loans$270 Discounted
cash flow
Spread1.90%3.10%2.47%Decrease
Reinsurance recoverables and deposit receivables$452 Discounted cash flowLapse rate(8)1%50%Increase
Spread over SOFR(9)0.44%1.82%Increase
Option Budget(13)0%6%Decrease
Liabilities:
Market risk benefit liabilities(6)$5,000 Discounted
cash flow
Lapse rate(8)1%20%Decrease
Spread over SOFR(9)0.44%1.85%Decrease
Utilization rate(10)37%94%Increase
Withdrawal rateSee table footnote (11) below.
Mortality rate(12)0%16%Decrease
   Equity volatility curve18%26% Increase
Policyholders’ account balances(7)$17,502 Discounted
cash flow
Lapse rate(8)0%80%Decrease
Spread over SOFR(9)0.44%1.82%Decrease
Mortality rate(12)0%23%Decrease
Option Budget(13)(1)%6%Increase
Notes issued by consolidated VIEs$517 LiquidationLiquidation value100%100%100%Increase
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 As of December 31, 2025
Fair ValueValuation
Techniques
Unobservable InputsMinimumMaximumWeighted
Average
Impact of
Increase in
Input on
Fair
Value(1)
 (in millions)
Assets:
Corporate securities(2)(3)$7,702 Discounted
cash flow
Discount rate1.10%25.50%8.47%Decrease
Market comparables
EBITDA multiple(4)
5.5X8.5X7.5XIncrease
LiquidationLiquidation value12.01%39.00%30.18%Increase
Asset backed securities$1,767 Discounted
cash flow
Discount rate2.10%10.05%6.10%Decrease
Liquidity premium1.50%2.60%1.89%Decrease
Commercial mortgage-backed securities$853 Discounted
cash flow
Liquidity premium0.90%0.90%0.90%Decrease
Market risk benefit assets(6)$2,330 Discounted cash flowLapse rate(8)1%20%Increase
Spread over SOFR(9)0.38%1.61%Increase
Utilization rate(10)37%94%Decrease
Withdrawal rateSee table footnote (11) below.
Mortality rate(12)0%16%Increase
Equity volatility curve15%25%Decrease
Equity securities$214 Discounted
cash flow
Discount rate(5)40%40%Decrease
Market comparables
EBITDA multiple(4)
7.0X7.0X7.0XIncrease
Net Asset ValueShare price$3$1,809$778Increase
Commercial mortgage and other loans$263 Discounted
cash flow
Spread2.15%3.10%2.63%Decrease
Reinsurance recoverables and deposit receivables$367 Discounted cash flowLapse rate(8)1%50%Increase
Spread over SOFR(9)0.38%1.61%Increase
Option Budget(13)0%6%Decrease
Liabilities:
Market risk benefit liabilities(6)$4,623 Discounted
cash flow
Lapse rate(8)1%20%Decrease
Spread over SOFR(9)0.38%1.61%Decrease
Utilization rate(10)37%94%Increase
Withdrawal rateSee table footnote (11) below.
Mortality rate(12)0%16%Decrease
 Equity volatility curve15%25%Increase
Policyholders’ account balances(7)$18,716 Discounted
cash flow
Lapse rate(8)0%80%Decrease
Spread over SOFR(9)0.38%1.61%Decrease
Mortality rate(12)0%23%Decrease
Option Budget(13)(2)%9%Increase
Notes issued by consolidated VIEs$382 LiquidationLiquidation value100%100%100%Increase
___________ 
(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

(2)Includes assets classified as fixed maturities, available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities, trading.
(3)Excludes notes which have been offset with the associated debt under a netting agreement.
(4)Represents multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.
(5)For these investments, a range of discount rates is typically used and is therefore a more meaningful representation of the unobservable inputs used in the valuation rather than weighted average.
(6)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(7)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(8)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.
(9)The spread over the secured overnight financing rate (“SOFR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of March 31, 2026 and December 31, 2025, respectively. This spread includes an estimate of non-performance risk (“NPR”), which is the risk that the obligation will not be fulfilled by the Company. NPR is primarily estimated by utilizing the credit spreads associated with issuing funding agreements, adjusted for any illiquidity risk premium. In order to reflect the financial strength ratings of the Company, credit spreads associated with funding agreements, as opposed to credit spread associated with debt, are utilized in developing this estimate because funding agreements are insurance liabilities and are therefore senior to debt. Effective April 2023, the Company entered into an agreement with The Ohio National Life Insurance Company, now known as AuguStar Life Insurance Company (“AuguStar”), an affiliate of Constellation Insurance Holdings, Inc., to reinsure approximately $10 billion of account values of PDI traditional variable annuity contracts with guaranteed living benefits. See Note 12 for additional information regarding this transaction. As a result of this transaction, a ceded MRB asset balance was established to fair value the reinsurance reimbursements to the Company. The establishment of the fair value also required an estimate of NPR for AuguStar, which may differ from the Company’s; however, the NPR spreads for AuguStar were developed using a methodology similar to that of the Company.
(10)The utilization rate assumption estimates the percentage of contracts that will utilize the benefit during the contract duration, and begin lifetime withdrawals at various time intervals from contract inception. The remaining contractholders are assumed to either begin lifetime withdrawals immediately or never utilize the benefit. Utilization assumptions may vary by product type, tax status and age. The impact of changes in these assumptions is highly dependent on the product type, the age of the contractholder at the time of the sale, and the timing of the first lifetime income withdrawal. Range reflects the utilization rate for the vast majority of business with living benefits.
(11)The withdrawal rate assumption estimates the magnitude of annual contractholder withdrawals relative to the maximum allowable amount under the contract. These assumptions vary based on the age of the contractholder, the tax status of the contract and the duration since the contractholder began lifetime withdrawals. As of both March 31, 2026 and December 31, 2025, the minimum withdrawal rate assumption is 78% and the maximum withdrawal rate assumption may be greater than 100%. The fair value of the liability will generally increase the closer the withdrawal rate is to 100% and decrease as the withdrawal rate moves further away from 100%.
(12)The range reflects the mortality rates for the vast majority of business with living benefits and other contracts, with policyholders ranging from 50 to 90 years old. While the majority of living benefits have a minimum age requirement, certain other contracts do not have an age restriction. This results in contractholders with mortality rates approaching 0% for certain benefits. Mortality rates may vary by product, age and duration. A mortality improvement assumption is also incorporated into the overall mortality table.
(13)Option budget estimates the expected long-term cost of options used to hedge exposures associated with equity price and interest rate changes. The level of option budget determines future costs of the options, which impacts the growth in account value and the valuation of embedded derivatives.

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

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

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

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

Three Months Ended March 31, 2026(6)
Fair Value, beginning of periodTotal realized and unrealized gains (losses)PurchasesSalesIssuancesSettlementsOther(1)
Transfers into
Level 3(7)
Transfers out of Level 3(7)
Fair Value, end of period
Unrealized gains (losses) for assets and liabilities still held(2)
(in millions)
Fixed maturities, available-for-sale:
U.S. states$5 $0 $0 $0 $0 $0 $0 $0 $0 $5 $0 
Foreign government5 0 0 0 0 0 0 0 0 5 0 
Corporate securities(3)6,933 (154)686 (94)0 (360)13 469 (28)7,465 (165)
Structured securities(4)5,055 (32)1,298 (54)0 (150)(1)0 (220)5,896 (32)
Other assets:
Fixed maturities, trading2,313 (44)724 (24)0 (41)(1)16 (28)2,915 (49)
Equity securities626 (32)23 (2)0 (14)0 0 (33)568 (28)
Commercial mortgage and other loans
263 0 39 0 26 (58)0 0 0 270 0 
Other invested assets1,088 (1)59 (12)0 0 0 0 0 1,134 (1)
Short-term investments1 (11)26 0 0 28 0 0 0 44 (11)
Cash equivalents0 0 0 0 0 0 0 0 0 0 0 
Reinsurance recoverables and deposit receivables
367 60 44 0 0 (21)2 0 0 452 39 
Separate account assets
211 (4)6 (1)0 (8)0 6 0 210 (4)
Liabilities:
Policyholders’ account balances(5)
(18,799)1,589 0 0 0 (381)1 0 0 (17,590)323 
Other liabilities0 0 0 0 0 0 0 0 0 0 0 
Notes issued by consolidated VIEs(767)(2)0 0 (138)0 (423)0 0 (1,330)(4)

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 
Three Months Ended March 31, 2026
Total realized and unrealized gains (losses)
Unrealized gains (losses) for assets and liabilities still held(2)
Realized investment gains (losses), netOther income (loss)Interest credited to policyholders’ account balances
Included in other comprehensive income (losses)
Net investment incomeRealized investment gains (losses), netOther income (loss)Interest credited to policyholders’ account balances
Included in other comprehensive income (losses)
(in millions)
Fixed maturities, available-for-sale$(77)$0 $0 $(111)$2 $(89)$0 $0 $(108)
Other assets:
Fixed maturities, trading0 (44)0 0 0 0 (49)0 0 
Equity securities0 (32)0 0 0 0 (28)0 0 
Commercial mortgage and other loans
0 0 0 0 0 0 0 0 0 
Other invested assets0 (1)0 0 0 0 (1)0 0 
Short-term investments(11)0 0 0 0 (11)0 0 0 
Cash equivalents0 0 0 0 0 0 0 0 0 
Reinsurance recoverables and deposit receivables
60 0 0 0 0 39 0 0 0 
Separate account assets
0 0 (4)0 0 0 0 (4)0 
Liabilities:
Policyholders’ account balances1,589 0 0 0 0 323 0 0 0 
Other liabilities0 0 0 0 0 0 0 0 0 
Notes issued by consolidated VIEs0 (2)0 0 0 0 (4)0 0 


 
Three Months Ended March 31, 2025(6)
Fair Value, beginning of periodTotal realized and unrealized gains (losses)PurchasesSalesIssuancesSettlementsOther(1)
Transfers into
Level 3(7)
Transfers out of Level 3(7)
Fair Value, end of period
Unrealized gains (losses) for assets and liabilities still held(2)
(in millions)
Fixed maturities, available-for-sale:
U.S. states$6 $0 $0 $0 $0 $(1)$0 $0 $0 $5 $0 
Foreign government7 0 0 0 0 (2)0 0 0 5 0 
Corporate securities(3)5,831 (68)868 (350)0 (194)(41)234 (1)6,279 (71)
Structured securities(4)2,333 18 826 (323)0 (65)(362)865 (75)3,217 19 
Other assets:
Fixed maturities, trading1,986 (21)423 (261)0 (252)366 3 (106)2,138 (7)
Equity securities518 (17)154 (23)0 0 0 119 (18)733 (23)
Commercial mortgage and other loans
233 0 0 0 30 0 0 0 0 263 0 
Other invested assets953 (1)14 (1)0 0 0 0 0 965 (1)
Short-term investments461 0 8 (3)0 (4)0 0 0 462 0 
Cash equivalents0 0 1 0 0 0 0 0 0 1 0 
Reinsurance recoverables and deposit receivables613 (4)23 0 0 (18)(233)0 0 381 (21)
Separate account assets
232 (8)60 (34)0 (1)0 4 0 253 (8)
Liabilities:
Policyholders’ account balances(5)
(12,746)1,435 0 0 0 (625)(2)0 0 (11,938)407 
Other liabilities(1)(12)0 0 0 0 0 0 0 (13)(12)
Notes issued by consolidated VIEs(60)0 0 0 (7)0 0 0 0 (67)0 

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 
Three Months Ended March 31, 2025
Total realized and unrealized gains (losses)
Unrealized gains (losses) for assets and liabilities still held(2)
Realized investment gains (losses), netOther income (loss)Interest credited to policyholders’ account balances
Included in other comprehensive income (losses)
Net investment incomeRealized investment gains (losses), netOther income (loss)Interest credited to policyholders’ account balances
Included in other comprehensive income (losses)
(in millions)
Fixed maturities, available-for-sale$(19)$0 $0 $(28)$(3)$(22)$0 $0 $(30)
Other assets:
Fixed maturities, trading0 (6)0 0 (15)0 (7)0 0 
Equity securities0 (17)0 0 0 0 (23)0 0 
Commercial mortgage and other loans
0 0 0 0 0 0 0 0 0 
Other invested assets0 (1)0 0 0 0 (1)0 0 
Short-term investments0 0 0 0 0 0 0 0 0 
Cash equivalents0 0 0 0 0 0 0 0 0 
Reinsurance recoverables and deposit receivables(4)0 0 0 0 (21)0 0 0 
Separate account assets
0 0 (8)0 0 0 0 (8)0 
Liabilities:
Policyholders’ account balances1,435 0 0 0 0 407 0 0 0 
Other liabilities(12)0 0 0 0 (12)0 0 0 
Notes issued by consolidated VIEs0 0 0 0 0 0 0 0 0 
__________
(1)“Other” includes additional activity not allocated to the specific categories within the rollforward of Level 3 Assets and Liabilities.
(2)Unrealized gains or losses related to assets and liabilities still held at the end of the period do not include amortization or accretion of premiums and discounts.
(3)Includes U.S. corporate public, U.S. corporate private, foreign corporate public and foreign corporate private securities.
(4)Includes asset-backed, commercial mortgage-backed and residential mortgage-backed securities.
(5)Issuances and settlements for Policyholders’ account balances are presented net in the rollforward.
(6)Excludes MRB assets of $2,166 million and $2,139 million and MRB liabilities of $5,000 million and $5,021 million for the periods ended March 31, 2026 and 2025, respectively. See Note 11 for additional information.
(7)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the period in which the transfers occur for any such positions still held at the end of the period.

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 As of March 31, 2026
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Derivative Assets:
Interest Rate$15 $11,041 $0 $$11,056 
Currency0 1,685 0 1,685 
Credit0 56 0 56 
Currency/Interest Rate0 2,016 0 2,016 
Equity22 9,648 0 9,670 
Netting(1)(23,021)(23,021)
Total derivative assets$37 $24,446 $0 $(23,021)$1,462 
Derivative Liabilities:
Interest Rate$6 $25,165 $0 $$25,171 
Currency0 1,621 0 1,621 
Credit0 0 0 0 
Currency/Interest Rate0 1,105 0 1,105 
Equity29 9,934 0 9,963 
Netting(1)(31,459)(31,459)
Total derivative liabilities$35 $37,825 $0 $(31,459)$6,401 

 As of December 31, 2025
 Level 1Level 2Level 3Netting(1)Total
 (in millions)
Derivative Assets:
Interest Rate$7 $11,210 $0 $$11,217 
Currency0 1,384 0 1,384 
Credit0 112 0 112 
Currency/Interest Rate0 1,656 0 1,656 
Equity293 11,454 0 11,747 
Netting(1)(24,445)(24,445)
Total derivative assets$300 $25,816 $0 $(24,445)$1,671 
Derivative Liabilities:
Interest Rate$22 $25,571 $0 $$25,593 
Currency0 1,591 0 1,591 
Credit0 0 0 0 
Currency/Interest Rate0 1,619 0 1,619 
Equity258 10,096 0 10,354 
Netting(1)(32,942)(32,942)
Total derivative liabilities$280 $38,877 $0 $(32,942)$6,215 
__________ 
(1)“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.

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


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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31, 2026
Fair Value, beginning of periodTotal realized and unrealized gains (losses)(1)PurchasesSalesIssuancesSettlementsOtherTransfers into
Level 3(2)
Transfers out of Level 3(2)Fair Value, end of periodUnrealized gains (losses) for assets still held(1)
(in millions)
Net Derivative - Equity$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 
Net Derivative - Interest Rate0 0 0 0 0 0 0 0 0 0 0 



Three Months Ended March 31, 2025
Fair Value, beginning of periodTotal realized and unrealized gains (losses)(1)PurchasesSalesIssuancesSettlementsOtherTransfers into
Level 3(2)
Transfers out of Level 3(2)Fair Value, end of periodUnrealized gains (losses) for assets still held(1)
(in millions)
Net Derivative - Equity$0 $1 $0 $0 $0 $0 $0 $0 $0 $1 $1 
Net Derivative - Interest Rate0 (13)0 0 0 0 0 0 0 (13)(13)
__________ 
(1)Total realized and unrealized gains (losses) as well as unrealized gains (losses) for assets still held at the end of the period are recorded in “Realized investment gains (losses), net.”
(2)Transfers into or out of Level 3 are generally reported at the value as of the beginning of the period in which the transfers occur for any such positions still held at the end of the period.

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

Three Months Ended March 31,
20262025
(in millions)
Gains (Losses):
Investment real estate$0 $(12)
Investment in JV/LP and Other
$(5)$0 
Equity securities
$9 $0 

March 31, 2026December 31, 2025
(in millions)
Carrying value after measurement as of period end:
Investment real estate(1)
$0 $45 
Investment in JV/LP and Other(1)
$74 $61 
Equity securities(1)
$32 $92 
__________ 
(1)Reported carrying values for 2026 include values as of the measurement dates of March 31, 2026 for “Investment in JV/LP and Other” and “Equity securities.” Reported carrying values for 2025 include values as of the measurement dates of March 31, 2025 for “Investment real estate,” December 31, 2025 for “Investment in JV/LP and Other” and September 30, 2025 and December 31, 2025 for “Equity securities.”

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

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

Three Months Ended March 31,
20262025
(in millions)
Commercial mortgage and other loans:
Interest income$8 $8 
Changes in fair value$0 $0 
Notes issued by consolidated VIEs:
Interest expense$8 $0 
Changes in fair value$2 $0 



March 31, 2026December 31, 2025
(in millions)
Commercial mortgage and other loans(1):
Fair value as of period end$1,495 $1,056 
Aggregate contractual principal as of period end$1,485 $1,048 
Other invested assets:
Fair value as of period end$26 $26 
Notes issued by consolidated VIEs:
Fair value as of period end$1,330 $767 
Aggregate contractual principal as of period end$1,330 $767 
__________ 
(1)As of March 31, 2026, for loans for which the fair value option has been elected, none of the loans were 90 days or more past due.


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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 March 31, 2026
 Fair ValueCarrying
Amount(1)
 Level 1Level 2Level 3TotalTotal
 (in millions)
Assets:
Commercial mortgage and other loans$0 $13 $62,288 $62,301 $63,917 
Policy loans13 0 9,975 9,988 9,988 
Other invested assets0 93 0 93 93 
Short-term investments625 1 0 626 626 
Cash and cash equivalents6,422 248 0 6,670 6,670 
Accrued investment income0 3,633 0 3,633 3,633 
Reinsurance recoverables and deposit receivables
0 8 7,066 7,074 7,074 
Other assets56 3,401 2 3,459 3,459 
Total assets$7,116 $7,397 $79,331 $93,844 $95,460 
Liabilities:
Policyholders’ account balances—investment contracts$0 $35,871 $48,916 $84,787 $90,343 
Securities sold under agreements to repurchase0 10,975 0 10,975 10,975 
Cash collateral for loaned securities0 8,905 0 8,905 8,905 
Reinsurance and funds withheld payables(2)
0 10,772 (37)10,735 10,735 
Short-term debt
0 910 36 946 946 
Long-term debt(3)
7,263 10,059 457 17,779 18,882 
Notes issued by consolidated VIEs0 0 1,953 1,953 1,953 
Other liabilities0 7,636 31 7,667 7,667 
Separate account liabilities—investment contracts0 22,320 17,545 39,865 39,865 
Total liabilities$7,263 $107,448 $68,901 $183,612 $190,271 
 
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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

 December 31, 2025
 Fair ValueCarrying
Amount(1)
 Level 1Level 2Level 3TotalTotal
 (in millions)
Assets:
Commercial mortgage and other loans$0 $14 $63,164 $63,178 $63,659 
Policy loans12 0 9,946 9,958 9,958 
Other invested assets0 93 0 93 93 
Short-term investments632 1 0 633 633 
Cash and cash equivalents6,652 222 0 6,874 6,874 
Accrued investment income0 3,636 0 3,636 3,636 
Reinsurance recoverables and deposit receivables
0 8 6,710 6,718 6,718 
Other assets37 3,142 2 3,181 3,181 
Total assets$7,333 $7,116 $79,822 $94,271 $94,752 
Liabilities:
Policyholders’ account balances—investment contracts$0 $35,175 $49,931 $85,106 $89,970 
Securities sold under agreements to repurchase0 9,598 0 9,598 9,598 
Cash collateral for loaned securities0 8,700 0 8,700 8,700 
Reinsurance and funds withheld payables(2)
0 10,639 (32)10,607 10,607 
Short-term debt
0 1,408 33 1,441 1,443 
Long-term debt(3)
7,507 10,324 522 18,353 18,856 
Notes issued by consolidated VIEs0 0 1,892 1,892 1,892 
Other liabilities0 6,993 31 7,024 7,024 
Separate account liabilities—investment contracts0 22,548 17,663 40,211 40,211 
Total liabilities$7,507 $105,385 $70,040 $182,932 $188,301 
__________ 
(1)Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.
(2)Includes contracts reinsured through coinsurance with funds withheld agreement with Prismic Life Reinsurance, Ltd (“Prismic Re”) with a fair value of $7,430 million (carrying amount of $7,430 million) and $7,513 million (carrying amount of $7,513 million), a portion of which relates to insurance contracts as of March 31, 2026 and December 31, 2025, respectively. See Note 12 for additional information regarding the reinsurance arrangement with Prismic Re.
(3)Excludes debt with fair value of $15,844 million (carrying amount of $15,844 million) and $15,744 million (carrying amount of $15,744 million) as of March 31, 2026 and December 31, 2025, respectively, which have been offset with the associated notes under a netting agreement.


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

Deferred Policy Acquisition Costs (“DAC”)

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31, 2026
Individual LifeU.S. Legacy ProductsInternational BusinessesTotal
Retirement
Term LifeVariable/
Universal Life
AnnuitiesGuaranteed Universal Life
(in millions)
Balance, BOP$2,304 $2,203 $4,845 $2,308 $545 $9,678 $21,883 
Capitalization174 48 169 1 5 263 660 
Amortization expense(81)(53)(57)(58)(4)(178)(431)
Other adjustments
0 0 (1)0 0 4 3 
Foreign currency adjustment(1)0 0 0 0 (11)(12)
Balance, EOP$2,396 $2,198 $4,956 $2,251 $546 $9,756 22,103 
Other businesses(373)
Total DAC balance$21,730 

Three Months Ended March 31, 2025

Individual LifeU.S. Legacy Products(1)International BusinessesTotal
Retirement(1)Term LifeVariable/
Universal Life(1)
AnnuitiesGuaranteed Universal Life
(in millions)
Balance, BOP$1,744 $2,215 $4,369 $2,556 $509 $9,304 $20,697 
Capitalization306 46 144 1 13 305 815 
Amortization expense(82)(52)(53)(61)(6)(169)(423)
Other adjustments(2)
(2)0 (1)0 1 (214)(216)
Foreign currency adjustment2 0 0 0 0 184 186 
Balance, EOP$1,968 $2,209 $4,459 $2,496 $517 $9,410 21,059 
Other businesses(269)
Total DAC balance$20,790 
__________
(1)Prior period amounts have been updated to conform to current presentation.
(2)Includes the impact of the reinsurance transaction with Prismic Re International in International Businesses. See Note 12 for additional information.

Deferred Reinsurance Losses (“DRL”)

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

Three Months Ended March 31, 2026

U.S. Legacy ProductsTotal
Retirement
Guaranteed Universal Life
(in millions)
Balance, BOP$248 $932 $1,180 
Amortization
(7)(10)(17)
Balance, EOP$241 $922 1,163 
Other businesses63 
Total DRL balance$1,226 


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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31, 2025

U.S. Legacy ProductsTotal
Retirement
Guaranteed Universal Life
(in millions)
Balance, BOP$280 $969 $1,249 
Amortization
(8)(9)(17)
Balance, EOP$272 $960 1,232 
Other businesses86 
Total DRL balance$1,318 

Deferred Reinsurance Gains (“DRG”)

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

Three Months Ended March 31, 2026

U.S. Legacy Products
Total
Retirement
AnnuitiesGuaranteed Universal Life
(in millions)
Balance, BOP$67 $263 $333 $663 
Deferred reinsurance gain
2 0 0 2 
Amortization
(1)(6)(4)(11)
Balance, EOP$68 $257 $329 654 
Other businesses40 
Total DRG balance$694 

Three Months Ended March 31, 2025

U.S. Legacy Products
Total
RetirementAnnuitiesGuaranteed Universal Life
(in millions)
Balance, BOP$62 $287 $348 $697 
Deferred reinsurance gain
1 0 0 1 
Amortization
(1)(6)(4)(11)
Foreign currency adjustment2 0 0 2 
Balance, EOP$64 $281 $344 689 
Other businesses43 
Total DRG balance$732 

Deferred Sales Inducements (“DSI”)

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




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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31,
2026
2025(1)
(in millions)
Balance, BOP
$348 $378 
Capitalization
1 1 
Amortization expense
(8)(8)
Balance, EOP
341 371 
Other businesses
25 27 
Total DSI balance
$366 $398 
__________
(1)Prior period amounts have been updated to conform to current presentation.

Value of Business Acquired (“VOBA”)

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

Three Months Ended March 31,
20262025
(in millions)
Balance, BOP
$384 $421 
Amortization expense
(9)(10)
Foreign currency adjustment
(5)20 
Balance, EOP
370 431 
Other businesses(1)
12 15 
Total VOBA balance
$382 $446 
__________
(1)Represents Aoba Life business.


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

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

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Assets

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

March 31,
2026
December 31,
2025
(in millions)
Asset Type:
U.S. Treasury securities and obligations of U.S. government authorities and agencies
$4,924 $4,753 
Obligations of U.S. states and their political subdivisions
2,483 2,514 
Foreign government bonds
122 109 
U.S. corporate securities
12,553 13,783 
Foreign corporate securities
3,302 4,282 
Asset-backed securities
2,129 3,445 
Mortgage-backed securities
13,335 10,154 
Mutual funds:
Equity
85,788 92,137 
Fixed Income
29,998 30,602 
Other
6,152 6,315 
Equity securities
5,198 5,459 
Commercial mortgage and other loans
52 53 
Other invested assets
19,837 19,749 
Short-term investments
1,011 1,276 
Cash and cash equivalents
2,152 1,620 
Total
$189,036 $196,251 

For the periods ended March 31, 2026 and December 31, 2025, there were no transfers of assets, other than cash, from the general account to a separate account; therefore, no gains or losses were recorded.


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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Separate Account Liabilities

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

Three Months Ended March 31, 2026
PGIM
Retirement
Group InsuranceIndividual Life
U.S. Legacy Products
Total
(in millions)
Balance, BOP$29,278 $12,154 $26,916 $54,073 $77,880 $200,301 
Deposits2,055 150 22 1,139 12 3,378 
Investment performance179 (128)(74)(1,549)(1,269)(2,841)
Policy charges(16)(5)(57)(321)(463)(862)
Surrenders and withdrawals(1,145)(445)(7)(284)(3,364)(5,245)
Benefit payments(950)(123)(85)(157)(28)(1,343)
Net transfers (to) from general account31 7 (3)(200)4 (161)
Other(207)69 25 (62)1 (174)
Balance, EOP$29,225 $11,679 $26,737 $52,639 $72,773 $193,053 
Other businesses(1)(4,017)
Total separate account liabilities$189,036 

Cash surrender value(2)$29,225 $11,525 $26,591 $51,250 $72,350 $190,941 
__________
(1)Primarily represents activity from the Company’s intercompany eliminations as well as Divested and Run-off Businesses. There are no associated cash surrender charges.
(2)“Cash surrender value” represents the amount of the contractholder’s account balances distributable at the balance sheet date less certain surrender charges. There is no cash surrender charges for the PGIM segment.

Three Months Ended March 31, 2025
PGIM
Retirement
Group InsuranceIndividual Life
U.S. Legacy Products
Total
(in millions)
Balance, BOP
$28,645 $12,664 $25,126 $46,891 $83,618 $196,944 
Deposits
2,211 289 11 924 12 3,447 
Investment performance
569 175 511 (1,220)(168)(133)
Policy charges
(16)(6)(38)(309)(510)(879)
Surrenders and withdrawals
(1,695)(567)(9)(280)(3,353)(5,904)
Benefit payments
(910)(129)(60)(153)(27)(1,279)
Net transfers (to) from general account
(83)(157)13 (109)7 (329)
Other
(118)78 (7)44 2 (1)
Balance, EOP
$28,603 $12,347 $25,547 $45,788 $79,581 191,866 
Other businesses(1)
(3,675)
Total separate account liabilities
$188,191 
Cash surrender value(2)
$28,603 $12,207 $25,452 $42,169 $78,856 $187,287 
__________
(1)Primarily represents activity from the Company’s intercompany eliminations as well as Divested and Run-off Businesses. There are no associated cash surrender charges.
(2)“Cash surrender value” represents the amount of the contractholder’s account balances distributable at the balance sheet date less certain surrender charges. There is no cash surrender charges for the PGIM segment.

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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

9. LIABILITY FOR FUTURE POLICY BENEFITS

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

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

Benefit Reserves

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

Three Months Ended March 31, 2026
Present Value of Expected Net Premiums

Individual LifeInternational BusinessesCorporate and OtherTotal
Retirement
Term LifeLong-Term Care
(in millions)
Balance, BOP$87,431 $10,637 $41,359 $2,868 $142,295 
Effect of cumulative changes in discount rate assumptions, BOP14,178 280 3,431 64 17,953 
Balance at original discount rate, BOP101,609 10,917 44,790 2,932 160,248 
Effect of actual variances from expected experience and other activity17 (75)(306)21 (343)
Adjusted balance, BOP101,626 10,842 44,484 2,953 159,905 
Issuances1,587 206 525 0 2,318 
Net premiums / considerations collected(3,082)(339)(1,749)(82)(5,252)
Interest accrual927 131 349 35 1,442 
Foreign currency adjustment(1,977)0 (168)0 (2,145)
Other adjustments0 (16)28 0 12 
Balance at original discount rate, EOP99,081 10,824 43,469 2,906 156,280 
Effect of cumulative changes in discount rate assumptions, EOP(17,517)(409)(4,016)(103)(22,045)
Balance, EOP$81,564 $10,415 $39,453 $2,803 134,235 
Other businesses, EOP112 
Total balance, EOP$134,347 




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PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31, 2026
Present Value of Expected Future Policy Benefits

Individual LifeInternational BusinessesCorporate and OtherTotal
Retirement
Term LifeLong-Term Care
(in millions)
Balance, BOP$167,704 $19,166 $125,543 $11,660 $324,073 
Effect of cumulative changes in discount rate assumptions, BOP17,769 602 26,267 1,435 46,073 
Balance at original discount rate, BOP185,473 19,768 151,810 13,095 370,146 
Effect of actual variances from expected experience and other activity26 (95)(309)20 (358)
Adjusted balance, BOP185,499 19,673 151,501 13,115 369,788 
Issuances1,587 206 525 0 2,318 
Interest accrual1,846 237 1,172 157 3,412 
Benefit payments(3,849)(375)(2,844)(100)(7,168)
Foreign currency adjustment(1,991)0 (790)0 (2,781)
Other adjustments91 (7)80 0 164 
Balance at original discount rate, EOP183,183 19,734 149,644 13,172 365,733 
Effect of cumulative changes in discount rate assumptions, EOP(22,213)(874)(29,712)(1,726)(54,525)
Balance, EOP$160,970 $18,860 $119,932 $11,446 311,208 
Other businesses, EOP1,483 
Total balance, EOP$312,691 

Three Months Ended March 31, 2026
Net Liability for Future Policy Benefits - Benefit Reserves

Individual LifeInternational BusinessesCorporate and OtherTotal
Retirement
Term LifeLong-Term Care
(in millions)
Balance, EOP, pre-flooring$79,406 $8,445 $80,479 $8,643 $176,973 
Flooring impact, EOP156 2 91 0 249 
Balance, EOP, post-flooring79,562 8,447 80,570 8,643 177,222 
Less: Reinsurance recoverables
5,089 618 292 0 5,999 
Balance after reinsurance recoverables, EOP, post-flooring
$74,473 $7,829 $80,278 $8,643 171,223 
Other businesses, EOP(1)1,317 
Total balance after reinsurance recoverables, EOP
$172,540 

53

Table of Contents
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)

Three Months Ended March 31, 2025
Present Value of Expected Net Premiums

Individual Life
International Businesses
Corporate and Other
Total(2)
Retirement(2)
Term LifeLong-Term Care
(in millions)
Balance, BOP$72,526 $10,724 $45,851 $2,854 $131,955 
Effect of cumulative changes in discount rate assumptions, BOP14,545 578 2,599 132 17,854 
Balance at original discount rate, BOP87,071 11,302 48,450 2,986 149,809 
Effect of actual variances from expected experience and other activity22 (62)(303)19 (324)
Adjusted balance, BOP87,093 11,240 48,147 3,005 149,485 
Issuances4,148 201 768 0 5,117 
Net premiums / considerations collected(1,559)(340)(1,893)(80)(3,872)
Interest accrual824 133 368 36 1,361 
Foreign currency adjustment2,777 0 1,264 0 4,041 
Other adjustments0 1 43 0 44 
Balance at original discount rate, EOP93,283 11,235 48,697 2,961 156,176 
Effect of cumulative changes in discount rate assumptions, EOP(16,053)(460)(3,029)(102)(19,644)
Balance, EOP$77,230 $10,775 $45,668 $2,859 136,532 
Other businesses, EOP93 
Total balance, EOP$136,625 

Three Months Ended March 31, 2025
Present Value of Expected Future Policy Benefits

Individual Life
International Businesses
Corporate and Other
Total(2)
Retirement(2)
Term LifeLong-Term Care
(in millions)
Balance, BOP $151,679 $18,996 $135,485 $11,178 $317,338 
Effect of cumulative changes in discount rate assumptions, BOP 20,199 1,134 17,834 1,548 40,715 
Balance at original discount rate, BOP 171,878 20,130