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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
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| ☒ | 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
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| ☐ | 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)
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| New Jersey | 22-3703799 |
(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:
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| Title of Each Class | Trading Symbols(s) | Name of Each Exchange on Which Registered |
| Common Stock, Par Value $.01 | PRU | New York Stock Exchange |
| 5.950% Junior Subordinated Notes | PRH | New York Stock Exchange |
| 5.625% Junior Subordinated Notes | PRS | New York Stock Exchange |
| 4.125% Junior Subordinated Notes | PFH | New 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.
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| Large Accelerated Filer | x | | Accelerated Filer | ☐ |
| Non-accelerated Filer | ☐ | | Smaller 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
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| Item 2. | | |
| Item 3. | | |
| Item 4. | | |
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| Item 1. | | |
| Item 1A. | | |
| Item 2. | | |
| Item 5. | | |
| Item 6. | | |
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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.
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)
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| | 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 | |
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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 value | | 4,781 | | | 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 loans | | 9,988 | | | 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 investments | | 474,124 | | | 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 assets | | 0 | | | 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 assets | | 189,036 | | | 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’ dividends | | 809 | | | 1,272 | |
| Securities sold under agreements to repurchase | | 10,975 | | | 9,598 | |
| Cash collateral for loaned securities | | 8,905 | | | 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 debt | | 946 | | | 1,443 | |
| Long-term debt | | 18,882 | | | 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 liabilities | | 189,036 | | | 196,251 | |
| Total liabilities | | 730,469 | | | 738,159 | |
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 21) | | | | |
| MEZZANINE EQUITY | | | | |
Redeemable noncontrolling interests | | 2,608 | | | 2,794 | |
| Total mezzanine equity | | 2,608 | | | 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 capital | | 25,948 | | | 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. equity | | 31,975 | | | 32,438 | |
| Noncontrolling interests | | 344 | | | 349 | |
| Total equity | | 32,319 | | | 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
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, |
| | | | | | 2026 | | 2025 |
| 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 revenues | | | | | 15,526 | | | 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 policyholders | | | | | 232 | | | 145 | |
Amortization of deferred policy acquisition costs(1) | | | | | 411 | | | 407 | |
| | | | | | | |
| General and administrative expenses(1) | | | | | 3,469 | | | 3,083 | |
| Total benefits and expenses | | | | | 14,793 | | | 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
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, |
| | | | | | 2026 | | 2025 |
| 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 interests | | | | | 8 | | | 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
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 interests | | | | | | | | | | | | | 12 | | | 12 | | | 213 | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | (17) | | | (17) | | | (62) | |
| Consolidations (deconsolidations) of noncontrolling interests | | | | | | | | | | | | | | | 0 | | | (345) | |
| Stock-based compensation programs | | | (65) | | | | | 125 | | | | | 60 | | | | | 60 | | | |
| Dividends declared on Common Stock | | | | | (496) | | | | | | | (496) | | | | | (496) | | | |
| Comprehensive income: | | | | | | | | | | | | | | | | | |
| Net income (loss) | | | | | 597 | | | | | | | 597 | | | 1 | | | 598 | | | 8 | |
| Other comprehensive income (loss), net of tax | | | | | | | | | (373) | | | (373) | | | (1) | | | (374) | | | |
| Total comprehensive income (loss) | | | | | 597 | | | | | (373) | | | 224 | | | 0 | | | 224 | | | 8 | |
| Balance, March 31, 2026 | $ | 6 | | | $ | 25,948 | | | $ | 34,932 | | | $ | (25,461) | | | $ | (3,450) | | | $ | 31,975 | | | $ | 344 | | | $ | 32,319 | | | $ | 2,608 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 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 interests | | | | | | | | | | | | | 4 | | | 4 | | | 64 | |
| Distributions to noncontrolling interests | | | | | | | | | | | | | (21) | | | (21) | | | (18) | |
| Consolidations (deconsolidations) of noncontrolling interests | | | | | | | | | | | | | 13 | | | 13 | | | 8 | |
| Stock-based compensation programs | | | (30) | | | | | 101 | | | | | 71 | | | | | 71 | | | |
| Dividends declared on Common Stock | | | | | (486) | | | | | | | (486) | | | | | (486) | | | |
| Comprehensive income: | | | | | | | | | | | | | | | | | |
| Net income (loss) | | | | | 707 | | | | | | | 707 | | | 9 | | | 716 | | | 26 | |
| Other comprehensive income (loss), net of tax | | | | | | | | | 1,970 | | | 1,970 | | | | | 1,970 | | | |
| Total comprehensive income (loss) | | | | | 707 | | | | | 1,970 | | | 2,677 | | | 9 | | | 2,686 | | | 26 | |
Balance, March 31, 2025 | $ | 6 | | | $ | 25,871 | | | $ | 33,408 | | | $ | (24,661) | | | $ | (4,741) | | | $ | 29,883 | | | $ | 320 | | | $ | 30,203 | | | $ | 2,019 | |
| | | | | | | | | | | | | | | | | |
See Notes to Unaudited Interim Consolidated Financial Statements
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, |
| 2026 | | 2025 |
| 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, net | 119 | | | 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 activities | 1,008 | | | (2,506) | |
| CASH FLOWS FROM INVESTING ACTIVITIES | | | |
| Proceeds from the sale/maturity/prepayment of: | | | |
| Fixed maturities, available-for-sale | 15,183 | | | 10,959 | |
| | | |
| Fixed maturities, trading | 876 | | | 1,123 | |
| Assets supporting experience-rated contractholder liabilities | 336 | | | 486 | |
| Equity securities | 1,778 | | | 2,344 | |
| Commercial mortgage and other loans | 1,709 | | | 1,947 | |
| Policy loans | 456 | | | 461 | |
| Other invested assets | 995 | | | 876 | |
| Short-term investments | 9,596 | | | 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 deposits | 9,869 | | | 8,993 | |
| Policyholders’ account withdrawals | (5,712) | | | (4,600) | |
| Net change in securities sold under agreements to repurchase and cash collateral for loaned securities | 1,583 | | | 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 options | 29 | | | 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 VIEs | 627 | | | 7 | |
| | | |
| | | |
| | | |
Other, net(1) | 246 | | | 253 | |
| Cash flows from (used in) financing activities | 5,440 | | | 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 YEAR | 19,749 | | | 18,520 | |
| CASH, CASH EQUIVALENTS, RESTRICTED CASH AND RESTRICTED CASH EQUIVALENTS, END OF PERIOD | $ | 15,993 | | | $ | 16,104 | |
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, |
| 2026 | | 2025 |
| | | |
| 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 | |
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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
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements
1. BUSINESS AND BASIS OF PRESENTATION
Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement-related services, mutual funds and investment management.
Effective January 1, 2026, the Company made the following segment reporting changes to isolate the impacts of certain discontinued products that were previously commingled with the results of actively sold products that more closely reflect the Company’s strategic focus. These changes are consistent with the Company’s recent organizational changes and strategy and reflect how the Chief Operating Decision Maker (“CODM”) assesses performance and allocates resources:
•“U.S. Legacy Products” segment: (i) traditional variable annuities with guaranteed living benefit riders and certain other annuity products, previously included in the former Individual Retirement Strategies segment, and (ii) guaranteed universal life policies, previously included in the Individual Life segment, have been combined into a new reportable segment named “U.S. Legacy Products.” This segment represents run-off blocks of business consisting of products that are no longer being sold in U.S. markets and will be managed with a focus on reducing risk and optimizing value.
•“Retirement” segment: The blocks of business in the former Individual Retirement Strategies segment that were not moved into the U.S. Legacy Products segment, discussed above, consisting primarily of registered index-linked annuity and fixed annuity products, and the products previously included in the former Institutional Retirement Strategies segment have been combined into a new reportable segment named “Retirement.” This combined segment better represents the Company’s strategic management, growth trajectory, and resource allocation policies.
•“Individual Life” segment: There were no other impacts to this segment other than the transfer of the guaranteed universal life policies, discussed above. The remaining blocks of business contained within this segment primarily consist of term, indexed universal life, and variable universal life products.
These segment reporting changes are being applied retrospectively and do not have an impact on any of the Company’s previously issued Consolidated Financial Statements. See Note 19 for additional information regarding the Company’s segments.
The Company’s principal operations now consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of Retirement, Group Insurance, Individual Life and U.S. Legacy Products), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included within Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments, as well as the Divested and Run-off Businesses described above.
As previously disclosed, in January 2026, The Prudential Life Insurance Company, Ltd. (“Prudential of Japan”), a Japanese insurance subsidiary of the Company, reported the findings of its internal investigation into incidents of misconduct involving certain employees of Prudential of Japan. In response to these findings, Prudential of Japan is implementing a series of actions which include strengthening oversight of sales practices, governance and risk management, as well as leadership changes. Moreover, in February 2026, following discussions with the Japanese regulator, the Company voluntarily suspended new sales activity at Prudential of Japan for a 90-day period commencing February 9, 2026. In April 2026, the Company announced the voluntary extension of the suspension of new sales for an additional 180 days through November 5, 2026. See “—Litigation and Regulatory Matters—Regulatory” within Note 21 for additional information.
Basis of Presentation
The Unaudited Interim Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) on a basis consistent with reporting interim financial information in accordance with instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). The Unaudited Interim Consolidated Financial Statements include the accounts of Prudential Financial,
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for additional information regarding the Company’s consolidated variable interest entities. Intercompany balances and transactions have been eliminated.
In the opinion of management, all adjustments necessary for a fair statement of the financial position and results of operations have been made. All such adjustments are of a normal, recurring nature. Interim results are not necessarily indicative of the results that may be expected for the full year. These financial statements should be read in conjunction with the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The most significant estimates include those used in determining future policy benefits; policyholders’ account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits (“MRBs”); the measurement of goodwill and any related impairment; the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments (“OTTI”); pension and other postretirement benefits; any provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.
Out of Period Adjustments
The Company recorded out of period adjustments resulting in a net charge of $150 million to “Income (loss) from operations before income taxes and equity in earnings of joint ventures and other operating entities” for the 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. |
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 Losses | | Fair 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 subdivisions | 5,540 | | | 103 | | | 584 | | | 0 | | | 5,059 | |
Foreign government securities | 60,717 | | | 284 | | | 13,326 | | | 0 | | | 47,675 | |
| U.S. public corporate securities | 117,124 | | | 1,316 | | | 10,685 | | | 20 | | | 107,735 | |
| U.S. private corporate securities(1) | 47,818 | | | 912 | | | 2,303 | | | 109 | | | 46,318 | |
| Foreign public corporate securities | 25,217 | | | 260 | | | 1,406 | | | 27 | | | 24,044 | |
| Foreign private corporate securities | 41,638 | | | 961 | | | 3,104 | | | 91 | | | 39,404 | |
| Asset-backed securities(2) | 21,482 | | | 200 | | | 66 | | | 2 | | | 21,614 | |
| Commercial mortgage-backed securities | 10,154 | | | 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 Losses | | Fair Value |
| | (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 26,334 | | | $ | 668 | | | $ | 4,823 | | | $ | 0 | | | $ | 22,179 | |
| Obligations of U.S. states and their political subdivisions | 5,881 | | | 138 | | | 554 | | | 0 | | | 5,465 | |
Foreign government securities | 62,469 | | | 497 | | | 12,352 | | | 0 | | | 50,614 | |
| U.S. public corporate securities | 115,160 | | | 1,977 | | | 9,345 | | | 11 | | | 107,781 | |
| U.S. private corporate securities(1) | 47,976 | | | 1,177 | | | 1,964 | | | 88 | | | 47,101 | |
| Foreign public corporate securities | 24,496 | | | 413 | | | 1,178 | | | 28 | | | 23,703 | |
| Foreign private corporate securities | 41,099 | | | 1,638 | | | 2,523 | | | 55 | | | 40,159 | |
| Asset-backed securities(2) | 19,130 | | | 226 | | | 26 | | | 1 | | | 19,329 | |
| Commercial mortgage-backed securities | 9,958 | | | 87 | | | 302 | | | 0 | | | 9,743 | |
| Residential mortgage-backed securities(3) | 5,493 | | | 43 | | | 155 | | | 0 | | | 5,381 | |
Total fixed maturities, available-for-sale(1) | $ | 357,996 | | | $ | 6,864 | | | $ | 33,222 | | | $ | 183 | | | $ | 331,455 | |
__________
(1)Excludes notes with amortized cost of $15,744 million (fair value, $15,744 million), which have been offset with the associated debt under a netting agreement.
(2)Includes credit-tranched securities collateralized by loan obligations, home equity loans, auto loans, education loans and other asset types.
(3)Includes publicly-traded agency pass-through securities and collateralized mortgage obligations.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
The following tables set forth the fair value and gross unrealized losses on fixed maturities, available-for-sale without an allowance for credit losses aggregated by investment category and length of time that individual fixed maturity securities had been in a continuous unrealized loss position, as of the dates indicated:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 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 subdivisions | | 669 | | | 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 securities | | 27,994 | | | 672 | | | 48,859 | | | 9,998 | | | 76,853 | | | 10,670 | |
| U.S. private corporate securities | | 8,355 | | | 157 | | | 22,438 | | | 2,144 | | | 30,793 | | | 2,301 | |
| Foreign public corporate securities | | 6,319 | | | 132 | | | 8,098 | | | 1,272 | | | 14,417 | | | 1,404 | |
| Foreign private corporate securities | | 7,471 | | | 267 | | | 14,577 | | | 2,835 | | | 22,048 | | | 3,102 | |
| Asset-backed securities | | 9,533 | | | 30 | | | 655 | | | 36 | | | 10,188 | | | 66 | |
| Commercial mortgage-backed securities | | 1,323 | | | 8 | | | 5,014 | | | 320 | | | 6,337 | | | 328 | |
| Residential mortgage-backed securities | | 3,092 | | | 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 subdivisions | | 399 | | | 9 | | | 3,631 | | | 545 | | | 4,030 | | | 554 | |
Foreign government securities | | 9,886 | | | 510 | | | 23,570 | | | 11,842 | | | 33,456 | | | 12,352 | |
| U.S. public corporate securities | | 9,789 | | | 218 | | | 52,459 | | | 9,114 | | | 62,248 | | | 9,332 | |
| U.S. private corporate securities | | 3,297 | | | 68 | | | 24,064 | | | 1,895 | | | 27,361 | | | 1,963 | |
| Foreign public corporate securities | | 2,253 | | | 35 | | | 8,586 | | | 1,142 | | | 10,839 | | | 1,177 | |
| Foreign private corporate securities | | 849 | | | 44 | | | 16,286 | | | 2,473 | | | 17,135 | | | 2,517 | |
| Asset-backed securities | | 2,979 | | | 6 | | | 626 | | | 20 | | | 3,605 | | | 26 | |
| Commercial mortgage-backed securities | | 249 | | | 1 | | | 5,435 | | | 301 | | | 5,684 | | | 302 | |
| Residential mortgage-backed securities | | 353 | | | 2 | | | 1,210 | | | 153 | | | 1,563 | | | 155 | |
| Total fixed maturities, available-for-sale | | $ | 33,698 | | | $ | 976 | | | $ | 147,942 | | | $ | 32,225 | | | $ | 181,640 | | | $ | 33,201 | |
As of 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
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 Cost | | Fair Value |
| (in millions) |
Fixed maturities, available-for-sale: | | | |
| Due in one year or less | $ | 22,569 | | | $ | 22,605 | |
| Due after one year through five years | 66,157 | | | 65,912 | |
Due after five years through ten years | 57,697 | | | 56,908 | |
| Due after ten years(1) | 178,485 | | | 147,392 | |
| Asset-backed securities | 21,482 | | | 21,614 | |
| Commercial mortgage-backed securities | 10,154 | | | 9,876 | |
| Residential mortgage-backed securities | 6,702 | | | 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, | | |
| | 2026 | | 2025 | | | | |
| | (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | |
| Proceeds from sales(1) | $ | 8,481 | | | $ | 4,912 | | | | | |
| Proceeds from maturities/prepayments | 6,794 | | | 5,761 | | | | | |
| Gross investment gains from sales and maturities | 359 | | | 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.
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 Securities | | Asset-Backed Securities | | Commercial Mortgage-Backed Securities | | Residential Mortgage-Backed Securities | | Total |
| (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | | | | | |
| Balance, beginning of period | $ | 0 | | | $ | 0 | | | $ | 182 | | | $ | 1 | | | $ | 0 | | | $ | 0 | | | $ | 183 | |
| Additions to allowance for credit losses not previously recorded | 0 | | | 0 | | | 55 | | | 1 | | | 0 | | | 0 | | | 56 | |
| Reductions for securities sold during the period | 0 | | | 0 | | | (2) | | | 0 | | | 0 | | | 0 | | | (2) | |
| Additions (reductions) on securities with previous allowance | 0 | | | 0 | | | 35 | | | 0 | | | 0 | | | 0 | | | 35 | |
| Write-downs charged against the allowance | 0 | | | 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 Securities | | Asset-Backed Securities | | Commercial Mortgage-Backed Securities | | Residential Mortgage-Backed Securities | | Total |
| (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | | | | | |
| Balance, beginning of period | $ | 0 | | | $ | 0 | | | $ | 331 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 331 | |
| Additions to allowance for credit losses not previously recorded | 0 | | | 0 | | | 16 | | | 1 | | | 0 | | | 0 | | | 17 | |
| Reductions for securities sold during the period | 0 | | | 0 | | | (6) | | | 0 | | | 0 | | | 0 | | | (6) | |
| Additions (reductions) on securities with previous allowance | 0 | | | 0 | | | 3 | | | 0 | | | 0 | | | 0 | | | 3 | |
| Write-downs charged against the allowance | 0 | | | 0 | | | (94) | | | 0 | | | 0 | | | 0 | | | (94) | |
| Balance, end of period | $ | 0 | | | $ | 0 | | | $ | 250 | | | $ | 1 | | | $ | 0 | | | $ | 0 | | | $ | 251 | |
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.
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, 2026 | | December 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 securities | | 2,327 | | | 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, 2026 | | December 31, 2025 |
| | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
| | | (in millions) |
| Investments in Japanese government and government agency securities: | | | | | | | | |
| Fixed maturities, available-for-sale | | $ | 52,952 | | | $ | 40,625 | | | $ | 54,863 | | | $ | 43,554 | |
| Fixed maturities, trading | | 19 | | | 18 | | | 19 | | | 18 | |
| Assets supporting experience-rated contractholder liabilities | | 558 | | | 529 | | | 536 | | | 510 | |
| Total | | $ | 53,529 | | | $ | 41,172 | | | $ | 55,418 | | | $ | 44,082 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | March 31, 2026 | | December 31, 2025 |
| | | Amortized Cost | | Fair Value | | Amortized Cost | | Fair Value |
| | | (in millions) |
Investments in Brazilian government and government agency securities: | | | | | | | | |
| Fixed maturities, available-for-sale | | $ | 4,039 | | | $ | 3,480 | | | $ | 3,651 | | | $ | 3,152 | |
| Short-term investments | | 1 | | | 1 | | | 1 | | | 1 | |
| Cash equivalents | | 306 | | | 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, 2026 | | December 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 | % |
| Retail | | 5,511 | | | 8.8 | | | 5,680 | | | 9.0 | |
| Apartments/Multi-Family | | 18,995 | | | 30.3 | | | 18,522 | | | 29.5 | |
| Industrial | | 16,900 | | | 27.0 | | | 17,280 | | | 27.5 | |
| Hospitality | | 1,627 | | | 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 loans | | 54,483 | | | 87.1 | | | 54,503 | | | 86.8 | |
| Agricultural property loans | | 8,105 | | | 12.9 | | | 8,275 | | | 13.2 | |
| Total commercial mortgage and agricultural property loans | | 62,588 | | | 100.0 | % | | 62,778 | | | 100.0 | % |
| Allowance for credit losses | | (409) | | | | | (414) | | | |
| Total net commercial mortgage and agricultural property loans | | 62,179 | | | | | 62,364 | | | |
| Other loans: | | | | | | | | |
Residential mortgage loans | | 2,454 | | | | | 1,632 | | | |
| Uncollateralized loans | | 165 | | | | | 171 | | | |
| Other collateralized loans | | 692 | | | | | 603 | | | |
| Total other loans | | 3,311 | | | | | 2,406 | | | |
| Allowance for credit losses | | (78) | | | | | (55) | | | |
| Total net other loans | | 3,233 | | | | | 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%).
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 losses | | 53 | | | 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.
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 |
| 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | Prior | | Revolving Loans | | Total |
| (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 greater | 0 | | | 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 - 1.2x | 358 | | | 502 | | | 416 | | | 498 | | | 207 | | | 972 | | | 11 | | | 2,964 | |
| Less than 1.0x | 0 | | | 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 greater | 0 | | | 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 - 1.2x | 5 | | | 0 | | | 26 | | | 41 | | | 64 | | | 235 | | | 0 | | | 371 | |
| Less than 1.0x | 0 | | | 0 | | | 19 | | | 13 | | | 568 | | | 266 | | | 43 | | | 909 | |
| Total | $ | 20 | | | $ | 898 | | | $ | 759 | | | $ | 850 | | | $ | 1,365 | | | $ | 3,990 | | | $ | 223 | | | $ | 8,105 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2025 |
| Amortized Cost by Origination Year |
| 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | Prior | | Revolving Loans | | Total |
| (in millions) |
| Commercial mortgage loans | | | | | | | | | | | | | | | |
| Loan-to-Value Ratio: | | | | | | | | | | | | | | | |
| 0%-59.99% | $ | 2,816 | | | $ | 2,088 | | | $ | 2,057 | | | $ | 1,270 | | | $ | 2,570 | | | $ | 16,546 | | | $ | 62 | | | $ | 27,409 | |
| 60%-69.99% | 3,670 | | | 4,506 | | | 1,873 | | | 1,250 | | | 1,581 | | | 3,048 | | | 0 | | | 15,928 | |
| 70%-79.99% | 677 | | | 711 | | | 1,242 | | | 506 | | | 901 | | | 1,948 | | | 0 | | | 5,985 | |
| 80% or greater | 0 | | | 36 | | | 0 | | | 258 | | | 454 | | | 4,433 | | | 0 | | | 5,181 | |
| Total | $ | 7,163 | | | $ | 7,341 | | | $ | 5,172 | | | $ | 3,284 | | | $ | 5,506 | | | $ | 25,975 | | | $ | 62 | | | $ | 54,503 | |
| Debt Service Coverage Ratio: | | | | | | | | | | | | | | | |
Greater than 1.2x | $ | 6,602 | | | $ | 6,779 | | | $ | 4,673 | | | $ | 2,963 | | | $ | 5,333 | | | $ | 23,384 | | | $ | 45 | | | $ | 49,779 | |
| 1.0 - 1.2x | 463 | | | 534 | | | 499 | | | 238 | | | 82 | | | 885 | | | 17 | | | 2,718 | |
| Less than 1.0x | 98 | | | 28 | | | 0 | | | 83 | | | 91 | | | 1,706 | | | 0 | | | 2,006 | |
| Total | $ | 7,163 | | | $ | 7,341 | | | $ | 5,172 | | | $ | 3,284 | | | $ | 5,506 | | | $ | 25,975 | | | $ | 62 | | | $ | 54,503 | |
| Agricultural property loans | | | | | | | | | | | | | | | |
| Loan-to-Value Ratio: | | | | | | | | | | | | | | | |
| 0%-59.99% | $ | 813 | | | $ | 624 | | | $ | 296 | | | $ | 977 | | | $ | 1,944 | | | $ | 1,927 | | | $ | 143 | | | $ | 6,724 | |
| 60%-69.99% | 76 | | | 140 | | | 554 | | | 8 | | | 15 | | | 85 | | | 58 | | | 936 | |
| 70%-79.99% | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 16 | | | 0 | | | 16 | |
| 80% or greater | 4 | | | 0 | | | 5 | | | 433 | | | 10 | | | 104 | | | 43 | | | 599 | |
| Total | $ | 893 | | | $ | 764 | | | $ | 855 | | | $ | 1,418 | | | $ | 1,969 | | | $ | 2,132 | | | $ | 244 | | | $ | 8,275 | |
| Debt Service Coverage Ratio: | | | | | | | | | | | | | | | |
Greater than 1.2x | $ | 893 | | | $ | 741 | | | $ | 799 | | | $ | 741 | | | $ | 1,849 | | | $ | 1,756 | | | $ | 201 | | | $ | 6,980 | |
| 1.0 - 1.2x | 0 | | | 19 | | | 40 | | | 65 | | | 62 | | | 148 | | | 0 | | | 334 | |
| Less than 1.0x | 0 | | | 4 | | | 16 | | | 612 | | | 58 | | | 228 | | | 43 | | | 961 | |
| Total | $ | 893 | | | $ | 764 | | | $ | 855 | | | $ | 1,418 | | | $ | 1,969 | | | $ | 2,132 | | | $ | 244 | | | $ | 8,275 | |
Residential mortgage loans primarily include fixed-rate, amortizing mortgage loans on rental properties owned by borrowers with FICO scores typically considered prime or above. The primary credit quality indicator is whether a loan is performing or nonperforming. The Company defines nonperforming residential mortgage loans as those that are 90 days or more past due and/or in nonaccrual status.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 | |
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, |
| | 2026 | | 2025 |
| | Term Extension | | Other Than Insignificant Delay in Payment | | % of Amortized Cost | | Term Extension | | Other Than Insignificant Delay in Payment | | % of Amortized Cost |
| | ($ in millions) |
Commercial mortgage loans | | $ | 44 | | | $ | 0 | | | 0.0 | % | | $ | 0 | | | $ | 0 | | | 0.0 | % |
| Agricultural property loans | | $ | 0 | | | $ | 0 | | | 0.0 | % | | $ | 0 | | | $ | 0 | | | 0.0 | % |
For the 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 |
| | | Current | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due(1)(2) | | Total Past Due | | Total Loans | | Non-Accrual Status(3) |
| | | (in millions) |
| Commercial mortgage loans | | $ | 54,249 | | | $ | 89 | | | $ | 0 | | | $ | 145 | | | $ | 234 | | | $ | 54,483 | | | $ | 225 | |
| Agricultural property loans | | 7,350 | | | 23 | | | 11 | | | 721 | | | 755 | | | 8,105 | | | 754 | |
Residential mortgage loans | | 2,413 | | | 33 | | | 6 | | | 2 | | | 41 | | | 2,454 | | | 2 | |
| Other collateralized loans | | 692 | | | 0 | | | 0 | | | 0 | | | 0 | | | 692 | | | 0 | |
| Uncollateralized loans | | 165 | | | 0 | | | 0 | | | 0 | | | 0 | | | 165 | | | 25 | |
| Total | | $ | 64,869 | | | $ | 145 | | | $ | 17 | | | $ | 868 | | | $ | 1,030 | | | $ | 65,899 | | | $ | 1,006 | |
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 |
| | | Current | | 30-59 Days Past Due | | 60-89 Days Past Due | | 90 Days or More Past Due(1)(2) | | Total Past Due | | Total Loans | | Non-Accrual Status(3) |
| | | (in millions) |
| Commercial mortgage loans | | $ | 54,349 | | | $ | 0 | | | $ | 0 | | | $ | 154 | | | $ | 154 | | | $ | 54,503 | | | $ | 190 | |
| Agricultural property loans | | 7,443 | | | 8 | | | 0 | | | 824 | | | 832 | | | 8,275 | | | 875 | |
Residential mortgage loans | | 1,630 | | | 2 | | | 0 | | | 0 | | | 2 | | | 1,632 | | | 0 | |
| Other collateralized loans | | 603 | | | 0 | | | 0 | | | 0 | | | 0 | | | 603 | | | 0 | |
| Uncollateralized loans | | 171 | | | 0 | | | 0 | | | 0 | | | 0 | | | 171 | | | 25 | |
| Total | | $ | 64,196 | | | $ | 10 | | | $ | 0 | | | $ | 978 | | | $ | 988 | | | $ | 65,184 | | | $ | 1,090 | |
__________
(1)As of December 31, 2025, there were no loans in this category accruing interest.
(2)Includes loans for which no credit losses are expected due to U.S. agency guarantees.
(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.
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, 2026 | | December 31, 2025 |
| | | (in millions) |
| LPs/LLCs: | | | | |
| Equity method: | | | | |
| Private equity | | $ | 10,897 | | | $ | 10,832 | |
| Hedge funds | | 2,976 | | | 2,909 | |
Real estate-related(1) | | 2,948 | | | 2,761 | |
| Subtotal equity method | | 16,821 | | | 16,502 | |
| Fair value: | | | | |
| Private equity | | 780 | | | 848 | |
| Hedge funds | | 1,913 | | | 1,964 | |
| Real estate-related | | 804 | | | 810 | |
| Subtotal fair value | | 3,497 | | | 3,622 | |
| Total LPs/LLCs | | 20,318 | | | 20,124 | |
Real estate held through direct ownership(1) | | 1,927 | | | 1,888 | |
| Total alternative assets | | 22,245 | | | 22,012 | |
Credit-like instruments(2) | | 2,460 | | | 1,929 | |
| Derivative instruments | | 1,459 | | | 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, 2026 | | December 31, 2025 |
| | (in millions) |
| Fixed maturities | $ | 3,070 | | | $ | 3,089 | |
| Equity securities | 19 | | | 11 | |
| Commercial mortgage and other loans | 263 | | | 250 | |
| Policy loans | 233 | | | 230 | |
| Other invested assets | 10 | | | 10 | |
| Short-term investments and cash equivalents | 38 | | | 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.
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, |
| | | 2026 | | 2025 |
| | | (in millions) |
| Fixed maturities, available-for-sale(1) | | $ | 4,184 | | | $ | 3,773 | |
| Fixed maturities, trading | | 216 | | | 167 | |
| Assets supporting experience-rated contractholder liabilities | | 15 | | | 14 | |
| Equity securities | | 65 | | | 44 | |
| Commercial mortgage and other loans | | 740 | | | 692 | |
| Policy loans | | 122 | | | 124 | |
Other invested assets | | 451 | | | 396 | |
| Short-term investments and cash equivalents | | 232 | | | 267 | |
| Gross investment income | | 6,025 | | | 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, | | |
| | | 2026 | | 2025 | | | | |
| | | (in millions) |
| Fixed maturities(1) | | $ | (744) | | | $ | (64) | | | | | |
| Commercial mortgage and other loans | | (6) | | | (58) | | | | | |
| Investment real estate | | 14 | | | (10) | | | | | |
| LPs/LLCs | | 0 | | | (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.
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, 2026 | | December 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, 2026 | | December 31, 2025 |
| Remaining Contractual Maturities of the Agreements | | | | Remaining Contractual Maturities of the Agreements | | |
| Overnight & Continuous | | Up to 30 Days | | 30 to 90 Days | | Total | | Overnight & Continuous | | Up to 30 Days | | 30 to 90 Days | | Total |
| (in millions) |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 9,776 | | | $ | 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 securities | 651 | | | 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:
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2026 | | December 31, 2025 |
| Remaining Contractual Maturities of the Agreements | | | | Remaining Contractual Maturities of the Agreements | | |
| Overnight & Continuous | | Up to 30 Days | | Total | | Overnight & Continuous | | Up to 30 Days | | Total |
| (in millions) |
| | | | | | | | | | | |
Obligations of U.S. states and their political subdivisions | $ | 40 | | | $ | 0 | | | $ | 40 | | | $ | 45 | | | $ | 0 | | | $ | 45 | |
Foreign government securities | 179 | | | 0 | | | 179 | | | 226 | | | 0 | | | 226 | |
| U.S. public corporate securities | 6,331 | | | 64 | | | 6,395 | | | 7,068 | | | 152 | | | 7,220 | |
| Foreign public corporate securities | 1,065 | | | 4 | | | 1,069 | | | 1,157 | | | 16 | | | 1,173 | |
| Equity securities | 1,216 | | | 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, trading | 926 | | | 442 | | | 0 | | | 0 | |
| Equity securities | 66 | | | 106 | | | 0 | | | 0 | |
| Commercial mortgage and other loans | 576 | | | 583 | | | 247 | | | 244 | |
| Other invested assets | 8,814 | | | 8,227 | | | 474 | | | 477 | |
| Cash and cash equivalents | 686 | | | 654 | | | 0 | | | 0 | |
| Accrued investment income | 13 | | | 12 | | | 1 | | | 1 | |
| Other assets | 1,344 | | | 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.
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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Primary Underlying Risk /Instrument Type | March 31, 2026 | | December 31, 2025 |
| | | Fair Value | | | | Fair Value |
| Gross Notional | | Assets | | Liabilities | | Gross Notional | | Assets | | Liabilities |
| | (in millions) |
| Derivatives Designated as Hedge Accounting Instruments: | | | | | | | | | | | |
| Interest Rate | | | | | | | | | | | |
| Interest Rate Swaps | $ | 5,117 | | | $ | 21 | | | $ | (334) | | | $ | 5,083 | | | $ | 23 | | | $ | (344) | |
| Interest Rate Forwards | 351 | | | 0 | | | 0 | | | 10 | | | 0 | | | 0 | |
| Foreign Currency | | | | | | | | | | | |
| Foreign Currency Forwards | 4,929 | | | 59 | | | (219) | | | 4,912 | | | 28 | | | (208) | |
| Currency/Interest Rate | | | | | | | | | | | |
| Foreign Currency Swaps | 33,551 | | | 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 Futures | 9,955 | | | 15 | | | (6) | | | 12,079 | | | 7 | | | (22) | |
| Interest Rate Options | 27,105 | | | 53 | | | (1,211) | | | 30,025 | | | 134 | | | (1,382) | |
| Interest Rate Forwards | 6,404 | | | 12 | | | (67) | | | 3,658 | | | 11 | | | (7) | |
Interest Rate Total Return Swaps | 1,514 | | | 222 | | | (221) | | | 1,434 | | | 217 | | | (221) | |
| Foreign Currency | | | | | | | | | | | |
| Foreign Currency Forwards | 35,545 | | | 1,626 | | | (1,402) | | | 34,149 | | | 1,356 | | | (1,383) | |
| Currency/Interest Rate | | | | | | | | | | | |
| Foreign Currency Swaps | 7,140 | | | 435 | | | (142) | | | 7,318 | | | 370 | | | (179) | |
| Credit | | | | | | | | | | | |
| Credit Default Swaps | 5,756 | | | 56 | | | 0 | | | 5,784 | | | 112 | | | 0 | |
| Equity | | | | | | | | | | | |
| Equity Futures | 1,256 | | | 12 | | | (19) | | | 1,033 | | | 3 | | | (6) | |
| Equity Options | 225,676 | | | 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 GICs | 75,016 | | | 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.
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, 2026 | | December 31, 2025 | |
| Balance Sheet Line Item in which Hedged Item is Recorded | Carrying Amount of the Hedged Assets (Liabilities) | | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1) | | Carrying Amount of the Hedged Assets (Liabilities) | | Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Liabilities)(1) | |
| | | | | | | | |
| (in millions) |
| Fixed maturities, available-for-sale, at fair value | $ | 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 | |
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.
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’ Benefits | | Change in AOCI(1) |
| | (in millions) |
| Derivatives Designated as Hedge Accounting Instruments: | | | | | | | | | | | | | | | |
| Fair value hedges | | | | | | | | | | | | | | | |
| Gains (losses) on derivatives designated as hedge instruments: | | | | | | | | | | | | | | | |
| Interest Rate | $ | 2 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | (8) | | | $ | 0 | | | $ | 0 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (36) | | | 0 | |
| Total gains (losses) on derivatives designated as hedge instruments | 2 | | | 0 | | | 0 | | | 0 | | | 0 | | | (8) | | | (36) | | | 0 | |
| Gains (losses) on the hedged item: | | | | | | | | | | | | | | | |
| Interest Rate | (3) | | | 0 | | | 7 | | | 0 | | | 0 | | | 3 | | | (5) | | | 0 | |
| Currency | 0 | | | 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 | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Currency | 0 | | | 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 Rate | 0 | | | 0 | | | (2) | | | 0 | | | 0 | | | 0 | | | 0 | | | 1 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 63 | |
| Currency/Interest Rate | 23 | | | 0 | | | 73 | | | 54 | | | 0 | | | 0 | | | 0 | | | 703 | |
| Total gains (losses) on cash flow hedges | 23 | | | 0 | | | 71 | | | 54 | | | 0 | | | 0 | | | 0 | | | 767 | |
| Net investment hedges | | | | | | | | | | | | | | | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 10 | |
| Currency/Interest Rate | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Total gains (losses) on net investment hedges | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 10 | |
| Derivatives Not Qualifying as Hedge Accounting Instruments: | | | | | | | | | | | | | | | |
| Interest Rate | 15 | | | (77) | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Currency/Interest Rate | 109 | | | 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 instruments | 537 | | | 194 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Total | $ | 559 | | | $ | 194 | | | $ | 78 | | | $ | 54 | | | $ | 0 | | | $ | (5) | | | $ | (10) | | | $ | 761 | |
| | | | | | | | | | | | | | | |
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’ Benefits | | Change in AOCI(1) |
| | (in millions) |
| Derivatives Designated as Hedge Accounting Instruments: | | | | | | | | | | | | | | | |
| Fair value hedges | | | | | | | | | | | | | | | |
| Gains (losses) on derivatives designated as hedge instruments: | | | | | | | | | | | | | | | |
| Interest Rate | $ | (3) | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 0 | | | $ | 35 | | | $ | 30 | | | $ | 0 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 53 | | | 0 | |
| Total gains (losses) on derivatives designated as hedge instruments | (3) | | | 0 | | | 0 | | | 0 | | | 0 | | | 35 | | | 83 | | | 0 | |
| Gains (losses) on the hedged item: | | | | | | | | | | | | | | | |
| Interest Rate | 3 | | | 0 | | | 5 | | | 0 | | | 0 | | | (49) | | | (32) | | | 0 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (53) | | | 0 | |
| Total gains (losses) on hedged item | 3 | | | 0 | | | 5 | | | 0 | | | 0 | | | (49) | | | (85) | | | 0 | |
| | | | | | | | | | | | | | | |
| Amortization for gains (losses) excluded from assessment of the effectiveness | | | | | | | | | | | | | | | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (3) | | | (69) | |
Total amortization for gains (losses) excluded from assessment of the effectiveness | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (3) | | | (69) | |
| Total gains (losses) on fair value hedges net of hedged item | 0 | | | 0 | | | 5 | | | 0 | | | 0 | | | (14) | | | (5) | | | (69) | |
| Cash flow hedges | | | | | | | | | | | | | | | |
| Interest Rate | 0 | | | 0 | | | (3) | | | 0 | | | 0 | | | 0 | | | 0 | | | 8 | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (26) | |
| Currency/Interest Rate | 22 | | | 0 | | | 96 | | | (147) | | | 0 | | | 0 | | | 0 | | | (103) | |
| Total gains (losses) on cash flow hedges | 22 | | | 0 | | | 93 | | | (147) | | | 0 | | | 0 | | | 0 | | | (121) | |
| Net investment hedges | | | | | | | | | | | | | | | |
| Currency | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (15) | |
| Currency/Interest Rate | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Total gains (losses) on net investment hedges | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | (15) | |
| Derivatives Not Qualifying as Hedge Accounting Instruments: | | | | | | | | | | | | | | | |
| Interest Rate | 189 | | | 141 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Currency | (174) | | | 0 | | | 0 | | | (1) | | | 0 | | | 0 | | | 0 | | | 0 | |
| Currency/Interest Rate | (28) | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Credit | (11) | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
| Equity | (1,469) | | | 202 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | | | 0 | |
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.
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) | |
| Currency | 60 | |
| Currency/Interest Rate | 853 | |
| Total amount recorded in AOCI | 912 | |
| Amount reclassified from AOCI to income: | |
| Interest Rate | 2 | |
| Currency | 3 | |
| 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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| March 31, 2026 |
| NAIC Rating Designation of Underlying Credit Obligation(1) |
| NAIC 1 | NAIC 2 | NAIC 3 | NAIC 4 | NAIC 5 | NAIC 6(2) | Total |
| Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value |
| (in millions) |
Single name reference(3) | $ | 0 | | $ | 0 | | $ | 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 1 | NAIC 2 | NAIC 3 | NAIC 4 | NAIC 5 | NAIC 6(2) | Total | | |
| Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | Gross Notional | Fair Value | | |
| (in millions) | | |
Single name reference(3) | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | |
Index reference(3) | 0 | | 0 | | 0 | | 0 | | 5,043 | | 61 | | 0 | | 0 | | 0 | | 0 | | 741 | | 51 | | 5,784 | | 112 | | | |
| Total | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 5,043 | | $ | 61 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 741 | | $ | 51 | | $ | 5,784 | | $ | 112 | | | |
_________
(1)The NAIC rating designations are based on availability and the lowest ratings among Moody’s Investors Service, Inc. (“Moody’s”), Standard & Poor’s Rating Services (“S&P”) and Fitch Ratings Inc. (“Fitch”). If no rating is available from a rating agency, an NAIC 6 rating is used.
(2)The NAIC rating designation is due to approximately 4% and 3% of the index reference name rated as NAIC 6 as of 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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
6. FAIR VALUE OF ASSETS AND LIABILITIES
Fair Value Measurement—Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative fair value guidance establishes a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:
Level 1—Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities.
Level 2—Fair value is based on significant inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted prices in active markets for similar assets and liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, and other market observable inputs.
Level 3—Fair value is based on at least one significant unobservable input for the asset or liability. The assets and liabilities in this category may require significant judgment or estimation in determining the fair value.
For a discussion of the Company’s valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 6 to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. There have been no material changes in the Company’s valuation techniques during the period represented by these Unaudited Interim Consolidated Financial Statements.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
Assets and Liabilities by Hierarchy Level—The tables below present the balances of assets and liabilities reported at fair value on a recurring basis, as of the dates indicated.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Level 1 | | Level 2 | | Level 3 | | Netting(1) | | Total |
| | (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 0 | | | $ | 22,582 | | | $ | 0 | | | $ | | $ | 22,582 | |
| Obligations of U.S. states and their political subdivisions | 0 | | | 5,054 | | | 5 | | | | | 5,059 | |
Foreign government securities | 0 | | | 47,670 | | | 5 | | | | | 47,675 | |
| U.S. corporate public securities | 0 | | | 107,671 | | | 64 | | | | | 107,735 | |
| U.S. corporate private securities(2) | 0 | | | 40,781 | | | 5,537 | | | | | 46,318 | |
| Foreign corporate public securities | 0 | | | 24,005 | | | 39 | | | | | 24,044 | |
| Foreign corporate private securities | 0 | | | 37,579 | | | 1,825 | | | | | 39,404 | |
| Asset-backed securities(3) | 0 | | | 16,672 | | | 4,942 | | | | | 21,614 | |
| Commercial mortgage-backed securities | 0 | | | 9,031 | | | 845 | | | | | 9,876 | |
| Residential mortgage-backed securities | 0 | | | 6,435 | | | 109 | | | | | 6,544 | |
| Subtotal | 0 | | | 317,480 | | | 13,371 | | | | | 330,851 | |
| Assets supporting experience-rated contractholder liabilities: | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | 0 | | | 246 | | | 0 | | | | | 246 | |
| | | | | | | | | |
Foreign government securities | 0 | | | 612 | | | 0 | | | | | 612 | |
| Corporate securities | 0 | | | 57 | | | 0 | | | | | 57 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Equity securities | 2,156 | | | 1,710 | | | 0 | | | | | 3,866 | |
| | | | | | | | | |
| Subtotal | 2,156 | | | 2,625 | | | 0 | | | | | 4,781 | |
| Market risk benefit assets | 0 | | | 0 | | | 2,166 | | | | | 2,166 | |
| Fixed maturities, trading | 0 | | | 12,916 | | | 2,915 | | | | | 15,831 | |
Equity securities | 9,732 | | | 2,252 | | | 568 | | | | | 12,552 | |
| Commercial mortgage and other loans | 0 | | | 1,225 | | | 270 | | | | | 1,495 | |
| Other invested assets(4) | 37 | | | 24,446 | | | 1,134 | | | (23,021) | | | 2,596 | |
| Short-term investments | 2,496 | | | 3,751 | | | 44 | | | | | 6,291 | |
| Cash equivalents | 620 | | | 8,646 | | | 0 | | | | | 9,266 | |
| Reinsurance recoverables and deposit receivables | 0 | | | 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 balances | 0 | | | 0 | | | 17,590 | | | | | 17,590 | |
| Reinsurance and funds withheld payables | 0 | | | 78 | | | 0 | | | | | 78 | |
| Other liabilities | 35 | | | 37,825 | | | 0 | | | (31,459) | | | 6,401 | |
| Notes issued by consolidated VIEs | 0 | | | 0 | | | 1,330 | | | | | 1,330 | |
| Total liabilities | $ | 35 | | | $ | 37,903 | | | $ | 23,920 | | | $ | (31,459) | | | $ | 30,399 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 |
| | Level 1 | | Level 2 | | Level 3 | | Netting(1) | | Total |
| | (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | $ | 0 | | | $ | 22,179 | | | $ | 0 | | | $ | | $ | 22,179 | |
| Obligations of U.S. states and their political subdivisions | 0 | | | 5,460 | | | 5 | | | | | 5,465 | |
Foreign government securities | 0 | | | 50,609 | | | 5 | | | | | 50,614 | |
| U.S. corporate public securities | 0 | | | 107,718 | | | 63 | | | | | 107,781 | |
| U.S. corporate private securities(2) | 0 | | | 42,007 | | | 5,094 | | | | | 47,101 | |
| Foreign corporate public securities | 0 | | | 23,661 | | | 42 | | | | | 23,703 | |
| Foreign corporate private securities | 0 | | | 38,425 | | | 1,734 | | | | | 40,159 | |
| Asset-backed securities(3) | 0 | | | 15,227 | | | 4,102 | | | | | 19,329 | |
| Commercial mortgage-backed securities | 0 | | | 8,890 | | | 853 | | | | | 9,743 | |
| Residential mortgage-backed securities | 0 | | | 5,281 | | | 100 | | | | | 5,381 | |
| Subtotal | 0 | | | 319,457 | | | 11,998 | | | | | 331,455 | |
| Assets supporting experience-rated contractholder liabilities: | | | | | | | | | |
| U.S. Treasury securities and obligations of U.S. government authorities and agencies | 0 | | | 245 | | | 0 | | | | | 245 | |
| | | | | | | | | |
Foreign government securities | 0 | | | 596 | | | 0 | | | | | 596 | |
| Corporate securities | 0 | | | 55 | | | 0 | | | | | 55 | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Equity securities | 2,225 | | | 1,721 | | | 0 | | | | | 3,946 | |
| | | | | | | | | |
| Subtotal | 2,225 | | | 2,617 | | | 0 | | | | | 4,842 | |
| Market risk benefit assets | 0 | | | 0 | | | 2,330 | | | | | 2,330 | |
| Fixed maturities, trading | 0 | | | 12,556 | | | 2,313 | | | | | 14,869 | |
| Equity securities | 8,052 | | | 2,294 | | | 626 | | | | | 10,972 | |
| Commercial mortgage and other loans | 0 | | | 793 | | | 263 | | | | | 1,056 | |
| Other invested assets(4) | 301 | | | 25,816 | | | 1,088 | | | (24,445) | | | 2,760 | |
| Short-term investments | 116 | | | 5,664 | | | 1 | | | | | 5,781 | |
| Cash equivalents | 1,466 | | | 11,372 | | | 0 | | | | | 12,838 | |
| Reinsurance recoverables and deposit receivables | 0 | | | 206 | | | 367 | | | | | 573 | |
| | | | | | | | | |
| Separate account assets(5)(6) | 9,419 | | | 159,115 | | | 211 | | | | | 168,745 | |
| Total assets | $ | 21,579 | | | $ | 539,890 | | | $ | 19,197 | | | $ | (24,445) | | | $ | 556,221 | |
| Market risk benefit liabilities | $ | 0 | | | $ | 0 | | | $ | 4,623 | | | $ | | $ | 4,623 | |
| Policyholders’ account balances | 0 | | | 0 | | | 18,799 | | | | | 18,799 | |
| Reinsurance and funds withheld payables | 0 | | | 174 | | | 0 | | | | | 174 | |
| Other liabilities | 280 | | | 38,877 | | | 0 | | | (32,942) | | | 6,215 | |
| Notes issued by consolidated VIEs | 0 | | | 0 | | | 767 | | | | | 767 | |
| Total liabilities | $ | 280 | | | $ | 39,051 | | | $ | 24,189 | | | $ | (32,942) | | | $ | 30,578 | |
__________
(1)“Netting” amounts represent cash collateral of $(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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
(6)Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Unaudited Interim Consolidated Statements of Financial Position.
Quantitative Information Regarding Internally-Priced Level 3 Assets and Liabilities—The tables below present quantitative information regarding significant internally-priced Level 3 assets and liabilities.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of March 31, 2026 |
| Fair Value | | Valuation Techniques | | Unobservable Inputs | | Minimum | | Maximum | | Weighted Average | | Impact of Increase in Input on Fair Value(1) |
| | (in millions) | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | |
| Corporate securities(2)(3) | $ | 8,331 | | | Discounted cash flow | | Discount rate | | 1.20% | | 31.61% | | 9.14% | | Decrease |
| | | Market comparables | | EBITDA multiple(4) | | 5.5X | | 8.5X | | 6.9X | | Increase |
| | | Liquidation | | Liquidation value | | 12.01% | | 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 premium | | 0.90% | | 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 rate | | See table footnote (11) below. |
| | | | | Mortality rate(12) | | 0% | | 16% | | | | Increase |
| | | | | Equity volatility curve | | 18% | | 26% | | | | Decrease |
| Equity securities | $ | 181 | | | Market comparables | | EBITDA multiple(4) | | 6.0X | | 7.0X | | 6.2X | | Increase |
| | | Net Asset Value | | Share price | | $3 | | $1,809 | | $750 | | Increase |
| Commercial mortgage and other loans | $ | 270 | | | Discounted cash flow | | Spread | | 1.90% | | 3.10% | | 2.47% | | Decrease |
| Reinsurance recoverables and deposit receivables | $ | 452 | | | Discounted cash flow | | Lapse 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 rate | | See table footnote (11) below. |
| | | | | Mortality rate(12) | | 0% | | 16% | | | | Decrease |
| | | | | | Equity volatility curve | | 18% | | 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 | | | Liquidation | | Liquidation value | | 100% | | 100% | | 100% | | Increase |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of December 31, 2025 |
| Fair Value | | Valuation Techniques | | Unobservable Inputs | | Minimum | | Maximum | | Weighted Average | | Impact of Increase in Input on Fair Value(1) |
| | (in millions) | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | |
| Corporate securities(2)(3) | $ | 7,702 | | | Discounted cash flow | | Discount rate | | 1.10% | | 25.50% | | 8.47% | | Decrease |
| | | Market comparables | | EBITDA multiple(4) | | 5.5X | | 8.5X | | 7.5X | | Increase |
| | | Liquidation | | Liquidation value | | 12.01% | | 39.00% | | 30.18% | | Increase |
| Asset backed securities | $ | 1,767 | | | Discounted cash flow | | Discount rate | | 2.10% | | 10.05% | | 6.10% | | Decrease |
| | | | | Liquidity premium | | 1.50% | | 2.60% | | 1.89% | | Decrease |
| Commercial mortgage-backed securities | $ | 853 | | | Discounted cash flow | | Liquidity premium | | 0.90% | | 0.90% | | 0.90% | | Decrease |
| Market risk benefit assets(6) | $ | 2,330 | | | Discounted cash flow | | Lapse rate(8) | | 1% | | 20% | | | | Increase |
| | | | | Spread over SOFR(9) | | 0.38% | | 1.61% | | | | Increase |
| | | | | Utilization rate(10) | | 37% | | 94% | | | | Decrease |
| | | | | Withdrawal rate | | See table footnote (11) below. |
| | | | | Mortality rate(12) | | 0% | | 16% | | | | Increase |
| | | | | Equity volatility curve | | 15% | | 25% | | | | Decrease |
| Equity securities | $ | 214 | | | Discounted cash flow | | Discount rate(5) | | 40% | | 40% | | | | Decrease |
| | | Market comparables | | EBITDA multiple(4) | | 7.0X | | 7.0X | | 7.0X | | Increase |
| | | Net Asset Value | | Share price | | $3 | | $1,809 | | $778 | | Increase |
| Commercial mortgage and other loans | $ | 263 | | | Discounted cash flow | | Spread | | 2.15% | | 3.10% | | 2.63% | | Decrease |
| Reinsurance recoverables and deposit receivables | $ | 367 | | | Discounted cash flow | | Lapse rate(8) | | 1% | | 50% | | | | Increase |
| | | | | Spread over SOFR(9) | | 0.38% | | 1.61% | | | | Increase |
| | | | | Option Budget(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 rate | | See table footnote (11) below. |
| | | | | Mortality rate(12) | | 0% | | 16% | | | | Decrease |
| | | | | | Equity volatility curve | | 15% | | 25% | | | | Increase |
| Policyholders’ account balances(7) | $ | 18,716 | | | Discounted cash flow | | Lapse rate(8) | | 0% | | 80% | | | | Decrease |
| | | | | Spread over SOFR(9) | | 0.38% | | 1.61% | | | | Decrease |
| | | | | Mortality rate(12) | | 0% | | 23% | | | | Decrease |
| | | | | | | | | | | | | |
| | | | | Option Budget(13) | | (2)% | | 9% | | | | Increase |
| Notes issued by consolidated VIEs | $ | 382 | | | Liquidation | | Liquidation value | | 100% | | 100% | | 100% | | Increase |
___________
(1)Conversely, the impact of a decrease in input would have the opposite impact on fair value as that presented in the table.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
(2)Includes assets classified as fixed maturities, available-for-sale, assets supporting experience-rated contractholder liabilities and fixed maturities, trading.
(3)Excludes notes which have been offset with the associated debt under a netting agreement.
(4)Represents multiple of earnings before interest, taxes, depreciation and amortization (“EBITDA”), and are amounts used when the Company has determined that market participants would use such multiples when valuing the investments.
(5)For these investments, a range of discount rates is typically used and is therefore a more meaningful representation of the unobservable inputs used in the valuation rather than weighted average.
(6)Market risk benefits primarily represent fair value for all living benefit guarantees including accumulation, withdrawal and income benefits. Since the valuation methodology for these assets and liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(7)Policyholders’ account balances primarily represent general account liabilities for the index-linked interest credited on certain of the Company’s life and annuity products that are accounted for as embedded derivatives. Since the valuation methodology for these liabilities uses a range of inputs that vary at the contract level over the cash flow projection period, presenting a range, rather than a weighted average, is a more meaningful representation of the unobservable inputs used in the valuation.
(8)Lapse rates for contracts with living benefit guarantees are adjusted at the contract level based on the in-the-moneyness of the living benefit and reflect other factors, such as the applicability of any surrender charges. Lapse rates are reduced when contracts are more in-the-money. Lapse rates for contracts with index-linked crediting guarantees may be adjusted at the contract level based on the applicability of any surrender charges, product type, and market related factors such as interest rates. Lapse rates are also generally assumed to be lower for the period where surrender charges apply. For any given contract, lapse rates vary throughout the period over which cash flows are projected for the purposes of valuing these balances.
(9)The spread over the secured overnight financing rate (“SOFR”) swap curve represents the premium added to the proxy for the risk-free rate (SOFR) to reflect the Company’s estimates of rates that a market participant would use to value the living benefits in both the accumulation and payout phases and index-linked interest crediting guarantees as of 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 Inputs—In addition to the sensitivities of fair value measurements to changes in each unobservable input in isolation, as reflected in the table above, interrelationships between these inputs may also exist, such that a change in one unobservable input may give rise to a change in another or multiple inputs. Examples of such interrelationships for significant internally-priced Level 3 assets and liabilities are as follows:
Corporate Securities—The rate used to discount future cash flows reflects current risk-free rates plus credit and liquidity spread requirements that market participants would use to value an asset. The discount rate may be influenced by many factors, including market cycles, expectations of default, collateral, term and asset complexity. Each of these factors can influence discount rates, either in isolation, or in response to other factors. During weaker economic cycles, as the expectations of default increase, credit spreads widen, which results in a decrease in fair value.
Commercial Mortgage-backed Securities—Interrelationships may exist between the prepayment rate, the default rate and/or loss severity, depending on specific market conditions. In stronger economic cycles, prepayment rates are generally driven by underlying property appreciation and subsequent cash-out refinances, while default rates and loss severity may be lower. During weaker economic cycles, prepayment rates may decline, while default rates and loss severity increase. Generally, a change in the assumption used for the probability of default would be accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumption used for prepayment rates. The impact of these factors on average life and economics varies with the deal structure and tranche subordination.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
Market Risk Benefits—The Company expects efficient benefit utilization and withdrawal rates to generally be correlated with lapse rates. However, behavior is generally highly dependent on the facts and circumstances surrounding the individual contractholder, such as their liquidity needs or tax situation, which could drive lapse behavior independent of other contractholder behavior assumptions. To the extent more efficient contractholder behavior results in greater in-the-moneyness at the contract level, lapse rates may decline for those contracts. Similarly, to the extent that increases in equity volatility are correlated with overall declines in the capital markets, lapse rates may decline as contracts become more in-the-money.
Changes in Level 3 Assets and Liabilities—The following tables describe changes in fair values of Level 3 assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods (excluding MRBs disclosed in Note 11). When a determination is made to classify assets and liabilities within Level 3, the determination is based on significance of the unobservable inputs in the overall fair value measurement. All transfers are based on changes in the observability of the valuation inputs, including the availability of pricing service information that the Company can validate. Transfers into Level 3 are generally the result of unobservable inputs utilized within valuation methodologies and the use of indicative broker quotes for assets that were previously valued using observable inputs. Transfers out of Level 3 are generally due to the use of observable inputs in valuation methodologies as well as the availability of pricing service information for certain assets that the Company can validate.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2026(6) |
| Fair Value, beginning of period | Total realized and unrealized gains (losses) | Purchases | Sales | Issuances | Settlements | Other(1) | Transfers into Level 3(7) | Transfers out of Level 3(7) | Fair Value, end of period | Unrealized gains (losses) for assets and liabilities still held(2) |
| (in millions) |
| Fixed maturities, available-for-sale: | | | | | | | | | | | |
| | | | | | | | | | | |
| U.S. states | $ | 5 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 5 | | $ | 0 | |
| Foreign government | 5 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 5 | | 0 | |
| Corporate securities(3) | 6,933 | | (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, trading | 2,313 | | (44) | | 724 | | (24) | | 0 | | (41) | | (1) | | 16 | | (28) | | 2,915 | | (49) | |
| Equity securities | 626 | | (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 assets | 1,088 | | (1) | | 59 | | (12) | | 0 | | 0 | | 0 | | 0 | | 0 | | 1,134 | | (1) | |
| Short-term investments | 1 | | (11) | | 26 | | 0 | | 0 | | 28 | | 0 | | 0 | | 0 | | 44 | | (11) | |
| Cash equivalents | 0 | | 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 liabilities | 0 | | 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) | |
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), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (losses) | Net investment income | | Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (losses) |
| (in millions) |
| Fixed maturities, available-for-sale | $ | (77) | | $ | 0 | | $ | 0 | | $ | (111) | | $ | 2 | | | $ | (89) | | $ | 0 | | $ | 0 | | $ | (108) | |
| | | | | | | | | | |
| Other assets: | | | | | | | | | | |
| Fixed maturities, trading | 0 | | (44) | | 0 | | 0 | | 0 | | | 0 | | (49) | | 0 | | 0 | |
| Equity securities | 0 | | (32) | | 0 | | 0 | | 0 | | | 0 | | (28) | | 0 | | 0 | |
Commercial mortgage and other loans | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
| Other invested assets | 0 | | (1) | | 0 | | 0 | | 0 | | | 0 | | (1) | | 0 | | 0 | |
| Short-term investments | (11) | | 0 | | 0 | | 0 | | 0 | | | (11) | | 0 | | 0 | | 0 | |
| Cash equivalents | 0 | | 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 balances | 1,589 | | 0 | | 0 | | 0 | | 0 | | | 323 | | 0 | | 0 | | 0 | |
| Other liabilities | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
| Notes issued by consolidated VIEs | 0 | | (2) | | 0 | | 0 | | 0 | | | 0 | | (4) | | 0 | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2025(6) |
| Fair Value, beginning of period | Total realized and unrealized gains (losses) | Purchases | Sales | Issuances | Settlements | Other(1) | Transfers into Level 3(7) | Transfers out of Level 3(7) | Fair Value, end of period | Unrealized gains (losses) for assets 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 government | 7 | | 0 | | 0 | | 0 | | 0 | | (2) | | 0 | | 0 | | 0 | | 5 | | 0 | |
| Corporate securities(3) | 5,831 | | (68) | | 868 | | (350) | | 0 | | (194) | | (41) | | 234 | | (1) | | 6,279 | | (71) | |
| Structured securities(4) | 2,333 | | 18 | | 826 | | (323) | | 0 | | (65) | | (362) | | 865 | | (75) | | 3,217 | | 19 | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Other assets: | | | | | | | | | | | |
| Fixed maturities, trading | 1,986 | | (21) | | 423 | | (261) | | 0 | | (252) | | 366 | | 3 | | (106) | | 2,138 | | (7) | |
| Equity securities | 518 | | (17) | | 154 | | (23) | | 0 | | 0 | | 0 | | 119 | | (18) | | 733 | | (23) | |
Commercial mortgage and other loans | 233 | | 0 | | 0 | | 0 | | 30 | | 0 | | 0 | | 0 | | 0 | | 263 | | 0 | |
| Other invested assets | 953 | | (1) | | 14 | | (1) | | 0 | | 0 | | 0 | | 0 | | 0 | | 965 | | (1) | |
| Short-term investments | 461 | | 0 | | 8 | | (3) | | 0 | | (4) | | 0 | | 0 | | 0 | | 462 | | 0 | |
| Cash equivalents | 0 | | 0 | | 1 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 1 | | 0 | |
| Reinsurance recoverables and deposit receivables | 613 | | (4) | | 23 | | 0 | | 0 | | (18) | | (233) | | 0 | | 0 | | 381 | | (21) | |
| | | | | | | | | | | |
Separate account assets | 232 | | (8) | | 60 | | (34) | | 0 | | (1) | | 0 | | 4 | | 0 | | 253 | | (8) | |
| Liabilities: | | | | | | | | | | | |
Policyholders’ account balances(5) | (12,746) | | 1,435 | | 0 | | 0 | | 0 | | (625) | | (2) | | 0 | | 0 | | (11,938) | | 407 | |
| Other liabilities | (1) | | (12) | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | (13) | | (12) | |
| Notes issued by consolidated VIEs | (60) | | 0 | | 0 | | 0 | | (7) | | 0 | | 0 | | 0 | | 0 | | (67) | | 0 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2025 |
| Total realized and unrealized gains (losses) | | Unrealized gains (losses) for assets and liabilities still held(2) |
| Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (losses) | Net investment income | | Realized investment gains (losses), net | Other income (loss) | Interest credited to policyholders’ account balances | Included in other comprehensive income (losses) |
| (in millions) |
| Fixed maturities, available-for-sale | $ | (19) | | $ | 0 | | $ | 0 | | $ | (28) | | $ | (3) | | | $ | (22) | | $ | 0 | | $ | 0 | | $ | (30) | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Other assets: | | | | | | | | | | |
| Fixed maturities, trading | 0 | | (6) | | 0 | | 0 | | (15) | | | 0 | | (7) | | 0 | | 0 | |
| Equity securities | 0 | | (17) | | 0 | | 0 | | 0 | | | 0 | | (23) | | 0 | | 0 | |
Commercial mortgage and other loans | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
| Other invested assets | 0 | | (1) | | 0 | | 0 | | 0 | | | 0 | | (1) | | 0 | | 0 | |
| Short-term investments | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
| Cash equivalents | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
| Reinsurance recoverables and deposit receivables | (4) | | 0 | | 0 | | 0 | | 0 | | | (21) | | 0 | | 0 | | 0 | |
| | | | | | | | | | |
Separate account assets | 0 | | 0 | | (8) | | 0 | | 0 | | | 0 | | 0 | | (8) | | 0 | |
| Liabilities: | | | | | | | | | | |
| Policyholders’ account balances | 1,435 | | 0 | | 0 | | 0 | | 0 | | | 407 | | 0 | | 0 | | 0 | |
| Other liabilities | (12) | | 0 | | 0 | | 0 | | 0 | | | (12) | | 0 | | 0 | | 0 | |
| Notes issued by consolidated VIEs | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | |
__________
(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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | As of March 31, 2026 |
| | Level 1 | | Level 2 | | Level 3 | | Netting(1) | | Total |
| | (in millions) |
| Derivative Assets: | | | |
| Interest Rate | $ | 15 | | | $ | 11,041 | | | $ | 0 | | | $ | | $ | 11,056 | |
| Currency | 0 | | | 1,685 | | | 0 | | | | | 1,685 | |
| Credit | 0 | | | 56 | | | 0 | | | | | 56 | |
| Currency/Interest Rate | 0 | | | 2,016 | | | 0 | | | | | 2,016 | |
| Equity | 22 | | | 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 | |
| Currency | 0 | | | 1,621 | | | 0 | | | | | 1,621 | |
| Credit | 0 | | | 0 | | | 0 | | | | | 0 | |
| Currency/Interest Rate | 0 | | | 1,105 | | | 0 | | | | | 1,105 | |
| Equity | 29 | | | 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 1 | | Level 2 | | Level 3 | | Netting(1) | | Total |
| | (in millions) |
| Derivative Assets: | | | |
| Interest Rate | $ | 7 | | | $ | 11,210 | | | $ | 0 | | | $ | | $ | 11,217 | |
| Currency | 0 | | | 1,384 | | | 0 | | | | | 1,384 | |
| Credit | 0 | | | 112 | | | 0 | | | | | 112 | |
| Currency/Interest Rate | 0 | | | 1,656 | | | 0 | | | | | 1,656 | |
| Equity | 293 | | | 11,454 | | | 0 | | | | | 11,747 | |
| Netting(1) | | | | | | | (24,445) | | | (24,445) | |
| Total derivative assets | $ | 300 | | | $ | 25,816 | | | $ | 0 | | | $ | (24,445) | | | $ | 1,671 | |
| Derivative Liabilities: | | | | | | | | | |
| Interest Rate | $ | 22 | | | $ | 25,571 | | | $ | 0 | | | $ | | $ | 25,593 | |
| Currency | 0 | | | 1,591 | | | 0 | | | | | 1,591 | |
| Credit | 0 | | | 0 | | | 0 | | | | | 0 | |
| Currency/Interest Rate | 0 | | | 1,619 | | | 0 | | | | | 1,619 | |
| Equity | 258 | | | 10,096 | | | 0 | | | | | 10,354 | |
| Netting(1) | | | | | | | (32,942) | | | (32,942) | |
| Total derivative liabilities | $ | 280 | | | $ | 38,877 | | | $ | 0 | | | $ | (32,942) | | | $ | 6,215 | |
__________
(1)“Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty, subject to master netting agreements.
Changes in Level 3 Derivative Assets and Liabilities—The following tables provide a summary of the changes in fair value of Level 3 derivative assets and liabilities as of the dates indicated, as well as the portion of gains or losses included in income, attributable to unrealized gains or losses related to those assets and liabilities still held at the end of their respective periods.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2026 |
| Fair Value, beginning of period | Total realized and unrealized gains (losses)(1) | Purchases | Sales | Issuances | Settlements | | Other | Transfers into Level 3(2) | Transfers out of Level 3(2) | Fair Value, end of period | Unrealized gains (losses) for assets still held(1) |
| (in millions) |
| Net Derivative - Equity | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | |
| Net Derivative - Interest Rate | 0 | | 0 | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | 0 | | 0 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 |
| Fair Value, beginning of period | Total realized and unrealized gains (losses)(1) | Purchases | Sales | Issuances | Settlements | | Other | Transfers into Level 3(2) | Transfers out of Level 3(2) | Fair Value, end of period | Unrealized gains (losses) for assets still held(1) |
| (in millions) |
| Net Derivative - Equity | $ | 0 | | $ | 1 | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 0 | | | $ | 0 | | $ | 0 | | $ | 0 | | $ | 1 | | $ | 1 | |
| Net Derivative - Interest Rate | 0 | | (13) | | 0 | | 0 | | 0 | | 0 | | | 0 | | 0 | | 0 | | (13) | | (13) | |
__________
(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, |
| | 2026 | | 2025 |
| | (in millions) |
| Gains (Losses): | | | | |
| | | | |
| | | | | | | |
| Investment real estate | | $ | 0 | | | $ | (12) | |
Investment in JV/LP and Other | | $ | (5) | | | $ | 0 | |
Equity securities | | $ | 9 | | | $ | 0 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | |
| March 31, 2026 | | December 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.”
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, |
| 2026 | | 2025 |
| (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, 2026 | | December 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.
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | March 31, 2026 |
| | Fair Value | | Carrying Amount(1) |
| | Level 1 | | Level 2 | | Level 3 | | Total | | Total |
| | (in millions) |
| Assets: | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Commercial mortgage and other loans | $ | 0 | | | $ | 13 | | | $ | 62,288 | | | $ | 62,301 | | | $ | 63,917 | |
| Policy loans | 13 | | | 0 | | | 9,975 | | | 9,988 | | | 9,988 | |
| Other invested assets | 0 | | | 93 | | | 0 | | | 93 | | | 93 | |
| Short-term investments | 625 | | | 1 | | | 0 | | | 626 | | | 626 | |
| Cash and cash equivalents | 6,422 | | | 248 | | | 0 | | | 6,670 | | | 6,670 | |
| Accrued investment income | 0 | | | 3,633 | | | 0 | | | 3,633 | | | 3,633 | |
Reinsurance recoverables and deposit receivables | 0 | | | 8 | | | 7,066 | | | 7,074 | | | 7,074 | |
| Other assets | 56 | | | 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 repurchase | 0 | | | 10,975 | | | 0 | | | 10,975 | | | 10,975 | |
| Cash collateral for loaned securities | 0 | | | 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 VIEs | 0 | | | 0 | | | 1,953 | | | 1,953 | | | 1,953 | |
| Other liabilities | 0 | | | 7,636 | | | 31 | | | 7,667 | | | 7,667 | |
| Separate account liabilities—investment contracts | 0 | | | 22,320 | | | 17,545 | | | 39,865 | | | 39,865 | |
| Total liabilities | $ | 7,263 | | | $ | 107,448 | | | $ | 68,901 | | | $ | 183,612 | | | $ | 190,271 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | December 31, 2025 |
| | Fair Value | | Carrying Amount(1) |
| | Level 1 | | Level 2 | | Level 3 | | Total | | Total |
| | (in millions) |
| Assets: | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Commercial mortgage and other loans | $ | 0 | | | $ | 14 | | | $ | 63,164 | | | $ | 63,178 | | | $ | 63,659 | |
| Policy loans | 12 | | | 0 | | | 9,946 | | | 9,958 | | | 9,958 | |
| Other invested assets | 0 | | | 93 | | | 0 | | | 93 | | | 93 | |
| Short-term investments | 632 | | | 1 | | | 0 | | | 633 | | | 633 | |
| Cash and cash equivalents | 6,652 | | | 222 | | | 0 | | | 6,874 | | | 6,874 | |
| Accrued investment income | 0 | | | 3,636 | | | 0 | | | 3,636 | | | 3,636 | |
Reinsurance recoverables and deposit receivables | 0 | | | 8 | | | 6,710 | | | 6,718 | | | 6,718 | |
| Other assets | 37 | | | 3,142 | | | 2 | | | 3,181 | | | 3,181 | |
| Total assets | $ | 7,333 | | | $ | 7,116 | | | $ | 79,822 | | | $ | 94,271 | | | $ | 94,752 | |
| Liabilities: | | | | | | | | | |
| Policyholders’ account balances—investment contracts | $ | 0 | | | $ | 35,175 | | | $ | 49,931 | | | $ | 85,106 | | | $ | 89,970 | |
| Securities sold under agreements to repurchase | 0 | | | 9,598 | | | 0 | | | 9,598 | | | 9,598 | |
| Cash collateral for loaned securities | 0 | | | 8,700 | | | 0 | | | 8,700 | | | 8,700 | |
Reinsurance and funds withheld payables(2) | 0 | | | 10,639 | | | (32) | | | 10,607 | | | 10,607 | |
Short-term debt | 0 | | | 1,408 | | | 33 | | | 1,441 | | | 1,443 | |
Long-term debt(3) | 7,507 | | | 10,324 | | | 522 | | | 18,353 | | | 18,856 | |
| Notes issued by consolidated VIEs | 0 | | | 0 | | | 1,892 | | | 1,892 | | | 1,892 | |
| Other liabilities | 0 | | | 6,993 | | | 31 | | | 7,024 | | | 7,024 | |
| Separate account liabilities—investment contracts | 0 | | | 22,548 | | | 17,663 | | | 40,211 | | | 40,211 | |
| Total liabilities | $ | 7,507 | | | $ | 105,385 | | | $ | 70,040 | | | $ | 182,932 | | | $ | 188,301 | |
__________
(1)Carrying values presented herein differ from those in the Company’s Unaudited Interim Consolidated Statements of Financial Position because certain items within the respective financial statement captions are not considered financial instruments or are out of scope under authoritative guidance relating to disclosures of the fair value of financial instruments.
(2)Includes contracts reinsured through coinsurance with funds withheld agreement with Prismic Life Reinsurance, Ltd (“Prismic Re”) with a fair value of $7,430 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:
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2026 |
| | | Individual Life | | U.S. Legacy Products | | International Businesses | | Total |
| Retirement | | Term Life | | Variable/ Universal Life | | Annuities | | Guaranteed Universal Life | | |
| (in millions) |
| Balance, BOP | $ | 2,304 | | | $ | 2,203 | | | $ | 4,845 | | | $ | 2,308 | | | $ | 545 | | | $ | 9,678 | | | $ | 21,883 | |
| Capitalization | 174 | | | 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 Life | | U.S. Legacy Products(1) | | International Businesses | | Total |
| Retirement(1) | | Term Life | | Variable/ Universal Life(1) | | Annuities | | Guaranteed Universal Life | | |
| (in millions) |
| Balance, BOP | $ | 1,744 | | | $ | 2,215 | | | $ | 4,369 | | | $ | 2,556 | | | $ | 509 | | | $ | 9,304 | | | $ | 20,697 | |
| Capitalization | 306 | | | 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 adjustment | 2 | | | 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 Products | | Total |
| Retirement | | Guaranteed Universal Life | |
| (in millions) |
| Balance, BOP | $ | 248 | | | $ | 932 | | | $ | 1,180 | |
| | | | | |
Amortization | (7) | | | (10) | | | (17) | |
| | | | | |
| | | | | |
| Balance, EOP | $ | 241 | | | $ | 922 | | | 1,163 | |
| Other businesses | | | | | 63 | |
| Total DRL balance | | | | | $ | 1,226 | |
PRUDENTIAL FINANCIAL, INC.
Notes to Unaudited Interim Consolidated Financial Statements—(Continued)
| | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 |
|
| | U.S. Legacy Products | | Total |
| Retirement | | Guaranteed Universal Life | |
| (in millions) |
| Balance, BOP | $ | 280 | | | $ | 969 | | | $ | 1,249 | |
| | | | | |
Amortization | (8) | | | (9) | | | (17) | |
| | | | | |
| | | | | |
| Balance, EOP | $ | 272 | | | $ | 960 | | | 1,232 | |
| Other businesses | | | | | 86 | |
| 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 | | Annuities | | Guaranteed 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 businesses | | | | | | | 40 | |
| Total DRG balance | | | | | | | $ | 694 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2025 |
|
| | U.S. Legacy Products | | Total |
| Retirement | | Annuities | | Guaranteed Universal Life | |
| (in millions) |
| Balance, BOP | $ | 62 | | | $ | 287 | | | $ | 348 | | | $ | 697 | |
Deferred reinsurance gain | 1 | | | 0 | | | 0 | | | 1 | |
Amortization | (1) | | | (6) | | | (4) | | | (11) | |
| | | | | | | |
| Foreign currency adjustment | 2 | | | 0 | | | 0 | | | 2 | |
| Balance, EOP | $ | 64 | | | $ | 281 | | | $ | 344 | | | 689 | |
| Other businesses | | | | | | | 43 | |
| 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:
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, |
| 2026 | | 2025 |
| (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).”
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.
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 Insurance | | Individual Life | | U.S. Legacy Products | | Total |
| (in millions) |
| Balance, BOP | $ | 29,278 | | | $ | 12,154 | | | $ | 26,916 | | | $ | 54,073 | | | $ | 77,880 | | | $ | 200,301 | |
| Deposits | 2,055 | | | 150 | | | 22 | | | 1,139 | | | 12 | | | 3,378 | |
| Investment performance | 179 | | | (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 account | 31 | | | 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 Insurance | | Individual Life | | U.S. Legacy Products | | Total |
| (in millions) |
Balance, BOP | $ | 28,645 | | | $ | 12,664 | | | $ | 25,126 | | | $ | 46,891 | | | $ | 83,618 | | | $ | 196,944 | |
Deposits | 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.
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 Life | | International Businesses | | Corporate and Other | | Total |
| Retirement | | Term Life | | | Long-Term Care | |
| (in millions) |
| Balance, BOP | $ | 87,431 | | | $ | 10,637 | | | $ | 41,359 | | | $ | 2,868 | | | $ | 142,295 | |
| Effect of cumulative changes in discount rate assumptions, BOP | 14,178 | | | 280 | | | 3,431 | | | 64 | | | 17,953 | |
| Balance at original discount rate, BOP | 101,609 | | | 10,917 | | | 44,790 | | | 2,932 | | | 160,248 | |
| | | | | | | | | |
| Effect of actual variances from expected experience and other activity | 17 | | | (75) | | | (306) | | | 21 | | | (343) | |
| Adjusted balance, BOP | 101,626 | | | 10,842 | | | 44,484 | | | 2,953 | | | 159,905 | |
| Issuances | 1,587 | | | 206 | | | 525 | | | 0 | | | 2,318 | |
| Net premiums / considerations collected | (3,082) | | | (339) | | | (1,749) | | | (82) | | | (5,252) | |
| Interest accrual | 927 | | | 131 | | | 349 | | | 35 | | | 1,442 | |
| Foreign currency adjustment | (1,977) | | | 0 | | | (168) | | | 0 | | | (2,145) | |
| Other adjustments | 0 | | | (16) | | | 28 | | | 0 | | | 12 | |
| Balance at original discount rate, EOP | 99,081 | | | 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, EOP | | | | | | | | | 112 | |
| Total balance, EOP | | | | | | | | | $ | 134,347 | |
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 Life | | International Businesses | | Corporate and Other | | Total |
| Retirement | | Term Life | | | Long-Term Care | |
| (in millions) |
| Balance, BOP | $ | 167,704 | | | $ | 19,166 | | | $ | 125,543 | | | $ | 11,660 | | | $ | 324,073 | |
| Effect of cumulative changes in discount rate assumptions, BOP | 17,769 | | | 602 | | | 26,267 | | | 1,435 | | | 46,073 | |
| Balance at original discount rate, BOP | 185,473 | | | 19,768 | | | 151,810 | | | 13,095 | | | 370,146 | |
| | | | | | | | | |
| Effect of actual variances from expected experience and other activity | 26 | | | (95) | | | (309) | | | 20 | | | (358) | |
| Adjusted balance, BOP | 185,499 | | | 19,673 | | | 151,501 | | | 13,115 | | | 369,788 | |
| Issuances | 1,587 | | | 206 | | | 525 | | | 0 | | | 2,318 | |
| Interest accrual | 1,846 | | | 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 adjustments | 91 | | | (7) | | | 80 | | | 0 | | | 164 | |
| Balance at original discount rate, EOP | 183,183 | | | 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, EOP | | | | | | | | | 1,483 | |
| Total balance, EOP | | | | | | | | | $ | 312,691 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2026 |
| Net Liability for Future Policy Benefits - Benefit Reserves |
|
| | Individual Life | | International Businesses | | Corporate and Other | | Total |
| Retirement | | Term Life | | | Long-Term Care | |
| (in millions) |
| Balance, EOP, pre-flooring | $ | 79,406 | | | $ | 8,445 | | | $ | 80,479 | | | $ | 8,643 | | | $ | 176,973 | |
| Flooring impact, EOP | 156 | | | 2 | | | 91 | | | 0 | | | 249 | |
| Balance, EOP, post-flooring | 79,562 | | | 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 | |
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 Life | | | Long-Term Care | |
| (in millions) |
| Balance, BOP | $ | 72,526 | | | $ | 10,724 | | | $ | 45,851 | | | $ | 2,854 | | | $ | 131,955 | |
| Effect of cumulative changes in discount rate assumptions, BOP | 14,545 | | | 578 | | | 2,599 | | | 132 | | | 17,854 | |
| Balance at original discount rate, BOP | 87,071 | | | 11,302 | | | 48,450 | | | 2,986 | | | 149,809 | |
| | | | | | | | | |
| Effect of actual variances from expected experience and other activity | 22 | | | (62) | | | (303) | | | 19 | | | (324) | |
| Adjusted balance, BOP | 87,093 | | | 11,240 | | | 48,147 | | | 3,005 | | | 149,485 | |
| Issuances | 4,148 | | | 201 | | | 768 | | | 0 | | | 5,117 | |
| Net premiums / considerations collected | (1,559) | | | (340) | | | (1,893) | | | (80) | | | (3,872) | |
| Interest accrual | 824 | | | 133 | | | 368 | | | 36 | | | 1,361 | |
| Foreign currency adjustment | 2,777 | | | 0 | | | 1,264 | | | 0 | | | 4,041 | |
| Other adjustments | 0 | | | 1 | | | 43 | | | 0 | | | 44 | |
| Balance at original discount rate, EOP | 93,283 | | | 11,235 | | | 48,697 | | | 2,961 | | | 156,176 | |
| Effect of cumulative changes in discount rate assumptions, EOP | (16,053) | | | (460) | | | (3,029) | | | (102) | | | (19,644) | |
| Balance, EOP | $ | 77,230 | | | $ | 10,775 | | | $ | 45,668 | | | $ | 2,859 | | | 136,532 | |
| Other businesses, EOP | | | | | | | | | 93 | |
| Total balance, EOP | | | | | | | | | $ | 136,625 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 Life | | | Long-Term Care | |
| (in millions) |
| Balance, BOP | $ | 151,679 | | | $ | 18,996 | | | $ | 135,485 | | | $ | 11,178 | | | $ | 317,338 | |
| Effect of cumulative changes in discount rate assumptions, BOP | 20,199 | | | 1,134 | | | 17,834 | | | 1,548 | | | 40,715 | |
| Balance at original discount rate, BOP | 171,878 | | | 20,130 | | |