PRUDENTIAL FINANCIAL INC

Business Updates

•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, in consultation with the Japanese regulator, the Company voluntarily suspended new sales activity at Prudential of Japan for a 90-day period commencing February 9, 2026. See Note 25 to the Consolidated Financial Statements “—Litigation and Regulatory Matters—Regulatory” for additional information. This matter did not have a material impact on our 2025 operating results; however, we estimate that it will result in a reduction of Prudential of Japan's pre-tax adjusted operating income for 2026 in the range of $300 to $350 million, reflecting decreased sales, increased surrenders, and higher costs. Should the suspension of new sales activities extend beyond the initial 90-day period, the adverse effects are expected to be greater. It is also possible that reputational and other harm resulting from this matter will negatively impact our other businesses in Japan.

•In January 2026, an agreement was entered into to sell the Company’s 24% equity interest (through a private equity limited partnership managed by LeapFrog Investments) in ICEA Lion Insurance Holdings, Ltd., a Kenya-based insurer and asset manager. The closing of this transaction is subject to regulatory approvals and customary closing conditions.

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

•In December 2024, the Company entered into an agreement with Prismic Life Reinsurance International, Ltd. (“Prismic Re International”), a wholly-owned subsidiary of Prismic, to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies originated by the Company’s Japanese affiliates. The transaction was completed in March 2025 with an effective date of March 1, 2025. See Note 15 to the Consolidated Financial Statements for additional information.

•In March 2024, the Company entered into a definitive agreement with Grupo ST S.A. to sell Prudential of Argentina (“POA”). Effective in the first quarter of 2024, the results of POA and the impact of its sale were reflected in the Divested and Run-off Businesses that are included within our Corporate and Other operations. The transaction, which did not have a material impact on the Company’s results, was completed in May 2024.

The results of our International Businesses’ operations are translated on the basis of weighted average monthly exchange rates, inclusive of the effects of the intercompany arrangement discussed in “—External and Economic Factors—Impact of Foreign Currency Exchange Rates” above. To provide a better understanding of operating performance within the International Businesses, where indicated below, we have analyzed our results of operations excluding the effect of the year-over-year change in foreign currency exchange rates. Our results of operations, excluding the effect of foreign currency fluctuations, were derived by translating foreign currencies to USD at uniform exchange rates for all periods presented, including for constant dollar information discussed below. For our Japan operations, we used an exchange rate of 143 yen per USD. In addition, for constant dollar information discussed below, activity denominated in USD is generally reported based on the amounts as transacted in USD. Annualized new business premiums presented on a constant exchange rate basis in the “Sales Results” section below reflect translation based on these same uniform exchange rates.

The following table sets forth the International Businesses’ operating results for the periods indicated:

Adjusted operating income increased $141 million, including an unfavorable comparative net impact of $14 million from currency fluctuations. Both periods also include the impact of our annual reviews and update of assumptions and other refinements, which resulted in a net charge of $2 million in 2025, compared to a net charge of $55 million in 2024.

Excluding these items, adjusted operating income increased $102 million, primarily reflecting:

•higher net investment spread results, primarily driven by higher income from non-coupon investments, lower losses from derivatives, and portfolio growth in Japan and Brazil;

•higher underwriting results, driven by business growth in Brazil and growth in retirement and savings products in Japan; and

•higher earnings from joint ventures and other operating entities.

•higher operating and variable expenses, primarily driven by business growth; and

•the net impact from ceded reinsurance to Prismic Re International.

Revenues increased $223 million, including an unfavorable comparative net impact of $207 million from our annual reviews and update of assumptions and other refinements. Excluding this item, revenues increased $430 million, primarily reflecting:

•higher net investment income, driven by growth in retirement and savings products in Japan and higher reinvestment rates;

•higher income from non-coupon investments;

•lower losses from derivatives;

•higher policy charges and fee income, driven by growth in retirement and savings products in Japan; and

•higher earnings from joint ventures and other operating entities.

•lower premiums attributable to the decline of traditional life insurance business in force in Japan, partially offset by the impact of lower ceded reinsurance in the current period and business growth in Brazil; and

•the net impact from ceded reinsurance to Prismic Re International.

Benefits and expenses increased $82 million, including an unfavorable comparative net impact of $14 million from currency fluctuations and a favorable comparative net impact of $260 million from our annual reviews and update of assumptions and other refinements. Excluding these items, benefits and expenses increased $328 million, primarily reflecting:

•higher interest credited to policyholders’ account balances, reflecting growth in retirement and savings products in Japan; and

•higher general and administrative expenses, including both operating and variable expenses, primarily driven by business growth.

•favorable changes in estimates of the liability for future policy benefits; and

•lower policyholders’ benefits, including changes in reserves, due to the decline of traditional life insurance business in force in Japan, partially offset by the impact of lower ceded reinsurance in the current year.

The following table sets forth annualized new business premiums, as defined under “—Results of Operations—Segment Measures” above, on an actual and constant exchange rate basis for the periods indicated:

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

Our diverse product portfolio in Japan, in terms of currency mix and premium payment structure, allows us to adapt to changing market and competitive dynamics, including from a low interest rate environment. We regularly examine our product offerings and their related profitability and reprice or discontinue sales of certain products that do not meet our profit expectations. The impact of these actions, coupled with the introduction of certain new products, has generally resulted in higher sales of products denominated in USD relative to products denominated in other currencies; however, more recently we have experienced an increase in sales of our yen-denominated product offerings as a result of growing demand for these products. See “—Business Outlook” and “—External and Economic Factors—Industry Trends” above for additional information regarding product considerations specific to our Japanese operations.

The table below presents annualized new business premiums on a constant exchange rate basis, by product category and distribution channel, for the periods indicated:

(1)Includes retirement income, endowment and savings variable life.

(2)Includes single-payment market value adjusted investment contracts, single-payment whole life products and recurring-payment annuity products.

Annualized new business premiums, on a constant exchange rate basis, increased $81 million, primarily reflecting:

•Life Planner sales increased $85 million, primarily driven by higher investment contract and life product sales in Japan, and higher life and accident and health product sales in Brazil;

•Life Consultant sales increased $48 million, driven by higher investment contract and retirement product sales, partially offset by lower life product sales;

•Independent Agency and Other sales increased $2 million, primarily driven by higher life product sales, mostly offset by lower investment contract sales; and

•Bank channel sales decreased $54 million, driven by lower life and investment contract product sales.

Sales Force

The following table sets forth the number of Life Planners and Life Consultants for the periods indicated:

•The number of Life Planners increased by 200, primarily driven by an increase in Brazil reflecting business growth.

•The number of Life Consultants increased by 139, reflecting favorable recruitment and lower resignations.