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, 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 new sales suspension for an additional 180 days through November 5, 2026. See “—Company Overview” above for additional information.

•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. This investment was not a significant contributor to the International Businesses segment’s operating results, and beginning in the fourth quarter of 2025, its results are reflected in Divested and Run-off Businesses included within our Corporate and Other operations in “Equity in earnings of joint ventures and other operating entities, net of taxes.”

•In April 2026, an agreement was signed to sell the Company’s 49% equity interest in a life insurance joint venture in Indonesia to its joint venture partner, CT Corp. The closing of this transaction is subject to regulatory approvals and customary closing conditions. This joint venture was not a significant contributor to the International Businesses segment’s operating results, and beginning in the first quarter of 2026, its results are reflected in Divested and Run-off Businesses included within our Corporate and Other operations in “Equity in earnings of joint ventures and other operating entities, net of taxes.”

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 “—Results of Operations—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 147 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 decreased $38 million, including an unfavorable comparative net impact of $5 million from foreign currency fluctuations. Excluding this item, adjusted operating income decreased $33 million, primarily reflecting:

•higher operating expenses, primarily driven by remediation costs associated with the Prudential of Japan matter, as discussed above, and to support business growth.

•higher net investment spread results, primarily driven by higher reinvestment rates and business growth, as well as higher prepayment fee income and higher income from non-coupon investments;

•higher underwriting results, driven by business growth, partially offset by impacts from the Prudential of Japan matter, including the suspension of sales and elevated surrenders; and

•higher surrender charges, including the elevated impacts from the Prudential of Japan matter.

Revenue increased $49 million, including an unfavorable comparative net impact of $13 million from foreign currency fluctuations. Excluding this item, revenue increased $62 million, primarily reflecting:

•higher net investment income, driven by higher reinvestment rates, business growth, and higher prepayment fee income, as well as higher income from non-coupon investments; and

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

•lower premiums attributable to the decline of traditional life insurance business in force in Japan and the impact of the sales suspension related to the Prudential of Japan matter, partially offset by business growth in Brazil.

Benefits and expenses increased $87 million, including a favorable comparative net impact of $8 million from foreign currency fluctuations. Excluding this item, benefits and expenses increased $95 million, primarily reflecting:

•higher general and administrative expenses, primarily driven by remediation costs associated with the Prudential of Japan matter, and to support business growth;

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

•unfavorable changes in estimates of the liability for future policy benefits, reflecting higher surrenders.

•lower policyholders’ benefits, including changes in reserves, due to the decline of traditional life insurance business in force in Japan, and impacts from the Prudential of Japan matter, including the suspension of sales and elevated surrenders.

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:

(1)2026 results reflect the impact of the sales suspension resulting from the Prudential of Japan matter.

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. 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.

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)2026 results reflect the impact of the sales suspension resulting from the Prudential of Japan matter.

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

(3)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, decreased $154 million:

•Life Planner sales decreased $108 million, primarily driven by lower sales in Japan across all products resulting from the sales suspension at Prudential of Japan, as discussed above;

•Life Consultant and Bank channel sales decreased $24 million and $13 million, respectively, primarily driven by lower investment contract product sales; and

•Independent Agency and Other sales decreased $9 million, driven by lower life and retirement product sales, partially offset by higher investment contract product sales.