PRUDENTIAL FINANCIAL INC

The Closed Block division includes certain in-force traditional domestic participating life insurance and annuity products and assets that are used for the payment of benefits and policyholder dividends on these policies (collectively, the “Closed Block”), as well as certain related assets and liabilities. We no longer offer these traditional domestic participating policies. See Note 13 to the Unaudited Interim Consolidated Financial Statements for additional information.

Each year, the Board of Directors of The Prudential Insurance Company of America (“PICA”) determines the dividends payable on participating policies for the following year based on the experience of the Closed Block, including investment income, net realized and unrealized investment gains (losses), mortality experience and other factors. Although the Closed Block experience for dividend action decisions is based upon statutory results, at the time the Closed Block was established, we developed, as required by U.S. GAAP, an actuarial calculation of the timing of the maximum future earnings from the policies included in the Closed Block. Actual cumulative earnings, as required by U.S. GAAP, reflect the recognition of realized investment gains and losses in the current period, as well as changes in assets and related liabilities that support the Closed Block policies. If actual cumulative earnings in any given period are greater than the cumulative earnings we expected, we record this excess as a policyholder dividend obligation. Additionally, any accumulated net unrealized investment gains that have arisen subsequent to the establishment of the Closed Block are reflected as a policyholder dividend obligation, with a corresponding amount reported in AOCI, while any accumulated net unrealized investment losses are reflected as a reduction of the policyholder dividend obligation, to the extent the overall policyholder dividend obligation is otherwise positive.

We will subsequently pay this excess to Closed Block policyholders as an additional dividend unless it is otherwise offset by future Closed Block performance that is less favorable than we originally expected. The policyholder dividends we charge to expense within the Closed Block division will include any change in our policyholder dividend obligation that we recognize for the excess of actual cumulative earnings in any given period over the cumulative earnings we expected in addition to the actual policyholder dividends declared by the Board of Directors of PICA. If actual cumulative earnings fall below expected cumulative earnings in future periods, earnings volatility in the Closed Block division, which is primarily due to changes in investment results, may not be offset by changes in the cumulative earnings policyholder dividend obligation. For a discussion of the Closed Block division’s realized investment gains (losses), net, see “—General Account Investments.”

As of September 30, 2026, the excess of actual cumulative earnings over the expected cumulative earnings was $1,330 million; however, due to the accumulation of net unrealized investment losses in excess of this amount, the policyholder dividend obligation balance as of September 30, 2026 was reduced to zero.

The following table sets forth the Closed Block division’s results for the periods indicated:

Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities increased $6 million. Net investment activity results decreased, primarily reflecting:

•lower other income, driven by unfavorable changes in the market value of equity securities; and

•higher realized investment losses, driven by unfavorable changes in the market value of derivatives and higher losses from the sale of fixed income securities.

As a result of these and other factors, a $255 million reduction in the policyholder dividend obligation was recorded in the third quarter of 2026, compared to a $33 million increase in the third quarter of 2025.

Revenues decreased $339 million, primarily reflecting:

•lower other income; and

•higher realized investment losses, as discussed above.

Benefits and expenses decreased $345 million, primarily reflecting:

•lower dividends to policyholders, reflecting a reduction in the policyholder dividend obligation due to changes in cumulative earnings and other factors, as discussed above.

Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities increased $23 million. Net investment activity results decreased, primarily reflecting:

•lower other income, driven by less favorable changes in the market value of fixed maturity and equity securities.

•higher net investment income from non-coupon and fixed income investments; and

•lower realized investment losses, driven by favorable changes in the market value of derivatives, partially offset by higher losses from the sale of fixed income securities.

Net insurance activity results increased, primarily reflecting a favorable change in reserves, partially offset by higher policyholder benefits, as well as lower premiums due to the runoff of policies in force.

As a result of these and other factors, a $305 million reduction in the policyholder dividend obligation was recorded in the first nine months of 2026, compared to a $334 million reduction in the first nine months of 2025.

Revenues decreased $96 million, primarily reflecting:

•lower other income; and

•lower premiums, as discussed above.

•higher net investment income; and

•lower realized investment losses, as discussed above.

Benefits and expenses decreased $119 million, primarily reflecting:

•lower policyholders’ benefits, including changes in reserves.