PRUDENTIAL FINANCIAL INC

Prudential Financial, a financial services leader with approximately $1.616 trillion of assets under management as of September 30, 2026, has operations primarily in the United States of America (“U.S.”), Asia, Europe and Latin America. Through our subsidiaries and affiliates, we offer a wide array of financial products and services, including life insurance, annuities, retirement-related services, mutual funds and investment management. We offer these products and services to individual and institutional customers through one of the largest distribution networks in the financial services industry. We believe we are a uniquely integrated financial services company, with a competitive position supported by our longstanding brand, broad customer relationships, global distribution capabilities, and a diversified business model that combines liability generation across retirement and protection products with asset management expertise across public and private markets. Together, these capabilities enable us to originate, manage, and allocate capital at scale, meet evolving customer and client needs, and generate earnings and cash flow across market cycles.

In August 2026, we announced a deliberate, multi-year strategy to become a more focused, higher-performing enterprise. We intend to exit emerging markets and concentrate capital, talent, and management attention on large, developed markets where we believe we have the greatest opportunity to compete and scale, including the United States, Japan, and select markets in Europe; strengthen leadership positions in global retirement, asset management, and select protection businesses; optimize capital deployment toward higher-return and less capital-intensive opportunities; and leverage global scale, technology, and simplification initiatives to improve efficiency. As part of this strategy, we are undertaking an enterprise-wide cost savings initiative expected to reduce annual operating expenses by approximately $750 million by year-end 2028. Through these actions, we seek to deliver earnings growth, increase free cash flow conversion, maintain strong returns on capital, and create durable long-term value for shareholders.

Business Segments

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.

In addition, as previously announced in August 2026, the Company announced its intent to exit certain of its emerging markets businesses previously included within the International Businesses segment. As a result, effective in the third quarter of 2026, (i) the operating results of certain businesses, including its Brazil and Mexico operations, are reflected in Divested and Run-off Businesses included within Corporate and Other operations, and (ii) the former International Businesses segment has been renamed “Japan Businesses” to reflect the ongoing operations in Japan. In connection with this change, the results of the Company’s indirect 40% ownership interest in Administradora de Fondos de Pensiones Habitat S.A. (“AFP Habitat”), previously included within the former International Businesses’ segment results, are now included within the Retirement segment results, reflecting the Company’s recent organizational and strategic changes.

These segment reporting changes were applied retrospectively and did not have an impact on any of the Company’s previously issued Consolidated Financial Statements.

Our principal operations now consist of PGIM (our global investment management business), our U.S. Businesses (consisting of Retirement, Group Insurance, Individual Life and U.S. Legacy Products), our Japan Businesses, the Closed Block division, and our 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 in Corporate and Other. 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 generally accepted accounting principles in the United States of America (“U.S. GAAP”). Our 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.

Prudential of Japan Matter

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 has been 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 Japan Financial Services Agency (“FSA”), 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 at Prudential of Japan for an additional 180 days through November 5, 2026.

On October 9, 2026, the FSA issued a business suspension order prohibiting Prudential of Japan from soliciting new business through January 31, 2027. The FSA also issued a partial business suspension order to Gibraltar Life Insurance Company, Ltd. (“Gibraltar Life”), a Japanese insurance subsidiary of the Company, commencing October 13, 2026 and extending through January 31, 2027, applicable to its Life Consultant channel but not its independent agency channel. The FSA also issued business improvement orders to each of Prudential of Japan, Prudential Holdings of Japan, Inc., and Gibraltar Life, requiring each company to submit business improvement plans to the FSA by the end of November 2026 and report regularly on their progress.

The suspension of sales at Prudential of Japan resulted in an estimated reduction of $375 million in Japan Businesses’ pre-tax adjusted operating income through the first nine months of 2026. We now estimate that the suspension of new sales at Prudential of Japan as extended through January 31, 2027 will result in a reduction of pre-tax adjusted operating income of approximately $500 million for 2026, inclusive of the nine month impact above, and in the range of $500 to $550 million for 2027, reflecting remediation costs associated with sustaining the business, one-time and other operating costs, and lower earnings attributable to the gradual ramp-up of new sales after sales resume.

We estimate that the partial suspension of new sales at Gibraltar Life from October 13, 2026 through January 31, 2027 will result in a reduction of Japan Businesses’ pre-tax adjusted operating income of approximately $100 million for 2026 and approximately $175 million for 2027, reflecting remediation costs associated with sustaining the business.

Should the suspension of new sales activities extend beyond January 2027, we would expect the adverse effects to our Japan Businesses’ pre-tax adjusted operating income to be greater. We do not expect a material impact to capital, Economic Solvency Ratios (“ESR”) or cash flows from these actions. It is also possible that reputational and other harm resulting from or in connection with this matter will negatively impact our other businesses in Japan. Actual results may differ materially from these preliminary expectations, as covered under “Forward-Looking Statements.”