Prudential(PRU) - 2025 Q2 - Quarterly Results

HIGHLIGHTS Financial Metrics Summary Prudential Financial, Inc.'s key financial performance indicators for Q2 2025 and year-to-date show overall growth in adjusted operating income, alongside changes in net income and shareholder distributions Key Financial Metrics (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Adjusted operating income (loss) before income taxes | 1,560 | 1,665 | 2,995 | 3,185 | 6% | | After-tax adjusted operating income (loss) | 1,197 | 1,284 | 2,312 | 2,472 | 7% | | Income (loss) attributable to Prudential Financial, Inc. | 1,198 | 533 | 2,336 | 1,240 | -47% | | Operating Return on Average Equity | 13.5 % | 14.9 % | 13.1 % | 14.4 % | | | Dividends paid | 475 | 485 | 951 | 971 | 2% | | Share repurchases | 250 | 250 | 500 | 500 | —% | | Adjusted Operating Income - diluted (per share) | 3.28 | 3.58 | 6.34 | 6.87 | 8% | | Net income (loss) - diluted (per share) | 3.28 | 1.48 | 6.40 | 3.44 | -46% | Financial Highlights This section details the reconciliation of after-tax adjusted operating income per share to net income (loss) per share, highlighting the impact of various reconciling items such as realized investment gains/losses and changes in market risk benefits Earnings per share of Common Stock (diluted) (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 | 2Q 2025 | Year-to-date 2024 | Year-to-date 2025 | | :------------------------------------------------------------------ | :------ | :------ | :---------------- | :---------------- | | After-tax adjusted operating income (loss) | 3.28 | 3.58 | 6.34 | 6.87 | | Realized investment gains (losses), net, and related charges and adjustments | 0.49 | (1.45) | 0.31 | (2.14) | | Change in value of market risk benefits, net of related hedging gains (losses) | (0.82) | (1.20) | (0.48) | (2.19) |\n| Total reconciling items, after income taxes | — | (2.10) | 0.06 | (3.43) | | Net income (loss) attributable to Prudential Financial, Inc. | 3.28 | 1.48 | 6.40 | 3.44 | Other Financial Highlights This section presents key capitalization data, including senior and junior subordinated debt, various measures of Prudential Financial, Inc. equity, and per-share metrics, along with common stock market capitalization Capitalization Data (as of 2Q 2025) | Metric | 2Q 2024 (millions) | 3Q 2024 (millions) | 4Q 2024 (millions) | 1Q 2025 (millions) | 2Q 2025 (millions) | | :------------------------------------------ | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Short-term debt | 588 | 950 | 953 | 1,406 | 1,373 | | Long-term debt | 10,771 | 10,487 | 10,600 | 10,949 | 11,056 | | Junior subordinated long-term debt | 8,582 | 8,589 | 8,587 | 8,591 | 7,595 | | GAAP book value (total PFI equity) | 28,013 | 30,416 | 27,872 | 29,883 | 30,582 | | Adjusted book value | 35,570 | 35,547 | 34,408 | 34,454 | 34,292 | | GAAP book value per common share - diluted | 77.51 | 84.47 | 77.62 | 83.59 | 85.98 | | Adjusted book value per common share - diluted | 98.42 | 98.71 | 95.82 | 96.37 | 96.41 | | Common Stock market capitalization | 41,919 | 43,099 | 42,031 | 39,535 | 37,808 | Operations Highlights This section provides an overview of key operational metrics, including Assets Under Management and Administration (AUM&A) across all segments and the number of distribution representatives, indicating growth in total AUM&A Assets Under Management and Administration (in billions) (as of 2Q 2025) | Metric | 2Q 2024 | 3Q 2024 | 4Q 2024 | 1Q 2025 | 2Q 2025 | | :-------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Total PGIM | 1,328.1 | 1,399.9 | 1,375.2 | 1,385.3 | 1,440.7 | | Total assets under management | 1,482.0 | 1,557.9 | 1,512.4 | 1,522.1 | 1,580.3 | | Total assets under management and administration | 1,665.9 | 1,747.7 | 1,685.9 | 1,702.5 | 1,773.5 | | Prudential Advisors | 2,821 | 2,877 | 2,794 | 2,906 | 2,985 | | Life Planners | 5,836 | 5,900 | 6,035 | 6,175 | 6,161 |\n| Life Consultants | 6,724 | 6,861 | 6,844 | 6,840 | 6,822 | Combined Statements of Operations This section presents the consolidated statements of operations, detailing revenues, benefits, and expenses, and reconciling adjusted operating income to net income attributable to Prudential Financial, Inc. for Q2 and year-to-date 2025 Combined Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 7,277 | 6,426 | 22,283 | 12,872 | -42% | | Net investment income | 4,218 | 4,600 | 8,338 | 9,119 | 9% | | Total revenues | 13,849 | 13,506 | 35,555 | 26,918 | -24% | | Insurance and annuity benefits | 8,137 | 7,195 | 23,911 | 14,539 | -39% | | Interest credited to policyholders' account balances | 952 | 1,135 | 1,854 | 2,218 | 20% | | Total benefits and expenses | 12,289 | 11,841 | 32,560 | 23,733 | -27% | | Adjusted operating income (loss) before income taxes | 1,560 | 1,665 | 2,995 | 3,185 | 6% | | Income (loss) attributable to Prudential Financial, Inc. | 1,198 | 533 | 2,336 | 1,240 | -47% | Consolidated Balance Sheets This section provides a snapshot of the company's consolidated financial position, detailing assets, liabilities, mezzanine equity, and total equity at the end of Q2 2025, showing an increase in total assets and Prudential Financial, Inc. equity Consolidated Balance Sheet (as of 2Q 2025) | Metric | 06/30/2024 (millions) | 09/30/2024 (millions) | 12/31/2024 (millions) | 03/31/2025 (millions) | 06/30/2025 (millions) | | :-------------------------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | :-------------------- | | Total investments | 432,648 | 469,117 | 444,780 | 449,706 | 460,581 | | Total assets | 715,311 | 760,437 | 735,587 | 739,262 | 758,952 | | Future policy benefits | 262,330 | 285,474 | 268,912 | 269,969 | 270,133 | | Policyholders' account balances | 154,991 | 164,088 | 166,254 | 170,278 | 180,931 | | Total liabilities | 685,091 | 727,719 | 705,461 | 707,040 | 725,836 | | Total Prudential Financial, Inc. equity | 28,013 | 30,416 | 27,872 | 29,883 | 30,582 | Combining Balance Sheets This section provides a detailed breakdown of the consolidated balance sheet by major business segments for June 30, 2025, and December 31, 2024, offering a segmented view of assets, liabilities, and equity Total Assets by Segment (as of June 30, 2025) | Segment | Total Assets (millions) | | :------------------ | :---------------------- | | Consolidated PFI | 758,952 | | Closed Block Division | 48,458 | | PGIM | 37,454 | | U.S. Businesses | 450,163 | | International Businesses | 191,258 | | Corporate and Other | 31,619 | Total Prudential Financial, Inc. Equity by Segment (as of June 30, 2025) | Segment | Total PFI Equity (millions) | | :------------------ | :-------------------------- |\n| Consolidated PFI | 30,582 | | Closed Block Division | (1,626) | | PGIM | 2,942 | | U.S. Businesses | 16,301 | | International Businesses | 20,564 | | Corporate and Other | (7,599) | Short-Term and Long-Term Debt - Unaffiliated This section details the company's short-term and long-term debt structure, categorized by use of proceeds and source, showing a slight decrease in total debt from December 2024 to June 2025 Total Debt by Use of Proceeds (as of June 30, 2025 vs. Dec 31, 2024) | Debt Type | June 30, 2025 (millions) | December 31, 2024 (millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | | Capital Debt | 14,198 | 13,825 | | Operating Debt | 5,379 | 5,875 | | Limited recourse and non-recourse borrowing | 447 | 440 | | Total Debt | 20,024 | 20,140 | Total Debt by Source (as of June 30, 2025 vs. Dec 31, 2024) | Source | June 30, 2025 (millions) | December 31, 2024 (millions) | | :-------------------------------------- | :----------------------- | :--------------------------- | | Prudential Financial, Inc. | 18,686 | 18,818 | | The Prudential Insurance Company of America | 881 | 927 | | Other Affiliates | 457 | 395 | | Total Debt | 20,024 | 20,140 | PGIM Statements of Operations - PGIM This section presents PGIM's statements of operations, highlighting a 4% year-to-date increase in total revenues and a 3% increase in adjusted operating income before income taxes, with an adjusted operating margin of 23.5% in Q2 2025 PGIM Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Net investment income | 14 | 59 | (29) | 79 | 372% | | Asset management fees, commissions and other income | 949 | 984 | 1,982 | 1,949 | -2% | | Total revenues | 963 | 1,043 | 1,953 | 2,028 | 4% | | Total benefits and expenses | 757 | 814 | 1,578 | 1,643 | 4% | | Adjusted operating income (loss) before income taxes | 206 | 229 | 375 | 385 | 3% | | Adjusted operating margin | 22.1 % | 23.5 % | 20.0 % | 20.1 % | | Supplementary Revenue and Assets Under Management Information - PGIM This section provides a detailed breakdown of PGIM's revenue by type and source, along with a comprehensive view of Assets Under Management (AUM) by asset class and customer type, showing overall AUM growth PGIM Supplementary Revenue Information (YTD 2025 vs. YTD 2024) | Revenue Type | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change | | :-------------------------------- | :--------------------------- | :--------------------------- | :------- | | Asset management fees | 1,551 | 1,653 | 7% | | Other related revenues | 164 | 120 | -27% | | Service, distribution and other revenues | 238 | 255 | 7% | | Total PGIM revenues | 1,953 | 2,028 | 4% | PGIM Assets Under Management (AUM) by Customer Type (as of June 30, 2025 vs. June 30, 2024) | Customer Type | June 30, 2024 (billions) | June 30, 2025 (billions) | | :------------------------------ | :----------------------- | :----------------------- | | Institutional customers - Third Party | 585.2 | 647.6 | | Retail customers - Third Party | 234.5 | 256.7 | | Affiliated | 508.4 | 536.4 | | Total | 1,328.1 | 1,440.7 | Supplementary Assets Under Management Information - PGIM This section details the activity in PGIM's Assets Under Management (AUM) for institutional, retail, and affiliated customers, showing beginning and ending AUM, additions, withdrawals, net flows, and changes in market value, with significant market value increases contributing to overall AUM growth Institutional Customers - Third Party AUM Activity (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (billions) | 2Q 2025 (billions) | | :---------------------------------------------- | :----------------- | :----------------- | | Beginning assets under management | 596.9 | 620.2 | | Net institutional additions (withdrawals) | (6.4) | 2.6 | | Change in market value | 0.9 | 24.0 | | Ending assets under management | 585.2 | 647.6 | Retail Customers - Third Party AUM Activity (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (billions) | 2Q 2025 (billions) | | :---------------------------------------------- | :----------------- | :----------------- | | Beginning assets under management | 228.1 | 240.6 | | Net retail additions (withdrawals) | (0.6) | (2.8) | | Change in market value | 6.7 | 18.6 | | Ending assets under management | 234.5 | 256.7 | Affiliated AUM Activity (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (billions) | 2Q 2025 (billions) | | :---------------------------------------------- | :----------------- | :----------------- | | Beginning assets under management | 516.4 | 524.5 | | Net affiliated additions (withdrawals) | 1.9 | 0.6 |\n| Change in market value | (3.1) | 10.9 | | Ending assets under management | 508.4 | 536.4 | U.S. BUSINESSES Combined Statements of Operations - U.S. Businesses This section provides a combined statement of operations for all U.S. Businesses, showing a 36% year-to-date decrease in total revenues primarily due to lower premiums, but a 3% increase in adjusted operating income before income taxes U.S. Businesses Combined Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 4,282 | 3,724 | 16,151 | 7,122 | -56% | | Net investment income | 2,528 | 2,760 | 5,006 | 5,460 | 9% | | Total revenues | 8,410 | 8,008 | 24,383 | 15,714 | -36% | | Insurance and annuity benefits | 5,692 | 4,750 | 18,699 | 9,313 | -50% | | Interest credited to policyholders' account balances | 643 | 754 | 1,244 | 1,478 | 19% | | Total benefits and expenses | 7,387 | 7,053 | 22,555 | 13,828 | -39% | | Adjusted operating income (loss) before income taxes | 1,023 | 955 | 1,828 | 1,886 | 3% | Combined Statements of Operations - Retirement Strategies This section provides a combined overview of the Retirement Strategies segment within U.S. Businesses, detailing financial performance, sales results, account values, and market risk benefit features for both Institutional and Individual Retirement Strategies Statements of Operations - Institutional Retirement Strategies This section focuses on the statements of operations for Institutional Retirement Strategies, showing a 58% year-to-date decrease in total revenues, primarily due to lower premiums, and an 18% decrease in adjusted operating income before income taxes Institutional Retirement Strategies Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 2,758 | 2,126 | 13,055 | 3,871 | -70% | | Net investment income | 1,142 | 1,248 | 2,234 | 2,491 | 12% | | Total revenues | 4,041 | 3,507 | 15,579 | 6,612 | -58% | | Adjusted operating income (loss) before income taxes | 550 | 396 | 991 | 808 | -18% | Institutional Retirement Strategies Sales Results and Account Values This section details the sales results and account values for Institutional Retirement Strategies, showing positive net flows and an increase in ending total account value, net of reinsurance ceded, for Q2 2025 Institutional Retirement Strategies Account Values (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | | Beginning total account value | 274,630 | 293,930 | | Net flows | (2,153) | 3,329 | | Ending total account value, gross | 274,128 | 307,306 | | Ending total account value, net | 264,999 | 298,407 | - International reinsurance notional amounts increased from $102,465 million in Q2 2024 to $127,701 million in Q2 2025[45] Statements of Operations - Individual Retirement Strategies This section presents the statements of operations for Individual Retirement Strategies, showing a 7% year-to-date increase in total revenues but a 10% decrease in adjusted operating income before income taxes for Q2 2025 Individual Retirement Strategies Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 11 | 17 | 39 | 37 | -5% | | Net investment income | 496 | 682 | 940 | 1,311 | 39% | | Total revenues | 1,254 | 1,321 | 2,475 | 2,659 | 7% | | Insurance and annuity benefits | 39 | 127 | 79 | 157 | 99% | | Adjusted operating income (loss) before income taxes | 439 | 326 | 879 | 790 | -10% | Individual Retirement Strategies Sales Results and Account Values This section provides sales results and account values for actively-sold protected investment and income products, as well as discontinued traditional variable annuities and guaranteed living benefit blocks, showing a decrease in total actively-sold product sales but an increase in their ending account value Actively-Sold Protected Investment and Income Product Sales (Q2 2025 vs. Q2 2024) | Product Type | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | | :---------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | | FlexGuard Suite | 2,219 | 1,718 | 3,946 | 4,052 | | Fixed | 1,221 | 1,384 | 2,771 | 2,489 | | Total Sales | 3,479 | 3,135 | 6,784 | 6,608 | Ending Total Account Value, Net (Individual Retirement Strategies) (Q2 2025 vs. Q2 2024) | Product Type | 2Q 2024 (millions) | 2Q 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | | Actively-Sold Protected Investment and Income Solutions | 36,903 | 51,749 | | Discontinued Traditional VA and Guaranteed Living Benefit Block | 86,996 | 79,770 | Individual Retirement Strategies Account Value Activity This section details the account value activity for Individual Retirement Strategies in both General Account and Separate Account, showing positive net flows in the General Account and negative net flows in the Separate Account for Q2 2025 Individual Retirement Strategies Account Values (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | | Account Values in General Account: | | | | Beginning balance | 35,140 | 48,660 | | Net flows | 2,886 | 2,446 | | Ending balance, net | 36,737 | 51,384 | | Account Values in Separate Account: | | | | Beginning balance | 99,560 | 87,166 | | Net flows | (3,410) | (3,172) | | Ending balance, net | 87,162 | 80,135 | Individual Retirement Strategies Market Risk Benefit Features This section provides information on market risk benefits account values and net amount at risk for Individual Retirement Strategies, categorized by risk management design and product design type, showing a decrease in total net amount at risk in Q2 2025 compared to Q1 2025 Market Risk Benefits (as of 2Q 2025) | Metric | 2Q 2024 (millions) | 3Q 2024 (millions) | 4Q 2024 (millions) | 1Q 2025 (millions) | 2Q 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | | Total Market Risk Benefits Account Values | 94,805 | 95,636 | 89,934 | 85,577 | 88,714 | | Total Market Risk Benefits Net Amount at Risk | 9,358 | 7,878 | 9,285 | 9,715 | 9,137 | Statements of Operations - Group Insurance This section details the financial performance of the Group Insurance segment, showing a 7% year-to-date increase in total revenues and a 29% increase in adjusted operating income before income taxes for Q2 2025 Statements of Operations - Group Insurance This section presents the statements of operations for Group Insurance, highlighting a 7% year-to-date increase in premiums and a 29% increase in adjusted operating income before income taxes for Q2 2025 Group Insurance Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 1,272 | 1,349 | 2,570 | 2,745 | 7% | | Total revenues | 1,586 | 1,687 | 3,220 | 3,435 | 7% | | Insurance and annuity benefits | 1,140 | 1,230 | 2,389 | 2,526 | 6% | | Total benefits and expenses | 1,465 | 1,562 | 3,054 | 3,221 | 5% | | Adjusted operating income (loss) before income taxes | 121 | 125 | 166 | 214 | 29% | Group Insurance Supplementary Information This section provides supplementary information for Group Insurance, including annualized new business premiums, future policy benefits, policyholders' account balances, separate account liabilities, and key ratios for Group Life and Group Disability Insurance, showing growth in new business premiums and improved benefits ratios Group Insurance Key Metrics (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | | Total Annualized New Business Premiums | 46 | 77 | 424 | 477 | | Total Future Policy Benefits (end of period) | 5,550 | 5,712 | | | | Total Policyholders' Account Balances (end of period) | 4,893 | 4,564 | | | | Total Group Insurance Benefits ratio | 81.1 % | 80.9 % | 82.9 % | 81.1 % | | Total Group Insurance Administrative expense ratio | 15.1 % | 15.2 % | 15.1 % | 15.0 % | | Net face amount of policies in force (in billions) | 2,092 | 2,118 | | | Statements of Operations - Individual Life This section details the financial performance of the Individual Life segment, showing a 3% year-to-date decrease in total revenues but a significant improvement in adjusted operating income before income taxes, turning positive in Q2 2025 Statements of Operations - Individual Life This section presents the statements of operations for Individual Life, highlighting a 3% year-to-date decrease in total revenues but a substantial improvement in adjusted operating income before income taxes, moving from a loss to a gain in Q2 2025 Individual Life Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 241 | 232 | 487 | 469 | -4% | | Policy charges and fee income | 510 | 531 | 1,013 | 1,072 | 6% | | Net investment income | 762 | 697 | 1,568 | 1,391 | -11% | | Total revenues | 1,529 | 1,493 | 3,109 | 3,008 | -3% | | Insurance and annuity benefits | 795 | 686 | 1,655 | 1,486 | -10% | | Adjusted operating income (loss) before income taxes | (87) | 108 | (208) | 74 | 136% | Individual Life Supplementary Information This section provides supplementary information for Individual Life, including annualized new business premiums by product type and distribution channel, account value activity for policyholders' account balances and separate account liabilities, and net face amount in force, showing growth in new business premiums and separate account liabilities Individual Life Key Metrics (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | | Total Annualized New Business Premiums | 203 | 223 | 370 | 433 | | Total Policyholders' Account Balances (Ending balance, net) | 28,853 | 25,319 | | | | Total Separate Account Liabilities (Ending balance) | 51,385 | 57,995 | | | | Total Net Face Amount In Force (in billions) | 522 | 516 | | | INTERNATIONAL BUSINESSES Statements of Operations - International Businesses This section presents the statements of operations for International Businesses, showing a 1% year-to-date decrease in total revenues but a 1% increase in adjusted operating income before income taxes for Q2 2025 International Businesses Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Premiums | 3,002 | 2,709 | 6,141 | 5,766 | -6% | | Net investment income | 1,390 | 1,451 | 2,802 | 2,920 | 4% | | Total revenues | 4,512 | 4,399 | 9,225 | 9,137 | -1% | | Insurance and annuity benefits | 2,452 | 2,446 | 5,224 | 5,235 | —% | | Adjusted operating income (loss) before income taxes | 702 | 761 | 1,598 | 1,609 | 1% | Sales Results and Supplementary Information - International Businesses This section provides sales results and supplementary information for International Businesses, including net premiums, annualized new business premiums by region and distribution channel, face amount of individual policies in force, policyholder account balances, and persistency ratios, showing growth in annualized new business premiums and distribution representatives International Businesses Sales Results (YTD 2025 vs. YTD 2024, Actual Exchange Rate) | Metric | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | | :---------------------------------------------- | :--------------------------- | :--------------------------- | | Net premiums, policy charges and fee income | 6,301 | 5,946 | | Annualized new business premiums | 1,036 | 1,117 | International Businesses Key Metrics (as of 2Q 2025, Constant Exchange Rate) | Metric | 2Q 2024 (billions) | 2Q 2025 (billions) | | :---------------------------------------------- | :----------------- | :----------------- | | Face amount of individual policies in force | 587 | 578 | | Policyholder Account Balances (in millions) | 52,390 | 51,945 | | 13 months persistency | 91.9 % | 92.8 % | | 25 months persistency | 84.5 % | 83.0 % | International Businesses Distribution Representatives (as of 2Q 2025) | Metric | 2Q 2024 | 2Q 2025 | | :---------------- | :------ | :------ | | Total Life Planners | 5,836 | 6,161 | | Life Consultants | 6,724 | 6,822 | CORPORATE AND OTHER Statements of Operations - Corporate and Other This section details the statements of operations for the Corporate and Other segment, showing a significant increase in total revenues year-to-date and a 14% improvement in adjusted operating income (loss) before income taxes for Q2 2025 Corporate and Other Statements of Operations (Q2 2025 vs. Q2 2024) | Metric | 2Q 2024 (millions) | 2Q 2025 (millions) | Year-to-date 2024 (millions) | Year-to-date 2025 (millions) | % change (YTD) | | :---------------------------------------------- | :----------------- | :----------------- | :--------------------------- | :--------------------------- | :------------- | | Net investment income | 286 | 330 | 559 | 660 | 18% | | Total revenues | (36) | 56 | (6) | 39 | 750% | | Interest expense | 174 | 215 | 347 | 422 | 22% | | Operating expenses | 133 | 107 | 438 | 262 | -40% | | Total benefits and expenses | 335 | 336 | 800 | 734 | -8% | | Adjusted operating income (loss) before income taxes | (371) | (280) | (806) | (695) | 14% | INVESTMENT PORTFOLIO Investment Portfolio Composition This section provides a detailed breakdown of the company's investment portfolio composition, including fixed maturities, equity securities, commercial mortgage and other loans, and policy loans, categorized by Closed Block Division, Funds Withheld, and PFI Excluding these, showing a stable allocation with a high proportion of high-quality securities Total Investment Portfolio Composition (as of June 30, 2025) | Asset Type | Total Portfolio (millions) | % of Total | | :---------------------------------------------- | :------------------------- | :--------- | | Public, available-for-sale, at fair value | 238,001 | 54.9 % | | Private, available-for-sale, at fair value | 89,685 | 19.6 % | | Commercial mortgage and other loans, at book value | 62,503 | 14.0 % | | Policy loans, at outstanding balance | 9,946 | 1.7 % | | Subtotal (excluding other entities) | 455,748 | 100.0 %| | Total investments | 460,581 | | Fixed Maturities by Credit Quality (PFI Excluding Closed Block Division and Funds Withheld, as of June 30, 2025) | Credit Quality (NAIC Rating) | Public Fixed Maturities (% of Total) | Private Fixed Maturities (% of Total) | | :--------------------------- | :----------------------------------- | :------------------------------------ | | 1 (Highest Quality) | 77.0 % | 25.9 % | | 2 (High Quality) | 19.6 % | 58.9 % | | Subtotal - High or Highest Quality Securities | 96.6 % | 84.8 % | Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations and Funds Withheld This section presents the investment portfolio composition specifically for Japanese Insurance Operations and separately for the portfolio excluding Japanese Insurance Operations and Funds Withheld, detailing asset classes and their respective proportions, highlighting differences in asset allocation between these segments Investment Portfolio Composition - Japanese Insurance Operations (as of June 30, 2025) | Asset Type | Amount (millions) | % of Total | | :---------------------------------------------- | :---------------- | :--------- | | Public, available-for-sale, at fair value | 104,492 | 65.3 % | | Private, available-for-sale, at fair value | 22,152 | 13.8 % | | Commercial mortgage and other loans, at book value | 15,589 | 9.7 % | | Total | 160,099 | 100.0 %| Investment Portfolio Composition - Excluding Japanese Insurance Operations and Funds Withheld (as of June 30, 2025) | Asset Type | Amount (millions) | % of Total | | :---------------------------------------------- | :---------------- | :--------- | | Public, available-for-sale, at fair value | 110,073 | 47.7 % | | Private, available-for-sale, at fair value | 54,513 | 23.6 % | | Commercial mortgage and other loans, at book value | 39,023 | 16.9 % | | Total | 230,862 | 100.0 %| Investment Results This section provides a comprehensive overview of investment results for the General Account, including investment income, yield, and realized gains (losses) across various asset classes, as well as results from other investments and Funds Withheld, showing an increase in total investment income but significant realized losses year-to-date 2025 General Account Investment Results (Six Months Ended June 30, 2025 vs. 2024) | Metric | 2024 Investment Income (millions) | 2025 Investment Income (millions) | 2024 Realized Gains (Losses) (millions) | 2025 Realized Gains (Losses) (millions) | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | | Fixed maturities | 6,250 | 6,719 | (279) | (38) | | Commercial mortgage and other loans | 1,082 | 1,197 | (95) | (114) | | Gross investment income before investment expenses | 8,048 | 8,573 | (374) | (152) | | Other investments | 488 | 546 | 153 | (1,429) | | Investment results of Funds Withheld | 595 | 705 | 40 | (591) | | Total Investment Income | 8,338 | 9,119 | (175) | (2,174) | General Account Investment Yields (Six Months Ended June 30, 2025 vs. 2024) | Asset Type | 2024 Yield | 2025 Yield | | :---------------------------------------------- | :--------- | :--------- | | Fixed maturities | 4.20 % | 4.40 % | | Commercial mortgage and other loans | 4.27 % | 4.46 % | | Short-term investments and cash equivalents | 6.25 % | 4.45 % | Investment Results - Japanese Insurance Operations This section details the investment results specifically for Japanese Insurance Operations, including investment income, yield, and realized gains (losses) for various asset classes, showing an increase in total investment income but a shift from realized gains to losses year-to-date 2025 Japanese Insurance Operations Investment Results (Six Months Ended June 30, 2025 vs. 2024) | Metric | 2024 Investment Income (millions) | 2025 Investment Income (millions) | 2024 Realized Gains (Losses) (millions) | 2025 Realized Gains (Losses) (millions) | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | | Fixed maturities | 2,120 | 2,202 | 170 | 84 | | Gross investment income before investment expenses | 2,578 | 2,660 | 156 | 70 | | Other investments | 226 | 261 | (557) | (138) | | Total | 2,648 | 2,750 | (401) | (68) | Japanese Insurance Operations Investment Yields (Six Months Ended June 30, 2025 vs. 2024) | Asset Type | 2024 Yield | 2025 Yield | | :---------------------------------------------- | :--------- | :--------- | | Fixed maturities | 3.07 % | 3.17 % | | Commercial mortgage and other loans | 3.80 % | 3.78 % | | Short-term investments and cash equivalents | 7.54 % | 4.14 % | Investment Results - Excluding Funds Withheld and Japanese Insurance Operations This section presents investment results for the portfolio excluding Funds Withheld and Japanese Insurance Operations, showing an increase in total investment income but significant realized losses year-to-date 2025 Investment Results - Excluding Funds Withheld and Japanese Insurance Operations (Six Months Ended June 30, 2025 vs. 2024) | Metric | 2024 Investment Income (millions) | 2025 Investment Income (millions) | 2024 Realized Gains (Losses) (millions) | 2025 Realized Gains (Losses) (millions) | | :---------------------------------------------- | :-------------------------------- | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | | Fixed maturities | 4,130 | 4,517 | (449) | (122) | | Commercial mortgage and other loans | 757 | 901 | (81) | (100) | | Gross investment income before investment expenses | 5,470 | 5,913 | (530) | (222) | | Other investments | 262 | 285 | 710 | (1,291) | | Total | 5,355 | 5,793 | 180 | (1,513) | Investment Yields - Excluding Funds Withheld and Japanese Insurance Operations (Six Months Ended June 30, 2025 vs. 2024) | Asset Type | 2024 Yield | 2025 Yield | | :---------------------------------------------- | :--------- | :--------- | | Fixed maturities | 5.20 % | 5.46 % | | Commercial mortgage and other loans | 4.51 % | 4.74 % | | Short-term investments and cash equivalents | 6.12 % | 4.54 % | ADJUSTED OPERATING INCOME IMPACT FROM ANNUAL ASSUMPTION UPDATES AND OTHER REFINEMENTS Adjusted Operating Income Impact from Annual Assumption Updates and Other Refinements This section quantifies the impact of annual assumption updates and other refinements on adjusted operating income before income taxes across different business segments for the three months ended June 30, 2025, and June 30, 2024, showing a net negative impact in Q2 2025 Adjusted Operating Income (Loss) Before Income Taxes Impact from Updates (Three Months Ended June 30, 2025) | Segment | Impact (millions) | | :----------------------------------------------- | :---------------- | | Retirement Strategies - Institutional Retirement Strategies | (32) | | Retirement Strategies - Individual Retirement Strategies | (81) | | Group Insurance | 11 | | Individual Life | 58 | | International Businesses | (2) | | Corporate and Other | — | | Total | (46) | Adjusted Operating Income (Loss) Before Income Taxes Impact from Updates (Three Months Ended June 30, 2024) | Segment | Impact (millions) | | :----------------------------------------------- | :---------------- | | Retirement Strategies - Institutional Retirement Strategies | 132 | | Retirement Strategies - Individual Retirement Strategies | 8 | | Group Insurance | 25 | | Individual Life | (98) | | International Businesses | (55) | | Corporate and Other | (6) | | Total | 6 | COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES Combined Statements of Operations - AOI to U.S. GAAP Reconciliation of Revenues and Benefits and Expenses This section provides a detailed reconciliation of revenues and benefits and expenses from an Adjusted Operating Income (AOI) basis to U.S. GAAP for various periods, breaking down the reconciling items such as realized investment gains/losses, changes in market risk benefits, and impacts from divested businesses, illustrating the differences between management's operating view and statutory reporting Reconciliation of Total Revenues (Six Months Ended June 30, 2025) | Metric | Adjusted Operating Income basis (millions) | Reconciling Items (millions) | U.S. GAAP (millions) | | :---------------------------------------------- | :--------------------------------------- | :--------------------------- | :------------------- | | Total revenues | 26,918 | 278 | 27,196 | Reconciliation of Total Benefits and Expenses (Six Months Ended June 30, 2025) | Metric | Adjusted Operating Income basis (millions) | Reconciling Items (millions) | U.S. GAAP (millions) | | :---------------------------------------------- | :--------------------------------------- | :--------------------------- | :------------------- | | Total benefits and expenses | 23,733 | 1,803 | 25,536 | Reconciliation of Total Revenues (Three Months Ended June 30, 2025) | Metric | Adjusted Operating Income basis (millions) | Reconciling Items (millions) | U.S. GAAP (millions) | | :---------------------------------------------- | :--------------------------------------- | :--------------------------- | :------------------- | | Total revenues | 13,506 | 220 | 13,726 | KEY DEFINITIONS AND FORMULAS Key Definitions and Formulas This section provides comprehensive definitions for key financial terms and formulas used throughout the report, including Adjusted operating income, After-tax adjusted operating income, Annualized New Business Premiums, Assets Under Administration, Assets Under Management, Book value per share of Common Stock, and various other operational and financial metrics, crucial for understanding the company's financial reporting - Adjusted operating income is a non-GAAP measure used to evaluate segment performance and allocate resources, excluding items like realized investment gains/losses, changes in market risk benefits, and results of divested businesses to highlight underlying profitability trends[113][114][115] - Assets Under Management (AUM) represents the fair market value of assets directly managed by Prudential or its joint ventures, or assets invested in company products managed by third-party sub-advisors, including derivatives used in portfolio management strategies[120] - Adjusted book value per common share is a non-GAAP measure that augments the understanding of financial position by providing a measure of net worth primarily attributable to business operations, separate from the portion affected by capital and currency market conditions[121] RATINGS AND INVESTOR INFORMATION Ratings and Investor Information This section provides financial strength ratings from major rating agencies for Prudential's insurance entities and credit ratings for Prudential Financial, Inc. and its subsidiaries as of July 30, 2025, along with general investor contact information Financial Strength Ratings (as of July 30, 2025) | Entity | A.M. Best | Standard & Poor's | Moody's | Fitch Ratings | | :---------------------------------------------- | :-------- | :---------------- | :------ | :------------ | | The Prudential Insurance Company of America | A+ | AA- | Aa3 | AA | | PRUCO Life Insurance Company | A+ | AA- | Aa3 | AA | | The Prudential Life Insurance Co., Ltd. (Prudential of Japan) | NR | A+ | NR | NR | Credit Ratings for Prudential Financial, Inc. (as of July 30, 2025) | Debt Type | A.M. Best | Standard & Poor's | Moody's | Fitch Ratings | | :------------------------ | :-------- | :---------------- | :------ | :------------ | | Short-Term Borrowings | AMB-1 | A-1 | P-2 | F1 | | Long-Term Senior Debt | a- | A | A3 | A | | Junior Subordinated Long-Term Debt | bbb | BBB+ | Baa1 | BBB | - Prudential Financial, Inc. Common Stock is traded on the New York Stock Exchange under the symbol PRU. More information is available at investor.prudential.com[145]