Core Insights - The commentary emphasizes the importance of logic over sentiment in market analysis, aiming to provide clear-headed insights into business, economics, and investing [1] Group 1 - The platform aims to cut through market noise and focus on what truly matters, promoting a mindset of curiosity and critical thinking [1] Group 2 - There are no disclosed positions in any mentioned companies, indicating an unbiased perspective in the analysis [2] - The article expresses personal opinions and does not represent any business relationships with the companies discussed [2]

Group 1 - The shift from pension plans to 401k retirement plans has made it more difficult for Americans to secure a comfortable retirement [1] - Many individuals are unprepared for retirement due to reliance on self-funded options [1] Group 2 - The article discusses the challenges faced by Americans in achieving retirement security [1] - It highlights the historical context of retirement planning in the U.S. and its implications for future retirees [1]

Group 1 - The shift from pension plans to 401k retirement plans has made it more difficult for Americans to secure a comfortable retirement [1] - Many individuals are unprepared for retirement due to reliance on self-funded options [1] Group 2 - The article discusses the challenges faced by Americans in achieving retirement security [1] - It highlights the historical context of retirement planning in the U.S. and its implications for future retirees [1]

Core Viewpoint - Prudential Financial reported a mixed performance in its Q2 2025 earnings, with adjusted operating income exceeding estimates but total revenues declining year over year, raising questions about future performance trends [2][3]. Financial Performance - Adjusted operating income for Q2 2025 was $3.58 per share, beating the Zacks Consensus Estimate by 11.5% and reflecting a 5.6% year-over-year increase [2]. - Total revenues amounted to $13.5 billion, slightly surpassing estimates by 0.2% but showing a decline of 2.4% year over year, primarily due to lower premiums [3]. - Total benefits and expenses were $11.8 billion, down 3.6% year over year, attributed to lower insurance and annuity benefits [3]. Segment Performance - PGIM's adjusted operating income rose 11.2% year over year to $229 million, although it fell short of the Zacks Consensus Estimate of $240 million [4]. - PGIM's assets under management increased by 8% year over year to $1.441 trillion, driven by market appreciation and strong investment performance [5]. - U.S. Businesses reported adjusted operating income of $955 million, a decline of 6.6% year over year, but exceeded the Zacks Consensus Estimate by 2% [5]. - International Businesses saw an 8.4% year-over-year increase in adjusted operating income to $761 million [6]. - Corporate and Other segment incurred an adjusted operating loss of $280 million, which was narrower than the previous year's loss of $371 million [7]. Capital Deployment - Prudential returned $735 million to shareholders through share repurchases of $250 million and dividends of $485 million in Q2 [8]. Financial Position - As of the end of Q2 2025, cash and cash equivalents stood at $16.1 billion, a decrease of 13.2% from the end of 2024, while total debt increased by 4% to $20.9 billion [9]. - Assets under management and administration rose 6.5% year over year to $1.8 trillion [9]. - Adjusted book value per common share increased by 10.9% year over year to $85.98, with an operating return on average equity of 14.9%, up 140 basis points year over year [10]. Market Outlook - Recent estimates for Prudential have trended downward, indicating a potential shift in market sentiment [11][13]. - Prudential holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [13].

Prudential’s new business profit grew in the first half of the year amid buoyant demand in key markets from Hong Kong to Indonesia https://t.co/5nChw46pg8 ...

Summary of Key Points from the Earnings Call Industry Overview - The earnings call focuses on the Property & Casualty (P&C) and Life Insurance sectors in North America, highlighting slow growth and a competitive environment as significant themes emerging from the 2Q25 earnings reports [1][2]. Key Insights on Property & Casualty (P&C) Insurance 1. **P&C Carriers Performance**: - P&C carriers did not require growth to achieve good results, with companies like Travelers and Hartford reporting strong underwriting profitability despite missing premium growth expectations. Travelers' combined ratio was 90.3% and Hartford's was 88.6%, attributed to improvements in personal and commercial lines [2]. 2. **P&C Brokers Performance**: - In contrast, P&C brokers needed growth for positive results, particularly in the SMID and specialty markets. The slowdown in commercial property pricing and macroeconomic uncertainties led to expectations of lower growth moving forward. Companies like AON performed well due to better-than-expected growth [3]. 3. **Personal Auto Insurance**: - The personal auto market showed less intense competition than anticipated, with Travelers achieving an impressive combined ratio of 85.3%. However, growth in personal auto remains lower than expected due to uncertainties around tariffs and previous management actions focused on profitability [7]. 4. **Continued Growth Pressure**: - The P&C sector is expected to face ongoing growth pressures, particularly in commercial property and workers' compensation lines, with pricing likely to remain soft [15]. Key Insights on Life Insurance 1. **Mixed Flows in Life Insurance**: - Net flows for retirement, annuities, and investment management were mixed, with some companies like Voya and Prudential seeing solid inflows, while others faced outflows [10]. 2. **Group Life/Disability Business Challenges**: - The group life segment faced headwinds from elevated claims and lower recoveries, leading to inconsistent earnings performance across companies [11]. 3. **Divergence in Life Mortality**: - There was a divergence in mortality results among life insurers, with some experiencing headwinds while others saw supportive mortality. This inconsistency is viewed as temporary rather than indicative of a broader trend [14]. 4. **Spread Compression**: - Spread compression in life insurance continues, but companies expect manageable impacts on earnings, supported by higher account values [17]. 5. **Variable Investment Income (VII)**: - VII remained under pressure for most companies, with expectations for improvement in the second half of 2025 [18]. Notable Turnaround Stories - Companies like Lincoln, Voya, and Everest are noted for their turnaround strategies, with Lincoln showing strong earnings supported by its Group Protection segment. Voya's turnaround is seen as more straightforward, focusing on its medical stop-loss product, while Everest is still working through underwriting issues [19][20]. Conclusion - The earnings call reveals a complex landscape for both P&C and Life Insurance sectors, with varying performance metrics and challenges. The focus is shifting towards earnings power and the ability to navigate competitive pressures and macroeconomic uncertainties. Companies with strong underwriting and innovative strategies are positioned to outperform their peers in the evolving market [2][3][10][19].

Financial Performance - Net income attributable to Prudential Financial, Inc. for Q2 2025 was $533 million, a decrease of $665 million compared to Q2 2024[493]. - For the first six months of 2025, net income attributable to Prudential Financial, Inc. was $1,240 million, down $1,096 million from the same period in 2024[494]. - Adjusted operating income before income taxes for U.S. Businesses in Q2 2025 was $955 million, a decrease from $1,023 million in Q2 2024[503]. - The Retirement Strategies segment reported an adjusted operating income of $722 million in Q2 2025, down from $989 million in Q2 2024[503]. - International Businesses achieved an adjusted operating income of $761 million in Q2 2025, compared to $702 million in Q2 2024[503]. - Realized investment losses for Q2 2025 amounted to $516 million, compared to gains of $175 million in Q2 2024[503]. - Total revenues for the company in the first half of 2025 were $9.271 billion, down from $18.054 billion in the same period of 2024, representing a 48.7% decrease[575]. Asset Management - Prudential Financial has approximately $1.580 trillion in assets under management as of June 30, 2025[466]. - Total assets under management (AUM) as of June 30, 2025, reached $1,440.7 billion, a $113 billion (8.5%) increase year-over-year[568]. - Institutional third-party AUM increased to $647.6 billion as of June 30, 2025, up $46.5 billion (7.7%) from $601.1 billion at the end of 2024[561]. - PGIM's revenues for Q2 2025 were $1,043 million, an increase of $80 million (8.3%) compared to Q2 2024's $963 million[547]. - PGIM's asset management fees for Q2 2025 totaled $825 million, reflecting a $48 million (6.2%) increase from $777 million in Q2 2024[552]. Insurance Operations - Long-duration insurance products with fixed and guaranteed terms in U.S. operations total $204 billion, while contracts with adjustable crediting rates subject to guaranteed minimums amount to $36 billion[481]. - The Japanese operations have insurance liabilities and policyholder account balances totaling $158 billion, including $110 billion in insurance products with fixed and guaranteed terms[489]. - The Group Insurance segment saw an increase in results for both Q2 and the first six months of 2025, primarily due to higher underwriting results[509]. - The benefits ratio for Group Insurance improved to 80.2% for the three months ended June 30, 2025, compared to 79.4% in the same period of 2024[621]. - The Group disability benefits ratio was 74.7% for the three months ended June 30, 2025, compared to 64.1% in 2024, indicating a decline in underwriting results[621]. Market Conditions and Risks - Changes in interest rates are a key driver of Prudential's liquidity and capital positions, impacting net investment spreads and overall financial performance[474]. - Prudential anticipates that market conditions, including tariffs and inflation, may adversely affect liquidity and capital positions[473]. - The company employs a proactive asset/liability management program to mitigate interest rate risks across its operations[477]. - The company’s fixed annuity products are exposed to investment risks, which are managed through investment strategies and product design features[606]. - The Asset Liability Management strategy employs a combination of fixed income instruments and derivatives to manage expected liabilities associated with annuity guarantees[611]. Sales and Premiums - Annualized new business premiums are analyzed to measure current sales performance, including 10% of first-year premiums from single-payment products, but do not correspond to U.S. GAAP revenues[517]. - Total annualized new business premiums for the three months ended June 30, 2025, increased by $31 million to $77 million, driven by higher sales in the National market segment[633]. - Annualized new business premiums for Q2 2025 were $541 million on an actual exchange rate basis, up from $519 million in Q2 2024, representing a 4.2% increase[657]. - Life Consultant sales increased by $29 million in Q2 2025, primarily due to higher investment contract product sales[661]. - Bank channel sales decreased by $17 million in Q2 2025, mainly due to lower life and investment contract product sales[661]. Currency and Foreign Operations - As of June 30, 2025, total foreign currency hedges amounted to $7.9 billion, up from $6.4 billion as of December 31, 2024, indicating an increase in hedging against currency volatility[524]. - The net cumulative unrealized investment gains related to foreign exchange remeasurement for USD- and AUD-denominated assets totaled $1.0 billion as of June 30, 2025, with approximately 1% expected to be recognized in 2025[535]. - The company’s Japanese operations have $86.0 billion in USD-denominated assets supporting USD-denominated liabilities as of June 30, 2025[524]. - The company entered into a reinsurance agreement in December 2024 to reinsure approximately $7 billion of reserves for certain USD-denominated Japanese whole life policies, effective March 1, 2025[648]. Operational Efficiency and Strategy - The company is focused on becoming leaner and more agile by simplifying management structures and investing in technology[471]. - Prudential Financial expects to benefit from a mutually-reinforcing business system that provides competitive advantages and earnings diversification[470]. - The company performed an annual review of assumptions impacting future premiums and benefits, which may lead to adjustments in financial results[497]. - The company regularly examines product profitability and adjusts offerings, which has generally resulted in higher sales performance[658].

Core Insights - Prudential (PRU) reported revenue of $13.51 billion for the quarter ended June 2025, reflecting a year-over-year decline of 2.4% while EPS increased to $3.58 from $3.39 a year ago, indicating a positive surprise of +11.53% against the consensus estimate of $3.21 [1] Financial Performance - The reported revenue of $13.51 billion exceeded the Zacks Consensus Estimate of $13.48 billion by +0.2% [1] - Total Revenues from U.S. Businesses were $8.01 billion, surpassing the average estimate of $7.93 billion, but showing a year-over-year decline of -4.7% [4] - Total Revenues from International Businesses were $4.4 billion, slightly below the average estimate of $4.55 billion, with a year-over-year decline of -2.5% [4] - Total Revenues from Corporate and Other were $56 million, exceeding the estimate of $52.8 million, but reflecting a significant year-over-year decline of -255.6% [4] Assets Under Management - Assets Under Management and Administration for PGIM totaled $1,440.7 billion, surpassing the average estimate of $1,401.82 billion [4] - Retail customer assets were reported at $256.7 billion, exceeding the estimate of $246.55 billion [4] - Institutional customer assets reached $647.6 billion, above the average estimate of $627.09 billion [4] Segment Performance - Adjusted Operating Income from net investment income was $4.6 billion, slightly above the average estimate of $4.53 billion [4] - Premiums reported were $6.43 billion, marginally exceeding the estimate of $6.41 billion [4] - Total Revenues from U.S. Businesses in Retirement Strategies for Individual Retirement Strategies were $1.32 billion, below the average estimate of $1.43 billion, but showing a year-over-year increase of +6% [4] - Total Revenues from U.S. Businesses in Retirement Strategies for Institutional Retirement Strategies were $3.51 billion, slightly below the average estimate of $3.56 billion, reflecting a year-over-year decline of -13.2% [4] Stock Performance - Prudential's shares have returned -5.1% over the past month, contrasting with the Zacks S&P 500 composite's +3.4% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Core Viewpoint - Prudential (PRU) reported quarterly earnings of $3.58 per share, exceeding the Zacks Consensus Estimate of $3.21 per share, and showing an increase from $3.39 per share a year ago, representing an earnings surprise of +11.53% [1][2] Financial Performance - The company posted revenues of $13.51 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 0.20%, but down from $13.84 billion year-over-year [2] - Over the last four quarters, Prudential has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Prudential shares have declined approximately 12.7% since the beginning of the year, contrasting with the S&P 500's gain of 8.3% [3] - The current Zacks Rank for Prudential is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $3.59 on revenues of $14.14 billion, and for the current fiscal year, it is $13.47 on revenues of $55.72 billion [7] - The trend of estimate revisions for Prudential was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Insurance - Multi line industry, to which Prudential belongs, is currently in the bottom 33% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Prudential's stock performance [5]

[HIGHLIGHTS](index=3&type=section&id=HIGHLIGHTS) [Financial Metrics Summary](index=3&type=section&id=Financial%20Metrics%20Summary) 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](index=4&type=section&id=Financial%20Highlights) 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](index=5&type=section&id=Other%20Financial%20Highlights) 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](index=6&type=section&id=Operations%20Highlights) 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](index=7&type=section&id=Combined%20Statements%20of%20Operations) 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](index=8&type=section&id=Consolidated%20Balance%20Sheets) 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](index=9&type=section&id=Combining%20Balance%20Sheets) 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](index=10&type=section&id=Short-Term%20and%20Long-Term%20Debt%20-%20Unaffiliated) 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](index=11&type=section&id=PGIM) [Statements of Operations - PGIM](index=11&type=section&id=Statements%20of%20Operations%20-%20PGIM) 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](index=12&type=section&id=PGIM%20-%20Supplementary%20Revenue%20and%20Assets%20Under%20Management%20Information) 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](index=13&type=section&id=PGIM%20-%20Supplementary%20Assets%20Under%20Management%20Information) 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](index=14&type=section&id=U.S.BUSINESSES) [Combined Statements of Operations - U.S. Businesses](index=14&type=section&id=COMBINED%20STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES) 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](index=15&type=section&id=COMBINED%20STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES) 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](index=16&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INSTITUTIONAL%20RETIREMENT%20STRATEGIES) 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](index=17&type=section&id=U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INSTITUTIONAL%20RETIREMENT%20STRATEGIES%20SALES%20RESULTS%20AND%20ACCOUNT%20VALUES) 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](index=45&type=chunk) [Statements of Operations - Individual Retirement Strategies](index=18&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INDIVIDUAL%20RETIREMENT%20STRATEGIES) 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](index=19&type=section&id=U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INDIVIDUAL%20RETIREMENT%20STRATEGIES%20SALES%20RESULTS%20AND%20ACCOUNT%20VALUES) 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](index=20&type=section&id=U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INDIVIDUAL%20RETIREMENT%20STRATEGIES%20ACCOUNT%20VALUE%20ACTIVITY) 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](index=21&type=section&id=U.S.%20BUSINESSES%20-%20RETIREMENT%20STRATEGIES%20-%20INDIVIDUAL%20RETIREMENT%20STRATEGIES%20MARKET%20RISK%20BENEFIT%20FEATURES) 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](index=22&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20GROUP%20INSURANCE) 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](index=22&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20GROUP%20INSURANCE) 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](index=23&type=section&id=U.S.%20BUSINESSES%20-%20GROUP%20INSURANCE%20SUPPLEMENTARY%20INFORMATION) 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](index=24&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20INDIVIDUAL%20LIFE) 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](index=24&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20U.S.%20BUSINESSES%20-%20INDIVIDUAL%20LIFE) 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](index=25&type=section&id=U.S.%20BUSINESSES%20-%20INDIVIDUAL%20LIFE%20SUPPLEMENTARY%20INFORMATION) 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](index=26&type=section&id=INTERNATIONAL%20BUSINESSES) [Statements of Operations - International Businesses](index=26&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20INTERNATIONAL%20BUSINESSES) 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](index=27&type=section&id=INTERNATIONAL%20BUSINESSES%20-%20SALES%20RESULTS%20AND%20SUPPLEMENTARY%20INFORMATION) 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](index=29&type=section&id=CORPORATE%20AND%20OTHER) [Statements of Operations - Corporate and Other](index=29&type=section&id=STATEMENTS%20OF%20OPERATIONS%20-%20CORPORATE%20AND%20OTHER) 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](index=30&type=section&id=INVESTMENT%20PORTFOLIO) [Investment Portfolio Composition](index=30&type=section&id=Investment%20Portfolio%20Composition) 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](index=31&type=section&id=Investment%20Portfolio%20Composition%20-%20Japanese%20Insurance%20Operations%20and%20Excluding%20Japanese%20Insurance%20Operations%20and%20Funds%20Withheld) 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](index=32&type=section&id=Investment%20Results) 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](index=33&type=section&id=Investment%20Results%20-%20Japanese%20Insurance%20Operations) 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](index=34&type=section&id=INVESTMENT%20RESULTS%20-%20EXCLUDING%20FUNDS%20WITHHELD%20AND%20JAPANESE%20INSURANCE%20OPERATIONS) 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](index=35&type=section&id=ADJUSTED%20OPERATING%20INCOME%20IMPACT%20FROM%20ANNUAL%20ASSUMPTION%20UPDATES%20AND%20OTHER%20REFINEMENTS) [Adjusted Operating Income Impact from Annual Assumption Updates and Other Refinements](index=35&type=section&id=ADJUSTED%20OPERATING%20INCOME%20IMPACT%20FROM%20ANNUAL%20ASSUMPTION%20UPDATES%20AND%20OTHER%20REFINEMENTS) 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](index=36&type=section&id=COMBINED%20STATEMENTS%20OF%20OPERATIONS%20-%20AOI%20TO%20U.S.%20GAAP%20RECONCILIATION%20OF%20REVENUES%20AND%20BENEFITS%20AND%20EXPENSES) [Combined Statements of Operations - AOI to U.S. GAAP Reconciliation of Revenues and Benefits and Expenses](index=36&type=section&id=COMBINED%20STATEMENTS%20OF%20OPERATIONS%20-%20AOI%20TO%20U.S.%20GAAP%20RECONCILIATION%20OF%20REVENUES%20AND%20BENEFITS%20AND%20EXPENSES) 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](index=40&type=section&id=KEY%20DEFINITIONS%20AND%20FORMULAS) [Key Definitions and Formulas](index=40&type=section&id=KEY%20DEFINITIONS%20AND%20FORMULAS) 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](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - 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](index=120&type=chunk) - 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](index=121&type=chunk) [RATINGS AND INVESTOR INFORMATION](index=43&type=section&id=RATINGS%20AND%20INVESTOR%20INFORMATION) [Ratings and Investor Information](index=43&type=section&id=RATINGS%20AND%20INVESTOR%20INFORMATION) 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](index=145&type=chunk)