EX-99.12exhibit991-3q24qfsrestatem.htmEX-99.1 Document
Table of Contents
Exhibit 99.1
Prudential Financial, Inc. (PRU)
Adjusted as of January 15, 2025
Quarterly Financial Supplement
Third Quarter 2024
Reference is made to Prudential Financial, Inc.'s (PFI) filings with the Securities and Exchange Commission for general information and consolidated financial information. All financial information in this document is unaudited.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
TABLE OF CONTENTS
Page
HIGHLIGHTS
Financial Metrics Summary
1
Financial Highlights
2
Other Financial Highlights
3
Operations Highlights
4
Combined Statements of Operations
5
Consolidated Balance Sheets
6
Combining Balance Sheets
7
Short-Term and Long-Term Debt - Unaffiliated
8
PGIM
Statements of Operations
9
Supplementary Revenue and Assets Under Management Information
10
Supplementary Assets Under Management Information
11
U.S.BUSINESSES
Combined Statements of Operations
12
Combined Statements of Operations - Retirement Strategies
13
Statements of Operations - Institutional Retirement Strategies
14
Institutional Retirement Strategies Sales Results and Account Values
15
Statements of Operations - Individual Retirement Strategies
16
Individual Retirement Strategies Sales Results and Account Values
17
Individual Retirement Strategies Account Value Activity
18
Individual Retirement Strategies Market Risk Benefit Features
19
Statements of Operations - Group Insurance
20
Group Insurance Supplementary Information
21
Statements of Operations - Individual Life
22
Individual Life Supplementary Information
23
INTERNATIONAL BUSINESSES
Combined Statements of Operations
24
Statements of Operations - Life Planner
25
Statements of Operations - Gibraltar Life and Other
26
Sales Results and Supplementary Information
27
CORPORATE AND OTHER
Statements of Operations
29
INVESTMENT PORTFOLIO
Investment Portfolio Composition
30
Investment Portfolio Composition - Japanese Insurance Operations and Excluding Japanese Insurance Operations
31
Investment Results
32
Investment Results - Japanese Insurance Operations
33
Investment Results - Excluding Japanese Insurance Operations
34
COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES
35
KEY DEFINITIONS AND FORMULAS
39
RATINGS AND INVESTOR INFORMATION
42
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
During the fourth quarter of 2024, the Company identified an immaterial error in the application of adjusted operating income, its segment measure of performance, which resulted in an overstatement thereof for indexed variable and fixed annuity products within the Retirement Strategies segment, in the first three quarters of 2024 and each of the four quarters of 2023. As a result, the Company has decided to voluntarily revise its historical adjusted operating income for the relevant periods, resulting in a decrease in after-tax adjusted operating income of $115 million or $0.31 per Common share for the nine months ended September 30, 2024, and $24 million or $0.07 per Common share for the nine months ended September 30, 2023, compared to previously reported amounts. These revisions had no impact to GAAP net income, book value, statutory results, or the historical or expected future cash flows of these products.
The Company furnishes herewith, as Exhibit 99.1, a revised Quarterly Financial Supplement (unaudited) for the quarter ended September 30, 2024 to provide additional information regarding these revisions. The updates made for these revisions are highlighted in yellow throughout. Except as expressly described above, there have been no other changes to the previously issued supplement for the quarter ended September 30, 2024. In addition, except as specifically described above, the revised supplement does not reflect events occurring after the original filing thereof, nor does it modify or update disclosures therein in any way other than as required to reflect the revisions described above. The unaudited supplemental financial information included in Exhibit 99.1 has been prepared by, and is the responsibility of, the Company's management.
This information should be read together with the consolidated financial statements and the related notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's Quarterly Report on Form 10-Q, filed on October 31, 2024, and the Company's other filings with the SEC.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
FINANCIAL METRICS SUMMARY
(in millions, except per share and return on equity data)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Earnings
Adjusted operating income (loss) before income taxes:
PGIM
211
172
169
206
241
541
616
14%
U.S. Businesses
1,069
964
805
1,023
1,040
2,773
2,868
3%
International Businesses
811
748
896
702
766
2,435
2,364
-3%
Corporate and Other
(438)
(653)
(435)
(371)
(487)
(1,381)
(1,293)
6%
Total adjusted operating income before income taxes
1,653
1,231
1,435
1,560
1,560
4,368
4,555
4%
Income taxes, applicable to adjusted operating income
335
305
320
363
352
914
1,035
13%
After-tax adjusted operating income
1,318
926
1,115
1,197
1,208
3,454
3,520
2%
Income (loss) attributable to Prudential Financial, Inc.
(802)
1,317
1,138
1,198
448
1,171
2,784
138%
Return on Equity
Operating Return on Average Equity (based on adjusted operating income) (1)
15.1
%
10.7
%
12.7
%
13.5
%
13.6
%
13.1
%
13.3
%
Return on Average Equity (based on net income (loss))
-11.8
%
19.6
%
16.5
%
17.4
%
6.1
%
5.4
%
13.1
%
Distributions to Shareholders
Dividends paid
461
458
476
475
471
1,392
1,422
2%
Share repurchases
250
250
250
250
250
750
750
—%
Total capital returned
711
708
726
725
721
2,142
2,172
1%
Per Share Data
Net income (loss) - diluted (2)
(2.23)
3.61
3.12
3.28
1.24
3.15
7.64
143%
Adjusted Operating Income - diluted
3.58
2.54
3.05
3.28
3.33
9.33
9.67
4%
Shareholder dividends
1.25
1.25
1.30
1.30
1.30
3.75
3.90
4%
GAAP book value - diluted
70.82
76.77
75.00
77.51
84.47
Adjusted book value - diluted (3)
94.19
96.64
97.03
98.42
98.71
Shares Outstanding
Weighted average number of common shares - basic
362.6
360.3
359.0
358.8
356.9
364.6
358.3
-2%
Weighted average number of common shares - diluted
363.8
361.0
360.5
360.5
358.7
365.8
359.9
-2%
End of period common shares - basic
361.3
359.2
359.1
357.7
355.9
End of period common shares - diluted
364.5
362.4
362.8
361.4
360.1
__________
(1) Operating Return on Average Equity (based on adjusted operating income) is a non-GAAP measure and represents adjusted operating income after-tax, annualized for interim periods, divided by average Prudential Financial, Inc. equity excluding accumulated other comprehensive income, adjusted to remove amounts included for foreign currency exchange rate remeasurement and the cumulative change in fair value of funds withheld embedded derivatives as described on page 3.
(2) For the three months ended September 30, 2023 weighted average shares for basic earnings per share is used for calculating diluted earnings per share because dilutive shares and dilutive earnings per share are not applicable when a net loss is reported. As a result of the net loss attributable to Prudential Financial available to holders of Common Stock for the three months ended September 30, 2023 all potential stock options and compensation programs were considered antidilutive.
(3) Adjusted book value is calculated as total equity (GAAP book value) excluding accumulated other comprehensive income (loss), the cumulative effect of foreign currency exchange rate remeasurements and currency translation adjustments corresponding to realized investment gains and losses, and the cumulative change in fair value of funds withheld and modified coinsurance embedded derivatives as described on page 3.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
FINANCIAL HIGHLIGHTS
(in millions, except per share data)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Earnings per share of Common Stock (diluted):
After-tax adjusted operating income
3.58
2.54
3.05
3.28
3.33
9.33
9.67
Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments
(6.79)
0.94
(0.17)
0.49
(2.05)
(7.79)
(1.74)
Change in value of market risk benefits, net of related hedging gains (losses)
(0.69)
0.60
0.34
(0.82)
(0.41)
(0.44)
(0.89)
Market experience updates
0.39
(0.22)
(0.09)
0.13
(0.35)
0.51
(0.31)
Divested and Run-off Businesses:
Closed Block division
0.01
(0.14)
(0.01)
(0.17)
0.01
(0.14)
(0.17)
Other Divested and Run-off Businesses
(0.31)
0.12
(0.10)
0.11
0.13
(0.06)
0.14
Difference in earnings allocated to participating unvested share-based payment awards
0.03
(0.01)
—
—
0.02
0.06
0.02
Other adjustments (1)
(0.02)
(0.03)
(0.02)
(0.01)
(0.01)
(0.07)
(0.04)
Total reconciling items, before income taxes
(7.38)
1.26
(0.05)
(0.27)
(2.66)
(7.93)
(2.99)
Income taxes, not applicable to adjusted operating income
(1.57)
0.19
(0.12)
(0.27)
(0.57)
(1.75)
(0.96)
Total reconciling items, after income taxes
(5.81)
1.07
0.07
—
(2.09)
(6.18)
(2.03)
Net income (loss) attributable to Prudential Financial, Inc.
(2.23)
3.61
3.12
3.28
1.24
3.15
7.64
Weighted average number of outstanding common shares - basic
362.6
360.3
359.0
358.8
356.9
364.6
358.3
Weighted average number of outstanding common shares - diluted
363.8
361.0
360.5
360.5
358.7
365.8
359.9
For earnings per share of Common Stock calculation:
Net income (loss) attributable to Prudential Financial, Inc.
(802)
1,317
1,138
1,198
448
1,171
2,784
Less: Earnings allocated to participating unvested share-based payment awards
5
14
15
14
5
17
33
Net income (loss) attributable to Prudential Financial, Inc. for earnings per share of Common Stock calculation
(807)
1,303
1,123
1,184
443
1,154
2,751
After-tax adjusted operating income
1,318
926
1,115
1,197
1,208
3,454
3,520
Less: Earnings allocated to participating unvested share-based payment awards
15
10
15
13
13
40
41
After-tax adjusted operating income for earnings per share of Common Stock calculation
1,303
916
1,100
1,184
1,195
3,414
3,479
___________
(1) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
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Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
OTHER FINANCIAL HIGHLIGHTS
(in millions, except per share data)
2023
2024
3Q
4Q
1Q
2Q
3Q
Capitalization Data (1):
Senior debt:
Short-term debt
615
618
585
588
950
Long-term debt
10,787
10,788
10,786
10,771
10,487
Junior subordinated long-term debt
8,090
8,094
8,582
8,582
8,589
Prudential Financial, Inc. Equity:
GAAP book value (total PFI equity) at end of period
25,814
27,820
27,209
28,013
30,416
Less: Accumulated other comprehensive income (AOCI)
(7,831)
(6,504)
(7,661)
(7,444)
(4,844)
GAAP book value excluding AOCI (2)
33,645
34,324
34,870
35,457
35,260
Less: Cumulative change in fair value of funds withheld embedded derivatives (3)
—
(181)
14
178
(238)
Less: Cumulative effect of foreign exchange rate remeasurement and currency translation adjustments corresponding to realized gains (losses) (4)
(687)
(518)
(345)
(291)
(49)
Adjusted book value
34,332
35,023
35,201
35,570
35,547
Book Value per Share of Common Stock:
GAAP book value per common share - diluted
70.82
76.77
75.00
77.51
84.47
GAAP book value excluding AOCI per share - diluted (2)
92.30
94.71
96.11
98.11
97.92
Adjusted book value per common share - diluted
94.19
96.64
97.03
98.42
98.71
End of period number of common shares - diluted
364.5
362.4
362.8
361.4
360.1
Common Stock Price Range (based on closing price):
High
99.14
105.21
117.40
121.31
127.32
Low
88.66
88.61
101.84
107.35
105.53
Close
94.89
103.71
117.40
117.19
121.10
Common Stock market capitalization (1)
34,284
37,253
42,158
41,919
43,099
__________
(1) As of end of period.
(2) Foreign currency translation adjustments and the cumulative impact of foreign currency exchange rate remeasurement, except for those items remeasured through net income (loss), are a component of accumulated other comprehensive income.
(3) Amount represents the cumulative change in fair value of funds withheld embedded derivatives related to unrealized gains and losses on available-for-sale securities and certain derivatives associated with customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
(4) Includes the cumulative impact of net gains and losses resulting from foreign currency exchange rate remeasurement and associated realized investment gains and losses included in net income (loss) and currency translation adjustments corresponding to realized investment gains and losses.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
OPERATIONS HIGHLIGHTS
2023
2024
3Q
4Q
1Q
2Q
3Q
Assets Under Management and Administration (in billions) (1)(2):
PGIM:
Institutional customers
547.6
582.6
616.6
604.4
630.4
Retail customers
312.5
330.3
345.4
349.9
361.9
General account
358.5
385.2
379.4
373.8
407.6
Total PGIM
1,218.6
1,298.1
1,341.4
1,328.1
1,399.9
U.S. Businesses
116.5
123.9
126.3
124.6
128.6
International Businesses
16.4
17.9
18.2
17.9
18.1
Corporate and Other
9.8
9.7
10.4
11.4
11.3
Total assets under management
1,361.3
1,449.6
1,496.3
1,482.0
1,557.9
Assets under administration
164.7
181.5
182.6
183.9
189.8
Total assets under management and administration
1,526.0
1,631.1
1,678.9
1,665.9
1,747.7
Distribution Representatives (1):
Prudential Advisors
2,681
2,660
2,752
2,821
2,877
International Life Planners
5,917
5,856
5,855
5,836
5,900
Gibraltar Life Consultants
6,736
6,808
6,792
6,724
6,861
__________
(1) As of end of period.
(2) At fair market value.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
3,659
6,364
15,006
7,277
12,527
18,860
34,810
85%
Policy charges and fee income
1,060
1,059
1,056
1,061
1,098
3,165
3,215
2%
Net investment income
3,892
3,918
4,120
4,218
4,436
11,375
12,774
12%
Asset management fees, commissions and other income
1,437
1,532
1,524
1,293
1,428
4,217
4,245
1%
Total revenues
10,048
12,873
21,706
13,849
19,489
37,617
55,044
46%
Benefits and expenses (1):
Insurance and annuity benefits
4,348
7,130
15,774
8,137
13,321
20,867
37,232
78%
Change in estimates of liability for future policy benefits
49
20
15
(29)
66
230
52
-77%
Interest credited to policyholders' account balances
827
867
902
952
1,038
2,379
2,892
22%
Interest expense
419
439
529
480
485
1,315
1,494
14%
Deferral of acquisition costs
(576)
(637)
(647)
(614)
(636)
(1,691)
(1,897)
-12%
Amortization of acquisition costs
351
356
362
363
356
1,061
1,081
2%
General and administrative expenses
2,977
3,467
3,336
3,000
3,299
9,088
9,635
6%
Total benefits and expenses
8,395
11,642
20,271
12,289
17,929
33,249
50,489
52%
Adjusted operating income before income taxes
1,653
1,231
1,435
1,560
1,560
4,368
4,555
4%
Income taxes, applicable to adjusted operating income
335
305
320
363
352
914
1,035
13%
After-tax adjusted operating income
1,318
926
1,115
1,197
1,208
3,454
3,520
2%
Reconciling items:
Realized investment gains (losses), net, and related charges and adjustments
(2,472)
338
(63)
175
(737)
(2,848)
(625)
78%
Change in value of market risk benefits, net of related hedging gains (losses)
(251)
216
123
(297)
(146)
(160)
(320)
-100%
Market experience updates
143
(78)
(32)
47
(127)
188
(112)
-160%
Divested and Run-off Businesses:
Closed Block division
2
(50)
(3)
(60)
2
(50)
(61)
-22%
Other Divested and Run-off Businesses
(113)
43
(35)
38
47
(22)
50
327%
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
(11)
(26)
(27)
(43)
(43)
(42)
(113)
-169%
Other adjustments (2)
(9)
(12)
(8)
(5)
(3)
(24)
(16)
33%
Total reconciling items, before income taxes
(2,711)
431
(45)
(145)
(1,007)
(2,958)
(1,197)
60%
Income taxes, not applicable to adjusted operating income
(586)
54
(31)
(99)
(212)
(660)
(342)
48%
Total reconciling items, after income taxes
(2,125)
377
(14)
(46)
(795)
(2,298)
(855)
63%
Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities
(1,058)
1,662
1,390
1,415
553
1,410
3,358
138%
Income tax expense (benefit)
(251)
359
289
264
140
254
693
173%
Income (loss) before equity in earnings of joint ventures and other operating entities
(807)
1,303
1,101
1,151
413
1,156
2,665
131%
Equity in earnings of joint ventures and other operating entities, net of taxes and earnings attributable to noncontrolling interests
5
14
37
47
35
15
119
693%
Income (loss) attributable to Prudential Financial, Inc.
(802)
1,317
1,138
1,198
448
1,171
2,784
138%
Earnings attributable to noncontrolling interests
11
9
13
(27)
3
11
(11)
-200%
Net income (loss)
(791)
1,326
1,151
1,171
451
1,182
2,773
135%
Less: Income (loss) attributable to noncontrolling interests
11
9
13
(27)
3
11
(11)
-200%
Net income (loss) attributable to Prudential Financial, Inc.
(802)
1,317
1,138
1,198
448
1,171
2,784
138%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on assets supporting experience-rated contractholder liabilities, change in value of market risk benefits, net of related hedging gains (losses), revenues of Divested and Run-off Businesses, and include revenues representing equity in earnings of joint ventures and other operating entities other than those classified as Divested and Run-off Businesses. Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes, benefits and expenses of Divested and Run-off Businesses, and certain components of acquisitions, including the Assurance IQ acquisition which are recognized as compensation expense over the requisite service periods and include charges for income attributable to noncontrolling interests. Revenues and Benefits and expenses exclude market experience updates. See pages 35-38 for reconciliation.
(2) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
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Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
CONSOLIDATED BALANCE SHEETS
(in millions)
09/30/2023
12/31/2023
03/31/2024
06/30/2024
09/30/2024
Assets:
Investments:
Fixed maturities, available-for-sale, at fair value
295,318
316,321
318,510
311,092
340,730
Fixed maturities, held-to-maturity, at amortized cost, net of allowance for credit losses
—
—
—
—
—
Fixed maturities, trading, at fair value
7,129
9,790
10,288
10,250
12,065
Assets supporting experience-rated contractholder liabilities, at fair value
2,943
3,168
3,359
3,351
3,654
Equity securities, at fair value
7,039
8,242
7,224
7,098
6,771
Commercial mortgage and other loans
57,908
59,305
58,781
60,243
62,573
Policy loans
9,959
10,047
9,907
9,739
9,947
Other invested assets
21,868
22,855
24,227
24,634
25,367
Short-term investments
5,072
5,005
5,953
6,241
8,010
Total investments
407,236
434,733
438,249
432,648
469,117
Cash and cash equivalents
16,892
19,419
18,735
17,111
20,198
Accrued investment income
3,191
3,287
3,361
3,434
3,566
Deferred policy acquisition costs
20,394
20,856
20,613
20,564
21,182
Value of business acquired
514
530
484
446
488
Market risk benefit assets
2,200
1,981
2,225
2,233
2,134
Reinsurance recoverables and deposit receivables
25,941
27,311
27,929
27,746
29,633
Income tax assets
1,108
939
958
856
479
Other assets
13,136
13,179
13,205
13,299
12,947
Separate account assets
190,642
198,888
200,064
196,859
200,550
Total assets
681,254
721,123
725,823
715,196
760,294
Liabilities:
Future policy benefits
253,551
273,281
272,790
262,330
285,474
Policyholders' account balances
140,788
147,018
151,810
154,991
164,088
Market risk benefit liabilities
4,660
5,467
4,624
4,592
5,178
Reinsurance and funds withheld payables
14,199
15,729
15,746
15,604
17,443
Securities sold under agreements to repurchase
5,547
6,056
6,563
6,929
7,455
Cash collateral for loaned securities
6,067
6,477
6,978
7,050
8,471
Income tax liabilities
—
—
—
—
—
Short-term debt
615
618
585
588
950
Long-term debt
18,877
18,882
19,368
19,353
19,076
Other liabilities
18,155
17,546
16,749
15,621
17,578
Notes issued by consolidated variable interest entities
791
1,374
1,132
1,174
1,456
Separate account liabilities
190,642
198,888
200,064
196,859
200,550
Total liabilities
653,892
691,336
696,409
685,091
727,719
Mezzanine Equity:
Redeemable noncontrolling interests
414
524
544
545
560
Total mezzanine equity
414
524
544
545
560
Equity:
Accumulated other comprehensive loss
(7,831)
(6,504)
(7,661)
(7,444)
(4,844)
Other equity (1)
33,645
34,324
34,870
35,457
35,260
Total Prudential Financial, Inc. equity
25,814
27,820
27,209
28,013
30,416
Noncontrolling interests
1,133
1,443
1,661
1,547
1,599
Total equity
26,947
29,263
28,870
29,560
32,015
Total liabilities, mezzanine equity and equity
681,253
721,123
725,823
715,196
760,294
____________
(1) Includes $(238) million, $178 million, $(14) million and $181 million of cumulative change in fair value of funds withheld and modified coinsurance embedded derivatives as described on page 3, as of September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.
Page 6
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINING BALANCE SHEETS
(in millions)
As of September 30, 2024
Consolidated PFI
Closed Block Division
PFI Excluding Closed Block Division
PGIM
U.S. Businesses
International Businesses
Corporate and Other
Assets:
Total investments
469,117
49,519
419,598
3,833
213,476
171,025
31,264
Deferred policy acquisition costs
21,182
159
21,023
—
12,016
9,558
(551)
Other assets
69,445
1,246
68,199
4,714
46,213
12,713
4,559
Separate account assets
200,550
—
200,550
29,331
174,779
—
(3,560)
Total assets
760,294
50,924
709,370
37,878
446,484
193,296
31,712
Liabilities:
Future policy benefits
285,474
42,683
242,791
—
123,199
110,175
9,417
Policyholders' account balances
164,088
4,391
159,697
—
99,599
55,841
4,257
Debt
20,026
—
20,026
1,565
7,206
106
11,149
Other liabilities
57,581
5,412
52,169
3,565
26,182
8,494
13,928
Separate account liabilities
200,550
—
200,550
29,331
174,779
—
(3,560)
Total liabilities
727,719
52,486
675,233
34,461
430,965
174,616
35,191
Mezzanine Equity:
Redeemable noncontrolling interests
560
—
560
393
—
—
167
Total mezzanine equity
560
—
560
393
—
—
167
Equity:
Accumulated other comprehensive loss
(4,844)
(143)
(4,701)
(77)
(410)
(1,989)
(2,225)
Other equity (1)
35,260
(1,430)
36,690
2,844
15,849
20,639
(2,642)
Total Prudential Financial, Inc. equity
30,416
(1,573)
31,989
2,767
15,439
18,650
(4,867)
Noncontrolling interests
1,599
11
1,588
257
80
30
1,221
Total equity
32,015
(1,562)
33,577
3,024
15,519
18,680
(3,646)
Total liabilities, mezzanine equity and equity
760,294
50,924
709,370
37,878
446,484
193,296
31,712
As of December 31, 2023
Consolidated PFI
Closed Block Division
PFI Excluding Closed Block Division
PGIM
U.S. Businesses
International Businesses
Corporate and Other
Assets:
Total investments
434,733
49,336
385,397
4,906
184,264
169,531
26,696
Deferred policy acquisition costs
20,856
168
20,688
—
11,757
9,351
(420)
Other assets
66,646
1,584
65,062
4,511
41,498
12,342
6,711
Separate account assets
198,888
—
198,888
32,647
169,386
—
(3,145)
Total assets
721,123
51,088
670,035
42,064
406,905
191,224
29,842
Liabilities:
Future policy benefits
273,281
43,587
229,694
—
107,007
113,501
9,186
Policyholders' account balances
147,018
4,500
142,518
—
85,983
51,941
4,594
Debt
19,500
—
19,500
1,577
7,360
72
10,491
Other liabilities
52,649
4,539
48,110
3,095
21,668
8,267
15,080
Separate account liabilities
198,888
—
198,888
32,647
169,386
—
(3,145)
Total liabilities
691,336
52,626
638,710
37,319
391,404
173,781
36,206
Mezzanine Equity:
Redeemable noncontrolling interest
524
—
524
524
—
—
—
Total mezzanine equity
524
—
524
524
—
—
—
Equity:
Accumulated other comprehensive loss
(6,504)
(144)
(6,360)
(86)
(1,862)
(1,922)
(2,490)
Other equity (1)
34,324
(1,405)
35,729
2,768
17,281
19,335
(3,655)
Total Prudential Financial, Inc. equity
27,820
(1,549)
29,369
2,682
15,419
17,413
(6,145)
Noncontrolling interests
1,443
11
1,432
1,539
82
30
(219)
Total equity
29,263
(1,538)
30,801
4,221
15,501
17,443
(6,364)
Total liabilities, mezzanine equity and equity
721,123
51,088
670,035
42,064
406,905
191,224
29,842
____________
(1) Corporate and Other includes $(238) million and $181 million of cumulative change in fair value of funds withheld and modified coinsurance embedded derivatives as described on page 3, as of September 30, 2024 and December 31, 2023, respectively.
Page 7
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
SHORT-TERM AND LONG-TERM DEBT - UNAFFILIATED
(in millions)
As of September 30, 2024
As of December 31, 2023
Senior Debt
Senior Debt
Short-term Debt
Long-term Debt
Junior Subordinated Long-term Debt
Total Debt
Short-term Debt
Long-term Debt
Junior Subordinated Long-term Debt
Total Debt
Borrowings by use of proceeds:
Capital Debt
347
4,571
8,589
13,507
—
4,869
8,094
12,963
Operating Debt
519
5,594
—
6,113
535
5,589
—
6,124
Limited recourse and non-recourse borrowing
84
322
—
406
83
330
—
413
Total Debt
950
10,487
8,589
20,026
618
10,788
8,094
19,500
As of September 30, 2024
As of December 31, 2023
Prudential Financial, Inc.
The Prudential Insurance Company of America (1)(2)
Other Affiliates
Total Debt
Prudential Financial, Inc.
The Prudential Insurance Company of America (1)(2)
Other Affiliates
Total Debt
Borrowings by sources:
Capital Debt
13,117
347
43
13,507
12,573
346
44
12,963
Operating Debt
5,619
494
—
6,113
5,614
510
—
6,124
Limited recourse and non-recourse borrowing
—
84
322
406
—
130
283
413
Total Debt
18,736
925
365
20,026
18,187
986
327
19,500
__________
(1) Includes Prudential Funding, LLC.
(2) Capital Debt at The Prudential Insurance Company of America includes $347 million of surplus notes as of September 30, 2024 and $346 million as of December 31, 2023.
Page 8
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - PGIM
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
—
—
—
—
—
—
—
—
Policy charges and fee income
—
—
—
—
—
—
—
—
Net investment income
42
79
(43)
14
16
189
(13)
-107%
Asset management fees, commissions and other income
934
836
1,033
949
1,005
2,534
2,987
18%
Total revenues
976
915
990
963
1,021
2,723
2,974
9%
Benefits and expenses (1):
Insurance and annuity benefits
—
—
—
—
—
—
—
—
Change in estimates of liability for future policy benefits
—
—
—
—
—
—
—
—
Interest credited to policyholders' account balances
—
—
—
—
—
—
—
—
Interest expense
28
29
24
26
30
84
80
-5%
Deferral of acquisition costs
(1)
—
(1)
—
—
(2)
(1)
50%
Amortization of acquisition costs
—
1
1
—
1
1
2
100%
General and administrative expenses
738
713
797
731
749
2,099
2,277
8%
Total benefits and expenses
765
743
821
757
780
2,182
2,358
8%
Adjusted operating income before income taxes
211
172
169
206
241
541
616
14%
Total revenues
976
915
990
963
1,021
2,723
2,974
9%
Less: Passthrough distribution revenue
20
19
21
22
23
59
66
12%
Less: Revenue associated with consolidations
62
16
23
10
24
69
57
-17%
Total adjusted revenues (2)
894
880
946
931
974
2,595
2,851
10%
Adjusted operating margin (2)(3)
23.6
%
19.5
%
17.9
%
22.1
%
24.7
%
20.8
%
21.6
%
__________
(1) Revenues exclude realized investment gains, net of losses. Benefits and expenses include charges for income attributable to noncontrolling interests and exclude certain components of the consideration for acquisitions.
(2) Not calculated in accordance with GAAP. Adjusted revenue excludes passthrough distribution revenue and revenue associated with consolidations. Adjusted operating income before income taxes as a percentage of total adjusted revenues.
(3) Reported Operating Margin based on total revenues is 23.6%, 21.4%, 17.1%, 18.8%, and 21.6% for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively, and 20.7% and 19.9% for nine months ended September 30, 2024 and September 30, 2023, respectively.
Page 9
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
PGIM - SUPPLEMENTARY REVENUE AND ASSETS UNDER MANAGEMENT INFORMATION
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Supplementary Revenue Information (in millions):
Analysis of revenues by type:
Asset management fees
738
735
774
777
803
2,184
2,354
8%
Other related revenues (1)
71
66
93
71
90
181
254
40%
Service, distribution and other revenues
167
114
123
115
128
358
366
2%
Total PGIM revenues
976
915
990
963
1,021
2,723
2,974
9%
Analysis of asset management fees by source:
Institutional customers
363
366
378
377
385
1,082
1,140
5%
Retail customers
261
257
276
281
293
757
850
12%
General account
114
112
120
119
125
345
364
6%
Total asset management fees
738
735
774
777
803
2,184
2,354
8%
Supplementary Assets Under Management Information (at fair market value) (in billions):
September 30, 2024
Public Equity
Public Fixed Income
Real Estate
Private Credit and Other Alternatives
Multi-Asset
Total
Institutional customers
73.9
452.5
68.2
33.6
2.2
630.4
Retail customers
136.5
153.1
2.3
0.5
69.5
361.9
General account
3.3
257.8
61.3
85.1
0.1
407.6
Total
213.7
863.4
131.8
119.2
71.8
1,399.9
September 30, 2023
Public Equity
Public Fixed Income
Real Estate
Private Credit and Other Alternatives
Multi-Asset
Total
Institutional customers
56.2
387.2
70.5
32.4
1.3
547.6
Retail customers
108.1
131.6
2.2
0.9
69.7
312.5
General account
3.6
228.6
54.4
71.9
—
358.5
Total
167.9
747.4
127.1
105.2
71.0
1,218.6
__________
(1) Other related revenues, net of related expenses are $45 million, $39 million, $56 million, $36 million, and $37 million for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively, and $140 million and $96 million for the nine months ended September 30, 2024 and September 30, 2023, respectively.
Page 10
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
PGIM - SUPPLEMENTARY ASSETS UNDER MANAGEMENT INFORMATION
(in billions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Institutional Customers - Assets Under Management (at fair market value):
Beginning assets under management
536.7
528.6
562.7
596.9
585.2
528.9
562.7
Additions
14.4
20.5
45.2
16.9
15.7
47.2
77.8
Withdrawals
(18.2)
(26.8)
(19.1)
(25.8)
(20.2)
(64.2)
(65.1)
Net institutional additions (withdrawals), excluding money market activity
(3.8)
(6.3)
26.1
(8.9)
(4.5)
(17.0)
12.7
Change in market value
(13.8)
36.7
3.2
0.9
30.6
6.9
34.7
Net money market flows
0.1
(1.1)
0.2
(0.1)
(2.8)
(0.4)
(2.7)
Other (1)
9.4
4.8
4.7
(3.6)
1.8
10.2
2.9
Ending assets under management
528.6
562.7
596.9
585.2
610.3
528.6
610.3
Affiliated institutional assets under management
19.0
19.9
19.7
19.2
20.1
19.0
20.1
Total assets managed for institutional customers at end of period
547.6
582.6
616.6
604.4
630.4
547.6
630.4
Retail Customers - Assets Under Management (at fair market value):
Beginning assets under management
209.4
203.1
215.5
228.1
234.5
191.7
215.5
Additions
11.9
14.8
15.7
14.5
16.4
37.1
46.6
Withdrawals
(13.8)
(22.0)
(15.2)
(15.1)
(15.1)
(45.0)
(45.4)
Net retail additions (withdrawals), excluding money market activity
(1.9)
(7.2)
0.5
(0.6)
1.3
(7.9)
1.2
Change in market value
(4.7)
19.5
12.2
6.7
9.4
19.2
28.3
Net money market flows
0.7
0.3
0.3
0.5
0.2
1.3
1.0
Other
(0.4)
(0.2)
(0.4)
(0.2)
(0.3)
(1.2)
(0.9)
Ending assets under management
203.1
215.5
228.1
234.5
245.1
203.1
245.1
Affiliated retail assets under management
109.4
114.8
117.3
115.4
116.8
109.4
116.8
Total assets managed for retail customers at end of period
312.5
330.3
345.4
349.9
361.9
312.5
361.9
__________
(1) Third quarter 2023 includes $9.5 billion related to the reinsurance of in-force structured settlement annuities business to Prismic Life Reinsurance, Ltd., which were previously included in General Account assets under management. First quarter 2024 includes $5.8 billion related to the reinsurance of certain guaranteed universal life policies to Somerset Reinsurance Ltd., which were previously included in General Account assets under management. Second quarter 2024 includes a decrease of assets associated with PGIM Wadhwani LLP, a business now reflected in Divested and Run-off Businesses and included in Corporate and Other assets under management.
Page 11
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - U.S. BUSINESSES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
550
3,505
11,869
4,282
9,686
8,916
25,837
190%
Policy charges and fee income
997
990
990
995
1,029
2,979
3,014
1%
Net investment income
2,355
2,281
2,478
2,528
2,666
6,725
7,672
14%
Asset management fees, commissions and other income
641
705
636
605
599
2,020
1,840
-9%
Total revenues
4,543
7,481
15,973
8,410
13,980
20,640
38,363
86%
Benefits and expenses (1):
Insurance and annuity benefits
1,601
4,607
13,007
5,692
10,743
12,319
29,442
139%
Change in estimates of liability for future policy benefits
33
(29)
(9)
(381)
64
(85)
(326)
-284%
Interest credited to policyholders' account balances
563
581
601
643
703
1,609
1,947
21%
Interest expense
226
253
333
282
294
726
909
25%
Deferral of acquisition costs
(307)
(349)
(370)
(402)
(416)
(876)
(1,188)
-36%
Amortization of acquisition costs
204
209
212
212
213
621
637
3%
General and administrative expenses
1,154
1,245
1,394
1,341
1,339
3,553
4,074
15%
Total benefits and expenses
3,474
6,517
15,168
7,387
12,940
17,867
35,495
99%
Adjusted operating income before income taxes
1,069
964
805
1,023
1,040
2,773
2,868
3%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments; investment gains, net of losses, on assets supporting experience-rated contractholder liabilities, and change in value of market risk benefits, net of related hedging gains (losses). Benefits and expenses exclude charges related to realized investment gains, net of losses; change in experience-rated contractholder liabilities due to asset value changes, and include charges for income attributable to noncontrolling interests. Revenues and Benefits and expenses exclude market experience updates.
Page 12
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - U.S. BUSINESSES - RETIREMENT STRATEGIES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
(959)
2,041
10,325
2,769
8,153
4,387
21,247
384%
Policy charges and fee income
318
310
312
320
320
970
952
-2%
Net investment income
1,491
1,405
1,536
1,638
1,764
4,229
4,938
17%
Asset management fees, commissions and other income
528
584
586
568
554
1,636
1,708
4%
Total revenues
1,378
4,340
12,759
5,295
10,791
11,222
28,845
157%
Benefits and expenses (1):
Insurance and annuity benefits
(417)
2,615
10,898
3,757
8,768
6,278
23,423
273%
Change in estimates of liability for future policy benefits
31
(25)
11
(468)
47
(168)
(410)
-144%
Interest credited to policyholders' account balances
293
308
355
398
467
804
1,220
52%
Interest expense
14
20
31
28
36
53
95
79%
Deferral of acquisition costs
(117)
(131)
(169)
(179)
(186)
(323)
(534)
-65%
Amortization of acquisition costs
89
90
95
100
102
275
297
8%
General and administrative expenses
563
573
657
670
659
1,680
1,986
18%
Total benefits and expenses
456
3,450
11,878
4,306
9,893
8,599
26,077
203%
Adjusted operating income before income taxes
922
890
881
989
898
2,623
2,768
6%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, and change in value of market risk benefits, net of related hedging gains (losses). Benefits and expenses exclude charges related to realized investment gains, net of losses.
Page 13
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - U.S. BUSINESSES - RETIREMENT STRATEGIES - INSTITUTIONAL RETIREMENT STRATEGIES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
(979)
2,027
10,297
2,758
8,134
4,315
21,189
391%
Policy charges and fee income
10
7
6
8
10
26
24
-8%
Net investment income
1,098
1,006
1,092
1,142
1,199
3,174
3,433
8%
Asset management fees, commissions and other income
92
143
143
133
130
332
406
22%
Total revenues
221
3,183
11,538
4,041
9,473
7,847
25,052
219%
Benefits and expenses (1):
Insurance and annuity benefits
(438)
2,584
10,858
3,718
8,742
6,175
23,318
278%
Change in estimates of liability for future policy benefits
24
(25)
(3)
(456)
41
(176)
(418)
-138%
Interest credited to policyholders' account balances
146
137
154
153
177
415
484
17%
Interest expense
(6)
1
17
9
12
—
38
—%
Deferral of acquisition costs
(18)
(24)
(19)
(15)
(23)
(51)
(57)
-12%
Amortization of acquisition costs
3
3
2
2
4
13
8
-38%
General and administrative expenses
71
75
88
80
82
208
250
20%
Total benefits and expenses
(218)
2,751
11,097
3,491
9,035
6,584
23,623
259%
Adjusted operating income before income taxes
439
432
441
550
438
1,263
1,429
13%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, and change in value of market risk benefits, net of related hedging gains (losses). Benefits and expenses exclude charges related to realized investment gains, net of losses.
Page 14
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - RETIREMENT STRATEGIES - INSTITUTIONAL RETIREMENT STRATEGIES SALES RESULTS AND ACCOUNT VALUES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Beginning total account value
258,533
254,933
267,654
274,630
274,128
251,818
267,654
Additions
4,697
14,287
10,990
4,011
11,081
14,211
26,082
Withdrawals and benefits
(7,781)
(6,163)
(6,417)
(6,164)
(6,619)
(19,120)
(19,200)
Net flows
(3,084)
8,124
4,573
(2,153)
4,462
(4,909)
6,882
Change in market value, interest credited and interest income
878
2,565
2,655
1,919
4,476
5,157
9,050
Other (1)
(1,394)
2,032
(252)
(268)
4,763
2,867
4,243
Ending total account value, gross
254,933
267,654
274,630
274,128
287,829
254,933
287,829
Reinsurance ceded
(9,273)
(9,237)
(9,179)
(9,129)
(9,062)
(9,273)
(9,062)
Ending total account value, net
245,660
258,417
265,451
264,999
278,767
245,660
278,767
Amounts included in ending total account value, net above:
Investment-only stable value wraps
65,497
64,098
62,842
61,455
62,189
International reinsurance (2)
88,253
102,544
102,049
102,465
108,927
Group annuities and other products
91,910
91,775
100,560
101,079
107,651
Ending total account value, net
245,660
258,417
265,451
264,999
278,767
__________
(1) Other activity includes the effect of foreign exchange rate changes associated with our United Kingdom international reinsurance business; net presentation of receipts and payments related to funding agreements backed commercial paper which typically have maturities of less than 90 days, and changes in asset balances for externally-managed accounts.
(2) Represents notional amounts based on present value of future benefits under international reinsurance contracts.
Page 15
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - U.S. BUSINESSES - RETIREMENT STRATEGIES - INDIVIDUAL RETIREMENT STRATEGIES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
20
14
28
11
19
72
58
-19%
Policy charges and fee income
308
303
306
312
310
944
928
-2%
Net investment income
393
399
444
496
565
1,055
1,505
43%
Asset management fees, commissions and other income
436
441
443
435
424
1,304
1,302
—%
Total revenues
1,157
1,157
1,221
1,254
1,318
3,375
3,793
12%
Benefits and expenses (1):
Insurance and annuity benefits
21
31
40
39
26
103
105
2%
Change in estimates of liability for future policy benefits
7
—
14
(12)
6
8
8
—%
Interest credited to policyholders' account balances
147
171
201
245
290
389
736
89%
Interest expense
20
19
14
19
24
53
57
8%
Deferral of acquisition costs
(99)
(107)
(150)
(164)
(163)
(272)
(477)
-75%
Amortization of acquisition costs
86
87
93
98
98
262
289
10%
General and administrative expenses
492
498
569
590
577
1,472
1,736
18%
Total benefits and expenses
674
699
781
815
858
2,015
2,454
22%
Adjusted operating income before income taxes
483
458
440
439
460
1,360
1,339
-2%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, and change in value of market risk benefits, net of related hedging gains (losses). Benefits and expenses exclude charges related to realized investment gains, net of losses.
Page 16
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - RETIREMENT STRATEGIES - INDIVIDUAL RETIREMENT STRATEGIES SALES RESULTS AND ACCOUNT VALUES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Actively -Sold Protected Investment and Income Product Sales (1):
FlexGuard Suite
1,279
1,263
1,727
2,219
2,244
3,607
6,190
Investment Only VA (2)
48
35
28
39
28
116
95
Fixed
616
804
1,550
1,221
1,346
1,779
4,117
Total
1,943
2,102
3,305
3,479
3,618
5,502
10,402
Actively-Sold Protected Investment and Income Solutions (1):
Beginning total account value
25,970
27,069
30,655
35,257
39,108
21,208
30,655
Sales
1,943
2,102
3,305
3,479
3,618
5,502
10,402
Full surrenders and death benefits
(208)
(239)
(281)
(322)
(351)
(622)
(954)
Sales, net of full surrenders and death benefits
1,735
1,863
3,024
3,157
3,267
4,880
9,448
Partial withdrawals and other benefit payments
(135)
(170)
(181)
(184)
(184)
(401)
(549)
Net flows
1,600
1,693
2,843
2,973
3,083
4,479
8,899
Change in market value, interest credited, and other
(494)
1,901
1,770
891
1,554
1,402
4,215
Policy charges
(7)
(8)
(11)
(13)
(16)
(20)
(40)
Ending total account value, gross
27,069
30,655
35,257
39,108
43,729
27,069
43,729
Reinsurance ceded
(1,552)
(1,694)
(1,986)
(2,205)
(2,494)
(1,552)
(2,494)
Ending total account value, net
25,517
28,961
33,271
36,903
41,235
25,517
41,235
Discontinued Traditional VA and Guaranteed Living Benefit Block (3):
Beginning total account value
100,327
94,021
99,053
99,443
96,267
98,814
99,053
Sales
7
7
9
7
6
24
22
Full surrenders and death benefits
(1,544)
(1,636)
(2,284)
(2,467)
(2,510)
(4,269)
(7,261)
Sales, net of full surrenders and death benefits
(1,537)
(1,629)
(2,275)
(2,460)
(2,504)
(4,245)
(7,239)
Partial withdrawals and other benefit payments
(927)
(1,122)
(1,109)
(1,037)
(1,037)
(2,838)
(3,183)
Net flows
(2,464)
(2,751)
(3,384)
(3,497)
(3,541)
(7,083)
(10,422)
Change in market value and other
(3,298)
8,321
4,311
857
4,924
4,000
10,092
Policy charges
(544)
(538)
(537)
(536)
(534)
(1,710)
(1,607)
Ending total account value, gross
94,021
99,053
99,443
96,267
97,116
94,021
97,116
Reinsurance ceded
(9,432)
(10,103)
(9,702)
(9,271)
(9,526)
(9,432)
(9,526)
Ending total account value, net
84,589
88,950
89,741
86,996
87,590
84,589
87,590
__________
(1) Includes Prudential FlexGuard and FlexGuard Income, Prudential Premier Investment, MyRock, Private Placement Variable Annuity and all fixed annuity products. Excludes discontinued traditional variable annuities and guaranteed living benefits.
(2) Represents variable annuities without guaranteed living benefits including Prudential Premier Investment, MyRock and Private Placement Variable Annuity.
(3) Includes Prudential Highest Daily Income, Prudential Defined Income and other legacy variable products with and without guaranteed minimum income and withdrawal benefits.
Page 17
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - RETIREMENT STRATEGIES - INDIVIDUAL RETIREMENT STRATEGIES ACCOUNT VALUE ACTIVITY
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Account Values in General Account (1):
Beginning balance
26,455
27,613
30,844
35,140
38,942
22,063
30,844
Premiums and deposits
1,856
2,030
3,226
3,373
3,522
5,278
10,121
Full surrenders and death benefits
(121)
(155)
(237)
(266)
(296)
(358)
(799)
Premiums and deposits net of full surrenders and death benefits
1,735
1,875
2,989
3,107
3,226
4,920
9,322
Partial withdrawals and other benefit payments
(148)
(191)
(218)
(221)
(224)
(445)
(663)
Net flows
1,587
1,684
2,771
2,886
3,002
4,475
8,659
Change in market value, interest credited and other
(285)
1,189
1,513
905
960
1,478
3,378
Net transfers (to) from separate account
(142)
360
15
14
451
(399)
480
Policy charges
(2)
(2)
(3)
(3)
(5)
(4)
(11)
Ending balance, gross
27,613
30,844
35,140
38,942
43,350
27,613
43,350
Reinsurance ceded
(1,552)
(1,694)
(1,986)
(2,205)
(2,494)
(1,552)
(2,494)
Ending balance, net
26,061
29,150
33,154
36,737
40,856
26,061
40,856
Account Values in Separate Account (1):
Beginning balance
99,842
93,477
98,864
99,560
96,433
97,959
98,864
Premiums and deposits
94
79
88
113
102
248
303
Full surrenders and death benefits
(1,631)
(1,720)
(2,328)
(2,523)
(2,565)
(4,533)
(7,416)
Premiums and deposits net of full surrenders and death benefits
(1,537)
(1,641)
(2,240)
(2,410)
(2,463)
(4,285)
(7,113)
Partial withdrawals and other benefit payments
(914)
(1,101)
(1,072)
(1,000)
(997)
(2,794)
(3,069)
Net flows
(2,451)
(2,742)
(3,312)
(3,410)
(3,460)
(7,079)
(10,182)
Change in market value, interest credited and other
(3,507)
9,033
4,568
843
5,518
3,924
10,929
Net transfers (to) from general account
142
(360)
(15)
(14)
(451)
399
(480)
Policy charges
(549)
(544)
(545)
(546)
(545)
(1,726)
(1,636)
Ending balance, gross
93,477
98,864
99,560
96,433
97,495
93,477
97,495
Reinsurance ceded
(9,432)
(10,103)
(9,702)
(9,271)
(9,526)
(9,432)
(9,526)
Ending balance, net
84,045
88,761
89,858
87,162
87,969
84,045
87,969
__________
(1) Premiums and deposits, and surrenders and withdrawals, are classified within the general account and separate account for purposes of this presentation based on the allocation of customer funds. For example, premiums allocated by customers to separate account investments at the time of sale, while remitted through the company's general account, are shown as separate account premium in this display, rather than as general account premium and transfers to the separate account.
Page 18
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - RETIREMENT STRATEGIES - INDIVIDUAL RETIREMENT STRATEGIES MARKET RISK BENEFIT FEATURES
(in millions)
2023
2024
3Q
4Q
1Q
2Q
3Q
MARKET RISK BENEFITS ACCOUNT VALUES AND NET AMOUNT AT RISK (1):
Market Risk Benefits Account Values by Risk Management Design:
Account Values with Auto-Rebalancing Feature - risk retained by Prudential
66,563
70,093
70,679
68,512
68,960
Account Values with Auto-Rebalancing Feature - externally reinsured
2,269
2,315
2,254
2,115
2,115
Account Values without Auto-Rebalancing Feature
23,869
25,244
25,056
24,178
24,561
Total
92,701
97,652
97,989
94,805
95,636
Market Risk Benefits Net Amount at Risk by Product Design Type:
Net Amount at Risk with Auto-Rebalancing Feature
9,508
7,177
6,373
6,541
5,638
Net Amount at Risk without Auto-Rebalancing Feature
3,909
2,576
2,597
2,817
2,240
Total
13,417
9,753
8,970
9,358
7,878
__________
(1) At end of period.
Page 19
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - U.S. BUSINESSES - GROUP INSURANCE
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
1,268
1,231
1,298
1,272
1,299
3,793
3,869
2%
Policy charges and fee income
163
169
175
165
189
505
529
5%
Net investment income
130
128
136
128
134
384
398
4%
Asset management fees, commissions and other income
15
19
25
21
21
56
67
20%
Total revenues
1,576
1,547
1,634
1,586
1,643
4,738
4,863
3%
Benefits and expenses (1):
Insurance and annuity benefits
1,179
1,166
1,249
1,140
1,241
3,537
3,630
3%
Change in estimates of liability for future policy benefits
—
—
—
—
—
—
—
—
Interest credited to policyholders' account balances
39
42
40
36
35
124
111
-10%
Interest expense
1
1
2
4
2
7
8
14%
Deferral of acquisition costs
(1)
(2)
(6)
(4)
(5)
(1)
(15)
-1400%
Amortization of acquisition costs
1
5
1
2
1
4
4
—%
General and administrative expenses
268
269
303
287
287
814
877
8%
Total benefits and expenses
1,487
1,481
1,589
1,465
1,561
4,485
4,615
3%
Adjusted operating income before income taxes
89
66
45
121
82
253
248
-2%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses.
Page 20
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - GROUP INSURANCE SUPPLEMENTARY INFORMATION
(dollar amounts in millions, or as otherwise noted)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Annualized New Business Premiums:
Group life
61
41
189
27
35
255
251
Group disability
34
19
189
19
28
216
236
Total
95
60
378
46
63
471
487
Future Policy Benefits (1):
Group life
2,242
2,421
2,350
2,328
2,266
Group disability
3,175
3,178
3,240
3,222
3,253
Total
5,417
5,599
5,590
5,550
5,519
Policyholders' Account Balances (1):
Group life
5,250
5,229
4,889
4,782
4,878
Group disability
112
113
119
111
110
Total
5,362
5,342
5,008
4,893
4,988
Separate Account Liabilities (1):
Group life
22,864
25,021
25,265
24,546
26,021
Group Life Insurance:
Gross premiums, policy charges and fee income (2)
1,100
1,149
1,098
1,123
1,137
3,320
3,358
Earned premiums
900
873
903
897
924
2,729
2,724
Earned policy charges and fee income
138
144
150
139
164
433
453
Benefits ratio (3)
84.8
%
87.5
%
90.1
%
85.3
%
85.0
%
87.6
%
86.8
%
Administrative operating expense ratio
11.8
%
11.2
%
12.1
%
11.8
%
11.0
%
11.8
%
11.6
%
Persistency ratio
93.7
%
93.6
%
95.1
%
95.0
%
94.6
%
Group Disability Insurance:
Gross premiums, policy charges and fee income (2)
393
385
426
410
403
1,144
1,239
Earned premiums
368
358
395
375
375
1,064
1,145
Earned policy charges and fee income
25
25
25
26
25
72
76
Benefits ratio (3)
76.2
%
72.2
%
71.3
%
70.4
%
78.9
%
70.7
%
73.5
%
Administrative operating expense ratio
24.1
%
25.9
%
25.9
%
26.5
%
26.5
%
24.9
%
26.3
%
Persistency ratio
91.2
%
91.1
%
93.8
%
93.2
%
92.9
%
Total Group Insurance:
Benefits ratio (3)
82.4
%
83.3
%
84.7
%
81.1
%
83.4
%
83.1
%
83.1
%
Administrative operating expense ratio
15.1
%
14.9
%
16.0
%
15.8
%
15.1
%
15.2
%
15.6
%
Net face amount of policies in force (in billions) (4)
2,143
2,155
2,065
2,092
2,102
__________
(1) As of end of period.
(2) Before returns of premiums to participating policyholders for favorable claims experience.
(3) Benefits ratios excluding the impact of the annual assumption updates and other refinements in the second quarter. Benefits ratios including these impacts for Group Life, Group Disability, and Total Group Insurance are 85.3%, 64.1% and 79.4% for the three months ended June 30, 2024, respectively. Benefits ratios including these impacts for Group Life, Group Disability, and Total Group Insurance are 86.8%, 71.4%, 82.5% and 86.9%, 69.6%, 82.3% for the nine months ended September 30, 2024 and September 30, 2023, respectively.
(4) At end of period; net of reinsurance.
Page 21
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - U.S. BUSINESSES - INDIVIDUAL LIFE
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
241
233
246
241
234
736
721
-2%
Policy charges and fee income
516
511
503
510
520
1,504
1,533
2%
Net investment income
734
748
806
762
768
2,112
2,336
11%
Asset management fees, commissions and other income
98
102
25
16
24
328
65
-80%
Total revenues
1,589
1,594
1,580
1,529
1,546
4,680
4,655
-1%
Benefits and expenses (1):
Insurance and annuity benefits
839
826
860
795
734
2,504
2,389
-5%
Change in estimates of liability for future policy benefits
2
(4)
(20)
87
17
83
84
1%
Interest credited to policyholders' account balances
231
231
206
209
201
681
616
-10%
Interest expense
211
232
300
250
256
666
806
21%
Deferral of acquisition costs
(189)
(216)
(195)
(219)
(225)
(552)
(639)
-16%
Amortization of acquisition costs
114
114
116
110
110
342
336
-2%
General and administrative expenses
323
403
434
384
393
1,059
1,211
14%
Total benefits and expenses
1,531
1,586
1,701
1,616
1,486
4,783
4,803
—%
Adjusted operating income (loss) before income taxes
58
8
(121)
(87)
60
(103)
(148)
-44%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses. Revenues and Benefits and expenses exclude market experience updates.
Page 22
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
U.S. BUSINESSES - INDIVIDUAL LIFE SUPPLEMENTARY INFORMATION
(in millions, or as otherwise noted)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
ANNUALIZED NEW BUSINESS PREMIUMS (1):
Term life
33
33
31
34
34
87
99
Universal life
17
27
20
22
19
54
61
Variable life
136
145
116
147
157
391
420
Total
186
205
167
203
210
532
580
ANNUALIZED NEW BUSINESS PREMIUMS BY DISTRIBUTION CHANNEL (1):
Prudential Advisors
35
38
35
44
43
106
122
Third party distribution
151
167
132
159
167
426
458
Total
186
205
167
203
210
532
580
ACCOUNT VALUE ACTIVITY:
Policyholders' Account Balances (2):
Beginning balance
32,713
32,730
33,026
33,176
33,365
31,522
33,026
Premiums and deposits
587
675
634
604
619
1,800
1,857
Surrenders and withdrawals
(417)
(557)
(436)
(414)
(445)
(1,301)
(1,295)
Net sales
170
118
198
190
174
499
562
Benefit payments
(41)
(43)
(48)
(43)
(30)
(145)
(121)
Net flows
129
75
150
147
144
354
441
Interest credited and other
274
624
401
388
440
1,141
1,229
Net transfers from separate account
128
113
138
148
158
1,285
444
Policy charges
(514)
(516)
(539)
(494)
(526)
(1,572)
(1,559)
Ending balance, gross
32,730
33,026
33,176
33,365
33,581
32,730
33,581
Reinsurance ceded
—
—
(4,506)
(4,512)
(4,520)
—
(4,520)
Ending balance, net
32,730
33,026
28,670
28,853
29,061
32,730
29,061
Separate Account Liabilities:
Beginning balance
43,230
42,171
46,453
50,128
51,385
39,419
46,453
Premiums and deposits
739
836
794
904
1,018
2,313
2,716
Surrenders and withdrawals
(212)
(235)
(293)
(334)
(316)
(714)
(943)
Net sales
527
601
501
570
702
1,599
1,773
Benefit payments
(119)
(126)
(138)
(165)
(183)
(340)
(486)
Net flows
408
475
363
405
519
1,259
1,287
Change in market value, interest credited and other
(1,003)
4,262
3,796
1,352
2,569
3,772
7,717
Net transfers to general account
(128)
(113)
(138)
(148)
(158)
(1,285)
(444)
Policy charges
(336)
(342)
(346)
(352)
(362)
(994)
(1,060)
Ending balance
42,171
46,453
50,128
51,385
53,953
42,171
53,953
NET FACE AMOUNT IN FORCE (in billions) (3):
Term life
293
290
286
283
280
Universal life
97
97
80
79
79
Variable life
150
154
158
160
162
Total
540
541
524
522
521
__________
(1) Excludes corporate-owned life insurance.
(2) Includes fixed rate funds, alliance deposits, supplementary contracts and deferred revenues on variable products.
(3) At end of period; net of reinsurance. Net Face Amount In Force excludes certain policies considered to be non-core business drivers impacting adjusted operating income for Individual Life. Policies within the Closed Block division are not reported through Individual Life.
Page 23
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - INTERNATIONAL BUSINESSES
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
3,112
2,864
3,139
3,002
2,850
9,955
8,991
-10%
Policy charges and fee income
77
82
80
80
83
226
243
8%
Net investment income
1,316
1,367
1,412
1,390
1,428
3,922
4,230
8%
Asset management fees, commissions and other income
61
65
82
40
56
201
178
-11%
Total revenues
4,566
4,378
4,713
4,512
4,417
14,304
13,642
-5%
Benefits and expenses (1):
Insurance and annuity benefits
2,751
2,525
2,772
2,452
2,581
8,557
7,805
-9%
Change in estimates of liability for future policy benefits
16
49
24
352
2
315
378
20%
Interest credited to policyholders' account balances
239
263
279
288
315
680
882
30%
Interest expense
3
5
(1)
(2)
5
18
2
-89%
Deferral of acquisition costs
(292)
(312)
(293)
(268)
(308)
(886)
(869)
2%
Amortization of acquisition costs
156
156
159
161
164
466
484
4%
General and administrative expenses
882
944
877
827
892
2,719
2,596
-5%
Total benefits and expenses
3,755
3,630
3,817
3,810
3,651
11,869
11,278
-5%
Adjusted operating income before income taxes
811
748
896
702
766
2,435
2,364
-3%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on assets supporting experience-rated contractholder liabilities, change in value of market risk benefits, net of related hedging gains (losses) and include revenues representing equity in earnings of joint ventures and other operating entities. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to noncontrolling interests. Revenues and Benefits and expenses exclude market experience updates.
Page 24
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - INTERNATIONAL BUSINESSES - LIFE PLANNER
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
1,665
1,511
1,818
1,663
1,527
5,292
5,008
-5%
Policy charges and fee income
48
52
47
48
56
144
151
5%
Net investment income
584
608
629
602
619
1,743
1,850
6%
Asset management fees, commissions and other income
62
61
56
54
45
185
155
-16%
Total revenues
2,359
2,232
2,550
2,367
2,247
7,364
7,164
-3%
Benefits and expenses (1):
Insurance and annuity benefits
1,421
1,311
1,589
1,343
1,365
4,530
4,297
-5%
Change in estimates of liability for future policy benefits
11
23
13
217
5
82
235
187%
Interest credited to policyholders' account balances
61
68
69
68
76
175
213
22%
Interest expense
(1)
(4)
(7)
(3)
2
1
(8)
-900%
Deferral of acquisition costs
(143)
(144)
(155)
(132)
(141)
(443)
(428)
3%
Amortization of acquisition costs
76
76
78
81
82
230
241
5%
General and administrative expenses
407
438
418
393
394
1,253
1,205
-4%
Total benefits and expenses
1,832
1,768
2,005
1,967
1,783
5,828
5,755
-1%
Adjusted operating income before income taxes
527
464
545
400
464
1,536
1,409
-8%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on assets supporting experience-rated contractholder liabilities and include revenues representing equity in earnings of joint ventures and other operating entities. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to noncontrolling interests. Revenues and Benefits and expenses exclude market experience updates.
Page 25
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - INTERNATIONAL BUSINESSES - GIBRALTAR LIFE AND OTHER
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
1,447
1,353
1,321
1,339
1,323
4,663
3,983
-15%
Policy charges and fee income
29
30
33
32
27
82
92
12%
Net investment income
732
759
783
788
809
2,179
2,380
9%
Asset management fees, commissions and other income
(1)
4
26
(14)
11
16
23
44%
Total revenues
2,207
2,146
2,163
2,145
2,170
6,940
6,478
-7%
Benefits and expenses (1):
Insurance and annuity benefits
1,330
1,214
1,183
1,109
1,216
4,027
3,508
-13%
Change in estimates of liability for future policy benefits
5
26
11
135
(3)
233
143
-39%
Interest credited to policyholders' account balances
178
195
210
220
239
505
669
32%
Interest expense
4
9
6
1
3
17
10
-41%
Deferral of acquisition costs
(149)
(168)
(138)
(136)
(167)
(443)
(441)
—%
Amortization of acquisition costs
80
80
81
80
82
236
243
3%
General and administrative expenses
475
506
459
434
498
1,466
1,391
-5%
Total benefits and expenses
1,923
1,862
1,812
1,843
1,868
6,041
5,523
-9%
Adjusted operating income before income taxes
284
284
351
302
302
899
955
6%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments, investment gains, net of losses, on assets supporting experience-rated contractholder liabilities, change in value of market risk benefits, net of related hedging gains (losses) and include revenues representing equity in earnings of joint ventures and other operating entities. Benefits and expenses exclude charges related to realized investment gains, net of losses and change in experience-rated contractholder liabilities due to asset value changes and include charges for income attributable to noncontrolling interests. Revenues and Benefits and expenses exclude market experience updates.
Page 26
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INTERNATIONAL BUSINESSES - SALES RESULTS AND SUPPLEMENTARY INFORMATION
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
Actual exchange rate basis (1):
Net premiums, policy charges and fee income:
Japan - Prudential of Japan
1,422
1,266
1,584
1,386
1,311
4,620
4,281
Japan - Gibraltar Life
1,476
1,383
1,354
1,371
1,350
4,745
4,075
Emerging Markets
291
297
281
325
272
816
878
Total
3,189
2,946
3,219
3,082
2,933
10,181
9,234
Annualized new business premiums:
Japan - Prudential of Japan
143
182
196
156
162
497
514
Japan - Gibraltar Life
236
310
224
268
324
708
816
Emerging Markets
112
106
97
95
102
284
294
Total
491
598
517
519
588
1,489
1,624
Annualized new business premiums by distribution channel:
Life Planners
255
288
293
251
264
781
808
Gibraltar Life Consultants
131
139
105
120
136
403
361
Banks
68
82
59
74
110
174
243
Independent Agency
37
89
60
74
78
131
212
Total
491
598
517
519
588
1,489
1,624
Constant exchange rate basis (2):
Net premiums, policy charges and fee income:
Japan - Prudential of Japan
1,486
1,362
1,690
1,499
1,412
4,732
4,601
Japan - Gibraltar Life
1,548
1,464
1,454
1,482
1,436
4,879
4,372
Emerging Markets
243
252
235
286
253
698
774
Total
3,277
3,078
3,379
3,267
3,101
10,309
9,747
Annualized new business premiums:
Japan - Prudential of Japan
150
195
211
172
175
510
558
Japan - Gibraltar Life
241
314
229
275
331
716
835
Emerging Markets
88
86
80
85
94
228
259
Total
479
595
520
532
600
1,454
1,652
Annualized new business premiums by distribution channel:
Life Planners
238
281
291
257
269
738
817
Gibraltar Life Consultants
132
142
108
124
140
406
372
Banks
68
82
59
75
110
174
244
Independent Agency
41
90
62
76
81
136
219
Total
479
595
520
532
600
1,454
1,652
__________
(1) Translated based on applicable average exchange rates for the period shown.
(2) Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 129 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.
Page 27
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INTERNATIONAL BUSINESSES - SALES RESULTS AND SUPPLEMENTARY INFORMATION
2023
2024
3Q
4Q
1Q
2Q
3Q
Face amount of individual policies in force at end of period (in billions) (1)(2):
(Constant exchange rate basis)
Japan - Prudential of Japan
320
312
307
301
297
Japan - Gibraltar Life
288
285
281
279
277
Emerging Markets
43
44
42
43
46
Total
651
641
630
623
620
Number of individual policies in force at end of period (in thousands) (3):
Japan - Prudential of Japan
4,501
4,511
4,531
4,535
4,555
Japan - Gibraltar Life
6,626
6,594
6,552
6,519
6,520
Emerging Markets
769
789
765
783
820
Total
11,896
11,894
11,848
11,837
11,895
International life insurance individual policy persistency:
Life Planner:
13 months
92.2
%
92.0
%
91.4
%
90.6
%
89.5
%
25 months
83.2
%
83.1
%
82.6
%
82.0
%
81.3
%
Gibraltar Life (4):
13 months
94.8
%
94.3
%
94.8
%
94.8
%
94.7
%
25 months
88.7
%
88.0
%
88.3
%
88.6
%
88.4
%
Number of Life Planners at end of period:
Japan
4,337
4,310
4,339
4,257
4,264
All other countries
1,580
1,546
1,516
1,579
1,636
Total Life Planners
5,917
5,856
5,855
5,836
5,900
Gibraltar Life Consultants
6,736
6,808
6,792
6,724
6,861
__________
(1) Foreign denominated activity translated to U.S. dollars at uniform exchange rates for all periods presented, including Japanese yen 129 per U.S. dollar. U.S. dollar-denominated activity is included based on the amounts as transacted in U.S. dollars.
(2) Net of reinsurance.
(3) Direct business only; policy count includes annuities.
(4) Reflects business sold by Life Consultants and Independent Agents.
Page 28
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
STATEMENTS OF OPERATIONS - CORPORATE AND OTHER
(in millions)
2023
2024
Year-to-date
3Q
4Q
1Q
2Q
3Q
2023
2024
% change
Revenues (1):
Premiums
(3)
(5)
(2)
(7)
(9)
(11)
(18)
-64%
Policy charges and fee income
(14)
(13)
(14)
(14)
(14)
(40)
(42)
-5%
Net investment income
179
191
273
286
326
539
885
64%
Asset management fees, commissions and other income
(199)
(74)
(227)
(301)
(232)
(538)
(760)
-41%
Total revenues
(37)
99
30
(36)
71
(50)
65
230%
Benefits and expenses (1):
Insurance and annuity benefits
(4)
(2)
(5)
(7)
(3)
(9)
(15)
-67%
Change in estimates of liability for future policy benefits
—
—
—
—
—
—
—
—
Interest credited to policyholders' account balances
25
23
22
21
20
90
63
-30%
Interest expense
162
152
173
174
156
487
503
3%
Deferral of acquisition costs
24
24
17
56
88
73
161
121%
Amortization of acquisition costs
(9)
(10)
(10)
(10)
(22)
(27)
(42)
-56%
General and administrative expenses
203
565
268
101
319
717
688
-4%
Total benefits and expenses
401
752
465
335
558
1,331
1,358
2%
Adjusted operating loss before income taxes
(438)
(653)
(435)
(371)
(487)
(1,381)
(1,293)
6%
__________
(1) Revenues exclude realized investment gains, net of losses and related charges and adjustments. Benefits and expenses exclude charges related to realized investment gains, net of losses and goodwill impairment and certain components of consideration for a business acquisition, which are recognized as compensation expense over the requisite service periods. Revenues and Benefits and expenses include consolidating adjustments.
Page 29
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INVESTMENT PORTFOLIO COMPOSITION
(in millions)
September 30, 2024
December 31, 2023
Closed
PFI Excluding
Closed
PFI Excluding
Total
Block
Funds
Closed Block Division and Funds Withheld
Total
Block
Funds
Closed Block Division and Funds Withheld (2)
Portfolio
Division
Withheld (1)
Amount
% of Total
Portfolio (2)
Division
Withheld (1)(2)
Amount
% of Total
Fixed maturities:
Public, available-for-sale, at fair value
257,380
20,206
6,466
230,708
58.1
%
241,222
20,483
3,270
217,469
58.9
%
Private, available-for-sale, at fair value
82,897
10,288
2,718
69,891
17.6
%
74,542
10,003
2,678
61,861
16.7
%
Fixed maturities, trading, at fair value
11,588
726
6,831
4,031
1.0
%
8,785
887
2,944
4,954
1.3
%
Assets supporting experience-rated contractholder liabilities, at fair value
3,654
—
—
3,654
0.9
%
3,168
—
—
3,168
0.9
%
Equity securities, at fair value
6,223
1,824
5
4,394
1.1
%
7,634
1,970
—
5,664
1.5
%
Commercial mortgage and other loans, at book value, net of allowance
61,475
7,819
156
53,500
13.5
%
58,786
7,769
23
50,994
13.8
%
Policy loans, at outstanding balance
9,947
3,388
—
6,559
1.7
%
10,047
3,479
—
6,568
1.8
%
Other invested assets, net of allowance (3)
22,958
4,710
1,445
16,803
4.2
%
19,454
4,513
1,007
13,934
3.8
%
Short-term investments, net of allowance
8,003
558
67
7,378
1.9
%
4,992
232
51
4,709
1.3
%
Subtotal (4)
464,125
49,519
17,688
396,918
100.0
%
428,630
49,336
9,973
369,321
100.0
%
Invested assets of other entities and operations (5)
4,992
—
—
4,992
6,103
—
—
6,103
Total investments
469,117
49,519
17,688
401,910
434,733
49,336
9,973
375,424
Fixed Maturities by Credit Quality (4)(6):
September 30, 2024
December 31, 2023
PFI Excluding Closed Block Division and Funds Withheld
PFI Excluding Closed Block Division and Funds Withheld (2)
Gross
Gross
Gross
Gross
Amortized
Unrealized
Unrealized
Allowance for
Fair
Amortized
Unrealized
Unrealized
Allowance for
Fair
Cost
Gains
Losses
Credit Losses
Value
% of Total
Cost
Gains
Losses
Credit Losses
Value
% of Total
Public Fixed Maturities:
NAIC Rating (7)
1
189,192
5,712
16,148
—
178,756
77.5
%
182,105
6,683
15,644
1
173,143
79.6
%
2
46,121
1,340
2,607
—
44,854
19.4
%
39,358
1,020
3,395
—
36,983
17.0
%
Subtotal - High or Highest Quality Securities
235,313
7,052
18,755
—
223,610
96.9
%
221,463
7,703
19,039
1
210,126
96.6
%
3
5,394
85
402
—
5,077
2.3
%
5,216
143
238
—
5,121
2.3
%
4
1,390
58
45
—
1,403
0.6
%
1,765
50
99
53
1,663
0.8
%
5
546
18
39
18
507
0.2
%
479
13
63
7
422
0.2
%
6
191
8
8
80
111
0.0
%
224
4
16
75
137
0.1
%
Subtotal - Other Securities
7,521
169
494
98
7,098
3.1
%
7,684
210
416
135
7,343
3.4
%
Total
242,834
7,221
19,249
98
230,708
100.0
%
229,147
7,913
19,455
136
217,469
100.0
%
Private Fixed Maturities:
NAIC Rating (7)
1
18,847
356
1,330
—
17,873
25.6
%
17,121
240
1,588
—
15,773
25.5
%
2
43,067
1,329
2,252
—
42,144
60.3
%
38,561
880
2,795
—
36,646
59.2
%
Subtotal - High or Highest Quality Securities
61,914
1,685
3,582
—
60,017
85.9
%
55,682
1,120
4,383
—
52,419
84.7
%
3
5,822
189
167
—
5,844
8.3
%
5,130
118
246
5
4,997
8.1
%
4
3,020
36
87
28
2,941
4.2
%
3,112
28
89
2
3,049
4.9
%
5
905
32
59
3
875
1.3
%
1,283
21
69
3
1,232
2.0
%
6
274
18
14
64
214
0.3
%
158
17
5
6
164
0.3
%
Subtotal - Other Securities
10,021
275
327
95
9,874
14.1
%
9,683
184
409
16
9,442
15.3
%
Total
71,935
1,960
3,909
95
69,891
100.0
%
65,365
1,304
4,792
16
61,861
100.0
%
_____________
(1) Includes investments that support customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
(2) Prior period amounts have been restated to conform to current period presentation.
(3) Other invested assets consist of investments in limited partnerships and limited liability companies (“LPs/LLCs”), investment real estate held through direct ownership, derivative instruments and other miscellaneous investments.
(4) Excludes (i) assets of our investment management operations, including assets managed for third parties, (ii) derivative operations and (iii) those assets classified as "Separate account assets" on our balance sheet.
(5) Includes invested assets of our investment management and derivative operations. Excludes assets of our investment management operations that are managed for third parties and those assets classified as “Separate account assets” on our balance sheet.
(6) Excludes fixed maturity securities classified as trading.
(7) Reflects equivalent ratings for investments of the international operations. Includes, as of September 30, 2024 and December 31, 2023, 875 securities with amortized cost of $8,545 million (fair value $8,531 million) and 639 securities with amortized cost of $7,242 million (fair value $7,227 million), respectively, that have been categorized based on expected NAIC designations pending receipt of SVO ratings.
Page 30
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INVESTMENT PORTFOLIO COMPOSITION - JAPANESE INSURANCE OPERATIONS AND EXCLUDING JAPANESE INSURANCE OPERATIONS AND FUNDS WITHHELD (1)
(in millions)
September 30, 2024
December 31, 2023
Amount
% of Total
Amount
% of Total
Investment Portfolio Composition - Japanese Insurance Operations (2):
Fixed maturities:
Public, available-for-sale, at fair value
113,574
67.3
%
113,737
68.2
%
Private, available-for-sale, at fair value
22,963
13.6
%
20,891
12.5
%
Fixed maturities, trading, at fair value
515
0.3
%
669
0.4
%
Assets supporting experience-rated contractholder liabilities, at fair value
3,654
2.2
%
3,168
1.9
%
Equity securities, at fair value
1,179
0.7
%
1,614
1.0
%
Commercial mortgage and other loans, at book value, net of allowance
16,717
9.9
%
17,980
10.8
%
Policy loans, at outstanding balance
2,702
1.6
%
2,670
1.6
%
Other invested assets (3)
5,840
3.4
%
5,617
3.4
%
Short-term investments, net of allowance
1,638
1.0
%
421
0.2
%
Total
168,782
100.0
%
166,767
100.0
%
September 30, 2024
December 31, 2023 (4)
Amount
% of Total
Amount
% of Total
Investment Portfolio Composition - Excluding Japanese Insurance Operations and Funds Withheld (2):
Fixed maturities:
Public, available-for-sale, at fair value
117,134
51.3
%
103,732
51.3
%
Private, available-for-sale, at fair value
46,928
20.6
%
40,970
20.2
%
Fixed maturities, trading, at fair value
3,516
1.5
%
4,285
2.1
%
Assets supporting experience-rated contractholder liabilities, at fair value
—
0.0
%
—
0.0
%
Equity securities, at fair value
3,215
1.4
%
4,050
2.0
%
Commercial mortgage and other loans, at book value, net of allowance
36,783
16.1
%
33,014
16.3
%
Policy loans, at outstanding balance
3,857
1.7
%
3,898
1.9
%
Other invested assets, net of allowance (3)
10,963
4.9
%
8,317
4.1
%
Short-term investments, net of allowance
5,740
2.5
%
4,288
2.1
%
Total
228,136
100.0
%
202,554
100.0
%
__________
(1) Excludes Closed Block division.
(2) Excludes assets classified as "Separate account assets" on our balance sheet.
(3) Other invested assets consist of investments in LPs/LLCs, investment real estate held through direct ownership, derivative instruments and other miscellaneous investments.
(4) Prior period amounts have been restated to conform to current period presentation.
Page 31
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INVESTMENT RESULTS (1)
(in millions)
Three Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses) (3)
Yield (2)
Amount
Yield (2)(3)
Amount (3)
General Account (4)
Fixed maturities (5)
4.48
%
3,298
(527)
4.15
%
3,075
(277)
Equity securities
2.55
%
28
—
2.32
%
30
—
Commercial mortgage and other loans
4.31
%
564
(41)
4.01
%
495
(68)
Policy loans
4.66
%
75
—
4.50
%
72
—
Short-term investments and cash equivalents
5.92
%
252
—
6.48
%
232
2
Gross investment income before investment expenses
4.49
%
4,217
(568)
4.31
%
3,904
(343)
Investment expenses
-0.15
%
(273)
—
-0.13
%
(217)
—
Subtotal
4.34
%
3,944
(568)
4.18
%
3,687
(343)
Other investments (5)
243
54
281
(2,033)
Investment results of other entities and operations (6)
27
(5)
44
38
Investment results of Funds Withheld (7)
337
(1,092)
48
167
Less: investment income related to adjusted operating income reconciling items
(115)
—
(168)
—
Total
4,436
(1,611)
3,892
(2,171)
Nine Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses) (3)
Yield (2)
Amount
Yield (2)(3)
Amount (3)
General Account (4)
Fixed maturities (5)
4.34
%
9,548
(806)
4.09
%
9,116
(496)
Equity securities
3.04
%
109
—
2.93
%
109
—
Commercial mortgage and other loans
4.31
%
1,646
(136)
3.95
%
1,435
(105)
Policy loans
4.57
%
219
—
4.56
%
216
—
Short-term investments and cash equivalents
6.40
%
743
—
5.84
%
643
2
Gross investment income before investment expenses
4.40
%
12,265
(942)
4.24
%
11,519
(599)
Investment expenses
-0.16
%
(806)
—
-0.13
%
(653)
—
Subtotal
4.24
%
11,459
(942)
4.11
%
10,866
(599)
Other investments (5)
731
195
743
(2,357)
Investment results of other entities and operations (6)
19
1
197
27
Investment results of Funds Withheld (7)
932
(1,040)
70
167
Less: investment income related to adjusted operating income reconciling items
(367)
—
(501)
—
Total
12,774
(1,786)
11,375
(2,762)
________
(1) Excludes Closed Block division.
(2) Yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest-related items, such as settlements of duration management swaps which are included in realized investment gains and losses and included in adjusted operating income. For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost, net of allowance. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for security lending liabilities).
A yield is not presented for other investments as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and investment income and assets related to other investments.
(3) Prior period amounts have been reclassified to conform to current period presentation.
(4) Excludes commercial loans and assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders, assets of our investment management operations, including assets that are managed for third parties. assets classified as "Separate account assets" on our balance sheet and investments that support customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
(5) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in "Other investments." Realized gains (losses) for "Other investments" includes changes in fair value of product-related and other derivatives and embedded derivatives.
(6) Includes invested income of assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and investment management operations.
(7) Includes investments that support customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
Page 32
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INVESTMENT RESULTS - JAPANESE INSURANCE OPERATIONS
(in millions)
Three Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses)
Yield (1)
Amount
Yield (1)
Amount
Japanese Insurance Operations:
Fixed maturities (2)
3.18
%
1,115
(82)
2.96
%
1,009
(15)
Equity securities
1.90
%
6
—
1.12
%
5
—
Commercial mortgage and other loans
3.71
%
153
(1)
3.67
%
162
(33)
Policy loans
3.71
%
24
—
3.89
%
25
—
Short-term investments and cash equivalents
5.25
%
35
—
5.20
%
27
—
Gross investment income before investment expenses
3.25
%
1,333
(83)
3.05
%
1,228
(48)
Investment expenses
-0.14
%
(90)
—
-0.12
%
(79)
—
Subtotal
3.11
%
1,243
(83)
2.93
%
1,149
(48)
Other investments (2)
121
343
84
(807)
Total
1,364
260
1,233
(855)
Nine Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses)
Yield (1)
Amount
Japanese Insurance Operations:
Fixed maturities (2)
3.10
%
3,235
88
2.88
%
2,981
189
Equity securities
3.06
%
33
—
2.84
%
37
—
Commercial mortgage and other loans
3.78
%
478
(15)
3.66
%
484
(48)
Policy loans
3.76
%
73
—
3.88
%
74
—
Short-term investments and cash equivalents
5.88
%
92
—
4.76
%
71
—
Gross investment income before investment expenses
3.21
%
3,911
73
3.00
%
3,647
141
Investment expenses
-0.13
%
(246)
—
-0.13
%
(241)
—
Subtotal
3.08
%
3,665
73
2.87
%
3,406
141
Other investments (2)
347
(214)
238
(926)
Total
4,012
(141)
3,644
(785)
__________
(1) Yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest-related items, such as settlements of duration management swaps which are included in realized investment gains and losses and included in adjusted operating income. For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost, net of allowance. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for security lending liabilities).
A yield is not presented for other investments as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and investment income and assets related to other investments.
(2) Includes fixed maturity securities classified as available-for-sale and held-to-maturity and excludes fixed maturity securities classified as trading, which are included in "Other investments." Realized gains (losses) for "Other investments" includes changes in fair value of product-related and other derivatives and embedded derivatives.
Page 33
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
INVESTMENT RESULTS - EXCLUDING FUNDS WITHHELD AND JAPANESE INSURANCE OPERATIONS (1)
(in millions)
Three Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses) (3)
Yield (2)
Amount
Yield (2)(3)
Amount (3)
Excluding Funds Withheld and Japanese Insurance Operations (4):
Fixed maturities (5)
5.68
%
2,183
(445)
5.17
%
2,066
(262)
Equity securities
2.81
%
22
—
2.92
%
25
—
Commercial mortgage and other loans
4.59
%
411
(40)
4.19
%
333
(35)
Policy loans
5.31
%
51
—
4.90
%
47
—
Short-term investments and cash equivalents
6.02
%
217
—
6.66
%
205
2
Gross investment income before investment expenses
5.46
%
2,884
(485)
5.21
%
2,676
(295)
Investment expenses
-0.16
%
(183)
—
-0.13
%
(138)
—
Subtotal
5.30
%
2,701
(485)
5.08
%
2,538
(295)
Other investments (5)
122
(289)
197
(1,226)
Total
2,823
(774)
2,735
(1,521)
Nine Months Ended September 30,
2024
2023
Investment Income
Realized Gains (Losses)
Investment Income
Realized Gains (Losses) (3)
Yield (2)
Amount
Yield (2)(3)
Amount (3)
Excluding Funds Withheld and Japanese Insurance Operations (4):
Fixed maturities (5)
5.48
%
6,313
(894)
5.13
%
6,135
(685)
Equity securities
3.04
%
76
—
2.98
%
72
—
Commercial mortgage and other loans
4.57
%
1,168
(121)
4.11
%
951
(57)
Policy loans
5.12
%
146
—
5.02
%
142
—
Short-term investments and cash equivalents
6.47
%
651
—
5.97
%
572
2
Gross investment income before investment expenses
5.33
%
8,354
(1,015)
5.15
%
7,872
(740)
Investment expenses
-0.18
%
(560)
—
-0.13
%
(412)
—
Subtotal
5.15
%
7,794
(1,015)
5.02
%
7,460
(740)
Other investments (5)
384
409
505
(1,431)
Total
8,178
(606)
7,965
(2,171)
__________
(1) Excludes Closed Block division.
(2) Yields are based on net investment income as reported under U.S. GAAP and as such do not include certain interest-related items, such as settlements of duration management swaps which are included in realized investment gains and losses and included in adjusted operating income. For interim periods, yields are annualized. The denominator in the yield percentage is based on quarterly average carrying values for all asset types except for fixed maturities which are based on amortized cost, net of allowance. Amounts for fixed maturities, short-term investments and cash equivalents are also netted for securities lending activity (i.e., income netted for rebate expenses and asset values netted for security lending liabilities).
A yield is not presented for other investments as it is not considered a meaningful measure of investment performance. Yields exclude investment income and assets related to assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders and investment income and assets related to other investments.
(3) Prior period amounts have been reclassified to conform to current period presentation.
(4) Excludes assets supporting experience-rated contractholder liabilities where the investment results generally accrue to contractholders, assets of our investment management operations, including assets that are managed for third parties and assets classified as "Separate account assets" on our balance sheet and investments that support customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
(5) Includes fixed maturity securities classified as available-for-sale and excludes fixed maturity securities classified as trading, which are included in "Other investments." Realized gains (losses) for "Other investments" includes changes in fair value of product-related and other derivatives and embedded derivatives.
Page 34
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES
(in millions)
Nine Months Ended September 30, 2024
Nine Months Ended September 30, 2023
Reconciling Items
Reconciling Items
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Revenues:
Premiums
34,810
—
—
—
1,235
357
—
—
36,402
18,860
—
—
(1)
1,228
358
—
—
20,445
Policy charges and fee income
3,215
120
—
(92)
—
9
—
—
3,252
3,165
95
—
59
—
—
—
—
3,319
Net investment income
12,774
(12)
—
—
1,527
379
—
—
14,668
11,375
(14)
—
—
1,491
515
—
—
13,367
Realized investment gains (losses), net (3)
(449)
(1,315)
—
—
(532)
(22)
—
—
(2,318)
293
(2,932)
—
—
(361)
(123)
—
—
(3,123)
Asset management fees, commissions and other income
4,694
759
—
—
360
486
(101)
—
6,198
3,924
464
—
—
183
527
(51)
—
5,047
Change in value of market risk benefits, net of related hedging gains (losses)
—
—
(320)
—
—
—
—
—
(320)
—
—
(160)
—
—
—
—
—
(160)
Total revenues
55,044
(448)
(320)
(92)
2,590
1,209
(101)
—
57,882
37,617
(2,387)
(160)
58
2,541
1,277
(51)
—
38,895
Benefits and expenses:
Insurance and annuity benefits
37,232
(10)
—
(5)
2,339
584
—
—
40,140
20,867
17
—
7
2,290
566
—
—
23,747
Change in estimates of liability for future policy benefits
52
22
—
25
—
(112)
—
—
(13)
230
34
—
(137)
—
104
—
—
231
Interest credited to policyholders' account balances
2,892
141
—
—
87
128
—
—
3,248
2,379
389
—
—
89
145
—
—
3,002
Interest expense
1,494
—
—
—
—
10
—
—
1,504
1,315
—
—
—
—
6
—
—
1,321
Deferral of acquisition costs
(1,897)
—
—
—
—
(1)
—
—
(1,898)
(1,691)
—
—
—
—
—
—
—
(1,691)
Amortization of acquisition costs
1,081
24
—
—
9
3
—
—
1,117
1,061
21
—
—
10
—
—
—
1,092
General and administrative expenses
9,635
—
—
—
216
547
12
16
10,426
9,088
—
—
—
202
478
(9)
24
9,783
Total benefits and expenses
50,489
177
—
20
2,651
1,159
12
16
54,524
33,249
461
—
(130)
2,591
1,299
(9)
24
37,485
__________
(1) See page 40 for a definition of adjusted operating income.
(2) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
(3) Includes realized gains and losses from sales of funds withheld and modified coinsurance assets not passed back to reinsurers of $(249) million for nine months ended September 30, 2024. Also includes changes in the value of the funds withheld and modified coinsurance embedded derivatives associated with available-for-sale securities of $(73) million and certain derivatives of $1 million for nine months ended September 30, 2024.
Page 35
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES
(in millions)
Three Months Ended September 30, 2024
Three Months Ended September 30, 2023
Reconciling Items
Reconciling Items
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Revenues:
Premiums
12,527
—
—
1
393
124
—
—
13,045
3,659
—
—
(1)
392
123
—
—
4,173
Policy charges and fee income
1,098
48
—
(35)
—
—
—
—
1,111
1,060
12
—
40
—
—
—
—
1,112
Net investment income
4,436
(3)
—
—
504
118
—
—
5,055
3,892
(5)
—
—
511
173
—
—
4,571
Realized investment gains (losses), net (3)
(191)
(1,428)
—
—
(233)
8
—
—
(1,844)
47
(2,126)
—
—
(231)
(92)
—
—
(2,402)
Asset management fees, commissions and other income
1,619
408
—
—
153
134
(45)
—
2,269
1,390
(281)
—
—
(57)
119
(22)
—
1,149
Change in value of market risk benefits, net of related hedging gains (losses)
—
—
(146)
—
—
—
—
—
(146)
—
—
(251)
—
—
—
—
—
(251)
Total revenues
19,489
(975)
(146)
(34)
817
384
(45)
—
19,490
10,048
(2,400)
(251)
39
615
323
(22)
—
8,352
Benefits and expenses:
Insurance and annuity benefits
13,321
(13)
—
(2)
714
196
—
—
14,216
4,348
91
—
4
515
202
—
—
5,160
Change in estimates of liability for future policy benefits
66
10
—
95
—
9
—
—
180
49
2
—
(108)
—
8
—
—
(49)
Interest credited to policyholders' account balances
1,038
(243)
—
—
28
40
—
—
863
827
(28)
—
—
30
43
—
—
872
Interest expense
485
—
—
—
—
4
—
—
489
419
—
—
—
(1)
3
—
—
421
Deferral of acquisition costs
(636)
—
—
—
—
—
—
—
(636)
(576)
—
—
—
—
—
—
—
(576)
Amortization of acquisition costs
356
8
—
—
3
—
—
—
367
351
7
—
—
3
—
—
—
361
General and administrative expenses
3,299
—
—
—
70
88
(2)
3
3,458
2,977
—
—
—
66
180
(11)
9
3,221
Total benefits and expenses
17,929
(238)
—
93
815
337
(2)
3
18,937
8,395
72
—
(104)
613
436
(11)
9
9,410
__________
(1) See page 40 for a definition of adjusted operating income.
(2) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
(3) Includes realized gains and losses from sales of funds withheld and modified coinsurance assets not passed back to reinsurers of $(92) million for three months ended September 30, 2024. Also includes changes in the value of the funds withheld and modified coinsurance embedded derivatives associated with available-for-sale securities of $(547) million and certain derivatives of $21 million for three months ended September 30, 2024.
Page 36
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES
(in millions)
Three Months Ended December 31, 2023
Three Months Ended March 31, 2024
Reconciling Items
Reconciling Items
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Revenues:
Premiums
6,364
—
—
2
447
106
—
—
6,919
15,006
—
—
(1)
409
123
—
—
15,537
Policy charges and fee income
1,059
142
—
7
—
—
—
—
1,208
1,056
50
—
(57)
—
7
—
—
1,056
Net investment income
3,918
(4)
—
—
468
116
—
—
4,498
4,120
(4)
—
—
514
134
—
—
4,764
Realized investment gains (losses), net (3)
(4)
(510)
—
—
(19)
41
—
—
(492)
(102)
(85)
—
—
(125)
4
—
—
(308)
Asset management fees, commissions and other income
1,536
656
—
—
229
348
(34)
—
2,735
1,626
340
—
—
164
246
(39)
—
2,337
Change in value of market risk benefits, net of related hedging gains (losses)
—
—
216
—
—
—
—
—
216
—
—
123
—
—
—
—
—
123
Total revenues
12,873
284
216
9
1,125
611
(34)
—
15,084
21,706
301
123
(58)
962
514
(39)
—
23,509
Benefits and expenses:
Insurance and annuity benefits
7,130
(122)
—
(9)
1,072
182
—
—
8,253
15,774
50
—
(1)
859
202
—
—
16,884
Change in estimates of liability for future policy benefits
20
18
—
96
—
(28)
—
—
106
15
2
—
(25)
—
(9)
—
—
(17)
Interest credited to policyholders' account balances
867
42
—
—
29
43
—
—
981
902
304
—
—
30
47
—
—
1,283
Interest expense
439
—
—
—
—
3
—
—
442
529
—
—
—
(1)
2
—
—
530
Deferral of acquisition costs
(637)
—
—
—
—
—
—
—
(637)
(647)
—
—
—
—
(1)
—
—
(648)
Amortization of acquisition costs
356
8
—
—
3
—
—
—
367
362
8
—
—
3
2
—
—
375
Goodwill impairment
—
—
—
—
—
177
—
—
177
—
—
—
—
—
—
—
—
—
General and administrative expenses
3,467
—
—
—
71
191
(8)
12
3,733
3,336
—
—
—
74
306
(12)
8
3,712
Total benefits and expenses
11,642
(54)
—
87
1,175
568
(8)
12
13,422
20,271
364
—
(26)
965
549
(12)
8
22,119
__________
(1) See page 40 for a definition of adjusted operating income.
(2) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
(3) Includes realized gains and losses from sales of funds withheld and modified coinsurance assets not passed back to reinsurers of $(77) million and $(63) million for three months ended December 31, 2023 and March 31, 2024, respectively. Also includes changes in the value of the funds withheld and modified coinsurance embedded derivatives associated with available-for-sale securities of $(503) million and $262 million and certain derivatives of $35 million and $(16) million for three months ended December 31, 2023 and March 31, 2024, respectively.
Page 37
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
COMBINED STATEMENTS OF OPERATIONS - AOI TO U.S. GAAP RECONCILIATION OF REVENUES AND BENEFITS AND EXPENSES
(in millions)
Three Months Ended June 30, 2024
Reconciling Items
Adjusted Operating Income (Loss) basis (1)
Total realized investment gains (losses), net, and related charges and adjustments
Change in value of market risk benefits, net of related hedging gains (losses)
Market experience updates
Closed Block Division
Other Divested and Run-off Businesses
Equity in earnings of joint ventures and other operating entities, and earnings attributable to noncontrolling interests
Other adjustments (2)
U.S. GAAP
Revenues:
Premiums
7,277
—
—
—
433
109
—
—
7,819
Policy charges and fee income
1,061
22
—
—
—
2
—
—
1,085
Net investment income
4,218
(5)
—
—
509
128
—
—
4,850
Realized investment gains (losses), net (3)
(156)
197
—
—
(174)
(34)
—
—
(167)
Asset management fees, commissions and other income
1,449
11
—
—
43
105
(17)
—
1,591
Change in value of market risk benefits, net of related hedging gains (losses)
—
—
(297)
—
—
—
—
—
(297)
Total revenues
13,849
225
(297)
—
811
310
(17)
—
14,881
Benefits and expenses:
Insurance and annuity benefits
8,137
(47)
—
(2)
766
186
—
—
9,040
Change in estimates of liability for future policy benefits
(29)
10
—
(45)
—
(113)
—
—
(177)
Interest credited to policyholders' account balances
952
79
—
—
29
41
—
—
1,101
Interest expense
480
—
—
—
1
4
—
—
485
Deferral of acquisition costs
(614)
—
—
—
—
—
—
—
(614)
Amortization of acquisition costs
363
8
—
—
3
—
—
—
374
General and administrative expenses
3,000
—
—
—
72
154
26
5
3,257
Total benefits and expenses
12,289
50
—
(47)
871
272
26
5
13,466
__________
(1) See page 40 for a definition of adjusted operating income.
(2) Represents adjustments not included in the above reconciling items, including certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.
(3) Includes realized gains and losses from sales of funds withheld and modified coinsurance assets not passed back to reinsurers of $(94) million for three months ended June 30, 2024. Also includes changes in the value of the funds withheld and modified coinsurance embedded derivatives associated with available-for-sale securities of $212 million and certain derivatives of $(4) million for three months ended June 30, 2024.
Page 38
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
KEY DEFINITIONS AND FORMULAS
1. Adjusted operating income before income taxes:
Adjusted operating income is a non-GAAP measure used by the Company to evaluate segment performance and to allocate resources. Adjusted operating income excludes “Realized investment gains (losses), net, and related charges and adjustments." A significant element of realized investment gains and losses are impairments and credit-related and interest rate-related gains and losses. Impairments and losses from sales of credit-impaired securities, the timing of which depends largely on market credit cycles, can vary considerably across periods. The timing of other sales that would result in gains or losses, such as interest rate-related gains or losses, is largely subject to our discretion and influenced by market opportunities as well as capital and other factors.
Realized investment gains (losses) within certain businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments are included in adjusted operating income. Adjusted operating income generally excludes realized investment gains and losses from products that contain embedded derivatives, and from associated derivative portfolios that are part of an asset-liability management program related to the risk of those products. Adjusted operating income also excludes gains and losses from changes in value of certain assets and liabilities relating to foreign currency exchange movements that have been economically hedged or considered part of our capital funding strategies for our international subsidiaries, as well as gains and losses on certain investments that are designated as trading.
Adjusted operating income also excludes investment gains and losses on assets supporting experience-rated contractholder liabilities and changes in experience-rated contractholder liabilities due to asset value changes, because these recorded changes in asset and liability values are expected to ultimately accrue to contractholders. Adjusted operating income excludes the changes in fair value of equity securities that are recorded in net income. Additionally, adjusted operating income excludes the impact of annual assumption updates and other refinements included in the above items.
Adjusted operating income excludes “Change in value of market risk benefits, net of related hedging gains (losses)”, which reflects the impact from changes in current market conditions, and market experience updates, reflecting the immediate impacts in current period results from changes in current market conditions on estimates of profitability, which we believe enhances the understanding of underlying performance trends. Adjusted operating income also excludes the results of Divested and Run-off Businesses, which are not relevant to our ongoing operations and discontinued operations and earnings attributable to noncontrolling interests, each of which is presented as a separate component of net income under GAAP. Additionally, adjusted operating income excludes other items, such as certain components of the consideration for acquisitions, which are recognized as compensation expense over the requisite service periods, and goodwill impairments. Earnings attributable to noncontrolling interests is presented as a separate component of net income under GAAP and excluded from adjusted operating income.
Adjusted operating income does not equate to "Net income" as determined in accordance with U.S. GAAP. Adjusted operating income is not a substitute for income determined in accordance with U.S. GAAP, and our definition of adjusted operating income may differ from that used by other companies. The items above are important to an understanding of our overall results of operations. However, we believe that the presentation of adjusted operating income as we measure it for management purposes enhances the understanding of our results of operations by highlighting the results from ongoing operations and the underlying profitability of our businesses. Trends in the underlying profitability of our businesses can be more clearly identified without the fluctuating effects of the items described above.
2. After-tax adjusted operating income:
Adjusted operating income before taxes, as defined above, less the income tax effect applicable to adjusted operating income before taxes. The tax effect associated with pre-tax adjusted operating income is based on applicable domestic and foreign tax regulations inclusive of pertinent adjustments.
3. Annualized New Business Premiums:
Premiums from new sales that are expected to be collected over a one year period. Group insurance annualized new business premiums exclude new premiums resulting from rate changes on existing policies, from additional coverage issued under our Servicemembers' Group Life Insurance contract, and from excess premiums on group universal life insurance that build cash value but do not purchase face amounts. Group insurance annualized new business premiums include premiums from the takeover of claim liabilities. Excess (unscheduled) and single premium business for the company's domestic individual life and international operations are included in annualized new business premiums based on a 10% credit. Amounts ascribed to Gibraltar Life Consultants include production by captive agents associated with the Japan operation.
4. Assets Under Administration:
Fair market value of assets in client accounts and mortgage servicing assets, which are reported on an unpaid principal balance basis, that are not included in Assets Under Management. Prudential does not receive a management fee on these assets, but may receive a fee for executing trades, custody or record keeping services, or servicing the mortgage loans. In addition, fair market value of assets for which Prudential provides non-discretionary investment advice and receives a fee.
5. Assets Under Management:
Fair market value of assets directly managed by Prudential or joint ventures of which Prudential has at least 50% ownership, and assets invested in investment options included in the Company’s products that are managed by third party sub-advised managers at the discretion of Prudential. This includes externally managed modified coinsurance for both Hartford and Allstate. It also includes the fair value of derivatives used in various portfolio management strategies related to the portfolio’s invested assets, regardless of the hedge accounting designation, but excludes direct hedges of product liabilities and expenses.
6. Book value per share of Common Stock:
GAAP equity attributed to Prudential Financial, Inc. divided by the number of common shares outstanding at end of period, on a diluted basis. Adjusted book value per common share is a non-GAAP measure. This non-GAAP measure augments the understanding of our financial position by providing a measure of net worth that is primarily attributable to our business operations, separate from the portion that is affected by capital and currency market conditions including the removal of the associated accounting impacts of the remeasurement of certain insurance liabilities and investments that are marked to market through AOCI under GAAP, and the cumulative change in fair value of funds withheld embedded derivatives related to unrealized gains and losses on available-for-sale securities and certain derivatives associated with customer liabilities reinsured under coinsurance with funds withheld and modified coinsurance arrangements.
However, adjusted book value per common share is not a substitute for book value per share including AOCI determined in accordance with GAAP, and the adjustments made to derive the measure are important to an understanding of our overall financial position.
Page 39
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
KEY DEFINITIONS AND FORMULAS
7. Borrowings - Capital Debt:
Debt utilized to meet the capital requirements of our business.
8. Borrowings - Operating Debt:
Debt utilized for business funding to meet specific purposes, which may include activities associated with our PGIM and Assurance IQ businesses. Operating debt also consists of debt issued to finance specific portfolios of investment assets, the proceeds from which will service the debt. Specifically, this includes assets supporting reserve requirements under Regulation XXX and Guideline AXXX, as well as funding for institutional and insurance company portfolio cash flow timing differences.
9. Divested and Run-off Businesses:
Businesses that have been or will be sold or exited, including businesses that have been placed in wind down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP.
10. Earned Premiums:
The portion of premium, net of returns to participating policyholders and amounts ceded, that represents coverage already provided or that belongs to the insurer based on the part of the policy period that has passed.
11. General Account:
Includes assets of the insurance companies for which the Company bears the investment risk. These generally include assets supporting "Future Policy Benefits" and "Policyholders' Account Balances". General account assets also include assets of the parent company, Prudential Financial, Inc. and excludes assets recognized for statutory purposes that are specifically allocated to a separate account.
12. Gibraltar Life:
Includes results from the Japan operation.
13. Gibraltar Life Consultants:
Captive insurance agents for Gibraltar Life.
14. Group Insurance Benefits Ratios:
Ratio of policyholder benefits to earned premiums, policy charges and fee income.
15. Group Life Insurance and Group Disability Insurance Administrative Operating Expense Ratios:
Ratio of administrative operating expenses (excluding commissions) to gross premiums, and net policy charges and fee income.
16. Individual Retirement Strategies Account Values in General Account and Separate Account:
Amounts represent the breakdown of invested customer funds in annuities either written or reinsured by the Company.
17. Individual Retirement Strategies - Net Amounts at Risk:
Living Benefit Features - For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance.
Death Benefit Features - Net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date.
18. Insurance and Annuity Benefits:
Total death benefits, annuity benefits, disability benefits, other policy benefits, and losses paid or incurred, under insurance and annuity contracts, plus the change in reserves for future policy benefits, losses and loss adjustment expenses.
19. International Life Planners:
Captive insurance Advisors in our Life Planner operations.
Page 40
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
KEY DEFINITIONS AND FORMULAS
20. Non-recourse and Limited-recourse Debt:
Limited and non-recourse borrowing is where the debt holder is only entitled to collect against the assets pledged to the debt as collateral or has very limited rights to collect against other assets.
21. Other Related Revenues:
Other related revenues include incentive fees, transaction fees, seed and co-investment results, and commercial mortgage revenues.
22. PGIM Asset Under Management Classifications:
Public Equity - Represents stock ownership interest in a corporation or partnership (excluding hedge funds) or real estate investment trust.
Public Fixed Income - Represents debt instruments that pay fixed interest and usually have a maturity (excluding mortgages).
Real Estate - Includes direct real estate equity and real estate mortgages.
Private Credit and Other Alternatives - Includes private credit, private equity, hedge funds and other alternative strategies.
Multi-Asset - Includes funds or products that invest in more than one asset class, balancing equity and fixed income funds and target date funds.
23. Policy Persistency - Group Insurance:
Percentage of the premiums in force at the end of the prior year that are still in force at the end of the period (excluding Servicemembers' Group Life Insurance and Prudential Employee Benefit Plan).
24. Policy Persistency - International Businesses:
13 month persistency represents the average percentage of face amount of policies that are still in force at their 13th policy month. 25 month persistency represents the average percentage of face amount of policies that are still in force at their 25th policy month.
25. Prudential Advisors:
Captive financial professionals in our insurance operations in the United States.
26. Prudential Financial, Inc. Equity:
Amount of capital assigned to each of the Company's segments for purposes of measuring segment adjusted operating income before income taxes, established at a level which management considers necessary to support the segment's risks. Represents all of Prudential Financial, Inc. equity that is not attributable to noncontrolling interests.
27. Separate Accounts:
Assets of our insurance companies allocated under certain policies and contracts that are segregated from the general account and other separate accounts. The policyholder or contractholder predominantly bears the risk of investments held in a separate account.
28. Wrap-Fee Products:
Investment products generating asset-based fees in which the funds of the customer are generally invested in other investment products such as mutual funds.
Page 41
Table of Contents
Prudential Financial, Inc.
Quarterly Financial Supplement
Third Quarter 2024
RATINGS AND INVESTOR INFORMATION
FINANCIAL STRENGTH RATINGS
as of January 15, 2025
Standard &
Fitch
A.M. Best*
Poor's
Moody's*
Ratings*
The Prudential Insurance Company of America
A+
AA-
Aa3
AA-
PRUCO Life Insurance Company
A+
AA-
Aa3
AA-
PRUCO Life Insurance Company of New Jersey
A+
AA-
NR
AA-
The Prudential Life Insurance Co., Ltd. (Prudential of Japan)
NR
A+
NR
NR
Gibraltar Life Insurance Company, Ltd.
NR
A+
NR
NR
The Prudential Gibraltar Financial Life Insurance Co. Ltd.
NR
A+
NR
NR
CREDIT RATINGS:
as of January 15, 2025
Prudential Financial, Inc.:
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
The Prudential Insurance Company of America:
Capital and surplus notes
a
A
A2
A
Prudential Funding, LLC:
Short-Term Debt
AMB-1
A-1+
P-1
F1+
Long-Term Senior Debt
a+
AA-
(P)A1
NR
PRICOA Global Funding I:
Long-Term Senior Debt
aa-
AA-
Aa3
AA-
* NR indicates not rated.
INVESTOR INFORMATION:
Corporate Office:
Prudential Financial, Inc.
751 Broad Street
Newark, New Jersey 07102
Common Stock:
Common Stock of Prudential Financial, Inc. is traded on the New York Stock Exchange under the symbol PRU.
For more information, please visit our website at investor.prudential.com.
Page 42
Mentions · how they’re counted
| Category | Underlined | Word counter | Model’s count |
|---|---|---|---|
| AI AI, artificial intelligence, generative AI, machine learning, large language model, LLM | 0 | — | — |
| Layoffs layoffs, RIF, headcount reduction, workforce optimization, restructuring | 0 | — | — |
| Recession recession, downturn, contraction, slowdown | 0 | — | — |
| Tariffs tariff, trade war, trade barriers, trade restrictions, trade policy | 0 | — | — |
| Buybacks share repurchase, buyback program | 1 | — | — |
Underlines use the same word lists the scores use. AI, recession and tariffs follow Palanor’s word counter, so those counts match it exactly on the same text. Layoffs and buybacks use the terms the model was given. The model’s count is an estimate by meaning, not by string, so it can differ from the underlines.
Source: SEC EDGAR · public domain · Highlights by Palanor