Slides
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OCTOBER 9, 2026 JAPAN UPDATE
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2 UPDATED TIMELINE OF SALES SUSPENSION IN JAPAN FSA BUSINESS SUSPENSION ORDERS IN EFFECT UNTIL JANUARY 31, 2027 Summary of Japan’s Financial Services Agency (FSA) Orders Prudential Holdings of Japan (PHJ) – Business improvement order Prudential of Japan (POJ) – Business improvement and business suspension order Gibraltar Life (Gibraltar) – Business improvement and partial business suspension order January 16, 2026 PRU announced findings of internal investigation into misconduct issues at POJ February 9, 2026 Voluntary 90-day sales suspension at POJ began April 21, 2026 PRU announced voluntary extension of sales suspension at POJ by additional 180 days May 10, 2026 180-day voluntary extension of sales suspension at POJ began October 8, 2026 Special Investigation Committee (SIC) report published October 9, 2026 FSA issued business suspension and improvement orders November 30, 2026 Business improvement plans from PHJ, POJ, and Gibraltar are due to FSA January 31, 2027 End of suspension orders issued on October 9 for POJ and Gibraltar October 13, 2026 Business suspensions begin at POJ and Gibraltar
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3 ADDRESSING ROOT CAUSES OF POJ MISCONDUCT FINDINGS FROM BOTH SIC AND FSA LARGELY CONSISTENT WITH REMEDIATION STEPS ALREADY UNDERWAY Governance and Accountability Sales Model Design POJ Organization and Management Culture • Defining roles across POJ, PHJ, and the enterprise more precisely with strengthened Board and senior management oversight • Enabling control functions to have greater independence and influence • Separating sales leadership and control responsibilities to strengthen both • Implementing new LP compensation model to place greater emphasis on customer outcomes and redesigning recruitment standards • Enhancing sales transparency and activity management • Strengthening customer protection by providing multiple points of contact and support across the company • Defining the redesigned culture with senior leaders spending more time in the field • Launching conduct risk management framework redesign • Building capacity for self-detection and correcting issues as they arise • Streamlining head-office responsibilities, including the establishment of a new Customer Office • Assigning clear functional ownership with transition to Chief Officer structure • Upgrading operational controls, management information, and decision-making • Finalizing branch transition and consolidation plans to give managers the span, tools, and authority to supervise effectively ELEMENT INITIATIVES
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4 UPDATED ESTIMATED FINANCIAL IMPACTS FOR POJ TOTAL POJ SALES SUSPENSION IMPACT ACROSS 2026 AND 2027 REMAINS ROUGHLY IN-LINE WITH PRIOR EXPECTATIONS • Estimated cumulative impact across 2026 and 2027 remains essentially unchanged at ~$1.0B of pre-tax AOI • Updated estimated financial impacts assume sales remain suspended through January 31, 2027, with a 12-18 month phased reopening • No material impacts to capital, ESR, or cash flows expected in 2026 or 2027 Prior Estimates Shared in April(1) Assumed suspension through November 5, 2026 Updated Estimated POJ Impacts(1) Assumes suspension through January 31, 2027 70 60 50 2026 2027 Gradual Ramp-Up One-Time & Other Operating Costs Costs Associated with Sustaining the Business $525-575M Bar order corresponds with the order of the legend to the left of the chart 95 60 2026 2027 $400-450M $500M $500-550M 450-500 290-340 405 370-390 70-100 (1) Based on pre-tax adjusted operating income. See Non -GAAP Measures in appendix. 5
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5 ESTIMATED FINANCIAL IMPACTS FOR GIBRALTAR PARTIAL BUSINESS SUSPENSION ONLY IMPACTS LIFE CONSULTANT CHANNEL • Estimated cumulative impact across 2026 and 2027 of ~$275M of pre-tax AOI, assuming sales remain suspended through January 31, 2027 • Since 2019, substantial changes have been made to Gibraltar’s governance and operating model, addressing many of the same issues being remediated in POJ • Gibraltar reached out to over 2 million of its customers and as of mid-September, 57 of those customers were eligible for reimbursement totaling ~$2.6M (1) Based on pre-tax adjusted operating income. See Non -GAAP Measures in appendix. 2026 2027 Costs Associated with Sustaining the Business $100M $175M Estimated Gibraltar Impacts(1) Assumes suspension through January 31, 2027 Initiatives Underway at Gibraltar Also informed by POJ Learnings Life Consultant Compensation Redesign Field Manager Compensation Redesign Enhanced Governance
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6 CONTINUED CONFIDENCE IN JAPAN BUSINESS GROWING OUR JAPAN BUSINESS REMAINS A KEY STRATEGIC PRIORITY Complete remediation efforts Demonstrate effectiveness Continue to rebuild customer trust Resume sales in POJ and GIB Foundation for regaining momentum and contributing meaningfully to Prudential’s long-term growth Decades of experience Established customer relationships Meaningful capabilities EXISTING FOUNDATION INITIATIVES UNDERWAY
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7 FORWARD-LOOKING STATEMENTS Certain of the statements included in this presentation and made during the corresponding conference call, including those regarding expected duration of Japan sales suspensions, POJ’s phased reopening and Gibraltar’s productivity recovery, projected financial impacts and sales levels, assumptions regarding customer surrenders and sales-force retention and compensation, anticipated capital and cash-flow effects, the implementation and effectiveness of remediation and business-model reforms, and the Japan businesses’ ability to rebuild customer trust and contribute to long-term growth, constitute forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words such as “expects”, “believes”, “anticipates”, “includes”, “plans”, “assumes”, “estimates”, “projects”, “intends”, “should”, “will”, “shall”, or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Prudential Financial, Inc. and its subsidiaries. Prudential Financial, Inc.’s actual results may differ, possibly materially, from expectations or estimates reflected in such forward-looking statements. Certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements include, among others, losses on investments or financial contracts due to deterioration in credit quality or value, or counterparty default; losses on insurance products due to mortality experience, morbidity experience or policyholder behavior experience that differs significantly from our expectations when we price our products; and uncertainty regarding remediation of the matters discussed herein. Additional factors and uncertainties that could cause actual results to differ can be found in the “Risk Factors” and “Forward-Looking Statements” sections included in Prudential Financial, Inc.’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. Each of our forward-looking statements contained herein is subject to the risk that we will be unable to execute our strategy and other risks. Prudential Financial, Inc. does not undertake to update any particular forward-looking statement included in this presentation. ____________________________________________________________________________ Prudential Financial, Inc. of the United States is not affiliated with Prudential plc which is headquartered in the United Kingdom.
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8 NON-GAAP MEASURES This presentation includes references to adjusted operating income. Consolidated adjusted operating income is not calculated based on accounting principles generally accepted in the United States of America (GAAP). We believe that our use of this non-GAAP measure helps investors understand and evaluate the Company’s performance and financial position. The presentation of adjusted operating income as we measure it for management purposes enhances the understanding of the 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 below. However, this non-GAAP measure is not a substitute for income determined in accordance with GAAP, and the adjustments made to derive this measure are important to an understanding of our overall results of operations and financial position. 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. Additionally, 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.
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9 NON-GAAP MEASURES (CONTINUED) 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. The tax effect associated with pre-tax adjusted operating income is based on applicable IRS and foreign tax regulations inclusive of pertinent adjustments. 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 this non-GAAP measure 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. Due to the inherent difficulty in reliably quantifying certain items, including future realized investment gains/losses and changes in asset and liability values, given their unknown timing, unpredictable nature and potential significance, we cannot, without unreasonable effort, provide a reconciliation of our estimated future adjusted operating income to net income attributable to Prudential Financial, Inc., the most directly comparable GAAP measure. The variability of these items, which are necessary for a presentation of the reconciliation, could have a significant impact on our reported U.S. GAAP financial results.