Prudential Financial, Inc. (“Prudential Financial”) and its subsidiaries (collectively, “Prudential” or the “Company”) provide a wide range of insurance, investment management, and other financial products and services to both individual and institutional customers throughout the United States and in many other countries. Principal products and services provided include life insurance, annuities, retirement solutions, mutual funds and investment management.

The Company’s principal operations consist of PGIM (the Company’s global investment management business), the U.S. Businesses (consisting of the Retirement Strategies, Group Insurance and Individual Life businesses), the International Businesses, the Closed Block division, and the Company’s Corporate and Other operations. The Closed Block division is accounted for as a divested business that is reported separately from the Divested and Run-off Businesses that are included within Corporate and Other operations. Divested and Run-off Businesses consist of businesses that have been, or will be, sold or exited, including businesses that have been placed in wind-down status that do not qualify for “discontinued operations” accounting treatment under U.S. GAAP. The Company’s Corporate and Other operations include corporate items and initiatives that are not allocated to business segments as well as the Divested and Run-off Businesses described above.

In September 2023, the Company, through its Corporate and Other operations, invested approximately $200 million, and acquired a 20% equity interest as a limited partner, in Prismic Life Holding Company LP (“Prismic”), a Bermuda-exempted limited partnership that owns all of the outstanding capital stock of Prismic Life Reinsurance, Ltd. (“Prismic Re”), a licensed Bermuda-based life and annuity reinsurance company. As this investment is accounted for under the equity method, both Prismic and Prismic Re are considered related parties. Beginning with the fourth quarter of 2023, the operating results of Corporate and Other reflect the Company’s share of earnings in Prismic on a quarter lag. For information regarding the Company’s initial reinsurance transaction with Prismic Re, effective September 2023, see Note 15.

As part of its continuous improvement process, the Company is working to become a leaner and more agile company by simplifying its management structure, empowering its employees with faster decision-making processes and investing in technology and data platforms. As part of this, the Company is implementing changes to its organizational structure and has recorded a restructuring charge of $200 million to “General and administrative expenses” in the fourth quarter of 2023 within its Corporate and Other operations. The Company expects these actions will create operating efficiencies, and provide reinvestment capacity to build capabilities, realize additional efficiencies, strengthen its competitiveness and fuel future growth.

On January 1, 2023, the Company adopted Accounting Standard Update (“ASU”) 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, which provided new authoritative guidance impacting the accounting and disclosure requirements for long-duration insurance and investment contracts issued by the Company. See “Adoption of ASU 2018-12” below for additional information regarding this adoption, including the impacts to the Company’s 2022 and 2021 financial statements from implementing the new accounting standard, as well as the transition impacts recorded as of January 1, 2021. See Note 2 for additional details regarding the key policy changes effected by this ASU and updated accounting policies resulting from the adoption of this ASU for all periods presented in the Consolidated Financial Statements.

Financial, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner and variable interest entities (“VIEs”) in which the Company is considered the primary beneficiary. See Note 4 for additional information regarding the Company’s consolidated variable interest entities. Intercompany balances and transactions have been eliminated.

In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts which provides new authoritative guidance impacting the accounting and disclosure requirements for long-duration insurance and investment contracts issued by the Company. The Company adopted this guidance, effective January 1, 2023, using the modified retrospective transition method, where permitted, for changes to the liability for future policy benefits and deferred policy acquisition costs (“DAC”) and related balances, and using the retrospective transition method, as required, for market risk benefits. The Company applied the guidance as of the transition date of January 1, 2021 and retrospectively adjusted prior period amounts shown in the 2023 financial statements to reflect the new guidance.


	December 31, 2022
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions)
Deferred policy acquisition costs	$	19,537	$	1,009	$	20,546
Value of business acquired	595		26		621
Reinsurance recoverables and deposit receivables	17,460		1,533		18,993
Income tax assets	4,214		(4,214)		0
Market risk benefit assets	0		800		800
Other assets	12,728		(42)		12,686
TOTAL ASSETS	$	689,917	$	(888)	$	689,029

Future policy benefits	284,452		(22,679)		261,773
Policyholders' account balances	135,602		22		135,624
Market risk benefit liabilities	0		5,864		5,864
Reinsurance and funds withheld payables	4,462		1,271		5,733
Income tax liabilities	0		277		277
Other liabilities(1)	15,703		17		15,720
Total liabilities	672,338		(15,228)		657,110

Accumulated other comprehensive income (loss)	(19,827)		16,021		(3,806)
Retained earnings	33,392		(1,678)		31,714
Total Prudential Financial, Inc. equity	16,250		14,343		30,593
Noncontrolling interests	958		(3)		955
Total equity	17,208		14,340		31,548
TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY	$	689,917	$	(888)	$	689,029


	Year Ended December 31, 2022
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions, except per share amounts)
REVENUES
Premiums	$	38,019	$	(1,544)	$	36,475
Policy charges and fee income	5,574		(959)		4,615
Other income (loss)	(273)		881		608
Realized investment gains (losses), net	(3,369)		(1,138)		(4,507)
Change in value of market risk benefits, net of related hedging gains (losses)	0		(409)		(409)
Total revenues	60,050		(3,169)		56,881
BENEFITS AND EXPENSES
Policyholders' benefits	43,487		(2,671)		40,816
Change in estimates of liability for future policy benefits	0		654		654
Interest credited to policyholders' account balances	2,316		(123)		2,193
Amortization of deferred policy acquisition costs	2,429		(996)		1,433
General and administrative expenses	12,493		83		12,576
Total benefits and expenses	61,826		(3,053)		58,773
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	(1,776)		(116)		(1,892)
Total income tax expense (benefit)	(370)		91		(279)
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	(1,406)		(207)		(1,613)
Equity in earnings of operating joint ventures, net of taxes	(56)		(6)		(62)
NET INCOME (LOSS)	(1,462)		(213)		(1,675)
Less: Income attributable to noncontrolling interests	(24)		(4)		(28)
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$	(1,438)	$	(209)	$	(1,647)

EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	(3.93)	$	(0.56)	$	(4.49)
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	(3.93)	$	(0.56)	$	(4.49)


	Year Ended December 31, 2021
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions, except per share amounts)
REVENUES
Premiums	$	34,827	$	(877)	$	33,950
Policy charges and fee income	5,944		(511)		5,433
Other income (loss)	2,951		13		2,964
Realized investment gains (losses), net	4,024		(1,909)		2,115
Change in value of market risk benefits, net of related hedging gain	0		3,597		3,597
Total revenues	70,934		313		71,247
BENEFITS AND EXPENSES
Policyholders' benefits	38,458		(467)		37,991
Change in estimates of liability for future policy benefits	0		(35)		(35)
Interest credited to policyholders' account balances	3,482		(51)		3,431
Amortization of deferred policy acquisition costs	2,097		(615)		1,482
General and administrative expenses	13,582		27		13,609
Total benefits and expenses	61,553		(1,141)		60,412
INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	9,381		1,454		10,835
Total income tax expense (benefit)	1,674		321		1,995
INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF OPERATING JOINT VENTURES	7,707		1,133		8,840
Equity in earnings of operating joint ventures, net of taxes	87		11		98
NET INCOME (LOSS)	7,794		1,144		8,938
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL FINANCIAL, INC.	$	7,724	$	1,144	$	8,868

EARNINGS PER SHARE
Basic earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	19.65	$	2.91	$	22.56
Diluted earnings per share-Common Stock:
Net income (loss) attributable to Prudential Financial, Inc.	$	19.51	$	2.89	$	22.40


	Year Ended December 31, 2022
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions)
NET INCOME (LOSS)	$	(1,462)	$	(213)	$	(1,675)
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(1,185)		54		(1,131)
Net unrealized investment gains (losses)	(52,667)		(3,178)		(55,845)
Interest rate remeasurement of future policy benefits	0		63,643		63,643
Gain (loss) from changes in non-performance risk on market risk benefits	0		938		938
Total	(53,216)		61,457		8,241
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(12,063)		14,618		2,555
Other comprehensive income (loss), net of taxes	(41,153)		46,839		5,686
Comprehensive income (loss)	(42,615)		46,626		4,011
Less: Comprehensive income (loss) attributable to noncontrolling interests	(26)		(3)		(29)
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$	(42,589)	$	46,629	$	4,040


	Year Ended December 31, 2021
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions)
NET INCOME (LOSS)	$	7,794	$	1,144	$	8,938
Other comprehensive income (loss), before tax:
Foreign currency translation adjustments for the period	(1,138)		37		(1,101)
Net unrealized investment gains (losses)	(11,712)		(3,241)		(14,953)
Interest rate remeasurement of future policy benefits	0		18,941		18,941
Gain (loss) from changes in non-performance risk on market risk benefits	0		(693)		(693)
Total	(11,743)		15,044		3,301
Less: Income tax expense (benefit) related to other comprehensive income (loss)	(2,314)		3,465		1,151
Other comprehensive income (loss), net of taxes	(9,429)		11,579		2,150
Comprehensive income (loss)	(1,635)		12,723		11,088
Comprehensive income (loss) attributable to Prudential Financial, Inc.	$	(1,690)	$	12,723	$	11,033


	Year Ended December 31, 2022
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	(1,462)	$	(213)	$	(1,675)
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	3,369		1,138		4,507
Change in value of market risk benefits, net of related hedging (gain) loss	0		409		409
Policy charges and fee income	(2,532)		302		(2,230)
Interest credited to policyholders' account balances	2,316		(123)		2,193
Depreciation and amortization	124		(7)		117
Change in:
Deferred policy acquisition costs	232		(954)		(722)
Future policy benefits and other insurance liabilities	6,573		(441)		6,132
Income taxes	(1,685)		91		(1,594)
Derivatives, net	(2,981)		448		(2,533)
Other, net	(827)		(650)		(1,477)
Cash flows from (used in) operating activities	$	5,158	$	0	$	5,158


	Year Ended December 31, 2021
IMPACTED LINES ONLY	As Previously Reported		Effect of Change		As Currently Reported
	(in millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	7,794	$	1,144	$	8,938
Adjustments to reconcile net income to net cash provided by operating activities:
Realized investment (gains) losses, net	(4,024)		1,909		(2,115)
Change in value of market risk benefits, net of related hedging (gain) loss	0		(3,597)		(3,597)
Policy charges and fee income	(2,302)		168		(2,134)
Interest credited to policyholders' account balances	3,482		(51)		3,431
Depreciation and amortization	204		2		206
Change in:
Deferred policy acquisition costs	(451)		(592)		(1,043)
Future policy benefits and other insurance liabilities	7,762		979		8,741
Income taxes	(62)		321		259
Derivatives, net	(2,426)		96		(2,330)
Other, net	(1,524)		(379)		(1,903)
Cash flows from (used in) operating activities	$	9,812	$	0	$	9,812


	January 1, 2021
	Retained Earnings
	(in millions)
Balance after-tax, prior to transition	$	30,749
Reclassification of market risk benefits non-performance risk to AOCI(1)	(1,588)
Updates to certain universal life contract liabilities(2)	(1,025)
Change in non-participating traditional and limited-payment contract liabilities(3)	(543)
Other	(271)
Total pre-tax adjustments	(3,427)
Tax impacts	815
Balance after-tax, after transition	$	28,137

(3)Reflects the impact on in-force contract liabilities where expected benefits exceed expected gross premiums and/or exhausts any deferred profit liabilities at any issue-year cohort level as a result of updating to current best estimate cash flow assumptions as of transition date, as well as the impact of flooring the liability for future policy benefits at zero at the issue-year cohort level as of transition date.

At transition, there was a pre-tax charge to retained earnings of $402 million for certain issue-year cohorts related to non-participating traditional and limited-payment products where the expected benefits exceeded the expected gross premiums and/or exhausted any deferred profit liabilities. The charge is primarily driven by the loss of the aggregation benefit as sufficiencies in issue-year cohorts cannot offset issue-year cohorts with deficiencies. For additional information regarding the liability for future policy benefits, see Note 2.


	January 1, 2021
	Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance after-tax, prior to transition	$	30,738
Unwinding amounts related to unrealized investment gains and losses(1)	5,534
Reclassification of MRB NPR to AOCI(2)	1,588
Interest rate remeasurement of future policy benefits(3)	(62,711)
Change in operating joint ventures	(12)

Total pre-tax adjustments	(55,601)
Tax impacts	13,205
Balance after-tax, after transition	$	(11,658)

(1)Primarily reflects i) the removal of amounts related to the impact of unrealized investment gains and losses on premium deficiency reserves for non-participating traditional and limited-payment contracts and ii) amounts related to DAC and other balances as unrealized investment gains or losses no longer impact the amortization pattern of such balances under the new guidance. Also includes the impacts from updates to reserves and other related balances for certain universal life contracts. For additional information, see Note 2.

(3)Reflects the impact of remeasuring in-force non-participating traditional and limited-payment contract liabilities using current upper-medium grade fixed- income instrument yields. This adjustment largely reflects the difference between discount rates locked-in at contract inception versus current discount rates as of January 1, 2021.


	January 1, 2021
	Deferred Policy Acquisition Costs
	Retirement Strategies		Individual Life				International Businesses				Other Businesses		Total
	Individual Variable		Term Life		Variable/ Universal Life		Life Planner		Gibraltar Life and Other
	(in millions)
Balance prior to transition	$	4,643	$	2,417	$	3,779	$	4,278	$	3,390	$	520	$	19,027
Unwinding amounts related to unrealized investment gains and losses and other activity	273		0		450		337		570		106		1,736

Balance after transition	$	4,916	$	2,417	$	4,229	$	4,615	$	3,960	$	626	$	20,763


	January 1, 2021
	Benefit Reserves(1)
	Retirement Strategies		Individual Life		International Businesses				Corporate and Other		Other Businesses(2)		Total
	Institutional		Term Life		Life Planner		Gibraltar Life and Other		Long- Term Care
	(in millions)
Balance prior to transition	$	65,383	$	7,887	$	51,607	$	69,542	$	7,975	$	6,624	$	209,018
Changes in cash flow assumptions and other activity	(3,805)		0		10		(523)		(18)		1		(4,335)
Balance after transition, at original discount rate	61,578		7,887		51,617		69,019		7,957		6,625		204,683
Cumulative changes in discount rate assumptions and other activity	13,548		2,662		22,590		13,784		4,905		5,381		62,870
Balance after transition, at current discount rate	75,126		10,549		74,207		82,803		12,862		12,006		267,553
Less: Reinsurance recoverable	0		799		160		307		0		13		1,279
Balance after transition, net of reinsurance recoverable	$	75,126	$	9,750	$	74,047	$	82,496	$	12,862	$	11,993	$	266,274


	January 1, 2021
	Deferred Profit Liability(1)
	Retirement Strategies		International Businesses				Other Businesses		Total
	Institutional		Life Planner		Gibraltar Life and Other
	(in millions)
Balance prior to transition	$	1,315	$	1,964	$	3,746	$	349	$	7,374
Changes in benefit reserves	3,801		110		730		148		4,789
Balance after transition	5,116		2,074		4,476		497		12,163
Less: Reinsurance recoverable	0		7		15		0		22
Balance after transition, net of reinsurance recoverable	$	5,116	$	2,067	$	4,461	$	497	$	12,141


	January 1, 2021
	Additional Insurance Reserves(1)
	Retirement Strategies		Individual Life		Other Businesses		Total
	Individual Variable		Variable/ Universal Life
	(in millions)
Balance prior to transition	$	889	$	9,415	$	483	$	10,787
Unwinding amounts related to unrealized investment gains and losses	(65)		(1,444)		(106)		(1,615)
Balance prior to transition, excluding amounts related to unrealized investment gains and losses	824		7,971		377		9,172
Reclassification of future policy benefits AIR to MRBs	(824)		0		(92)		(916)
Reclassification of policyholders’ account balances AIR to MRBs	0		0		(48)		(48)
Updates to certain universal life contract liabilities(2)	0		1,772		7		1,779
Change in discount rate for annuitization benefits	0		0		116		116
Balance after transition, excluding amounts related to unrealized investment gains and losses	0		9,743		360		10,103
Amounts related to unrealized investment gains and losses after transition	0		1,186		0		1,186
Balance after transition	0		10,929		360		11,289
Less: Reinsurance recoverable	0		4,387		0		4,387
Balance after transition, net of reinsurance recoverable	$	0	$	6,542	$	360	$	6,902


	January 1, 2021
	Universal Life Loss Recognition Reserves/Profit Followed by Losses Liability(1)
	Individual Life		Other Businesses
					Total
	(in millions)
Balance prior to transition	$	1,823	$	6	$	1,829
Unwinding amounts related to unrealized investment gains and losses	(1,149)		0		(1,149)
Balance prior to transition, excluding amounts related to unrealized investment gains and losses	674		6		680
Derecognizing LRR & PFL	(674)		0		(674)
Balance after transition, excluding amounts related to unrealized investment gains and losses	0		6		6
Amounts related to unrealized investment gains and losses after transition	1,018		0		1,018
Balance after transition	$	1,018	$	6	$	1,024


	January 1, 2021
	Non-Participating Traditional and Limited-Payment Loss Recognition Reserves/Profit Followed by Losses Liability(1)
	Retirement Strategies		International Businesses				Corporate and Other		Other Businesses		Total
	Institutional		Life Planner		Gibraltar Life and Other		Long- Term Care
	(in millions)
Balance prior to transition	$	1,985	$	181	$	670	$	734	$	145	$	3,715
Unwinding amounts related to unrealized investment gains and losses	(1,985)		(169)		(670)		(734)		(105)		(3,663)
Balance prior to transition, excluding amounts related to unrealized investment gains and losses	0		12		0		0		40		52
Derecognizing LRR & PFL	0		(12)		0		0		(40)		(52)
Balance after transition	$	0	$	0	$	0	$	0	$	0	$	0


	January 1, 2021
	Terminal Dividend Liability(1)
	Individual Life				Closed Block Division		Total
	Variable/ Universal Life		Term Life
	(in millions)
Balance prior to transition	$	212	$	4	$	375	$	591
Unwinding amounts related to unrealized investment gains and losses and other activity	(11)		0		0		(11)
Balance after transition	201		4		375		580
Less: Reinsurance recoverable	0		0		0		0
Balance after transition, net of reinsurance recoverable	$	201	$	4	$	375	$	580


	January 1, 2021
	Unearned Revenue Reserves(1)
		Individual Life		International Businesses
		Variable/Universal Life		Life Planner		Gibraltar Life and Other		Corporate and Other		Other Businesses		Total
	(in millions)
Balance prior to transition		$	2,204	$	161	$	45	$	152	$	30	$	2,592
Unwinding amounts related to unrealized investment gains and losses and other activity		539		2		5		38		0		584
Balance after transition		2,743		163		50		190		30		3,176
Less: Reinsurance recoverable		0		0		0		0		0		0
Balance after transition, net of reinsurance recoverable		$	2,743	$	163	$	50	$	190	$	30	$	3,176

__________


	January 1, 2021
	Market Risk Benefits(1)
	Retirement Strategies		Other Businesses		Total
	Individual Variable
	(in millions)
Liability for guaranteed benefits recorded at fair value, prior to transition	$	18,731	$	148	$	18,879
AIR to be reclassified to MRBs, prior to transition, excluding amounts related to unrealized investment gains and losses	824		140		964
Total liability prior to transition	19,555		288		19,843
Change in reserve basis to MRB framework	122		98		220
MRBs after transition, at current NPR value	19,677		386		20,063
Less: Reinsured MRBs	204		7		211
MRBs after transition, net of reinsurance	19,473		379		19,852

MRBs after transition, at contract inception NPR value	21,259		392		21,651
Cumulative change in NPR	1,582		6		1,588
MRBs after transition, at current NPR value	$	19,677	$	386	$	20,063

__________


	January 1, 2021
	Cost of Reinsurance(1)
	Individual Life
	Variable/Universal Life
	(in millions)
Balance prior to transition	$	3,058
Unwinding amounts related to unrealized investment gains and losses	(659)
Balance prior to transition, excluding amounts related to unrealized investment gains and losses	2,399
Impact from updates to certain universal life contract liabilities(2)	860
Balance after transition, excluding amounts related to unrealized investment gains and losses	3,259
Amounts related to unrealized investment gains and losses after transition	580
Balance after transition	$	3,839

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining future policy benefits; policyholders’ account balances related to the fair value of embedded derivative instruments associated with the index-linked features of certain universal life and annuity products; market risk benefits; the measurement of goodwill and any related impairment; the valuation of investments including derivatives, the measurement of allowance for credit losses, and the recognition of other-than-temporary impairments (“OTTI”); pension and other postretirement benefits; any provision for income taxes and valuation of deferred tax assets; and accruals for contingent liabilities, including estimates for losses in connection with unresolved legal and regulatory matters.

Certain amounts in prior periods have been reclassified for reasons unrelated to the adoption of ASU 2018-12 to conform to the current period presentation, including an adjustment related to the prior period presentation for certain redeemable noncontrolling interests. These balances were previously reported within “Other liabilities” based on materiality considerations but are now presented as “Mezzanine equity.” The Company’s mezzanine equity balances were $524 million and $371 million as of December 31, 2023 and 2022, respectively, and were related to consolidated PGIM entities with noncontrolling interests that are redeemable at the option of the holder. See Note 2 for additional information. The increase in the mezzanine equity balance in 2023 was primarily driven by the consolidation of a new entity. Changes in the balance during 2022 and 2021 were not material.

On April 1, 2022, the Company completed the sale of Prudential Annuities Life Assurance Corporation (“PALAC”), a wholly owned subsidiary, representing a portion of its in-force traditional variable annuity block of business, to Fortitude Group Holdings, LLC (“Fortitude”). The PALAC block primarily consisted of non-New York traditional variable annuities with guaranteed living benefits that were issued prior to 2011, which constituted approximately $30 billion of Prudential’s total in-force individual annuity account values at the closing of the transaction. The Company, through coinsurance and modified coinsurance agreements, has retained the economics of certain variable annuities, indexed annuities, and fixed annuities with a guaranteed lifetime withdrawal income feature issued by PALAC.

On April 1, 2022, the Company completed the sale of its Full Service Retirement business to Great-West Life & Annuity Insurance Company (“Great-West”), primarily through a combination of (i) the sale of all of the outstanding equity interests of certain legal entities, including Prudential Retirement Insurance and Annuity Company (“PRIAC”); (ii) the ceding of certain insurance policies through reinsurance; and (iii) the sale, transfer and/or novation of certain in-scope contracts and brokerage accounts.

The Company recognized a net pre-tax gain on sale of $650 million in 2022, composed of (i) an $850 million gain recorded in “Other income”; (ii) $150 million of realized losses recorded in “Realized investment gains (losses), net,” related to assets transferred as part of the reinsurance of certain retained policies to Great-West; and (iii) $50 million of indirect expenses and charges recorded in “General and administrative expenses” on the Consolidated Statements of Operations. These amounts reflect certain post-closing adjustments in accordance with the terms of the transaction agreement. The net gain is excluded from adjusted operating income and reported within Divested Businesses as part of Corporate and Other operations. In addition, the Company recognized a deferred gain of approximately $400 million in 2022, including a post-closing true-up, for the ceding of certain insurance policies through reinsurance to Great-West. This deferred reinsurance gain will be recognized in income over the term of the ceded policies.

Excluding the gain on sale recognized in 2022, the Full Service Retirement business generated pre-tax income/(loss) of approximately $(220) million and $180 million for the years ended December 31, 2022 and 2021, respectively. These amounts exclude the impact of overhead costs retained in the Company’s Corporate and Other operations and not transferred to Great-West.

In June 2021, Prudential International Insurance Holdings, Ltd. (“PIIH”), a subsidiary of Prudential Financial, completed the sale of The Prudential Life Insurance Company of Taiwan Inc. (“POT”) to Taishin Financial Holding Co, Ltd. (the “Buyer”) for cash consideration of approximately NT$5.5 billion, equal to approximately $200 million at then current exchange rates. The terms of the transaction included additional contingent consideration that was tied to the level of yields for the 10-year

Taiwanese Government bond for two years after the signing of the transaction and was measured at fair value each period, resulting in the receipt of the maximum contractual amount of $100 million in 2022. Also in connection with the transaction, the Company recognized a liability with a fair value of approximately $32 million as of December 31, 2023, representing its financial guarantee of certain insurance obligations of POT.

In March 2021, the Company sold its 35% ownership stake in Pramerica SGR, PGIM’s asset management joint venture in Italy, to its partner UBI Banca, which was acquired in 2020 by Intesa Sanpaolo Group. The after-tax gain on the sale of Pramerica SGR was approximately $330 million, which was recognized in adjusted operating income in the first quarter of 2021.