PRUDENTIAL FINANCIAL INC
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
Extracted filing text, with the paragraph anchors used by the comparison.
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Corporate and Other
In March 2024, the Company committed to a plan to exit the operations of Assurance IQ (“AIQ”); therefore, beginning with the first quarter of 2024, AIQ is classified as a divested business within our Corporate and Other operations. AIQ’s results are excluded from adjusted operating income and historical results have been updated to conform to current period presentation.
In September 2023, the Company acquired a 20% interest as a limited partner in Prismic, a Bermuda-exempted limited partnership that owns all the outstanding capital stock of Prismic Re. 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.
Corporate and Other includes corporate operations, after allocations to our business segments, and Divested and Run-off Businesses other than those that qualify for “discontinued operations” accounting treatment under U.S. GAAP. The following table sets forth Corporate and Other’s operating results for the periods indicated:
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| (in millions) | ||||
| Operating results: | ||||
| Investment income | $50 | $55 | $143 | $147 |
| Interest expense on debt | (213) | (201) | (631) | (628) |
| Pension and employee benefits | 94 | 81 | 285 | 258 |
| Other corporate activities(1) | (418) | (373) | (1,090) | (1,158) |
| Adjusted operating income(1) | (487) | (438) | (1,293) | (1,381) |
| Realized investment gains (losses), net, and related charges and adjustments | (273) | 162 | (132) | (18) |
| Market experience updates | 3 | (4) | 6 | (7) |
| Divested and Run-off Businesses(1) | 47 | (113) | 50 | (22) |
| Equity in earnings of joint ventures and other operating entities and earnings attributable to noncontrolling interests | (9) | (41) | (49) | (15) |
| Other adjustments | 0 | (1) | 0 | 0 |
| Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities | $(719) | $(435) | $(1,418) | $(1,443) |
(1)Effective first quarter of 2024, the results of AIQ are excluded from Corporate and Other’s adjusted operating results and are included in Divested and Run-off Businesses. Prior period amounts have been updated to conform to current period presentation.
Three Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, increased $49 million primarily driven by higher net charges from other corporate activities of $45 million, reflecting higher net expenses, including costs for corporate initiatives. Interest expense on debt increased $12 million, primarily driven by higher average debt balances. Pension and employee benefits results were favorable by $13 million, primarily reflecting a change in the postretirement retiree medical plan.
Nine Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $88 million, primarily driven by lower net charges from other corporate activities of $68 million, reflecting a decrease in legal reserves and lower costs related to corporate initiatives, partially offset by higher costs for long-term compensation plans and unfavorable foreign exchange rate impacts. Pension and employee benefits results were favorable by $27 million, primarily reflecting a change in the postretirement retiree medical plan.
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