PRUDENTIAL FINANCIAL INC

•In March 2024, the Company committed to a plan to exit the operations of 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:

(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.

(2)Includes goodwill impairments of $177 million and $903 million recorded in the fourth quarters of 2023 and 2022, respectively, related to AIQ. See Note 2 and Note 10 to the Consolidated Financial Statements for additional information regarding goodwill impairments.

2024 to 2023 Annual Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $251 million. Net charges from other corporate activities decreased by $209 million, primarily reflecting lower costs related to corporate initiatives, including the absence of a restructuring charge recorded in the prior year, and a decrease in legal reserves, partially offset by higher net expenses and other corporate charges. Pension and employee benefits results were favorable by $21 million, primarily reflecting a change in the postretirement retiree medical plan.

For purposes of calculating pension income from our qualified pension plan for the year ended December 31, 2025, we increased the discount rate from 5.30% to 5.85% as of December 31, 2024. The expected rate of return on plan assets increased from 7.50% in 2024 to 8.00% in 2025. The assumed rate of increase in compensation will remain unchanged at 6.25% in 2025. Giving effect to the foregoing changes and other factors, we expect income from our qualified pension plan in 2025 to be approximately $25 million to $30 million higher than 2024 levels. This increase is primarily driven by the higher discount rate.

For purposes of calculating postretirement income for the year ended December 31, 2025, we increased the discount rate from 5.20% to 5.70% as of December 31, 2024. The expected rate of return on plan assets decreased from 6.75% in 2024 to 6.50% in 2025. Giving effect to the foregoing changes and other factors, we expect postretirement income in 2025 to be approximately $10 million to $15 million lower than 2024 levels. This decrease is primarily driven by increased medical experience.

In 2025, pension and other postretirement benefit service costs related to active employees will continue to be allocated to our business segments. For further information regarding our pension and postretirement plans, see Note 19 to the Consolidated Financial Statements.