PRUDENTIAL FINANCIAL INC

We analyze the performance of our segments and Corporate and Other operations using a measure of segment profitability called adjusted operating income. See “—Segment Measures” below for a discussion of adjusted operating income and its use as a measure of segment operating performance.

Shown below are the adjusted operating income contributions of each segment and Corporate and Other operations for the periods indicated and a reconciliation of this segment measure of performance to “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” as presented in the Consolidated Statements of Operations.

(1)The amount for 2023 reflects the correction of an error related to indexed variable and fixed annuity products within the Retirement Strategies segment. See “—Overview” above for additional information.

(3)See “—General Account Investments” and Note 23 to the Consolidated Financial Statements for additional information.

(4)Represents the contribution to income (loss) of Divested and Run-off Businesses that have been or will be sold or exited, including businesses that have been placed in wind-down, but did not qualify for “discontinued operations” accounting treatment under U.S. GAAP. See “—Divested and Run-off Businesses” for additional information.

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

(6)Equity in earnings of joint ventures and other operating entities is included in adjusted operating income but excluded from “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” as it is reflected on an after-tax U.S. GAAP basis as a separate line in the Consolidated Statements of Operations. Earnings attributable to noncontrolling interests are excluded from adjusted operating income but included in “Income (loss) before income taxes and equity in earnings of joint ventures and other operating entities” as they are reflected on a U.S. GAAP basis as a separate line in the Consolidated Statements of Operations. Earnings attributable to noncontrolling interests represent the portion of earnings from consolidated entities that relates to the equity interests of minority investors.

(7)Includes certain components of consideration for business acquisitions, which are recognized as compensation expense over the requisite service periods.

Segment results for 2024 presented above reflect the following:

PGIM. Results for 2024 increased in comparison to 2023, primarily reflecting higher net asset management fees and net other related revenues, partially offset by higher expenses.

Retirement Strategies. Results for 2024 increased in comparison to 2023, inclusive of a favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results decreased, primarily driven by higher expenses and lower net fee income, partially offset by higher net investment spread results.

Group Insurance. Results for 2024 decreased in comparison to 2023, inclusive of a less favorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results increased, primarily driven by higher underwriting results and higher net investment spread results, partially offset by higher expenses.

Individual Life. Results for 2024 decreased in comparison to 2023, inclusive of an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding this item, results decreased, primarily driven by higher expenses, including costs associated with the recent guaranteed universal life reinsurance transactions as well as from the consolidation of our internal captive reinsurance arrangements, partially offset by the ongoing favorable impacts from these reinsurance transactions.

International Businesses. Results for 2024 decreased in comparison to 2023, inclusive of an unfavorable net impact from foreign currency exchange rates and an unfavorable comparative net impact from our annual reviews and update of assumptions and other refinements. Excluding these items, results increased, primarily driven by higher net investment spread results and higher earnings from joint ventures and other operating entities, partially offset by lower underwriting results.

Corporate and Other. Results for 2024 reflected decreased losses in comparison to 2023, primarily driven by lower net charges from other corporate activities.

Closed Block Division. Results for 2024 decreased in comparison to 2023, primarily driven by lower net investment activity results, partially offset by a reduction in the policyholder dividend obligation.