PRUDENTIAL FINANCIAL INC

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 Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $91 million. Net charges from other corporate activities were lower by $77 million, primarily driven by lower net costs related to corporate initiatives and lower expenses related to an update of internal expense allocations. Investment income results increased $29 million, primarily driven by higher income on non-coupon investments. Pension and employee benefits results were favorable by $10 million primarily reflecting higher earnings from our pension and post-retirement plans from higher expected returns on plan assets and lower service costs. Interest expense on debt increased $25 million, largely reflecting the absence of income offsets from the termination of an affiliated financing agreement resulting from the reinsurance transactions in Individual Life.

Six Month Comparison. The loss from Corporate and Other operations, on an adjusted operating income basis, decreased $111 million, primarily driven by lower net charges from other corporate activities of $120 million reflecting lower net costs related to long-term compensation plans and other corporate initiatives, and lower expenses related to an update of internal expense allocations, partially offset by higher technology costs. Investment income results increased $29 million, primarily driven by higher income on non-coupon investments. Pension and employee benefits results were favorable by $18 million, primarily reflecting higher earnings from our pension and post-retirement plans from higher expected returns on plan assets and lower service costs. Interest expense on debt increased $56 million, largely reflecting the absence of income offsets from the termination of an affiliated financing agreement resulting from the reinsurance transactions in Individual Life.