PRUDENTIAL FINANCIAL INC

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations is to provide readers with a foundational understanding of our Company, our consolidated financial statements, and the significant internal and external drivers of our results. The discussion of financial results within is focused on adjusted operating income, which is the Company’s segment-level measure of performance, and provides readers with period-over-period analysis of operating results and significant drivers. In addition to discussing our detailed segment results of operations, we have also provided supplemental information that we believe assists with a greater understanding of our overall financial results.

A brief description of these key informational sections follows:

•“Executive Summary” provides an overview of the Company and its operations, along with recent significant events that have impacted our organizational structure or financial results. This section also provides management’s outlook for each respective business segment.

•“External and Economic Factors” discusses industry trends, including the economic environment and demographics for each of our businesses, and includes a discussion of how the impact of potential changes in either interest rates or foreign currency exchange rates may impact our overall operations and financial position.

•“Accounting Policies & Pronouncements” discusses the accounting policies applied in preparing our consolidated financial statements that management believes are most dependent on the application of estimates and assumptions and which require management’s most difficult, subjective, or complex judgments. This section should be read in conjunction with Note 2 to the Consolidated Financial Statements.

•“Liquidity and Capital Resources” provides information about our liquidity and capital positions, including any significant actions that have impacted, or are expected to impact, these positions. Information is also provided on our insurance companies’ regulatory capital requirements, the sources and uses of our holding company’s cash, and additional information about financing activities of the Company.

•“Ratings” provides information on the ratings for Prudential Financial and certain of its subsidiaries as of the date of this filing.

•“General Account Investments” provides information about the investment objectives, strategies and overall portfolio composition of the general account that supports the liabilities of our insurance companies. Investment results are presented separately for our U.S.-based and Japanese-based operations, our Closed Block division, and our Funds Withheld portfolios, which support liabilities relating to reinsurance agreements where the economic benefits and associated investment risk ultimately inure to the reinsurer. This section should be read in conjunction with Note 3 to the Consolidated Financial Statements.

•“Valuation of Assets and Liabilities” provides additional breakout of the fair value of assets and liabilities for Prudential Financial Inc., excluding those held in the Closed Block division and Funds Withheld portfolios, and separately for the Closed Block division and Funds Withheld portfolios. This section should be read in conjunction with Note 6 to the Consolidated Financial Statements.

•“Income Taxes” provides information about our effective tax rate and unrecognized tax benefits. This section should be read in conjunction with Note 17 to the Consolidated Financial Statements.

•“Risk Management” provides detail about our risk governance structure and the framework for evaluating the risks across the Company. This section should be read in conjunction with “Item 1A. Risk Factors.”