Prudential Financial, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Prudential Financial Quarterly Earnings Conference call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. If you should require assistance during the call, please press star followed by the zero. As a reminder, today's conference is being recorded, and I would now like to turn the conference over to the Head of Investor Relations, Darren Arita. Please go ahead, sir.

Thank you, Brad. Good morning, and thank you for joining our call. Representing Prudential on today's call are Charlie Lowry, Chairman and CEO, Rob Fausen, Vice Chairman, Steve Pelletier, Head of Domestic Businesses, Scott Slyster, Head of International Businesses, Ken Tanji, Chief Financial Officer, and Rob Axel, Controller and Principal Accounting Officer. We will start with prepared remarks by Charlie, Rob, and Ken, and then we will take your questions. Today's presentation may include forward-looking statements. it is possible that actual results may differ materially from the predictions we make today. In addition, this presentation may include references to non-GAAP measures. For reconciliation of such measures to comparable GAAP measures and the discussion of factors that could cause actual results to differ materially from those in the forward-looking statements, please see the slide titled Forward-looking Statements and Non-GAAP Measures in the appendix to today's presentation. which can be found on our website at investor.credential.com. Also, as a reminder, we will be hosting an Investor Day here in Newark, New Jersey, starting at midday on June 5th. The focus will be on our business strategy with plenty of time to interact with our executives. We will also feature a financial wellness experience exhibit at the start of the event. We hope that you will be able to join us. With that, I will hand it over to Charlie.

Thank you, Darren. Good morning, and thank you for joining us today. The first quarter of 2019 marked a solid start to the year for Prudential. We accelerated our strategy to bring greater financial opportunity to more customers. We produced a 12.6% adjusted operating return on equity, increased our book value per share, and generated good business fundamentals. With a foundation of a rock-solid balance sheet, we continue to return capital to shareholders totaling $915 million this quarter via share repurchases and dividends. Our three interconnected businesses are the drivers of our financial results. They are the U.S. financial wellness business, PGM, our global asset manager, and International, which has our life insurance business in Japan, and smaller businesses in growth markets around the world. In our U.S. financial wellness businesses, we continue to grow our suite of solutions to help the employees of our workplace clients learn, adopt, and practice positive financial behaviors. Rob will provide more color on these solutions in a moment. Our workplace clients employ millions of people. giving us a distinct advantage in our ability to connect with a large population via a trusted environment. These workers can engage with us how, when, and where they prefer in an in-person, phone, or digital way. We see a significant opportunity to expand our total addressable market and to grow as we holistically serve people's needs, including investment, retirement income, protection, as well as savings and debt management. PGM is a top 10 global asset manager, with leading positions in alternatives, including real estate and private credit. The business continues to generate consistently strong investment performance, third-party flows, and core earnings growth. PGM provides a competitive advantage for our other businesses by helping to innovate new solutions and by generating differentiated investment returns. Fijian in turn benefits from Prudential's significant pool of assets and large balance sheet. Finally, our international operations further distinguish our business model from that of our peers, as they provide sustained growth, strong returns, and steady capital generation. We continue to grow our Japan business, maintaining a leadership position in the Japan life insurance market, and also have businesses in highly populated growth markets, including Brazil, Chile, Indonesia, India, China, and Africa. Turning to slide three, I'll provide four additional financial highlights on the first quarter. First, first quarter adjusted operating earnings declined from the year-ago period, primarily due to two factors. One, higher costs for compensation plans tied to prudential stock and overall equity market returns, and two, lower fee income reflecting lower average variable annuity assets under management. These two items were partially offset by continued underlining growth across a number of our businesses. Second, our adjusted book value per share grew to more than $96. Third, we deployed our capital into growing the business, repurchasing shares, and paying dividends. And fourth, we achieved all of this while maintaining a robust capital position consistent with our AA standard. We also saw solid drivers across many of the businesses. Our retirement business account values increased to a record level. Individual annuity sales continued to increase, and the business maintained its regular quarterly capital generation with $285 million paid to the holding company. And our life planner business also delivered a strong sales quarter driven by a record level of life planners. While we are encouraged by the momentum of our businesses, it is important to highlight that we remain disciplined on pricing to ensure that we continue to generate returns at or above our target levels, given the recent decline in long-term interest rates, which has had an effect on the level of sales in some of our businesses. Before I turn it over to Rob for more on how our businesses are executing on our strategic priorities, I'd like to say a few words about our commitment to solving the financial challenges of our changing world. So let's turn to slide four. Underlying our purpose is a commitment to fostering sustainable business that produces attractive returns for our long-term shareholders, along with an integrated environmental, social, and governance framework. We've been recognized by a number of third parties specializing in ESG, with high marks from Sustainalytics, Institutional Shareholder Services, MSCI, and CDP. As an example of our actions, just last month we announced a $180 million investment in Opportunity Youth. This funds partnerships, grants, corporate contributions and impact investments through 2025 to improve the financial security of young people around the world. We care about ensuring that future generations are prepared for a successful professional and financial life, and we are proud of our commitment to their success. This is a great example of who we are as a company and the purpose for which we exist. Thank you all for your time this morning. And with that, I'll turn it over to Rob. Thanks, Charlie.