Prudential Financial, Inc.

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

Thank you, Greg. Good morning, and thank you for joining our call. Representing Prudential on today's call are Charlie Lowry, Chairman and CEO, Rob Thousand, Vice Chairman, Andy Sullivan, Head of US 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 comments 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 the 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.prudential.com. With that, I'll hand it over to Charlie.

Thank you, Darren. Good morning, everyone, and thank you for joining us today. Yesterday, we reported fourth quarter earnings per share of $2.33. We also reported an adjusted operating return on equity of 12.1% for the full year. Looking back on 2019, we implemented a number of important actions to enhance our business and financial performance for the long term. As a result, we have begun 2020 with a clear set of initiatives against which we will execute. with a renewed confidence that our businesses can deliver increased earnings performance. I'll begin this morning by sharing a few accomplishments from 2019. First, we launched a process, talent, and technology transformation initiative, which is on track to realize $500 million in run rate cost savings by 2022. As part of this program, we initiated a voluntary separation program for segments of our U.S. workforce during the fourth quarter. which is reducing our cost base over the course of 2020 and creating a more agile and competitive workforce. Second, we returned approximately $4 billion to shareholders via dividends and share repurchases. The 10% increase in our dividend represents the 12th consecutive year of dividend increases and produces a yield on book value in excess of 4%. Third, we completed our acquisition of Assurance IQ in October, adding a leading direct-to-consumer financial wellness solutions platform. We're encouraged by the growth in customer demand, the interest from carriers wanting to put their products on the platform, and the level of talent we are attracting from well-known technology companies. Finally, we made progress in our ongoing efforts to reduce the variability of our quarterly earnings pattern, and we added transparency to our quarterly financial performance. In 2019, our financial performance was impacted by a low interest rate environment, the annual assumption update in our individual life business, and higher-than-typical expenses in our international businesses. In 2020, we're implementing a number of initiatives to drive improved financial performance in the years ahead. We're focused on executing three key initiatives. First, we remain focused on enhancing the customer experience to produce long-term sustainable growth. while generating $140 million in cost savings this year. Second, in our international businesses, we continue to focus on increasing the percentage of earnings coming from growth markets. Supporting this objective, this quarter we closed on the acquisition of a Colombian pension fund manager with Habitat, expanding our presence in Latin America. We also completed the sale of our Italian insurance business, and are exploring strategic options for operations in other markets, including Korea. We'll share further details at the appropriate time. And third, we're continuing to take steps to mitigate the effects of the low interest rate environment, such as adjusting the mix and pricing of our products. Turning to slide three, I'll briefly touch upon some of the key drivers of our fourth quarter results, which Rob will cover in more detail. Our U.S. businesses benefited from record account values in retirement and individual annuities. Earnings increased from the prior year quarter, reflecting higher net investment spread results, partly offset by lower fees in our annuities business. PGM, our global asset manager, reported record assets under management of $1.3 trillion, as well as higher net asset management fees and other related revenues. Our international businesses increased earnings, driven by higher net investment spread results and business growth, partly offset by higher than typical expenses. Turning to slide four, I'd like to touch briefly on four ways we generate value to our stakeholders in a sustainable way. First, we are a purpose-driven company. We strive to make lives better by solving the financial challenges of our changing world and do so for a broad array of stakeholders. Second, In December, our Board introduced a multi-stakeholder framework that extends the Board's accountability to investors, employees, customers, and society at large, reinforcing the Board's commitment and ours to enabling positive change as well as strong financial returns. Third, this multi-stakeholder framework is reflected in our continued pursuit of exemplary environmental, social, and governance practices. Finally, we provide transparency so investors can measure our progress. We disclose metrics and targets related to the Financial Stability Board's task force on climate-related financial disclosures. This includes quantifying greenhouse gas emissions, recycling, and water usage. In addition, we publish metrics in accordance with the Sustainability Accounting Standards Board. We continue to be recognized for our commitment and standards we uphold. Just last month, Fortune included us on its list of world's most admired companies for the fifth consecutive year. We are proud to have earned the first place distinction in the life and health insurance category each year. In closing, we continue to move quickly and with conviction to execute on our strategy that we put into place, including the three initiatives I have outlined for 2020. With that, I'll turn it over to Rob for a closer look at our business performance for the quarter. and our earnings outlook. Thank you, Charlie.