Prudential Financial, Inc.

Ladies and gentlemen, thank you for standing by and welcome to Credential's quarterly earnings conference call. At this point, all the participant lines are in a listen-only mode. If you should require any assistance during the call, please press star zero and an operator will assist you offline. As a reminder, today's call is being recorded. I'll turn the call now over to Darren Arita. Please go ahead.

Thank you, John. 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 U.S. 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-GATT measures. For a reconciliation of such measures to the comparable GATT measures and a 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-GATT Measures in the appendix to today's presentation and the quarterly financial supplements, both of which can be found on our website at investor.prudential.com. With that, I'll hand it over to Charlie.

Thank you, Darren, and thanks to everyone for joining us today. As always, we hope you and your families remain safe and healthy. We reported strong financial results for the second quarter, reflecting robust investment performance and further progress in achieving our cost savings targets. We also made significant progress executing on our strategy to become a higher growth, less market sensitive and more nimble company. As an example, we announced an agreement to sell our full service retirement business last month. Second, our cost savings program is progressing well and is ahead of our original plan. And third, with the support of our rock solid balance sheet, we are thoughtfully redeploying capital. both by increasing capital return to shareholders and by selectively pursuing acquisition opportunities. I'll now provide an update on each of these strategic initiatives, beginning with our recent divestiture activity. Turning to slide three, following the sale of our Korea business last year, we successfully closed on the sale of our Taiwan business during the second quarter. And in July, we announced an agreement to sell our full-service retirement business to Empower Retirements, in a transaction which is expected to close in the first quarter of 2022. Including the announced full service sale and the completed sales of our Korea and Taiwan businesses, we expect net proceeds of approximately $4.2 billion from these divestitures. Meanwhile, we continue to pursue opportunities to reduce the size of our legacy block of traditional variable annuities with guaranteed living benefits. Moving to slide four. As I mentioned earlier, we are progressing well and remain on track to generate $750 million of cost savings by the end of 2023. To date, we have achieved $515 million of run rate cost savings, which exceeded our original target of $500 million and did so 18 months ahead of plan. These savings include $130 million in the second quarter and a total of $240 million for the first half of 2021. We have also identified new cost savings to replace those we had not yet realized in our full-service retirement business and, as a result, continue to expect to generate $750 million of cost savings. Turning to slide five, these initiatives are complemented by our thoughtful approach to capital redeployment. including through increased shareholder distributions. Last month, when announcing our agreement to sell the full-service retirement business, we increased our share repurchase authorization by an additional $500 million, our second increase of this amount since the beginning of 2021. This brings our total shareholder distributions to a targeted $11 billion through the end of 2023. up from the $10 billion target we initially identified earlier this year. Year to date, we've returned $2.2 billion to shareholders, including $1.3 billion in the second quarter, comprised of $875 million in share buybacks and $460 million in dividend payments. In addition, Consistent with our disciplined approach to capital management and guided by our philosophy of being prudent stewards of shareholder capital, we intend to reduce leverage and enhance our financial flexibility by redeeming $900 million of outstanding debt in the third quarter. Meanwhile, we are being disciplined in executing on our programmatic M&A opportunities, as we have done in the past, with a focus on higher growth areas, including asset management, and emerging markets. As evidence of this, earlier this year, our Africa joint venture partner closed on a minority stake in ICEA Lion Holdings, a highly respected financial service market leader in Kenya with operations in Tanzania and Uganda. More recently in July, PGM announced a deal to acquire Montana Capital Partners, a European-based private equity secondaries asset manager which will enhance PGM's capabilities and further expand its $250 billion alternatives platform. These transactions are consistent with our strategy to add capabilities in PGM and deepen our presence in emerging markets, enhancing our growth opportunity. Our capital deployment is supported by our rock-solid balance sheet, including highly liquid assets of $4.9 billion at the end of the second quarter, and AA financial strength capital levels at our primary business subsidiaries. Before turning it over to Rob, I'd like to provide an update on our environmental, social, and governance commitments, which are integral to our business strategy and purpose of solving the financial challenges of our changing world. This quarter, I'll focus on our environmental commitments. Last month, We took an important next step to integrate our ESG and financial frameworks with the renewal of a standing $4 billion credit facility, which now directly links our financing costs to our progress in meeting previously established sustainability targets. These targets include reducing our greenhouse gas emissions, as well as improving diverse representation among our senior ranks. We also continue to make strong progress against other goals outlined in our 2019 Global Environmental Commitment, including investing in sustainable companies and projects, issuing our inaugural green bond last year, and by providing greater transparency around our general account investment allocations. We are also reducing our reliance on paper documentation, both internally and in the volume of letters and other mailings shared with our customers. In partnership with American Forests, we aspire to significantly reduce our paper use by the end of 2022. We are committed to ensuring that sustainability runs through everything we do at Prudential. This also includes fulfilling the nine commitments to advance racial equity that we established one year ago this week, which are in addition to our ongoing diversity, equity, and inclusion efforts. I look forward to updating you next quarter on the progress of this work as well as on our other social commitments. With that, I'll turn it over to Rob for more specific details on our business performance.