Prudential Financial, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Prudential's quarterly earnings conference call. At this time, all participants have been placed in a listen-only mode. Later, we'll conduct a question and answer session. Instructions will be given at that time. 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 will now turn the call over to Mr. Bob McLaughlin. Please go ahead.

Good morning, and thank you for joining our call. Representing Prudential on today's call are Andy Sullivan, CEO, and Janella Freas, CFO. We will start with comments by Andy and Janella, and then we will address your questions. Today's discussion may include forward-looking statements. It is possible that actual results may differ materially from the predictions we make today. In addition, our presentation includes references to non-GAAP measures. For a reconciliation of such measures to the comparable GAAP measures, and a discussion of the factors that could cause actual results to differ materially from those in the forward-looking statements, please see the slides titled Forward-Looking Statements and Non-Gap Measures in the appendix to today's presentation, which can be found on our website at investor.prudential.com. And now I'll turn it over to Andy.

Good morning, everyone, and welcome to the call. We had a strong third quarter. Our pre-tax adjusted operating income was $1.9 billion. or $4.26 per share, a record high of 28% from the prior year quarter, reflecting earnings growth in every business. And our year-to-date adjusted operating return on equity was over 15%. These results reflect higher spread income and more favorable underwriting experience across our global retirement and insurance businesses, as well as higher fee income in PGM. Current quarter results benefited from alternative investment income that was above our expectations, as well as other favorable one-time items. Higher alternative investment income was driven by stronger private equity and hedge fund returns, partially offset by lower real estate returns. Our third quarter performance reflects sustained momentum across our businesses. Let me highlight a few examples. PGM remains focused on delivering strong investment performance and strengthening core capabilities, while continuing to invest in the business to drive future growth. This quarter, we achieved positive net inflows across both third party and affiliated channels. In institutional retirement, we closed a jumbo pension risk transfer transaction, reinforcing our market leadership and complementing the robust longevity risk transfer activity so far this year. Our individual retirement, individual life, and group insurance businesses are benefiting from our differentiated distribution and the actions we've taken to broaden our product portfolios and diversify our market segments. Individual retirement delivered over $3 billion in sales for the seventh consecutive quarter. And individual life and group insurance, we delivered double-digit year-to-date sales growth. Turning to our international insurance businesses, in Japan, where our business has been traditionally focused on protection products, we continue to expand our retirement and savings solutions, leaning into the changing nature of this marketplace. And in Brazil, we set a new sales record in the Life Planner channel. In addition, we continue to expand our third-party distribution network and deepen our strategic partnerships. While business performance was strong for the quarter overall, let me bring one area of pressure to your attention. Jenison, our active equity manager, continue to experience outflows consistent with broader industry trends. These outflows are dampening our organic growth and earnings momentum in PGM. We are encouraged by the third quarter results and remain committed to delivering stronger and more consistent earnings growth that creates long-term value for our shareholders. Moving to slide three, I've been clear on my three priorities as CEO. First, we are evolving our strategy to focus on opportunities that will deliver the most profitable growth over time and are allocating our capital accordingly. Specifically, we're looking to focus on areas with large and growing addressable markets in which we have highly differentiated capabilities and can earn attractive returns. Accordingly, in the third quarter, we completed the sale of our PGM Taiwan business to focus resources on higher growth opportunities. Second, we are determined to execute with more consistency and discipline. We are quickly evolving to a unified asset manager model in PGM and have taken actions to deliver run rate savings that will drive margin expansion in 2026. Client response to our new organizational structure, which includes a centralized distribution capability for institutional investors, has been overwhelmingly positive. In fact, we now expect to double the percentage of clients engaging with two or more of our asset management businesses, which will drive additional margin growth over time. The sales momentum in our global retirement businesses underscores how we're meeting evolving customer needs around the world. In U.S. retirement strategies, year-to-date sales of over $30 billion demonstrate our leadership in the growing retirement market, and contributed our highest earnings in the last five quarters. Additionally, over the past three years in Japan, we've launched seven new products, reflecting our commitment to meeting the evolving needs of our customers through a comprehensive suite of protection and retirement solutions. As a result, sales in Japan have increased by about 35% over this period, with yen-denominated sales increasing by over 50%. And third, We are enhancing our culture with a focus on speed and accountability. As an example, we accelerated our succession plan in Japan, appointing Brad Hearn as CEO, reporting directly to me. This move ensures we have the right leadership in place to drive our growth strategy in Japan. Brad brings a strong track record of driving results and scaling distribution networks from his time leading our domestic Prudential Advisors business. His experience is directly relevant given the shifting nature of Japan's market towards retirement. He will continue working closely with Caroline, Jacques, and the entire leadership team to share best practices and collaborate across businesses, ultimately helping us better serve customers and capture opportunities in this rapidly evolving market. We extend our thanks to Hamada-san for his 33 years of service in Japan. Before I turn it over to Janella, I want to emphasize that across the enterprise, we're taking clear and decisive action to address these priorities. I look forward to sharing more in the quarters ahead as we continue to build on our momentum. With that, I'll hand it over to Janella.