Prudential Financial, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Prudential's quarterly earnings conference call. At this time, all participants are in listen-only mode. Later, we'll conduct a question and answer session, and instructions will be given at that time. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Tina Madden. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us. Representing Prudential on today's call are Andy Sullivan, Chief Executive Officer, and Janella Freas, Chief Financial Officer. We'll start with prepared remarks by Andy and Janella, and then we'll address your questions. Before we begin, I want to remind you that today's discussion may include forward-looking statements. It is possible that our actual results may differ materially from those statements. In addition, remarks made on today's call and in our quarterly earnings press release, earnings presentation, and quarterly financial supplement, which can be found on our website at investor.prudential.com, include references to non-GAAP measures. For a reconciliation of such measures to the most comparable GAAP measures, and a discussion of the factors that could cause actual results to differ materially from those in these forward-looking statements. Please see the slides titled Forward-Looking Statements and Non-Gap Measures in the appendices to our earnings presentation and quarterly financial supplement. With that, I'll now turn the call over to Andy.

Good morning, everyone, and welcome to our earnings call. Before turning to our full-year results, let me take a moment to address the employee misconduct in our Japan business described in our press release yesterday afternoon. I want to emphasize that doing right by our customers is a core value of our company and a cornerstone of what we stand for, and we are taking this issue extremely seriously. For nearly 40 years, Prudential has been a symbol of exceptional customer care in Japan, and we are committed to restoring the standing that has long set us apart in that market. In January of this year, Prudential of Japan announced findings of an internal investigation into instances of misconduct by certain of its employees. This misconduct very clearly does not meet our standards or what our customers expect of us. In consultation with the regulators in Japan, we have made the decision to voluntarily halt new sales at POJ for a 90-day period. To fully address the root causes of the misconduct, we are implementing a series of actions across the business, which include strengthening oversight of sales practices, governance, and risk management. We will also be restructuring employee compensation and enhancing education, compliance training, and recruiting standards for all POJ employees. While we have set a 90-day suspension of sales, we will not resume distribution through the Life Planner channel until we are comfortable that our internal compliance and oversight environment supports doing so. This could result in an extension of the 90-day period. These actions are essential to restoring trust in this important market. While there are financial implications to the sales suspension, we believe that this is the prudent path forward in addressing the misconduct and positioning our business in Japan to rebuild customer trust. We are working with local regulators and other key stakeholders to address these issues thoroughly, implement the necessary remediation measures, and uphold the highest standards of governance and customer care going forward. We expect an impact on 2026 pre-tax adjusted operating income of 300 to $350 million, equivalent to approximately 5% of 2025 PFI earnings. Janella will cover more details on the financial implications in her remarks. We're also establishing a customer reimbursement program that will be developed and administered by an independent oversight committee. We intend to make this right for these customers, and we remain deeply committed to responding in a manner that places customer trust as our highest priority. That is who we are, and we are confident we will come out of this as a stronger company. Now, moving to our financial results. Last year, I set out three priorities that are essential to delivering stronger performance, more consistent results, and sustained long-term value for our shareholders. These were evolving and delivering on our strategy, improving on our execution, and fostering a high-performance culture. Our issues in Japan only reinforce that these are the right priorities, and we must continue on the path my team has set. While we have more work to do across the company, I am encouraged by the tangible progress we have made. Over the last year, we sharpened the focus on our businesses in large and growing addressable markets, where we have differentiated capabilities and believe we can earn superior returns. we executed with greater accountability and discipline as we streamlined the organization and strengthened our core franchises. This progress makes clear that our brand, customer value proposition, and scale are unique competitive advantages that position us for durable long-term growth as we reposition our company globally. In 2025, we delivered solid progress and results. For the full year, our pre-tax adjusted operating income was $6.6 billion, or $14.43 per share, and our adjusted operating return on equity was approximately 15%, up nearly 200 basis points from the prior year. We also delivered nearly $3 billion to shareholders in the year through dividends and buybacks. Our full-year performance displayed improved and more disciplined execution, and demonstrated the momentum we believe we are building across our businesses as we continue to meet growing demand for our products fulfilled through our diversified distribution platforms, resulting in higher sales growth. Let me now recap the highlights across each of our businesses. In PGM, we delivered strong investment performance last year with solid traction across our core capabilities, including public fixed income, securest highest products, and asset-backed finance, as well as indirect lending. We also saw continued progress in newer vehicles, such as ETFs, and are beginning to see tangible benefits from our new centralized distribution model. 2025 was a transformative year for PGM. We moved quickly to integrate our asset management capabilities into one unified platform, enabling deeper client cross-sell engagement and reducing costs over time. Additionally, bringing together our public and private fixed income capabilities into a single $1 trillion global credit platform positions us as one of the largest and most differentiated credit managers in the industry. Clients value the ability to access the full spectrum of credit, from liquid public markets to bespoke private solutions, through one integrated platform with consistent underwriting, deeper origination, and the scale to source opportunities others cannot. And as I've said many times before, I am a deep believer in being proactive in the marketplace, which means we're continuing to be vigilant for the best opportunities to enhance our capabilities, scale our business, and better serve our customers around the world. Alongside this momentum, it is important to acknowledge areas where we see pressure. As I noted on our last call, Our fundamental active equity platform, Genesyn, is not immune to broader industry trends and is experiencing systemic outflows with the continued shift from active to passive management. These outflows have weighed on PGM's organic growth and earnings momentum. In addition, this quarter's net flows were impacted by a single, low-fee, fixed-income client withdrawal at the end of 2025, which was unrelated to performance. We continue to manage through these headwinds and expect offsetting growth over time, as PGIP's diversified offerings across public fixed income, private credit, and real estate continue to grow. The bottom line is we generated over $30 billion of total net inflows last year from these three asset classes. Additionally, our momentum is building in key growth areas, such as asset-backed finance, direct lending, and ETFs. This success will be enhanced going forward as we start to realize the benefits of our newly integrated distribution model. The results of our U.S. businesses reflect the actions taken over the last year to sharpen our focus and leverage our competitive strengths. In retirement strategies, we delivered $40 billion of sales across our institutional and individual channels for the year, reflecting solid demand, diversified distribution, and our ongoing leadership in meeting the evolving needs of retirement customers. We continue to strengthen our solutions, improve the mix of products we sell, and refine the capital and asset strategies that underpin our business. In institutional retirement, we remain well positioned to lead the large pension and longevity risk transfer markets in both the United States and Europe. In 2025, we delivered nearly $26 billion of sales, including our second longevity risk transfer transaction in the Netherlands. In individual retirement, we generated sales of $14 billion in 2025, capping an eighth consecutive quarter of more than $3 billion in sales, reflecting strength in Ryla, as well as growth in fixed annuities supported by strategic reinsurance partners, including Prismic. Our diverse product set and distribution strength are driving strong top-line growth, a clear proof point of our focus on consistent execution. Group insurance generated full-year sales of over $600 million, up 11% year-over-year, underscoring the benefits of further product diversification and increasing our market presence in our premier segment. These are key areas of strategic focus as we continue to grow and expand the profitability of this business. In individual life, Full-year sales of $955 million increased 5% over the prior year as we continue to pivot our focus towards less capital-intensive accumulation products, including FlexGuard Life. We continue to deliver this new business growth at solid returns on capital. Now, turning to our international businesses. In Japan, we are highly focused on the issue in POJ. That said... We are capturing growing customer demand for retirement and savings products, which now account for a majority of our sales in the country. Over the past three years, we have launched 10 new products in this category, which have steadily gained traction and accounted for nearly a quarter of 2025 sales. Now, turning to emerging markets. This business reported record full-year sales of $386 million on a constant currency basis. up 6% from the prior year. This growth is primarily driven by broader distribution in Brazil. As we turn to 2026, we will continue to evaluate our global footprint to ensure that we are prioritizing markets and geographies that are large and growing and where we believe we are competitively positioned to win and can deliver industry-leading returns on capital. The decision to exit our P-GIP Taiwan business last quarter and our insurance business in Kenya last month are prime examples of us executing on this priority and driving stronger discipline across the company. As part of our focus on talent and high-performance culture, we continue to refine our management structure to make the organization more results-driven and accountable and to improve the speed of decision-making. The changes we made last year bring me closer to our businesses and their leaders as well as our customers, as we execute our growth strategy in 2026. To conclude, we believe we've established the foundation for the broader reimagining of Prudential, one that positions us to lead and win in the markets we choose to compete in. While we are still early in this transformation, the momentum we're building gives us great confidence in the road ahead. With that, I'll hand the call over to Janelle.