Third Quarter 2024 Earnings Presentation
3Q24 EARNINGS CALL
Expanding access to investing, insurance, and retirement security
KEY MESSAGES
Becoming a higher growth, more capital efficient company
Maintaining disciplined capital deployment
Supported by our rock solid balance sheet
WE MAKE LIVES
BETTERBYSOLVING
THEFINANCIAL
CHALLENGESOFOURCHANGINGWORLD
2
BECOMING A HIGHER GROWTH, MORE CAPITAL EFFICIENT COMPANY
Addressing the global retirement opportunity
Expanding leadership in Retirement Strategies, launching new products in
Growing our market leading businesses
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International |
PGIM |
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Supporting the growth of our |
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Benefiting from |
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Broadening products |
businesses and increasing |
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strong multi-channel |
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and distribution |
private alternatives capital |
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distribution |
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deployment |
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Increasing capital flexibility
Announced second Guaranteed Universal Life reinsurance transaction
of
3
MAINTAINING DISCIPLINED CAPITAL DEPLOYMENT
CREATING SUSTAINABLE, PROFITABLE GROWTH AND SHAREHOLDER RETURNS
Investing in market leading businesses to support growth
Returned over
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(1) Capital returned to shareholders in the third quarter of |
4 |
SUPPORTED BY OUR ROCK SOLID BALANCE SHEET
Financial strength
tosupport allstakeholders
Capital supports AA financial strength rating as of September 30, 2024, 2023(1)
Highly liquid assets of $4.3 billion(1)
High quality, well diversified investment portfolio
Disciplined Asset Liability Management
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(1) Parent company highly liquid assets predominantly include cash, short-term investments, |
5 |
THIRD QUARTER 2024 HIGHLIGHTS
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Financial Highlights |
Earnings Drivers |
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($ millions, except per share amounts)
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Pre-Tax Adjusted Operating Income |
(1) |
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Adjusted Operating Income Per Share |
(1) |
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YTD 2024 |
3Q24 |
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($ millions, pre-tax adjusted operating income)
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PGIM |
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International Businesses |
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+ Higher asset management |
+ More favorable underwriting |
- Less favorable underwriting |
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fees |
+ Higher spread income |
- Higher expenses |
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- Higher expenses |
- Lower fee income |
+ Higher JV earnings |
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- Higher expenses |
+ Higher spread income |
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GAAP Net Income Per Share |
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Adjusted Operating ROE |
(2) |
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Adjusted Book Value Per Share |
(1) |
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13.7% |
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3Q23 3Q24
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3Q23 |
3Q24 |
3Q23 |
3Q24 |
Note: See Appendix for segment results.
- See reconciliation in Appendix for non-GAAP measures Adjusted Operating Income, Adjusted Operating Income Per Share, and Adjusted Book Value Per Share.
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(2) Based on year-to-date 2024 after-tax Adjusted Operating Income and average Adjusted Book Value. See Appendix for more information. |
6 |
PGIM
Earnings Contribution to Prudential
Trailing twelve months(1)
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($ millions) |
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PGIM 10%
Total Net Flows
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($ billions) |
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310. |
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210. |
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11.0 |
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10. |
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( 9). 0 |
( |
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( |
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( 910). |
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( 920). |
( |
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3Q23 |
4Q23 |
1Q24 |
2Q24 |
3Q24 |
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Institutional |
Retail |
Affiliated |
Net Flows |
Key Priorities
- Maintain strong investment performance(2)
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- Percentage of AUM(3) outperforming public benchmarks:
1 Year: 86%, 3 Year: 65%, 5 Year: 79%, 10 Year: 85%
- Percentage of AUM(3) outperforming public benchmarks:
- Leverage leading asset management capabilities to grow our mutually reinforcing business system
- Globalize both product and client footprint and continue to add capabilities
- Grow in alternatives, including private credit, and other high margin areas
- Selectively acquire new capabilities through programmatic M&A
Asset Management Fees
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Trailing twelve months |
Multi-Asset |
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($ millions) |
Private Credit & |
5% |
Other Alts
12%
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Public |
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Fixed |
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Real |
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Income |
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40% |
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Estate |
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21% |
Public
Equity
22%
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
- PGIM calculations as of
September 30, 2024 for$819 billion of third-party AUM managed against public benchmarks. Past performance is not a guarantee or reliable indicator of future results. All investments involve risk, including the possible loss of capital. Performance is defined as outperformance (gross of fees) relative to each individual strategy's respective benchmark(s). - Represents PGIM's benchmarked AUM (83% of total third-party AUM is benchmarked over 1 year, 77% over 3 years, 67% over 5 years, and 50% over 10 years). This calculation does not include non-benchmarked assets (including general account assets and assets not managed by PGIM). Returns are calculated gross of investment management fees, which would reduce an investor's net return. Excess performance is based on all actively managed Fixed Income,
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Equity, and Real Estate AUM for |
7 |
Diversified Portfolio with Favorable Growth Opportunities
Earnings Contribution to Prudential
Trailing twelve months(1) ($ millions)
Key Priorities
- Drive higher value and higher growth with a complementary mix of businesses and diversified sources of earnings
- Transform our capabilities to improve customer experiences
- Expand our addressable market with new financial solutions leveraging the capabilities across Prudential
- Continue to grow our businesses by leveraging our strong brand, product breadth, and distribution strength
Diversified Sources of Earnings
Trailing twelve months(2)
Underwriting
20%
Net Spread
49%
31%
Performance Highlights
- Institutional Retirement Strategies sales of
$11 billion contribute to strong year-to-date sales of$26 billion - Continued Individual Retirement Strategies sales growth, with sales of
$3.6 billion representing our best quarter in over a decade Favorable Group Insurance benefits ratio of 83.4%, at the low-end of our target range- Individual Life sales reflect pivot towards more capital efficient products
Note: See Appendix for segment results.
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
U.S. Businesses include Retirement Strategies, Group Insurance, and Individual Life.
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(2) Based on net spread income, net fee income, and underwriting margin and claims experience gross of expenses. Excludes assumption updates and other refinements. |
8 |
INTERNATIONAL BUSINESSES
Market Leader in
Earnings Contribution to Prudential
Trailing twelve months(1) ($ millions)
International
Businesses
39%
Key Priorities
- Expand product and business capabilities to meet customers' evolving insurance and retirement security needs
- Enhance customer experience and deliver differentiated distribution leveraging digital tools
- Optimize capital and operational efficiency
- Expand in select high growth emerging markets through investments in organic growth and selective M&A
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Sales(2) |
Sales - Currency Mix(2) |
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($ millions) |
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Trailing twelve months |
Other 2% |
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BRL |
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14% |
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JPY |
USD |
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24% |
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60% |
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3Q23 |
4Q23 |
1Q24 |
2Q24 |
3Q24 |
- Based on pre-tax adjusted operating income excluding Corporate & Other operations.
- Constant exchange rate basis. Foreign denominated activity translated to
U.S. Dollars (USD) at uniform exchange rates for all periods presented, including Japanese Yen (JPY) 129 per USD and Brazilian Real (BRL) 6 per USD.
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USD-denominated activity is included based on the amounts as transacted in USD. Sales represented by annualized new business premiums. |
9 |
ADJUSTED OPERATING INCOME & EPS CONSIDERATIONS
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($ millions, except per share amounts) |
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(1) |
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3Q24 Reported |
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Variable Investment Income |
• |
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Underwriting |
• |
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Expenses & Other |
• |
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Adjusted |
Adjusted Operating |
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Operating Income |
Income Per Share |
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Pre-Tax |
After-Tax |
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Assumes a normalized level |
50 |
0.11 |
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3Q24 experience normalized |
(15) |
(0.03) |
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Primarily timing of expenses and seasonal items |
(100) |
(0.22) |
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(2) |
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4Q24 Baseline |
4Q24 baseline includes items specific to the fourth quarter that decrease EPS by $0.33(3)
Note: See Appendix for segment detail.
- See reconciliation in Appendix for non-GAAP measures, Adjusted Operating Income, and Adjusted Operating Income Per Share.
- EPS rollforward list of considerations not intended to be exhaustive and rollforward is not a projection of 4Q24 results. Does not consider future items such as, among other things, the expected impact of planned transactions, share repurchases, business growth, and market impacts.
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(3) Items specific to the fourth quarter include expense and seasonality impacts. See Appendix for details. |
1 0 |
Attachments
Disclaimer
Proxy Statement – Form DEF 14A
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