Prudential Financial (PRU) 2 May 192019 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Prudential Financial Quarterly Earnings Conference Call. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session, and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. like Investor the Relations, now the over would of Head Darin I to conference turn to And Arita. Please go ahead, sir.

Good Accounting Prudential Ken Financial Axel, are Businesses; Scott Thank our Tanji, Chairman; Steve CEO; Chief Brad. morning, Head Officer. of you Vice and thank Controller you, Domestic Head for Rob call. Falzon, Representing Rob Lowrey, of on Officer; Charlie call Sleyster, and Pelletier, today's Principal Chairman and and joining International Businesses;

remarks by we from prepared actual Rob and questions. We presentation then with will differ forward-looking the that Charlie, Ken, and make today. is will Today's materially start we results may possible your take predictions statements. may include It

this presentation include addition, non-GAAP may measures. to In references

comparable could the of titled Non-GAAP in the presentation, For the a reconciliation Forward-Looking actual of cause the see appendix and to such materially – measures factors forward-looking discussion GAAP measures from that slide to which in Statements non-GAAP our to differ a results here please those of reminder, will in X. statements, on can and be Measures today's focus investor.prudential.com. with Also, strategy, with starting Day will Investor our as on The hosting an time New mid-day be to on we Jersey, be at executives. June at plenty interact our business Newark, website found comparable

that, hope We hand will will We be start you that also Charlie. us. I events. feature to a the will With Financial to Wellness the experience exhibit it of at able over join

thank morning Thank today. you, Darin. you for and us joining Good

to a With good repurchases totaling per dividends. share We strategy opportunity share and shareholders the accelerated to solid rock-solid on adjusted marked of for year capital $XXX Prudential. to produced to value XXXX return operating foundation XX.X% of greater our book increased generated quarter return bring business first to a this million via sheet, we continued equity, quarter financial a balance more our fundamentals. and customers. a The We start

our and Financial has the around business employees workforce Financial Japan of They provide solutions life our our which International, – drivers positive are the are interconnected adopt three manager; markets will our and the in In to and results. in our of these continue world. solutions U.S. insurance PGIM, our growth workplace business: Wellness asset Wellness to U.S. businesses, businesses Our financial the behaviors. grow businesses financial of smaller in moment. clients suite on of help more our learn, we a practice color Rob global

large ability investment, trusted provides core credit. generate is workers debt our when millions pool with significant people, by us with connect in earnings from employ global new a assets via helping to businesses investment management. growth. clients competitive and phone third-party to in performance, including positions significant top workplace market differentiated PGIM a large of business a real asset or generating addressable way. savings income, including of leading innovate population well continues by and environment. opportunity returns. strong manager, private giving a holistically prefer benefits where and estate Prudential's in We they and advantage our other as us balance Our to expand distinct These serve consistently with for turn our PGIM solutions and investment how, sheet. a retirement and flows PGIM XX The alternatives we people's an digital in needs to as advantage to engage protection can total and see as grow in-person, a

generation. our operations further business model peers they from our international distinguish steady strong that as and returns, of our provide growth, capital Finally, sustained

India, market Japan highly populated Indonesia, Brazil, China in a position also including growth in maintaining businesses grow to insurance life our markets, the continue and We leadership and Chile, business, Africa. have Japan

additional four highlights provide slide quarter. financial the to X. first on I'll Turning

First, lower operating average are due Prudential's reflecting and for assets declined lower under fee management. two across our plans factors, annuity year higher and cost overall offset income from businesses. items These two, stock underlining tied of the primarily variable compensation first partially by two quarter period a adjusted to one, continued number to equity earnings ago market returns; growth

adjusted share book Second, our $XX. grew value to than more per

our Third, maintaining business, we this we AA and growing a growth consistent And – the robust of shares dividends. fourth, deployed capital our while all into capital into achieved repurchasing position paying with standard.

solid of many the drivers across businesses. saw also We

capital maintained to Retirement company, Life account sales level. delivered to with record Our continue driven of business quarter and regular holding Planner $XXX by Individual quarterly a generation million business increased paid life record our also sales a its business a values the level increase the planners. strong Annuities to and

recent has encouraged which we important the interest we levels businesses, effect long-term pricing businesses. on in continue our While are to disciplined highlight our level of the we by generate it momentum rates, decline at that had is in the to of to on of that ensure above target or our given sales an remain some returns

for our over to priorities, it businesses a our changing words few to say to executing solving on how like turn Rob more I'd our about the I of world. on challenges strategic are financial Before commitment our

governance specializing with sustainable returns a MSCI shareholder CDP. social to and an parties fostering our turn for with marks along let's Underlying third We've environmental, recognized from number our X. in is commitment institutional long-term shareholders, that ESG Sustainalytics, slide business services, integrated of high by framework. a and to been attractive So produces purpose

commitment This we investments security for for the the financial grants, in world. Rob. care We As an actions, month, XXXX life it that this Youth. your are the through young generations This financial a to and of and we as proud future $XXX our ensuring last morning, over which of a exist. their and we you investment about I'll impact to example to all Thank who our prepared purpose that, professional partnerships, successful of just example contributions time company corporate turn success. is improve announced a of and people around great are funds are million we Opportunity and for a with

color Charlie. on provide are Financial International. growing Wellness, businesses: U.S. PGIM our Thanks, three and more we I'll how

As fees, U.S. earnings individual Wellness for shown on spread a and and underwriting produce investment from represents our diversified workplace source businesses solutions Financial slide X, that income.

Our including needs. help protection broad capabilities advice, financial income their retirement solutions to wellness continue and investment, with clients

We have wellness. three financial key growth priorities for

our we wins to platform. First, contribute billion over of Group in XXXX, sales our help $XXX capabilities about continuing we Since and of value retirement differentiated in understand competitiveness to of are we plan Wellness our have launch the the million $XX generated proposition. service Financial full that Insurance case employers

addition more us existing with we clients of In that expect value proposition. win to clients, helping aligned our new to are retain our

workers and to and our digital Financial utilize engaging platform. understand activate better are existing our solutions. we their We and workplace these relationships Wellness Second, pathways program educating financial through

by Prudential's program workplace seminars Our adopted nearly of been advisers. financial clients In of financial in XXX employees worksite clients. delivered has this financial program, pathways workplace by our participate our

take and productivity a of that enhancing Our and including wellness third, venue X we we a to in appropriate that particular adopted And XXXX. individual for thereby platform is Based on at X,XXX we LINK to by making or We topics, platform has which meet and connect have solutions. we traction match are on obtain experience needs released that employees. of significantly on tools that workers, solutions personalized is customize a participation, been by via asset addressing recently holistic This our contributions digital our digital digitally includes produce employees the expand tangible market, experiencing on satisfaction employees for second and their substantial nearly a financial goals, in Financial of investment, studies advisers conducted, Wellness are Ultimately, significant What Prudential growth we needs employers financial LINK assessment variety experience our their way company's financial address already deliver of do behaviors is their retirement with the decide increasing phone to mix nearly action. protection retirement our employers better of and to long-term million utilizing needs. more needs a This clients, beginning change above, of allow investment individuals' and level. provides half level to This case individuals education their that potential. individuals. launched in clients the employees. increases good increase online and highly plan helps a are options we help One plan engagement via the reaching can income financial workplace difference. addressable tools participants or believe allocation results by the

workplace rolled to out Turning X. clients. additional our slide recently for We solutions

clients. workplace I Prudential the reach As mentioned, by our extended of to LINK we previously

share consolidation them addition, debt allows a individuals down their of loan student coaching phone helping employers one-way capabilities In and designed loan we to help options student individuals, to pay employers deployed financial feature including piloting available first that we've healthier year. more repayment learn of student and are adopt quarter during this XXX the activate than evaluate can about service or a to the loan assistance Also employees. behaviors. financial via And screen

guide for their an new help a time. financial a decisions while we're and decisions who outcomes Wellness enhancements Financial just an All job in emotionally are make lost critical meeting transition, lives And PruPassages, navigate challenging generating their during productivity this and those claims For going these moments individual's and easier through resources process services, changes for at beneficiary introduced one, informed needs individuals maintain for aimed employers during to helps we people providing more business. to have period. which positive our at loved improving

five-year strong fixed over asset quarter, net and retail assets are over X. positive billion specifically flows under by our institutional and performance of long-term net slide would that of flows the performance. including In $X global period. net to positive management. trillion under about the $X.X of benchmarks have These investment XX% $XXX generated million third-party has flows. I driven note Turning outperformed management current $X.X business highlight include assets of their our income that solid of our we management and flows billion PGIM,

way with basis private real Our the asset overall investor into strong performance management allowed contributed third markets diversified largest flows stable are investments credit high-return investment we global By XX and emerging points. as has to This and alternatives. field estate offering our example, to alternative keeping of attract us significant and our at platforms. in such has strategies product

grow. are pipeline to our encouraged ability our to and We continue by

assets distinctive class Our currently model of multi-manager globally including helps sourced U.S. capabilities broad roughly management XX% the under from expand outside with with asset us to

to X. turning slide Now

operation Japanese Our as as demographics. markets with high-growth in our those well business including world-class International life businesses includes attractive insurance other

led record year Japan premiums, and by our competitive business a and Sales a than strategy, Life summary, other sales by combined Life to compared In U.S. annual number models represents level of the Our remains seasonally year of differentiated Planners to International. Gibraltar, total This businesses: which quarter, our in half and bank to lower of of continued earnings the increasing which our a Financial execute the sales, higher more positive the PGIM quarter. XX% than half ago the current reflects the to driven international, conditions sales ability Planner the Wellness, by X% in U.S. was in across channel. for ago. momentum were primarily were X,XXX. proven international higher record This level increased dollar quarter. about with of from in earnings

that serve to monetizing those hand continue We that, generate well, execution over have we Ken. attractive we growth profitable are and strong at to thoughtful I'll it and strategies With customers fundamentals build fundamentals to our returns. quality as

had not these impact pretax Thanks, by Rob. per $XX total, these includes an results which million $X.XX they We quarter. highlight be items in indicative future adjusted operating or because performance. reduced the Slide X X may share. notable of on current items the In earnings items

ago Excluding the relatively the per share quarter. $X.XX, with earnings items, consistent would notable be year

fee by the long-term million of First, lag higher-than-expected income returns variable prepayment partially This income, returns. and equity fund X reflects effect investment below which about $XXX was prepayment offset expectations. includes private quarter income and non-coupon hedge lower-than-expected

costs appreciation resulted $XX to quarter benefit And primarily market current certain annuities reflects -- profile equity the was policies. highlighted expectations as seasonal the mortality life variable a in the of with the and to longevity recognition complementary our associated underwriting and favorable XX in Second, million benefits of adjustment in appendix. our Page variable and on third, inline with and of experience certain

granted, when for I compensation earnings quarterly is expense couple our expense are and of of million impacted pattern, also corporate also retiree primarily and to the resulted items each $XX results. Long-term like would appendix the in in million highlight in $XX expense is current PGIM. of which $XX in quarter Regarding employees awards a eligible of year. recognized in -- additional other This about first that million quarter included

deferred that pretax quarter or million $XX per like In the I In results concentration market in premiums and earnings an based quarter $X.XX We $XXX stock our exceeded total, compensation first share. performance. incremental plans compensation in and appreciation addition, on Market the this of also highlight corporate by in operation favors employee are that quarter. expectations an would our these annual Prudential's a reduced Insurance by primarily of current expense and certain earnings other. pattern $XX current million International in to items and resulted long-term the X in estimate million. results equity benefited about

provide We dividends I'll billion capital to current quarter XXXX. during We repurchases. share authorization share million and an on of repurchase shareholders $X $XXX million shares through XX. slide and to returned update deployment, through for $XXX repurchased leverage. our liquidity the Turning

In addition, we stock increased our per dividend by share quarterly XX%. common

cash billion to of quarter, the the consistent at amounted with billion than liquidity company liquid $X Our parent to and $X.X XXXX $X the assets higher target at our billion end year-end range. and

strong a balance also We maintained sheet.

Our to strength AA levels leverage and better ratio targeted our financial remains regulatory be above capital ratios our target. our continue than financial

operating continued per capabilities businesses more XX on a a wellness in strong slide to we financial businesses, shareholders with value to and growth $XXX and our Turning maintained number share and providing with and financial along across capital flexibility. a We and underlying million equity to market-leading book robust integrated our with generated adjusted summary, a global adjusted of complementary customers. record position solutions are distributed liquidity return

your Now I'll turn the operator it to questions. for

Erik Our first go Bass comes Autonomous line question Research. today the of Instructions] ahead. Please [Operator from from

pulling the the do risk pipeline or it is on to I year. expect you active transfer was comment hoping forward momentum the you here? And pension seen this start could you've given strong to very remain activity,

at transfer decline Erik, it's for rates funding the pension look has pipeline Steve. as I'll address quite plans solid. levels We year on still this The -- in in impacted your an basis. question. for interest the risk aggregate

regard already their mitigate need capital the hedge we quite companies to solid see us steps solution that the to and still as we movements. However, for opportunity very see still have being a strong markets taken set to before or in exposure

good pipeline. we the is with This the that compete see our on still about, funded opportunities and So set. pretty side solid net speaking U.S. a I'm about we feel opportunity to very

balance million flows side, On we a very the pipeline. reinsurance, considerations. quarter. in on see for $XXX reinsurance. million the companies look of and in funded the the unfunded the of aggregate and Also, PRT area in announced of manage pretty risk actually the front $X.X longevity second in longevity reported was stay the We this the as strong demand to in reinsurance their side, this business ahead publicly longevity strong to we of billion quarter, That the $XXX Brexit in dollars U.K. we beginning another business, that billion couple since expect year

that Thank the still XX%. or the then you. to new being of PRT you're about you about corporate to think in I you it Is And generate than line XX% historically, returns can case? talk objective able business? higher talked on the

still That Erik. be Yes. the would case,

quite certain been certain our basis, able our corporate write is the at in consistent objectives, high-single-digits. to risk level very we objectives. unlevered business the objectives. return in by-and-large, a to business this the There are choose For that target on quite that are make might we an do some a into our characteristics actually instances we've time, low-double-digits with due at piece consistent levels consistent But that of quite which business corporate our of this to return with with so corporate

Great, thank you.

Please do with we go And JPMorgan. question ahead. Bhullar of Jimmy from the have a line

questions. of couple a had I

quarter just side, color had what's you could Gibraltar. conditions, going Planners at just in First, sales? weak business your Japanese terms on the pretty expectations of you and competitive good in a result for very on the Life us a on but Obviously, give some

This is Scott. Thanks Jimmy.

ways. I two that I'll answer think in

is seeing For needs feel Planners. It's benefit to is It's model like in the our that our selling traditional the well Life we based fairly now Life Planner continuing account model, and business, a Planner is trained differentiated. you're increase. Life Japan

I in think year. this we up or X% over were Planners XXX Life Japan

if fairly that's straightforward, I So think will. you

you -- a is more market bank that Gibraltar do and with at are more look a little If over the and in different little up the it's that market businesses, there, set end activity opportunistic. of we you a there,

all, different be some than drivers the the and looking against we we have customers do that margin. to might market the mutual fund and there do of competitors things cases, compete First on in other also

part, For focused our the on most very business we're there, recurring premium.

to Investor in therefore, from Japan into than recall is move And that them different may player that schooled the our been the needs-based well and their average we in You bank what do competitive. think planning take former Planners Day market. are pretty Life the I is like substantially has Market focus channel.

our I that And that so in to decline we're maintain forecast if core banks, a quarter-to-quarter, going what to it's would hard we our that really going do not stick just we're from You've need vary. pricing little knitting seen a the a there. bit year-over-year, stable discipline, to and customers although to much say of and perspective. will there's But

product? increase long value much over might just just for how book changes from experience earnings, in earnings you for on And insight impact volatility Ken, have accounting duration the do in you

Yeah.

the and end, the objective in guidance. any appropriate is Overall, of fundamental and We're business accounting performance too we're early days methods, early that are way through to, in line to the working those Ken. be measures it's for new our able our provide our with is that's clear provide it, business in this our Jimmy, adopting to mix. economics So of

too very So, days, for it's early us impact. still to on early directional comment

XQ Okay. million repeat expect on to tailwind that's And to $XX lastly, the after-tax you in that don't then just earnings an XQ, number?

No. It's pre-tax. a

so it's to EPS, $X.XX, number, $X.XX like right? going to Pre-tax

that's I yes. think right, about

you. Thank Okay.

line have ahead. question Please Gallagher from we Evercore. And a with go the do Tom of

Hi.

just happening debt on like part dividends the billion using but you $X XQ, it on your to stayed went question. of are Was So, there? your that or first versus planning up Holdco what's my dividends Can and That's of by Holdco you cash out leverage looks subs, flat. about buybacks of comment timing this year? fund

Yeah.

quarter. overall, the we into pay billion basis. at position So of matures was operations quarterly of $X our flat nice, on insurance come of year. feel have from the assets highly that company businesses and good is and stable fee And and that our a second which and the of dividends dividends that very half holding flow our position liquid have that to really for regularly, on the well the a us capital businesses We the second from about terms company. did we and The cash We are from then debt, from assets providing -- liquid regular did issue tend holding quarterly in in that annuities debt have and to PGIM, dividends we were in year-end. pre-funding

the our year. flow, businesses will -- generating for we go and through cash plans support solid our distributions shareholder So support as are

yes. guess, I Ken, So

expect there, to Is course dividends throughout your a dividends from not re-leverage? fair you fund conclusion? So bottom buybacks that the with the year, and to line of subs all

nature reflective and over actually, trending And down, our cash right. the flow time you've our seen leverage That's business. of of that's strong

follow-up And is you. Got my just on PGIM. just then

the the way balances you this income fixed but you're on it don't from Now and asset income, equities. fixed I disclose in between it outflows and equity big looks like pretty seeing know ending flows, inflows in

the quite revenue are is to that because that case. you And would PGIM implications also, up curious remain there you underneath? with to just well, see that want if know yields have for Just expect what's that happening there revenue held so yields --

it's Thanks I'll your for address Tom, question. it. Steve.

that, in trend, face observation case equity You're right about That's fixed the into by in and quarters, making largely active for large, seen the to several we've income the of especially passive outflows flows on been in the equities. the and side. the past

-- flows equity XXXX, that the seen we've on our we've of speaking, the generally moderate Although say. seen pressure in course

Our equity fixed as We of as mandates. a very performance remains well income good strong. see pipeline performance our

regard beginning So, in on the flows observation remain certainly in income fixed based performance especially a of the the fixed to years. end In into that and equities into, business. fee-yielding true to higher and We income flows management very our That's of well. say, year strategies. day cycle the the half been in to continue revenue virtuous say investment speaking, as confident relatively the I ability yield, would over asset generate that at have really our the to past, two is been

have we been some been it strong. characteristics with are and we observation of make of just be maintain we've and for final are able so. level our scale businesses expect I'd scale while income also at that inflows, business That so stable And now. fixed outflows the -- our especially income the fixed of PGIM, XX all to the even some basis quite fee face point in remains that period able strong equity to

we our when the margin it attract flows operating So, well for into in business. that bodes business,

helpful. That's Thanks. Okay.

question And we ahead. now Please of Suneet Citi. with line from Kamath have the go a

Thanks.

you're a the to spending been maybe wellness kind And an on wanted it's initiative. over start with basis? of Just spend showing and the that the give couple years much where of annual you sense how us up? past on of Can what has

funnel, concentrating Wellness is into through Wellness matter. spend not retirement I meaningful group a people kind have Financial experience, that fair of group our if the where our and you overall as businesses will. Suneet, top say the we retirement. a in portion that, company. client visible before That's spend engagement the would of a I come of separate the is amount Financial and on but that broken of would spendings it. We've out address spoken about as initiative The a

are this you Rob businesses, when very a portion In due some years in pleased is So, speak to directly attributable experience. Financial returns, G&A top comments. to cite I'd funnel. who Rob's the to opening over prospects mentioned. -- at presentation, pick are particular individuals we portal other Financial comments. We some of this us embedded Rob is revenues in -- see I to top the solutions, on those particular, that of lead the of realizing employers. expenses solutions engagement Financial that we'll who their the those will The the in with our Wellness digital the well, LINK on period over solutions. the those in Wellness that introduced track the past solutions, significant And Wellness being are properties and effort our insurance activated We strong see now like on well in analysis that that in us in June, -- it. people completing that investment X emerge our the individuals up outcomes strong in with with have with those numbers see can properties people X,XXX and that Financial feel the portal, the momentum we're terms engagement now tracking who of in areas Wellness very engagement beginnings is Financial the And group numbers employers in see this digital the portal. all the come I we're through very see of the the that very accessible time, digital see an we very across regard momentum and access with of his extended over capabilities metrics metrics solid We expenses achieving of in actually that the those we resulting portal more couple the in that we're the emphasize the outlined beginnings of to platform, that initiative definitely and the needs-based time, learning We're but but via is Investor different Day million with in Lots individual-based to solutions, the engagement, solid Rob experiences experience. Financial capabilities. engagement our his full-service the individuals talk for could all individual for sales of in highlighted Wellness and sales from Wellness that as And on retirement about of will kind tracking effort. of that in and and of of

together to just allowed building and service customer globally. And Overall, by us we've managing you to expense customer reflects and same pulling centers disciplined been data, implementing approach business improving and in of significant I'll digital quality and efficiencies Steve that to is and described add. our PGIM efficiency, time, just combination across in expanding capabilities efficiencies This to, at resources initiatives consistent and operating actions resources and Ken. gain taking increase our very the the improving systems and automation. And that savings company excellence, to our engagement a those functions of gain creating the to

the margins across modestly able described. looked expense, our that you below our surface invest see a the pretty and you'd growing to time, at if but, into stable growth being outlook earnings rate Steve operating same capabilities a So, at at and growing the expanding

portion I in sensitivity eligible your It price give kind just sensitivity retirement relative compensation decent of -- shortfall either quarter And you. us plan, on of to the markets was seems the to stock a you Can the the us or hit any then around the of model that employees. this? help Thank guess for that first Okay. like consensus?

that a and that in out over period. I two prior $XX that means going made, their the kind we a occur between Corporate, was it in distinguish quarter retiree-eligible not even piece a are million if pieces it well. though as that quarter occurred $XX this to it's them. expense granted accounting was and to of first three-year paid There And and The Yes. typically million when the quarters occurred in really it's that That's that's requires retiree-eligible, but think -- you're is grants over market-sensitive. that to million; when $XX in PGIM, typically important

of of it's market-related. timing seasonal more expense So than a

million On the of and market-related of performance extent and linking XX% stock defer Or our tied having market management's aligned the it indexes, aligning those it you the In piece either was fluctuation improved which that quarter, -- first $XX compensation with by as was compensation improved think S&P Corporate, XX%. the $XX people to that. by primarily would and to that markets. and the interest and million to can price plans our in our experience in stock

you sort in components. of calibrate those XX% million of to So can both a $XX change

that, is that And a basis? will that one, happen that $XX the adjusted every quarterly on quarter? Meaning second million,

will moves. more degree. to as opposite sizable market quarter, a the fourth if in you It saw you it look And the direction Yes. to actually

it. Got

Okay. Thanks.

it's current in sensitivities sensitivity about I'd but plus we you It's the The just the give benefit on is of year minus equities. being for the That Rob. that talk only or we've -- for that We $X.XX. the XX% Suneet, into add is earnings factored of that, $X.XX that full thing is given you quarter, is a hits is the net it timing compensation throughout. sort piece of in year the this. number spread such whereas that full

Okay. Thanks.

question Nadel with And a go Please from UBS. John of line ahead. have we do the

that segue question. at It aggregate a to strong at the that a wanted to response me market your the appreciate for on It's an there in in end the first basis quarter, actually seems where So I go. high level to to Rob, performance good your was as comment given I impact through we Suneet's But average year. basis we performance a impact getting significant these negative to more market of not the and the arrangements. on we impact of a are point-to-point rest lagged that had through compensation be earnings company's the the work get

year-to-date So just seeing XX%-plus, mean this by pressures business up guess, I I quarter right? confirm point XX% overcome your than first the earnings or We market's the segment comment, to performance. results, XX to be ought more at almost

the to it. the about Yes. Ken. exactly timing. way This That's think is It's

one costs over markets, and comp saw long-term benefit quarters, this impact And first $X.XX year. which the sense? of That So would of million you the and then deferred see would component the XX% on the be that over hitting the for year's being $X.XX make than we more in increase that one $XX subsequent you expense was in of quarter, provided the a period. the that of

It comp despite as to revenue that in know the other to guess. on disconnect. international has ought lay significant relative does even case deck degree four It's XQ, now, relative very to not think me, And I'd I see but growth think I you the you for guess quarters. in of help connection I for your because there's you coming necessarily straight perspective you seasonally try at particular good impact I expectations. of than of negative could That's first from It call if I Financial us, the and But around as to quarter this the lagged and earnings this your guys the good that operations of sense cost effect. slides a be to of that highlight the I this highlighting your -- it's for some flush the the et us more your strategic earnings the benefit so just out so advise I performing -- rest me seasonal, Maybe make this seasonal Day pretty consensus upfront isn't good a Wellness, to some well. rest in miss pattern well could between the item of year. for all. -- positive is there's cetera. backdrop, commentary remainder that when not really right, some really seems you're hear you bold cetera, the see year. about there I businesses and shows forever, missed out and more market one Investor some to to and I a what's then up the et and guess been just been about that to impact guys a you've

timing the stock -- appropriately immediately Yes. to is then fees We accounting the time. interest and occur the recognized There's of align for management's think consideration. and performance the a that do will important it's over that with

equity thing and that to obviously, markets underlying positive earnings think you in the time, quarters. the expect are should see over very So we power a for subsequent our

Hey, John, it's Charlie.

all, your say performing appreciate are be it. to you think for We frustration And really source a for our well. thank of First we let as me No, comment. candid, it's for businesses us well.

businesses Financial We we them been to is Wellness of the we've in acquiring from way. very journey be at And scale. a non-strategic in come think in. of -- are where all we high this together with of they're divesting we're is businesses, we're terms integrated an and they're pleased on long We proud that want initiative bringing The in. quality, businesses the

we things. are the is that's quite frankly, frustrated noise by so the created accounting and out some by other there also, that of And regulation

simplify them that we we Rob over more time, have is that to tried us over reflect have line good so and simplify simplify in and working will you've to have that AOI to seen we'll and as and able we bring to crew strategy. will And our his we but we good try we more and work really and work and the what to a try clarify on see be net and years to our business think a do income earnings. have to system commit with on and And results

appreciate much. very that, Charlie. Thanks I

of the from Please question ahead. go line a have with do Krueger we And Ryan KBW.

your question a Thanks, had good liquidity targets. morning. on company, holding I above

buyback relatively your are equal flow free your dividends and think to I cash generation.

over down? situations capital look more how above curious, on that's you're opportunistic dependent it's about to and targets or time your thinking if excess manage if Just you that utilizing

and about good as ways. opportunities cash flow really grow picture It's cash pretty is generating feel we first, a of to our pension a flow. good again, risk of One, in businesses yeah, combination our businesses, capital been transfer. Well, consistent such that attractive in us position our from using our

also reduce We to financial of a leverage, opportunity and provides had also that source have the flexibility for us.

real our -- consistent. we increasing continue. I we distributions about So good and expect overall, cash should you line shareholder we in We've been think It's as our capital And flow. been generate to position. with earnings very feel that our

heading annuity, any you business assumptions Okay, give policyholder and perspective feeling you're review? behavioral on how about rate trends into the can variable and assumption thanks. annuity actuarial And the and variable interest

still going We're that. through Yeah.

work, As doing you don't know, we do We're not prefer that our in quarter. second call. and preview we that -- we on this to still the

you. Okay, understood. Thank

line have go the from Dowling And a we Partners. & with do Humphrey Lee Please ahead. of question

questions. as my just timing of in taking surprising given as the talked is to this yield first is for as or income question and you've prepayment income. Obviously, is I activity was and I market you related a lower thank which down My well, Hi, that debt see your to a structural prepayment some peers quarter, refinancing lowered having quarter think change wondering, any there you down? issuance spread tightened. came slow in do issue, the about

No.

typically or their borrowers, think that's think -- needs of the and just strategies tied some rate it's tied more businesses. the environments to less financing are typical I about the underlying and to around is way it volatility, tied that transactions to

over a on we below what consistent be that -- at has change at just very fairly expectations see look is and time, above the quarter to typical, been this tends we looked as and that you typical. so and our it So happened basis, if

PGIM. Got And it. then shifting gear to

fair wondering, came talk especially can also a at pipeline, terms seeing about terms I and your institutional what in you're of recently perspective? sales little down amount. on the you on gross sales, a of looking the in if a side Just bit was gross then just by

address in of in equities of multiple but doing across asset performance with I’ll echo in in with that institutional see have also already distribution classes, comments has investment we've solid been from Humphrey, feel confident it's and I'll already prospect the yet that made some front the question mandates string do as with -- positive income performance do our every We we We continue long, -- market us and we're to well. we're of some Steve. global that long our so, the some particular continuing. awarded. the platforms fixed some in for And your that I generating, that flows made very earlier. but seeing, pipeline in to net fund, they've of build-out the which of

a is opposed low timing change the client So sales to more issue just demand? in as a of gross

Correct.

Okay. Thank you.

line ahead. Please of from And Barnidge question Sandler the we do with John have O'Neill. a go

just then this Wellness you much Financial have And do carry hot How Thanks. industry Both VA into being coming think how the of demand? of and FA you momentum versus seen this much over from driven growth, sales XQ? is did program well.

Steve. when say for to momentum. the growth, sales, I to at above industry access dynamics having saying continuing multiple in our quarter. this across that channels it that annuity. a reflect always across a the we in our quarter first to think relation building we a of see within and that, defined in XXXX business. and distribution have of ground our sales the seeing has index year in it's our in pricing We the levels. businesses contribution product, off we're we're accordingly really ago income momentum have that John, which There the among growing continue got industry, I'll that we industry think has pleased their this been to both growing our we to particular, diversification all major in we basically this sales prospect and type that, be Prudential and but look was really strength what advisers fixed them for think we see strong profitable first financial address we're XXXX to will We the we run quarter we saw manage products environment a take operating. market in In And and momentum question. product $XXX the But solution. that is million clients of in the every in pickup diversification growth your will of been and a saw which able see with in multiple demand our in I It's sustainable and strong very the business of

we've gaining in been market. share So this

behavior XQ than with the my season also the this on answers. consumer, And be being the Thanks you XQ? owners? was for finalized, And part changes this business reform have of first tax any relevant the noticed Okay. in follow-up, for more may since

would season, I've to regard to tax not seen dynamics years. any -- from behaviors that unusual in previous particular compared be any the

from do the we line Goldman have ahead. with a Sachs. go question And Alex Please of Scott

Good morning. Hi.

I question was had First dividend capacity. on just

on year? biggest this already, in a think, but dividend capacity your some I you guess of year of you this more versus think talk how about it expect last being, to international dividends just sort When towards to dividends? could of looks opco, do have mix and U.S. weighted bit commented I of the kind I you light it access

capital Yes. of This the is our in reform remind did Company company. strengthening of and Ken. Last year, tax that a America, have Prudential Insurance led our position of I'll impact you that flagship insurance to U.S. we

Japan, ordinary cash the time but generating well we would didn't at our expect with in flow a source of after-tax we certainly levels, vary and which will about flow quarterly take of international so with PGIM a course, generating having other from flows cash businesses, year and quarter-to-quarter, cash also over diversity XX% our but as in quarterly And our that typical business it's flow, of the to from annuities year, last earnings. particularly businesses as this cash dividend

Got it.

looking sort X I think where points been. I other I just margin I maybe expense, first other receive it's was but the question just X follow-up quarter from and margin, PGIM. at there, the to earnings sort my a of, these adjusted even earnings seasonal the there around margins that appreciate mean deferred that and was, was on or look related And mean Okay. core down and I for XQs. of, When comp revenues you relative

mean, expect would So remain to -- interested already or sort if margins a should XX%? you think if there. core to was closer maybe the expect before And this or we we talked lower about else remind of could higher do there we just them should anything be back at have that's margin target going up us, I to that you go guys to I a level? I there on level, was

-- We in business. at, scale we Day, In to numbers rate, the equal, doing, how businesses margin the talk can question. objectives again see look reality been the expand our Investor But we that of do in the see the the erosion we course. which but we're we and same continued Maybe the business. do XX%-plus ability of to We that, at successful which we continue quite our being opportunity due and our as business. at to do more the in margin Steve. of things it's not gradually margins this I'll all see can in margin range is follow-up the see about the expansion into in you refer. of not Alex, we've address your attract maintain seeing fee the we and flows type we average

you. Thank

Lowrey. at closing turn And back Please go for conference time, sir. remarks, over this Charlie ahead, to I'll the

Sure. Thank you.

final close of few our a about sheet. scale our our We confident balance and with thoughts. the businesses feel strategy, me strength Let the of

in here X. value look at greater businesses even focus our and growth Newark continue impact in should for on in and to call, you new greater make have we you our lives forward to lead global shareholders. June and our We will day. details our an a the financial our for Day we more grow providing expand markets, businesses and technology on with customers nice the to to the joining This As and deploy our Thank community. of Investor on

and that using Teleconference participation for Thank today. your conference for ladies your does you AT&T And the for Service. conclude Executive and gentlemen,

now may disconnect. You