Slide 1: 3Q23 Earnings Call
3Q23 Earnings Call November 2, 2023 Expanding access to investing, insurance, and retirement security
Slide 2: Key Messages
Key Messages Transforming our business for sustainable growth WE MAKE LIVES BETTER by Navigating the macro environment SOLVING the FINANCIAL CHALLENGES with our rock solid balance sheet of our CHANGING WORLD Maintaining balanced and disciplined capital deployment Expanding access to investing, insur
Slide 3: Transforming Our Business for Sustainable Growth
Transforming Our Business for Sustainable Growth Reducing market sensitivity and • Completed $10B(1) structured settlement annuity reinsurance increasing capital transaction to Prismic efficiency • Launched Prismic to enhance our mutually reinforcing business Enhancing system capabilities and • Cont
Slide 4: Navigating the Macro Environment with our Rock Solid Balance Sheet
Navigating the Macro Environment with our Rock Solid Balance Sheet Capital continues to support AA rating level as of September 30, 2023(1) Increasing capital Highly liquid assets efficiency and of $4.3 billion(2) liquidity Financial strength to support all stakeholders Disciplined High quality, Ass
Slide 5: Maintaining Balanced and Disciplined Capital Deployment
Maintaining Balanced and Disciplined Capital Deployment Increased capital efficiency from Prismic transaction Investing in businesses for long-term, sustainable growth Returned over $700 million to shareholders in 3Q23(1) Creating sustainable, profitable growth and shareholder returns (1) Capital re
Slide 6: Third Quarter 2023 Highlights
Third Quarter 2023 Highlights Financial Highlights Earnings Drivers ($ millions, except per share amounts) ($ millions, pre-tax adjusted operating income) YTD 2023 3Q23 PGIM U.S. Businesses International Businesses – Lower Other Related + Higher spread income + Higher spread income (1) Pre-Tax Adjus
Slide 7: PGIM
PGIM Active Global Investment Manager Across a Broad Range of Private and Public Asset Classes Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Maintain strong investment performance(2) ($ millions) – Percentage of AUM(3) outperforming public benchmarks: $771 3 Year: 69
Slide 8: U.S. Businesses
U.S. Businesses Diversified Portfolio with Expanding Market Opportunities and Improving Risk Profile Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Create higher value, higher growth, and less market sensitive ($ millions) sources of earnings • Transform our capabilit
Slide 9: International Businesses
International Businesses Market Leader in Japan with Expanding Presence in Growth Markets Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Continue to address the insurance and retirement security needs of ($ millions) customers through differentiated distribution and o
Slide 10: Adjusted Operating Income & EPS Considerations
Adjusted Operating Income & EPS Considerations ($ millions, except per share amounts) Adjusted Adjusted Operating Operating Income Income Per Share Pre-Tax After-Tax 3Q23 Reported(1) $1,606 $3.44 Variable Investment • Assumes a normalized level 25 0.05 Income Underwriting • Normalized for 3Q23 exper
Slide 11: Significant Capital Position
Significant Capital Position Capital Position Sources of Funding • Parent company liquid assets within $3 to $5 billion liquidity • Parent company highly liquid assets of $4.3 billion(1) target range • Free cash flow(2) ~65% of earnings over time • PICA RBC ratio > 375% • Japan solvency margin ratio
Slide 12: Key Messages
Key Messages Transforming our business for sustainable growth WE MAKE LIVES BETTER by Navigating the macro environment SOLVING the FINANCIAL CHALLENGES with our rock solid balance sheet of our CHANGING WORLD Maintaining balanced and disciplined capital deployment Expanding access to investing, insur
Slide 13: Appendix
Appendix Expanding access to investing, insurance, and retirement security
Slide 14: Retirement Strategies
Retirement Strategies Delivering Value by Protecting Customer and Client Outcomes Earnings $408 Contribution $16 to Prudential Key Priorities $377 ($4) Trailing twelve months(1) ($30) ($13) • Expand access to retirement security, broadening distribution ($ $169 millions) $124 through new relationshi
Slide 15: Group Insurance
Group Insurance Leading Group Benefits Provider with Opportunity to Further Diversify Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Execute on diversification strategy while maintaining pricing ($ millions) discipline – Maintain National segment share (>5,000 lives)
Slide 16: Individual Life
Individual Life Broad Product Portfolio and Multi-Channel Distribution Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Improve profitability through disciplined pricing and expense ($ millions) management • Expand digital capabilities to drive operating efficiencies an
Slide 17: Life Planner
Life Planner Highly Productive Proprietary Distribution with Steady Long-Term Growth Potential Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Lead with protection solutions while expanding product and ($ millions) business capabilities to meet customers’ evolving need
Slide 18: Gibraltar Life & Other
Gibraltar Life & Other Meeting Client Needs via Multiple Channels Earnings Contribution to Prudential Key Priorities Trailing twelve months(1) • Lead with protection solutions while expanding product and ($ millions) business capabilities to meet customers’ evolving needs $1,220 • Optimize Life Cons
Slide 19: Investment Portfolio
Investment Portfolio Portfolio Composition(1) Highlights $351 billion • Broadly diversified, high quality portfolio with strong Asset Liability Management Other Equities/Alts 5% – High allocation to government securities 5% (mostly U.S. and Japan) – Significant protections with private credit Govern
Slide 20: Mortgage Loan Portfolio
Mortgage Loan Portfolio • Conservative underwriting with a weighted average loan-to-value (LTV) of 59% and debt service coverage ratio (DSCR) of 2.48x as well as a prudent loan monitoring process with loan evaluations occurring at least annually – 60% rated CM1 and 30% rated CM2 • Office represents
Slide 21: Adjusted Operating Income Rollforward by Business
Adjusted Operating Income Rollforward by Business ($ millions, pre-tax) 3Q23 4Q23 3Q23 4Q23 Reported Expenses & Expenses & Baseline(4) VII Underwriting Other(2) Other(3) PGIM $211 - - (10) - $201 Institutional $439 (5) 5 10 - $449 Retirement Strategies Individual $502 10 - - - $512 Retirement Strate
Slide 22: Seasonality of Key Financial Items
Seasonality of Key Financial Items ($ millions, pre-tax adjusted operating income) 4Q23 1Q24 2Q24 3Q24 Higher compensation PGIM ($45) expense(2) Lowest Highest Individual Life ($30) underwriting gains $25 underwriting gains Life Planner ($40) Lowest premiums $60 Highest premiums ($20) Lower premiums
Slide 23: Forward-Looking Statements
Forward-Looking Statements Certain of the statements included in this presentation, including those regarding our plans to transform our business for sustainable growth, our capital and liquidity management strategies, and those under the headings “Key Priorities,” “Adjusted Operating Income & EPS C
Slide 24: Non-GAAP Measures
Non-GAAP Measures This presentation includes references to adjusted operating income, adjusted book value, and adjusted operating return on equity, which is based on adjusted operating income and adjusted book value. Consolidated adjusted operating income, adjusted book value, and adjusted operating
Slide 25: Non-GAAP Measures (Continued)
Non-GAAP Measures (Continued) Realized investment gains (losses) within certain businesses for which such gains (losses) are a principal source of earnings, and those associated with terminating hedges of foreign currency earnings and current period yield adjustments, are included in adjusted operat
Slide 26: Reconciliations between Adjusted Operating Income and the Comparable GAAP Measure
Reconciliations between Adjusted Operating Income and the Comparable GAAP Measure Third Quarter ($ millions) 2023 2022 Net income (loss) attributable to Prudential Financial, Inc. $ (802) $ (92) Income (loss) attributable to noncontrolling interests 11 (16) Net income (loss) (791) (108) Less: Earnin
Slide 27: Reconciliations between Adjusted Operating Income Per Share and the Comparable GAAP Measure
Reconciliations between Adjusted Operating Income Per Share and the Comparable GAAP Measure Third Quarter 2023 2022 Net income (loss) per share attributable to Prudential Financial, Inc. $ (2.23) $ (0.26) Less: Reconciling Items: Realized investment losses, net, and related charges and adjustments (
Slide 28: Reconciliation between Adjusted Book Value and the Comparable GAAP Measure
Reconciliation between Adjusted Book Value and the Comparable GAAP Measure ($ millions, except per share data) September 30, 2023 GAAP book value $ 25,814 Less: Accumulated other comprehensive income (AOCI) (7,831) GAAP book value excluding AOCI 33,645 Less: Cumulative effect of foreign exchange rat