Press Release: Prudential Financial, Inc. Announces 2020 Results
Prudential Financial, Inc. Announces 2020 Results
Charles Lowrey, Chairman and CEO, commented on results:
"As we reflect on the extraordinary events of 2020 and the ongoing global pandemic, we thank our employees for their continued dedication to fulfilling our company's purpose of making lives better by solving the financial challenges of our changing world.
During the fourth quarter, we continued to successfully execute against our 2020 priorities, paving the path for the acceleration of our strategy in 2021 and beyond.
Looking ahead, we will continue our transformation by executing on our $750 million cost savings plan and by taking additional steps to increase our growth potential and reduce our market sensitivity. Over the next three years we plan to reallocate between $5 billion and $10 billion of capital with the intention of doubling the earnings contribution of our higher growth businesses and halving Individual Annuities.
Backed by the strength of our rock solid balance sheet, we also plan to return approximately $10 billion of capital to shareholders via dividends and share repurchases during this time period. This includes the resumption of share repurchases in the first quarter of 2021, as part of our $1.5 billion authorization for the year.
These changes will position Prudential to make a more meaningful difference in the financial lives of more people around the world, and to deliver attractive returns to our shareholders."
Prudential Financial, Inc. (NYSE: PRU) today reported fourth quarter and year-end 2020 results. Net income attributable to Prudential Financial, Inc. was $819 million ($2.03 per Common share) for the fourth quarter of 2020, compared to net income of $1.128 billion ($2.76 per Common share) for the fourth quarter of 2019. After-tax adjusted operating income was $1.183 billion ($2.93 per Common share) for the fourth quarter of 2020, compared to $915 million ($2.24 per Common share) for the fourth quarter of 2019.
Net loss attributable to Prudential Financial, Inc. was $374 million ($1.00 per Common share) for 2020, compared to net income of $4.186 billion ($10.11 per Common Share) for 2019. After-tax adjusted operating income was $4.111 billion ($10.21 per Common share) for 2020, compared to $4.656 billion ($11.24 per Common share) for 2019.
Consolidated adjusted operating income and adjusted book value are non-GAAP measures. These measures are discussed later in this press release under "Forward-Looking Statements and Non-GAAP Measures" and reconciliations to the most comparable GAAP measures are provided in the tables that accompany this release.
RESULTS OF ONGOING OPERATIONS
The Company's ongoing operations include PGIM, U.S. Businesses (consisting of U.S. Workplace Solutions, U.S. Individual Solutions, and Assurance IQ), International Businesses, and Corporate & Other. In the following business-level discussion, adjusted operating income refers to pre-tax results.
PGIM, the Company's global investment management business, reported record high adjusted operating income of $404 million for the fourth quarter of 2020, compared to $288 million in the year-ago quarter. The increase reflects higher asset management fees, driven by an increase in average account values, and higher Other Related Revenue, driven by record high agency revenue and the impact of investment performance on incentive fees and co- and seed investment earnings, partially offset by higher expenses, primarily driven by business growth.
PGIM assets under management of $1.499 trillion, a record high, were up 13% from the year-ago quarter, reflecting market appreciation and public fixed income inflows. Third-party net inflows of $6.3 billion in the current quarter reflect retail inflows of $3.8 billion and institutional inflows of $2.5 billion.
U.S. Businesses reported adjusted operating income of $807 million for the fourth quarter of 2020, compared to $841 million in the year-ago quarter. The decrease reflects less favorable underwriting results, driven by COVID-19 related net mortality experience, and a change in business practice in our Individual Life business, and lower fee income, net of distribution expenses and other associated costs, in our Individual Annuities business, partially offset by higher net investment spread results, driven by higher variable investment income, and lower expenses.
U.S. Workplace Solutions, consisting of Retirement and Group Insurance, reported adjusted operating income of $451 million for the fourth quarter of 2020, compared to $342 million in the year-ago quarter.
U.S. Individual Solutions, consisting of Individual Annuities and Individual Life, reported adjusted operating income of $375 million for the fourth quarter of 2020, compared to $508 million in the year-ago quarter.
Assurance IQ reported a loss, on an adjusted operating income basis, of $19 million in the current quarter, compared to a loss of $9 million in the year-ago quarter. This reflects a 94% increase in sales, driven by higher Medicare sales during the annual enrollment period, that were more than offset by increased expenses to support business growth, including higher marketing, distribution, and infrastructure costs.
International Businesses, consisting of Life Planner and Gibraltar Life & Other, reported adjusted operating income of $790 million for the fourth quarter of 2020, compared to $748 million in the year-ago quarter. The increase reflects lower expenses, business growth, and more favorable underwriting results, partially offset by lower net investment spread results.
(MORE TO FOLLOW) Dow Jones Newswires
February 04, 2021 16:18 ET (21:18 GMT)