You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: As always, we hope you and your families remain safe and healthy.
Prudential delivered solid financial results for the third quarter, reflecting our strong investment performance and high demand for the products we've introduced to support our customers as they solve their financial challenges in a changing world.
We also made significant progress executing on our transformation strategy to become a higher-growth, less market-sensitive, and more nimble company.
First, we reached agreements to divest our full-service recordkeeping business and to sell a portion of our traditional variable annuities, advancing our pivot toward less market-sensitive, and higher-growth businesses.
Second, we continue to advance our cost-savings program and remain on track to achieve $750 million of savings by the end of 2023.
And third, with the support of our rock-solid balance sheet, we are maintaining a disciplined and balanced approach to redeploying capital.
I'll provide an update on each of these transformation initiatives before turning it over to Rob and Ken.
Turning to Slide 3.
In September, we reached an agreement to sell a block of our traditional variable annuities to Fortitude Re.
This divestiture, which is expected to close in the first half of 2022, represents approximately 20% of our traditional individual annuities account values and significantly advances our goal of cutting in half the earnings contribution of legacy variable annuities products through a mix of strategic transactions and natural runoff.
This transaction expands upon our prior divestiture activity, including the agreement we announced in July to sell our full-service recordkeeping business and the successful completion of the sales of our Taiwan and Korea insurance businesses.
As a result of these divestitures to date, we expect to generate net proceeds of approximately $6 billion by the first half of 2022.
And we continue to explore additional opportunities to derisk in-force blocks of business.
With the pending sale of our full-service recordkeeping business and our annuities block transaction, we have combined our individual annuities and retirement businesses to better serve the retirement needs of both individuals and institutions and support our growth strategy.
Turning next to our cost-savings program on Slide 4.
We are progressing well and remain on track to achieve our $750 million cost-savings targets by the end of 2023 as we look to reduce expenses while improving both the customer and employee experience.
To date, we have achieved $590 million in run-rate cost savings, exceeding our $500 million targets for the full year.
These savings include 145 million achieved in the third quarter for a total of $385 million this year.
Turning to Slide 5.
We continue to demonstrate a disciplined and balanced approach to capital deployment by enhancing returns to shareholders, reducing leverage, and investing in the growth of our businesses, all supported by our rock-solid balance sheet.
Year to date, we returned $3.5 billion to shareholders, including 2.1 billion of share buybacks and 1.4 billion in dividend payments, reflecting a 5% increase in our quarterly dividend compared to last year.
And we're targeting to return $11 billion of capital to shareholders by the end of 2023.
During the third quarter, we also took steps to enhance our financial flexibility by redeeming $900 million of outstanding debt.
This reduced financial leverage and generated 30 million in annual interest savings going forward.
We also continued to deploy capital in our businesses to drive long-term growth.
For example, this quarter, we completed a $5 billion funded pension risk transfer transaction, which is the fourth largest transaction in the history of the PRT market and demonstrates our expertise, ability to execute at scale, and commitment to this market.
We also deployed capital to support our ongoing pivot to less interest rate-sensitive and higher-growth products, including our FlexGuard and variable life products.
Our capital deployment is supported by our balance sheet strength, including highly liquid assets of $3.8 billion at the end of the third quarter and a capital position that continues to support a AA financial strength rating.
Turning to Slide 6.
I'm pleased to report a meaningful expansion of our environmental, social, and governance commitments.
Earlier this week, we announced our commitment to achieve net-zero emissions across our primary global home office operations by 2050, with an interim goal of becoming carbon-neutral by 2040.
We're also carefully assessing the emissions impact of our investment portfolio.
As an immediate action, we will restrict new direct investments in companies that derive a material portion of their revenues from thermal coal.
Separately, on the social front, the Prudential Foundation achieved an important milestone during the quarter, reaching $1 billion in funding to partners aimed at eliminating barriers to financial and social mobility around the world since making its first grant in 1978.
These investments include funding aligned with our racial equity commitments to support organizations, such as those supporting minority-owned small businesses and historically black colleges and universities that foster black economic empowerment and address the racial wealth gap.
This milestone by the foundation follows the $1 billion investment mark achieved in our impact investing portfolio in 2020.
We are confident these actions taken alongside of our strategic transformation will help us build a more sustainable company on behalf of all our stakeholders.
I'll provide an overview of our financial results and business performance for our PGIM, U.S., and international businesses.
I'll begin on Slide 7 with our financial results for the third quarter.
Our pre-tax adjusted operating income was $1.8 billion or $2.78 per share on an after-tax basis and reflected the benefit of strong markets and business growth, which exceeded the net mortality impacts from COVID-19.
PGIM, our global asset manager, had record-high asset management fees driven by record account values of over $1.5 trillion that were offset by lower other related revenues relative to the elevated level in the year-ago quarter as well as higher expenses supporting business growth.
Results of our U.S. businesses increased approximately 29% from the year-ago quarter and reflected higher net investment spread, driven by higher variable investment income, and higher fee income primarily driven by equity market appreciation, partially offset by less favorable underwriting experience driven by COVID-19-related mortality.
Earnings in our international businesses increased 14%, reflecting continued business growth, higher net investment spread, lower expenses, and higher earnings from joint venture investments.
This increase was partially offset by less favorable underwriting results, primarily driven by higher COVID-19 claims.
Turning to Slide 8.
PGIM continues to demonstrate the strength of its diversified capabilities in both public and private asset classes across fixed income, alternatives, real estate, and equities as a top 10 global active investment manager.
PGIM's investment performance remains attractive with more than 94% of assets under management outperforming their benchmarks over the last three-, five- and 10-year periods.
Third-party net flows were 300 million in the quarter, including institutional net flows of 700 million, primarily driven by public fixed income flows.
Modest retail net outflows of 400 million were due to equity outflows from sub-advised mandates and client reallocations due to rising rates and inflation concerns.
As the investment engine of Prudential, PGIM benefits from a mutually beneficial relationship with our U.S. and International Insurance businesses.
PGIM's asset origination capabilities and investment management expertise provide a competitive advantage by helping our businesses to bring enhanced solutions and more value to our customers.
And our businesses, in turn, provide a source of growth for PGIM through affiliated flows that complement its successful third-party track record of growth.
PGIM's asset management fees reached another record, up 13% compared to the year-ago quarter as a result of strong flows driven by investment performance and market depreciation.
PGIM's alternatives business, which has assets in excess of 250 billion, continues to demonstrate momentum across private credit and real estate equity and debt, benefiting by our global scale and market-leading positions.
As an example, PGIM's private businesses deployed almost $12 billion of capital this quarter, 28% more than the year-ago quarter.
This strategic focus on expanding higher-yielding products has resulted in stable fee rates over time despite industrywide fee pressures.
Now turning to Slide 9.
businesses produced diversified earnings from fees, net investment spread, and underwriting income and benefit from our complimentary mix of longevity and mortality businesses.
We continue to shift our business mix away from low-growth, capital-intensive, and interest rate-sensitive products and businesses, transform our capabilities and cost structure and expand our addressable markets.
In addition to the agreement that we announced in July to sell our full-service retirement business, this quarter, we also announced the sale of a portion of our legacy in-force annuities block to reduce the overall contribution of traditional variable annuities.
These transactions are significant steps forward in shifting our business mix and product portfolio to reduce market sensitivity and accelerate long-term growth.
In addition, our product pivots have worked well, demonstrated by continued strong sales of our buffered annuity products, which were $1.3 billion in the third quarter, representing 88% of total individual annuity sales.
Since the launch of FlexGuard in 2020, sales have exceeded $6 billion.
These sales reflect customer demand for investment solutions that offer the potential for appreciation from equity markets combined with downside protection.
We have also exercised discipline through frequent pricing actions, and our sales continue to benefit from having a strong and trusted brand and highly effective distribution team.
Also, our Individual Life sales continue to be strong and reflect our product pivot strategy, with higher variable life sales compared to the year-ago quarter.
Our retirement business reflected strong sales in the quarter, including a 5.2 billion funded pension risk transfer transaction and 1.6 billion of international reinsurance transactions, demonstrating our market-leading capabilities.
With respect to Assurance, our digitally enabled distribution platform, total revenues, our primary financial metric as we concentrate on scaling the business, were up 47% over the prior-year quarter.
During the third quarter, we increased the number of agents to prepare for the seasonally higher expected demand of the Medicare annual enrollment period that occurs in the fourth quarter.
Turning to Slide 10.
Our international businesses include our Japanese life insurance operation, where we have a differentiated multichannel distribution model, as well as other operations, focused on high-growth emerging markets.
Sales across both Life Planner and Gibraltar operations were higher than last quarter amid the state of emergency in Japan that ended on September 30th.
dollar-denominated product repricing in Japan that we implemented in the third quarter of last year.
We also continue to see sales momentum in Brazil, particularly within the third-party distribution channel.
We remain encouraged by the resiliency of our unique distribution capabilities, which have supported the continued growth of our in-force business.
And with that, I'll hand it over to Ken.
I'll begin on Slide 11, which provides insight into earnings for the fourth quarter of 2021 relative to our third quarter results.
Pretax adjusted operating income in the third quarter was $1.8 billion and resulted in earnings per share of $3.78 on an after-tax basis.
To get a sense for how our fourth quarter results might develop, we suggest adjustments for the following items.
First, variable investment income outperformed expectations in the third quarter by 570 million.
Next, we included a placeholder for COVID-19 claims experience in the fourth quarter that is a similar level to our experience in the third quarter.
While we have provided this placeholder for COVID-19-related claims experience, the actual impact will depend on a variety of factors, such as infection and fatality rates, geographic and demographic mix, and the continued acceptance and effectiveness of vaccines.
Third, we expect seasonal expenses and other items will be higher in the fourth quarter by 140 million.
Fourth, we anticipate net investment income will be reduced by about 10 million, reflecting the difference between new money rates and disposition yields of our investment portfolio.
And last, we expect the fourth quarter effective tax rate to normalize.
These items combined get us to a baseline of $2.27 per share in the fourth quarter.
I'll note that if you exclude items specific to the fourth quarter, earnings per share would be $3.05.
The key takeaway is that our underlying earnings power has increased from last quarter, driven by the benefits of business growth, our cost-savings program, and market appreciation.
While we have provided these items to consider, please note that there may be other factors that affect earnings per share in the fourth quarter.
Turning to Slide 12.
We continue to maintain a robust capital position and adequate sources of funding.
Our capital position continues to support a AA financial strength rating and have substantial sources of funding.
Our cash and liquid assets were $3.8 billion, which is greater than three times annual fixed charges, and other sources of funds include free cash flow from our businesses and contingent capital facilities.
Turning to Slide 13 and in summary.
We are executing on divestitures.
We are on track to achieve our targeted cost-saving initiatives.
And with the support of our rock-solid balance sheet, we are thoughtfully redeploying capital.

user
q3 adjusted operating earnings per share $3.78.

assistant