Good morning, everyone, and welcome to day two of the Morgan Stanley U.S. Financials, Payments and CRE Conference. Before we get going, I would remind everyone that for important disclosures, please see Morgan Stanley Research Disclosure website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your Morgan Stanley sales representative. It's my pleasure and privilege to introduce Robin Raju, Chief Financial Officer of Equitable. Robin, thank you for being with us this morning. Thought a good place to start would just be on recent stock price performance. Up until recently, it had been one of the best-performing stocks in the sector, but it does seem like over the last several months, some of that outperformance has eroded away. Just hoping you had any insights on what's happening there, what's happening with the stock price. Well, thank you, Nigel, for having me. I really appreciate the opportunity. We don't tend to comment on valuation in general as we look to drive value over the long term for our shareholders. We're focusing on managing the business on an economic fair value framework overall. If you think about it, since IPO, I believe our total shareholder return was about 68%. That compares to the S&P, about 55%, and peers at 38%. Over the long term, we have consistently delivered shareholder value, and we fully expect to do that over the long term. Now, as the short term regards, we don't know factually what drives short-term behavior because we're focused on the long term. The only factual thing we know is AXA's convertible bond shares hit the market. That was about 44 million shares. We bought back seven million of those shares. That's still a lot of shares out there in the market that puts some technical pressure on the stock over the short term. Over the long term, we're comfortable that we'll still deliver and be a top TSR performer for our shareholders, and that's where we're focused. Okay. Sounds good. Another issue that's been coming up more recently has been Regulation 213. Before I delve into some of the questions surrounding that, perhaps if you can just explain, what is this regulation and how does it impact Equitable? Sure. I think it was in 2015, the NAIC started working on VM-21 which seeks to better align reserves from an RBC standpoint, it incentivizes appropriate hedging on an economic basis. When we were big supportive of that, we early adopted it in 2020. We like the framework. The framework isn't perfect. It's not fully economic. It has a reversion to the mean in it, which assumes interest rates go up to 3.5%. We don't fully manage on the framework because we hedged economics overall. In response, though, to the NAIC's work, the New York DFS implemented their own VA reserving framework for New York companies called Reg 213. It's meant to be more conservative than VM-21 or the NAIC framework. However, the regulation itself had some unintended uneconomic impacts that conflicted with VM-21, it's amplified post the Venerable transaction, a big de-risking transaction that we take. For example, what I like to say is when equity markets move, the NAIC standard is more conservative, when equity markets move up, Reg 213 is more conservative. It's contrary to the intended outcome of the reserve. Where we're focused now is working with New York. We're in daily discussions with New York, we're focused on either working with them to change the reg and really showing them how the reg has an unintended consequences on our business. Two is looking to see if there are opportunities related to permitted practice which reflect our economic approach to managing the business. Then three, looking at management actions, whether it's internal restructuring or reinsurance. I guess just in terms of those different options, what's the timing on that? One of the questions that just came in over the web was when would we likely see a resolution? Is this likely something that we can get potentially changed or find a workaround by the end of the year, or is this somewhat a longer timeframe? Yeah. We're working on all three of those tracks right now in parallel. We're in daily discussions with New York, I wouldn't want to comment too much on detail because we're having those discussions live with New York right now. We would like to have some of these solutions in place by year-end. We're fortunate because we have the $2.5 billion of cash at the holdco. We have capital flexibility at the holdco. We want to get those either one of those three tracks or a combination of those tracks implemented from now through year-end. Perhaps if you can just touch on, it seems like post the transaction with Venerable, the potential impact of Reg 213 would be somewhat higher. I think a lot of people would have looked at that block of business and thought, well, your legacy block is the more risky block. Why would getting rid of the more risky block result in that sort of solution? Why would it end up with that sort of impact? I'd just be interested there as well. Sure. It is one of the unintended consequences of the Reg. You're right. On a VM-21 basis and how we view it economically, we should hold more reserves for that fixed rate GMxB block. The amount of reserves we hold managing it on an economic basis were validated through the Venerable transaction as smart money through the Venerable team paid a positive cede on that business, reflecting the appropriateness of the reserves that we have for that block. On the Reg 213, though, when you look at these different blocks and pulled it in, you actually hold less reserves for a block like Venerable. You have less credit in terms of reinsurance for a block like that fixed rate GMxB block versus you hold more reserves for other types of blocks. Again, it's one of those unintended consequences that we don't believe was the intention of New York, but one of the things we're working with them on and showing them as we go through the process with New York. I guess, just sticking with the Venerable transaction, now that that's been closed, the natural question that people have is how you're going to do some more. Where is potentially doing additional block transactions in your overall strategy for the management of individual retirement? We're really pleased with closing that transaction, number 1. It was a validated economic approach in which we managed the business, as I mentioned. It significantly reduced the tail risk of the company, 64% CTE reduction for one-third of the policies. It generated over $1 billion of economic value. Transactions like that, we certainly like. That was a big chunk of the risk related to their legacy fixed-rate GMxB block, and it was all policies that were held outside of New York. We feel that our primary focus right now is on growing the business and executing against the task ahead of us. If we saw additional opportunity to generate that type of value for shareholders, we'd obviously look at it. We don't necessarily have the need to do a transaction like that as we did pre-transaction. There were a lot of questions on how we were managing, and we thought it was a good opportunity to validate the economic approach that we managed the business. Now we're focused on growth. Obviously, we'd look to see if there are other solutions that delivered that type of value for shareholders over the long term. Is it just the Individual Retirement that you'd look at doing potential block transactions, or are there potentially opportunities in your other businesses as well? I think Individual Life has been one that people kind of throw out there as potentially something to do as well. I think from an in-force perspective, we always look at all of the blocks across all of our business segments and to see where we can deliver best value for shareholders. There would be nothing off the table, but we'd have to make sure that it delivers good value for shareholders and good economic value. I guess, just sticking with Individual Retirement, when you introduced your Structured Capital Solution about a decade or so ago, it was first in the market and did very well for you. More recently, we've seen everyone else kind of clamoring to this market and be quite aggressive with new product introductions. It raises the question as to the competitive landscape. What kind of impact is that having on the competitive landscape? Does your return profile on what you're selling now begin to erode at some point? Or is it still hitting your target returns? Sure. First, we are proud to have invented that market in the buffered annuity space. It provides a great need for clients. For clients, pre-retirees, who are looking to maintain equity exposure, buffered annuities and these protected equity strategies help meet their financial needs. It's good for clients, number 1. Number 2, it's a perfectly ALM matched product for us, and a shorter duration. It has a great risk profile for shareholders as well. We continue to focus on generating value in that market, not driving market share. Although we have seen increased competition, the pie has increased. More advisors are adept at selling buffered annuities, and it's more of a mainstream product at this time. Our difference, though, there is not the product in itself, it's really our distribution model. Through Equitable Advisors, we have an affiliated distribution that sells that product. The second element is through relationships in our P&C channels. For instance, like Allstate, we have premier relationships where we have a leading edge in terms of access with those distributors. Just because the whole market is competing doesn't mean we're competing in the same space. We have privileged distribution relationships, where we drive long-term value overall. The best example I like to give for people in terms of distribution value, we're number 2 in the VA market, but we're number 12 in the wirehouses. The wirehouses are the ones that'll pick you off and where your margins would be at risk in terms of high competition. That's not where we play. Where we play is where we believe we can add value over the long term, and that's through affiliated distribution and privileged distribution that we have in some of our third-party relationships. One of the things you said on the conference call recently was as people have been pulling back from the GMxB market, that may provide some opportunities for you. At least what I've been hearing from other companies is that the value proposition just isn't there. You can't come out with a quite a sufficient return and sufficient value to the policyholder with a sufficient risk profile to be able to really offer that product. A little surprised by the comment. Now you may be just hoping you can provide some color there as well. Sure. We do have an all-weather product portfolio in our individual retirement plans. We have SCS, which is our Structured Capital Strategies. That's the buffered annuity that I mentioned, provides pre-retirees equity exposure prior to retirement. That's about 70% of our business today. That's our leading product today. The second product we have is a floating rate GMxB product. I think that's the difference when I say floating rate, because floating rate enables us to have a good risk profile where us and the clients are matched, meaning as interest rates go up, the rate can go up. As interest rates go down, the rates go down. It provides a fair value proposition on both sides to the client and to our shareholders. We're unique in that no one else has that floating rate feature overall. That's a product that we see as competitive and as more people are moving away from fixed rate-oriented business, we see the market coming to us, and there are opportunities there as it delivers good value to shareholders. The third element that we have is an investment-only VA. It's called Investment Edge, and that offers tax-efficient distributions for clients in a rising tax rate environment. As taxes increase, those products end up being more valuable to clients as they can distribute income from it in a tax-efficient way overall. It doesn't have any guarantees in it. It's just mutual funds in this tax-efficient wrapper. Again, this all-weather product portfolio allows us to play, depending on where distribution goes and where the market evolves to in different parts of the market. I guess another element of the Venerable transaction was the capital that it freed up and allowed you to go beyond your $1 billion regular buyback to putting another $500 million on top of that. Now that transaction's closed, have you begun to accelerate the other buybacks, or is that more likely something that you're planning to do in the back half of the year? Sure. As you mentioned, our plan is to deliver 50% to 60% to shareholders. On top of that 50% to 60%, deliver $500 million incremental share buybacks to shareholders as part of the Venerable transaction. We'd expect to be consistent in the market throughout the year, we try not to be lumpy in one period versus the other. Expect us to be consistently in the market with our overall share buyback program. Now that $500 million is available to be deployed post-transaction close. It's still saying that if you do roll forward a few capital, even taking into consideration that additional $500 million there, you're still going to be in a significantly over-capitalized position at the end of the year. What would it take for you to draw that down? Is it resolution of the Reg 213, or is there other potential uses for that capital that you're looking at, potential acquisitions? I think a lot of people throw out what's happening with AllianceBernstein, whether you have an interest in buying that in or not. Just if you can run through whether we'd likely see incremental buybacks because of that excess capital position, or what are the other potential uses for that capital? We like to ensure that we're always hitting our 50%-60% payout ratio, no matter what the period is. As you saw last year in 2020, we were one of the few that kept our buyback program in place, even through the midst of the pandemic overall. That's what we want to be. We want to be consistent in returning cash to shareholders over the long term. That's how we'll continue to operate here. Dividends coming from the operating subsidiary. We have about $500 million that comes up through AllianceBernstein that's unregulated. We have dividends coming up from the insurance company, which are driven through a New York ordinary dividend formula. Our strategy is whenever we can take cash out of the insurance company, we take as much as we can then and meeting our economic thresholds in terms of capital management. We take out as much as we can and keep it at the hold co. We can ensure that we deliver long-term return of capital to shareholders. As we think of M&A, we have to always think of that in terms of compared to share buybacks. That's a high bar right now in terms of M&A, but that's something that we'll have to prove out if we ever decide to use it for M&A as well. For AllianceBernstein, we really like AllianceBernstein, that business model. Bernstein's one of the few businesses that have consistent active net inflows in their business. They've had 16 consecutive quarters of active net inflows, and in the first quarter this year, they had $6.5 billion of active net inflows. That business is performing very well. We like that business where it is today. We always look at the 65%. Some of you that have followed us know that's just a function of history. It's not by design that we have that 65%. We like where we sit today, and we see opportunities to increase value through the relationship of AllianceBernstein. We tend to describe the relationship as this virtuous cycle where we can see capital in terms of AllianceBernstein, and they can grow it at multiple times through third-party assets. For instance, we seeded AllianceBernstein's alternative business, and now it's a $20 billion business that AllianceBernstein has scale and continue to expand across the board. We like the relationship where it is today in terms of the 65%, and we continuously look at ways to different synergies from a client standpoint where we can provide good solutions together. If I can just go back to what you were saying with regards to extracting dividends from the subsidiaries. I think last year, because of the interest rate decline, you had some very large hedge gains, but unfortunately, that's not included in the statutory income definition. Accordingly, that kind of takes away your dividend capacity. Would you potentially look at getting a special dividend out this year, or is dividend extraction this year off the table? As far as the historical dividends, if you recall, last year, we took out $2.1 billion from the insurance company. That was 2 years' worth of dividends, knowing that we wouldn't be able to take out a dividend this year. We front-loaded it last year just knowing how the formula works overall. I would not expect us to take out an extraordinary dividend this year. We're really focused with the DFS in terms of one was closing the Venerable transaction, which we did, and now is on Reg 213. That's where our focus is going to be with the department. You went through AllianceBernstein. One of the things with regards to the opportunities you've had to work with them and the potential to unlock additional synergies. Like to get some additional insight there as well. What are some of the things that you're working on with AB? Is it mostly surrounding the alternative investment portfolio and leveraging their capabilities to expand your general account more into that area, or are there other opportunities as well? First, as I mentioned, we couldn't be happier with the relationship with AllianceBernstein. Since our IPO, the total shareholder return's over 120%. It's been a great return for EQH shareholders. AB does have a global diversified platform, the primary synergy that we have with AllianceBernstein is us investing using our general account to get good yield for our policyholders, but allows AB to take that money and to grow it outside, whether it be alternative, as you mentioned, public credit, private credit. We have $120 billion with AllianceBernstein, that provides them scale and to go out and raise third-party money overall. We continuously look at other areas where we have value across the firms, whether it be client solutions within our wealth management business, where we can have AllianceBernstein funds or model portfolios incorporated leveraging Bernstein's research. The primary driver and the primary synergy between the firms is really leveraging the general account to create a higher multiple business for AllianceBernstein. Perhaps just touching on some of your other operations as well. Group retirement, obviously one of the areas that was impacted by the pandemic in that it does rely quite heavily on face-to-face sales. I'd be interested in how you've been able to transition that business to leverage more digital kind of solutions, and also whether the pandemic beginning to wane, getting people back into the schools and the like, has provided you the opportunity to get back to business as usual there as well. Sure. The group retirement business, we're number 1 in the 403 K-12 market. We've consistently delivered good net flows in that business and we're really optimistic about the prospects in that market. During the pandemic, the school closures did present challenges to that market as we couldn't get into the schools, but we quickly adapt to more of a digital remote engagement model with our teachers. That's really proven out. It's evidenced through positive net flows in that market in the first quarter of about $70 million overall. We'll continue with our strong distribution relationships as schools open up and as we may enter back into schools, or we'll continue to leverage the digital capabilities that we developed with teachers as well. We're not dependent on getting back into schools. It's something that we'd like to have. Now, as we've invested and we've adapted to digital technology, we now have the ability to interact with them virtually overall and help them with their retirement plans. I guess about a year or so ago, there was a bit of a regulatory investigation as to the fee practices and the like. Doesn't seem to have been an issue for you. Seems to been more of an idiosyncratic issue with another provider. Any updates there? No. There was another provider that the SEC flagged. Us being the number one provider in that market, we participated in the SEC investigation, and we'll continue to participate and work with them, and give them any information that they need. They're doing an industry sweep in the 403 business to evaluate the practices in that market. We're a leader in that space, so obviously we'd be a part of that industry evaluation and we fully expect to participate and we're happy to work with them and answer any questions that they may have. On the protection side, I guess employee benefits has been an area that you've talked about wanting to get bigger in. How is that going organically and, I guess, is that market just too competitive to have acquisitions as part of the solution there? Or potentially, are there some small providers who may be under the radar of others that you wouldn't need to pay the 15-20 times earnings for to potentially acquire? Sure. We're quite pleased with the organic growth coming in from employee benefits. It's a greenfield operation that we established in the small business space, and we established it with a unique technology platform. We were able to do that because we weren't in the space. We were able to create something new, not build on an existing in-force application. That's really our edge in that market is our technology platform. Growth in premiums are 47% year-over-year. You'd expect that with a growing business. We also saw an increase in enrollees. We have about 500,000 enrollees in that business today, about 515,000. To get really scale, we need that to be closer to 1 million participants or enrollees in that business overall. We like that business in terms of when we think about where we do bolt-on M&As. That's certainly a business that we would do. Right now, the valuations, Nigel, as you mentioned, are rich. They're coming in at 20 times plus. That's not something that we're willing to pay, as there are probably better uses for that shareholder capital. If we saw something that where we saw value from a bolt-on that it made sense economically for us and for our shareholders, that's certainly a market that we'd look to expand in. I guess wealth management's been the other area that you talked about bolt-ons. Is that kind of similar, rich valuations for the big guys, but potentially some smaller lift outs or smaller transactions being the opportunity there? Yeah. If you think about us on an M&A landscape, the markets that we really like are wealth management, employee benefits, and then the alternatives area in AllianceBernstein. AllianceBernstein's been pretty successful with team lift outs, so bringing teams in, us providing the seed capital and going out and raising third-party funds. The wealth management business. Sorry We've been good at growing, and we look to grow experienced advisors as they come with assets as well. That may be a better way to grow than paying a 20 times multiple where it sits today. If there is an opportunity that came in across any of those three businesses that we did see good shareholder value, we'd certainly take a look at it. We're active. We look at everything in the market, but right now the market seems a little rich in those areas for us. Thank you. Another topic that people have begun to talk about has been the economic scenario generator. I know you've been supportive of some of those proposals, but perhaps you could say an update as to what are they looking at doing there, what's the timeframe, and what aspects of the proposals out there do you like or could potentially be a challenge? Sure. As we discussed in the past, we manage the business on an economic basis, and we're fair value oriented. What that means, for instance, is we hedge the forward curve. We don't assume interest rates go up to 3.5%. Currently, under the NAIC scenario generator, no matter where interest rates are, all scenarios go up to 3.5%. What does that mean? It means you don't have to hedge because your liabilities always assume interest rates go up to 3.5%. We do not believe that's appropriate. We don't believe that's economic, and we believe you should manage your business wherever interest rates are at that current period. That's how we manage the business overall. The NAIC worked with Conning or Moody's, their ESG proposals, and they're moving more towards lower rates for longer periods of time, which are more aligned to how we manage the business economically. They've begun to do some survey work. I think they were going to launch in August this year, and I guess it looks like they may be delayed a little bit. We fully expect and fully hope that it's being placed by the 2022/2023 time period. We're supportive of it. We were one of the few that wrote a letter into the NAIC supporting the proposal, and we're big advocates in moving the industry to manage more on an economic basis. I guess the other potential change down the path is the LDTI. I know you've made some pretty dramatic reductions in your assumed interest rates on a GAAP basis, and that kind of mutes the impact, but just be interested in an update there as well. Sure. It's another industry reform that moves things closer to an economic basis, so aligned to how we manage. We're big supporters of FASB's change to the LDTI accounting. We look forward to the industry-wide adoption because I believe it'll give investors more transparency on insurance businesses and where people take different risks. We think investors should know what risk companies are taking, and you can decide what companies you want to invest in as a result. We look forward to the adoption of that. Expect us to have an investor day sometime in the middle of the summer, I suppose, of 2022, and we'd come out with more detail on what's changing, how it aligns to our economic framework, and hope to give investors more guidance at that time. Very good. Well, it doesn't seem like any other questions have come through the web, and you've exhausted my questions. Why don't we leave it there? I wanted to thank you again for joining us, giving us your time and sharing your insights. Thank you everyone else for the investors joining this session as well. Thank you.