Ladies and gentlemen, thank you for standing by, and welcome to the special conference called to discuss MetLife's risk transfer transaction. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Instructions will be given at that time. As a reminder, this conference is being recorded. With that, I will turn the call over to John Hall, MetLife's Global Head of Investor Relations. Thank you, operator. Good morning, everyone. We appreciate you joining us to discuss the risk transfer agreement we announced earlier this morning. Before we begin, I would like to point out that today's presentation may include forward-looking statements. It's possible actual results may differ materially from the forecasts we make today. I refer you to Slide 2, titled Cautionary Statement on Forward-Looking Statements in today's presentation, which can be found on the investor relations portion of metlife.com. In addition, this presentation may include references to non-GAAP measures that can be found in our quarterly financial supplements and other documents, which are also available on the investor relations portion of metlife.com. Joining me on the call today are Michel Khalaf, President and Chief Executive Officer, and John McCallion, Chief Financial Officer. Michel and John will offer prepared remarks that speak to the presentation I referenced earlier, which is available on our website. Following prepared remarks, we will have a Q&A session, and I ask that you focus your questions on the transaction at hand. I'll turn the call over to Michel. Thank you, John. Good morning, everyone. Thanks for joining our call on short notice. We are very pleased to speak to you today about the agreement we've entered to reinsure a $19.2 billion block of business comprised of universal life, variable universal life, universal life with secondary guarantees, and fixed annuities to affiliates of Global Atlantic. We believe this transaction is a clear example of our tactical execution to optimize our business mix and create long-term value for our shareholders. Since rolling out our Next Horizon strategy, MetLife has opportunistically unlocked significant value through strategic divestitures, including the sales of our auto and home business, our operations in Poland and Greece, and now today's risk transfer deal. To arrive at this transaction, we've moved forward from a position of strength. We conducted an exhaustive competitive process with a strong set of potential partners. The risk transfer agreement we've entered will appropriately accelerate the runoff of our legacy business, MetLife Holdings, that we established in spinning off a portion of our former U.S. retail life insurance business. The transaction will improve MetLife's enterprise risk profile and balance sheet efficiency, is value-enhancing and attractive across a broad range of measures, including EPS, ROE, and RBC, all while freeing up capital for higher order use. In addition, this agreement is grounded with a strong counterparty and efficient structure and critical protections. Most importantly, our customers will benefit from a continuity of service as MetLife will remain as administrator and service provider for the policies to be reinsured. Finally, we believe this transaction underscores the substantial financial flexibility embedded in MetLife's business model and the overall strength of our balance sheet. As noted in our press release, MetLife's board of directors has added an incremental $1 billion to our share repurchase authorization in recognition of today's announcement. This brings our full authorization to $4 billion. As always, we carefully weigh every use of capital with our goal to achieve the right balance between investing in responsible growth and returning capital to create long-term shareholder value. We are moving forward on the transaction with speed, and we are targeting a close in the second half of the year. I will now turn things over to John McCallion, who will share more detail on our announcement. Thank you, Michel, and good morning. First, let me say we are pleased with this transaction, which checks many boxes from a financial risk mitigation and value creation perspective. I want to acknowledge the many MetLife associates across numerous teams who have worked tirelessly to get us to this point. As we have discussed in the past, MetLife Holdings is a well-seasoned and well-diversified legacy block. We continue to focus on our primary objectives to meet customer obligations, look for efficiencies in how we operate, and seek opportunities to further optimize the business. To this point, we have continued to take a third-party perspective, which helps us better manage the business internally while also providing us optionality to appropriately accelerate the release of reserves and capital at the right value with the right strategic partner, which we have found in Global Atlantic. Now let's dig into the details on page four. The transaction covers 19.2 billion of current statutory reserves with approximately $14 billion of universal life, variable universal life, and universal life with secondary guarantees, with the remainder of balance being fixed annuities. We have structured the transaction on a coinsurance basis for general account reserves and modified coinsurance for separate accounts. We have included a number of important structural protections, including prescribed investment guidelines and the establishment of a comfort trust, including over-collateralization relative to the coinsurance obligation. In terms of value, the agreement is expected to generate $3.25 billion, comprised of a ceding commission of $2.25 billion, as well as approximately $1 billion of statutory capital released. In the aggregate, the transaction should add roughly 60 combined RBC points. As a result, as Michel noted, we have increased our existing $3 billion share repurchase authorization by $1 billion to $4 billion. The transaction results in an approximate $200 million after-tax reduction in MetLife Holdings run rate adjusted earnings. However, we expect the transaction to be accretive to adjusted earnings per share and a positive contributor to our adjusted ROE target of 13%-15%. In addition, we are maintaining our enterprise average two-year free cash flow ratio of 65%-75% of adjusted earnings, excluding notable items. On page five, we highlight other key considerations. As part of the transaction, we are entering into a five-year management agreement where MetLife Investment Management, or MIM, will manage approximately 40% of the general account assets transferred, or roughly $4.5 billion. Turning to servicing, the business will continue to be administered by MetLife, and meeting our customer obligations will remain an overriding priority. As such, MetLife will receive a customary expense allowance throughout the term of the reinsurance agreement. Finally, we expect the transaction to close in the second half of this year, subject to regulatory approvals. With that, I will turn the call back to the operator for your questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press one then zero on your touch-tone phone. You will hear an acknowledgment that you've been placed into queue, and you can remove yourself from queue at any time by repeating the one-zero command. If you're on a speakerphone, please pick up your handset before pressing the numbers. Once again, for questions, it's one then zero at this time. We'll go to the line of Tom Gallagher with Evercore. Good morning. First question is, what are you thinking about the remaining $2 billion of capital from the deal? What are your plans there, and how are you thinking about that? Thanks. Good morning, Tom. At a high level, I'd just remind that we view all capital as precious, and we always look to put it to its highest and best use, and that's across a range of options, including funding organic and inorganic growth. In the absence of appropriate risk-adjusted hurdle rate clearing options, we return it to shareholders. As we've said, our board has approved an additional $1 billion for our buyback authorization, which brings the total to $4 billion. That's sort of indicative of our direction of travel here. When we've established authorizations in the past, we've been deliberate and consistent in terms of bringing them down. Also keep in mind that the transaction should close sometime in the second half of 2023, which is when we would expect to realize value from the deal. Thanks, Michel. I guess my follow-up is, how big of a part of the overall block was the SG UL piece of the total? Secondly, what about variable annuities? Is that still something you're considering doing risk transfer on within MetLife Holdings? Why life insurance, not VA? Was the life insurance transaction and life insurance and fixed annuities just a better value for you at this point? There's like five questions, Tom, we'll go with it. Subparts. Okay. Let me just try to hit your first one on UL SG. It's about four of the 14. Ends up being roughly half of our exposure on UL SG. Just to give you a sense, we have, give or take, $8 billion of reserves. This transaction brings it down to 3.7, which is remaining. A little over 50% of exposure there. Yeah, look, I think it goes back to just maybe Michel's opening comments around just the position we come from with regards to this is, this isn't something we have to do. This is an opportunity. I think that's probably the same way we look at all the blocks there. We're very comfortable running these businesses ourselves. If there's an opportunity that makes sense and it allows us to appropriately release capital reserves, then we'll transact, and there's a lot of other considerations with that. That's probably how I'd answer your question around just why this versus something else. I think we'll continue to maintain our approach, which is we take a third-party view on these blocks. Helps us manage them better internally. We learn a lot doing it that way. At the same time, if we see there's a transaction that makes sense for our stakeholders, we'll do that. Okay, thanks. We'll go next to the line of Jimmy Bhullar with J.P. Morgan. Hey, good morning. First, just had a question on the individual life blocks that are being reinsured, UL and UL SG. Are there any sort of aspects to the structure where you still will retain some risk if there's either a big change in experience on the block or maybe higher reinsurance costs going forward? Just trying to think about any residual risk to MetLife from the reinsured blocks. Hey, Jimmy, it's John. Good. Thanks for the question. The answer is, all risk is transferred. It's 100% transfer, including YRT risk. That goes 100% as part of the deal. Obviously, you've been trying to wind down the MetLife Holdings division for a while. On LTC, which wasn't part of this deal, is it fair to assume that the bid-ask spread is still fairly wide? Because people have been optimistic about deals for LTC for the last decade, nothing major has happened. Has the environment for LTC offloading improved, or is it still unrealistic to assume something in the sort of near to intermediate term? I don't think there's a big improvement or much improvement at all in that space, at least in terms of how we might look at it. Again, we feel comfortable with our reserving practices, our assumptions, how we manage the block, our expertise. Again, it's not something we feel like there's a burning platform that we have to do something, and we're very happy to manage it accordingly. Having said that, I'd say my sense and our sense around this is that most external parties are probably looking at other things, and there's very limited kind of interest or incoming questions around LTC. Okay. If I could just ask one more on Michel's comments on buybacks. Should we assume that the step-up in the level of buybacks, because of the $1 billion that's been added, would really begin after the deal closes? Or are you going to step up the level of activity from now on, or would it be later in the year? Yeah. I would just say, Jimmy, that we're going to follow our normal practice here. We'll assess, but as we've, I think, demonstrated in the past, post-divestitures, we are deliberate and expeditious. I think same here. Okay. Thank you. We'll go next to the line of Erik Bass with Autonomous Research. Please go ahead. Hi. Thank you. Can you talk about the composition of the asset portfolio that will be transferred in the transaction? Good morning, Erik. It's John. Generally, it's a represented sample of the assets that we have. You can't really transfer PEs, a little harder, so that doesn't move around. Other than that, I'd say there's a component of every asset class and general representation. Got it. Sort of no change to VII then, presumably, but some of your mortgage loan portfolio may transfer. Yeah. There's no Private Equity that moved. It's just it's a more complicated setup. There are private assets that moved, but I would say it's marginal on the private side, including commercial mortgages. Thanks. Can you just talk about the breakdown of the remaining liabilities in MetLife Holdings after this transaction? Sure. I'll just rough justice here. We have, call it, 40-ish of VA liabilities. Maybe double that if you include then the closed block, right? Those liabilities, then there's obviously LTC, which is just above the 15 range. Then there's some more open block life insurance policies term, kind of ordinary life insurance. Got it. Thank you. We'll go next to the line of Tracy Dolin-Benguigui with Barclays. Thank you. Good morning. The other deals that I have seen where a life insurer had done a block deal with ULSG that co-marketed with fixed annuities, that actually resulted in a negative cede, and you guys got a nice positive cede. Can you share if there were certain assumptions that the counterparty found attractive, like a lapse assumption or something else that speaks to the high quality of that block? Good morning, Tracy. Thanks for the question. I think as we've said in the past and over the course of other calls regarding these blocks, these all have positive margin. I can't speak to others and how they've kind of managed. But there's differences in product features. Obviously, the assumptions you use, and even kind of the riskier, if you will, of the policies, I guess, perceived riskier of the ULSG. We had positive margin across the block there. Then just maybe adding to the conversation on capital, you're maintaining your free cash flow target of 65%-75%. I'm wondering if you could unpack that a little bit. Are you considering any type of credit downturn scenario when you're setting that target? It does not take into account, like I'd say, an adverse move from the general outlook. Obviously, our assumptions do assume kind of some level of stress here. We've been talking about that we expect some level of recession. I think what kind of recession really matters, right? Not all recessions are created equal, and we're not assuming kind of a real distressed recession, but we think there's some headwinds ahead of us, and that's factored into the guidance. Thank you. We'll go next to the line of Suneet Kamath with Jefferies. Thanks. Just a question on the RBC, the 60 points benefit. Is that before or after the additional $1 billion of buyback that I'm assuming you're going to upstream to the holding company? Yeah. Good morning, Suneet. That is before. That's kind of the, I'll say, the raw number of excess capital gets generated at close. Then we'd have to adjust for redeployment of that capital. Got it. Then on the free cash flow, post this deal, is Holdings still 100% free cash flow or something in that neighborhood? I'd say in the neighborhood's probably a good term to use there. I think there are some products that are a little over, there's some products that are still growing in terms of their reserves, you could think like LTC. I'd say it's in the roughly like the 90%-100%, and this block was commensurate with that. Okay, thanks. We'll go next to the line of Alex Scott with Goldman Sachs. Hey, first one I had for you, more of a housekeeping item maybe. What are the GAAP book value implications of the transaction? Just trying to think through any need for debt reduction at all, if there's a impact. Hey, good morning, Alex. I'll start with the kind of the back end question there on the debt reduction. No impact there. Marginal impact to kind of leverage ratio. I will say, in terms of GAAP book value, though, you have to consider, and there's just the way the timing of the accounting will work is, upon signing this quarter, we would have to kind of move the assets to held for sale. Then at closing, you kind of do the reinsurance accounting. Obviously, with where rates are and stuff, we have some unrealized losses that would have to be moved to retained earnings. There's a shift in your GAAP, where that resides in your GAAP book value. Then that will come through earnings in the second quarter. Then obviously when the reinsurance happens, then that results in kind of a deferred gain. There's some timing and nuances. Obviously, that's just kind of GAAP accounting. I wouldn't consider it too interesting, other than because it's not really economics here. Those are just some nuances you have to consider. I'd say it's about, we would expect roughly at these rates, probably a $700 million net income impact in 2Q negative. Got it. Okay. I get that a lot of that's non-economic. Just good to have visibility on it going in. Second one I had is just in light of going through this process, I assume you probably looked pretty hard at everything in Holdings. Could you help us think through how much of the statutory capital in Metropolitan Life Insurance Company is backing what's left in Holdings? When I think through variable annuities, many of that's to all long-term care. Can you help us get a feel for how much that capital's backing that? It's a hard one. I hesitate because I'm just trying to think through how to best answer it. Obviously capital is supporting all of the blocks of business, right? It's hard to isolate. Holistically, there's diversification in there and things like that. It's probably a little bit of a hard one. I'd say, at the end of the day, relatively speaking, it's still capital-intensive relative to the other business that we have and that we're originating these days. That's probably the best qualitative answer I can give you. Got it. Okay. Thank you. We'll go next to the line of Ryan Krueger with KBW. Hi, thanks. Good morning. I just had a quick one. Does the $200 million of foregone earnings include the amortization of the positive ceding commission? If so, how much is that? It's minor because it gets amortized over a long period of time. Right? I guess I think it's in there, but I think it's minor. Right? I think the 200's really kind of the true loss of earnings of this business. It's not really the offset by the positive cede. Got it. Was the free cash flow on this block relatively similar to that $200 million number? Yeah, it's probably 80%-90%. Okay, great. Thank you. We'll go next to the line of Joshua Shanker of Bank of America. Yeah. Hi there. Just a couple questions. This deal seems maybe opportunistic, announced concurrently with the buyback. In terms of process, did this come suddenly? Has this been worked on for a while? What's changed in the market that pulled everything together? Hey, Josh, it's John. Good morning. The way I'd answer that is, I think we've been pretty consistent for quite some time. I'd probably say almost three to four years, we've been talking about the fact that we have taken a third-party view. We have been in various discussions around with counterparties, understanding what they value. Everything evolves, and I think we've been methodical in that process, because as we've talked about, we're always very comfortable managing this block ourselves. If there was an opportunity that made sense, for us to appropriately release capital and reserves, we would. It's just been, kind of, I'd say, part of our overall process. As we were able to narrow it down over time and we saw a good opportunity, then that's when we kind of accelerated our process. It happened concurrently with the share price falling off, for macroeconomic reasons, making buybacks a more attractive opportunity. Is there any calculus in approaching deals that the relative value of managing the block yourself versus buying back your shares makes you more or less interested in getting deals done? Yeah. I'd love to say that we could be that nimble. These are large, complicated blocks of business in terms of just everything that goes with it administratively, different concepts. You had talked about any reinsurance associated with. There's a lot of different dynamics in the block here, so there's a lot to get through. It'd be nice to say that we're that nimble and agile on something like this, but this is a process we've been going through just continuously, and that will continue. That mentality will continue throughout. In terms of where share price is, we don't ignore it, but it couldn't be a factor just because this takes so much time to think through. It ultimately is obviously in front of us. Thank you very much. We have time for one more question. That will come from Michael Ward of Citi. Thanks, guys. Good morning, and congrats. I guess I'm just wondering if you could sort of comment on the free cash flow target. Sounds like you're maintaining it going forward. The $200 million of lost earnings, I'm wondering if it's bolstered at all by the proceeds from the deal or if you're sort of still pushing that forward longer term, that $65-$75. Yeah. Good morning, Mike. Yes. It certainly, I think all else equal, we're removing a block that has high free cash flow. That $200 million, it's close to the free cash flow level. Having said that, we've also been, over time, continuing to shift our mix and our new businesses probably has a higher% of free cash flow. Now, it takes a long time for that to shift, we can still think that's the case. That's part of the reason why it gives us, we're confident in maintaining the guidance. Thank you. Was this the whole fixed annuity block from Holdings? Yes. Okay. Thanks, guys. Thank you. I'll turn it back to John Hall for closing remarks. Well, great. Well, thanks everybody for joining us this morning. If there's any further questions, please follow up with me, have a good day. Thank you. Thank you. Ladies and gentlemen, today's conference will be available for replay beginning at 2:00 P.M. Eastern time today, running through midnight, May 31st. You may access the AT&T replay system by dialing 866-207-1041 and entering the access code of 6629833. International participants may dial 402-970-0847. Those numbers again are 1-866-207-1041 or 402-970-0847 with the access code of 6629833. That does conclude our conference for today. Thank you for your participation and for using AT&T event conferencing. 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