`Good morning, and welcome to the Voya Financial transaction with Allianz Global Investors conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star then two. Participants are limited to one question and one follow-up question. Please note, this event is being recorded. I would now like to turn the conference over to Michael Katz, EVP of Finance, Strategy and Investor Relations. Thank you. Please go ahead. Good morning. Thank you for joining us today. We're excited to discuss the definitive agreement that we have reached with Allianz Global Investors. As a reminder, material for today's call are available on our website at investors.voya.com or via the webcast. Turning to slide two, some of the comments made during this conference call may contain forward-looking statements within the meaning of federal securities laws. I refer you to this slide for more information. We will also be referring today to certain non-GAAP financial measures. GAAP reconciliations are available in our press release and financial supplement found on our website, investors.voya.com. Joining me on the call are Rod Martin, our Chairman and Chief Executive Officer, as well as Mike Smith, our Vice Chairman and Chief Financial Officer. After their prepared remarks, we will take your questions. For that Q&A session, we have also invited the Chief Executive Officer of our investment management business, Christine Hurtsellers. For joining us today, we're excited to discuss the definitive agreement that we've reached with Allianz Global Investors. Let's move to slide three. This is a highly strategic and financially compelling transaction that supports our focus on growth and value creation for all of our stakeholders. To begin, the transaction includes a new strategic distribution partnership with Allianz GI. As you've heard us express before, expanded international scale and reach have long been at the top of our list of desired inorganic opportunities in investment management. Through this agreement, we will now have the opportunity to bring our highly valued asset management strategies to a broader global client base. The partnership will give us access to Allianz GI's significant global reach, which includes more than 500 relationship managers and 19 locations across Europe and Asia Pacific. In addition to the distribution partnership, Voya will acquire certain U.S. teams and assets of Allianz GI. Both the teams and the assets that they manage will complement our existing capabilities and track record. Specifically, we'll be adding their Income and Growth, fundamental equity, and private placement franchises to our existing expertise in fixed income, private strategies, and alternatives. At the same time, we will significantly diversify our existing client mix across retail, institutional, U.S., and international investors. We're excited about welcoming their talented teams to ours. The terms of this agreement are very attractive to Voya. Financially, there are several benefits that align with the M&A requirements that we've shared with you previously. As I reiterated on our first quarter earnings call last month, we are focused on driving further EPS growth at Voya over the next several years. This is our North Star. In line with that focus, this transaction will provide immediate 6%-8% EPS accretion on a cash basis. It also will significantly improve investment management's adjusted operating margin. The favorable financial terms, including no usage of our excess capital, will give us continued flexibility to generate further shareholder value and support our long-term EPS growth plans. We will continue to be opportunistic and disciplined with capital management that build upon the strong track record that we have demonstrated. In summary, we're excited about the transaction and the many benefits it'll provide. With that, let me ask Mike to provide you with more details on this transaction and its multiple strategic and financial benefits. Thank you, Rod. We're excited by the opportunities this transaction presents for Voya. It will build on Voya Investment Management's strong commercial momentum, as demonstrated by six consecutive years of positive net flows. The transaction also meaningfully increases scale and broadens our distribution. With that, let's turn to slide four. As Rod said, this transaction includes a new strategic distribution partnership with Allianz GI, giving us the international footprint that will enable Voya to offer investment products to a much larger client base. We view Allianz as an outstanding partner, as it has one of the largest global distribution footprints in Europe and APAC. Our strategic partnership will leverage this footprint for distribution of Voya funds internationally. We expect to acquire over $100 billion of AUM, meaningfully scaling up our investment management franchise. We will also add talented investment teams and broaden our product suite with AGI's Income and Growth, fundamental equity and private placement franchises. These teams have a solid track record of performance, notably delivering over $20 billion in flows in 2021, which represented organic growth of over 20%. To be clear, the Structured Alpha assets and teams referenced in Allianz GI's recently announced regulatory resolution are not part of this transaction. Beyond the scale, we will significantly diversify our client base, adding international and retail clients to our already strong reach among U.S. institutional investors and advisors. More specifically, our non-U.S. client base will triple to nearly 30%, while our retail footprint will expand to approximately 40% of AUM. Importantly, the structure of the transaction gives us continued flexibility to execute our broader strategy and growth plans. In lieu of capital, Allianz Group will receive a 24% stake in Voya Investment Management. The transaction requires no external financing and no use of our excess capital. This structure strongly aligns our two firms' collective interest in maximizing the value of our new strategic distribution partnership. The terms of the agreement also provide protections for attrition of assets following the close of the transaction. Importantly, Voya has robust protection against any legal or regulatory liabilities related to Allianz GI's other business activities, including all activities in the U.S., prior to the close of the transaction. Finally, from a timing perspective, we are moving quickly in partnership with Allianz GI. Our first milestone is the seamless transfer of both the investment teams and the economics no later than July 26, 2022. To be clear, Voya will have operational control by that date. Turning to slide five. As we've highlighted throughout this presentation, this transaction aligns very well with our strategic priorities, increasing both our scale and our international distribution while supporting our continued focus on our high growth, high return capital light businesses. Financially, we believe this transaction is highly compelling for several reasons. First, the transaction is expected to be immediately cash accretive to Voya. Specifically, we expect 6%-8% cash accretion in 2023. Second, it supports Voya Investment Management's margin expansion. We expect Voya IM's adjusted operating margin to be between 30% and 32% in 2023. Finally, all of this is done without the use of any excess capital. In closing, this transaction presents a unique opportunity for Voya IM to enter into an international distribution partnership with very strong global reach and to acquire highly complementary assets that enhance margins without sacrificing the flexibility that we value from our strong excess capital position. With that, I will turn the call back to the operator so that we can take your questions. Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star two. As a reminder, participants are limited to one question and one follow-up question. One moment, please, while we poll for your questions. Our first questions come from the line of Erik Bass with Autonomous Research. Please proceed with your questions. Hi. Thank you. Can you comment on the investment performance and flow trends in the AGI US business? I think you mentioned $20 billion of inflows in 2021, so some color on what drove that would be helpful. Then as well, how AUM is holding up in the second quarter, given the market weakness. Christine, you want to start, please? Certainly. From what we see year to date, the strategies are holding up very well. When you think about the largest pool of assets, Income and Growth. We just had results from April and May, and so, really when you look at those two months, it's net even, so no outflows. Certainly watching closely, overall, very strong performing teams, long run track record. Again, we're really excited about bringing the teams over and focusing on continuing to grow the assets. Got it. The large inflow in 2021, what was that from? The large inflows in 2021 really were just recognizing the strengths of all the strategies and investment performance. They're also thematic equities, so when you think about AI technology-driven equity strategies, Income and Growth and income solutions really have garnered a lot of interest globally. Overall, you know, as we referenced, over $20 billion in flows last year associated with these teams. Thank you. The 30%-32% margin, it sounds like that's a day one expectation, or at least by 2023. I guess, could there be any upside to that over time from expense or revenue synergies? Yeah. Erik, thanks for the question. You're right, that is a day one, you know, margin expectation. More color to come on where it'll go from there. As you'll recall, at Investor Day, we had staked out an organic plan to increase Voya Investment Management's margin b y 3% over the next three-year period, roughly, linearly. We are working now to incorporate the impacts of this transaction along with what we believe we will be able to achieve going forward. We need to reflect the current macro environment, which is obviously changing day to day. We will bring all that together into a more complete picture on the second quarter call in early August. Great. Thank you. Thank you. Our next question has come from the line of Elyse Greenspan with Wells Fargo. Please proceed with your questions. Hi. Thanks. Good morning. Just trying when you guys give us the 2023 guidance, I guess, what level of AUM growth are you assuming at AGI, you know, in 2023 and just kind of in a normalized environment? Elyse, I'll take that. This is Mike. Nothing out of the ordinary or unusual, I think is the way to put it. It's fairly consistent in terms of, you know, the flows that we would have expected on our book. They're relatively conservative assumptions. I don't think it's gonna change, you know, I don't think it's gonna be a particularly meaningful effect if it's meaningfully different either way in terms of just flows, right? In terms of market, we would have applied the same kinds of assumptions that we apply on our book of business generally, which is 8% on equities and following the forward on fixed income. Okay. The guidance, you know, the EPS accretion, that 6%-8%, you guys obviously also set the 12%-17% Voya standalone EPS guide at your Investor Day. Obviously, that assumes normalized markets, which there's been a lot of volatility in equity markets right now. Should we think about the accretion from this deal coming on top of that? You know, giving some, you know, some buffer relative to that target? I mean, I ask this, right, recognizing we're still, you know, a bit away from 2023 at this point. Thank you, Elyse. I think, let's go back to what we had said at the end of the first quarter, which was, we still saw a path at that time to double-digit growth based on where markets were in early May. I don't have anything new to talk about in terms of developments of the markets since then. We will hold that off for the second quarter call when I'll be able to base that on, you know, an actual second quarter reported results, and we'll be able to give you a solid baseline to understand that. Just to reiterate what we had also said at Investor Day, and it's important and relevant to this, is the 12%-17% that we had flagged at that time was purely organic. It did not rely on doing transactions. You should think of this as incremental to that. We will bring all that together into a revised understanding given what markets have done, given the impacts of the transaction, and we'll, I think, be able to lay that out reasonably clearly for you in August. Okay. Thanks for the color. Thank you. Our next question has come from the line of Andrew Kligerman with Credit Suisse. Please proceed with your question. Hey, good morning. The commentary to start the call, you mentioned 100, more than $100 billion in AUM, and then you also said that you had some robust protections in place. Should I read into that 100+ billion as, you know, you would end up with no less than $100 billion in AUM should there be breakage? And what are your expectations for breakage? And, you know, given these equity markets, you know, is some of that protection related to market changes, or is it just outflows? Andrew, thanks for the question. We're protected in terms of the impact to accretion as it relates to inflows and outflows. It's probably the easiest way to understand it. To the extent that there are market impacts, positive or negative, then we would own that from here. The mechanism is not to guarantee assets under management. It's to guarantee the appropriate revenue in order to protect the accretion, is the way to think about it. That protection lasts into early 2023. Got it. Any numbers that you could put around it, Mike, or? Not at this point, no. I think the main thing to take away is, you know, whatever it is, the relative accretion is protected, regardless of what ultimately happens. You know, I think, you know, we're optimistic that given the strength of the teams that we won't see substantial deterioration, but you know, time will tell. As I said, we're confident in the cash accretion. Just a quick follow-up. So, you know, guidance is typically more than 90% of earnings to be deployed toward capital return to shareholders. Should we just think about this as kind of a boost to your earnings and ultimately you'll maintain your buyback and dividend guidance in that 90-plus range? Yeah. This is, it will slightly increase the share of investment management earnings to Voya overall, but not meaningfully enough to change our overall cash conversion ratio. Yeah, we'll still be in the 90%-100% range, probably more toward the upper end of that. We'll continue to have the same philosophy we've had for the last several years. I think, in fact, the way we structured the deal is consistent with the philosophy we've taken, right? Of you know, managing our excess capital carefully and being very thoughtful and focused on delivering shareholder value. Awesome. Thank you. Our next question has come from the line of Alex Scott with Goldman Sachs. Please proceed with your questions. Hey, good morning. I thought I'd ask about the distribution piece of the you know, announced partnership and transaction here. I mean, the 6%-8% sounds like it's more sort of just day one earnings coming on. Could you help us think through what the distribution partnership brings? I mean, I'm sure you're not ready to, like, throw net flow expectations out there or something like that, but maybe even just, like, if you can help quantify for us, like, the you know, amount it expands your total distribution or any kind of stats you can give to help us think through how much it might improve organic growth for investment management over time? Sure. I'll start, but quickly throw it to Christine. Alex, there's 500 distribution relationships that are part of the international platform that this strategic partnership creates in over 19 different geographies. It's if we were starting with a fresh piece of paper, it's hard to envision a relationship that would be more optimistic than what this creates. Great teams, great long-term aligned view of growth in this business. We've got some existing strategies that have served Voya very well already that we will bring to this. What we collectively can do together, look, we're just beginning to scratch the surface on the ideation of that. With that, Christine. Yes, thank you, Rod. Absolutely. Thinking about, you know, the growth going forward with the distribution partnership is, as Rod outlined, you really have a formidable global brand in our partner with AGI, and so very excited about the opportunities here. When you think about where the world is today, just given U.S. rates relative to other countries, you know, sort of the view on the dollar, U.S. strategies that we manufacture continue to really be sought after overseas. We're very excited about expanding our credit offerings. One thing this partnership will bring us as well is access to UCITS platform. When you think about that, just the possibilities to develop products for retail investors off of our equity machine learning team as an example, you know, certainly our credit strategies. We're really excited about the opportunities there. Overall, we expect it to be a substantial support to our overall net flow growth for the months and years to come. Got it. Thank you. Thank you. Our next question has come from the line of Tom Gallagher with Evercore. Please proceed with your questions. Good morning. Allianz gets a 24% economic stake in your investment management business. Are they also getting a revenue share for distribution here? How do those economics work if they are? Mike? Yeah. Thanks, Tom. Yes, there is a revenue share on the international distribution piece, the pieces that they sell globally. That is the mechanism by which we'll true up to the extent that there are adjustments on the net flow basis. That revenue share percent could move in order to basically protect us. That's the basic economics. There's no revenue share on US distributed products. Gotcha. Mike, there's no day one economics that would be for incremental sales they're making, meaning there's not an additional revenue they're getting from day one necessarily, or are they also getting a revenue share on another piece of the in-force, if you wanna call it that? The way to think of it is the equity stake represents kind of everything looking backwards, and everything looking forward is handled on the basis of the new distribution revenue share. Gotcha. So that can impact incremental margins, but it won't affect the current margins? Yeah. Yeah, I think that's right. That's probably. If that's what you're trying to get to, yeah, that's probably about. Yeah. A good way to think about it. Then my follow-up is the cash accretion, the 6%-8%. Can you talk about what the GAAP accretion range might be considering intangible amortization? Would it be lower, but I assume it would be lower, but I assume it'll still be positive. Any sort of range you can give on what t he GAAP EPS accretion will look like? Thanks, Tom. I think what you've said is pretty much what I would echo. Still a little early for us to give a range. We're still working through some fairly detailed analysis as well as, you know, consultations with our audit partners in order to arrive at a conclusion around the treatment of the intangibles and any related amortization. We expect the impact to the cash accretion of 6%-8% to be modest, but I don't think it's going to be significant. It'll still be, I think, an accretive deal and I think a meaningfully accretive deal. Okay, thanks. If I could just sneak one more in. The protection of attrition on the assets, can you comment on what that is exactly? Would that drop the Allianz stake below 24% if you lost a certain amount of assets? Or how would that protection work? The adjustment is all through the revenue share. There's no impact to the equity stake. Gotcha. Thank you. Thank you. Again, if you have a question, please press star then one on your telephone keypad. Our next questions come from the line of Jimmy Bhullar with J.P. Morgan. Please proceed with your questions. Hey, good morning. Just had a couple of technical questions. On the, I think you mentioned long-term distribution deal. Is it indefinite given that Allianz is taking a stake in the firm, or is it for an explicit number of years? It's an indefinite agreement. There's no end date. Obviously, you know, these kind of arrangements can be exited by parties under certain conditions, but there is no targeted date that the arrangement ends. Okay. Is there an impact on your buyback plans, short term or long term because of the deal? I guess short term, maybe because of just having this information and the timing of when you released it and stuff, and longer term, just any other changes in how you think about buybacks. No. I mean, no change. That's, I think, the beauty of this transaction for us, is it doesn't change anything in terms of what we do. Which is not to say we aren't watching what's going on in the world, but this transaction has no implications whatsoever. Jimmy, you're right. Short term, we had non-public information. Now it's out. Long term, strongly agree with Mike's point that our capital philosophy and approach has not changed in terms of capital management. Yeah, I guess short term, you had the information. There's still a couple of weeks to go for the quarter to close and for you to get to quiet period. If there was a delay, you might have potentially or you have some time to be potentially able to catch up to that if you intend to still do the same amount and at a lower price? Understood. Just lastly on, like, Allianz's liquidity options from this stake, are there any restrictions on what they can do with the stake, who they can sell to, or how should one think about that? Or you have the first preference. Look, we're not gonna get into all those details here. I think you can think of this though as being, you know, kind of relatively consistent with the sorts of conditions that you would see in any kind of transaction like this, right? Where we'll have meaningful flexibility and a say, they'll have a level of flexibility as well. I don't think it's gonna have any meaningful strategic implications for us. We've constructed, I think, in a way that's very, very positive for both sides. Thank you. Thank you. Our next questions come from the line of Suneet Kamath with Jefferies. Please proceed with your questions. Thanks. Just one on the adjusted operating margin guidance, the 30%-32%. Does that include the intangible amortization that you were talking about before, as it relates to cash moving to GAAP? No, it doesn't. Our practice has been to put the amortization on acquired businesses in corporate. We're still working through how we're gonna handle that with VIM in this situation. That assumes the cash accretion being added on to the existing operating margin. Okay, got it. I guess maybe broadly, can you talk about AGI relative to your retirement business? Is it a current product provider in terms of retirement, or do you see opportunities to add AGI to your retirement business? Just thinking about that side of the company away from VIM. Christine? I don't know directly the relationship with the retirement business, but way to think about it, when you think about the teams coming over, particularly the Income and Growth team, when you think about just retirees and growing interest for those who stay in plan to really have good income solutions, we're very excited about being able to bring those differentiated products to the wealth business that we have to continue to strengthen, you know, our position and our ability to really maximize the distribution reach that Voya's wealth business does bring. Again, definitely see some opportunities, thinking specifically about the U.S. teams that we're bringing over. Okay, thanks. Thank you. Our next questions come from the line of Tom Gallagher with Evercore. Please proceed with your questions. Hey, thanks for the follow-up. Just the one, the only other question I had is on Structured Alpha, and I assume that was a big part of your due diligence, was making sure there wasn't a kind of permanent brand reputation damage. Can you talk a little bit about the level of due diligence you did and how you ultimately got confident? Like, I understand you're legally walled off, but I'm just wanna make sure there's not sort of contagion risk here. Tom, it's Rod. You are correct. You should assume that we did a thorough review of Structured Alpha. The way that Mike and I have discussed the transaction and the protections, we think it fully anticipated that. None of the teams, none of the business associated with Structured Alpha, are coming with the transaction. The teams that we've talked about are, and it was a thoughtful consideration as we went through this evaluation, and we feel very good about what we are bringing to Voya and what the opportunities that we've discussed over the last, you know, 30 or 40 minutes on the call are presenting to us. Tom, I think we take a lot of comfort from, and we shared this in the presentation, right? That these teams generated substantial positive flows last year, which, you know, that was certainly well after a lot of the publicity around the Structured Alpha. In terms of contagion, we don't see any evidence of that. I think, you know, once we move it into the Voya compliance environment, I think we're even further removed and feeling even better about our ability to bring the value that these teams create to the market and to the customers. Okay, thanks. Thank you. This concludes our question-and-answer session. I would like to turn the conference call back over to Rod Martin for any closing comments. Thank you again for joining us today. This transaction provides us a unique and attractive inorganic opportunity to accelerate our growth plans. It will add significant scale outside of the US, provide diversification of investment strategies and clients, and add talented individuals to our investment management teams. At the same time, the organic growth plans that we shared with you last November will continue to be one of the biggest drivers of our top and bottom line growth over the next several years. We remain focused on the continued execution of the revenue growth, margin improvement, and capital management aspects of the EPS growth plans that we have previously shared with you. In summary, we are confident in our ability to continue to deliver greater shareholder value while positioning Voya for long-term success. Thank you and good day. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.