Equitable Holdings, Inc.

Good day, and thank you for standing by. Welcome to the Equitable Holdings First Quarter Earnings Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during today's session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I will now let the hand of conference over to your speaker today, Jessica Baer, Head of Relations, Please go ahead.

Thank you. Good morning and welcome to Equitable Holdings first quarter 2021 earnings call. Materials for today's call can be found on our website at ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward-looking and subject to certain SEC rules and regulations regarding disclosure. Our results may materially differ from those expressed in or indicated by such forward-looking statements. So I'd like to refer you to the Safe Harbor language on slide two of our presentation for additional information. Joining me on today's call is Mark Pearson, President and Chief Executive Officer of Equitable Holdings, Robin Raju, our Chief Financial Officer, Nick Lane, President of Equitable Financial, and Ali Dabaj, Alliance Bernstein's Chief Financial Officer and Head of Strategy. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found in the investor relations portion of our website in our earnings slide presentation and financial supplement. I would now like to turn the call over to Mark and Robin for their prepared remarks.

Thank you, Jessica, and good morning, and thank you for joining our earnings call. I hope all of you and your families are continuing to stay safe and healthy. We have now passed the one-year anniversary of when our lives were first changed by the pandemic, and these remain challenging times. Sadly, the number of COVID-related deaths in the US reached an all-time high in Q1, reflecting peak infections of the virus in late 2020. Since then, the health crisis in the US has been improving, and the economic outlook is brighter, with consumer confidence reaching a 14-month high. It's beginning to feel, here in the US at least, that we are entering a more optimistic time. People are once again looking to the future with hope and assessing their goals, priorities and plans. It's been a year where the people of Equitable have come together and shown extraordinary resilience and innovation to connect with our clients. These relations and new digital capabilities are resulting in positive momentum inside the company. Please turn to slide three so I can share some highlights of this momentum. It was a strong first quarter for Equitable. I'm pleased to report first quarter non-GAAP operating earnings of $600 million, or $1.35 per share, up 19% over the previous year. Our subsidiary, Alliance Bernstein, performed particularly well, with first quarter earnings and distributions growing by 27%. Assets under management are up 27% year over year to $822 billion, supported by good net flows and strong equity markets this quarter. New business activity continues to trend positively and is now back to pre-COVID levels. Total company net flows were $4.6 billion in the quarter, with net inflows of $5.7 billion, excluding our legacy fixed-rate GMXV runoff business. Capital ratios in the balance sheet remain strong, thanks to our economic risk management policy, the cornerstone of how we manage the business. Our landmark variable annuity reinsurance transaction with Venable, which improves our risk profile, remains on track to close in the second quarter. We returned $504 million to shareholders in the first quarter through dividends and share repurchases. And as a reminder, we expect an incremental $500 million of repurchases following the close of the Venable deal. Importantly, we continue to focus on driving longer term shareholder value by maintaining our leadership positions, focusing on client engagement and innovation, and growing our most capital resilient businesses. Now turning to slide four, I will provide more detail on this look forward view. In driving long-term shareholder value, we have a number of distinct capabilities and key enablers that give us confidence in our ability to grow. Through our broad distribution reach and product innovation, we have leadership positions in a number of attractive markets. Today, we are the number two player in the VA market where we have approximately $75 billion of assets excluding our legacy GMXB block, which are fully ALM matched and low capital intensive. Despite increased competition, our Buffett annuity SCS product had record sales in the first quarter. In group retirement, we are the number one provider of supplementary retirement solutions in educators K through 12 market. And our business now has over $44 billion of assets. We are benefiting here from the build-up of our digital engagement with teachers in the past year. In our life business, we continue to improve our risk profile, pivoting from the IUL protection to the VUL accumulation market, evidenced by VUL premiums up 11% in the quarter. We continue to benefit from AB's heritage of research and investment ingenuity, with active net inflows across all channels in AB, totaling $6.5 billion for the first quarter. With respect to our nascent businesses, our wealth management business has grown to $70 billion of assets under advice, up 13% in the quarter. Our advisors have pivoted well to virtual meetings and benefiting from clients seeking advice in these more complex times. Our employee benefits division has now grown to over 515,000 enrollees and will continue to grow in significance over the next few years. Our technology-enabled approach is resulting in satisfactory loss ratios, strong persistency of accounts with one. We continue to grow our alternatives business inside AB, now with approximately $20 billion of limited capital. This business continues to grow through a combination of organic growth as well as targeted inorganic growth, including acquisitions, team lift-outs, and team build-outs. Financial rigor and risk discipline remain two of our hallmarks and are embedded throughout our business. The VA reinsurance transaction will reduce the CTE98 tail risk from our legacy VA portfolio, and the positive seeding commission from Venerable, who are backed by Apollo, validates the economic soundness of our reserving. Our $97 billion general account remains predominantly invested in investment-grade corporates and is conservatively positioned. At the appropriate time, we will reallocate to more illiquid assets to improve risk-adjusted returns. Our corporate structure is unique in having a strong asset manager and a strong insurance operations within equitable holdings. We have a virtuous cycle here in managing the general account to afford better risk adjusted yield, and at the same time, see new alternative strategies for AB and create high multiple businesses for our shareholders. Our strategy and our unique enablers, most importantly, the agile working methodology we're implementing across the organization and our risk approach provide confidence that equitable will remain stable, and value-generating for shareholders. Of course, success of any strategy depends on the quality of our people. And we know that the very best talent demands not only that we run our business well, but that we do our part in being a force for good. Let me provide more detail on the next page. Please turn to slide five. Equidal's purpose has never been more important helping people achieve financial wellness in order to live better lives. But we also want to help build a more just, sustainable, and thriving society, and we have the resources to make the difference. So in addition to our financial results, we are using these Q1 earnings calls to present for the first time our environmental, social, and governance progress. We will follow this up with an annual ESG report starting this year. Environment. Our approach is to improve the quality and returns of our investment portfolio by investing in companies that are also committed to improving their ESG impact. Approximately 70% of our general account investment grade corporates are aligned to the UN sustainability goals. AB has an established presence in offering portfolios with a purpose now amounting to $21 billion of assets under management. And AB has integrated ESG factors into their overall investment process for around 80% of assets under management. And we are especially proud of Alliance Bernstein's partnership with Columbia University's Earth Institute, which enables us to collaborate with renowned climate scientists to promote integration of climate risk and opportunities into portfolios. Social. We aspire to invest in our people and to build stronger communities where we live and work by fostering economic growth, particularly among disadvantaged and underrepresented groups. We aim to fully equip our people with the skills needed for the future, promote holistic well-being, and foster a more diverse workforce and inclusive culture. During this period of remote working, we did not slow down the enterprise rollout of agile working. but rather saw the importance of accelerating it. Today, one third of our workforce is working within a fully agile framework, incorporating design thinking processes. And we have supported this with over 20,000 employee hours of training completed. We've also made progress on diversity, equity and inclusion with the creation of the CEO Task Force for Racial Equity. including a redesign of our foundation programs to better support disadvantaged communities. Of late, we have developed wellness programs to support our people during the COVID crisis, and we have also invested in fostering a healthy work environment, evidenced by the Well Gold Certification of our Charlotte campus build-out. Finally, governance. We took the opportunity of our IPO to set the highest standards of governance for the newly listed equitable, including an independent chair, diverse and experienced board leadership, robust risk policies, clearly articulated business principles, and strong information security protections. We have also differentiated ourselves as an advocate for a more robust and sustainable risk management framework with the insurance sector. Additionally, we seek to align management compensation with stakeholder interest through a balanced scorecard. As our ESG efforts continue to materialize in progress, I'm excited by all the opportunities in front of Equitable, bridging profits. I'll now pass it to Robin to work through our first quarter results. Robin?