Hello, and welcome to the Equitable Holdings First Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session. [Operator Instructions] I would now like to turn the conference over to Erik Bass, Head of Investor Relations. You may begin.

Thank you. Good morning, and welcome to Equitable Holdings First Quarter 2025 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 differ materially from those expressed in or indicated by such forward-looking statements. Please refer to the Safe Harbor language on Slide 2 of our presentation for additional information. Joining me on today’s call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings; Robin Raju, our Chief Financial Officer; Nick Lane, President of Equitable Financial; Tom Simeone; AllianceBernstein’s Chief Financial Officer and Onur Erzan, Head of AllianceBernstein’s Global Client Group and Private Wealth business. 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 on the Investor Relations portion of our website and in our earnings release, slide presentation and financial supplement. I will now turn the call over to Mark.

Good morning, and thank you for joining today’s call. Given recent volatile markets, we recognize the first quarter may seem like a distant memory. Therefore, in addition to reviewing our results, we will also take a step back to focus on the powerful underlying growth drivers for our business and why investors should be confident in Equitable’s ability to navigate periods of volatility and create long-term shareholder value. Since our IPO in 2018, we have executed through periods of economic and market disruption, maintaining positive net flows and consistent capital return to shareholders, even during the depths of the pandemic and the market sell-off in 2022. Equitable is operating from a position of strength given our robust balance sheet, integrated business model and differentiated distribution. Periods of uncertainty only heighten the need for retirement and investment advice and I’m confident that if we stay connected to our clients and focus on controlling what we can control, we will deliver value for all our stakeholders. Turning to Slide 3, let me briefly cover our first quarter results. Non-GAAP operating earnings were $421 million or $1.30 per share, down 7% year-over-year on a per share basis. Adjusting for notable items, non-GAAP operating EPS was $1.35, which is down 3% compared to the prior year. As Robin will discuss in more detail later, we experienced a very high level of large individual life mortality claims this quarter and our Protection Solutions segment reported a loss of $17 million. While disappointed with the result, this quarter underscores why we made the decision to reinsure 75% of our individual life block to RGA. This transaction is on track to close mid-year and will significantly reduce our exposure to mortality volatility moving forward. Results for our Retirement and Wealth Management businesses reflect some seasonality in revenues…

Thanks, Mark. Turning to Slide 6, I will highlight our first quarter results. On a consolidated basis, non-GAAP operating earnings were $421 million or $1.30 per share. The only notable item in the quarter was below plan alternative investment income, which reduced earnings by $13 million after tax. Adjusting for this, non-GAAP earnings per share was $1.35 per share. As Mark mentioned, our results this quarter were impacted by elevated mortality claims in our individual life insurance block, which reduced earnings per share by about $0.20 relative to our normal expectations. If mortality had been in line with budget, earnings per share excluding notable items would have increased 12% year-over-year. GAAP net income was $63 million in the quarter. This is lower than our non-GAAP operating earnings due to non-economic hedging impacts, which are offset in OCI. Total assets under management and administration rose 3% year-over-year to $1 trillion, but they declined on a sequential basis as a result of weaker equity markets in the first quarter. Our reported book value per share ex AOCI was $27.62 in the quarter. As a reminder, GAAP accounting requires us to carry AB at book value, which we believe materially understates shareholders’ equity at the EQH level and inflates our leverage ratio. We added new disclosure this quarter to highlight book value per share including our ownership in AB at market value. The adjusted book value per share was $39.96 as of March 31 and our leverage ratio would have been nearly seven points lower. This difference will become more notable moving forward, given our increased ownership in a bit. I’ll provide some further details on our segment level earnings drivers on Slide 7. Mortality claims in our individual life insurance block came in approximately 80 million above our expectations on a pre-tax…

Thanks, Robin. While we’re living in a period of heightened macro uncertainty, I remain very optimistic about the long-term growth prospects for Equitable, given favorable demographic trends and a durable need for the advice, retirement and investment solutions we offer our clients. Equitable has a robust balance sheet, predictable cash flows and an all-weather product portfolio. As a result, the company has a strong track record of executing through volatile markets and creating value for our shareholders. Our financial position will only be enhanced by our individual. Life, reinsurance transaction, which gives us the ability to play offense if opportunities arise. We’ll now open the call to take your questions.

[Operator Instructions] Thank you. Your first question comes from Suneet Kamath with Jefferies. Your line is open.

Great. Thanks. First for Robin on the $2 billion of proceeds. Can you size the extraordinary dividend that you plan to take up to the holding company?

Good morning, Suneet. So as we - as you mentioned, we expect a $2 billion in our benefit or capital release from the life insurance company post the transaction with RGA and that hasn’t changed. To-date, as you know, we redeployed about $760 million with investment in AB that brings our ownership to 69%. That leaves us about $1.5 billion left from the transaction. We remain committed to deploying the $500 million on top of the $760 million that we invested already and that leaves us about $1 billion of proceeds, which we’d expect to take at an extraordinary dividend later in this year. So, assuming that we achieve our 1.6 to 1.7 guidance that’s what we’re still working towards and then we have $1 billion of extraordinary dividend that we’re looking to take as well on top of that. Now given the pullback, we’ve been getting a lot of questions on the use of it - now given the pullback of our share price since in the month of April, that certainly buybacks will be certainly something that we look like that we’ll look at but we need to accompany that with debt repayment given the leverage ratio. But we’re also going to be watchful with the broader market environment as I mentioned on the call the transaction gives us tons of financial flexibility and resources to deploy. And given the volatility, we’re not in a bad - it’s not a bad position to sit on a bunch of cash right now as we wait the transaction to close, as well.

Okay. And then, I guess for Mark or maybe Nick, you made the point in your prepared remarks about this is a perfect environment to highlight the benefit of RILAs and some of the other products that you offer. I guess the question is, are you seeing that in April? In other words, a lot of times people make that comment, but market volatility sometimes often freezes market. But are you seeing incremental demand for your product given what’s going on in the market?

Yes, this is Nick. We’re seeing robust sales in April. To reiterate Mark’s comments, look, we see continued demand driven both by the demographic trends and as heightened period of volatility. Research shows that 70% of people out there are concerned about the impact of volatility on their retirement assets and given our distribution and product portfolio, we’re well positioned to meet that need.

And Suneet, the product range we have is something that really is an advantage to us. We talk about the all-weather portfolio. If somebody is wanting to secure income for the long-term, we have solutions for that. And the RILA product, of course, is a way somebody can protect capital on the downside that participate in any market recovery. So the product range itself helps. But yes, to your question, April was a good month for us, as Nick said.

The next question comes from Ryan Krueger with KBW. Your line is open.

Thanks. Good morning. First question was just on the seasonally elevated expenses as well as the lower fee days in the first quarter. Are you able to give us a rough sizing of the consolidated impact that had on earnings or EPS for the company?

Sure. We did have overall some seasonality in expenses as I mentioned on the call that’s related to timing of when we’ve paid the benefits and taxes on the bonus payments and then also the long-term incentive comp. I think maybe a lot of the focus has been in individual retirement where we have seen growth in revenue, but some of the expense pickup has shown earnings decline year-over-year. That’s about $10 million that should come back next quarter in terms of pre-tax impact for Individual Retirement on earnings on that and in addition for Individual Retirement, we expect steady growth in our net investment margin, aligning with the growth in the general accounts as we still continue to see robust sales in the all-weather product that Nick and Mark just mentioned as well. But keep in mind for individual retirement, about half of our earnings are fee related and that will be sensitive to equity markets across the board. So, we do expect some expenses to come back. But we are exposed to equity market volatility in these times.

Got it. Thanks. And then on the leverage ratio, do you feel that you need to bring the leverage ratio down from here? Or is your comment on the incremental buybacks just that you would need to do some debt repayment to keep the leverage ratio at the same level it’s already at?

Yeah, I think with the when we think about leverage ratio, I’m mainly looking at rating agency leverage ratios. If the GAAP leverage ratios we feel fine with also remember what I mentioned on the call, the GAAP leverage ratios don’t reflect the AB at market value, which would bring that down by about seven points across the board. But if we did incrementally more than the $500 million that we’re going to add on top of the 60% to 70% as part of the transaction, we’d likely accompany that with some debt repayment to make sure our leverage ratios are in line with what the rating agencies want to.

The next question comes from Michael Ward of UBS. Your line is open.

Hey, good morning. Thanks very much. So net flows were very strong across pretty much every segment. Just curious how you think about this momentum heading into the volatility that we’ve seen in April? And I guess specifically around IR and AB.

Great. Thanks. This is Nick. I’ll kick it off. As we’ve highlighted a couple of times, we see strong structural drivers and the current heightened period of volatility enhancing interest in our products. To start in Individual Retirement, first quarter, we had $1.4 billion in net flows, an 8% organic growth rate over the last twelve months. As Mark highlighted, our buffered annuity is right for these times. It provides downside protection with upside potential. So people that can secure their assets, but gives them the opportunity to participate if the market bounces back. If I hit on Group Retirement, Group Retirement, we had positive net flows, primarily our core K-12 teacher business. I’d remind you it’s a payroll contribution business focused on longer term retirement savings. We have about 1,000 advisors working with over 800,000 teachers in 5,000 local school environments. Employment tends to be more consistent through macro cycles. So we would expect that to consistently grow in the single-digits. And so we do see upside potential in institution. The institutional market is this environment is highlighting the need for secure income within defined contribution group plans. So, we’re focused in this time. We remain steadfast in guiding our clients. We see a demand for advice. So we see a demand for more durable retirement solutions and we’re well positioned to capture a disproportionate share of the value that we see emerging. I’d hand it over to Onur to hit on AB.

Thanks, Nick. Yeah, as was mentioned on the question, we came off of a very strong Q1 in terms of flows at AB. All of our three channels were net positive. April is always a tricky month for us given it’s the tax season. I’ll come back to the market volatility, but given our bookers, we are skewed towards high net worth and also high net worth, particularly in our private wealth business, in our US retail business, we tend to get some outflow pressure in April even when the markets are relatively well functioning. That combined with the heightened market volatility and the uncertainty around the rate cuts and inflation puts some challenges around the flows, particularly around the retail channels. As you know, we have a very strong Asia retail franchise. Whenever there’s a raised uncertainty, we tend to see a slowdown in flows in that region. That being said, all of the signs are quite positive. If I’d go beyond April, several strengths emerge. One, if you look at our institutional pipeline, our institutional pipeline increased materially several billion dollars in the first quarter. So that gives us confidence in terms of flows into our institutional channel going forward. As you know, Equitable commitment to private assets continues and our private assets continue to grow rapidly and we still have another $6.5 billion from the Equitable commitment. So that’s a positive. And then, on the retail side, as I think about fixed income, first, typically steepening yield curve and widening credit spreads means long-term better returns for fixed income strategies and we benefited from fixed income rebalancing in ‘23 and ‘24. We had $35 billion of net flows when that rebalancing happened in the past. So, once this rate kite cycle starts, we’re going to see the money flowing back to taxable fixed income and we’re going to benefit most likely disproportionately from that. And on the equity side, the good news is some of our flagship products and geographies are performing well. For instance, our Japan franchise remained strong despite all of the equity market and currency volatility and we are benefiting from some of the structural trends there like the new retirement accounts called NISAS. So all in all, April definite a tough month for almost every asset manager. We are not an exception. But when I look at where the puck is headed, I think we are very well positioned in terms of benefiting from the markets, as well as our distribution channels.

Thank you, guys. And then on capital deployment, I’m just kind of curious, recognizing there’s uncertainty out there, but is there anything that you would say, or, I guess kind of like a timeline of calm markets that could get you, off the sidelines to be more aggressive on the buyback? And should we think about your capital usage as kind of buybacks, debt reduction or maybe holding excess capital or is there other options that you haven’t spoken about?

Sure. So, Mike, just in our normal share buyback program, if we see dislocation in the market, we’ll certainly dip in and buy back more stock just at a normal course. If the stock is cheap, that’s just timing that we’ll do. On top of that with the transaction, we’re going to wait till the transaction closes. Once the transaction closes, that allows us want to see where the markets are and the evolution with the volatility that we’re currently seeing, but also allows us to take out the extraordinary dividend from the insurance company, as well. And at that point in time, we have tremendous financial flexibility at the holding company with the cash that we will have just in normal course of normal dividends in addition with the benefit of the transaction. So we will evaluate share buybacks with some debt repayment. We can - it’s very volatile at that time. The stock is likely to be cheap. So share buybacks even look more interesting in that type of period and then we’ll also be on the offensive for anything else that remains available for us at that time. But again, tons of financial flexibility and that’s a good thing to have in these volatile times.

The next question comes from Tom Gallagher with Evercore ISI. Your line is open.

Good morning. I had a few questions on RILA. Nick, maybe to start with you. I was sort of peaked by my interest was peaked by your comment that April sales were robust. Are we talking about a modest increase like 10%, something much larger? Want to get a sense for what you’re seeing right now, because and I’ll get to my follow-up after that if we just start with that. Thanks.

Yeah, We don’t disclose that level of information. But I would say they’re robust compared to first quarter.

Got it. And I guess, my follow-up is really this. It’s probably for Robin. The - it’s an interesting dynamic when you have a countercyclical product now that is benefiting from the markets being weaker and where clients are demanding probably the product in a greater way because of the underlying equity protection. But I don’t think the earnings in that product are really equity sensitive. Robin, would you mind kind of just reminding us the underlying profit margin of that product? And whether there is equity sensitivity, the earnings get better or worse if the markets weaken? Thanks.

Sure. Just as Nick and Mark mentioned earlier, this volatility in equity market drives the need for the RILA product and the product is structured around buffers that provide downside protection and upside participation. But I want to reiterate that’s not the only product that we have within the offering. It’s an all-weather product portfolio that provides buffer protection, income protection and investment only tax advantage vehicles as well that the team fully capitalized to drive growth in the retirement market. With the RILA specifically, you’re right, the underlying mechanics it’s really a spread-based earnings products and you saw our spread on NIM and individual retirement increased 9% year-over-year and that will continue to grow with the growth in the RILA sales going forward. It does take their time in terms of GAAP profit emerging. So some of the profit emergence ends up being slower because we have acquisition costs upfront, but that’s time, but the ultimate sensitivity to the RILA is spread-based earnings. The overall segment though is still 50% fee-based and so the overall segment has sensitivity to equity markets from the other products that we sell that are more investment-only oriented.

Tom, it’s Mark. If I could just add something to the demand, which I think is worth saying. These clients would be late 50s, early 60s on the retirement side. That would be typical for us. They have savings. They have 401(K)s, so it’s not coming out of disposable income necessary. So as we mentioned on the call, something like $600 billion a year is coming out of 401(k)s into better vehicles, of which RILA was one. So that helps keep the demand up.

The next question comes from Jimmy Bhullar with JPMorgan. Your line is open.

Yeah, good morning. So first, just had a question on the annuity business, but on a different topic. Just can you comment on what you’re seeing in terms of competition and just competitor behavior, especially in the buffer market, but just overall given that a number of companies seem to be very active and many more companies are selling similar products than was the case a few years ago? And then relatedly, if I look at your sales and flows, they were still very strong, but I think flows were weaker than they had been the last several quarters and sales growth slowed, as well versus what it had been obviously off of fairly high levels.

Sure. This is Nick. For our overall Retirement segment, we were up 6% year-over-year and as we’ve mentioned, we have an all-weather portfolio of protected equity, buffered annuities, income and ILVAs. RILAs were up 3% year-over-year and this was another record first quarter. We’re very intentional about focusing on segments where we can generate attractive returns and sustainable shareholder value. So we’ve been mindful of competitive churns on pricing. As we’ve mentioned historically, as we see new entrants enter, there tends to be a period of aggressive pricing. We’ve seen this before and it tends to be temporary and not sustainable. To-date, increased competition in RILA has net-net continued to grow the size of the pie as it raises adviser awareness in the broader $30 trillion retirement market and we think annuities and buffered annuities are still underpenetrated given the need out there. As the market leader, we continue to benefit from that growing pie. Over the last three years, we have more than doubled our sales. And finally, I’d just say we’re in a different macro environment today than January. Looking forward, we continue to be very excited about the opportunity and believe that given our history of innovation and our privileged distribution, we are well positioned to capture a disproportionate share of the value being created.

And then, just on LifePath, think there weren’t any new cases this quarter, but do you have any line of sight on what the rest of the year is looking like?

Sure. So we remain bullish on the long-term growth of this market and the current market environment is amplifying the need for Secure Income Solutions within defined contribution plans. As context, last year we had $600 million in flows from our Institutional segment coming from the launch of our LifePath paycheck. In the first quarter, we’ve continued to deepen and broaden our institutional offers. We had over $400 million in flows coming from our partnership with a leading HSA provider. We did not have any plans funded in the first quarter. We expect about $250 million of inflows from Lifepath in the second quarter. As we’ve stated, they’re going to continue to be lumpy. We get visibility 60 to 90 days looking out. So, going forward, we’ve been a leader in this market and we think given our relationships with both BlackRock, AB, JPMorgan and others, we’re well positioned as this market continues to grow.

The next question comes from Joel Hurwitz with Dowling. Your line is open.

Hey, good morning. So spreads in Individual Retirement look to have compressed a bit in the quarter. Anything unusual you would call out? And what are you expecting from a spread yield standpoint moving forward?

Hey, Joe. It’s Robin, I’ll take that. So in the quarter, you’re going to always have some noise quarterly on a quarterly basis when looking at spread income. That’s why I would look at the year-over-year as a function of longer term growth. But in the quarter with short term rates decreasing, we did see some decline in some of the floating rate exposure. But as a reminder, the floating rate assets are managed and matched with the floating rate liability. So as the one year segments reset, we expect to get some of that back going forward. But you’ll see some of that quarterly noise. But over the long-term, we still continue to expect strong growth in terms of spread income along with the general account book value in the segment and consistent cash flows coming out of this as well.

Okay. Makes sense. And then, just wanted to see if you have any update on your Bermuda entity. Any plans to move any business there in the near-term?

Yeah, Bermuda is set up and operational for us. It continues to be provide us with good optionality to manage cash flows going forward. No further update to give at this time though, but we remain focused on capital optimization and this is just another piece of the toolkit that gives us optionality.

The next question comes from Jack Madden with BMO Capital Markets. Your line is open.

Hey, good morning. Just on full year cash flow run rate guidance of the 1.6 to 1.7, are you seeing any risk to that outlook given the lower equity markets year-to-date? I know you generate a lot of cash flow from unregulated sources, but just wondering if there’s still a material equity market sensitivity that we should be thinking about regarding free cash flow?

Sure. The 1.6 to 1.7 guidance that we gave for the full year does assume an 8% normal equity market return. But keep in mind 50% of those cash flows are coming from the insurance businesses, is based on last year’s results. And so we will have some equity sensitivity on the other 50% on the Asset and Wealth pieces. I think if I take a look from where we are now, we’re probably on the lower end of the guidance of the 1.6 to 1.7. But still feel comfortable with that guidance.

Got it. Thanks. And then, on the – on AllianceBernstein, any changes to your thoughts on the ultimate ownership of that business now that you’re at somewhere around 69%? Are you looking to increase that this year?

Hi, it’s Mark. I’ll take that. Yes, very pleased that we’ve increased ownership to 69%. I mean, the real issue as we said on the call is there are very big synergies between the Equitable businesses and AB and we’re starting to harvest those synergies. And as we’ve said before, we like the fact that we have a currency in AB there. It helps us with acquisitions as we did with Carvell. It helps us with remuneration and it helps us put a value on a big part of our business. So, no plans to increase this at the moment.

The next question comes from Nick Anido with Wells Fargo. Your line is open.

Hey, thanks. Good morning. Just a follow-up to the cash generation question, as well. What gives you confidence in the $2 billion in 2027, especially given that you guys are at the lower end of the 1.6 to 1.7 now? And when that was given at the Investor Day, did that contemplate the increase in AB ownership?

Sure. We’re fully confident in that $2 billion number that we’re going out at Investor Day. As you’ve seen historically, we pretty much come in line with the numbers that we give to the market because we’re focused on execution internally. As a reminder, that when we gave that at Investor Day, it assumed an 8% annual return, we saw our equity markets up 20% plus the previous two years and now this year we see a decline. So, we don’t think that changes the long-term cash flow outlook that we provided at Investor Day. At Investor Day, we did not contemplate increasing our ownership in AB nor do we contemplate the life transaction at that time. That being said, remember we’re just swapping the transaction essentially swaps life insurance earnings for AllianceBernstein earnings, which we believe is higher multiple and provides a better return profile for our investors so that we can avoid unnecessary volatility in the business. So, full confidence in the $2 billion for 2027.

The next question comes from Maxwell Fritscher with Truist Securities. Your line is open.

Hi, good morning. I’m on for Mark Hughes. Just for the - in Protection Solutions, are you seeing any of the elevated mortality from flu season carryover into 2Q thus far?

Can’t give an update yet for April. April isn’t over. Yes, we still haven’t had a day here to go forward. But can’t we don’t have insight yet into the month of April’s mortality now. But keep in mind that this is exactly why we focus and we’re focused on closing the Life transaction either in Q2 or Q3. So we’re not dealing with mortality volatility anymore and we can focus on our core growth engines that we’ve been discussing on the call.

Understood. And then, at AB, there are outflows in outside the US, any color there and maybe any visibility going forward?

Sure. Onur here, I can take that. As I mentioned a little bit in the previous flow question, when we have uncertainty around the rate outlook and what will be the pace and degree of rate cuts, that’s when we get pressure on our taxable fixed income business in Asia. As you know, we are a high performing manager in the Asian market and taxable fixed income is definitely a strong flagship for us and that has been the main driver of the outflows overseas. That being said, over the years, we have been very successful in diversifying our position, leveraging our brand strength in Asia. Like for instance, if you look at the first quarter, we had very significant net flows into our multi-asset solutions because we created a multi-asset income solution, particularly targeting the Taiwan markets to diversify our exposure to our global high yield product and that has been working very well. And then, separately, as I mentioned in the previous question as a recap, our Japanese business tends to skew heavily towards equities, US Equities. And given our strong distribution network there, we continue to maintain strength from Q1 into April. So all in all, I don’t have any major concerns in terms of the long-term outlook. I think we will continue to well - continue to do well in Asia and in other overseas markets, but there might be some short term flow pressure, particularly in taxable fixed income, particularly in Asia.

The next question comes from Wilma Burdis with Raymond James. Your line is open.

Hey, good morning. This is something you highlighted in the new Slide 9 in the presentation. But could you give us a little bit of color on how the protection services deal reduces credit risk? Thanks.

Yeah, Wilma, I think you broke up a little bit. I think you’re referring to the distress that that we provided at year end?

Yes. The Slide 9, you added something where you talked about how the protection services deal reduces the credit risk.

I think and I guess you’re referring to the fact that some of the RGA transaction and GA assets associated with it that would reduce some of the credit risk associated. If you take a look on the page, we’re speaking about the overall credit risk in the GA portfolio as of year-end, which RBC was 4.25%. And you can see the credit losses, credit migration and the impact from alternatives, so about 50 points to that. And then the Protection deal, what it is, it helps because we have that $2 billion benefit and after we take out the extraordinary dividend, the RBC will improve by 75 to 100 points. That brings us to 450 to 475. So, that’s where you get the benefit from the Protection deal as it relates to our RBC posted credit stress test.

Got it. And then, given the Projection services - Protection deals changing the footprint of the investment portfolio, does this give Equitable opportunity to consider reinvesting at a quicker pace some of the assets? I know, especially there was quite a bit of the portfolio that was purchased around the time of the 2018 IPO, which was in a low rate environment. So, just wondering if that deal gives you an opportunity to accelerate some of that repositioning? Thanks.

Yeah, no, the structural repositions that we’ve spoken about since IPO have been completed on that. That’s delivered significant income for the insurance company. I think where we’re focused now is relative value with the growth in the RILA product where the general account is growing and we continue to get private credit capabilities with AllianceBernstein. As Onar mentioned, we’re about $14 billion of the $20 billion of commitment that we have with AllianceBernstein. So there’s another $6 billion to go and that should provide incremental income for us going forward. And then, I’m sure once we get there, there’ll be more to come, as well.

That is all the time we have for questions. This concludes today’s conference call. Thank you for joining. You may now disconnect.