Q1 2025 Brighthouse Financial Inc Earnings Call

Yes.

Michelle: Good morning, ladies and gentlemen, and welcome to Brighthouse Financial's first quarter 2025 earnings. My name is Michelle and I will be your coordinator. At this time, all participants are in a listen-only We will facilitate a question and answer session towards the end of the conference.

Good morning, ladies and gentlemen, and welcome to Brighthouse.

Michelle: <unk> first quarter 2025 earnings Conference call. My name is Michelle and I will be your coordinator today at this time all participants are in a listen only mode.

Michelle: A question and answer session towards the end of the conference call in fairness to all participants please limit yourself to one question and one follow up.

Michelle: In fairness to all participants, please limit yourself to one question and one follow-up.

Michelle: As a reminder, the conference is being recorded for I would now like to turn the presentation over to Dana Amante, Head of Investor Relations. Ms. Amante, you may proceed. Thank you and good morning.

Michelle: As a reminder, the conference is being recorded for replay purposes, I would now like to turn the presentation.

Ryan Amante, Head of Investory Relations, Miss Amante, you may proceed.

Dana Amante: Welcome to Brighthouse Financial's first quarter 2025 earnings call. Material for today's call were released last night and can be found on the investor relations section of our website. We encourage you to review all of these.

Speaker Change: Thank you and good morning. Welcome to Brighthouse Financial's first quarter, 2025 Earnings Call. Material for today's call will release last night and can be found on the Investor Relations section of our website. We encourage you to review all of these materials.

Dana Amante: Today you will hear from Eric Steigerwalt, our President and Chief Executive Officer, and Ed Spehar, our Chief Financial Officer. Following our prepared remarks, we will open the call up for a question and answer period. Also here with us today to participate in the discussions are Myles Lambert, our Chief Distribution and Marketing Officer, David Rosenbaum, Head of Product and Underwriting, and John Rosenthal, our Chief Investment Officer.

Speaker Change: Today, you will hear from Eric Steigerwalt, our President and Chief Executive Officer, and Ed Behar, R.C. Financial Officer.

Speaker Change: Following our prepared remarks, we will open the call up for a question and answer period. Also here with us today to participate in the discussions, our Myles Lambert, our chief distribution and marketing officer, David Rosenbaum, head of product and underwriting, and John Rosenthal, our chief investment officer.

Dana Amante: Before we begin, I'd like to note that our discussion during this call may include forward-looking statements within the meaning of the federal securities laws. Brighthouse Financial's actual results may differ materially from the results anticipated in the forward-looking statements as a result of risks and uncertainties described from time to time in Brighthouse Financial's filings with the SEC. Information discussed on today's call speaks only as of today, May 9, 2025. The company undertakes no obligation to update any information discussed on today's call.

Speaker Change: Before we begin, I'd like to note that our discussion during this call may include forward looking statements within the meaning of the federal security's laws.

Speaker Change: Brighthouse Financial's actual results may differ materially from their results anticipated in the forward-looking statements, as the results of risks and uncertainties described from time to time in Brighthouse Financial's filings with the SEC.

Speaker Change: Information discussed on today's call speaks only as of today, May 9, 2025.

Speaker Change: The company undertakes no obligation to update any information discussed on today's call.

Dana Amante: 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. Reconciliation of these non-GAAP measures on a historical basis to the most directly comparable GAAP measures and related definitions may be found on our earnings release, slide presentation, and financial supplement.

Speaker Change: During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non-GAAT measures.

Speaker Change: Reconciliation of these non-GAT measures on a historical basis to the most directly comparable GAT measures and related definitions may be found on our earnings release, fly presentations, and financial supplements.

Dana Amante: And finally, references to statutory results, including certain statutory-based measures used by management, are preliminary due to the timing of the filing of the statutory statement.

Speaker Change: And finally, references to statutory results, including certain statutory based measures used by management are preliminary due to the timing of the filing of the statutory statement. And now I'll turn the call over to our CEO , Eric Steigerwalt.

Eric Steigerwalt: And now I'll turn the call over to our CEO, Eric Steigerwalt. Thank you, Dana, and good morning, everyone. Brighthouse Financial reported solid results in the first quarter of 2025. During the quarter, we made further progress against our focused business strategy, including delivering strong sales results in both annuities and life insurance. We also made additional progress against the capital-focused strategic initiatives that we announced last year and that we continue to execute. We ended the quarter with holding company liquid assets of approximately $1 billion, maintaining a robust cash position. We also ended the quarter with an estimated combined risk-based capital, or RBC, ratio between 420% and 440%.

Thank you, Dana, and good morning everyone.

Speaker Change: Brighthouse Financial reported solid results in the first quarter of 2025.

Speaker Change: During the quarter, we made further progress against our focus business strategy, including delivering strong sales results in both annuities and life insurance.

Speaker Change: We also made additional progress against the capital focused strategic initiatives that we announced last year, and that we continue to execute. Thank you.

Speaker Change: We ended the quarter with holding company liquid assets of approximately one billion dollars maintaining a robust cash position.

Speaker Change: We also ended the quarter with an estimated combined risk-based capital or RBC ratio between 420% and 440%.

Eric Steigerwalt: which is within our target RBC ratio range of 400% to 450% in normal markets. As we have said in the past, balance sheet strength is essential to support our distribution franchise. I am pleased with the progress that we have made against our capital-focused strategic initiatives, which includes our ongoing work to simplify our variable annuity, or VA, and shield hedging strategies. As we discussed on our fourth quarter earnings call, as of year end 2024, we have fully transitioned to hedging shield annuity new business on a standalone basis. an important milestone in simplifying our hedging strategy. In 2025, we have continued to revise our hedging strategy for both our InForce VA and our first generation Shield Book of Business.

Speaker Change: Which is within our target RBC ratio range of 400% to 450% in normal markets.

As we have said in the past,

Bound Sheet Strength is essential to support our distribution franchise. [inaudible]

Speaker Change: I am pleased with the progress that we have made against our capital focus strategic initiatives, which includes our ongoing work to simplify our variable annuity or VA and shield hedging strategy.

Speaker Change: As we discussed on our fourth quarter earnings call, as of year end 2024, we have fully transitioned to hedging shield annuity new business on a standalone basis.

An important milestone in simplifying our hedging strategy.

Speaker Change: In 2025, we have continued to revise our hedging strategy for both our in-force VA and our first-generation shield book of business.

Eric Steigerwalt: While the execution of our capital-focused strategic initiatives continues, it is important to note that our focus on protecting our statutory balance sheet under adverse market scenarios remains unchanged.

Speaker Change: While the execution of our Capital Focus Strategic Initiatives continues, it is important to note that our focus on protecting our statutory balance sheet under adverse market scenarios remains unchanged.

Eric Steigerwalt: Shifting to sales. As I mentioned earlier, we delivered strong sales results in the quarter. I'm especially pleased with the continued sales growth of our flagship Shield annuity product suite, which I will discuss in more detail in a moment. Also in the quarter, we continued to drive steady growth in sales of our life insurance product. Our total annuity sales in the quarter were strong at approximately $2.3 billion. This includes approximately $2 billion in total SHIELD sales. which increased 3% sequentially and 5% compared with the first quarter of 2024. As we have said previously, last year we launched updates to our Shield Suite that are designed to help these products remain competitive and adapt to changes in the industry.

Shifting the sales.

Speaker Change: As I mentioned earlier, we delivered strong sales results in the quarter. I'm especially pleased with the continued sales growth of our flagship shield annuity product suite, which I will discuss in more detail in a moment.

Speaker Change: Also in the quarter, we continued to drive steady growth in sales of our life insurance products.

Speaker Change: Our total annuity sales in the quarter were strong at approximately $2.3 billion.

This includes approximately $2 billion in total SHIELD sales.

Speaker Change: which increased 3% sequentially and 5% compared with the first quarter of 2024.

Speaker Change: As we have said previously, last year we launched updates to our shield suite that are designed to help these products remain competitive and adapt to changes in the industry.

Eric Steigerwalt: And we remain proud to be a leader in the registered index-linked annuity market. While our total annuity sales were strong in the quarter, they were down 21% compared with the first quarter of 2024, primarily driven by lower sales of fixed annuity. Sequentially, annuity sales increased 1%. We're pleased to be one of the top annuity providers in the United States, and we continue to leverage the depth and breadth of our expertise, along with our strong distribution relationships, to competitively position ourselves in the markets that we choose to compete in.

Speaker Change: And we remain proud to be a leader in the registered index-linked annuity marketplace.

Speaker Change: While our total annuity sales were strong in the quarter, they were down 21% compared with the first quarter of 2024, primarily driven by lower sales of fixed annuities.

Sequentially, annuity sales increased 1 percent.

Speaker Change: We're pleased to be one of the top annuity providers in the United States and we continue to leverage the depth and breadth of our expertise along with our strong distribution relationships to competitively position ourselves in the markets that we choose to compete in. [inaudible]

Eric Steigerwalt: As I mentioned earlier, we continue to drive steady growth in sales of our life insurance product suite in the quarter. Life sales totaled $36 million, which is a 24% increase compared with the first quarter of 2024, and a 9% increase sequentially. As we have discussed previously, we have expanded into the institutional space with BlackRock's Life Path Paycheck, or LPP, product. Becoming available in defined contribution plans last year. Earlier this year, BlackRock announced that LPP is now live in six employer retirement plans. totaling $16 billion in assets under management. While inflows associated with LPP are expected to be uneven on a quarter-to-quarter basis, As defined contribution plans implement the solution, we do expect to see additional flows in 2025.

Speaker Change: As I mentioned earlier, we continue to drive steady growth in sales of our life insurance products in the quarter.

Speaker Change: Lifesales totaled $36 million, which is a 24% increase compared with the first quarter of 2024 and a 9% increase sequentially.

Speaker Change: As we have discussed previously, we have expanded into the institutional space with Black Rock's Lifepath Paycheck, or LPP Product.

Becoming available in defined contribution plans last year.

Speaker Change: Earlier this year, Black Rock announced that LPP is now live in six employer retirement plans.

Totaling $16 billion in assets under management. [inaudible]

Speaker Change: While inflows associated with LPP are expected to be uneven on a quarter to quarter basis.

Speaker Change: As defined contribution plans implement the solution. We do expect to see additional flows in 2025.

Eric Steigerwalt: We remain very excited about LPP and its success to date, and we expect our involvement with this product to enable Brighthouse to reach new customers through the worksite channel.

Speaker Change: We remain very excited about LPP and its success today, and we expect our involvement with this product to enable Brighthouse to reach new customers through the Worksite Channel.

Eric Steigerwalt: Turning to expenses. Corporate expenses in the quarter were $239 million on a pre-tax basis. which was higher than our run rate expectation. It is important to note that this higher level of corporate expenses is non-trendable, and we expect corporate expenses to normalize the remainder of 2025. Additionally, we remain focused on maintaining a disciplined approach to expense management, which is an important aspect of our business strategy.

Turning to Expenses

Speaker Change: Corporate expenses in the quarter were $239 million on a pre-text basis.

Speaker Change: Which was higher than our run rate expectation. It is important to note that this higher level of corporate expenses is nontrendable, and we expect corporate expenses to normalize the remainder of 2025.

Speaker Change: Additionally, we remain focused on maintaining a disciplined approach to expense management which is an important aspect of our business strategy.

Eric Steigerwalt: Regarding capital return to shareholders. In the quarter, we continued to return capital through the repurchase of our common stock. We were purchased $59 million of our common stock in the quarter. with an additional $26 million repurchased through May 6.

Regarding capital return to shareholders.

Speaker Change: In the quarter, we continue to return capital through the repurchase of our common stock.

Speaker Change: We were purchased $59 million of our common stock in the quarter, with an additional $26 million repurchased through May 6th.

Eric Steigerwalt: Before wrapping up, I would like to briefly touch on the current macro environment. Brighthouse Financial has a proven track record of being able to navigate volatile markets and periods of uncertainty. And we believe that we are well positioned to navigate this current environment. We remain focused on our mission and strategy and on delivering for our partners, customers, and shareholders.

Speaker Change: Before wrapping up, I would like to briefly touch on the current macro environment.

Speaker Change: Brighthouse Financial has a proven track record of being able to navigate volatile markets and periods of uncertainty.

Speaker Change: And we believe that we are well positioned to navigate this current environment.

Speaker Change: We remain focused on our mission and strategy, and on delivering for our partners, customers, and shareholders.

Eric Steigerwalt: To wrap up, we delivered a solid quarter to start the year, and I'm pleased with our progress as we continue to execute our business strategy. We continue to generate strong sales in both annuities and life insurance. as well as support our distribution franchise through our strong balance sheet and robust liquidity position. In addition, we continue to make progress against our strategic initiatives designed to improve capital efficiency, unlock capital, and remain within our target combined RBC ratio range in normal markets.

Speaker Change: To wrap up, we delivered a solid quarter to start the year. And I'm pleased with our progress as we continue to execute our business strategy. Thank you.

Speaker Change: We continue to generate strong sales in both annuities and life insurance.

Speaker Change: As well as support our distribution franchise through our strong balance sheet and robust liquidity position.

Speaker Change: In addition, we continue to make progress against our strategic initiatives, designed to improve capital efficiency, unlock capital, and remain within our target combined RBC ratio range

Ed Spehar: I'll now turn the call over to Ed to discuss our first quarter financial results.

Speaker Change: I'll now turn the call over to Ed, to discuss our first quarter financial results.

Ed Spehar: Thank you, Eric, and good morning, everyone. After the market closed yesterday, Brighthouse Financial reported results for the first quarter of 2025, including preliminary statutory results. Statutory Combined Total Adjusted Capital, or TAC, was approximately $5.5 billion at March 31. compared with approximately $5.4 billion at December 31st. The estimated combined risk-based capital, or RBC ratio, was between 420% and 440%. within our target range of 400% to 450% in normal market conditions. and normalized statutory earnings for the quarter were approximately $300 million. Statutory results benefited from a 25 basis point increase in the prescribed 20-year treasury yield mean reversion.

Thank you, Eric, and good morning, everyone.

Ed Spehar: After the market closed yesterday, Brighthouse Financial reported results for the first quarter of 2025, including preliminary statutory results.

Ed Spehar: Statutory Combined Total Adjusted Capital, or TAC, was approximately $5.5 billion at March 31st.

Compared with approximately $5.4 billion at December 31st. John Barnidge, Jamminder Bhullar, Thomas Gallagher, Thomas Gallagher, Thomas Gallagher,

Ed Spehar: The estimated combined risk-based capital, or RBC ratio, was between 420 percent and 440 percent.

Ed Spehar: Within our target range of 400% to 450% in normal market conditions.

Ed Spehar: and Normalized Statutory Earnings for the Quarter were approximately $300 million.

Ed Spehar: Statutory results benefited from a 25 basis point increase in the prescribed 20-year Treasury

Ed Spehar: which increased from 3.75% to 4%.

which increased from 3.75% to 4%.

Ed Spehar: Additionally, as Eric mentioned earlier, we continue to make progress on our capital-focused strategic initiative. As we discussed on the fourth quarter earnings call, as of year-end 2024, we fully transitioned to hedging new business for our Shield product suite on a standalone basis. We continue to develop a separate hedging strategy for our variable annuity and first-generation shield annuity block of business. We expect to complete the transition to this revised strategy for this legacy block of business before year end.

Ed Spehar: Additionally, as Eric mentioned earlier, we continue to make progress on our capital-focused strategic initiatives.

Eric Steigerwalt: As we discussed on the fourth quarter earnings call, as of year-end 2024, we fully transition to hedging new business for our shield product suite on a standalone basis.

Eric Steigerwalt: We continue to develop a separate hedging strategy for our variable annuity and first-generation to shield the annuity block of business.

Ed Spehar: Importantly, we continue to focus on protecting our statutory balance sheet under adverse market scenarios. Holding company liquid assets are still substantial. with approximately $1 billion at March 31st. We think about our capital strength as a combination of the operating company's RBC ratio. Holding company Liquid Assets and a conservative capital structure.

Eric Steigerwalt: Importantly, we continue to focus on protecting our statutory balance sheet under adverse market scenarios.

Holding company liquid assets are still substantial.

with approximately $1 billion at March 31st.

Eric Steigerwalt: We think about our capital strength as a combination of the operating company's RBC ratio, holding company liquid assets, and a conservative capital structure.

Ed Spehar: Now turning to first quarter adjusted earnings. Adjusted earnings for the quarter were $235 million.

Ed Spehar: including an unfavorable notable item of $10 million or 17 cents per share. related to an actuarial model refinement. Adjusted earnings excluding the impact from the notable item were $245 million. which compares with adjusted earnings on the same basis of $352 million in the fourth quarter of 2024. and $268 million in the first quarter of 2020.

Eric Steigerwalt: Including an unfavorable notable items of $10 million or <unk> 17 per share.

Eric Steigerwalt: Related to an actuarial model refinements.

Eric Steigerwalt: Adjusted earnings excluding the impact from notable items were $245 million.

Eric Steigerwalt: Which compares with adjusted earnings on the same basis of $352 million in the fourth quarter of 2024.

Eric Steigerwalt: And $268 million in the first quarter of 2024.

Ed Spehar: Adjusted earnings results, excluding the impact of the notable item, were approximately $15 million. Or 26 cents per share below our average quarterly run rate expectation. Alternative investment income was $39 million. or approximately $0.66 below our quarterly average run rate expectation. The alternative investment portfolio yield in the quarter was 1.4%.

Eric Steigerwalt: Adjusted earnings results, excluding the impact of the notable items were approximately $15 million or 26 pence per share below our average quarterly run rate expectation.

Eric Steigerwalt: Alternative investment income was $39 million or.

Eric Steigerwalt: <unk> 66 cents below our quarterly average run rate expectation.

Eric Steigerwalt: The alternative investment portfolio yield in the quarter was one 4%.

Ed Spehar: As a reminder, we continue to expect a yield on this portfolio of 9 to 11 percent annually over the long term. Our underwriting margin was above our run rate expectation. which more than offset the impact from corporate expenses that were high relative to our quarterly run rate expectations. while the underwriting margin was higher versus our run rate.

Eric Steigerwalt: As a reminder, we continue to expect a yield on this portfolio of 9% to 11% annually over the long term.

Eric Steigerwalt: Our underwriting margin was above our run rate expectation.

Eric Steigerwalt: Which more than offset the impact from corporate expenses that were high relative to our quarterly run rate expectation.

While the underwriting margin was higher versus our run rate expectation.

Ed Spehar: It was lower sequentially, driven by normal fluctuations in the volume and severity of claims net of reinsurance.

Eric Steigerwalt: It was lower sequentially driven by normal fluctuations in the volume and severity of claims net of reinsurance.

Ed Spehar: Shifting to results by second. The annuity segment reported adjusted earnings, less notable items of $324 million. which was relatively flat sequentially. The Life segment reported adjusted earnings of $9 million. Sequentially, results reflected a lower underwriting margin. Lower net investment income and higher expenses.

Eric Steigerwalt: Shifting to results by segment.

Eric Steigerwalt: The annuity segment reported adjusted earnings less notable items of $324 million.

Eric Steigerwalt: Which was relatively flat sequentially.

Eric Steigerwalt: The life segment reported adjusted earnings of $9 million sequentially.

Eric Steigerwalt: Sequentially results reflected a lower underwriting margin.

Eric Steigerwalt: Lower net investment income and.

Eric Steigerwalt: And higher expenses.

Ed Spehar: The runoff segment had an adjusted loss of $64 million. Results reflected lower net investment income, partially offset by a higher underwriting margin sequentially.

Eric Steigerwalt: The runoff segment had an adjusted loss of $64 million.

Eric Steigerwalt: Results reflected lower net investment income, partially offset by a higher underwriting margin sequentially.

Ed Spehar: The corporate and others segment report an adjusted loss of $24 million. which reflected higher expenses sequentially.

Eric Steigerwalt: The corporate and other segment reported an adjusted loss of $24 million, which reflected higher expenses sequentially.

Ed Spehar: In closing, we are pleased with our first quarter results, particularly because statutory results were in line with our expectations. The estimated combined RBC ratio ended the quarter within our target range, and we maintained a robust level of holding company liquid assets.

Eric Steigerwalt: In closing we are pleased with our first quarter results.

Eric Steigerwalt: Particularly because statutory results were in line with our expectations.

Eric Steigerwalt: The estimated combined RBC ratio ended the quarter within our target range and we maintained a robust level of holding company liquid assets.

Operator: We will now turn the call over to the operator to begin the question and answer session. Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Eric Steigerwalt: We will now turn the call over to the operator to begin the question and answer session.

Speaker Change: Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again in fairness to all participants we ask that you. Please limit yourself to one question and one follow up one moment for our first question.

Operator: In fairness to all participants, we ask that you please limit yourself to one question and one follow-up.

Operator: One moment for our first question.

Wes Carmichael: Our first question is going to come from the line of Wes Carmichael with Autonomous Research. Your line is open. Please go ahead. Hey, good morning, everybody. Sorry if I missed one clarification, but at the 25 basis point increase in mean reversion point, did you quantify how much a benefit that was to normalized data earning? Sure. Good morning, Wes. It was around $200 million. Okay, thank you.

Speaker Change: Our first question is going to come from the line of Wes Carmichael with Autonomous Research. Your line is open. Please go ahead.

Wes Carmichael: Hey, good morning, everybody.

Speaker Change: Sorry, if I missed that one clarification, but add the 25 basis point increase in mean reversion point did you quantify how much of a benefit that was to normalized stat earnings.

Wes Carmichael: Sure Good morning, Wes it was around $200 million.

David Rosenbaum: I guess my second question on sales and fixed annuities, it's been a little bit softer the last couple of quarters, and I know you had some change in a reinsurance partner, but would you expect that to accelerate from here, or is the competitive environment just not very attractive?

Speaker Change: Okay. Thank you.

Speaker Change: I guess my second question on sales and fixed annuities, it's been a little bit softer last couple of quarters and I know you had some change in our reinsurance partner, but would you expect that to accelerate from here or is the competitive environment, just not very attractive.

David Rosenbaum: Hey Wes, this is David, I'll start with that. So, you know, sales move around a bit and you've seen that in our results for fixed annuities. The first quarter of last year, 2024, was a big sales volume for us. And then the third quarter, as you mentioned, was also, you know, a solid quarter after we reestablished ourselves in the fixed market after we brought on a new reinsurance partner. So, when we think about this market, there's a lot of competition, as you mentioned. It is very rate-dependent, and we're going to continue to monitor sales volumes and the competitive environment in conjunction with our reinsurance partners.

Speaker Change: Hey, Wes this is David I'll start with that.

Speaker Change: No.

Speaker Change: Sales move around.

Speaker Change: A bit and you've seen that in our results for fixed annuities. The first quarter of last year 2024 was the big sales.

Speaker Change: Volume for US and then the third quarter as you mentioned.

Speaker Change: It was also.

Speaker Change: A solid quarter after we reestablished ourselves in the fixed market. After we brought on a new reinsurance partner.

Speaker Change: So when we think about this market there is a lot of competition as you mentioned it is very rate dependent.

Speaker Change: And we're going to continue to monitor sales volumes and.

Speaker Change: The competitive environment in conjunction with our reinsurance partners and our goal here is to really have.

David Rosenbaum: And our goal here is to really have consistent, competitive rates while maintaining our pricing discipline. So, we are looking to build momentum to drive fixed sales over the remainder of the year.

Speaker Change: Consistent competitive rates, while maintaining our pricing discipline. So we are looking to build momentum to drive fixed sales over the remainder of the year.

Speaker Change: Thank you.

John Barnidge: Thank you and one moment for our next question. Our next question comes from the line of John Barnidge with Piper Sandler. Your line is open. Please go ahead. Thank you very much for the opportunity.

Speaker Change: Thank you and one moment for our next question.

Speaker Change: Our next question comes from the line of John Barnidge with Piper Sandler. Your line is open. Please go ahead.

Speaker Change: Thank you very much for the opportunity.

John Barnidge: My question is on your outlook for flows and surrender activity this year. How are you thinking about that trending given a dynamic macro environment? Yeah, thanks. Thanks, John.

John Barnidge: My question is on your outlook for flows and surrender activity. This year, how are you thinking about that trending given the dynamic macro environment.

Speaker Change: Yes, thanks, Thanks John.

John Barnidge: So, let me just start with the drivers that we've seen over the last five to six quarters continued in the first quarter of this year as expected. So, outflows were modestly lower than the fourth quarter and up over the first quarter of last year driven by VA and SHIELD outflows, but specifically full surrender. So when we think about 2025, we have a substantial amount of fixed rate annuities, particularly the three and five year coming out of surrender in the second half in 2025, but but weighted to the second half of 2025. We continue to have more SHIELD come out of surrender each month, as you've seen, as we've had growing sales over the last few years.

John Barnidge: Let me just start with the.

John Barnidge: The drivers that we've seen over the last five to six quarters continued in the first quarter of this year and as expected. So outflows were modestly lower than the fourth quarter and up over the first quarter of last year, driven by VA and shield outflows, but specifically full surrenders.

John Barnidge: So when we think about 2025.

John Barnidge: We have a substantial amount of fixed rate annuities, particularly the three and five year coming out of surrender and the second in 2025, but but weighted to the second half of 2025, we.

John Barnidge: We continue to have more shield come out of surrender each months as.

John Barnidge: As you've seen we had as well.

John Barnidge: Growing sales over the last few years, and then third not surrender charge related but we do continue to see outflows our variable annuity block. So given these factors I currently expect flows to be at the 2024 level or higher this year.

John Barnidge: And then third, not surrender charge related, but we do continue to see outflows of our variable annuity block. So given these factors, I currently expect flows to be at the 2024 level or higher this year.

John Barnidge: Yes.

John Barnidge: Thank you for that.

John Barnidge: In my follow-up question... How do you think about the opportunity to better optimize your investment portfolio?

John Barnidge: Thank you for that and my follow up question.

Speaker Change: How do you think about the opportunity to better optimize your investment portfolio to be more competitive in the <unk> market. Thank you.

John Rosenthal: Hi, John. It's John. We're always thinking about ways to optimize the investment portfolio and the investment return. I can't give you any specifics, but… We're always. We're always working on it. So I think we're improving, but we're always working on it.

John: Hi, John its John.

John: We're always thinking about.

John: Ways to optimize the investment portfolio and the investment return I can't give you any specifics but.

John: We're always.

John: We're always working on it so I think we are.

John: Improving but we're always working on it.

John Rosenthal: Thank you.

John: Thank you.

Elyse Greenspan: One moment for our next question. Our next question is going to come from the line of Elyse Greenspan with Wells Fargo. Your line is open. Please go ahead. My first question is just on the RBC move in the quarter, and I think the mean reversion change was probably something, you know, within the neighborhood of 25 basis points. So, were there any other, you know, pushes and pulls within RBC? It seems like it might have been stable to slightly up, you know. excluding the mean reversion change in the quarter.

John: Thank you one moment for our next question.

Speaker Change: Our next question is going to come from the line of Elyse Greenspan with Wells Fargo. Your line is open. Please go ahead.

John: Thanks.

Elyse Greenspan: My first question is just on the RBC move in the quarter and I think the mean reversion change was probably something within.

In the neighborhood of 25 basis points. So were there any other pushes and pulls within RBC. It seems like it might have been stable to slightly up.

Elyse Greenspan: <unk>.

Elyse Greenspan: Excluding the mean reversion change in the quarter.

Ed Spehar: Good morning, Elyse. I think it's closer to 15 percentage points, the $200 million number that I cited, not 25. Okay, so then anything else you would highlight within RBC away from that? Sure, so we had some higher. We had Normstadt earnings beyond the $200 million. You see, we said it was approximately $300. I've also talked in the past about The seasonality of the capital charges associated with our fixed business. So in the past, I had said, you know, you could think about maybe 20 RBC points a year from strain in total. I would say that number is higher now than it was, and, you know, that's a good thing from the standpoint of we're writing business that we think is generating shareholder value.

Elyse Greenspan: Yes, good morning Elyse.

Elyse Greenspan: I think its closer to 15 percentage points.

Elyse Greenspan: The $200 million number that I cited not 25.

Elyse Greenspan: Okay. So then anything else you would highlight within within RBC away from that.

Elyse Greenspan: Sure. So we had some higher.

We had norm stat earnings beyond the $200 million Youll see we said it was approximately 300.

Elyse Greenspan: I've also talked in the past about.

Elyse Greenspan: The seasonality of the capital charges associated with our fixed business.

Elyse Greenspan: In the past I had said you could think about maybe 20 RBC points a year from strain in total I would say that number is higher now.

Elyse Greenspan: Then it was and.

Elyse Greenspan: It's a good thing from the standpoint of where writing business that we think is generating shareholder value. So we all know that strain is a fact of life and the life insurance industry, you have to put up capital.

Ed Spehar: So we all know that strain is a fact of life in the life insurance industry. You have to put up capital when you write business, and then you get the cash over time. So we do have more strain, I would say, than the 20 RBC points I've talked about in the past, but we still have the seasonality impact that I've discussed, which is. Related to the business risk capital charge for fixed, the C4 charge, right, it comes in once a year, and then, I mean, it comes in over the course of a year, and then it's released, and you start again in the new year.

Elyse Greenspan: When you write business and then you get the cash over time so.

Elyse Greenspan: We do have more strain I would say than the 20 RBC points I've talked about in the past, but we still have the seasonality impact that I've discussed which is related.

Elyse Greenspan: It related to the business risk capital charge for fixed C. Four charge right. It comes in once a year and then it comes in over the course of the year and then it is released and you start again in the in the new year. So you will see in the first quarter.

Ed Spehar: So you will see in the first quarter an impact from strain that's much more modest than what you would see in the subsequent quarters. So there is some benefit in the RBC from the seasonality of the capital charge.

Elyse Greenspan: And impact from strain that's much more modest than what you would see in the subsequent quarters. So there is some benefit in the RBC from the seasonality of the capital charges.

Elyse Greenspan: Thanks. And then, you know, my follow up, you know, in past quarters, you guys have, you know, spoken about, you know, actions to increase value. I think last quarter you were talking about slow reinsurance, and there's been other actions mentioned.

Speaker Change: Thanks, and then on my follow up Bob.

Speaker Change: In past quarters, you guys have spoken about options to increase value I think last quarter, you were talking about flow reinsurance and theres been other actions mentioned can you just talk to talk about things that you guys are considering right now.

Ed Spehar: Can you just talk to, you know, talk about things that you guys are considering right now? Sure. So, you know, we did talk about flow reinsurance. We continue to look at reinsurance options, including flow reinsurance. So that still is something that we're considering over time.

Sure so.

Speaker Change: We did talk about flow reinsurance, we continue to look at reinsurance.

Speaker Change: Options, including flow reinsurance so that still is something that we are considering over time.

Ed Spehar: I think the top priority today would be the simplification of our hedging strategy for our Enforce VA and First Generation Shield business. You've heard us talk about how beginning in July of last year we started to hedge our new product suite, Shield 2.0, on a stand-alone basis. We extended that to the entire in-force block of our LevelPay Plus Shield products and implemented the modeling associated with that in our financial, in our actuarial modeling to realize the full benefit of that stand-alone hedging for new business, and we've talked about modifying our strategy for this block of in-force VA and first-generation Shield.

Speaker Change: I think the top priority today would be the simplification of our hedging strategy for our in force VA and first generation shield business.

Speaker Change: You've heard us talk about how beginning in July of last year, we started to hedge our new product suite shield 2.0 on a standalone basis, we extended that to the.

Speaker Change: Entire in force block.

Speaker Change: Level pay plus shield products and implemented the modeling associated with that in our financial.

Speaker Change: In our actuarial modeling to realize the full benefit of that Standalone hedging for new business.

Speaker Change: And we've talked about.

Speaker Change: Modifying our strategy for this block of in force VA in first generation shield.

Ed Spehar: So an underlying goal of that effort is to simplify. I would stress, though, that we continue to manage to protect our statutory balance sheet. Our hedging position is, you know, again, maintaining that up to $500 million first loss tolerance that we've talked about. So we still have significant protection. It's not like a wholesale change in how we're managing the risk, but it is an approach that we are taking to simplify how we're gonna address this Enforce VA and First Generation Shield Block.

Speaker Change: So an underlying goal of that.

Speaker Change: The effort is to simplify.

Speaker Change: I would stress, though that we continue to manage to protect our statutory balance sheet, our hedging position is.

Speaker Change: Again, maintaining that up to $500 million first loss tolerance that we've talked about so we still have.

Speaker Change: Significant protection, it's not like a wholesale change in how we're managing the risk but it is an approach that we're taking to simplify how we're going to address this in force VA in first generation Shield block.

Speaker Change: Thank you.

Operator: One moment for our next question.

Speaker Change: Thank you one moment for our next question.

Suneet Kamath: Our next question is going to come from the line of Suneet Kamath with Jeffries. Your line is open. Please go ahead. Great, thanks. I think on the last call, Ed, you mentioned that you weren't expecting distributable earnings out of Blick in 25. Is that still your expectation? And if that's the case, I guess, what changes in 26 to get the distributable earnings going again?

Speaker Change: Our next question is going to come from the line of Sidney <unk> with Jefferies. Your line is open. Please go ahead great.

Sidney: Great. Thanks, I think on the last call you mentioned that you Werent expecting distributable earnings out of blip in 25 is that still your expectation and if that's the case I guess what changes in 2006 to get the distributable earnings going again.

Ed Spehar: Good morning, Suneet. I recall on the last call that I said that our final financial plan anticipated dividends over the three-year period from the operating companies. I don't remember a specific comment that I made about Blick. And, you know, I guess I would just say I wouldn't go beyond what I said last time, which is that our plan over the three-year period contemplates that we will take money up to the holding company. We don't get into, you know, specifics about any annual forecast for statutory results. Got it. I thought you had said something about starting next year, but.

Speaker Change: Good morning, Sidney IRA.

I recall on the last call that I said that.

Our final financial plan anticipated dividends over the three year period from the operating companies I don't remember a specific comment that I made about Blake.

Speaker Change: And I guess I would just say I am not I wouldn't go beyond what I said last time, which is that our plan over the three year period contemplates that we will take money up to the holding company, we don't get into specifics about any annual forecast for statutory results.

Speaker Change: Got it I thought you had said something about starting next year, but.

Suneet Kamath: I get the point. Maybe I did. I didn't recall, but perhaps I did, but I know my point was that I was trying to make a comment about the three-year outlook for cash flow from the operating company. I got it. That's fine. Thanks.

I get the point that you're making.

Speaker Change: Maybe I did I know it doesn't I didn't recall, but perhaps I did but I know my point was that.

Speaker Change: I was trying to make a comment about the three year outlook for cash flow.

Speaker Change: From the operating companies.

John Barnidge: Okay got it that's fine and then I guess, maybe a bigger question for Eric If I look at your stock price at the end of 2017. It was 58, if I look at where it is now it's 58. So in seven plus years were flat. Despite all the buybacks that you've done.

Suneet Kamath: And then I guess maybe a bigger question for Eric. If I look at your stock price at the end of 17, it was 58. If I look at where it is now, it's 58.

Suneet Kamath: So in seven plus years, we're flat despite all the buybacks that you've done.

Suneet Kamath: And I guess the question sort of like what I asked last time is, you know, does it make sense to just be part of a larger organization where you can benefit from more capital and more diversification and all those sort of things versus being a standalone kind of annuity?

Speaker Change: And I guess the question sort of like what I asked last time is.

Speaker Change: Does it make sense to just be part of a larger organization, where you can benefit from more capital and more diversification in all of those sort of things versus being a standalone kind of annuity writer.

Eric Steigerwalt: Good morning, Suneet. How are you? And look, my answer is going to be pretty much the same as last time, right? I think last time you commented on complexity as well. And look, every single day we're dealing with, whether it's complexity or capital generation or sales, etc., we're doing our jobs here. We've got a strategy that I think logically can produce shareholder value. And so we're just going to keep following that strategy, whether it's sort of from a BAU point of view or when we talk about some strategic initiatives that we have. I talked about them last time.

Speaker Change: Good morning, <unk> how are you.

Speaker Change: And look my my answer is going to be pretty much. The same as last time right. I think last time, you commented on complexity as well.

Speaker Change: Look every single day, we're dealing with whether its complexity or capital generation or sales et cetera, we're doing our jobs here.

Speaker Change: We've got a strategy that I think logically can produce shareholder value and so we're just going to keep following that strategy, whether it's sort of from a <unk> point of view.

Speaker Change: Or when we talk about some strategic initiatives that we have talked about them last time I won't repeat them, because I think Ed kind of listed some of them off from our leases question.

Eric Steigerwalt: I won't repeat them because I think Ed kind of listed some of them off from Elyse's question. But even in addition to what he said, there are other sort of value drivers that we can unlock over time. And it's our job to do that. So we're just going to keep doing what we're doing. We have bought back about, you know, roughly $2.5 billion of stock over the years. And our strategy with the inclusion of strategic initiatives from time to time is unchanged.

Speaker Change: But even in addition to what he said there are other sort of value drivers that we can unlock over time and it's our job to do that so we're just going to keep doing what we're doing we have bought back about roughly $2 5 billion of stock over the years.

Speaker Change: Our strategy with the inclusion of strategic initiatives from time to time is unchanged.

Speaker Change: Yeah.

Speaker Change: Alright, thanks for the answer.

Wilma Burdis: One moment for our next question. Our next question comes from the line of Wilma Burdis with Raymond James. Your line is open. Please go ahead. Hey, good morning.

Speaker Change: Thank you one moment our next question.

Speaker Change: Our next question comes from the line of William <unk> with Raymond James Your line is open. Please go ahead.

Wilma Burdis: You guys touched on this a little bit with Elyse's question, but could you just give us a little bit more detail on where you are with hedging the legacy block, where you're at right now, what steps you have left to complete, and then I know you kind of touched on this a little bit, but if you could just help me understand what you guys did in July with the new business versus year end and just how the kind of new business hedging played out. Thanks. Sure, Wilma.

Speaker Change: Hey, Good morning, you guys touched on the floor with Elisa question, but could you just give us a little bit more detail on where you are with hedging the legacy block.

Speaker Change: Where you're at right now what steps you have left to complete and then.

Speaker Change: I know you kind of touched on this a little bit but if you could just help me understand what you guys did in July with the new business versus year end, and just how that kind of new business hedging play out. Thanks.

Wilma Burdis: Let me start with the second one first. So when I said standalone hedging, it means essentially you're buying a call spread and writing an out-of-the-money put. And that is the option basket that creates the payout profile. that matches what you're guaranteeing the customer.

Speaker Change: Sure well, let me start with the second one first so.

Speaker Change: When I said standalone hedging it means.

Speaker Change: Essentially you are buying a call spread in writing and out of the money put.

Speaker Change: And that is the option basket that creates the payout profile.

Speaker Change: That matches the what.

Speaker Change: What's your guaranteeing the customer.

John Rosenthal: On the first question, we're not going to get into more detail about what we're doing. You know, one of the I mean, the primary reason not to do that is. You know, we run a very large derivative book. We have a very large hedging program. And we're not going to talk about things that we are working on and things that we will be doing that could be used to drive what actions we might be taking in the marketplace. That would not be in the interest of shareholders.

Speaker Change: On the first question.

Not going to get into more detail about what we're doing.

Speaker Change: One of them.

Speaker Change: The primary reason not to do that is.

Speaker Change: We run a very large derivative book, we have a very large hedging program and we're not going to talk about things that we are working on and things that we will be doing that could be used to derive what actions we might be taking in the marketplace that would not be in the interest of shareholders.

Speaker Change: Okay.

Ryan Krueger: One moment for our next question. Our next question is going to come from the line of Ryan Krueger with KBW. Your line is open. Please go ahead. Hey, thanks. Good morning. I guess just one more question on the changes you're making to the hedging strategy. I understand the simplification.

Speaker Change: Thank you one moment for our next question.

Speaker Change: Our next question is going to come from the line of Ryan Krueger with <unk>. Your line is open. Please go ahead.

Ryan Krueger: Hey, Thanks, good morning.

Ryan Krueger: I guess just one more question on the changes youre, making to that the hedging strategy I understand the simplification.

Ryan Krueger: I guess I was just hoping to better understand, like, what is it, like, how do you expect the changes to, from a practical standpoint, to benefit the company going forward? Like, what are the intended outcomes of what you're doing? And then are you making changes along the way, or are you more studying what you want to do, and then you're going to make all the changes at once?

Ryan Krueger: I guess I was just hoping to better understand like what.

Ryan Krueger: What is it.

Ryan Krueger: How do you expect the changes to stomach.

Ryan Krueger: From a practical standpoint to benefit the company going forward like what are the.

Ryan Krueger: Whatever the intended outcomes of what Youre doing in men are you, making changes along the way or are you more.

Ryan Krueger: Studying what you wanted to do and then Youre going to make all the changes at once later this year.

Ryan Krueger: Yeah, so it is more the latter for your second question. So we will decide what we're going to do. We will then implement. So it is not a gradual approach. It is. It is more as you described.

Ryan Krueger: Yes so.

Ryan Krueger: It is more of the ladder for your second question. So we will decide what we're going to do we will then implement so it is not a gradual approach it is.

Ryan Krueger: It is more as you.

Eric Steigerwalt: I would go back to your first question, you know, I highlighted that an underlying goal here is simplification. So if we look at our block of business, historically... The approach we took managing this block of business with S.H.I.E.L.D. and V.A. was driven by the capital benefits that we were achieving from writing S.H.I.E.L.D. relative to the offset of V.A. That had an inherent level of complexity that was More than tolerable, given the clear capital benefit that we... As we have now achieved what we have targeted since the separation, which is a balanced risk profile between the VA block and our SHIELD block, we have decided that we would like to pivot away from complexity toward simplification.

Ryan Krueger: Right.

Ryan Krueger: I would go back to your first question.

Ryan Krueger: I highlighted that.

Ryan Krueger: And underlying goal here is simplification.

Ryan Krueger: So if we look at our block of business historically.

Ryan Krueger: Historically.

Ryan Krueger: The approach we took managing this block of business with shield and VA.

Ryan Krueger: Was driven by the capital benefits that we were achieving from writing shield relative to the offset of VA that had an inherent level of complexity that was.

Ryan Krueger: More than tolerable, given the clear capital benefit that we were getting as we have now achieved what we have targeted since the separation, which is a balanced risk profile between the VA block and our shield block, we have decided that we would like to pivot away from complexity towards.

Eric Steigerwalt: And so that is the overarching goal of what we're doing here.

Ryan Krueger: Simplification.

Ryan Krueger: <unk> and so that is the overarching goal of what we're doing here.

Ryan Krueger: Got it. And then, are you able to give us any perspective on how the VA HEDS program performed in the volatility of April? Uh, sure. So...

Speaker Change: Got it and then are you able to give us any perspective on how the VA hedge program performed in the volatility of April.

Speaker Change: Sure so.

John Rosenthal: You know, there are, we look at grids when we think about our up to $500 million max loss tolerance, and those grids have the equity market and interest rates on the X. And if we look at our vertical for the equity market, now, again, this is a grid. There are obviously other things that happen in market environments. Basis risk, for example, is something you've heard us talk about in the past, is one thing. But if we look at our grid today and you think about this vertical of the down equity market, We show very little impact.

Speaker Change: There are.

Speaker Change: We look at grids, when we think about our up to $500 million Max loss tolerance, and those grids have the equity market and interest rates on.

Speaker Change: On the axes.

Speaker Change: And if we look at our vertical for the equity market now again this is a grid.

Speaker Change: There are obviously other things that happen in market environments.

Speaker Change: Basis risk for example is something you've heard us talk about in the past is as one thing.

Speaker Change: But if we look at our grid today and you think about this vertical of the down equity market.

We show very little impact.

John Rosenthal: between zero and down third. And we show an impact between down 30 to down 50 that is underneath that $500 million max loss.

Speaker Change: Between zero and down 30.

Speaker Change: And we show an impact between down 30 to down 50 that is.

Speaker Change: Underneath that $500 million Max loss.

Speaker Change: Okay.

Speaker Change: Thank you.

Wilma Burdis: Thank you and one moment for our next question. Our next question is going to come from the line of Wilma Burdis with Brayman James. Your line is open. Please go ahead. Hey, good morning.

Speaker Change: Thank you and one moment for our next question. Our next question is going to come from the line of William <unk> with Raymond James Your line is open. Please go ahead.

Eric Steigerwalt: Could you just talk a little bit more about your share repurchase program and how it works, given it seems like you leaned in on buybacks in April when prices were low? Thanks.

Speaker Change: Hey, good morning could you just talk a little bit more about your share repurchase program and how it works.

Speaker Change: Given it seems like you leaned in on buybacks in April in prices or Olympics.

Eric Steigerwalt: I'll start if Ed wants to jump in, he can. In the first quarter, I think I laid this all out, but I'll just tell you again, we repurchased $59 million. In... Since then, since the end of the first quarter, through the 6th of May, we repurchased another $26 million. Um... And so, you know, we haven't you can you can look historically at what we've done.

Speaker Change: I'll start if Ed wants to jump any Ken.

Speaker Change: In the first quarter I think I laid this all out but I will just tell you again, we repurchased $59 million.

Speaker Change: In.

Speaker Change: Since then since the end of the first quarter through the sixth of May we repurchased another $26 million.

Speaker Change: And so we have you can you can look historically at what we've done we haven't given any forward looking guidance in quite a while.

Operator: We haven't given any forward looking guidance in quite a while. So, you know, each time we're giving what we were purchased in the quarter, and then up to close to the call date, that's what we did in the first quarter, and then post the first quarter through May 6th. Thank you.

Speaker Change: So.

Speaker Change: And each time, we're giving what we repurchased in the quarter and then up to close to the call date.

Speaker Change: That's what we did in the first quarter and then post the first quarter through may 6th.

Speaker Change: Thank you.

Speaker Change: Thank you one moment for our next question and again, if you would like to ask a question. Please press star one on your telephone and our next question does come from the line of Tom Gallagher with Evercore ISI. Your line is open. Please go ahead.

Operator: And again, if you would like to ask a question, please press star 11 on your telephone.

Tom Gallagher: And our next question does come from the line of Tom Gallagher with Evercore ISI. Your line is open. Please go ahead. Good morning. I guess first question is the... Was the $100 million to $150 million of, let's call it, normal capital generation excluding the mean reversion, was that more or less in line with your plan? Like, did the hedges actually perform the way they were supposed to on both the VA and the RILA side this quarter, you know, within a certain tolerance? And then I guess I'm a little surprised to hear you saying, sounds like everything's being re-evaluated from a hedging standpoint.

Tom Gallagher: Good morning, I guess first question is the.

Speaker Change: What is the $100 million to $150 million of let's call. It normal capital generation. Excluding the mean reversion was that was that more or less in line with your plan like the hedges actually perform the way they were supposed to you on both the VA and the wireless side.

Tom Gallagher: This quarter.

Tom Gallagher: Within within a certain tolerance.

Speaker Change: And then I guess I'm, a little surprised to hear you Shang.

Speaker Change: It sounds like everything is being reevaluated from a hedging standpoint, you guys have been at this for a year.

Ed Spehar: You guys have been at this for a year. So is it, like, what's changed other than performance and about what you're seeing? Is it you've done more work on the cash flow projections and now you're wanting to have better outcomes? Like, why is it you're now re-evaluating trying to simplify what you've been spending a lot of time on already? Just want to understand kind of what's going on behind the scenes.

Speaker Change: So is it like.

Speaker Change: What's changed.

Speaker Change: Other than performance and about what Youre seeing is it you've done more work on the cash flow projections and now youre wanting to have better outcomes. Like why is it you are now reevaluating trying to simplify what you've been spending a lot of time on already just just want to understand kind of what's going on behind this.

Ed Spehar: Thanks. Yeah, so let me start with your first question. I think I said in my prepared remarks that results were in line with our expectations, and so I would just reiterate that again, that the first quarter statutory results were close to what we thought they were going to be. And obviously, the performance of our hedge portfolio is a key component of that expectation. The second part of your question, I guess I would go back first to what I said to Ryan. And second, in terms of the timeline here, we started talking about hedging new business on a standalone basis on our third quarter earnings call.

Speaker Change: Thanks.

Okay.

Speaker Change: Okay.

Speaker Change: Yes, So let me start with your first question I think I said in my prepared remarks that results were in line with our expectations and so I would just reiterate that again that.

Speaker Change: The first quarter statutory results were close to what we thought they were going to be.

Speaker Change: And obviously the performance of our hedge portfolio is a key component of that expectation.

Speaker Change: The second part of your question I guess I would go back first to what I said to Ryan.

Speaker Change: And.

Speaker Change: Second in terms of the timeline here, we started talking about hedging new business on a standalone basis on our third quarter earnings call.

Ed Spehar: We talked about some additional steps on our fourth quarter call, and we have been talking about how we are working on what revised approach might make sense for this in-force VA and first-generation shield, given the size of the block. given the fact that we have this more balanced risk profile than what we had seen historically. So, I don't know that it's, I guess I would characterize it a little differently than what you have, which is, this is not a surprise. We've been talking about this. It's not a wholesale change. I just described to you, for example, that we're very protected for, and what we believe we're very protected for, an adverse market environment, which has always been our overarching goal to protect the statutory balance sheet.

Speaker Change: We talked about some additional steps on our fourth quarter call.

Speaker Change: And we have been talking about how we are working on what revised approach might make sense for this in force VA in first generation shield given the size of the blocks now given the fact that we have this more balanced risk profile than what we had seen historically.

Speaker Change: Quickly.

Speaker Change: So I I don't know that it's I guess I would characterize it a little differently than what you have which is.

Speaker Change: This is not a surprise we've been talking about this.

Speaker Change: It's not a wholesale change.

Speaker Change: <unk> described to you for example that we're very protected for.

Speaker Change: And what we believe were very protected for an adverse market environment, which has always been our.

Speaker Change: Overarching goal to protect the statutory balance sheet, so I wouldn't.

Ed Spehar: So I wouldn't... I wouldn't say that it's a wholesale change. It's an approach that we think now makes sense, given where we are in this current market environment with the current mix of business that we have.

Speaker Change: Yeah.

Speaker Change: I wouldn't say that it's a.

Speaker Change: It's a wholesale change it's an approach that we think now makes sense given where we are in this current market environment with the current mix of business that we have.

Ed Spehar: Okay, appreciate that, Ed. So really, this isn't going back to the drawing board, wanting to do something meaningfully different.

Speaker Change: Okay.

Speaker Change: Okay I appreciate that Ed show.

Speaker Change: So really this is going back to the drawing board wanting wanting to do something meaningfully different would you say it's.

Ed Spehar: Would you say it's, you know, not wanting to pigeonhole you to, you know, a soundbite, but not, would you say the framework's in place and this is going to be Making some changes to it, or is it possible there's going to be something more meaningful? I just want to make sure I'm fully understanding what the message is. Yeah, this is not going back to the drawing board. Okay.

Speaker Change: Yeah.

Speaker Change: Not wanting to pigeonhole you too.

Speaker Change: A soundbite, but.

Speaker Change: But not would you say the frameworks in place and this is going to be.

Speaker Change: Yes.

Speaker Change: Some changes to it or is it possible, there's going to be something more meaningful.

Speaker Change: I just wanted to make sure I'm fully understanding what the matters.

Speaker Change: This is not going back to the drawing board.

Speaker Change: Okay.

Speaker Change: Thank you okay.

Alex Scott: Thank you and one moment for our next question. Our next question comes from the line of Alex Scott with Barclays. Your line is open. Please go ahead. Hey, good morning. Maybe the first one for you, just on the cash flow projections you've given us over time, and I know you don't have any that are sort of officially out there right now, but I feel like, you know, there was a time where, you know, we expected these cash flows to like, really inflect up over time. You know, it seems to be getting pushed out. Is it just keep getting pushing?

Speaker Change: Thank you and one moment for our next question.

Speaker Change: Our next question comes from the line of Alex Scott with Barclays. Your line is open. Please go ahead.

Alex Scott: Hey, good morning.

Alex Scott: Maybe the first one for you just on.

The cash flow projections, you've given us over time and I know you don't have any that are sort of officially out there right now.

Alex Scott: But I feel like there was a time, where we expect that these cash flows so I really inflect up over time.

Alex Scott: It seems to be getting pushed out is it just keep getting pushing is it getting pushed out or.

Alex Scott: Is it getting pushed out or? You know, at this point, is it not reasonable to expect the cash flows would have left up on the enforced block? I'm just trying to understand that. And, you know, if, if it's not like, what, what is it that's causing that? And like, why, why wouldn't you need to like, you know, adjust your balance sheet for that? If.

Alex Scott: At this point is it not reasonable to expect the cash flows would inflect up on the in force block I'm, just trying to understand that.

Alex Scott: No.

If it is not like what what is it that's causing that and like why or why wouldn't you need to.

Alex Scott: Just your balance sheet for that.

Alex Scott: If it's not coming to fruition.

Alex Scott: Yeah, could you clarify – good morning, Alex. Could you clarify that last comment you trailed off a little bit? Adjust our balance sheet for what? Sure, sure. I'm saying if you thought that eventually the reserves would release and you'd have more cash flow coming through, and they're not… Then do we need to be concerned that if you don't find some strategic alternatives here that you'd need to make a bigger adjustment to the statutory balance sheet, I guess, or the gap balance sheet, right? Which I guess is more the gap balance sheet just given the gap equity is a heck of a lot higher than the stat, but I'm just trying to think about risk of.

Alex Scott: Yes could you clarify.

Alex Scott: Alex could you clarify that last comment you trailed off a little bit adjust our balance sheet sure sure I'm sorry.

Alex Scott: Thing if you thought that eventually the reserves would release and you'd have more cash flow coming through and they're not.

Speaker Change: Then do we need to be concerned that if you don't find some strategic alternatives here that you would need to make a bigger adjustment to the statutory balance sheet I guess or.

Speaker Change: The GAAP balance sheet, right, which I guess is more of a GAAP balance sheet just given the.

Speaker Change: The GAAP equity is a heck of a lot higher than that but I'm just trying to think about risk of.

Alex Scott: You know, risk around reserves, liability, valuation, whether GAAP or STAT, if there's no strategic alternatives and if the cash flows really aren't conflicting upwards the way that you guys have kind of thought over the last few years. Yeah. So, Alex, there's a lot that you're talking about here. And I mean, you know, I mean, look, we're not going to discuss cash flow projections prior to having cash flow projections. I mean, we have put them out. You can deduce what you would like from what we have put out in the past. But, you know, as I've said over the years, this is a very significant effort to create those cash flows.

Speaker Change: Yes, the risk around reserve liability valuation, whether GAAP or stat.

Speaker Change: There is no strategic alternatives and if the cash flows really arent inflect upwards. The way that you guys kind of thought over the last few years.

Speaker Change: Yeah. So Alex there is a lot that you are talking about here.

Speaker Change: I mean look we're not going to discuss cash flow projections prior to having cash flow projections.

Speaker Change: I mean, we have put them out you can deduce what you would like from what we have put out in the past but.

Speaker Change: As I've said over the years. This is a very significant effort to create those cash flows and as I said on the last call.

Eric Steigerwalt: And as I said on the last call, you know, we have things that we're working on. To make sure that we have the right positioning, like I just said, on this revision to how we're going to hedge this Enforce VA and first-generation shield block, before we would be putting out new projected cash flows. So it's number one, the priority of the people in the finance organization and elsewhere to work on this simplification effort for the hedging strategy. And then after that, it would be to turn our attention to, you know, other things which would include the cash flow projections.

Speaker Change: We have things that we're working on.

Speaker Change: Sure.

Speaker Change: Two.

Speaker Change: To make sure that we have the right positioning like I just said.

Speaker Change: This revision to how we're going to hedge. This this this in force VA in first generation Shield block.

Speaker Change:

Speaker Change: Before we would be putting out new projected cash flows. So its number one priority of the people in the finance organization and elsewhere to work on this.

Speaker Change: Simplification effort for the hedging strategy.

Speaker Change: And then after that it would be to turn our attention to.

Speaker Change: Other things, which would include the.

Speaker Change: The cash flow projections. So clearly we're in May right now and you could probably deduce from my comments that the mid year target for releasing the long term statutory free cash flow projections is no longer realistic I had suggested on our last quarter call that.

Eric Steigerwalt: So, you know, clearly we're in May right now, and you could probably deduce from my comments that the midyear target for releasing the long-term statutory free cash flow projections is no longer realistic. I had suggested on the last quarter call that, you know, there was a chance it was slipping because of the other things we're focused on, and I would confirm now that, you know, we don't have an updated date for when we would do it, but I don't think we would continue to stick with the midyear that we had said to you in the past.

Speaker Change: There was a chance it was slipping because of.

Speaker Change: The other things, we're focused on and I would confirm now that.

Speaker Change: We don't have an updated date for when we would do it but I don't think we would continue to stick with the mid year that we had said to you in the past.

Eric Steigerwalt: And so, you know, everything else that you're asking, I think, you know, you would have to think about what questions you would want to ask, you know, after you see the updated numbers, because, you know, we're not going to go into discussions about cash flow projections that were put out. I guess last September. Oh, sorry. Sorry. Two Septembers ago.

Speaker Change: And so everything else that you are asking I think.

Speaker Change: You would have to think about what questions you would want to ask.

Speaker Change: After you see the updated numbers because.

Speaker Change: We're not going to go into discussions about.

Speaker Change: Cash flow projections that were put out.

Speaker Change: I guess last September.

Speaker Change: Alright, alright.

Speaker Change: Alright, sorry to septembers ago.

Eric Steigerwalt: That's helpful, and thank you for entertaining the question, maybe one that's much more on a positive note. You know, as much as we focus about the in-force, you know, you all have talked about the growth opportunity. When you think across RILA demographic changes, in-plan annuities and the potential for that to take a much bigger share of 401k assets over time. I mean, how do you think about the value there and just, you know, what you can do with that if you had more capital? I mean, if Brighthouse had more capital flexibility, would it be a game changer for what you could do in terms of growth into some of those opportunities?

Speaker Change: Got it.

Speaker Change: That's helpful and thank you for entertaining the question maybe one that's much more on a positive note.

Speaker Change: As much as we focus about the in force you all talked about the growth opportunities.

Speaker Change: When you think of Cros.

Speaker Change: The demographic changes in plan annuities and the potential for that to take much bigger share 401, K assets overtime.

Speaker Change: I mean.

Speaker Change: How do you think about the value there and just.

Speaker Change: What you can do with that if you had more capital flexibility.

Speaker Change: If brighthouse had more capital flexibility would it be a game changer.

Speaker Change: Could do in terms of growth into some of those opportunities.

Eric Steigerwalt: And how big could those opportunities be?

Speaker Change: Because of this opportunity is big.

Eric Steigerwalt: Hey, I'll start and Myles or David might want to jump in. You know, so far, we've been able to grow everywhere we want to. I don't think we said this. Maybe I said it in my prepared remarks. I can't remember. But March was our highest rile of sales month ever. So, I mean, we're growing well. Life Path Paycheck, I think you mentioned, that's going to take some time, obviously. And I've said over and over that the flows will be intermittent, but we certainly expect more this year. And I and others, you know, think that the growth possibilities are fantastic, potentially.

Speaker Change: Hey, I'll start.

Speaker Change: Miles or David might want to jump in.

Speaker Change: So far we've been able to grow everywhere, we want to I don't think we said this maybe I said it in my prepared remarks, I can't remember, but.

Speaker Change: March was our highest.

Speaker Change: Riley sales months ever.

Speaker Change: So I mean, we're.

Speaker Change: We're growing well.

Speaker Change: Lifetime Paycheck, I think you mentioned.

Speaker Change: That's going to take some time, obviously and I've said over and over that the flows will be intermittent, but we certainly expect more of this year.

Speaker Change: And I and others think that the growth possibilities are fantastic potentially.

Myles Lambert: We're not constrained there. You do have to remember, right, as David said, I thought pretty eloquently, it's about growth, it's about, you know, our fabulous distributors, but it's also about pricing discipline. So, you know, we're constantly looking at that balance. And, you know, right now, I don't feel like we're constrained to grow. We've never once, I have never once, I'm staring at Myles here, told him, you know, you can't sell. He's unconstrained, but we are going to run this company for profitable growth.

Speaker Change: We're not constrained there.

You do have to remember right as David said I thought pretty eloquently, it's about growth, it's about our fabulous distributors, but it's also about pricing discipline. So we were constantly looking at that balance.

Speaker Change: And right now I don't feel like we're constrained to grow we've we've never once I have never once I'm staring at miles here.

Speaker Change: You can't sell.

Speaker Change: He is unconstrained, but but we are going to run this company for profitable growth.

Myles Lambert: David or Myles, you want to add anything? You nailed it, Eric.

Speaker Change: David or miles you want to add anything.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Thank you.

Operator: Thank you and one moment for our next question.

Speaker Change: Thank you and one moment our next question.

Wes Carmichael: And our next question comes from the line of Wes Carmichael with Autonomous Research. Your line is open. Please go ahead. Hey, good morning. Thanks for taking the follow up. I had a question on surrenders in the annuity business. And if I look at the AUM roll forward for VA and SHIELD, that surrender rate, maybe it's consistent quarter to quarter, but it's been picking up steam for for quite some time. So just hoping you could talk a little bit about what you're seeing is that legacy VA what what types of products are, are surrendering here? And would you expect that pace?

Speaker Change: And our next question comes from the line of Wes Carmichael with Autonomous Research. Your line is open. Please go ahead.

Speaker Change: Hey, good morning, Thanks for taking the follow up I had.

Speaker Change: Question on surrenders in the annuity business and if I look at the AUM roll forward for VA and shield that surrender rate, maybe it's consistent quarter to quarter, but it's been picking up steam for for quite some time. So just hoping you could talk a little bit about what youre seeing is that legacy VA, what what types of products are doing.

Hearing here and would you expect that pace to continue.

David Rosenbaum: Yep, thanks, Wes.

David Rosenbaum: So, you know, very similar remarks to John's question earlier, but the drivers that we've seen over the last five to six quarters continued in the first quarter of 2025. So we're seeing full surrenders of SHIELD and VA. And you think about SHIELD, we have more business coming out of the surrender charge period. Outflows are weighted to VA, continue to benefit from the outflows of the capital-intensive legacy blocks, but given the volume of business that we've written, you know, SHIELD is becoming a larger contributor to the outflows, and from time to time, based on sales volumes, fixed annuities as well.

Speaker Change: Yes, thanks, Wes so.

Speaker Change: Very similar remarks to Johns question earlier, but the drivers that we've seen over the last five to six quarters.

Speaker Change: Continued in the first quarter of 2025, so we're seeing full surrenders shiel.

Speaker Change: Shield NBA and you think about shield, we have more business coming out of the surrender charge period.

Speaker Change: Outflows are weighted to VA continued to benefit from the outflows of the capital intensive legacy blocks.

Speaker Change: But given the volume of business that we've written.

Speaker Change: <unk> is becoming a larger contributor to the outflows and from time to time.

Speaker Change: Based on sales volumes fixed annuities as well.

David Rosenbaum: So, kind of where we think, or where I think about the flows for 2025.

Speaker Change: So kind of where we think think about the flows for 2025.

David Rosenbaum: At the 2024 level or higher in 2025 is kind of the current expectation, and really the difference year over year is more business from our fixed annuities coming out of surrender charge, and that's sort of weighted to the second half.

Speaker Change: At the 2024 level or higher in 2025 is kind of the current expectation and really the difference year over year as more business.

Speaker Change: From our fixed annuities coming out of surrender charge and that sort of weighted to the second half of the year.

David Rosenbaum: Got it. That's helpful, David.

Speaker Change: Got it that's helpful. David.

Wes Carmichael: And just last one. I think last quarter, there was a $100 million or so cash injection into Blick from the parent. And as we move forward to this quarter, RBC has improved here. I guess would you expect capital that's injected down there to stay down there? It seems like you've got a lot of liquidity at the holdco, but I guess in my mind, it always gives you a bit more flexibility if capital is at the top.

David Rosenbaum: Just last one I think last quarter, there was a $100 million so cash injection into Blake from the parent.

Speaker Change: As we move forward to this quarter RBC has improved here I guess would you expect capital that's injected down there to to stay down there. It seems like you've got a lot of liquidity at the Holdco, but I guess in my mind. It always gives you a bit more flexibility if capital is at the top of the house.

Ed Spehar: Yeah, Wes, hey, I would just go back to what I said, I think, in response to Suneet's question, which is our three-year financial plan does contemplate dividends to the holding company.

David Rosenbaum: Okay.

David Rosenbaum: Yes, Wes Hey, I would just go back to what I said I think in response and response to <unk> question, which is are our three year financial plan does contemplate a dividends to the holding company.

David Rosenbaum: Got you thanks.

Tom Gallagher: Thank you and one moment for our next question. Our next question is a follow-up question from the line of Tom Gallagher with Evercore ISI. Your line is open. Please go ahead. Thanks. Hey, Eric, just wanted to get your perspective. We obviously have had two recent industry transactions that certainly matter for Brighthouse from a business mix standpoint on the private side. You had the Met VA risk transfer deal, you had the Lincoln partnership announcement with Bain. I'm sure you guys are paying close attention to those.

David Rosenbaum: Thank you and one moment for our next question.

David Rosenbaum: Our next question is a follow up question from the line of Tom Gallagher with Evercore ISI. Your line is open. Please go ahead.

David Rosenbaum: Yes.

David Rosenbaum: Thanks.

Eric.

David Rosenbaum: Just wanted to get your perspective.

David Rosenbaum: We obviously have had.

David Rosenbaum: Two recent industry transactions that certainly matter for Brighthouse and from a business mix.

David Rosenbaum: Standpoint on the private side.

David Rosenbaum: You had the VA risk transfer deal you had the Lincoln partnership announcement with Bain.

David Rosenbaum: I'm sure you guys are paying close attention to those anything you read into those.

Eric Steigerwalt: Anything you read into those on, we'll call it market pricing points as it relates to private-public, anything that informs you on your business risk, market dynamics, anything you can comment on either one of those or kind of in a broader sense, what do you think is happening from an industry standpoint? Thanks. Sure, Tom. So you're referring to the Bain-Lincoln transaction, I think, and then I think you mentioned the MetLife transaction. Maybe overall, look, you're right, and we've known each other for a long time. We look at everything. We look in detail at everything. We're constantly tinkering with our strategy at the edges, as any good management team would be doing.

David Rosenbaum: We'll call it.

David Rosenbaum: Market pricing point as it relates to private public.

Yes.

David Rosenbaum: Anything that inform you on your business risk market dynamics any anything you can comment on.

David Rosenbaum: On either one of those or kind of in a broader sense, what do you think's happening from an industry standpoint. Thanks.

Tom Gallagher: Sure Tom.

Tom Gallagher: Yes, so youre, referring to the Bain Lincoln transaction, I think and then I think you mentioned the Metlife transaction. So.

Tom Gallagher: Maybe overall look you are right.

Tom Gallagher: Please note any drug for a long time, we look at everything we look in detail at everything we're constantly.

Tom Gallagher: Tinkering with our strategy at the edges as any good management team would be doing so.

Eric Steigerwalt: So the Bain-Lincoln transaction, I'm not really going to talk about it. I don't think it's my place to talk about it at all, but it's interesting. And it was opportunistic, I'm sure, on their part. And we look at transactions like that with an eye towards, OK, the art of the possible. Here's another transaction that we have to look at and think about. What could it possibly mean for Brighthouse in the future?

Tom Gallagher: The Bane Lincoln transaction, I'm, not really going to talk about it I don't think it's my place to talk about it at all but it's interesting.

Tom Gallagher: And it was opportunistic I'm sure on their part.

Tom Gallagher: And we look at transactions like that with an eye towards okay. They are to the possible here's here's another transaction that we have to look about and think about.

Tom Gallagher: What could it possibly mean for bright house in the future.

Eric Steigerwalt: And then with respect to the VA transaction. Look, I can't comment on any specifics, but I will tell you this. Certainly, again, your gut is always right on stuff like this, Tom. Obviously, we're looking at it. We've been looking at this kind of stuff for years and years. We have not done a transaction. We've done other reinsurance transactions, as you know. But I would say one thing. You know, this block of business isn't... You can't logically draw a straight line to large blocks of business, right? So it doesn't really tell us anything with respect to our overall block of business.

Tom Gallagher: And then with respect to the.

Tom Gallagher: Transaction.

Tom Gallagher: Look I can't comment on any specifics, but I will tell you. This certainly again you got as always right on stuff like this Tom obviously, we're looking at it we've been looking at this kind of stuff for years and years, we have not done a transaction. We've done other reinsurance transactions as you know, but I would say one thing.

Tom Gallagher: This block of business isn't you can logically draw straight line to large blocks of business right. So it doesn't really tell us anything with respect to our overall block of business, it's a small piece and therefore, even though it is.

Eric Steigerwalt: It's a small piece. And therefore, even though at separation, which is now almost eight years ago, there were a lot of similarities between us and our former parents' blocks. You know, eight years has gone by. Very different potentially surrender patterns, et cetera. And then, of course, this is just one block. So you can't extrapolate one block to an average of much larger blocks, and really in any company's cases. However, of course, Tom, as now I've already said, we're looking at all these things. And if they could potentially be an avenue down a road that we ought to go, then at some point we could go there.

Tom Gallagher: Separation, which is now almost eight years ago, there were a lot of similarities between us and our former parents blocks.

Tom Gallagher: Eight years has gone by very different potentially surrender patterns.

Tom Gallagher: Et cetera, and then of course. This is just one block. So you can't extrapolate one block to an average of much larger blocks and really in any any company's cases. However of course time is now I've already said, we're looking at all these things and if and if if they could potentially be in <unk>.

Tom Gallagher: Avenue down a road that we ought to go then then at some point we could go there.

Eric Steigerwalt: I hope that's helpful to some degree.

Tom Gallagher: Hope that's helpful to some degree.

Tom Gallagher: That is, thanks.

Tom Gallagher: That is thanks.

Tom Gallagher: Thank you and one moment for our last question.

Jimmy Buehler: Our last question is going to come from the line of Jimmy Buehler with J.P. Morgan. Your line is open. Please go ahead. Good morning. So first, I had a question on the RBC ratio. I think, Ed, you mentioned that the mean reversion benefit was around 15 points on the RBC. I don't know if you quantified the benefit of the lower C4 charge, the seasonal impact. Could you tell us what that was?

Our last question is going to come from the line of Jimmy Miller with Jpmorgan. Your line is open. Please go ahead.

Jimmy Miller: Hey, good morning, So first I had a question on the RBC ratio I think Ed you mentioned that the mean reversion benefit was around 15 points on the RBC.

Speaker Change: I don't know if you quantified the.

Speaker Change: Benefit of the lower before George just seasonal impact.

Speaker Change: Could you tell us what that was.

Ed Spehar: Yeah, good morning, Jimmy. I did not quantify it, but I would just say, like I've said in the past, I think the first quarter of maybe 23, I made a comment about this. There was a capital benefit in the first quarter because of this C4 release, and then you will have this business risk charge release, and then you will have it come in as you write business over the course of the year. So while I have said that the strain, I used to say 20 RBC points, I'd say it's more than that now. The average, you can take whatever that number is and divide by four, but I'm telling you that the first quarter is generally going to be pretty insignificant from a strain standpoint, so you'll have more in the subsequent three quarters.

Jimmy Miller: Yes, good morning, Jimmy I did not quantify it but I would just say like I've said in the past I think the first quarter of.

Jimmy Miller: Maybe 23 I made a comment about this.

Jimmy Miller: There was a there was a capital benefit in the first quarter because of the sea for release and then you will have this business risk charge release, and then you will have it come in.

Jimmy Miller: As you write business over the course of the year so.

Jimmy Miller: While I have said that the strain.

Jimmy Miller: I used to say 20, RBC points I'd say, it's more than that now the average you can take whatever that number is and divide by four but I'm, telling you that the first quarter is generally going to be.

Jimmy Miller: Pretty insignificant from a strained standpoint, so youll have more in the subsequent three quarters.

Ed Spehar: So, and then I think in the past, your comments about five points a quarter and then that coming back sort of implies that it would be a five, maybe 10 point benefit. But if I'm not off by a lot, is it reasonable to assume that your RBC could drop in 2Q as at least that tailwind goes way, obviously the mean reversion tailwind goes away, assuming normal hedging results, assuming normal statutory results outside of hedging.

Jimmy Miller: So and I think in your in the past year comments about five points a quarter and then that's coming back sort of implies that it would be five maybe 10 point.

Jimmy Miller: Benefit but if.

Jimmy Miller: If I'm not off by a lot is it reasonable to assume that that that your RBC could drop in Tokyo as the.

Jimmy Miller: At least that failed when goes way obviously, the mean reversion tailwind goes away assuming normal hedging results, assuming normal statutory results outside of hedging.

Ed Spehar: Yeah, so, Jimmy, I guess, I mean, I said we don't give annual RBC forecasts, so I'm certainly not going to get into quarterly RBC forecasts. Sorry.

Speaker Change: Yes, so Jimmy I guess, I mean, I said, we don't give annual RBC forecast, so I'm, certainly not going to get into quarterly RBC forecast sorry.

Eric Steigerwalt: And then just on the strategic initiative that you're thinking about, it seems like Capital is not a constraint for growth. So is the reason that you've thought of doing things and some of the actions that you've already taken more to just improve your capital cushion on the balance sheet from a sort of balance sheet standpoint as opposed to accelerating growth? Is that a fair? We're dueling buttons here, Jimmy. Look, we're trying to unlock capital all the time, and we're going to continue to do that. It helps you eventually remain unconstrained from a growth point of view.

Jimmy Miller: Yeah.

Jimmy Miller: And then just on the strategic initiatives that you are thinking about it seems like.

Jimmy Miller: Capital is not a constraint for growth. So is the reason that you've thought of doing things and some of the actions that you've already taken more to just improve your capital cushion on the balance sheet for from.

Jimmy Miller: Sort of balance sheet standpoint, as opposed to it.

Jimmy Miller: <unk> growth is that a fair point.

Jimmy Miller: We're compete were dueling.

Jimmy Miller: Buttons here Jimmy.

Jimmy Miller: Yeah.

Jimmy Miller: Look we're trying to unlock capital all the time and we're going to continue to do that.

Jimmy Miller: It helps you eventually remain unconstrained from a from a growth point of view.

Eric Steigerwalt: So you've seen some of the ones that we've already executed on, and you should expect us to be looking at other things as well. I want to try to stay ahead of the curve so that we can remain, as I already said, unconstrained from a growth perspective, both on the retail side and on the institutional side.

Jimmy Miller: So you've seen some of that some of the ones that we've already executed on and you should expect us to be looking at other things as well.

Jimmy Miller: Want to try to stay ahead of the curve. So that we can remain as I already said unconstrained from a growth perspective, both on the retail side and on the institutional side.

Jimmy Buehler: And just lastly, if you look at your valuation, obviously the market's concerned about your capital and hedges and other results. You've been on the buying back stock, which implies that you're comfortable with how things are and you're willing to let capital out the door to buy stock at a reasonable price. So for a company that's buying back stock and has been buying back very actively over the past several years, considering the sale at such a low multiple would seem odd unless there was a need for capital and sort of a dire need for capital. Otherwise, you're capitalizing your business at a relatively low valuation.

Jimmy Miller: And just lastly, if you look at your valuation obviously the market is concerned about your capital and hedges the results you've been buying back stock, which implied that.

Speaker Change: You're comfortable with how things are and you're willing to let capital out the door to buy stock at a reasonable price. So for a company that's buying back stock and had been buying back very actively over the past several years, considering the sale at such a low multiple would seem odd unless there was a need for capital.

Speaker Change: And sort of a dire need for capital otherwise you're capitalizing your business at all.

Speaker Change: At a relatively low valuation so what are your views on that because I can understand the logic of someone.

Eric Steigerwalt: So what are your views on that? Because I can understand the logic of someone having somebody come in and take a small stake and give you a little bit of more cushion, but exploring the sale of an entire company at a multiple that's so low where you're so actively buying back stock seems a little odd, unless you really need the money.

Speaker Change: Having somebody come in and take a small stake and give you a little bit more cushion, but exploring the sale of an entire company at a multiple that's so low there you're actively selectively buying back stock seems a little odd.

Speaker Change: Unless you really need the money.

Eric Steigerwalt: Hey, Jimmy. It's Eric. Look, I mean, I've already commented now a couple of times during the call with respect to the fact that we have not been constrained with respect to growth since the beginning. And then I'm going to assume that you're asking about some reports in the press, and I'm just going to say we don't comment on market rumors or speculation, so I'm just going to leave it at that. All right, good luck, thanks.

Hey, Jimmy it's Eric.

Speaker Change: Look I mean I've already commented on now a couple of times during the call with respect to the fact that we we have not been constrained with respect to growth.

Speaker Change: Since the beginning.

Speaker Change: And then I'm going to assume that you're that you're asking about some reports in the press and I'm just going to say, we don't comment on market rumors or speculation so I'm just going to leave it at that.

Speaker Change: Alright, good luck thanks.

Dana Amante: Thank you and I'm showing no further questions at this time and I would like to hand the conference back over to Dana Amante for closing remarks. Thank you, Michelle, and thank you, everyone, for joining the call today. Have a great day. This does conclude today's conference call. Thank you for participating, and you may now disconnect. Thank you for watching!

Speaker Change: Thank you and I'm showing no further questions at this time I would like to hand, the conference back over to Dana Monte for closing remarks.

Dana Monte: Thank you Michelle and thank you everyone for joining the call today have a great day.

Dana Monte: This does conclude today's conference call. Thank you for participating and you may now disconnect.

Dana Monte: Okay.

Dana Monte: Okay.

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Dana Monte: Good.

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Dana Monte: Yes.

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