Axa Equitable Holdings Inc — Earnings Call Q3 2026

Operator: Hello everyone, thank you for joining us and welcome to Equitable Holdings Inc. Third Quarter 26 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. I will now hand the conference over to Erik Bass, chief strategy officer and head of investor relations. Erik? Please go ahead. Erik Bass: Thank you. Good morning, and welcome to equitableholdingsthird0.252020earningscall.materialsfortoday'scallcanbefoundonourwebsite@ir.equitableholdings.com. Before we begin, I would like to note that some of the information we present today is forward looking and subject to certain SEC rules and regulations regarding disclosure. Our results may differ materially from those expressed in or indicated by such forward looking statements. Please refer to the safe harbor language on Slide 2 of our presentation for additional information. Joining me on today's call are Mark Pearson, President and Chief Executive Officer of Equitable Holdings Robin Matthew Raju, our Chief Financial Officer Nick Lane, President of Equitable Financial Seth Perry Bernstein, chief executive officer of AllianceBernstein. And Tom Simeone, chief financial officer of AllianceBernstein. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles. Also known as non GAAP measures. Reconciliations of these non GAAP measures to the most directly comparable GAAP measures and related definitions be found on the Investor Relations portion of our website and in our earnings release slide presentation and financial supplement. We will also refer to the pending transaction with Corebridge. Any statements about the transaction made during this call are not an offer of securities. A registration statement containing a prospectus will be filed with the SEC in connection with the transaction. I will now turn the call over to Mark. Mark Pearson: Good morning, and thank you for joining today's call. Equitable's third quarter results highlight the company's strong momentum heading into the merger with Corbridge. As we delivered double digit growth in earnings per share and positive organic growth across all businesses. The current macro environment and population demographics underscore the need for the financial advice and product solutions we provide. As our customers face rising costs, higher interest rates, and limited options for guaranteed retirement income. As we build a new Equitable and leverage our scale, distribution breadth, and complementary product offerings we see tremendous opportunity to reach more customers expand our business, and deliver value for shareholders. Starting on Slide 4, I will provide a few highlights from the third quarter. We reported non GAAP operating earnings per share of $2.13 or $1.98 excluding notable items. Which is up 19% year over year. Through the first 3 quarters of the year, EPS excluding notable items has increased 22% from 2025. Consistent with our guidance for greater than 15% growth in 2026. We ended the quarter with $1.2 trillion of assets under management and administration, up 4% year over year. Driven by positive net flows and uplift from favorable equity markets. We returned $320 million capital to shareholders during the quarter, which equates to a 59% payout ratio. Year to date, we have a payout ratio of 66% consistent with our 60% to 70% target range. Organic growth trends remain solid across our businesses. In Retirement, we had total net inflows of $1.1 billion driven by 14% growth in overall sales. This includes record rider sales, and we continue to see strong demand for our protected equity and retirement income solutions. We also had $500 million of spread lending net issuance, which is not included in net flows. Turning to wealth management, we continue to see strong new business momentum. With record $2.7 billion of advisory net inflows. Advisor productivity increased 14% on a trailing 12-month basis. Finally, Alliance Bernstein reported total net inflows of $6.6 billion with strength in institutional offsetting outflows in retail and private wealth. AB's private markets AUM ended the quarter at $105 billion up 33% year over year. And above the $90 billion to $100 billion target level. During the quarter, AB expanded its private markets platform, by enhancing its commercial mortgage loan capabilities and onboarding $12 billion of loans from Equitable. These assets will begin to generate fees in the fourth quarter and more importantly, AB now has a more robust offering to win mandates, from third party clients. This is another example of the flywheel benefits between Equitable and AB. We also completed the sale of our employee benefits business to the heart effective October 1st. While we like the employee benefits market, we lack the scale to effectively compete and grow the to a meaningful level of earnings. Lastly, we continue to make progress in establishing the operating model for new Equitable. During the quarter, we selected the Board of Directors for the new company. And we have named the top 500 leaders for the organization. So that we can hit the ground running in January. Regulators have begun to sign off on the merger and we expect to receive all required approvals in the fourth quarter so that we can close at year end. Moving to Slide 5, I want to spend a minute discussing the industry backdrop and why we see tremendous growth opportunity for new Equitable. US retirement represents 1 of the most attractive for financial services that I have seen anywhere in the world. The total US retirement asset pool has grown 7% annually over the past 10 years, and now exceeds $50 trillion representing 65% of global retirement assets. More than half of these assets sit in IRAs or defined contribution plans, where individuals control the funds and bear the investment risk. As a result, there is an incredible need for financial advice and solutions to help Americans manage market risks and ensure they have sufficient retirement income. Demographic factors have further crystallized this need. With over 4 million Americans turning 65 each year. This baby boomer retirement wave creates significant money in motion with nearly $1 trillion of IRA rollover activity each year. And the life insurance industry is well positioned to capture significant inflows. We see rising demand from customers and advisers for protected equity solutions like RILAs, and the guaranteed retirement income that our industry is uniquely positioned to provide. Annuity sales have increased at a 16% CAGR over the past 5 years, are approaching $500 billion annually. Higher interest rates enhance the consumer value proposition of annuities, providing another tailwind for sales moving forward. In addition, the inclusion of guaranteed income allocations within target date funds expands access to a broader pool of customers and creates a sizable new market. Finally, demographics will drive significant wealth transfer activity. Shifting assets to the next generation and underscoring the need for personalized financial advice. As a result, we view retirement savings, decumulation, and wealth management as secular growth opportunities. And meeting this need is central to Equitable's mission and business model. As highlighted on Slide 6, the new Equitable will be very well positioned to capture the US retirement growth opportunity and deliver attractive returns to shareholders. On a trailing 12 month basis, Equitable and Corbridge have generated over $48 billion of combined annuity sales. Which is over $10 billion higher than the next largest competitor. And represents approximately 10% market share. New Equitable will be the only company with a top 5 position in each major product category. And this breadth makes us critical to distribution partners. It also provides flexibility to adapt to changing customer demand trends and pricing conditions. Importantly, our size also shows up in higher earnings. With Corebridge and Equitable generating over $4 billion of combined operating income in 2025. Our superior scale will drive multiple competitive advantages. Our differentiated ability to source liabilities, coupled with partnerships with leading asset managers, including AB, BlackRock, and Blackstone, will enable us to access more directly originated assets and achieve higher risk adjusted yields. We also expect to have lower average cost of funds, driven by a strong multichannel distribution network which includes over 5 thousand Equitable and Corbidge advisers. As alluded to earlier, the breadth of our retail and institutional product offering will give us flexibility to adjust to market conditions and allocate capital where we see the most attractive returns. In addition, our size should yield superior operational scale and lower expense ratios. Allowing more of the spread and fee income we generate to fall to the bottom line. Finally, our business model means that we capture the full value chain by acting as a manufacturer, distributor, and asset manager. This gives us multiple sources of revenue on each transaction including high multiple distribution and asset management fees. Putting it all together, we expect New Equitable to have lower average unit costs than peers. Allowing us to provide attractive consumer value while also delivering compelling growth and returns for our shareholders. This is a key strategic benefit from the merger. And it gives us a clear right to win in the large and growing U. S. Retirement market. As this becomes clear to investors, we see meaningful potential upside in our valuation. I will now turn the call over to Robin to discuss our financial results in more detail. Robin Matthew Raju: Thank you, Mark. On Slide 7, I will provide more detail on our third quarter results. On a consolidated basis, non GAAP operating earnings were $595 million or $2.13 per share, while net income was $1.1 billion or $4.05 per share. Excluding notable items, non GAAP operating earnings, per share was $1.98. Up 19% year over year. Notable items in the quarter included our annual assumption review, which had a $28 million favorable impact on operating earnings. A model update benefit of $11 million and a legal reserve accrual of $15 million We also called out a $37 million out of period reinsurance benefit in our individual life business. Which, while onetime in nature, effectively offset some of the adverse mortality reported in prior periods. Finally, we reported $20 million of below plan alternative investment returns. Our alternatives portfolio represents about 3% of our total general account. And produced an annualized return of 5% in the quarter. This was at the upper end of our 4% to 5% guidance range. But below our long term expectation of 8% to 12% returns. Higher interest rates pressured real estate returns for the quarter, and will likely remain a near term headwind. We currently forecast a low single digits return in the fourth quarter. Our consolidated tax rate was 20% for the quarter, consistent with our guidance. Putting it all together, we are pleased with the company's earnings momentum. As Mark mentioned, non GAAP earnings per share ex notable items, is up 22% year to date. Putting us well on track to achieve our guidance of greater than 15% growth for the full year. Turning to Slide 8. I will provide some further details on our segment level earnings drivers. In retirement, third quarter earnings, excluding notable items, were $409 million. Net interest margin, or NIM, increased 12% year over year and 5% sequentially. Helped by growth in general account assets and higher returns in our alts portfolio. If you exclude the impact of alternatives, core spreads, slightly decreased by 5 basis points sequentially. Which we attribute primarily to timing factors. This quarter, spreads declined due to higher cash balances, and credit earning rates for our 1-year RILE contracts. Which reset more quickly than floating rate asset yields. We expect to see some noise in quarterly spreads. Particularly during periods of volatile interest rates. And continue to forecast go forward spreads to be roughly stable with the level from the first half of 26. Fee based revenues rose 1% sequentially and 16% year over year, driven by strong separate account returns. On the expense side, DAC amortization increased $18 million sequentially. Which reflects both growth in the block and an assumption update capturing higher lapse rates. We view this level as a good baseline for the fourth quarter. Turning to asset management. AB reported earnings of $152 million roughly flat year over year. Total AUM ended the quarter at $900 billion down slightly from the second quarter as positive net flows were offset by negative fixed income returns. The average base fee rate of 37.1 basis points declined modestly due to mix shift and timing as the new $12 billion commercial mortgage loan mandate will begin to accrue fees in the fourth quarter. While some of the recent large institutional wins have a lower base fee rate, they generate an attractive incremental margin on new revenues. And AB's adjusted margin increased 50 basis points sequentially. We also raised our guidance for the full year performance fees. To $135 to $150 million. Which implies a range of $62 million to $77 million for the fourth quarter. Moving to wealth management. This business reported exceptionally strong third quarter earnings of $75 million up 27% year over year. This reflects robust organic growth momentum, with advisory assets up 22% year over year. And a 14% increase in adviser productivity. Results also benefited from a 1-time payment related to the Stifel acquisition. Which effectively offset some expenses accrued earlier in the year. Looking forward, we view $70 million as a good baseline expectation for fourth quarter earnings. Finally, Corporate and Other reported a loss of $82 million after adjusting for notable items. Results this quarter benefited from improved mortality experience and lower expenses. In addition, we moved results from the exited employee benefits business which generated a small loss in the quarter below the line. The year to date corporate and other loss adjusting for notable items, is $286 million and we continue to forecast a loss of $350 million to $400 million for the full year. Turning to Slide 9. We returned $320 million of capital to shareholders during the quarter. Including $238 million of share repurchases. Our payout ratio was 59% for the quarter. And has been 66% year to date, putting us on track for our targeted 60% to 70% payout ratio. For the full year. We ended the third quarter with $900 million of cash and liquid assets at the holding company. Up from $800 million We also brought a portion of our proved insurance subsidiary dividend to the HoldCo in third quarter. And we continue to project full year 2026 cash generation of $1.8 billion Adjusted book value per share ex AOCI with our AB ownership stake at market value was $34.25. Yielding an adjusted leverage ratio of 25.5%. As a reminder, at the close of the merger with Corebridge, our GAAP shareholders' equity will be reset to reflect the fair value of assets and liabilities. This will result in a more meaningful book value. Return on equity, and leverage ratio. Overall, we feel good about the financial momentum across the company. And we will enter the merger from a position of strength. We are also making good progress on integration planning and expense synergies. And we have good line of sight into revenue synergies which will be quantified at investor day. As a proof point, we have identified over $100 million of run rate expense savings that will be recognized in the first half of 27. This puts us well on track to achieve the targeted a $150 million of run rate savings in the first year post merger. And we remain confident in achieving at least $500 million of run rate savings by the end of 28. Since this will likely be Equitable Holdings last earnings call, prior to the merger I want to take this opportunity to thank Mark Pearson for his leadership at Equitable since 2011. And the personal mentorship he is provided to me over the years. I am equally excited to work with Mark in his executive chair role and Marc Costantini as the CEO of the new Equitable in delivering on the promise of this merger. I will now pass the call back over to Mark. Mark Pearson: Thanks, Robin. With the merger expected to close by year end, this will be my last earnings call as Equitable's CEO. Before handing the reins to Marc Costantini and assuming the role of executive chairman. As I reflect on my journey, I am proud of the actions we have taken to strengthen our balance sheet shift our business mix, and enhance returns while delivering on our mission to help Americans secure financial well-being and retire with dignity. Thank you to all our employees and advisers who have worked so hard to get us to this point. Looking forward, I am incredibly excited about the opportunity for new Equitable. As we complete the merger with CoreBridge. And I look forward to working with Mark and the board to deliver on the opportunity in front of us. We will have the platform capabilities, and talent needed to win with customers and secure our place as the largest and most profitable US retirement protection asset and wealth management company. We now look forward to taking your questions. Operator: We will now begin the question and answer session. Please limit yourself to 1 question and 1 follow-up. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. And if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Suneet Kamath from Jefferies. Your line is open. Please go ahead. Suneet Kamath: Thanks. Good morning. First, congratulations and best of luck to Mark. Thanks for all of your help, over the years. I wanted to start with sure. Of course. I wanted to start with the higher interest rate environment. Obviously, we spiked in the quarter and then things have come back. Are you seeing anything in terms of policyholder behavior whether it relates to lapses or even product design as it relates to annuity competition. We have not seen rates this high and moved this quickly in a while, I just want to make sure we are not seeing sort of any unintended consequences. Thanks. Robin Matthew Raju: Sure. Suneet, I can start, and thanks for thanks for your question. So look, overall, we think the high interest rate environment is good for our business across the retirement business. You saw us have positive net flows of 1.1 billion record sales in RILE, But with that also comes some higher lapses that you saw as well. So there is a balance that you see in these specific scenarios, but nothing that we see that would cause concern at this point in time Higher interest rates mean more options for consumers, and annuities are a good place to have, whether it be FIAs or RILA products. As well. Some pressure on AV assets on the fixed income side with higher rates. As higher rates brought that AUM down. But we think as rates stabilize, that asset class is differentiated with AB's strong performance in that category as well. From the only thing I highlighted on the call was on the alternative side. Higher rates have a negative impact on the real estate equity exposure. So that is why we guided to a lowered single digit return for the fourth quarter. that is the only other thing that we are seeing at this time. But overall, we think higher interest rates are a good position to be in. And remember, our interest rate sensitivity that we disclosed to the market, every 50 basis points, it is about $40 million of operating earnings as well. Okay. Got it. that is helpful. Suneet Kamath: And then I guess on the new Equitable, as we think about I guess, liability generation of, you know, 70 to 80 billion a year, How much of that could AllianceBernstein effectively manage? And are there asset classes or investment strategies that you guys at EB need to build up like you did the CML portfolio in order to take advantage of getting a greater share of that $70 to $80 billion? Thanks. Robin Matthew Raju: Yes. So let me start, I will pass it over to Seth. Look, across, the new Equitable we are going to generate $70 to $80 billion of new liabilities every year. And so we are going to need more best-in-class asset managers. And we have that with AllianceBernstein and then also the partnerships with Blackstone and BlackRock. As well. As you saw with AB over the years, they built up many asset capabilities to support Equitable and their expansion in private markets, is over $100 billion now. And we would expect that to continue to build with new asset class capabilities and expansion on origination. But let me pass it over to Seth. To provide some more information. Seth? Seth Perry Bernstein: Thank you. Robin. I think you put it well. We continue to re react to the opportunities that we see. And to the extent the liability needs are different for the new equitable, we are already focused on what particular areas notably in private credit and elsewhere. Address that. So whether that is infrastructure, or other capabilities, we are looking actively at it, and we will pursue it if it makes sense for the broader entity. Mark Pearson: I think if I could add something, Suneet, Mark Pearson. Yeah. I mean, 1 of the things you will see is that Corbidge's liability are longer in duration than Equitable's and that opens up for different type of assets to back those longer liabilities as well, which as Seth said, AB are looking at will develop The plus for us as well, of course, is that means that AB have an even more robust offer to be successful in the insurance space, which they have shown great progress in the in the last couple of years. So it is it is it is a nice opportunity for us. Both in terms of supporting New Equitable, but also in opening up new markets for AV. Suneet Kamath: Okay. Thanks very much. Operator: Your next question comes from the line of Joel Hurwitz with Dowling and Partners. Your line is open. Please go ahead. Joel Hurwitz: Hey, good morning. Robin, first, just on the net interest margin retirement. You provided some good color on the drivers of the lower underlying results in the quarter, and I think you expect you said you expect that to return more towards half 1 levels. Would you expect that in the fourth quarter? Do you think the cash drag in that floating rate reset normalize in time for Q4 results? Robin Matthew Raju: Sure, Joel. Yes. The short answer to that is yes. It is, a function of timing. I think if you take a step back, though, NIM and dollar amounts was up 12% year over year. And do not forget fee based revenue in the retirement business as well was up 15% year over year. So we are getting good growth on the revenue side. there is some timing elements when you look at basis points quarter to quarter. Yeah. We had higher cash. And then with the spike in rates, we saw some of the liabilities reset faster than the assets. But that all should normalize. Overall, we are quite pleased with the results and the growth in the retirement business. And we expect to continue to grow NIM specifically as the general account book value grows and then also fee based revenues as a separate account grows as well on the retirement side. Joel Hurwitz: Got it. that is helpful. And then just on the assumption review, could you unpack the moving pieces in retirement in the quarter? Was benefit in the quarter, but looks like it is having a negative go forward impact on DAC amortization. Robin Matthew Raju: Sure. So 2 things. I think overall in see this, I think, across the industry as everybody updates their lapse assumption, which is a good thing. You are moving to current experience. You are going to see some acceleration of DAC amortization, but that is a noncash item. So just keep that in mind. Overall, our assumption update was positive in the quarter. You know, there are always ins and outs in an assumption update, but know, most importantly, it is around a narrow range that we see those outcomes and that is been consistent over the years for Equitable. Got it. Joel Hurwitz: Thank you. Operator: Your next question comes from the line of Tom Gallagher from Evercore ISI. Your line is open. Please go ahead. Thomas Gallagher: Good morning. Can you unpack a bit what happened to retirement flows this quarter? So they decreased from $1.7 billion in 2 q $1.1 billion. And then there was some movement between separate account and general account. Which was, I think, a little confusing. Anyway, can you talk more at the product level What are you seeing? RILA still holding up well? Maybe it is something happening on the group retirement side. Any color there would be helpful. Thanks. Nicholas Burritt Lane: Yes, sure. This is Nick. First, as a reminder, our retirement segment now encompasses both our individual retirement and our group retirement business. As you highlighted, it generated healthy flows of $1.1 billion But breaking it down, in Individual Retirement, we generated $1.5 billion of net flows. Driven by record sales of $5.5 billion and $4.2 billion of RILAs sales. So we continue to see strong demand and have the edge to deliver on it. In group retirement, we saw strong top line growth, but as you will recall and remember, flows are traditionally softer in the third quarter as teachers are not working in the summer months. They do not get paid, and therefore, they do not make payroll contributions. Going a little bit deeper in tax exempt this strong fundamentals are there. We are the number 1 player in K-12. We have over 1 thousand advisers that serve that space. We saw first year premium grow at 16% year over year. In institutional, which is also in that segment, as we said, it is going to be lumpy. We had a strong second quarter, as you will remember. Third quarter was a little bit more muted. We only onboarded 1 black Rock plan. But I would note the business has generated over $2.4 billion in assets since we launched it and as solid pipeline going forward. Last, we do continue to see some outflow pressure in our corporate block. This is our older vintage, lower margin 401(k) block. That represents less than 15% of our segment account value. And as a reminder, about 20% of the tax exempt outflows are participant driven. Of the remainder, we are able to capture 50% within Equitable Advisors speaking to the benefits of our flywheel. And we see upside in that translating these best practices to core bridge post merger. So looking forward, we continue to expect to generate positive flows and believe we have got a competitive edge. Thomas Gallagher: Got it. That was helpful color, Nick. Thanks. My follow-up is just on $37 million prior period adjustment for reinsurance on the life insurance side. Should we view that as an economic adjustment where you got a better reimbursement from some prior periods with your reinsurance partner, or is this really just an accounting-only adjustment on the EQH side so no change for your reinsurance partner. Just wanna get a sense for what actually happened here. Robin Matthew Raju: Yeah. Tom, thanks for the question. it is really an accounting change on our side. From a reinsurance standpoint with our partners, nothing's changed. it is timing of recognition in the accounting. Some of it should have been trued up. Earlier, and we caught it this period, and that is why we are calling it out as an out of period. Benefit. Thanks, Robin. Operator: Your next question comes from the line of Ryan Krueger from KBW. Your line is open. Please go ahead. Ryan Krueger: Thanks. Good morning. My first question was on wealth management. You certainly had strong flow trends. But it seems to be mostly productivity driven Your adviser count, though, has come down the last couple of quarters. So just hoping to get a little bit more detail on what you are seeing there from a new adviser headcount, recruitment and retention standpoint. Nicholas Burritt Lane: Yes. Thanks for the question. As you highlighted, we are very pleased by the momentum in the business as our value prop proposition is resonating with clients and advisors. $2.7 billion in net new assets with an 11% organic growth rate. We see continued momentum in the underlying growth drivers As you highlighted, productivity is up 14%. We think we bring a distinct edge. In our planning process, given our holistic life planning that serves a broader part of portfolio and continue to be focused on building wealth managers that get a deeper share of wallet. there is a robust pipeline to continue to grow that. At year-end last year, we highlighted that we have 922 wealth planners, which is up 11%. That continues to grow, and we have a healthy pipeline of over 2,000 advisers that we think we can continue to train and develop. Headcount, has been flat, but we think we have an edge given our model, out in the space. We are 1 of the few that continues to bring in new people into the industry. That allows us to continue to refresh and rejuvenate our pipeline. I would highlight the average age in the industry is 57. Our average age is 10 years lower, so it is more robust and, I think, more durable. Finally, the Corbridge acquisition is going to add $20 billion of assets and advisers, and we think there is an opportunity to continue to apply our best practices to further drive productivity. So net, very bullish on the future, strong momentum and would expect to continue to see that going forward. Ryan Krueger: Thank you. And then a quick 1 on AB and the fee rate. Should we expect some uptick in the fourth quarter fee rate as you start earning in fees from the Equitable CML portfolio, or is that going to be offset by just the general trend of somewhat lower fee new inflows. Seth Perry Bernstein: It is going to be mix-dependent. But Q3 is abnormally low just because of the $12 billion CML assets that we were not attracting any revenues. So the decline from Q2 to Q3 is largely driven by that. So absent that, we would have been pretty much flat versus 2Q 26. So it really just going to be as mix and market dependent from here. Ryan Krueger: Thank you. You are welcome. Operator: Your next question comes from the line of Wesley Carmichael from Wells Fargo. Your line is open. Please go ahead. Wesley Carmichael: Hey. Thanks. Good morning. I just wanted to come back to the interest rate question maybe from a different angle, not so much about unintended consequences, but maybe opportunity. But I guess with higher risk free rates, do you see industry retail annuity sales continuing to really accelerate from the, call it, $465 billion level in 2025? Or what do you think, really gives overall sales to take another leg up from here? Nicholas Burritt Lane: Yes. So look, I would first and foremost point to the demographic tailwinds that Mark highlighted. Some things you cannot predict, but you can predict demographics. Baby boomers are moving to their next stage, and they are looking for both more secure retirement solutions as well as advice And we are uniquely positioned, to capture both of that. So we would expect the momentum to continue to continue based on the core fundamentals out there. Wesley Carmichael: Got it. Thanks. And then just switching gears. On alt returns, I think, Robin, you are talking about higher rates or a headwind for real estate equity. It seems like maybe perhaps we have not seen as much on the monetization or realization side of private equity portfolios, least in the news. So just curious if rates are going to remain in these ZIP codes, do you kind of expect lower than expected returns in 2027? And beyond that, are there any levers that you would like to pull if those returns are gonna remain a little bit more subdued? Robin Matthew Raju: Yeah. Sure. Just keep in mind, the total allowance portfolio is about less than 3% of the total general account for Equitable. that is below industry average. As we do not have many long dated liabilities, that has decreased over time. Just a function of our liability profile. The all its returns in the quarter were about 5%. Good in buyout, but negative on real estate equity. Real estate equity is about 20% of the portfolio, and so that will remain a headwind. So I will not forecast into 2027 yet. I just guide to you know, what I mentioned for the fourth quarter at this time and then we will update again in our first quarter call. For the new Equitable. Thank you. Operator: Your next question comes from the line of Alex Scott from Barclays. Your line is open. Please go ahead. Alex Scott: Hey. Good morning. Wanted to see if you could give us some higher level color on the competitive environment that is out there and just seeing that some of the credit rate being offered look like they have gotten a little more aggressive relative to risk-free rates and so forth. So I just wanted to understand the supply of capital and just understand you are making the point about demand, but what is the supply of capital coming from maybe some of the private equity backed companies doing to the competitive environment? Nicholas Burritt Lane: You know, I will start. Look, overall, we had a record quarter in sales and value as we highlighted, up 11%. And $1.5 billion of net flows translating to a 5% trailing 12 month organic growth rate. From a competitive standpoint, we see no real change in the RILA space. We have not seen a new entrant since the first quarter of 25, and the alternative players have been in for a while. We are very mindful of competitive trends. On pricing and our focus on Equitable continues to be on profitable growth. So looking forward as you highlighted, we continue to see strong demand. But believe we have got a durable edge. The key to being successful in this market is generating attractive risk adjusted returns, and we have that through AB and align sight there. I would also highlight we have differentiated distribution with Equitable Advisors and shelf space on third party networks, which attracts lower cost liabilities. And as Mark highlighted, we have deep relationships and scale which we expect to further extend given our merger with Corbridge. So we believe we are in a privileged position to capture a disproportionate share of the value that is emerging in that space. Alex Scott: Great. Thank you. Follow-up question I had was on $100 million of expense synergies. That have been identified Wanted to see if you could shed a little more light there and the timing of when that will you know, begin to emerge. Robin Matthew Raju: Sure, Al. So as we mentioned at the merger, announcement, we expect to realize $500 million in total synergies as a function of the merger This is gonna come from 4 main areas, duplicate roles within the organization, IT systems, third party vendors, and real estate. What I mentioned on the call today and what we are announcing today, both Equitable and Corebridge, through the actions that we have taken relate. Mostly related to headcount, through the first wave of leadership announcements to over 500 people that Mark highlighted earlier, we have achieved $100 million of run rate saved that will come through in the first half of the year, and that puts us on track $150 million of year 1 saves So we feel very confident, and this should give you confidence in our ability to deliver on the thesis of the merger and the expense synergies that were recognized This is just the first element of what we have seen very early on. I think also taking a step back, I think both companies are in a unique position considering the development of technology around us. And being able to leverage AI as we integrate in this merger is going to enable us to have a better customer experience coming out of this. And also enable us to be more. Have more productivity and build a bigger scaled organization as a result of leveraging the technologies around us. So I think that is something unique around this merger that others do not have before. So it is about making us bigger and stronger, and leveraging technology that we will do as well as part of the merger. Thanks. Operator: Your next question comes from the line of Pablo Singzon from JPMorgan. Your line is open. Please go ahead. Pablo Singzon: Hi. Good morning. I wanted to follow-up on the higher DAC amortization you are assuming for individual retirement, and I recognize it is noncash. And it would be written off once the merger is affected. But does that reflect a decrease in persistency ultimately, right, and fundamentally? And if that is the case, does that have any impact on how you price your annuity business? Sure, Pablo. Robin Matthew Raju: Yeah. So higher DAC amortization, the result comes from some higher lapses that we reflected in our current assumption update. You should keep in mind, from a pricing standpoint, you know, we priced it economic realities of the products. And so we are assuming, you know, customer efficiency in our pricing. And so the returns that we price to are stable and ones that we expect and what we have realized over time But as experience emerges, we want to reflect that in our GAAP assumptions as well, and that is what you see come through in the DAC amortization. Thanks, Robin. And the next second question I had was about traditional VAs in retirement. Pablo Singzon: So sales there have been growing faster than RILAs, and I think been true not only for you, but for the market at large. So the question is, can you talk about what is driving the trend there? And just remind us what type of VAs you are selling today versus those you had placed in the runoff block. Thanks. Operator: If I think I understood your question, what is happening in the traditional VA versus the RILA space, Look, we see continued opportunity there. Nicholas Burritt Lane: there is a demand for secure income and our retirement cornerstone product meets that demand in a very, well constructed way. We also see enhanced demand for, I would say, the benefits annuities provide for tax deferral relative to accumulated savings. So we think about the income benefits, we think about the death benefits, and we think about the tax deferral, and we have got a suite of products that meet those needs to respond to different environments and serve customers based on their best interests and their desires. Operator: Your next question comes from the line of Francis Matten from BMO. Your line is open. Please go ahead. Jack Matton: Hey. Good morning. I just have 1 on your retirement business. Over the past few years, you have seen the net interest margin grow faster than operating earnings. Is there a point now where you expect the growth rate in DAC and commission expense to slow? Or should we expect to continue seeing that trend if Equitable continues to put up fairly robust sales growth? Robin Matthew Raju: Yes. Look, I think part of the robust sales growth as we have more, I more customers into our business, and as we continue to grow our retirement business. That does put on more DAC on the balance sheet as it relates to GAAP. So that is something you should see continue think where you will see us focus on is continued delivering strong spread based earnings and strong fee based earnings. You saw both up 1.22 thousand% year over year overall. And then with the merger, with Corbridge, you are gonna see lower unit costs come through in that retirement business as well which should accelerate growth for both retirement businesses on a go forward basis. But DAC is not, you know, always a negative thing. It means we are attracting more customers, and we are bringing them on to our book. And I would view that as a good thing. Thank you. Operator: Your next question comes from the line of Mark Hughes from Truist. Your line is open. Please go ahead. Max: Hi. Thank you. This is Maxwell on for Mark. You had highlighted the institutional pipeline at AB, but what are you seeing in private wealth and the retail channels? And how would you expect flows to trend there? Thank you. Seth Perry Bernstein: In private wealth, we are seeing renewed demand and pretty good flows. Are outflows in September were in part reinvested in October. So we. We are on a more normalized track, and we are happy about that. Institutional, we continue to see strong interest in fixed income. Third party fixed income interest. From insurance clients as well as other clients. We are seeing more equity search activity. Which is promising, but there is nothing to report there. And in retail, we have a continuation of the general trends we have seen with respect to large cap growth and equities and so forth. But recent performance has improved and so I do not have anything to report. But I think it is a better trend line. And I guess my final comment to you is our backlog remains quite healthy. And I am putting aside $100 billion that we are anticipating receiving from New Equitable following the merger. Very good. Thank you. Operator: Your next question comes from the line of Tracy Benguigui from Wolfe Research. Your line is open. Please go ahead. Tracy Benguigui: Thanks, and congrats to Mark, and best of luck to you. I am curious how your RILA sales trended. Okay. I am curious how your RILA sales trended up until September when we saw rates move up and how the sales trend were thereafter. Like, was pricing more attractive before September But I am also curious if you saw more demand starting September And also, what rate assumptions support your view that spreads stay roughly stable with the first half of 2026 levels? Nicholas Burritt Lane: Sure. I will start. You know, as a pioneer in launching RILA over a decade ago, we see the core consumer value proposition resonating, which is protected equity story with upside potential. And we see that demand continuing to grow. So we did not. We have not seen any month to month changes given those core fundamentals versus movements from that standpoint. You know, the pricing gets priced every 2 weeks. it is reflective of volatility in interest rates. And so we are able to align delivering that value proposition with very disciplined ALM match So it is a great product for the need. it is a great product that resonates in different environments. Robin Matthew Raju: Yeah. And we, you know, historically, we have not seen prior sales impacted by level of interest rates. When interest rates have declined in different periods, we have seen actually increases in RILA sales because as Nick mentioned, it is more of a equity participation for retirees. So it is less interest rate sensitive from what we offer to the client. From a return standpoint, as Nick mentioned, we price in current activity in all markets and what we offer to clients. And you see our differentiator continues to be distribution. On a spread basis, we are not assuming any increase in spreads. In from the first half of the year. We are assuming you know, that we will be come back to that first half of the year level and spreads after we after some of the timing gets normalized. In the fourth quarter. Tracy Benguigui: I think that is very helpful. I am also curious what quarters the $37 million after tax reinsurance true up represented that you were underestimating that reinsurance relief. And was this from RGA or another reinsurance partner? Robin Matthew Raju: It goes back over a few periods, and it is from, it is from the RGA transaction, but it does not remember, it is not. It does not impact what I mentioned earlier. it is not an impact from RGA. I think what was seeded and settled was correct. it is our internal accounting that there was a true up bond for this, which was a catch up for the prior periods. Tracy Benguigui: Okay. So it will not be an actual cash flow just an accounting recognition. Robin Matthew Raju: Correct. it is an accounting item. Thank you. Operator: Your next question comes from the line of Yaron Kinar from Mizuho. Your line is open. Please go ahead. Yaron Kinar: Thank you. Good morning, everybody, and congratulations to Mark as well on a wonderful run. My first question just goes back to interest rates and maybe slightly different angle here. If they continue to rise at some point concerns around CRE starts building. At what point do you think that becomes a legitimate risk to the balance sheet, and what actions can the company take to mitigate that? Robin Matthew Raju: Sure. Thanks, Yaron. Look, again, I think, overall, if you take a step back high interest rates are good for our business. And what we see is consumers in The US continue to remain strong, and that should help the economy to be resilient even in a high interest rate environment. So under that sense, as long as we still see good, strong strength of The US consumer, you know, I would expect the overall credit situation and equity market should be stable from that standpoint. The CML portfolio that we have is high quality. The LTVs are strong. We have been able to refi those as planned. So, sure, there is always risk in a high interest rate environment, but I think it goes back to what is happening in the economy. to the US consumer. that is trended there. that is a big protection against you know, any credit or CML actions that may be. But always important that we underwrite the securities properly both credit and CML, then we make sure we do stress test. You know, we have disclosed our stress test earlier this year. You saw us disclose in a credit environment our RBC will still remain above 430%, so which means the way we have positioned the balance sheet, we can absorb credit stress, still write good new business, still distribute cash flows to shareholders. Thank you. Yaron Kinar: And then my second 1, just a quick confirmation. I think on the last quarter's call, you had said that you expected to deploy the funds received from the employee benefits sale to Hartford to building up at scale businesses. I just wanna confirm that was still the case that you had no intent to deploy some of those funds towards buybacks. Robin Matthew Raju: Yes. We remain we closed the transaction this quarter. We remain on track to our $1.8 billion of cash flows for this year. Expect us to remain our 60% to 70% payout and use the nominal proceeds that we have to help support growth in this robust Okay. Yaron Kinar: So, again, just to confirm, is that $1.8 billion target would not include the Hartford funds? Robin Matthew Raju: Correct. Okay. Thank you. Operator: Your next question comes from the line of Wilma Jackson Burdis. From Raymond James. Your line is open. Please go ahead. Wilma Burdis: Hey. Good morning. Are you seeing more rational competition in the annuity space? there is been a little bit more regulatory action there with 2 of the top 20 annuity fixed annuities derisking their portfolio. The NAIC putting in place some rules limiting offshore activity. Investments in certain asset classes. Are you seeing any evidence that any of these are working? Thanks. Nicholas Burritt Lane: Thanks. For the question. I would go back and say, look, we view competitive activity as being sort of constant for the last, you know, 12 months. As you highlighted, I do think there is a focus on quality of those people that are running disciplined, have strong balance sheets, are delivering consumer value through the distribution and strong relationships. But you know, overall, we think that the fundamental drivers continue to focus on demand and competitive activity we have not seen a material change recently. Mark Pearson: I think as well, Wilma, it is Mark., Moves to strengthen the government. Governance and the disclosure in the industry. We welcome moves that actually show the value of a trusted brand over a long, long period will play to new equitable strengths. So these are things that we observe in the marketplace, and we think it is net positive for us. Wilma Burdis: Okay. Thank you. And then could you talk a little bit about the other alternatives? Is that driven by VC? I noticed you had a couple of good quarters there. Just curious if you have an outlook there. And then if you could give us a little bit more color on your data center and AI investments, which I realize you call out are very small, but little bit more color would help. Thanks. Robin Matthew Raju: Yeah. I think we shared in the earnings presentation, Wilma,, the returns by the different subsectors that we have on the alt portfolio as well. Again, I think with the high interest rates, would. You know, real estate equity is what is the biggest input into our fourth quarter guidance. it is still early, you know, with funds reporting. So we will continue to provide updates as we get more information overall. Yep. And we did disclose the hyperscales and data centers. it is a little bit more than 1% of the general account, so it is very small. Yeah. A lot of in the big high quality names, and then where we have private APS, it is more short duration good quality that we are comfortable with. So small part of the overall general account, though. Thank you. Operator: This concludes the Q&A session. And also concludes today's call. Thank you for attending. You may now disconnect.