Good day, ladies and gentlemen, and welcome to the Brighthouse Financial's Second Quarter 2018 Earnings Conference Call. [Operator Instructions] And I would now like to introduce your host for today’s conference, Mr. David Rosenbaum, Head of Investor Relations. Sir, you may begin.

Thank you, operator. Good morning and thank you for joining Brighthouse Financial's Second Quarter 2018 Earnings Call. Our earnings release, presentation and financial supplement were released last night and can be accessed on the Investor Relations section of our website at brighthousefinancial.com. We encourage you to review all of these materials, and we will refer to the slide presentation in our prepared remarks. Today, you will hear from Eric Steigerwalt, our President and Chief Executive Officer; followed by Anant Bhalla, our Chief Financial Officer. Following our prepared comments, we will open the call up for a question-and-answer period. Also here with us today to participate in the discussion are other members of senior management. Our discussion during this call will 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, including those described from time to time in Brighthouse Financial's filings with the US Securities and Exchange Commission. Information discussed on today's call speaks only as of today, August 7, 2018. The company undertakes no obligation to update any information discussed on today's call. During this call, we will be discussing certain financial measures that are not based on generally accepted accounting principles, also known as non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures and related definitions may be found on the Investor Relations portion of our website, in our earnings release, slide presentation or financial supplement. And finally, references to statutory results 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.

Thank you, David and good morning, everyone. Today, we are celebrating our one year anniversary as a publicly traded company. And we believe we have much to celebrate. We’ve made significant progress over the past year. We are proud of what we have accomplished and we remain focused on executing our strategy as we believe that will create shareholder value. An example of the success of our strategy is the announcement we made last night. Our board of directors has approved a $200 million stock repurchase program, our first as an independent publicly traded company and significantly ahead of our base case scenario. From the beginning we have worked diligently to enhance our financial strength and flexibility. This program reflects the progress we have made, the confidence we have in our strategy and our commitment to returning capital to shareholders. We expect to prudently manage this over the next year, consistent with the Board’s expectation. I’m going to focus the remainder of my comments today around the progress we’ve made with respect to our top priorities for 2018. As a reminder, the top priorities are, first, we are focused on exiting our transition service agreements or TSAs with MetLife. Exiting TSAs supports our goal of reducing our overall cost structure as a standalone company. Second, we are enhancing our distribution platform and network and developing new products that respond to the evolving needs of our advisors and the clients that they serve. And third, actively managing through NAIC variable annuity capital reform and growing our earnings power. Let’s begin with TSAs. Exiting TSAs with MetLife and replacing them with more cost effective solutions is essential to executing on our strategy. We began the quarter with 139 TSAs remaining and we were able to exit 12 in the second quarter. We…

Thank you, Eric and good morning, everyone. Let me start with the second quarter results and provide some perspectives on the key underlying themes beginning on slide 5. Adjusted earnings, excluding the impact from notable items, were $197 million in the quarter, compared to adjusted earnings on the same basis of $288 million in the first quarter of 2018 and $282 million in the second quarter of 2017. The annuity segment continues to perform well and results in the life segment were good, but were impacted by higher expenses. The only notable item in the quarter was establishment costs, lowering adjusted earnings by $44 million after tax or $0.37 per share. Now, I'd like to provide some perspectives on three themes related to our adjusted earnings this quarter. The first theme for the quarter that I would like to discuss is expenses. Corporate expenses were $288 million in the quarter, up approximately $58 million sequentially and the high watermark for 2018 and consistent with our expectations. On an after tax per share basis, that translates to a $0.38 per share sequential impact. As seen on slide 6, the corporate expense level in the quarter is approximately $20 million after tax or $0.17 per share, higher than our average quarterly run rate for the first 12 months as a public company. Actual first year corporate expenses were right in the middle of our expected range of $1 billion to $1.1 billion. The second theme is the investment portfolio. Net investment income was lower sequentially, primarily driven by a decrease in alternate investment income. This was partially offset by growth in assets and the investment portfolio repositioning that we started last quarter. The alternate investment income was approximately $17 million after tax or $0.14 per share lower than the four quarter historical…

[Operator Instructions] And our first question comes from the line of Humphrey Lee with Dowling & Partners.

Just related to the VA capital reform. So now with greater clarity, how have you changed your view related to your approach to your hedging strategy and the cash flow generation from the inflows block going forward, relative to kind of your -- what you laid out during the roadshow process.

Hi, Humphrey. Good morning. With respect to our hedging strategy, no change in the way we think about it, exactly the same way. You would see us probably talk about capitalization within RBC basis as the CTE 98 framework comes in there, but that doesn't impact the hedging strategy and we will update our sensitivity tables in terms of distributable earnings annually, so with our year-end process, but primarily no real change in our strategy and how we think about it.

So basically you still be over time expect to create 3 billion of asset buffer above CTE 95 level under the new regime and then use that to, in a sense, to reduce your hedging cost? That's still your thinking related to your hedging strategy.

Hi, Humphrey. It’s Eric. Look, I think that lies behind it going forward. Right now, certainly, the buffer is important. We've been looking at it and discussing it every quarter as we're doing right now. But I think once we adopt the new framework, you're going to hear us start to talk about as Anant just said frankly, capitalization with respect to RBC because that was the whole point of VA capital reform to make RBC more robust. So I think that answers your question.

And then looking at your realized investment losses, you have 75 million in the quarter or roughly $0.50 in your ECS lost number. My understanding is that is largely driven by kind of repositioning your investment portfolio. I was just wondering like how much yield did you pick up in the process and are you done with that repositioning or should we still expect some realized losses to come through in the coming quarters.

Hi, Humphrey. It’s John. I think, one, we're not done with the repositioning. We're going to continue to reposition at treasuries. Two, you're right, most of those losses -- those realized losses in the second quarter were due to trading out of lower coupon treasuries. And three, there will probably be continued losses in the future as we do that.

Is there any way to size the, I guess, the percentage you had done -- you have repositioned relative to your investment portfolio, so like where you stand right now, how are you thinking about the coming quarters.

Humphrey, we've rotated it at about $3 billion in the first quarter, first half of the year. As far as -- we're continuing to -- we're continuing to trim the position down. As far as ultimate timing and amount and impact, we're still evaluating that, but we have a bit to go.

And our next question comes from the line of Jimmy Bhullar with JP Morgan.

First, I just had a question on the expected timing and pace of your buyback plan and completing the program. Are you going to base it more on just certain price or what's really going to drive, if you could give us any sense of how fast you're going to complete the program?

Jimmy, it's Eric. I know that, I guess, many of you would want me to break it down quarter-by-quarter or something like that, but I'm not going to –

Or just your strategy on it and not looking for actual guidance, but just how are you going to -- are you going to start right now, are you going to evaluate based on where the price is? How would you approach it?

Look, we're thrilled that we're at this point. We are going to do all the above. At these prices, I certainly would like to buy back stock. We’ll do it over time and I think you can kind of plug into your model whatever you think is prudent. I think that that that might be a word to use. We're going to be prudent. Look, we've got to watch markets, we've got to think about the company overall, but we have an authorization and we intend to repurchase stock.

And then you mentioned elevated Universal Life claims, I think in the secondary guarantee part of the book. How much of that was related to the block that you recaptured it from a reinsurance company.

Hi, Jimmy. It’s Anant. So the block that we recaptured from our former parent last year, prior to separation, was a large traditional block, so that's not ULSG, but there will be some aspects of ULSG as well. Really, the driver there was severity.

I mean, from a third-party reinsurer, the block you recaptured from a third-party reinsurer?

It would be some portion of that, because there was a portion of the ULSG block that was recaptured. We don't have the exact percentages, but yes, there was a portion that was recaptured.

And we should assume that the reason you would have recaptured it just was basically increasing the insurance cost, that book should behave worse than sort of – than a normal UL block, right, because otherwise reinsurance, you would retain the reinsurance relationship, correct?

We recaptured it, because the insurance rate increase was higher than the current rates and so this is pretty standard across the industry. A lot of -- when reinsurers do this, it’s -- they don't do it for a particular company. They do it for the entire block that they've got from multiple companies. So it's not something systemic to us or specific to us.

Yeah. Jimmy, it’s Eric. I hear something else in that question too. No, we don't expect it to perform any differently, if that was part of your question.

Yeah. No. That's what I meant. My point was that if that's the block that actually had -- or part of your bad experience was in that block, then that might be normal going forward, obviously, not every single quarter, but that's a block that would typically show worse results. Obviously, secondary guarantee UL is behaving worse than normal UL anyway for the industry as a whole? The last question I had is just on establishment costs. What are your views on how -- like what the total amount is going to be from here on out and when do you think that you will be done with the majority of those expenses?

Hi. It’s Anant again. So we will be done in 2020. We view the expenses from here on to be basically around, in the low 100s for the rest of this year and this is in line with what we provided last quarter in terms of totals, again in the low-100s next year and then just under 50 million in 2020. So cumulative from here on, we’re talking around 250 across those numbers that I say, 250, 275.

Thank you. And our next question comes from the line of Ryan Krueger with KBW.

So in the past, you've talked about – from a hedging standpoint, putting 1 billion of assets -- of the cushion at risk and then moving that to $3 billion over time, I believe, by 2020. Does that change at all, now that there's this new VA capital framework and you're thinking more about managing to an RBC level, should we think about that specific strategy changing at all?

Hi, Ryan. It’s Anant. That does not change. The hedging strategy stays as it is, as you very eloquently said, we're at 1 billion assets at risk or deductible that we colloquially call it and that's why you got the range of 2 billion to 3 billion above 95, because the deductible will grow from 1 to 2. So almost think of holding a little more than the deductible for the strategy to work. When we talk about excess capital though, we can make that conversation all about RBC post the reform being adopted, because the CTE framework will make, as Eric said, RBC robust.

And then in terms of the shift, is that going to be something that will occur gradually over the next -- over time or will it be more of a -- you get to a certain point in time that you think it's the right time to do it and you’ll move from $1 billion to $2 billion or $3 billion.

Yeah. Well, as we laid out in our projections, we expect to go up like 0.5 billion a year over the passing of each year.

And then just one last on debt issuance that you mentioned, so should we think about the debt capacity that you have as something that would be potentially available to you for future share repurchases looking forward after you get done with this program.

It's Eric. I wouldn't think of it that way. I think about it, as we've said from the very beginning, we targeted a 25% leverage ratio and there's all kinds of things you can use it for and if we see opportunities, we want to take advantage of that financial flexibility and by the way term out our capital structure.

And our next question comes from the line of Erik Bass with Autonomous Research.

I guess, has anything changed in terms of your expectation of not taking a dividend, excuse me, from BLIC in 2019? And if you can early adopt the VA capital reform, does this change anything for ’19 – or 2019 or is that more of a 2020 impact?

Hi, Erik. Anant here. So let me answer your second question first. We will work with the regulators to see if we can early adopt. It's beneficial for us and we would like to look at it, but we have to see how everything comes together. Hopefully, this is passed shortly today. Secondly, on taking BLIC dividends, we're not contemplating BLIC dividends till we early adopt and have the RBC framework drive the requirements. So hopefully that answers your question.

So then I guess is it right to think of your near term interest expense and any other cash needs are still going to be largely funded by dividends from that?

Yes.

And then I understand you plan to keep your hedge program set at CTE 95 as the floor rather than changing that to CTE 98, so can you just talk about what the impact would be, if at any point in the future, kind of you dipped below a CTE 98 level at any point?

So CTE 98, in the new framework, will basically translate to a 400% RBC company. As we've shared, we're already above CTE 98 and we'll probably operate above CTE 98 in normal markets, which means we're going to be above 400% RBC. When we protect 95, that means from being above 400% RBC, whatever number we end up being at, meaningfully above it, we’ll basically come back to that range of 400. That's the way you should think about our program, more details to come once the framework is finalized.

So there wouldn't be any sort of trigger -- problem for dipping below, you just need to sort of rebuild back to your RBC target if that were to happen?

That's correct. It would be no trigger. We would be very robustly capitalized, even if we’re at 95, because you’d see us being at 400 or higher.

And our next question comes from the line of Randy Binner with B. Riley FBR.

Yeah. I wanted to go back to expenses and the timing, I think, Jimmy asked the question, but Anant, when you answered the low-100s this year and next, I think were you referring to the corporate segment? I just wanted to clarify that. And if that is the case, also get a feeling of the timing kind of in the other segments, because we saw higher expenses in the annuity segment as well. So I’m just trying to get a kind of a fuller picture of the pace of those expense improvements that helped the guide in the back half of ‘18.

Hi, Randy. Good morning. Sure. So when we talk about expenses, let's break it out in two categories. Establishment costs, those are the notable item and when I was answering the prior question, I was answering what are your establishment costs from here on, right, so around 275 between here and to 2020 with the breakout that I gave. When it comes to actually expenses that go through each of the segments, it's our operating expense, the corporate expenses, as we talk about it. And those were higher, as Eric and I mentioned, we had a high watermark of 288 a quarter. Those expenses, which are our corporate expenses, our range was to be 1 billion to 1.1 billion. We came in right in the middle of that range in our first year and that is what we will reduce by $150 million by 2020 run rate.

And then I had another question about one of the run rate items you mentioned near the end of your commentary, it was a 15 million or a 50 million run rate and I think you're referring to the run-off segment, could you -- we just couldn’t hear that on our end?

No worries, happy to clarify. Yes, it was run-off and one, five, 15 million area.

And our next question comes from the line of Andrew Kligerman with Credit Suisse.

First question around the CTE 98 greater than 0.5 billion buffer so to speak. When they do implement the final format, tax reform, what might you estimate would be the impact of tax reform on that buffer?

Hi, Andrew. It's Anant. We have given it together. Tax reform, meaning going to 21% tax rate plus we reform. We've answered all these questions with them being together, so we're not pushing that off into the future.

Do you have a sense of what the capital reform and tax reform together might impact the 500 plus million?

We would expect to still be at 98.

I see. So it could reduce then some of that 500 million or excess of 500 million?

That is correct and we would organically grow it back.

And then with respect to drilling a little deeper into the expenses, in the corporate operating expenses, I estimated that if you take out the notables or the establishment costs, corporate operating expenses went from about 17 million to 40 million pretax. So you saw a $23 million pick up and I was kind of curious what that consisted of.

Happy to answer it. So that pick up was basically higher corporate advertising and some many one-time items that we had going through. For example, we had our annual meeting. So shareholder service costs, we have a fair number of -- a number of shareholders and some liquidity facility that we're putting in place to again strengthen our backup resources, all those one-timers are what drove it. Maybe we can help everyone by providing a little view on how to think about corporate expenses on a run rate basis. There are two line items that you would look at, interest costs, which are pretty steady now in the last couple of quarters, plus these other operating expenses, which should constitute basically around 50 million a year or just sub of 50 million a year, driven by shareholder services, advertising, things like that.

And then with respect -- one last one, just with regard to your sales, I noticed that Lincoln National came out with a buffered product in mid-May. Maybe you could talk a little bit about the competitive landscape in products that are similar to the shield.

Yes. It's Myles Lambert speaking. We welcome new entrants into the structured annuity space. We think it further validates the product category and it's a good thing for our consumers and our advisors. We really like the competitiveness of our product, and as always, we’ll continue to monitor the competitive landscape and make changes to our product, if appropriate, but hopefully new entrants into the space just grows the overall category.

And our next question comes from the line of Suneet Kamath with Citi.

First question on the TSA. It sounded like you're targeting some pretty significant reductions in the second half. Any quantification of what the cost savings would be associated with what you're planning.

Sorry about that. It's Eric. My mic wasn’t on. Look, it's meaningful, but they're not the biggest pieces, I would say, Suneet. There's two ways to think about getting out of TSAs. One is every time we can exit a TSA and do that activity at a lower cost, you're going to have an expense save. So there are meaningful numbers there. I would say the biggest pieces though are in ’19 and that's why we've talked historically about ’19 really being the year where you're going to see a lot of downdraft in expenses, but we said previously that our second or third quarter would be our high watermark. Our second quarter is going to be our high watermark, so you are going to see some degradation of expenses in the third and fourth quarter, but ’19 is really – ‘19 and ’20 are the big years for us. I hope that helps.

And then on the buyback and the capital, since you're funding – sounds like you're funding that buyback with excess holding company cash, and does not seem to be an expectation for dividends out of the VA business, are we still looking at 2020 in terms of when you'd be comfortable taking dividends out at that kind of level that you had provided in the past.

Let me start and Anant will probably jump in here. Look, here's what I would say. We're pretty thrilled to have gotten this buyback authorization from the board and you're right, Suneet, we will do it out of the holding company cash that exists right now. The next piece of course is well, over time here, at least shorter term, can you do more? And I'm never going to get ahead of our board, but obviously the answer is maybe. The real key and I think this is what you're getting towards is, we want to end up being a consistent returner of capital to shareholders. So that's the goal. I mean I must admit sort of personally, the original goal was the first buyback. Well, now, we've announced that. As you think about the future, obviously, the next piece is, how do we become a consistent repurchaser of stock and obviously we hope to do that in the coming couple of years. Anant, do you want to add anything technically with respect to 2020?

Yes. So with respect to 2020, I would approach it with like three items. I would think of it three drivers to build on what Eric said. One is the adoption of VA capital reform and also early adopting that in 2019 is a great enabler because it really helps our unassigned funds and dividend capacity, so that's one of getting money out of BLIC to answer your specific question. The second is continuing to see markets perform well and that translating into separate account returns for us. That translation needs to happen. And then finally, what I would really say about this is that we want to make sure that as we implement these items, you continue to see the block perform well and the growth of the new business. So we’re going to see those three elements come through.

And then Anant, just one last one for you if I could. On the $2.7 billion buffer, it was sort of flat versus the first quarter, despite some pretty decent markets and higher rate. Any sense of -- can you give us a sense of kind of the moving pieces? I know, you’ve done this on prior calls in terms of how markets impacted you versus volatility, just as we track this going forward?

Sure. So volatility came down a little bit in the quarter and markets were up. Both those would have a mark-to-market impact and then you have the passage of time along with interest rates. Those are the items I would look at that drove the derivative mark-to-market. Another important consideration, as you think of that derivative mark to market on my prior comment answers, we are going to be building up our deductible from $1 billion to $2 billion over time and that's something we keep in mind, because that also drives, a, the mark-to-market will go down when that happens, but, b, that also drives cash flow out of the Life block, out of the Life company annuity block.

And our next question comes from the line of John Barnidge with Sandler O'Neill.

With your updated guidance, apologies, if you already said it, but can you give us your latest thoughts around the tax rate for the year, or the balance of the year rather?

Our expectation stays the same as earlier, mid to high-teens knowing that we sort of true up in the third quarter, so that’s the quarter where we do a tax rate true up to provision.

And then my other question, run-offs obviously has lower margins than annuity and also life. I know there's market conditions, but is there anything structurally preventing you from pursuing the divestiture for some or all of that sentiment.

Hi. I'll start and maybe anyone else will chime in. Structurally, we have to think of runoff as having a large ULSG block as we've talked about and that would require us working with Delaware, our regulator to, it's a complex reinsurance transaction, it's not as easy as just divesting it.

And our next question comes from the line of Alex Scott with Goldman Sachs.

I guess the first question was just a follow-up on the comments on the uses of capital from a potential debt issuance. I know you're not ready to talk about what you potentially do with it, but should the expectation be that that will be sort of sitting at the holding company until you decide or is there any need to put it into an operating company?

It's Eric. I’ll start. Anant, you can jump in. I would say general flexibility. We'll have to see, I mean, look, it's very nice to be sitting here, talking about the 27 Oliver Wyman proposals here and now having agreement from the regulators and us understanding it to a pretty great degree, but we'll have to see. I consider our excess leverage capacity to be exactly what we've said, since the beginning, financial flexibility. So that's how I would answer it. Anant, anything to add?

I think you covered it, Eric.

And then a follow-up question was just on the adjusted statutory earnings you gave, I guess, it was 175. I think you mentioned that was for the first half of the year, so a little less than 40% of GAAP earnings and I was just wondering if you could help us think about what are some of the differences that make that significantly lower and what do you – like, is that a metric we should be looking closer at, is that a better sort of indicator of the earnings power?

The short answer is yes. That is a better indicator of us being able to grow the assets above CTE 95 and talk about capital return out of the life company. Now, technically to answer your question, how does that differ from stat earnings, in essence, we manage the VA block as you know to funding CTE 95 and at that level of assets above that, this is taking out, so to start with adjusted statutory pretax income, almost 933 of the stat line and take out the existing reserve, AG43 reserve change, which will be sunset with passage of VA reform and include CTE 95 as the required reserve and capital, plus bringing unrealized gains and losses from the hedges, which are not in stat pretax income, but they go through tact, because at the end of the day, you have to grow your total adjusted capital to be able to return any.

And maybe one quick follow-up on the sunsetting of the standard scenario. I mean if you were to remove the standard scenario today, how much would the, like, I know, not necessarily implications for total asset requirement, but how much would the reserve requirement go down and how much would that benefit your stat surplus if that was removed today?

That is a great question. It would be meaningful and it’s the driver behind my comment about dividend capacity goes up meaningfully.

So should I take that to mean like over $1 billion?

You should take that to mean it's very meaningful.

And our final question comes from the line of Tom Gallagher with Evercore.

Good morning. Just first to follow up on Alex's question on the sun setting of the current framework. Anant, is the way to think about that could sort of pull forward the, some of the cash flow guidance you've given that initially or at this stage looks like it was a couple of years out and that might pull forward some of that in to 2019, if it all worked out on the sunsetting or any clarity on sort of the mechanics and what the output of that would look like, would be helpful?

Yeah. It helps. Let me explain where it helps the most. To my early answer, really helps with dividend capacity. So it removes any clouds, anyone may have thought we had because of standard scenario and it allows the flow of capital out of the life company to happen in an unencumbered manner through ordinary dividends. That's what it really allows. The core underlying cash flows and the hedging targets and dynamics, all that, none of that really changes.

So it's more the -- would you say the volatility of outcomes related to capital would improve?

Yes. Pretty much.

Okay. And then Eric just a higher level question for you. Anything under consideration right now whether it's -- with regard to risk transfer, whether it's VA, life insurance, spread products, I can appreciate when your stock was in the 50s or 60s, how that may not have made sense, but given where -- how the market's valuing your stock now, does that really change anything for you?

I don't think it changes with respect to where the stock price is. Our goal is to create shareholder value in the ways we can do it. I mean, the market values the stock, I understand that. I have said previously that everything's on the table. Now, I've also said, look, there is resource constraints to some degree. I mean, we can only do so much in any given year, Tom. But here's what I would say, nothing is off the table, nothing. We will consider anything if we think it's executable and will add shareholder value. So, the stock at any price, we will still consider anything if we think it's executable and will add shareholder value and we have the resources to do it, I guess, that's inherent in the notion of executable, hopefully that answered and I'm happy to do a follow on if you want.

And then just to be clear, based on what you know today about your initial evaluation of the new rules, you have more than enough capital in the OpCo to deal with the reform or is there still -- is there still some risk that you're going to be doing a debt deal, down streaming capital into the OpCos to deal with initial VA reform requirements.

Tom, I’d answer it the way Eric added – answered and I’ll add a little more, which is issuing a debt deal when the market opportunity is there to achieve financial flexibility in terms of your capital structure makes sense to us. Now to speculate point of downstream into the OpCo, there are two dynamics at play here. One is, we are looking to be very shareholder friendly by growing our deductible from 1 billion to a higher number, being able to do that by downstreaming capital or whatever is useful or organically growing capital, that is core to our strategy as well as reducing hedge costs. VA reform, we've talked a lot about the upfront impacts, it also changes the sensitivities, which we’ll update at year end. So we’d want to make sure that we can continue to deliver hedge cost reductions. Capital can be helpful for both those things.

Tom, I would just add. Look, you heard Anant say, maybe we’ll run at more than 98. So we're, in the end, we're starting to talk about 100 million, 200 million, 300 million here. We're not talking about $1 billion. Does that make sense? Do you get what I'm saying?

Yeah. I do. And then just final question for you guys, heading into 3Q, balance sheet review season, anything that you would flag as kind of watch areas?

No. We do a annual actuarial review in the third quarter, we have nothing we would flag for you at this point in time.

And we do have a follow-up question from the line of Erik Bass with Autonomous Research.

Tom actually just asked the question I was going to, but I guess as we think about your third quarter annual assumption review, would we expect you to align your GAAP assumptions with the NAIC scenarios or would you continue to set your own best estimate macro assumptions?

Eric, it's early to answer that. GAAP is based on best estimate. We've got to work through the third quarter process, I maybe like to make one point, which may help. We do not expect our third quarter actuarial process to impact our capital return that was just announced.

Thank you. And that does conclude today's Q&A session and I'd like to return the call to Mr. David Rosenbaum for any closing remarks.

Thank you, Sandra and thanks everybody for joining us today for our second quarter earnings conference call and for your interest in Brighthouse Financial and we'll speak again next quarter. Thank you.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day.