Good morning. My name is Mitchell and I will be your conference operator today. At this time, I would like to welcome everyone to the AXA Equitable Holdings Inc. First Quarter 2018 Results. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to Mr. Kevin Molloy. Please go ahead.

Thank you. Good morning and welcome to AXA Equitable Holding's first quarter 2018 earnings call. Materials for today's call can be found on our website at ir.axaequitableholdings.com. Turning to page, another important reminder. Our discussion during this call will include forward-looking statements within the meaning of the federal securities laws. AXA Equitable Holdings' actual results may differ materially from results anticipated in the forward-looking statements as a result of risks and uncertainties including those described in AXA Equitable Holdings' filings with the U.S. Securities and Exchange Commission. Information discussed on today's call is current only as of today June 20, 2018. The company undertakes no obligation to update any information discussed on today's call. Joining me on today's call is Mark Pearson, President and Chief Executive Officer of AXA Equitable Holdings and Anders Malmstrom, our Chief Financial Officer. Also, in the room is John Weisenseel, 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 financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures and related definitions maybe found on the Investor Relations portion of our website, in our earnings release, slide presentation and the financial supplement. I would like now to turn the call over to Mark and Anders for their prepared remarks.

Thank you, Kevin and good morning everyone. I'm pleased to be with you today for our first quarterly earnings call since becoming public on May 10. We are aware that there may be a number of investors listening who are just getting to know us. So, we thought it will be helpful to provide a quick overview of our business operations, before getting into our first quarter results. Axa Equitable has been around for 159 years now, providing advice and solutions that help our clients retire with dignity, protect their families, and prepare for their financial futures with confidence. Today, we serve more than 5 million clients, over 12,100 employees and financial advisors and total assets under management of $665 billion. Moving to slide 4, AXA Equitable Holdings operates with two well established and iconic brands. Firstly, 100% ownership of AXA Equitable Life which serves 2.8 million clients with individual retirement, group retirement and protection solutions. Secondly, we own 65% of AllianceBernstein, investment management and research house, itself listed on the New York Stock Exchange with a market cap of over $8 billion. Although our subsidiaries of distinct businesses they have grown up together and complement each other well. AB manages approximately 69% of AXA Equitable’s general account and 29% of the separate account. AB also provides deep expertise for our hedging and asset liability matching and in return AXA Equitable provides a source of seed capital for new product development, a key part of AB’s recent success. Both subsidiaries have very strong financial strength through ’18. AXA Equitable Life is rated A2 by Moody’s and A+ from S&P, both with a stable outlook. AllianceBernstein has also received A2 stable for Moody’s and an A stable from S&P. We are differentiated by the breadth and size of our businesses, I’m…

Thanks Anders. Before breaking for questions, I’d like to be clear on our goals and performance. On slide 15, we summarize our key financial targets. We’ve positioned the company to maintain a strong balance sheet, while delivering disciplined financial growth. We are holding our sales accountable to deliver 5% to 7% compound annual growth in operating earnings through 2020 supported in part by the 30% adjusted operating margin target that AB has publicly reported. And with a target payout ratio of 40% to 60%, this should result in a pro forma non-GAAP operating ROE in the mid-teens by 2020. We expect to maintain strong capitalization of CTE98 for variable annuity business and 350% to 400% RBC for the other insurance businesses. And finally, on slide 16. Just a reminder of the highlights from the first quarter. As a newly public company, I’m very pleased to deliver such strong results driven by continued solid performance across our two principal operating subsidiaries. We are confident that our leading positions in select markets, premier multi-channel distribution platform and investment expertise position us well to continue to generate earnings growth, maintain financial stability through market cycles and generate attractive returns and strong cash flows for shareholders. With that, I’ll hand it over to the operator to open the call to Q&A.

[Operator Instructions]. Your first question comes from Erik Bass from Autonomous Research. Your line is open.

I guess, first question, can you talk about the timeframe for potential capital return. Now are there any restrictions on when you could begin share repurchases and do you have a preferred approach between being in the market on a regular basis, or [when you] participate in future stock offerings from AXA? Anders Malmström: Thank you, Erik. This is Anders speaking. So first of all, as we already talked in [India] we can maintain to start paying dividends and from Q2 on, which means first time will be in August and as we indicated, it will be most probably around $0.13 per share per quarter. And we also said that we’re going to start using buybacks in the second half of the year. We’re going to comeback in Q2 with a more detailed plan. How are we going to do that? But I tell you, it will be in H2 so later in the year from that. But we come back into Q2 and earnings call and give you more detail.

And just to follow-up on that. With the 40% to 60% of operating earnings that you expect to deploy. I think you’re talking about doing that for 2018. Obviously, you want to pay dividend in each of the four quarters. But should we still use that as kind of the rough range to size total capital deployment for 2018? Anders Malmström: Yes. Absolutely. This is the right range and think about we’re going to do 75% this year, because basically we are public for three quarters.

And if I could sneak in just one more. Over what timeframe do you expect to complete the investment portfolio optimization and can you provide some more color on just the geography of where the benefits will show up in your results? Anders Malmström: As we already said in the S1 and I think during road show this is, [indiscernible] program and we have completed about one-third of the program which means on a run rate basis on an annualized basis this is a pick-up of about $50 million and you’re going to see the impact in the net investment income over all segments, I think you can expect the biggest impact of this in protection solution segment but it will impact all three segments. Now you will not see, we cannot call out the impact of the program standalone because obviously there is an underlying and performance income from the [indiscernible] pick-up of about 160 million on a pretax basis and as I said about one third is implemented which is on an annualized basis about $50 million.

Great. Thank you very much.

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

Hi, thanks good morning. When we think about the difference between net income and operating income, can you help dimension how much of that you have through cash items versus more accounting differences that result from the GMIB business? Anders Malmström: Yeah, this is again Anders speaking. So, you know as I said in the presentation, I think it’s really -- really the right way to look at the business is from an economic point of view and that’s what we try then to use operating earnings as the best proxy. Now I know GAAP in the end is what we have to report on but GAAP doesn’t really reflect the economics of the business. So that’s how I really think the operating earnings is the best way to look at. Now you see in the reconciliation when we go down from operating earnings to net income that the impact coming from the VA business is about $212 million. And think about the majority of this is really mark-to-market and I think about 186 is mark-to-market and about 26 million is coming from the static and hedge program but you can argue this is a cash item because really for options you pay a premium. So, 26 million is a cash item, the rest is mark-to-market for that reconciliation. But again, as I said I don’t think net income is the right way to look at it, it's really the economic view and we try to use operating as the best proxy to reflect that.

Got it, thanks and then on VA sales it's down from quarter I mean you noticed a strong year ago comparison, seems like we’re starting to see some improvement in overall market VA sales. Can you talk a little bit about your outlook going forward and if you expect to grow VA sales that’s here?

Yeah, hi its Mark I’ll take that question. Yeah, you’re right so first quarter 2017 was a particularly strong quarter for us ahead of the proposed DLL changes if you remember. Those changes were substantially altered and less disruptive to the industry and yeah as you say we are seeing some signs of improvement in sales conditions in the VA business since the first quarter end. And we’re very positive that over the long-term there is significant demand for these products and we’re very well placed with our product range and our distribution reach.

Great, thank you.

Your next question comes from Andrew Kligerman from Credit Suisse. Your line is open.

Hey good morning. Follow up on that annuity question, as I look at slide 11 in the net flows, the new products, it looks like the flow of the new product is $579 million this quarter versus $1.14 billion last quarter. Are you seeing more competition in the structured product area? Can you talk a little bit about that?

Yes. Hi, it's Mark. I'll follow up on that. Yes, there is more competition particularly in the space where we have our SCS product, a number of competitors have come out with similar products in there, so a little bit more crowdie there. And the other point behind that reduction in the net flows on the current product line is the maturities on our SCS that we sold 5 years ago. So, some of that business was planned to mature and come off and we're starting to see that. So, I think there is a combination of the two things. The sales being down slightly on a very strong quarter in 2017 and the natural outflows that we expect on the [SCS]. And also, on the competition side. I mean it's two things isn't it? One it's the product range you have but also the distribution capability you have. You will see I think ourselves over the last few years, are less volatile than some others because we have AXA advisors and we have distribution relationships broader than just warehouses. So, I think we're well placed, but yes, I think there is more competition there.

Got it. And then at AllianceBernstein, it's interesting the net flows in taxable fixed income were negative 9.6. And then on the active equity you are positive 2.9. And of course, that was great because your net fees were better. But that said, I was just curious as to what was driving the pressure in taxable fixed income and the strength in active equity.

This is -- Andrew, it's John from AB. I think the pressure on taxable fixed income was just driven by the increase that we saw in rates during the quarter. And then the strength in the equity side, we had actually won 2 large institutional equity mandates. And one was a value mandate, international value mandate. And those were really what was driving the equity numbers as well.

So, do we have a trend going forward?

Well we had positive active equity flows last year, $800 million. Obviously, that's going against what we're seeing in the industry and against our peers. So, we're quite pleased with that. Again, not quite sure that will continue, but time will tell. And one thing that's helped us I think is that our performance in the active equity space has improved over the course of the past 2 years. But I think we're seeing that in our flows. In fact, one of the large institutional mandates that we did win in the first quarter was actually that have left us many years ago and now has come back to us. So that was a very good sign.

Great. Thanks a lot.

You're welcome.

The next question comes from Jay Gelb from Barclays. Your line is open.

Thanks very much. Can you give us any perspective on how quickly the AXA parent company may sell down its remaining stake?

Hi Jay, it's Mark Pearson. I can't give you any more than AXA has already put out, which is its intention to fully exit over the next few years subject to market conditions. I think what I know AXA out publicly with that and we don't have any more information other than that.

Okay. Next question, it appears looking at AXA Equitables current valuation that the valuation of AllianceBernstein is not really reflected at all in the stock. I wonder, if that -- [my drive is] thinking at some point as to whether to buy in the rest of AllianceBernstein or perhaps spin it off?

Obviously, we can’t comment on valuation that’s the market to set. But in terms of our ownership of AB, Jay it's been 65% under the AXA umbrella for some years now. When we looked at this topic before, we are aware of financially valuation, but by the minorities. But we know that, there is a very good currency for AB in being listed both externally in many mandates and internally with the [CUT]. And in terms of, within our portfolio, we really liked the business, it ticks a lot of boxes for us, it’s low capital intensity, it gives us non-regulated cash flows into the holding company. And a lot of the businesses are distinct, they are pretty complementary and support each other very well in terms of the fundamental, the AB and look after on the life side and also the seed capital that the life business is able to provide from time-to-time to support the strategy. So, we’re happy with where we are now. We will look at it from time-to-time, I’m sure, but no plans to do so.

And my final question is. Just trying to get a perspective on AXA Equitable sensitivity on earnings per share perspective on a given move in equity markets or fixed income yields if you happen to have that?

Yes. Look, I think as we talk about before, I think, our business is sensitive to equity markets, I think most of our segments actually have quite a high portion of separate accounts. So, I think the sensitivity, there is really obvious the same is true for AllianceBernstein. We don’t give a number on that. But I think you probably can calculate it by yourself, because I mean fees are directly linked to equities. And then maybe just a sensitivity to interest rate is on the insurance side pretty limited from an earnings perspective. This is more long-term impact, I think on AllianceBernstein is obviously slightly higher because of all the fixed income in the underlying funds. But yes, we are sensitivity to equity market.

If at some point down the road perhaps, you can give us the details on that, that will be helpful. Thanks very much.

Your next question comes from Mark Hughes from SunTrust. Your line is open.

Just a quick follow-up on the question. Is it just the impact on account balances that drive the earnings affect related to market movements or are there other fees or revenue items to consider? Anders Malmström: So, this is again Anders speaking. I mean, I think, it’s really the impact on the underlying asset balances and then directly impacting the fees coming therefore. As we talked before, our hedging program really tries to immunize all the impact on the riders, which means on the guarantee. So there the impact should be very limited and that’s really coming from the fees and then the interest rate obviously going to impact the yield on the [general] account, but that’s much, much lower. But that’s only for the new money you’re going to invest that where you’re going to see the impact on any interest rates. But yes, it’s coming from the underlying asset balance.

And then compensation expense came in a little lower perhaps this quarter than we might have looked for. Is there any sort of seasonality or one-time items that might have impacted that or the cost efficiency measures? Anders Malmström: No, I think as you look at if you look at the expenses, I mean expenses overall are slightly off but if you take out and the impact from AllianceBernstein its actually down quarter-over-quarter which really goes back to the efficiency measures we are taking at the [interim inside]. And maybe John you want to comment on expenses on AllianceBernstein?

The AllianceBernstein is just the comp expense was up because the revenues were so much higher and your supply in comp ratio. This is far as the other expense lines; the G&A expense was flat for the quarter -- at quarter-over-quarter and the [personal] servicing was up I think just about $3 million. That was really due to higher trade execution expenses at the Bernstein research business because of the -- they were trading more market volume and obviously some of their trading expenses are variable and that’s reflected there as well.

Thank you.

[Operator Instructions]. Your next question comes from [indiscernible] with Citi. Your line is open.

Thanks, good morning. I wanted to start with the AllianceBernstein stake, our understanding is about 45% of that investment is sitting in a regulated insurance subsidiary. So, two questions on that, one, any thoughts in terms of why that is and then second, can you tell us which businesses that asset is supporting? Anders Malmström: So, this is Andre speaking, look I think [indiscernible] you’re correct. It’s about 28% out of the 65% owned by the insurance company, the rest of 37% are owned by the holding company. Now the reason for that is really historical, so that’s how we took and adopted the whole ownership structure. And then the only thing I can tell you about that is that we’re actively looking at changing that because from our perspective we will like to move the AB shares to the holding company but it's something that is more complicated than just do it and one thing. So that’s something we’re looking at. Now when it comes to your question about where it -- I mean what kind of business it supports, it does not, it will be a part of the surplus, that’s the way you have to think about it and under statutory which means the earnings coming out of it provides the statutory surplus but it's not allocated to a business. Our general count is not segregated to businesses but the AV shares you can think about as a surplus add.

And [especially] comment on the obviously impact if you were to move, I think we’ve given the market some guidance on it as well.

Yeah, so as you know because AllianceBernstein is equity, the [other] treatment is pretty high, so it’s a significant stake, the RBC impact is actually pretty small. If you were to exclude and move up the AB shares from Equitable into the holding company. It’s a low double-digit number in terms of RBC points.

Okay. So, I have a follow up on that, so just we should not think about the stake as being included in any of the available resources backing the VA block?

Correct.

Okay, and then my separate question is just on the free cash flow conversion of 40% to 60%. And I get that it's an at least kind of number. I guess given your business mix especially with the AllianceBernstein piece, I would have thought that maybe that was higher. Because the 40 -- figure should be higher because the 40 to 60 is pretty close to what we see from insurance companies that don't have sizable asset management operations. So, is there something that we're sort of missing there, or is it just conservatism?

So maybe. This is again Anders speaking. Looking, I think the 40% to 60% is really the range we gave when we went out. I think it is the range that we can definitely hit and I would say if everything works well in operating of this range. So, I think that's what I want to give you, but certainly I think there is upside there.

Okay. And just the last one just on the capital just to follow up. Is there any excess capital that you would point to either in insurance subsidiaries or elsewhere? Your 40 to 60 is obviously based on the earnings that you generate. Just want to make sure, maybe there is not a piece of excess capital that were not -- that is not contemplated in the 40 to 60?

Yeah so look the 40 to 60 is really the guidance we gave you over the next couple of years. Now when it comes to capitalization, I think you heard me talking about CT-98 which is really the target capitalization for VAs and then for non-VAs we target between 350% and 400% RBC. And if you take that together, you end up at RBC ratio of about 550 points. Now as we pointed out in the S1, at year-end '17 we were at about 650 RBC points. If you incorporate the VA recapture, which adds another 50 points you close to 700 points. Now obviously we're going to pay out the dividend and during this year the insurance company that we also generate earnings. And so, we think I think we are in a good position above our target capitalization. But keep in mind, the impact of the tax reform that has to be reflected at some point once its signed and then also the NAIC reform is coming. I'm not afraid of it. I think we are in a good position there. But from that perspective, I see maybe some capitalization above our target range, but this is all reflected that we can solidly and perform our range we gave you and this is 40% to 60%.

Okay thanks.

The next question comes from Alex Scott from Goldman Sachs. Your line is open.

Hi, good morning. First question was just on the hedge effectiveness. I get that U.S. GAAP accounting makes it a bit difficult for us to assess hedge performance U.S. GAAP numbers. And that's part of the reasons it's flow on. But could you shed some light on this hedge effectiveness metric you gave us. And am I right to interpret 94% hedge effectiveness this quarter in a quarter where like equity markets are moving. And a direction and interest rates moved up. Does that mean that the 6% breakage was actually a positive this quarter?

And so, I would say, think about it as a volatility measure when we talk about hedge effectiveness. Basically, what we measure here is on a 12-month trailing, the 12 months trailing ratio where we measured the movement in liability versus the movement in our hedge assets. Under liabilities really the economic liabilities how we manage our problem. So, every month, you have liabilities up and down, you have hedges up and down. And then you take the difference and you take this ratio and have a 12-month rolling average. Now by that the number is always below 100. Even though if it’s a [indiscernible] or it’s a low, it's always below 100 because you can never be above 100. But I won’t say, it was a gain or loss this quarter, but it’s pretty much, I think about it as a volatility measure as I said and then, I think overall, we were actually pretty flat for this quarter on an economic basis.

And just from the NAIC capital reform. Can you provide an update just based on, I think the NAIC recently put out some recommendations of their own, as opposed, I think previously was mostly all of alignment stuff? So, is there any additional clarity that you got from reviewing that and any update on the direction of it? Anders Malmström: So, as I said before. I think, overall, I think we are in a good position, I think when the NAIC came out with their detailed report we are still going through complications, so I cannot give you any update and from that perspective. I hope, I can give you that at Q2 call. My understanding is that the NAIC is going to put it final, I think in the August meeting. And after that, obviously we don’t have to do the final calculation. But as I said, I think we’re in a good position there, the NAIC reform goes in the right direction, it’s a much more economic framework, which supports the economic hedging, we’re doing from that perspective we’re fine from an assumption [policyholder] behavior assumption. So, I think, we as well, we’ll be in a good position. So overall, we support that initiative and it goes in the right direction its supports economic hedging. But quantification, I have to give you once we have the final regulations done all the numbers calculation.

And maybe, if I can sneak in one last one in. Just in terms of seasonal considerations is there anything you'd highlight thinking about going from Q1 to Q2? Anders Malmström: No. I think, look, I think quarter from a market perspective, it was [benign] quarter from that perspective slightly down obviously. I think the biggest changes really come from all the restructuring elements we’ve done in Q2. I think we increased the AB ownership at the AXA Equitable Holdings from 48% to 65%. I think that’s the biggest impact also to debt issuance that took place in Q2. So, you’re going to see all of that reflected in Q2, I think Mark talk about the sales. So, I think overall, I think it’s really the majority will be coming from the restructuring.

[Operator Instructions]. I have no questions in queue at this time. I turn the call back over to Kevin Molloy for closing remarks.

Thank you, Mitchell. Thanks everyone for joining us this morning. As always, if you have any follow-up questions please deny hesitate to call or e-mail. You can reach us at 212-314-2476 or through email at ir.axa-equitable.com. Thank you and have a great day.

Thank you everyone. This will conclude today’s conference call. You may now disconnect.