[Abrupt Start] Our first half results reflect these established and newer capital-light strategies and we've generated record gross sales whilst maintaining pricing discipline. Our gross sales were $6.3 billion in the first half, up 11% over the prior year. We're on track with our stated goal of growing annual gross sales at a double-digit clip. And with net sales of $4.4 billion in the first half, we are on track with our stated goal of managing net sales retained above the $6 billion to $7 billion annual level that continues to grow our retained AUM. Next looking at the quarter's results more closely. We reported gross sales of $3 billion in the second quarter, a decrease of 3% from the prior year quarter due to lumpy institutional sales with a 9% decrease over the sequential first quarter, which reflected a record level of sales boosted by the effects of market volatility and the US regional bank crisis. Retail channel sales were $2.3 billion in the second quarter, an increase of 5% over $2.2 billion in the second quarter of 2022. This reflects our fifth consecutive quarter of retail channel sales exceeding $2 billion driven by continued strong consumer demand for our products. Fixed annuities are an attractive solution for consumers given their relatively higher rates, guaranteed growth, principal protection and tax-advantaged accumulation and annuitization options. Our sales mix was consistent across the three retail channels including agent, bank and broker dealer in the second quarter as compared to the prior year. Institutional market sales were nearly $700 million in the second quarter comprised of $500 million of pension risk transfers and $200 million funding agreements compared to nearly $900 million in the second quarter of 2022 solely comprised of funding agreements. Funding agreement activity in the second quarter was driven…

Thanks, Chris. Today I'll provide more details about our financial results and key performance drivers, capital liquidity and leverage positions and wrap up with a few additional thoughts on our reinsurance strategy. Overall, F&G's financial performance in the second quarter was strong and builds on our proven track record and we continue to have strong capitalization and financial flexibility to successfully execute our growth strategy. Starting with adjusted net earnings. For the second quarter of 2023, we reported adjusted net earnings of $79 million or $0.63 per share. Our core earnings per share were $1.03, after adjusting for $0.40 per share of unfavorable significant items that are not consistent period-to-period. These significant items include $0.44 per share for alternative investment returns below our long-term expectations, partially offset by $0.04 per share of bond prepay income. For comparison, last year's second quarter adjusted net earnings of $155 million or $1.45 per share included favorable significant items of $0.39 per share. Adjusting for these significant items in both periods, second quarter adjusted net earnings increased by 14% over the prior year. I also wanted to highlight that on July 13, 2023 F&G filed an 8-K to provide investors and analysts with a supplemental disclosure of our 2022 10-K and first quarter financial supplement and investor presentation. This filing revised our prior LDTI accounting standard recast for calculation refinement of F&G's A&E adjustment to remove all market-related movements including the current period for market risk benefit from income. We believe this approach to be in line with peers. This change had a modest favorable benefit to adjusted net earnings, which is reflected in our first half 2023 results and we expect to persist in 2023 in future years. Importantly, F&G has generated consistent economics over time. As Chris mentioned, excluding significant items, F&G…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Your first question comes from Mark Hughes with Truist Securities. Please go ahead.

Yeah. Thank you. Good morning. Wendy you…

Good morning, Mark.

Good morning.

Good morning, again. Wendy, you talk about if you retain $57 billion that would be sufficient to grow the block offset outflows, what kind of growth rate are you thinking of when you're talking about grow the block? Is that just low-single digits, or what's the right number?

I would say, its single-digits, but on the upper-end.

Okay. And under those circumstances, is there a kind of a rule of thumb about the capital return or capital excess capital generation, if you're reinsuring 90% of the MYGA, if you're retaining enough to get kind of single-digit growth in the block. Your -- as you say your ROA profile improves relative to your capital usage, what does that mean for capital return?

Yeah. So we believe we'll be able to increase the dividend over time.

And the only thing I would add to that, this is Chris is that right now new business we're getting at least mid-teen ROEs on new business. The economics on flow are pretty meaningfully north of that. So we think this will show up relatively quickly in terms of its ability to expand overall net spread.

And then Chris the sales this quarter still quite strong in absolute terms but year-over-year, up mid single digits. I think that's probably I think the industry numbers suggest the overall sales growth was somewhat higher than that. Was this just competitive situation? Did you -- was the MYGA not quite as attractive this quarter? And again, not to criticize what's a good growth rate, but what was the dynamic this quarter?

Yeah. So I would say no nothing has really changed in terms of competitive environment. There's always pockets of products where perhaps you're seeing someone be a bit aggressive and you choose not to go chase it. I think for us it's -- we look across now all of the channels when deciding where to allocate capital. So no, I would say return targets for us have continued to be quite attractive. But keep in mind, we're also writing PRT business. We've got FHLB borrowings et cetera. So we just -- we go through the process it's pretty real time of where we want to allocate capital. The quarter-over-quarter looked like it slowed a little bit. But just keep in mind we had an absolute blowout first quarter. So right now our retail business is on a pace to do $10 billion of sales on its own. So no we're feeling like there's just tons of sales opportunity right now.

Great. Thank you.

[Operator Instructions] Next question comes from A.J. Hayes with Stephens. Please go ahead.

Hey, good morning, guys.

Good morning.

Congrats on the quarter and thanks for taking our question. Chris and Wendy you both called this out during your prepared remarks, but when we look at your normalized ROA or we utilize your long-term expected return assumption of approximately 10% on alternative assets. And back out any other one-timers, your ROA as you guys said has been over 100 basis points for six consecutive quarters now. So first off, congrats on that. But can you generally talk to what is driving this outperformance? And then whether we should expect this trend of hovering above 100 basis points to kind of continue for the foreseeable future here?

Yeah, that's where we're trying to give some discussion points for you and some modeling help with expanding the reinsurance and the owned distribution. You should see that ROA expand even above the levels that we currently experienced. We're seeing spread expansion in the existing business. We've had -- with the run-up in the interest rates the floaters are performing very well. And we -- in the QFS A.J. we show a nice exhibit that demonstrates how that has contributed to the NII line. We have had some increase in the cost of funds, but the product margin is basically what's causing that expansion.

Yeah. And the only thing I'd add to that is which we talked about on the call I mean we've grown the topline at a pretty incredible clip. As you know we've effectively doubled assets and earnings in three years when the goal was 5%. And look we've had to make some pretty significant investments in new channels and new technologies to execute upon that. But despite that, we're still getting some good expense synergies. In other words, we've grown fixed expenses at a rate well below what we've grown sales at. And I think now we should see more of that going forward. So it's really across the board. Blackstone has done a terrific job working with our investment team in terms of continuing to generate attractive additional spread for the portfolio product margins, as Wendy said, have been growing. And then as we continue to tightly manage fixed expense growth going forward, it's a good picture. And yes, I would say, it's pretty hard for us with a straight face to say that the goal is 100 basis points when we've averaged 113 basis points, and I think, there are more tailwinds than headwinds to that.

Great. Thanks for the color there. Chris I believe it was you that mentioned you're on track to hitting your goal of achieving institutional sales of $2 billion to $4 billion in 2023 here. But could you provide more color here in 3Q? Have you had any more of these lumpy institutional transactions so far during the quarter?

We have. So we closed one transaction. I'll double check it was $170 million or so. Pipeline is good. We continue to like the market a lot. There's a lot of activity. We're really selective on what we go after. It's quite an impressive and sophisticated funnel that the team uses to assess even -- do we even want to bid on a deal. But once we've decided and we've narrowed in on we like the profile of the deal. We think it lines up well with our line of sight on asset availability and we go after it. We've had a really good hit rate effectively one and four despite frankly being one of the lower rated players competing in the market. So we see a lot of upside there. We like the long duration profile of that business. And it's a small, but mighty team. And so these are assets we talk about expense leverage, we got a group of about a dozen people leading this effort bringing in billions of sales. So that positive contribution all around.

Okay. And then just looking at gross sales here institutional channel has been strong. You expect to achieve that goal that I just previously mentioned there. Retail channel as well has been performing well here. So a strong year in 2023 is kind of the expectation where we're expecting. Can you talk to gross sales maybe in 2024? You expect to hit the double-digit clip here in 2023. Is that a reasonable expectation again for 2024?

Yes. I would say it is. We've got new products in the works as well. We're close to entering the RIA market and I think that's going to open up a lot of avenues and other pockets of distribution for us, which I think will be really attractive. We talked about PRT. I think there's certainly tailwinds there. And then retail demand for fixed annuities you referenced some of the industry numbers is really just off the charts right now. You're looking at crediting rates of 5-ish percent tax deferred with principal guarantee. So I don't -- I honestly don't see that slowing down anytime soon. And again, for us, it's really -- we view our most important job on behalf of our shareholders is to allocate capital smartly. And now we've got a new business engine that's cooking along in sourcing premiums from multiple directions. So, yes, we will continue -- expect to continue to grow the topline at a double-digit clip.

Okay. Thanks again. Good luck for the rest of the year.

Thank you.

Thank you.

I would now like to turn the floor back over to Mr. Blunt for closing remarks.

Great. Look, we're pleased with our overall results despite the uncertainty and volatility in the current macro environment. We think F&G is poised to benefit in this higher rate environment and is off to a strong start in the first half of the year. We expect to expand our business with a focus on further improving our profitability, which we believe over time will drive multiple expansion to deliver value to shareholders. Along these lines, we look forward to discussing our business and emerging growth strategies in more detail at our upcoming Investor Day on October 3. Additional information will be provided on our investor site, as we get closer to the event. Thanks for joining us today and we appreciate your interest in F&G.

Thank you for attending today's presentation and the conference call has concluded. You may now disconnect.