Good morning, and welcome to the Voya Financial Fourth Quarter and Full-Year 2017 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Darin Arita, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Jennifer, and good morning everyone. Welcome to Voya Financial's fourth quarter 2017 conference call. A slide presentation for this call is available on our Web site at investors.voya.com or via the webcast. Turning to slide two; on today's call, we will be making forward-looking statements. Except with respect to historical information, statements made in this conference call constitute forward-looking statements within the meaning of Federal Securities Laws, including relating to trends in the company's operations and financial results, and the business and the products of the company and its subsidiaries. Voya 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 from time-to-time in Voya Financial's filings with the U.S. Securities and Exchange Commission. Slide two also notes that the call today includes non-GAAP financial measures. Beginning with the fourth quarter 2017 results, we change the terminology of several of our non-GAAP measures. We are now using the terms adjusted operating earnings per share, adjusted operating earnings, and adjusted operating revenue in place of the prior terms operating earnings per share, operating earnings, and operating revenues respectively. Please note that the methodology for deriving these non-GAAP measures remains unchanged. An explanation of how we calculate these and other non-GAAP financial measures and reconciliations to the most directly comparable GAAP measures can be found in the press release and quarterly investor supplement available on our website at investors.voya.com. Separately all references on this call to CBVA relates to closed block annuity segment. Joining me this morning on the call are Rod Martin, Voya Financial's Chairman and Chief Executive Officer; Alain Karaoglan, Voya Financial's Chief Operating Officer; and Mike Smith, Voya Financial's Chief Financial Officer. After their prepared remarks, we will take your questions. Also here with us today to participate in the Q&A session are other senior members of management; Charlie Nelson, Chief Executive Officer of Retirement; Christine Hurtsellers, Chief Executive Officer of Investment Management; and Carolyn Johnson, Chief Executive Officer of Annuities and Individual Life. With that, let's go to slide three. And I will turn the call over to Rod.

Good morning. Let's begin on slide four with our key themes for the year. 2017 was an important and pivotal year for Voya. We produced attractive growth in returns, maintained a strong capital position and announced a transformational transaction that will significantly reduce risk and accelerate growth. And we accomplished this while continuing to invest in our businesses to improve outcomes for our customers. With respect to growth in returns, we grew assets and premiums meaningfully over the past year. We achieved the ROE target that we shared at the Investor Day in June of 2015 for the total company and each of our businesses one year ahead of schedule. Given the achievement of our ROE target and the planned sale of the closed block variable annuity and annuities businesses, we have eliminated the use of the ongoing business ROE metric. As Mike will discuss later, we are also making changes on how we report our operating earnings. Our focus for the near term is on achieving the adjusted operating earnings per share target of a $1.30 to a $1.40 within 12 months of the transaction closing. This figure is comparable to the $10 to $20 target that we shared in December adjusting for the change in tax rate. We plan to share financial metrics and targets for 2019 and beyond at an Investor Day in the second half of this year. Our capital position is strong. At the end of 2017, we had $738 million of excess of capital after entering into a $500 million share repurchase program during the fourth quarter. In the first quarter, our board increased our share repurchase authorization. As a result, we will have a further $1 billion of remaining share repurchase authorization that can be deployed after the $500 million accelerated repurchase program…

Good morning. Let's go to slide nine. We have four key priorities in 2018. First, we will work toward closing the sale of our CBVA and annuity business. Second, we will continue to generate cost savings and become more efficient. Third, we will execute our capital initiative which includes a significant return of capital to shareholders. And fourth, we will continue to invest in our businesses to deliver more value to our customers and to grow profitable. Let's take a closer look at each of our businesses starting with retirement on slide 10. Retirement's return on capital for 2017 was 10.3%, up from 8.8% in 2016. We had great success growing the business, becoming more efficient and reducing risk in 2017. Our investment and distribution enabled access to more opportunities which translated into a record level deposit in both small, mid corporate and tax exempt market. Advisor productivity was also higher again particularly in the tax exempt market with average sales per advisor 12% higher in 2017. Our average participant count in the defined contribution business grew 6% in the year. And we took actions to reduce risk with respect to guaranteed minimum interest rate while continuing to partner with plan sponsors to improve participant's retirement income. Overall, we expect flows in 2018 to be strong though flows can fluctuate in any given quarter. We expect first quarter flows to negatively impacted by merger activity affecting our client. As we have seen in the past, they are times when we benefited from merger activity. We expect flows will build as we progress through 2018. Moving to slide 11, in investment management, the operating margin was 33.9%, up from 26.9% in 2016. Excluding investment capital, our operating margin was 28.3%, up slightly from 28.2%. Positive driver of earnings in 2017 include…

Before jumping into the slides, I'll make a few opening comments. Our announced sale of CBVA and annuities as well as U.S. tax reform had significant impact on our fourth quarter results and financial reporting. The announced sale led to the following; first, the sale resulted in a $2.4 billion GAAP charge. Second, we reclassified CBVA in the annuities into discontinued operations, which is not part of operating earnings. Third, we will retain a small portion of both of these businesses, the results of which are now included in corporate operating results. And finally, standard costs related to the sale are also now included in corporate operating results. We have recast our historical financial results to reflect all the classifications. With respect to tax reform as Rod mentioned earlier, there were several impacts. First, beginning with the first quarter of 2018, we expect our operating earnings to benefit from a lower tax rate in the range of 18% to 20%. This compares favorably to our prior tax rate of 32%. Second, the lower future tax rate reduces our deferred tax assets. This reduction consequently lowered our GAAP shareholder's equity excluding ALCI by $679 million at end of 2017. Finally, lower future tax rates also affected deferred tax assets on our statutory balance sheet. Our statutory capital was reduced by approximately 100 million. Now moving to slide 15, we reported fourth quarter adjusted operating earnings per share of $0.87. This includes $0.06 of combined prepayment and alternative income above our long-term expectations. Our fourth quarter operating results compared favorably to the years ago quarter when we reported $0.52. As a reminder, these figures now exclude most of our annuities businesses. Our strong fourth quarter result was primarily driven by sequentially higher fee income in retirement and investment management, strong expense management…

We will now begin the question-and-answer session. [Operator Instructions] Our first question is from Suneet Kamath with Citi.

I wanted to start on slide nine, if I could, where you talk about the expectation to deploy capital freed from the CBVA deal. I just want to confirm that the expectation is that that deployment will be in the form of share repurchases versus some other type of deployment. Is that still right?

Suneet, Mike will take that. Good morning.

Yes, Suneet, there's no change in our plans from what we announced in December. So yes, it's still intended to be used for share repurchases.

Okay. And then my second question relates to the individual life business. I know you're still in the process of doing your strategic review. But as we think about potential scenarios there, should we be thinking about sort of a similar level of stranded overhead as we saw with the CBVA and Annuity deal, if you decide to divest? Or is there any guidance that you can give or color you can give on how much overhead that business is absorbing?

Suneet, overhead cost will be a consideration as we think about what we're going to do. But it's a little early for us to get into those kind of details. We're still early in our strategic review, haven't really made any decisions, and so not going to go there. I think as we get to clarity around where we are going to go, and that should happen in the next few months, then we'll give you a better sense of how that could flow through when we are there.

Okay. And just maybe a quick clarification or conformation again, on the CBVA sale, to the extent that markets swing around between now and close, I'm assuming there's no impact on your overall consideration that you expect from that transaction?

Well, the way that deal works is that we're to deliver CTE95 upon close. As you know, our hedges are aimed at CTE95. We have, I think, a good and now long track record of hedging to that. We've gone through periods of market volatility, not unlike what we've experienced recently. So I think it's a little extreme to say there'll be no impact. There will be some noise, but we expect that to be very manageable and consistent with the kinds of historical experience you've seen in the past.

Okay, thanks, Mike.

Your next question is from Humphrey Lee with Dowling & Partners.

Good morning, and thank you for taking my question. Looking at Investment Management, there's definitely quarter-over-quarter improvement in fee rates. And I was just wondering what were the drivers for the improvement in the fees? And then also in terms of the third-party net inflows, what product lines are the main contributor?

Humphrey, Christine will take that.

Thank you. As far as the quarter-over-quarter improvement in fees in asset management, a lot of that was driven by the third quarter sale of a bank-owned life insurance product. So think of that as being a very large mandate with relatively lower fees, like a core fixed income product. Whereas in the fourth quarter what drove our sales were predominantly our credit products. And we also closed the CLO in the fourth quarter. So think about the fourth quarter fee activity, it's more reflective of the general institutional flows that we have.

Okay, got it. And then in terms of the guaranteed minimum interest rate product in Retirement, it doesn't appear you have any kind of renegotiation in the quarter. What is your expectation for 2018? Do you still have more renegotiations that you are targeting in 2018?

Charlie will take that.

Yes, thank you. Relative to 2018, we are largely completed with our group GMIR initiative that we undertook in 2017. So we're not anticipating significant additional acceleration because it's already embedded in our third quarter assumptions in terms of what we expect. We will, in the years ahead, start to look at our individual contracts in the retirement space that have GMIRs, but that will be a much slower and longer term kind of client-by-client type of realization.

Any sense of the size of the individual block that has these GMIRs or maybe in terms of the deck that is associated with the block?

You know, it's - when you look and you compare the group and the individual, the biggest impact that we thought we would be able to achieve is in the group contracts that we addressed. The individual is literally client-by-client. And so, yes, it takes a long time to address that. And certainly as interest rates rise there will be potentially less impact on those GMIRs or clients to address it. So we've not really given any guidance on that. We still have plans to try to address it in the future. But it's just going to be something that's going to have to evolve over time.

Understood. Thank you.

Your next question is from Ryan Krueger with KBW.

Hi, thanks. Good morning. First, post-tax reform, is the $600 million to $700 million free cash flow guidance still the same or is there any change to that?

That's correct.

Okay, so unchanged?

Unchanged.

Got it. And then as you generate cost saves going forward, just from a geography standpoint, how should we think about where those will come through. Will they be allocated to the business segments or will they come through corporate to offset the stranded overhead?

Ryan, this is Mike. The cost saves will occur in both the corporate areas and in the businesses. As you'll recall, we have some cost savings coming from some of our investments that we had talked about as part of the - solve on the cost saves. So as we achieve the $110 million to $130 million of overall cost saves, I think you can expect it to be in both.

Okay. And then just last quick one, do you - given the increasing interest rates, do you have any potential benefit to the CBVA before the deal closes or that just go as part of the deal?

So the given that we're hedging the CT95 and we're delivering CT95, any benefit would be more in the kind of the order of noise as opposed to a specific benefit that comes from higher rates, given the way the deal is structured.

Got it. Thank you.

Thank you.

Your next question is from Tom Gallagher with Evercore.

Good morning. First question is - can you provide a little more clarity on the extra $500 million of capital that's expected to be freed up over time from the VA deal, what sort of can you just get a little more information on why it's at least temporarily encumbered and over what period of time that might get freed up and maybe a little more description of what this is related to?

Tom, first I'll start by saying in terms of timing. Don't expect any release from that additional amount in the near future it will be over a number of years but not in '18 and into '19. The kinds of assets that it represents are things like feed capital that we used to support our investment management funds. And other relatively liquid asset categories I mean, I think, so that's the main reason that it fits as this.

Okay, Mike, and then next question does the NAIC variable annuity reform manner to you at all anymore from the standpoint of based on how that comes out would there be any sort of contingencies with this deal to you related to any outcomes there or is that kind of irrelevant at this point for you?

So I think it's safe to say there was a lot of work done through the deal on the potential impacts of VAIWG and based on what was expected to becoming. I think one thing to keep in mind as the timing of the VAIWG is not going to be before we expect to close the deal, right so that in self would be a good thing but moreover we've, the way the deal is structured is that were we kind of lot and how we're going to calculate CT95.

Okay. And then final question is just on the strategic review the individual life business. I get that the VA risk transfer deal made perfect sense because it was significantly impacting your valuation your multiple. I guess it's a little less clear what the individual life business review is really related to other than the fact that it has a low return on capital. So, is it fair to say that, the only way it would make sense is if there was some significant financial benefit to doing that because it doesn't, I can't imagine you're viewing that as like a major impediment from a valuation standpoint?

Tom, it's Carolyn Johnson. Good morning. As Rod said, we're really focused on closing that CBVA and the annuity business and why that's important to strategic review of life is little over a year ago. We combined the organizations of the individual life and the annuity business and so we shared some common organizational structures and so to get to the close of the deal we need to just entangle the individual life business from the annuity business and that really as giving us some opportunity to take a fresh look at the individual life business. So at this stage, as Mike said little bit earlier, were really early on in the process. We're looking at a number of strategic pass and really the strategic fit of the individual life business is part of VOYA. So we'll keep you updated as we make more progress on that but the job one is really just entangle in the life business from the annuity business.

Okay, thanks.

Your next question is from Josh Shanker with Deutsche Bank.

Yes, thank you so the first question involves the repeal of the insurance mandate for health care, wondering how that changes the outlook for work side full voluntary benefits if you have some thoughts there.

Good morning, Josh. There's not much of an impact of that if it towards happen if you look at our growth involuntary business it's really has increase because of the increase in employee accountability. It's been driven more by the high deductible health plan and that is going to continue and so we're not seeing a meaningful change in the competitive environment. We have a good set of solutions, reliable service, good distribution and we expect to continue to be able to grow in our voluntary benefits business.

And is there any change in the competitive landscape there are there more people want to gain or is it fairly consistent with where it was a year ago?

I think it's pretty consistent to where it was a year ago in the voluntary benefit business.

And then, you made the statement that you expected AUM flows to be heard by M&A activity in the first quarter. Can you put some numbers around that and of course looks little bit that both in retirement and then in investment management that net flows were little weaker than they were earlier in the year. I mean it can happen from one quarter to next is there anything to see in those numbers?

Charles?

Yes, thank you. Relative to the net flows for the first quarter and even following off of last year, for the first quarter as Rod had mentioned, we're expecting about $500 million to $600 million net flow differential in that and that's going to be primarily driven by our small, mid full service business if you will, mostly on the 401k. And it's been the result of some of our larger handful of larger full service plans. We've got 17,000 full service 401k plans of the handful of plans that have gone through some merger activity as Lawn described, sometimes you win on those where the your clients are the ones doing the acquisition and some are doesn't happen necessarily in your favor and we've benefited on both sides. It's just the lumpy kind of a thing, when you look across our business, our full service Small mid 401k has had 17 quarters in a row a positive net flows are flows in 2017 were up 56% over the previous year or temp lows, yes they were a little bit soft in 2017 but that's primarily because we were focusing on our in force GMIRs we didn't necessarily want to contribute growth in that area. We wanted to address the GMIR issue, so when you kind of look at across the business it's been really quite strong and as we look forward our distribution expansion is really trying to find ways to get our wholesalers in front of more advisors and have more firms in which our advisors can sell with, so when you look at it in totals we go forward yes sales can be lumpy from quarter-to-quarter long-term kind of over the last year or so it's been quite good in and we're quite bullish relative to 2018 as we go forward as well.

Is the reason both to provide the 2017 result by foreign states that are normal plan for quarterly growth in '18 outside of the M&A issue in 1Q?

I want to make sure I understand your question, so divide the full-year retirement.

2017 was a good net flow year but fourth quarter was weak but maybe that's lumpy should we assume outside this M&A issue in the first quarter that the 2017 growth trend in AUM that flows will be consistent to '18?

Yes, I think you will see as build throughout the year and build on our 2017 results. Yes, we see a very good business environment as part of the tax reform. I think it has been talked about the impact on work site businesses was we expect to see more new plans, new 401k plan to be created, more opportunity for non-qualified plans as well as increased match with all of those things together will hopefully drive continued net flow increase. So, as we think and we look and building environment in 2018. Yes, I think you can kind of say yes, there was a little bit of a depth in the fourth quarter and first quarter but we have plans to continue to build on that in 2018.

Thank you for the answers, and enjoy the New Year.

Thanks.

Thanks, Josh, and this is Christine. I just want to briefly touch upon the second part of your question as far as the new flows within asset management as they can be can be a little bit lumpy and so in the fourth quarter we had positive institution or IM-sourced cash flows just over $800 million and it was our eight consecutive quarter of positive flow. But certainly they can be lumpy, we did see a broader asset allocation decision with some of our global credits that something is people are moving around their portfolios based on where they believe they are in the credit cycle as an example and then certainly can affect things but. The strong investment performance is really providing great results and the first quarter pipeline, looks diverse and robust in 2018.

Thank you.

Your next question is from Sean Dargan with Wells Fargo Securities.

Thanks. Good morning. Until recently you were active in the pension risk transfer business. I'm wondering if you've looked at the policies and procedures for contact and group and new attempts and have you found anything there.

Thank you, Sean. It's Alain, so when we look at our situation, we are really properly reserved. We have very robust processes. We have good procedures in place across our operations IT and legal. We regularly review our processes to ensure that they are operating as a design and we leverage both internal and external resources available and have a thorough process established to locate any missing or unresponsive policy holders. So we feel very confident and comfortable with where we are and our processes that we follow and we did review them after the announcement that was made by another company.

Okay, great. And just wondering what your thoughts are or if you are seeing anything, specifically employee benefits but maybe in retirement, other business lines about pricing and new business as a reaction to lower taxes?

I think generally, we are making pricing decision. We look holistically at our solutions to ensure we are delivering the best value to our client. So when you do expect the lower operating tax rate overall to be a positive for our businesses. However, we don't deliver tax rates directly impacting our pricing decisions. We also have not seen any changes in the competitive environment as a result of tax reform. So what we are going to do is we are going to continue to do what we we've been doing, which is focusing on providing superior customer service and outcomes, so no impact on pricing from tax reforms.

Okay. Thanks.

[Operator Instructions] The next question is from Erik Bass with Autonomous Research.

Hi, thank you. Just wondering going back to investment management maybe Christine if you could provide, just a little bit more color on the sales on outlook. In particular, how do you think the business has positioned for higher interest rates?

Started positioning for higher rate, Erik, I would say, given that when we have a pretty diverse product mix, when you think about a very high performing growth equity strategies or bank loan portfolio, fixed income, commercial real-estate. So really we have enough as a product line really to dividend respond as client's demand might shift and certainly there are a couple of specific asset classes such as the strategy that is type disorder, current interest in the United States certainly potentially see a stronger demand as a result. But just overall, I don't see any of the market level utility nor any change generates you to do anything to change the strong activity that we are seeing.

Thank you. And then, how are you thinking about just the goal underneath from more global asset management product overtime and it's something you plan to build organically or is there interest and potentially looking at acquisitions to accelerate it?

Certainly, what we see is the world once what we make and just as an example global demand accounted for 20% of our institutional flows in 2016 and 25% the year before and that's would have been just focusing on few of our credit strategies to global channels. So, when I take a step back and I see the potential demand for real-estate to securitize. I definitely think that it's a good opportunity to expand our potential for global distribution and so certainly in terms of inorganic that is part of our thought process and we certainly working very closely with Ron and the leadership team and the board longer run with our strategy to evaluate the best way to grow our global footprint.

Great. Thank you.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I would like to turn the conference call back over to Rod Martin for any closing remarks.

Thank you. In closing, we have continued to improvement our business results and are optimistic about growing our retirement, investment management and employee benefit businesses. These are high growth, high return capital life businesses that generate significant free cash flow. Our management team has a track record of execution and remains committed to being diligent towards our capital. I look forward to updating with our progress. Thank you and good day.

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