Thank you, David, and good morning, everyone. Brighthouse delivered solid results during the first quarter of 2019. Equity markets were strong and favorably impacted both adjusted earnings and capital generation during the quarter. Investment income from alternative investments was lower as expected, given fourth quarter market performance. Claims were higher in life insurance due to lower reinsurance recoveries, but within normal quarterly variation. Sales remain very strong and we continued to reposition the investment portfolio and manage expenses.
Moving forward, we remain focused on executing our strategy, which we continue to believe will generate long-term shareholder value.
As we have previously disclosed, one of our goals is to be a consistent returner of capital over time. And we are making progress toward achieving this goal. We repurchased approximately $52 million of our stock in the first quarter. And we’ve continued repurchases in the second quarter of 2019 with approximately $14 million of our stock repurchased in April. Through April, we have purchased $171 million of our stock, under the $200 million authorization announced in August of 2018. Last night, we announced that the company authorized the repurchase of an additional $400 million of our common stock. This brings our cumulative authorizations to $600 million, 40% of the way towards our target of returning $1.5 billion to our shareholders through 2021. We currently anticipate fully utilizing this authorization within the next 12 months, but we will continue to be measured in our approach to repurchasing stock. We believe we have multiple levers to achieve the remainder of our capital return target.
First, we are prudently managing the capital backing our variable annuity block.
During the quarter, we completed a successful preferred stock offering. The net proceeds were contributed to Brighthouse Life Insurance Company or BLIC. And this higher level of assets puts us in an even better position to reduce hedging costs over time.
Although BLIC has ordinary dividend capacity in 2019, we are currently planning for regular dividends to the holding company from BLIC to begin in 2020, post the implementation of variable annuity capital reform in our statutory financials.
As we have said before, this will be an important milestone for the company.
Second, as we have said previously, our reinsurance subsidiary, Brighthouse Reinsurance Company of Delaware is robustly capitalized. We believe there is redundancy in the reserves and thus the possibility that over time excess capital could be released.
We are beginning conversations on this topic with our regulator in the coming months.
Third, the New England Life Insurance Company, or NELICO, has been and we anticipate will continue to be a stable source of capital for the holding company.
As you may recall, during the fourth quarter, NELICO paid a dividend to the holding company of $400 million.
Additionally, NELICO’s 2019 ordinary dividend capacity is over $100 million. We intend to dividend this amount to the holding company later this year.
Our ability to take out capital from NELICO was an important factor in determining our new stock repurchase authorization.
We expect NELICO will continue to generate $60 million to $70 million of dividend capacity per year over the next several years. And finally, we currently have excess capital at the holding company.
As a reminder, our goal is to have liquid assets at the holding company of at least 2 times our annual fixed charges. And as of the first quarter 2019, we are well in excess of our target.
Before I provide a few perspectives on our first quarter results, I wanted to update you on our CFO search. There is a lot of interest in this role.
We have begun the interview process and I would like to have this role filled in advance of our second quarter earnings call.
Turning to first quarter results, our key highlights for the quarter are summarized on Slide 3 of our earnings presentation.
First, I’m very pleased with our outstanding sales results in the first quarter. We had approximately $1.7 billion of annuity sales, our highest quarterly sales result, since becoming an independent public company in 2017. Annuity sales were up 36% in the first quarter, compared to the same period in 2018. In February, we launched our new hybrid life insurance product, Brighthouse SmartCare. This launch marked our first life insurance product introduction since becoming an independent public company and is part of our strategy to reestablish a competitive presence in the U.S. life insurance market. This product builds on our foundation of experience and knowledge in the life insurance space as we enter the expanding hybrid market. The early feedback from our distribution partners has been extremely positive. We intend to roll out this product to additional distributors throughout the year.
Second, we’re continuing to make necessary investments in our technology infrastructure and in our businesses. We refer to these investments as establishment costs. In the first quarter, establishment costs were approximately $34 million pre-tax. We still expect establishment costs of approximately $175 million to $200 million pre-tax cumulatively during 2019 and 2020.
Third, let me touch on our earnings results. Adjusted earnings, less notable items improved sequentially driven by the strong equity market performance in the quarter. This positive impact was partially offset by the lower investment income from our alternative investment portfolio, which was in line with our expectations, given the unfavorable equity markets in the fourth quarter of 2018, as well as higher claims due to lower reinsurance recoveries in life insurance in the quarter. And finally, we continue to prudently manage our variable annuity capitalization.
As we have talked about previously, we are managing our VA business to CTE98 or higher.
As of the end of the first quarter, our VA assets were $1.1 billion in excess of CTE98 consistent with our strategy.
Our hedging strategy continues to perform in line with our expectations. To wrap up, we had solid results this quarter and we are very excited about the new stock repurchase authorization and the value that it creates for shareholders.
Moving forward, we continue to remain focused on executing our strategy and continue to believe that it will enable us to achieve our longer-term financial targets. With that, let me turn the call over to Conor to discuss our first quarter financial results in more detail. Conor?