Elyse Greenspan: Hi. Thanks. Good morning. My first question on, the kind of normalized EPS and if we adjust for alts, went down a little bit in the quarter. And I know, Ed, you alluded to higher Q4 corporate costs. So as we think about kind of run rate earnings when you put kind of back into the range of something in the range of $4, assuming normal alts? And then with that being said, can you just give us a sense of just expectations for VII (ph) for the Q1 and any thoughts for 2024 as well?
Edward Spehar: Sure. Hi, Elyse. So you’re correct. You’re still going to get to a run rate type of number that’s in the $4 range. And you start with the 292 ex-notable, you adjust for the VII or alts that’s $0.95 a share off of normal approximately. And then the normal kind of corporate expense run rate because the fourth quarter is, as you can see from our results, historically, the fourth quarter is typically high relative to the average quarter and that’s probably in the neighborhood of $0.20 a share or something. So you’re going to get to that $4, $4 plus type of number as a normal quarter. And in terms of alts, I’m going to pass that over to John.
John Rosenthal: Yeah. Hi, Elyse. I think as we’ve suggested in the past, we really don’t want to get into the business of predicting near-term alt turns. So we’ll just have to wait and see. And as a reminder, we invest in alternatives, which for us is essentially all private equity for the long term. And the asset class is a good fit for our long-term liabilities. We continue to expect to earn 9% to 11% over the life of these assets, recognizing there will be short-term volatility in the interim, and we use that midpoint of the 9% to 11% for planning purposes.
Elyse Greenspan: Thanks. And then my second question, going back to some of the capital discussion and recognizing you guys have a good amount of capital to [indiscernible]. But that being said, I mean, Ed, does the — you guys bought back $60 million in the fourth quarter and $30 million year-to-date. Does it feel like that’s kind of the cadence we should think about from a buyback perspective?
Edward Spehar: Hey, Elyse. So, we made a decision a while back that we’re not going to give a forward look on pace of repurchase. I think you heard Eric and I both said that buybacks are something that you should expect to continue this year. You can look at our history and what we’ve done in terms of amount and timing. And I would just say you can base it off of that. One of the things that we have said, I guess, starting back in late ’22 was that, we were a little cautious on the environment. We haven’t had a credit cycle in a long time. Obviously, this year – last year was a good year. There was market was strong, but we do think it’s been a long time since credit cycle, and it makes sense to be a little bit prudent about that.
Elyse Greenspan: Thank you.
Operator: Thank you. And our next question coming from the line of Alex Scott with Goldman Sachs. Your line is open.
Alex Scott: Hi. Good morning. First one I have for you is, going back to the CTE98 level and it being lower. I just wanted to get a feel for how it changes the emergence of CTE over time? I think, if we go back far enough, you guys used to give us an indication of when the CTE requirement would peak in different scenarios and obviously, providing that level of detail, but I was hoping maybe you could give us an indication of how far away at this point are we from that and did this accounting change affected at all?
Edward Spehar: Hey, Alex. So our initial view is that it’s not going to change that much, that the sort of the timing of that would be similar to what it was prior to this new requirement.
Alex Scott: Got it. Okay. The second one I have is on the normalized statutory earnings. It’s weaker this year, a little negative, and I think that included one-time benefits from both the mean reversion point change and it sounded like some AAT release in 4Q. So the run rate there seems pretty low, any help you can give us in thinking through how that will unfold over the next year or two, or any kind of way to maybe further — I know it’s an already normalized number, but any help on just thinking where we are in terms of the statutory earnings power of the company?
Edward Spehar: So Alex, I don’t think I can give you any help on a one year view. And the reason for that is that there is still a fair amount of volatility. So you’re correct, the approximately $200 million loss in 2023. If you look at 2022, we had $1 billion of norm stat earnings. If you look at the range of norm stat earnings over the last five years or so, it’s been pretty wide. Now obviously, we think that over time, we’re going to have more predictable cash flows, more predictable earnings. But at this point, it’s still been pretty volatile. And I don’t think even as you look at our cash flows that we talked about, where we see convergence between the scenarios, we’re not talking about any single year of an outlook. If you go back over since 2018, our norm stat earnings has averaged slightly less than $400 million a year and our net cash flow to the holding company has averaged like $335 million a year.
Alex Scott: Got it. So I mean is that a rough way to think about recovery and this negative unassigned funds and how long it could take to rebuild? I mean that’s what I’m trying to get at is just trying to understand the period of time it could take to have that go away.
Edward Spehar: Yeah. So the our ability to predict what’s going to happen to unassigned funds, very difficult because you will see a lot of movement in CTE70 versus CTE98 depending on the market environment. And obviously, CT70 is driving TAC, and that’s going to have the impact and because it’s driving reserves and that’s going to impact TAC and that’s driving the movement in unassigned funds. So I would just go back to what I said, I think in response to Tom’s question, which is when we look at our capital plan, our expectation, what we could support over time. Our financial plan would suggest that we should be able to take capital up from BLIC in 2024. Now obviously, with negative unassigned funds, we would need to have regulatory approval to do that.
But as you can imagine, when we think about our financial position, we’re looking at our risk-based capital ratio, and you see where it was at the end of the year, and we have an expectation that would suggest that we should be able to support taking capital up in 2024.
Alex Scott: Got it. Thank you.
Operator: Thank you. And our next question coming from the line of Suneet Kamath with Jefferies. Your line is open.
Suneet Kamath: Thanks. Good morning. So I just wanted to go back to the September distributable earnings deck that you guys put out. If we looked at kind of the longer, longer term, sort of years six through 10 in that scenario, it would seem to have implied sort of a step-up in distributable earnings. So I’m just wondering, does any of that change as a result of this in any kind of material way and what I mean by this is obviously the accounting change.
Edward Spehar: Yeah. Hey, Suneet. I would not think the pattern is going to change that much based on this new requirement.
Suneet Kamath: Okay. Got it. And then, I guess, we’ve been talking a lot about BLIC and NELICO (ph), but we haven’t really talked about your captive reinsurance subsidiary. Does that come into play at all in terms of a source of holdco (ph) cash?
Edward Spehar: So you’re talking about Brighthouse Reinsurance Company of Delaware, BRCD?
Suneet Kamath: That’s right. Correct.
Edward Spehar: Yeah. So I would just repeat what I’ve said in the past, which is we do not view BRCD as a source of ongoing capital to the holding company or to BLIC for the holding company. As you know, we took $600 million dividends out of BRCD, so $1.2 billion. We think that brought the capitalization of that entity to a level that is appropriate and it’s a run-off business. It’s our life risk. Life risk with a lot of the concentration of the ULSG risk is in that entity. So I would not view that entity as an ongoing source of capital to the holding company — to BLIC or to the holding company.
Suneet Kamath: Okay. Thanks. And then maybe if I could just sneak one more in. Just in terms of your new sales and the strain associated with that. I think, Ed, in the past, you talked about maybe 5 points of RBC. Is that still kind of where we are in terms of the new business and the plan for ’24?
Edward Spehar: I think that’s still a reasonable expectation.
Suneet Kamath: Okay. Thanks.
Operator: Thank you. And I’m showing no further questions in the queue at this time. I will now turn the call back over to Dana Amante for closing remarks.
Dana Amante: Thank you, Olivia. And thank you, everyone, for joining our call this morning. Have a great day.
Operator: Ladies and gentlemen, that does conclude (ph) our conference for today. Thank you for your participation. You may now disconnect.
