EQH 8-K
Equitable Holdings, Inc. (EQH)
8-K
2021-11-03
For: 2021-11-03
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April 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2021
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer | ||||||
| incorporation or organization) | Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
(212 ) 554-1234
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Title of each class | Trading Symbol | Name of Exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 3, 2021, Equitable Holdings, Inc. (“EQH”) issued a press release announcing its financial results for the quarter ended September 30, 2021. A copy of the press release containing this information is furnished as Exhibit 99.1 hereto and is incorporated herein by reference. In addition, more detailed financial information may be found in EQH’s Financial Supplement for the quarter ended September 30, 2021. A copy of the Financial Supplement for the quarter ended September 30, 2021 is furnished as Exhibit 99.2 hereto and is incorporated herein by reference.
As provided in General Instruction B.2 of Form 8-K, the information and exhibits provided pursuant to this Item 2.02 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall they be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
In connection with its earnings call for the quarter ended September 30, 2021, EQH has prepared a presentation for use with investors and other members of the investment community, which will be accessible via EQH’s investor relations website at https://ir.equitableholdings.com at 8 a.m. ET on Thursday, November 4, 2021.
As provided in General Instruction B.2 of Form 8-K, the information provided pursuant to this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit | ||||
| Press release of Equitable Holdings, Inc., dated November 3, 2021 (furnished and not filed) | |||||
| Financial Supplement for the quarter ended September 30, 2021 (furnished and not filed) | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | ||||
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| EQUITABLE HOLDINGS, INC. | |||||||||||
| Date: November 3, 2021 | By: | /s/ Ralph Petruzzo | |||||||||
Name: | Ralph Petruzzo | ||||||||||
Title: | Associate General Counsel | ||||||||||
EQUITABLE HOLDINGS REPORTS THIRD QUARTER 2021 RESULTS
_______________________________________
Strong results in retirement and asset management; $7.1bn of net flows and AUM up 17%
Announcing XXX financing transaction unlocking $1bn in value; offsetting redundant reserves
Net income of $672m; net income per share of $1.59
Non-GAAP operating earnings1 of $818m, or $1.94 per share
Assumptions aligned to current experience and economic realities with nominal Q3 impact
_______________________________________
New York, NY, November 3, 2021 — Equitable Holdings, Inc. (“Equitable Holdings”, “Holdings”, or the “Company”) (NYSE: EQH) today announced financial results for the third quarter ended September 30, 2021.
“Driven by solid performance across our retirement and asset management businesses, we reported strong third quarter results, with non-GAAP operating earnings of $1.94 per share, a 56% year-over-year increase and up 13% sequentially over the prior quarter. Sustained growth of our capital-light businesses, positive net inflows and favorable equity markets propelled AUM up 17% to reach $871 billion, a record high. We remain uniquely positioned through our leading insurance offerings, affiliated distribution model and premier asset management subsidiary to capture the full value chain for our stakeholders,” said Mark Pearson, President and Chief Executive Officer.
Mr. Pearson continued, “Our fair value economic approach resulted in minimal assumption impacts in the third quarter and positions us well for LDTI while reinforcing our robust capital position and ability to deliver attractive returns. We have also made significant progress mitigating Reg. 213 redundant reserves since the half year and are pleased to announce a XXX financing transaction, unlocking $1 billion of capital, as we continue to create value for our shareholders and generate significant free cash flow.”
| Consolidated Results | |||||||||||
| Third Quarter | |||||||||||
| (in millions, except per share amounts or unless otherwise noted) | 2021 | 2020 | |||||||||
| Total Assets Under Management (“AUM”, in billions) | $ | 871 | $ | 746 | |||||||
| Net income (loss) attributable to Holdings | 672 | (779) | |||||||||
| Net income (loss) attributable to Holdings per common share | 1.59 | (1.77) | |||||||||
| Non-GAAP operating earnings (loss) | 818 | 568 | |||||||||
| Non-GAAP operating earnings (loss) per common share (“EPS”) | 1.94 | 1.24 | |||||||||
As of September 30, 2021, total AUM was $871 billion, a year-over-year increase of 17% driven by net inflows and market performance over the prior twelve months.
1 This press release includes certain non-GAAP financial measures. More information on these measures and reconciliations to the most comparable U.S. GAAP measures can be found in the “Use of Non-GAAP Financial Measures” section of this release.
1
The net income attributable to Holdings for the third quarter of 2021 was $672 million compared to net loss of $779 million in the third quarter of 2020 driven primarily by non-economic market impacts from hedging and non-performance risk under U.S. GAAP accounting.
Non-GAAP operating earnings in the third quarter of 2021 improved to $818 million from $568 million in the third quarter of 2020. Excluding notable items2 of $159 million, third quarter 2021 non-GAAP operating earnings were $660 million or $1.56 per share.
As of September 30, 2021, book value per common share, including accumulated other comprehensive income (“AOCI”), was $25.00. Book value per common share, excluding AOCI, was $20.37.
2 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
2
Business Highlights
•Business segment highlights:
◦Individual Retirement reported another record quarter in sales of our Structured Capital Strategies (“SCS”) buffered annuity product with $1.9 billion in first year premium.
◦Group Retirement gross premiums were $831 million in the quarter, with first year premiums up 39% and renewal premiums up 6% versus the prior year quarter, respectively.
◦Investment Management and Research (AllianceBernstein or “AB”)3 reported another quarter of net inflows, with $7.2 billion in the quarter, positive across all distribution channels.
◦Protection Solutions gross written premiums up 8% year-over-year driven by shift to less interested-sensitive VUL and continued momentum in Employee Benefits business.
•Capital management program:
◦As part of the Company’s 2021 capital management program, it returned $534 million to shareholders in the third quarter, including $74 million of quarterly cash dividends and $460 million of share repurchases.
◦The Company announced a XXX financing transaction via reinsurance with Swiss Re. The transaction includes term life insurance policies issued between 2009 and 2020 and unlocks $1 billion of statutory capital, further mitigating Reg. 213 redundant reserves.
◦The Company also completed internal restructuring, transferring separate account and general account investment advisory and administration contracts to a new holding company subsidiary, Equitable Investment Management, LLC. Moving forward, the Company expects 50% of cash flow from non-regulated subsidiaries.
◦The Company reported cash and liquid assets of $2 billion at Holdings, which remains above the $500 million minimum liquidity target.
•Completed annual actuarial assumption review:
◦The Company completed its annual actuarial assumption review in the third quarter, resulting in a limited impact to net income of $(85) million and a $6 million impact to non-GAAP operating earnings.
◦Nominal impacts were primarily driven by the incorporation of emerging experience in GAAP best estimate assumptions.
3 Refers to AllianceBernstein L.P. and AllianceBernstein Holding L.P., collectively.
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Business Segment Results
Individual Retirement
| (in millions, unless otherwise noted) | Q3 2021 | Q3 2020 | |||||||||
| Account value (in billions) | $ | 107.7 | $ | 107.8 | |||||||
| Segment net flows | |||||||||||
| Current Product Offering | 702 | 351 | |||||||||
| Fixed Rate (1) | (689) | (778) | |||||||||
| Total segment net flows | 13 | (427) | |||||||||
| Operating earnings (loss) | 316 | 371 | |||||||||
(1) Net flows of $(322) million not included Q3 2021 as it relates to AV ceded to Venerable.
•Account value decreased by (0.1)% primarily due to $16.9 billion of AV ceded to Venerable, partially offset by strong new business growth and equity markets.
•Net flows of $13 million increased compared to the third quarter of 2020 as net inflows of $702 million from our current product offering of less capital-intensive products was partially offset by anticipated outflows from the older fixed rate living benefits block of $(689) million.
•Operating earnings decreased from $371 million to $316 million versus the prior year quarter, primarily due to the Venerable transaction and partially offset by higher net investment income. Results included $(22) million of notable items in the current period, with higher net investment income from alternatives and prepayments which were more than offset by assumption updates.
Group Retirement
| (in millions, unless otherwise noted) | Q3 2021 | Q3 2020 | |||||||||
| Account value (in billions) | $ | 45.5 | $ | 38.7 | |||||||
| Segment net flows | (135) | (93) | |||||||||
| Operating earnings (loss) | 192 | 129 | |||||||||
•Account value increased by 18% driven primarily by equity market performance over the prior twelve months.
•Net flows of $(135) million decreased versus the prior year quarter primarily due to higher surrender activity, partially offset by higher sales and renewals.
•Operating earnings increased from $129 million to $192 million versus the prior year quarter, primarily due to higher net investment income and fee-type revenue on higher account values. Results included $43 million of notable items in the current period related to higher net investment income from alternatives and prepayments, and assumption updates.
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Investment Management and Research
| (in millions, unless otherwise noted) | Q3 2021 | Q3 2020 | |||||||||
| Total AUM (in billions) | $ | 742.2 | $ | 630.8 | |||||||
| Segment net flows (in billions) | 7.2 | 3.1 | |||||||||
| Operating earnings (loss) | 134 | 104 | |||||||||
•AUM increased by 18% due to equity market performance and net inflows over the prior twelve months.
•Third quarter net flows of $7.2 billion were driven by net inflows across all distribution channels, including $6.7 billion in active net inflows and the 18th consecutive quarter of active equity retail net inflows.
•Operating earnings increased from $104 million to $134 million, primarily driven by higher base fees on higher average AUM.
Protection Solutions
| (in millions) | Q3 2021 | Q3 2020 | |||||||||
| Gross written premiums | $ | 754 | $ | 700 | |||||||
| Annualized premiums | 67 | 49 | |||||||||
| Operating earnings (loss) | 160 | 51 | |||||||||
•Gross written premiums increased 8% versus the prior year quarter with continued success in strategic shift to less interest-sensitive life insurance accumulation products.
•Annualized premiums increased from $49 million to $67 million versus the prior year quarter driven by continued momentum in our Employee Benefits business.
•Operating earnings increased from $51 million to $160 million versus the prior year quarter, primarily due to higher net investment income and fee-type revenue on higher account values. Results included $59 million of notable items in the current period related to higher net investment income from alternatives and prepayments, lower reserve accruals and assumption updates.
Corporate and Other
Operating earnings of $16 million in the third quarter improved compared to operating loss of $87 million in the prior year quarter, primarily driven by higher net investment income. Results included $79 million of notable items in the current period related to higher net investment income from alternatives.
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Exhibit 1: Notable Items
Notable Items: Notable items represent the impact on results from our annual actuarial assumption review, approximate impacts attributable to significant variances from the Company’s expectations, and other items that the Company believes may not be indicative of future performance. The Company chooses to highlight the impact of these items and Non-GAAP measures, less notable items to provide a better understanding of our results of operations in a given period. Certain figures may not sum due to rounding.
Impact of notable items by segment and Corporate & Other:
| Three Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| (in millions) | |||||||||||
| Non-GAAP Operating Earnings | $ | 818 | $ | 568 | |||||||
| Adjustments related to notable items: | |||||||||||
| Individual Retirement | (15) | (26) | |||||||||
| Group Retirement | (16) | (5) | |||||||||
| Investment Management and Research | — | (5) | |||||||||
| Protection Solutions | (43) | (26) | |||||||||
| Corporate & Other | (79) | 1 | |||||||||
| Notable items subtotal | (153) | (60) | |||||||||
| Less: impact of actuarial assumption update | (6) | 31 | |||||||||
| Non-GAAP operating earnings, less notable items | $ | 660 | $ | 538 | |||||||
Impact of notable items by item category:
| Three Months Ended September 30, | |||||||||||
| 2021 | 2020 | ||||||||||
| (in millions) | |||||||||||
| Non-GAAP Operating Earnings | $ | 818 | $ | 568 | |||||||
| Pre-tax adjustments related to notable items: | |||||||||||
| Actuarial Updates/Reserve | (57) | — | |||||||||
| Mortality | 33 | (43) | |||||||||
| Expenses | — | (18) | |||||||||
| Net Investment Income | (162) | (2) | |||||||||
| Subtotal | (185) | (63) | |||||||||
| Post-tax impact of notable items | (153) | (60) | |||||||||
| Less: impact of actuarial assumption update | (6) | 31 | |||||||||
| Non-GAAP operating earnings, less notable items | $ | 660 | $ | 538 | |||||||
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Earnings Conference Call
Equitable Holdings will host a conference call at 8 a.m. ET November 4, 2021 to discuss its third quarter 2021 results. The conference call webcast, along with additional earnings materials will be accessible on the company’s investor relations website at ir.equitableholdings.com. Please log on to the webcast at least 15 minutes prior to the call to download and install any necessary software.
To register for the conference call, please use the following link:
EQH Third Quarter 2021 Earnings Call
After registering, you will receive an email confirmation including dial in details and a unique conference call code for entry. Registration is open through the live call. To ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call.
A webcast replay will be made available on the Equitable Holdings Investor Relations website at ir.equitableholdings.com.
About Equitable Holdings
Equitable Holdings, Inc. (NYSE: EQH) is a financial services holding company comprised of two complementary and well-established principal franchises, Equitable and AllianceBernstein. Founded in 1859, Equitable provides advice, protection and retirement strategies to individuals, families and small businesses. AllianceBernstein is a global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets. Equitable Holdings has approximately 12,000 employees and financial professionals, $871 billion in assets under management (as of 9/30/2021) and more than 5 million client relationships globally.
Contacts:
Investor Relations
Işıl Müderrisoğlu
(212) 314-2476
Media Relations
Matt Asensio
(212) 314-2010
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Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estimates,” “projects,” “should,” “would,” “could,” “may,” “will,” “shall” or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management’s current expectations and beliefs concerning future developments and their potential effects upon Equitable Holdings, Inc. (“Holdings”) and its consolidated subsidiaries. “We,” “us” and “our” refer to Holdings and its consolidated subsidiaries, unless the context refers only to Holdings as a corporate entity. There can be no assurance that future developments affecting Holdings will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy, including the impact of COVID-19 and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (ix) risks related to our common stock and (x) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property.
Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Holdings’ Annual Report on Form 10-K for the year ended December 31, 2020, and in Holdings’ subsequent filings with the Securities and Exchange Commission. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.
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Use of Non-GAAP Financial Measures
In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP Operating Earnings, Non-GAAP Operating EPS, and Book Value per common share, excluding AOCI, each of which is a measure that is not determined in accordance with U.S. GAAP. Management principally uses these non-GAAP financial measures in evaluating performance because they present a clearer picture of our operating performance and they allow management to allocate resources. Similarly, management believes that the use of these Non-GAAP financial measures, together with relevant U.S. GAAP measures, provide investors with a better understanding of our results of operations and the underlying profitability drivers and trends of our business. These non-GAAP financial measures are intended to remove from our results of operations the impact of market changes (where there is mismatch in the valuation of assets and liabilities) as well as certain other expenses which are not part of our underlying profitability drivers or likely to re-occur in the foreseeable future, as such items fluctuate from period-to-period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.
We also discuss certain operating measures, including AUM, AV, and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Non-GAAP Operating Earnings
Non-GAAP operating earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and are more sensitive to changes in market conditions than the variable annuity product liabilities as valued under U.S. GAAP. This is a large source of volatility in net income.
Non-GAAP operating earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:
•Items related to variable annuity product features, which include: (i) certain changes in the fair value of the derivatives and other securities we use to hedge these features; (ii) the effect of benefit ratio unlock adjustments, including extraordinary economic conditions or events such as COVID-19; and (iii) changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization on our SCS product;
•Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
•Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
•Other adjustments, which primarily include restructuring costs related to severance and separation, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses associated with equity securities and certain legal accruals; and
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•Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period.
Because Non-GAAP operating earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of 21% while taking into account any non-recurring differences for events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP operating earnings.
The table below presents a reconciliation of Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings for the three and nine months ended September 30, 2021 and 2020:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in millions) | 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 672 | $ | (779) | $ | (693) | $ | 590 | ||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||
| Variable annuity product features (1) | 172 | 1,620 | 3,632 | 473 | ||||||||||||||||||||||
| Investment (gains) losses | (164) | (17) | (767) | (190) | ||||||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 27 | 31 | 87 | 86 | ||||||||||||||||||||||
| Other adjustments (2) (3) (4) (5) | 141 | 66 | 672 | 836 | ||||||||||||||||||||||
| Income tax expense (benefit) related to above adjustments (6) | (35) | (357) | (761) | (253) | ||||||||||||||||||||||
| Non-recurring tax items | 5 | 4 | 6 | 12 | ||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 818 | $ | 568 | $ | 2,176 | $ | 1,554 | ||||||||||||||||||
_______________
(1)Includes COVID-19 impact on Variable annuity product features due to a first quarter 2020 assumption update of $1.5 billion and other COVID-19 related impacts of $35 million for the nine months ended September 30, 2020.
(2)Includes COVID-19 impact on Other adjustments due to a first quarter 2020 assumption update of $1.0 billion and other COVID-19 related impacts of $86 million for the nine months ended September 30, 2020.
(3)Includes separation costs of $25 million, $37 million, $62 million and $108 million for the three and nine months ended September 30, 2021 and 2020.
(4)Includes certain legal accruals related to the cost of insurance litigation of $180 million for the nine months ended September 30, 2021. No adjustment was made to prior period operating earnings as the impact was immaterial.
(5)Includes Non-GMxB related derivative hedge losses of ($4) million, $10 million, $140 million, and ($461) million for the three and nine months ended September 30, 2021 and 2020.
(6)Includes income taxes of ($554) million for the above related COVID-19 items for the nine months ended September 30, 2020.
Non-GAAP Operating EPS
Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred dividends by diluted common shares outstanding. The table below presents a reconciliation of GAAP EPS to Non-GAAP Operating EPS for the three and nine months ended September 30, 2021 and 2020.
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| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (per share amounts) | 2021 | 2020 | 2021 | 2020 | |||||||||||||||||||
| Net income (loss) attributable to Holdings (1) | $ | 1.62 | $ | (1.74) | $ | (1.64) | $ | 1.30 | |||||||||||||||
| Less: Preferred stock dividend | 0.03 | 0.03 | 0.12 | 0.08 | |||||||||||||||||||
| Net Income (loss) available to common shareholders | 1.59 | (1.77) | (1.76) | 1.22 | |||||||||||||||||||
| Adjustments related to: | |||||||||||||||||||||||
| Variable annuity product features (2) | 0.41 | 3.62 | 8.58 | 1.04 | |||||||||||||||||||
| Investment (gains) losses | (0.41) | (0.04) | (1.81) | (0.42) | |||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 0.07 | 0.07 | 0.21 | 0.19 | |||||||||||||||||||
| Other adjustments (3) (4) (5) (6) | 0.35 | 0.15 | 1.59 | 1.85 | |||||||||||||||||||
| Income tax expense (benefit) related to above adjustments (7) | (0.08) | (0.80) | (1.80) | (0.56) | |||||||||||||||||||
| Non-recurring tax items | 0.01 | 0.01 | 0.01 | 0.03 | |||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 1.94 | $ | 1.24 | $ | 5.02 | $ | 3.35 | |||||||||||||||
_______________
(1)For periods presented with a net loss, basic shares was used for the three months ended September 30, 2020 and nine months ended September 30, 2021.
(2)Includes COVID-19 impact on Variable annuity product features due to a first quarter 2020 assumption update of $3.23 and other COVID-19 related impacts of $0.08 for the nine months ended September 30, 2020.
(3)Includes COVID-19 impact on Other adjustments due to a first quarter 2020 assumption update of $2.31 for the nine months ended September 30, 2020 and other COVID-19 related impacts of $0.00 and $0.19 for the three and nine months ended September 30, 2020.
(4)Includes separation costs of $0.06, $0.08, $0.15 and $0.24 for the three and nine months ended September 30, 2021 and 2020.
(5)Includes certain legal accruals related to the cost of insurance litigation of $0.43 for the nine months ended September 30, 2021. No adjustments were made to prior period non-GAAP operating EPS as the impact was immaterial.
(6)Includes Non-GMxB related derivative hedge losses of ($0.01), $0.02, $0.31, and ($1.02) for the three and nine months ended September 30, 2021 and 2020.
(7)Includes income taxes of $0.00 and $(1.22) for the above related COVID-19 items for the three and nine months ended September 30, 2020.
Book Value per common share, excluding AOCI
We use the term “book value” to refer to total equity attributable to Holdings’ common shareholders. Book Value per common share, excluding AOCI, is our total equity attributable to Holdings, excluding AOCI and preferred stock, divided by ending common shares outstanding.
| September 30, 2021 | December 31, 2020 | ||||||||||
| Book value per common share | $ | 25.00 | $ | 32.46 | |||||||
| Per share impact of AOCI | (4.63) | (8.76) | |||||||||
| Book Value per common share, excluding AOCI | $ | 20.37 | $ | 23.70 | |||||||
Other Operating Measures
We also use certain operating measures which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
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Account Value (“AV”)
Account value generally equals the aggregate policy account value of our retirement products.
Assets Under Management (“AUM”)
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our general account investment portfolio and (iii) the separate account assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.
Segment net flows
Net change in segment customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.
12
Consolidated Statements of Income (Loss) (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Policy charges and fee income | $ | 867 | $ | 914 | $ | 2,755 | $ | 2,787 | |||||||||||||||
| Premiums | 230 | 221 | 729 | 754 | |||||||||||||||||||
| Net derivative gains (losses) | (185) | (1,472) | (3,930) | 1,890 | |||||||||||||||||||
| Net investment income (loss) | 997 | 879 | 2,914 | 2,530 | |||||||||||||||||||
| Investment gains (losses), net: | |||||||||||||||||||||||
| Credit losses on available-for-sale debt securities and loans | (2) | (4) | 4 | (47) | |||||||||||||||||||
| Other investment gains (losses), net | 165 | 21 | 763 | 237 | |||||||||||||||||||
| Total investment gains (losses), net | 163 | 17 | 767 | 190 | |||||||||||||||||||
| Investment management and service fees | 1,323 | 1,126 | 3,898 | 3,314 | |||||||||||||||||||
| Other income | 220 | 155 | 585 | 434 | |||||||||||||||||||
| Total revenues | 3,615 | 1,840 | 7,718 | 11,899 | |||||||||||||||||||
| BENEFITS AND OTHER DEDUCTIONS | |||||||||||||||||||||||
| Policyholders’ benefits | 751 | 1,034 | 2,518 | 4,546 | |||||||||||||||||||
| Interest credited to policyholders’ account balances | 305 | 306 | 905 | 930 | |||||||||||||||||||
| Compensation and benefits | 614 | 503 | 1,762 | 1,498 | |||||||||||||||||||
| Commissions and distribution-related payments | 436 | 342 | 1,215 | 982 | |||||||||||||||||||
| Interest expense | 59 | 52 | 184 | 152 | |||||||||||||||||||
| Amortization of deferred policy acquisition costs | 64 | 90 | 257 | 1,555 | |||||||||||||||||||
| Other operating costs and expenses | 456 | 436 | 1,511 | 1,308 | |||||||||||||||||||
| Total benefits and other deductions | 2,685 | 2,763 | 8,352 | 10,971 | |||||||||||||||||||
| Income (loss) from continuing operations, before income taxes | 930 | (923) | (634) | 928 | |||||||||||||||||||
| Income tax (expense) benefit | (165) | 218 | 222 | (141) | |||||||||||||||||||
| Net income (loss) | 765 | (705) | (412) | 787 | |||||||||||||||||||
| Less: Net income (loss) attributable to the noncontrolling interest | 93 | 74 | 281 | 197 | |||||||||||||||||||
| Net income (loss) attributable to Holdings | 672 | (779) | (693) | 590 | |||||||||||||||||||
| Less: Preferred stock dividends | 14 | 11 | 53 | 34 | |||||||||||||||||||
| Net income (loss) available to Holdings’ common shareholders | $ | 658 | $ | (790) | $ | (746) | $ | 556 | |||||||||||||||
13
Earnings Per Common Share
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 1.60 | $ | (1.77) | $ | (1.76) | $ | 1.23 | |||||||||||||||
| Diluted | $ | 1.59 | $ | (1.77) | $ | (1.76) | $ | 1.22 | |||||||||||||||
| Weighted average shares | |||||||||||||||||||||||
| Weighted average common stock outstanding for basic earnings per common share | 411.3 | 447.5 | 423.2 | 453.0 | |||||||||||||||||||
| Weighted average common stock outstanding for diluted earnings per common share (1) | 414.6 | 447.5 | 423.2 | 454.1 | |||||||||||||||||||
(1)Due to net loss for the nine months ended September 30, 2021 and three months ended September 30, 2020 approximately 3.7 million and 1.5 million share awards were excluded from the diluted EPS calculation.
Results of Operations by Segment
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Operating earnings (loss) by segment: | |||||||||||||||||||||||
| Individual Retirement | $ | 316 | $ | 371 | $ | 1,093 | $ | 1,094 | |||||||||||||||
| Group Retirement | 192 | 129 | 514 | 325 | |||||||||||||||||||
| Investment Management and Research | 134 | 104 | 381 | 291 | |||||||||||||||||||
| Protection Solutions | 160 | 51 | 264 | 88 | |||||||||||||||||||
| Corporate and Other (1) | 16 | (87) | (76) | (244) | |||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 818 | $ | 568 | $ | 2,176 | $ | 1,554 | |||||||||||||||
(1)Includes interest expense and financing fees of $65 million, $56 million, $180 million and $164 million for the three and nine months ended September 30, 2021 and 2020, respectively.
14
Select Balance Sheet Statistics
| September 30, 2021 | December 31, 2020 | ||||||||||
| (in millions) | |||||||||||
| ASSETS | |||||||||||
| Total investments and cash and cash equivalents | $ | 107,262 | $ | 115,266 | |||||||
| Separate Accounts assets | 142,093 | 135,950 | |||||||||
| Total assets | 284,579 | 275,397 | |||||||||
| LIABILITIES | |||||||||||
| Short-term and long-term debt | $ | 3,839 | $ | 4,115 | |||||||
| Future policy benefits and other policyholders' liabilities | 37,184 | 39,881 | |||||||||
| Policyholders’ account balances | 75,909 | 66,820 | |||||||||
| Total liabilities | 271,264 | 258,077 | |||||||||
| EQUITY | |||||||||||
| Preferred stock | 1,562 | 1,269 | |||||||||
| Accumulated other comprehensive income (loss) | 1,876 | 3,863 | |||||||||
| Total equity attributable to Holdings | $ | 11,680 | $ | 15,576 | |||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | 8,242 | 10,444 | |||||||||
15
Assets Under Management (Unaudited)
| September 30, 2021 | December 31, 2020 | ||||||||||
| (in billions) | |||||||||||
| Assets Under Management | |||||||||||
| AB AUM | $ | 742.2 | $ | 685.9 | |||||||
| Exclusion for General Account and other Affiliated Accounts | (77.4) | (87.6) | |||||||||
| Exclusion for Separate Accounts | (43.6) | (40.5) | |||||||||
| AB third party | $ | 621.2 | $ | 557.8 | |||||||
| Total company AUM | |||||||||||
| AB third party | $ | 621.2 | $ | 557.8 | |||||||
| General Account and other Affiliated Accounts (1) (3) | 107.3 | 115.3 | |||||||||
| Separate Accounts (2) (3) | 142.1 | 136.0 | |||||||||
| Total AUM | $ | 870.6 | $ | 809.0 | |||||||
_______________
(1) “General Account and Other Affiliated Accounts” refers to assets held in the general accounts of our insurance companies and other assets on which we bear the investment risk.
(2) “Separate Accounts” refers to the separate account investment assets of our insurance subsidiaries excluding any assets on which we bear the investment risk.
(3) As of June 30, 2021 and September 30, 2021, Separate Account and General Account AUM is inclusive of $16.9 billion, $63 million, $16.3 billion and $64 million, respectively, Account Value ceded to Venerable. For additional information on the Venerable transaction see Note 1 of the Notes to Consolidated Financial Statements within the 10-Q.
16
| Table of Contents | |||||||||||
| Consolidated Financials and Key Metrics | Page | ||||||||||
| Key Metrics Summary | |||||||||||
| Consolidated Statements of Income (Loss) | |||||||||||
| Consolidated Balance Sheets | |||||||||||
| Consolidated Capital Structure | |||||||||||
| Operating Earnings (Loss) by Segment and Corporate and Other | |||||||||||
| Assets Under Management and Administration | |||||||||||
| Sales Metrics by Segment | |||||||||||
| Select Metrics from Business Segments | |||||||||||
| Individual Retirement | |||||||||||
| Statements of Operating Earnings (Loss) and Summary Metrics | |||||||||||
| Select Operating Metrics | |||||||||||
| Group Retirement | |||||||||||
| Statements of Operating Earnings (Loss) and Summary Metrics | |||||||||||
| Select Operating Metrics | |||||||||||
| Investment Management and Research | |||||||||||
| Statements of Operating Earnings (Loss) and Summary Metrics | |||||||||||
| Select Operating Metrics | |||||||||||
| Net Flows | |||||||||||
| Protection Solutions | |||||||||||
| Statements of Operating Earnings (Loss) and Summary Metrics | |||||||||||
| Select Operating Metrics | |||||||||||
| Investments | |||||||||||
| Consolidated Investment Portfolio Composition | |||||||||||
| Consolidated Results of General Account Investment Portfolio | |||||||||||
| Additional Information | |||||||||||
| Deferred Policy Acquisition Costs Rollforward | |||||||||||
| Use of Non-GAAP Financial Measures | |||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||
| Glossary of Selected Financial and Product Terms | |||||||||||
| Analyst Coverage, Ratings & Contact Information | |||||||||||
All information included in this financial supplement is unaudited.
.
This financial supplement should be read in conjunction with Equitable Holdings, Inc.’s (“EQH”) Quarterly Report on Form 10-Q for the quarter ended September 30, 2021.
Equitable Holdings’ filings with the Securities and Exchange Commission (“SEC”) can be accessed upon filing at the SEC’s website at www.sec.gov, and at our website at ir.equitableholdings.com.
| 3Q 2021 Financial Supplement | 2 | |||||||
Consolidated Financials
and Key Metrics
| 3Q 2021 Financial Supplement | 3 | |||||||
| Key Metrics Summary | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (705) | $ | (1,136) | $ | (1,400) | $ | 223 | $ | 765 | 208.5 | % | $ | 787 | $ | (412) | (152.4) | % | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to the noncontrolling interest | (74) | (102) | (88) | (100) | (93) | (25.7) | % | (197) | (281) | (42.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (779) | $ | (1,238) | $ | (1,488) | $ | 123 | $ | 672 | 186.3 | % | $ | 590 | $ | (693) | (217.5) | % | ||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (1) | $ | 568 | $ | 748 | $ | 600 | $ | 758 | $ | 818 | 44.0 | % | $ | 1,554 | $ | 2,176 | 40.0 | % | ||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | $ | 17,300 | $ | 15,576 | $ | 10,693 | $ | 11,732 | $ | 11,680 | (32.5) | % | $ | 17,300 | $ | 11,680 | (32.5) | % | ||||||||||||||||||||||||||||||||||||||
| Less: Preferred Stock | 1,269 | 1,269 | 1,562 | 1,562 | 1,562 | 23.1 | % | 1,269 | 1,562 | 23.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 16,031 | 14,307 | 9,131 | 10,170 | 10,118 | (36.9) | % | 16,031 | 10,118 | (36.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 4,188 | 3,863 | 740 | 1,983 | 1,876 | (55.2) | % | 4,188 | 1,876 | (55.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 11,843 | $ | 10,444 | $ | 8,391 | $ | 8,187 | $ | 8,242 | (30.4) | % | $ | 11,843 | $ | 8,242 | (30.4) | % | ||||||||||||||||||||||||||||||||||||||
| Return on Equity (ex. AOCI) - TTM | (2.9) | % | (5.4) | % | (69.7) | % | (35.5) | % | (22.7) | % | (2.9) | % | (22.7) | % | ||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating ROE (1) | 16.3 | % | 17.3 | % | 21.3 | % | 26.8 | % | 32.4 | % | 16.3 | % | 32.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Debt to capital: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt to Capital | 19.2 | % | 20.9 | % | 26.4 | % | 24.6 | % | 24.7 | % | 19.2 | % | 24.7 | % | ||||||||||||||||||||||||||||||||||||||||||
| Debt to Capital (ex. AOCI) | 23.9 | % | 26.0 | % | 27.8 | % | 28.2 | % | 28.1 | % | 23.9 | % | 28.1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per common share: (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (1.77) | $ | (2.84) | $ | (3.46) | $ | 0.23 | $ | 1.59 | 189.9 | % | $ | 1.22 | $ | (1.76) | (244.0) | % | ||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (1) | $ | 1.24 | $ | 1.65 | $ | 1.35 | $ | 1.71 | $ | 1.94 | 55.8 | % | $ | 3.35 | $ | 5.02 | 49.9 | % | ||||||||||||||||||||||||||||||||||||||
| Book value per common share | $ | 36.05 | $ | 32.46 | $ | 21.32 | $ | 24.20 | $ | 25.00 | (30.6) | % | $ | 36.05 | $ | 25.00 | (30.6) | % | ||||||||||||||||||||||||||||||||||||||
| Book value per common share (ex. AOCI) | $ | 26.63 | $ | 23.70 | $ | 19.59 | $ | 19.48 | $ | 20.37 | (23.5) | % | $ | 26.63 | $ | 20.37 | (23.5) | % | ||||||||||||||||||||||||||||||||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 447.5 | 442.8 | 434.2 | 424.2 | 411.3 | (8.1) | % | 453.0 | 423.2 | (6.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 447.5 | 442.8 | 434.2 | 428.3 | 414.6 | (7.3) | % | 454.1 | 423.2 | (6.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Ending common shares outstanding | 444.7 | 440.8 | 428.3 | 420.2 | 404.7 | (9.0) | % | 444.7 | 404.7 | (9.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Return to common shareholders: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividend | $ | 76 | $ | 75 | $ | 74 | $ | 76 | $ | 74 | $ | 222 | $ | 224 | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares | 100 | 100 | 430 | 279 | 460 | 330 | 1,169 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total capital returned to common shareholders | $ | 176 | $ | 175 | $ | 504 | $ | 355 | $ | 534 | $ | 552 | $ | 1,393 | ||||||||||||||||||||||||||||||||||||||||||
| Market Values: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S&P 500 | 3,363 | 3,756 | 3,973 | 4,298 | 4,308 | 28.1 | % | 3,363 | 4,308 | 28.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| US 10-Year Treasury | 0.7 | % | 0.9 | % | 1.7 | % | 1.5 | % | 1.5 | % | 0.7 | % | 1.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. For a reconciliation of this item to the most directly comparable GAAP measure, refer to the “Non-GAAP Reconciliation” section in this document. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) For loss periods, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share or Non-GAAP Operating Earnings per common share as inclusion of such shares would have an anti-dilutive effect. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 4 | |||||||
| Consolidated Statements of Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges and fee income | $ | 914 | $ | 948 | $ | 949 | $ | 939 | $ | 867 | (5.1) | % | $ | 2,787 | $ | 2,755 | (1.1) | % | ||||||||||||||||||||||||||||||||||||||
| Premiums | 221 | 243 | 258 | 241 | 230 | 4.1 | % | 754 | 729 | (3.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (1,472) | (3,612) | (2,546) | (1,199) | (185) | 87.4 | % | 1,890 | (3,930) | (307.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 879 | 947 | 884 | 1,033 | 997 | 13.4 | % | 2,530 | 2,914 | 15.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | 17 | 554 | 184 | 420 | 163 | 858.8 | % | 190 | 767 | 303.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management and service fees | 1,126 | 1,294 | 1,257 | 1,318 | 1,323 | 17.5 | % | 3,314 | 3,898 | 17.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Other income | 155 | 142 | 167 | 198 | 220 | 41.9 | % | 434 | 585 | 34.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 1,840 | 516 | 1,153 | 2,950 | 3,615 | 96.5 | % | 11,899 | 7,718 | (35.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 1,034 | 780 | 939 | 828 | 751 | (27.4) | % | 4,546 | 2,518 | (44.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 306 | 292 | 291 | 309 | 305 | (0.3) | % | 930 | 905 | (2.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 503 | 598 | 580 | 568 | 614 | 22.1 | % | 1,498 | 1,762 | 17.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 342 | 369 | 382 | 397 | 436 | 27.5 | % | 982 | 1,215 | 23.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 52 | 48 | 74 | 51 | 59 | 13.5 | % | 152 | 184 | 21.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 90 | 58 | 87 | 106 | 64 | (28.9) | % | 1,555 | 257 | (83.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Other operating costs and expenses | 436 | 392 | 608 | 447 | 456 | 4.6 | % | 1,308 | 1,511 | 15.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total benefits and other deductions | 2,763 | 2,537 | 2,961 | 2,706 | 2,685 | (2.8) | % | 10,971 | 8,352 | (23.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations, before income taxes | (923) | (2,021) | (1,808) | 244 | 930 | 200.8 | % | 928 | (634) | (168.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | 218 | 885 | 408 | (21) | (165) | (175.7) | % | (141) | 222 | 257.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | (705) | (1,136) | (1,400) | 223 | 765 | 208.5 | % | 787 | (412) | (152.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: net (income) loss attributable to the noncontrolling interest | (74) | (102) | (88) | (100) | (93) | (25.7) | % | (197) | (281) | (42.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (779) | $ | (1,238) | $ | (1,488) | $ | 123 | $ | 672 | 186.3 | % | $ | 590 | $ | (693) | (217.5) | % | ||||||||||||||||||||||||||||||||||||||
| Less: Preferred stock dividends | (11) | (19) | (13) | (26) | (14) | (27.3) | % | (34) | (53) | (55.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | $ | (790) | $ | (1,257) | $ | (1,501) | $ | 97 | $ | 658 | 183.3 | % | $ | 556 | $ | (746) | (234.2) | % | ||||||||||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features (1) | $ | 1,620 | $ | 3,439 | $ | 2,267 | $ | 1,193 | $ | 172 | $ | 473 | $ | 3,632 | ||||||||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (17) | (554) | (183) | (420) | (164) | (190) | (767) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 31 | 23 | 34 | 26 | 27 | 86 | 87 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other adjustments (2) (3) (4) (5) | 66 | 116 | 524 | 7 | 141 | 836 | 672 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments (6) | (357) | (635) | (555) | (171) | (35) | (253) | (761) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 4 | (403) | 1 | — | 5 | 12 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating earnings (7) | $ | 568 | $ | 748 | $ | 600 | $ | 758 | $ | 818 | $ | 1,554 | $ | 2,176 | ||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes COVID-19 impact on Variable annuity product features due to a first quarter 2020 assumption update of $1.5 billion and other COVID-19 related impacts of $35 million for the nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes separation costs of $25 million,$37 million,$62 million and $108 million for the three and nine months ended September 30, 2021 and 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Includes certain legal accruals related to the cost of insurance litigation of $180 million for the nine months ended September 30, 2021. No adjustment was made to prior period operating earnings as the impact was immaterial. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (4) Includes COVID-19 impact on Other adjustments due to a first quarter 2020 assumption update of $1.0 billion and other COVID-19 related impacts of $86 million for the nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (5) Includes Non-GMxB related derivative hedge losses of ($4) million, $10 million, $140 million, and ($461) million for the three and nine months ended September 30, 2021 and 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (6) Includes income taxes of ($554) million for the above related COVID-19 items for the nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (7) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. For a reconciliation of this item to the most directly comparable GAAP measure, refer to the “Non-GAAP Reconciliation” section in this document. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 5 | |||||||
| Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Total investments | $ | 105,778 | $ | 109,087 | $ | 105,497 | $ | 100,467 | $ | 102,007 | |||||||||||||||||||
| Cash and cash equivalents | 8,684 | 6,179 | 6,795 | 5,761 | 5,255 | ||||||||||||||||||||||||
| Cash and securities segregated, at fair value | 1,869 | 1,753 | 1,413 | 1,073 | 909 | ||||||||||||||||||||||||
| Broker-dealer related receivables | 1,929 | 2,223 | 2,361 | 2,474 | 2,639 | ||||||||||||||||||||||||
| Deferred policy acquisition costs | 4,171 | 4,243 | 4,943 | 4,838 | 5,366 | ||||||||||||||||||||||||
| Goodwill and other intangible assets, net | 4,745 | 4,737 | 4,744 | 4,739 | 4,734 | ||||||||||||||||||||||||
| Amounts due from reinsurers | 4,580 | 4,566 | 4,526 | 14,462 | 14,801 | ||||||||||||||||||||||||
| GMIB reinsurance contract asset, at fair value | 2,818 | 2,488 | 1,907 | 2,026 | 1,937 | ||||||||||||||||||||||||
| Current and deferred income taxes | — | — | 509 | 428 | 293 | ||||||||||||||||||||||||
| Other assets | 4,476 | 3,701 | 3,859 | 4,149 | 4,545 | ||||||||||||||||||||||||
| Assets held-for-sale | — | 470 | 483 | — | — | ||||||||||||||||||||||||
| Separate Accounts assets | 123,446 | 135,950 | 139,795 | 145,565 | 142,093 | ||||||||||||||||||||||||
| Total assets | $ | 262,496 | $ | 275,397 | $ | 276,832 | $ | 285,982 | $ | 284,579 | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Policyholders’ account balances | $ | 62,726 | $ | 66,820 | $ | 73,303 | $ | 75,169 | $ | 75,909 | |||||||||||||||||||
| Future policy benefits and other policyholders’ liabilities | 41,139 | 39,881 | 35,922 | 36,835 | 37,184 | ||||||||||||||||||||||||
| Broker-dealer related payables | 760 | 1,443 | 2,283 | 1,643 | 1,087 | ||||||||||||||||||||||||
| Customers related payables | 3,461 | 3,417 | 3,179 | 2,942 | 3,153 | ||||||||||||||||||||||||
| Amounts due to reinsurers | 1,391 | 1,381 | 1,340 | 1,377 | 1,466 | ||||||||||||||||||||||||
| Short-term and long-term debt | 4,114 | 4,115 | 4,022 | 3,920 | 3,839 | ||||||||||||||||||||||||
| Income taxes payable | 1,648 | 749 | — | — | — | ||||||||||||||||||||||||
| Notes issued by consolidated variable interest entities, at fair value using the fair value option | — | 313 | 323 | 746 | 1,190 | ||||||||||||||||||||||||
| Other liabilities | 4,864 | 3,686 | 3,990 | 4,439 | 5,343 | ||||||||||||||||||||||||
| Liabilities held-for-sale | — | 322 | 270 | — | — | ||||||||||||||||||||||||
| Separate Accounts liabilities | 123,446 | 135,950 | 139,795 | 145,565 | 142,093 | ||||||||||||||||||||||||
| Total liabilities | 243,549 | 258,077 | 264,427 | 272,636 | 271,264 | ||||||||||||||||||||||||
| Redeemable noncontrolling interest | 95 | 143 | 137 | 42 | 143 | ||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||
| Preferred stock | 1,269 | 1,269 | 1,562 | 1,562 | 1,562 | ||||||||||||||||||||||||
| Common stock | 5 | 5 | 5 | 5 | 5 | ||||||||||||||||||||||||
| Additional paid-in capital | 1,953 | 1,985 | 1,928 | 1,980 | 1,917 | ||||||||||||||||||||||||
| Treasury shares | (2,147) | (2,245) | (2,300) | (2,537) | (2,537) | ||||||||||||||||||||||||
| Retained earnings | 12,032 | 10,699 | 8,758 | 8,739 | 8,857 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 4,188 | 3,863 | 740 | 1,983 | 1,876 | ||||||||||||||||||||||||
| Total equity attributable to Holdings | 17,300 | 15,576 | 10,693 | 11,732 | 11,680 | ||||||||||||||||||||||||
| Noncontrolling interest | 1,552 | 1,601 | 1,575 | 1,572 | 1,492 | ||||||||||||||||||||||||
| Total equity | 18,852 | 17,177 | 12,268 | 13,304 | 13,172 | ||||||||||||||||||||||||
| Total liabilities, redeemable noncontrolling interest and equity | $ | 262,496 | $ | 275,397 | $ | 276,832 | $ | 285,982 | $ | 284,579 | |||||||||||||||||||
| 3Q 2021 Financial Supplement | 6 | |||||||
| Consolidated Capital Structure | ||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | ||||||||||||||||||||||||
| Short-term and long-term debt: | |||||||||||||||||||||||||||||
| Short-term debt | |||||||||||||||||||||||||||||
| AB commercial paper | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
| AB revolving credit facility | — | — | — | — | — | ||||||||||||||||||||||||
| CLO Warehousing Debt (1) | — | — | 185 | 82 | 1 | ||||||||||||||||||||||||
| Total short-term debt | — | — | 185 | 82 | 1 | ||||||||||||||||||||||||
| Total long-term debt | 4,114 | 4,115 | 3,837 | 3,838 | 3,838 | ||||||||||||||||||||||||
Total short-term and long-term debt: [A] | $ | 4,114 | $ | 4,115 | $ | 4,022 | $ | 3,920 | $ | 3,839 | |||||||||||||||||||
| Equity: | |||||||||||||||||||||||||||||
| Preferred stock | $ | 1,269 | $ | 1,269 | $ | 1,562 | $ | 1,562 | $ | 1,562 | |||||||||||||||||||
| Common stock | $ | 5 | $ | 5 | $ | 5 | $ | 5 | $ | 5 | |||||||||||||||||||
| Additional paid-in capital | 1,953 | 1,985 | 1,928 | 1,980 | 1,917 | ||||||||||||||||||||||||
| Treasury stock, at cost | (2,147) | (2,245) | (2,300) | (2,537) | (2,537) | ||||||||||||||||||||||||
| Retained earnings | 12,032 | 10,699 | 8,758 | 8,739 | 8,857 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 4,188 | 3,863 | 740 | 1,983 | 1,876 | ||||||||||||||||||||||||
| Total equity attributable to Holdings | 17,300 | 15,576 | 10,693 | 11,732 | 11,680 | ||||||||||||||||||||||||
| Noncontrolling interest | 1,552 | 1,601 | 1,575 | 1,572 | 1,492 | ||||||||||||||||||||||||
| Total equity | $ | 18,852 | $ | 17,177 | $ | 12,268 | $ | 13,304 | $ | 13,172 | |||||||||||||||||||
Total equity attributable to Holdings, (ex. AOCI): [B] | $ | 13,112 | $ | 11,713 | $ | 9,953 | $ | 9,749 | $ | 9,804 | |||||||||||||||||||
| Capital: | |||||||||||||||||||||||||||||
| Total capitalization (3) | $ | 21,414 | $ | 19,691 | $ | 14,530 | $ | 15,570 | $ | 15,518 | |||||||||||||||||||
Total capitalization (ex. AOCI): [A+B] (3) | $ | 17,226 | $ | 15,828 | $ | 13,790 | $ | 13,587 | $ | 13,642 | |||||||||||||||||||
| Debt to capital: | |||||||||||||||||||||||||||||
| Debt to capital (2) | 19.2 | % | 20.9 | % | 26.4 | % | 24.6 | % | 24.7 | % | |||||||||||||||||||
| Debt to capital (ex. AOCI) (2) | 23.9 | % | 26.0 | % | 27.8 | % | 28.2 | % | 28.1 | % | |||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Roll-forward of common shares outstanding (millions of shares): | |||||||||||||||||||||||||||||
| Beginning balance | 449.4 | 444.7 | 440.8 | 428.3 | 420.2 | ||||||||||||||||||||||||
| Repurchases | (4.7) | (4.0) | (3.2) | (7.1) | — | ||||||||||||||||||||||||
| Retirements | — | — | (11.2) | (1.1) | (15.6) | ||||||||||||||||||||||||
| Issuances | — | 0.1 | 2.0 | 0.1 | 0.1 | ||||||||||||||||||||||||
| Ending basic common shares outstanding | 444.7 | 440.8 | 428.3 | 420.2 | 404.7 | ||||||||||||||||||||||||
| Total potentially dilutive shares | 1.1 | — | — | — | — | ||||||||||||||||||||||||
| Ending common shares outstanding - maximum potential dilution | 445.8 | 440.8 | 428.3 | 420.2 | 404.7 | ||||||||||||||||||||||||
| Notes: | |||||||||||||||||||||||||||||
(1) CLO Warehousing Debt related to VIE consolidation of CLO investment.
(2) Debt to capital ratio exclusive of CLO Warehousing Debt as the VIE debt is non-recourse.
(3) Total capitalization exclusive of CLO Warehousing Debt as the VIE debt is non-recourse.
| 3Q 2021 Financial Supplement | 7 | |||||||
| Operating Earnings (Loss) by Segment and Corporate and Other (1/2) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | Individual Retirement | Group Retirement | Inv Mgmt and Research | Protection Solutions | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 439 | $ | 96 | $ | — | $ | 482 | $ | 80 | $ | 1,097 | ||||||||||||||||||||||||||
| Net investment income (loss) | 296 | 189 | (2) | 294 | 270 | 1,047 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 77 | (11) | 2 | (7) | 3 | 64 | ||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 186 | 69 | 1,093 | 69 | 126 | 1,543 | ||||||||||||||||||||||||||||||||
| Segment revenues | 998 | 343 | 1,093 | 838 | 479 | 3,751 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 272 | — | — | 392 | 164 | 828 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 70 | 77 | — | 126 | 32 | 305 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 89 | 12 | 187 | 44 | 104 | 436 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 88 | (24) | — | 4 | (13) | 55 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 96 | 45 | 622 | 78 | 112 | 953 | ||||||||||||||||||||||||||||||||
| Interest expense and financing fees | — | — | — | — | 65 | 65 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 615 | 110 | 809 | 644 | 464 | 2,642 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 383 | 233 | 284 | 194 | 15 | 1,109 | ||||||||||||||||||||||||||||||||
| Income Taxes | (67) | (41) | (49) | (34) | 1 | (190) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 316 | 192 | 235 | 160 | 16 | 919 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (101) | — | — | (101) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 316 | $ | 192 | $ | 134 | $ | 160 | $ | 16 | $ | 818 | ||||||||||||||||||||||||||
| Three Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| Individual Retirement | Group Retirement | Inv Mgmt and Research | Protection Solutions | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 519 | $ | 75 | $ | — | $ | 450 | $ | 90 | $ | 1,134 | ||||||||||||||||||||||||||
| Net investment income (loss) | 324 | 174 | 13 | 240 | 121 | 872 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 58 | (3) | (14) | 3 | 1 | 45 | ||||||||||||||||||||||||||||||||
| Investment Management, service fees and other income | 178 | 55 | 900 | 58 | 88 | 1,279 | ||||||||||||||||||||||||||||||||
| Segment revenues | 1,079 | 301 | 899 | 751 | 300 | 3,330 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 298 | 1 | — | 455 | 163 | 917 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 78 | 76 | — | 130 | 22 | 306 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 71 | 9 | 148 | 40 | 74 | 342 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 94 | 14 | — | (16) | — | 92 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 93 | 46 | 531 | 82 | 89 | 841 | ||||||||||||||||||||||||||||||||
| Interest Expense and Financing Fees | — | — | 1 | — | 56 | 57 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 634 | 146 | 680 | 691 | 404 | 2,555 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 445 | 155 | 219 | 60 | (104) | 775 | ||||||||||||||||||||||||||||||||
| Income Taxes | (74) | (26) | (40) | (9) | 18 | (131) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 371 | 129 | 179 | 51 | (86) | 644 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (75) | — | (1) | (76) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 371 | $ | 129 | $ | 104 | $ | 51 | $ | (87) | $ | 568 | ||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 8 | |||||||
| Operating Earnings (Loss) by Segment and Corporate and Other (2/2) | ||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | Individual Retirement | Group Retirement | Inv Mgmt and Research | Protection Solutions | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 1,457 | $ | 273 | $ | — | $ | 1,493 | $ | 261 | $ | 3,484 | ||||||||||||||||||||||||||
| Net investment income (loss) | 972 | 564 | 10 | 827 | 613 | 2,986 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (51) | (16) | (7) | (18) | (22) | (114) | ||||||||||||||||||||||||||||||||
| Investment Management, service fees and other income | 579 | 197 | 3,166 | 194 | 347 | 4,483 | ||||||||||||||||||||||||||||||||
| Segment revenues | 2,957 | 1,018 | 3,169 | 2,496 | 1,199 | 10,839 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 641 | — | — | 1,370 | 485 | 2,496 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 205 | 227 | — | 383 | 90 | 905 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 245 | 41 | 517 | 120 | 292 | 1,215 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 239 | (11) | — | 63 | (16) | 275 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 307 | 140 | 1,831 | 241 | 257 | 2,776 | ||||||||||||||||||||||||||||||||
| Interest expense and financing fees | — | — | 1 | — | 180 | 181 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 1,637 | 397 | 2,349 | 2,177 | 1,288 | 7,848 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 1,320 | 621 | 820 | 319 | (89) | 2,991 | ||||||||||||||||||||||||||||||||
| Income Taxes | (227) | (107) | (142) | (55) | 14 | (517) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 1,093 | 514 | 678 | 264 | (75) | 2,474 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (297) | — | (1) | (298) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 1,093 | $ | 514 | $ | 381 | $ | 264 | $ | (76) | $ | 2,176 | ||||||||||||||||||||||||||
| Nine Months Ended September 30, 2020 | ||||||||||||||||||||||||||||||||||||||
| Individual Retirement | Group Retirement | Inv Mgmt and Research | Protection Solutions | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 1,513 | $ | 214 | $ | — | $ | 1,480 | $ | 291 | $ | 3,498 | ||||||||||||||||||||||||||
| Net investment income (loss) | 906 | 460 | 12 | 688 | 338 | 2,404 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 414 | 1 | (15) | 10 | (3) | 407 | ||||||||||||||||||||||||||||||||
| Investment Management, service fees and other income | 519 | 154 | 2,653 | 166 | 255 | 3,747 | ||||||||||||||||||||||||||||||||
| Segment revenues | 3,352 | 829 | 2,650 | 2,344 | 881 | 10,056 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 1,046 | 2 | — | 1,415 | 504 | 2,967 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 241 | 226 | — | 394 | 75 | 936 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 203 | 33 | 414 | 115 | 217 | 982 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 253 | 28 | — | 63 | (1) | 343 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 286 | 147 | 1,612 | 251 | 221 | 2,517 | ||||||||||||||||||||||||||||||||
| Interest Expense and Financing Fees | — | — | 5 | — | 164 | 169 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 2,029 | 436 | 2,031 | 2,238 | 1,180 | 7,914 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 1,323 | 393 | 619 | 106 | (299) | 2,142 | ||||||||||||||||||||||||||||||||
| Income Taxes | (229) | (68) | (109) | (18) | 53 | (371) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 1,094 | 325 | 510 | 88 | (246) | 1,771 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (219) | — | 2 | (217) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 1,094 | $ | 325 | $ | 291 | $ | 88 | $ | (244) | $ | 1,554 | ||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 9 | |||||||
| Assets Under Management and Administration | ||
| Balances as of | ||||||||||||||||||||||||||||||||
| (in billions USD, except for Equitable Headcount) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | |||||||||||||||||||||||||||
| Assets Under Management | ||||||||||||||||||||||||||||||||
| AB AUM | ||||||||||||||||||||||||||||||||
| Total AB | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | $ | 742.2 | ||||||||||||||||||||||
| Exclusion for General Account and other Affiliated Accounts | (85.9) | (87.6) | (84.5) | (76.7) | (77.4) | |||||||||||||||||||||||||||
| Exclusion for Separate Accounts | (36.6) | (40.5) | (42.2) | (44.4) | (43.6) | |||||||||||||||||||||||||||
| AB third party | $ | 508.3 | $ | 557.8 | $ | 570.4 | $ | 617.3 | $ | 621.2 | ||||||||||||||||||||||
| Total company AUM | ||||||||||||||||||||||||||||||||
| AB third party | $ | 508.3 | $ | 557.8 | $ | 570.4 | $ | 617.3 | $ | 621.2 | ||||||||||||||||||||||
| General Account and other Affiliated Accounts (1) (3) | 114.5 | 115.3 | 112.3 | 106.2 | 107.3 | |||||||||||||||||||||||||||
| Separate Accounts (2) (3) | 123.4 | 136.0 | 139.8 | 145.6 | 142.1 | |||||||||||||||||||||||||||
| Total AUM | $ | 746.3 | $ | 809.0 | $ | 822.5 | $ | 869.1 | $ | 870.6 | ||||||||||||||||||||||
| Total Assets Under Administration (AUA) (4) | $ | 56.3 | $ | 62.3 | $ | 70.1 | $ | 75.4 | $ | 77.4 | ||||||||||||||||||||||
| Equitable Advisor Headcount | ||||||||||||||||||||||||||||||||
| Total Number of Equitable Advisors | 4,273 | 4,530 | 4,369 | 4,314 | 4,263 | |||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||
(1) “General Account and Other Affiliated Accounts” refers to assets held in the general accounts of our insurance companies and other assets on which we bear the investment risk. | ||||||||||||||||||||||||||||||||
(2) “Separate Accounts” refers to the separate account investment assets of our insurance subsidiaries excluding any assets on which we bear the investment risk. | ||||||||||||||||||||||||||||||||
| (3) As of June 30, 2021 and September 30, 2021, Separate Account and General Account AUM is inclusive of $16.9 billion, $63 million, $16.3 billion and $64 million, respectively, Account Value ceded to Venerable. For additional information on the Venerable transaction see Note 1 of the Notes to Consolidated Financial Statements within the 10-Q. | ||||||||||||||||||||||||||||||||
| (4) AUA includes Equitable Advisors Advisory and Brokerage AUA; Equitable Advisors broker-dealer business is included in Corporate and Other. | ||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 10 | |||||||
| Sales Metrics by Segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Insurance Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 1,656 | $ | 1,968 | $ | 2,386 | $ | 2,753 | $ | 2,801 | 69.1 | % | $ | 5,205 | $ | 7,940 | 52.5 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits | 91 | 81 | 83 | 90 | 83 | (8.8) | % | 258 | 256 | (0.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 1,747 | $ | 2,049 | $ | 2,469 | $ | 2,843 | $ | 2,884 | 65.1 | % | $ | 5,463 | $ | 8,196 | 50.0 | % | ||||||||||||||||||||||||||||||||||||||
| Group Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 254 | $ | 332 | $ | 308 | $ | 306 | $ | 352 | 38.6 | % | $ | 844 | $ | 966 | 14.5 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits | 452 | 584 | 597 | 623 | 479 | 6.0 | % | 1,583 | 1,699 | 7.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 706 | $ | 916 | $ | 905 | $ | 929 | $ | 831 | 17.7 | % | $ | 2,427 | $ | 2,665 | 9.8 | % | ||||||||||||||||||||||||||||||||||||||
| Protection Solutions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 76 | $ | 95 | $ | 98 | $ | 100 | $ | 95 | 25.0 | % | $ | 264 | $ | 293 | 11.0 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits | 624 | 653 | 664 | 648 | 659 | 5.6 | % | 1,907 | 1,971 | 3.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 700 | $ | 748 | $ | 762 | $ | 748 | $ | 754 | 7.7 | % | $ | 2,171 | $ | 2,264 | 4.3 | % | ||||||||||||||||||||||||||||||||||||||
| Investment Management and Research (in billions USD) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Sales by distribution channel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional | $ | 8.3 | $ | 9.9 | $ | 4.9 | $ | 17.6 | $ | 2.6 | (68.7) | % | $ | 21.0 | $ | 25.1 | 19.5 | % | ||||||||||||||||||||||||||||||||||||||
| Retail | 17.5 | 17.7 | 23.0 | 23.8 | 25.6 | 46.3 | % | 61.3 | 72.4 | 18.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Private Wealth Management | 3.5 | 3.7 | 5.4 | 3.6 | 4.1 | 17.1 | % | 10.5 | 13.1 | 24.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Firmwide Gross Sales | $ | 29.3 | $ | 31.3 | $ | 33.3 | $ | 45.0 | $ | 32.3 | 10.2 | % | $ | 92.8 | $ | 110.6 | 19.2 | % | ||||||||||||||||||||||||||||||||||||||
| Gross sales by investment service | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Active | $ | 12.0 | $ | 13.5 | $ | 15.6 | $ | 18.3 | $ | 17.2 | 43.3 | % | $ | 37.9 | $ | 51.1 | 34.8 | % | ||||||||||||||||||||||||||||||||||||||
| Equity Passive (1) | 1.2 | 0.1 | 0.2 | 0.4 | 0.5 | (58.3) | % | 1.6 | 1.1 | (31.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income - Taxable | 11.0 | 13.6 | 12.4 | 16.3 | 8.8 | (20.0) | % | 40.7 | 37.5 | (7.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income - Tax-Exempt | 2.2 | 2.8 | 3.4 | 3.2 | 3.3 | 50.0 | % | 7.5 | 9.9 | 32.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income Passive (1) | — | — | — | 0.8 | 0.4 | 100.0 | % | — | 1.2 | 100.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) | 2.9 | 1.3 | 1.7 | 6.0 | 2.1 | (27.6) | % | 5.1 | 9.8 | 92.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Firmwide Gross Sales | $ | 29.3 | $ | 31.3 | $ | 33.3 | $ | 45.0 | $ | 32.3 | 10.2 | % | $ | 92.8 | $ | 110.6 | 19.2 | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as “Other.” In order to reflect the increasing significance of our Alternatives and Multi-Asset Solutions services, we updated the investment service line to “Alternatives and Multi-Asset Solutions." | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 11 | |||||||
Business Segments:
Operating Earnings Results and Metrics
| 3Q 2021 Financial Supplement | 12 | |||||||
| Individual Retirement - Operating Earnings (Loss) and Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 519 | $ | 521 | $ | 522 | $ | 496 | $ | 439 | (15.4) | % | $ | 1,513 | $ | 1,457 | (3.7) | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 324 | 340 | 325 | 351 | 296 | (8.6) | % | 906 | 972 | 7.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 58 | (83) | (59) | (69) | 77 | 32.8 | % | 414 | (51) | (112.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 178 | 181 | 192 | 201 | 186 | 4.5 | % | 519 | 579 | 11.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 1,079 | 959 | 980 | 979 | 998 | (7.5) | % | 3,352 | 2,957 | (11.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 298 | 161 | 206 | 163 | 272 | (8.7) | % | 1,046 | 641 | (38.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 78 | 71 | 68 | 67 | 70 | (10.3) | % | 241 | 205 | (14.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 71 | 78 | 81 | 75 | 89 | 25.4 | % | 203 | 245 | 20.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 94 | 46 | 78 | 73 | 88 | (6.4) | % | 253 | 239 | (5.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 93 | 96 | 112 | 99 | 96 | 3.2 | % | 286 | 307 | 7.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 634 | 452 | 545 | 477 | 615 | (3.0) | % | 2,029 | 1,637 | (19.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 445 | 507 | 435 | 502 | 383 | (13.9) | % | 1,323 | 1,320 | (0.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (74) | (65) | (72) | (88) | (67) | 9.5 | % | (229) | (227) | 0.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 371 | 442 | 363 | 414 | 316 | (14.8) | % | 1,094 | 1,093 | (0.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 371 | $ | 442 | $ | 363 | $ | 414 | $ | 316 | (14.8) | % | $ | 1,094 | $ | 1,093 | (0.1) | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 1,486 | $ | 1,536 | $ | 1,526 | $ | 1,590 | $ | 1,535 | 3.3 | % | $ | 1,486 | $ | 1,535 | 3.3 | % | ||||||||||||||||||||||||||||||||||||||
Average capital - TTM: [B] | $ | 6,682 | $ | 6,352 | $ | 6,248 | $ | 6,426 | $ | 6,304 | (5.7) | % | $ | 6,682 | $ | 6,304 | (5.7) | % | ||||||||||||||||||||||||||||||||||||||
Non-GAAP Operating ROC - TTM (1): [A/B] | 22.2 | % | 24.2 | % | 24.4 | % | 24.8 | % | 24.4 | % | 22.2 | % | 24.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average Account Value (TTM) | $ | 103,546 | $ | 105,663 | $ | 112,460 | $ | 113,609 | $ | 113,580 | 9.7 | % | $ | 103,546 | $ | 113,580 | 9.7 | % | ||||||||||||||||||||||||||||||||||||||
| Return on assets (TTM) | 1.74 | % | 1.73 | % | 1.61 | % | 1.66 | % | 1.61 | % | 1.74 | % | 1.61 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Product Offering | $ | 351 | $ | 534 | $ | 559 | $ | 762 | $ | 702 | 99.9 | % | $ | 1,622 | $ | 2,023 | 24.7 | % | ||||||||||||||||||||||||||||||||||||||
| Fixed Rate (3) | (778) | (863) | (1,075) | (940) | (689) | 11.5 | % | (2,422) | (2,704) | (11.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net flows | $ | (427) | $ | (329) | $ | (516) | $ | (178) | $ | 13 | 103.0 | % | $ | (800) | $ | (681) | 14.9 | % | ||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 1,656 | $ | 1,968 | $ | 2,386 | $ | 2,753 | $ | 2,801 | 69.1 | % | $ | 5,205 | $ | 7,940 | 52.5 | % | ||||||||||||||||||||||||||||||||||||||
| In-force Policy Count by Product (in thousands) (2): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Product Offering | 557 | 560 | 561 | 564 | 568 | 557 | 568 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Fixed Rate | 342 | 338 | 333 | 328 | 322 | 342 | 322 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 899 | 898 | 894 | 892 | 890 | 899 | 890 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) As of June 30, 2021 and September 30, 2021, In-force Policy Count by Product presented on a gross basis includes 108 thousand and 107 thousand ceded policies, respectively, related to the Venerable transaction. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Net flows excluded as it relates to AV ceded to Venerable for the three months ended June 30, 2021 and September 30, 2021 and nine months ended September 30, 2021 were $(120) million, $(322) million and $(442) million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 13 | |||||||
| Individual Retirement - Select Operating Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| First Year Premiums by Product: | ||||||||||||||||||||||||||||||||||||||||||||
| SCS | $ | 1,166 | $ | 1,511 | $ | 1,752 | $ | 1,905 | $ | 1,910 | $ | 3,380 | $ | 5,567 | ||||||||||||||||||||||||||||||
| Retirement Cornerstone | 324 | 256 | 369 | 454 | 531 | 1,250 | 1,354 | |||||||||||||||||||||||||||||||||||||
| Investment Edge | 97 | 130 | 184 | 301 | 274 | 318 | 759 | |||||||||||||||||||||||||||||||||||||
| Other | 69 | 71 | 81 | 93 | 86 | 257 | 260 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums | $ | 1,656 | $ | 1,968 | $ | 2,386 | $ | 2,753 | $ | 2,801 | $ | 5,205 | $ | 7,940 | ||||||||||||||||||||||||||||||
| First Year Premiums by Guarantee: | ||||||||||||||||||||||||||||||||||||||||||||
| Non-GMxB | $ | 1,255 | $ | 1,617 | $ | 1,919 | $ | 2,168 | $ | 2,186 | $ | 3,725 | $ | 6,273 | ||||||||||||||||||||||||||||||
| ROP death benefit only | 134 | 144 | 179 | 203 | 160 | 388 | 542 | |||||||||||||||||||||||||||||||||||||
| Total non-GMxB & ROP death benefit only | 1,389 | 1,761 | 2,098 | 2,371 | 2,346 | 4,113 | 6,815 | |||||||||||||||||||||||||||||||||||||
| Floating rate GMxB | 266 | 205 | 287 | 381 | 455 | 1,073 | 1,123 | |||||||||||||||||||||||||||||||||||||
| Fixed rate GMxB | 1 | 2 | 1 | 1 | — | 19 | 2 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums | $ | 1,656 | $ | 1,968 | $ | 2,386 | $ | 2,753 | $ | 2,801 | $ | 5,205 | $ | 7,940 | ||||||||||||||||||||||||||||||
| Account Values | ||||||||||||||||||||||||||||||||||||||||||||
| General Account: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 27,075 | $ | 28,376 | $ | 30,783 | $ | 32,259 | $ | 34,090 | $ | 26,108 | $ | 30,783 | ||||||||||||||||||||||||||||||
| Gross premiums (6) | 915 | 1,409 | 1,388 | 1,760 | 2,137 | 3,247 | 5,285 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (528) | (572) | (684) | (787) | (847) | (1,383) | (2,318) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | 387 | 837 | 704 | 973 | 1,290 | 1,864 | 2,967 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | 914 | 1,570 | 772 | 917 | 248 | 413 | 1,937 | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | (61) | — | — | (61) | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) (5) | — | — | — | 2 | (38) | (6) | (36) | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | (3) | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 28,376 | $ | 30,783 | $ | 32,259 | $ | 34,090 | $ | 35,590 | $ | 28,376 | $ | 35,590 | ||||||||||||||||||||||||||||||
| Separate Accounts: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 76,765 | $ | 79,455 | $ | 86,607 | $ | 88,521 | $ | 74,345 | $ | 82,814 | $ | 86,607 | ||||||||||||||||||||||||||||||
| Gross premiums (6) | 820 | 640 | 1,081 | 1,061 | 711 | 2,197 | 2,853 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (1,634) | (1,806) | (2,301) | (2,212) | (1,988) | (4,861) | (6,501) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | (814) | (1,166) | (1,220) | (1,151) | (1,277) | (2,664) | (3,648) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | 3,504 | 8,318 | 3,134 | 3,786 | (945) | (695) | 5,975 | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | (16,866) | — | — | (16,866) | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) (5) | — | — | — | 55 | — | — | 55 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 79,455 | $ | 86,607 | $ | 88,521 | $ | 74,345 | $ | 72,123 | $ | 79,455 | $ | 72,123 | ||||||||||||||||||||||||||||||
| Total: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 103,840 | $ | 107,831 | $ | 117,390 | $ | 120,780 | $ | 108,435 | $ | 108,922 | $ | 117,390 | ||||||||||||||||||||||||||||||
| Gross premiums (6) | 1,735 | 2,049 | 2,469 | 2,821 | 2,848 | 5,444 | 8,138 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (2,162) | (2,378) | (2,985) | (2,999) | (2,835) | (6,244) | (8,819) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | (427) | (329) | (516) | (178) | 13 | (800) | (681) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | 4,418 | 9,888 | 3,906 | 4,703 | (697) | (282) | 7,912 | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | (16,927) | — | — | (16,927) | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) (5) | — | — | — | 57 | (38) | (6) | 19 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | (3) | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 107,831 | $ | 117,390 | $ | 120,780 | $ | 108,435 | $ | 107,713 | $ | 107,831 | $ | 107,713 | ||||||||||||||||||||||||||||||
| Net Amount at Risk (NAR) | ||||||||||||||||||||||||||||||||||||||||||||
| Total GMIB NAR | $ | 13,403 | $ | 10,461 | $ | 8,049 | $ | 3,820 | $ | 4,119 | $ | 13,403 | $ | 4,119 | ||||||||||||||||||||||||||||||
| Total GMDB NAR | 21,061 | 18,271 | 17,562 | 9,002 | 9,569 | 21,061 | 9,569 | |||||||||||||||||||||||||||||||||||||
| Reserves (Net of Reinsurance) | ||||||||||||||||||||||||||||||||||||||||||||
| GMIB Reserves | $ | 14,984 | $ | 14,246 | $ | 11,680 | $ | 4,606 | $ | 4,913 | $ | 14,984 | $ | 4,913 | ||||||||||||||||||||||||||||||
| GMDB Reserves | 5,021 | 5,006 | 4,999 | 2,829 | 2,765 | 5,021 | 2,765 | |||||||||||||||||||||||||||||||||||||
| Total GMDB/IB Variable Annuity Reserves (Net of Reinsurance) | $ | 20,005 | $ | 19,252 | $ | 16,679 | $ | 7,435 | $ | 7,678 | $ | 20,005 | $ | 7,678 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Net flows excluded as it relates to AV ceded to Venerable for the three months ended June 30, 2021 and September 30, 2021 and nine months ended September 30, 2021 were ($120) million, ($322) million and ($442) million respectively. Investment performance, interest credited and policy charges excluded as it relates to AV ceded to Venerable for the three months ended June 30, 2021 and September 30, 2021 and nine months ended September 30, 2021 were $148 million, ($273) million and ($125) million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 14 | |||||||
| (2) Effective June 1, 2021, AV excludes activity related to ceded AV to Venerable. In addition, roll-forward reflects the AV ceded to Venerable as of the transaction date. For additional information on the Venerable transaction see Note 1 of the Notes to Consolidated Financial Statements within the 10-Q. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) For the three and nine months ended September 30, 2021 amounts reflect ($38) million trasnfer of policyholders account balances to future policyholder benefits and other policyholders liabilities related to structured settlement contracts. | ||||||||||||||||||||||||||||||||||||||||||||
(4) For the three months ended June 30, 2021 and nine months ended September 30, 2021 amounts reflect $57 million of AV transfer of a closed block of GMxB business from GR to IR. | ||||||||||||||||||||||||||||||||||||||||||||
| (5) For the nine months ended September 30, 2020, amounts are primarily related to our fixed income annuity (“FIA”) contracts which were previously reported as Policyholders’ account balances in the consolidated balance sheets and therefore included in our definition of “Account Value”. Effective January 1, 2020, FIAs are reported as future policy benefits and other policyholders’ liabilities in the consolidated balance sheets and accordingly were excluded from Account Value. | ||||||||||||||||||||||||||||||||||||||||||||
| (6) Includes deposits from certain other products not reported as first year premiums and deposits or renewal premiums and deposits elsewhere in this document. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 15 | |||||||
| Group Retirement - Operating Earnings (Loss) and Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 75 | $ | 81 | $ | 86 | $ | 91 | $ | 96 | 28.0 | % | $ | 214 | $ | 273 | 27.6 | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 174 | 181 | 180 | 195 | 189 | 8.6 | % | 460 | 564 | 22.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (3) | — | — | (5) | (11) | (266.7) | % | 1 | (16) | N/M | ||||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 55 | 57 | 63 | 65 | 69 | 25.5 | % | 154 | 197 | 27.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 301 | 319 | 329 | 346 | 343 | 14.0 | % | 829 | 1,018 | 22.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholder benefits | 1 | — | — | — | — | (100.0) | % | 2 | — | (100.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 76 | 77 | 75 | 75 | 77 | 1.3 | % | 226 | 227 | 0.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 9 | 12 | 13 | 16 | 12 | 33.3 | % | 33 | 41 | 24.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 14 | (7) | 5 | 8 | (24) | (271.4) | % | 28 | (11) | (139.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 46 | 45 | 55 | 40 | 45 | (2.2) | % | 147 | 140 | (4.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 146 | 127 | 148 | 139 | 110 | (24.7) | % | 436 | 397 | (8.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 155 | 192 | 181 | 207 | 233 | 50.3 | % | 393 | 621 | 58.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (26) | (26) | (30) | (36) | (41) | (57.7) | % | (68) | (107) | (57.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 129 | 166 | 151 | 171 | 192 | 48.8 | % | 325 | 514 | 58.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 129 | $ | 166 | $ | 151 | $ | 171 | $ | 192 | 48.8 | % | $ | 325 | $ | 514 | 58.2 | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 434 | $ | 491 | $ | 536 | $ | 617 | $ | 680 | 56.7 | $ | 434 | $ | 680 | 56.7 | % | |||||||||||||||||||||||||||||||||||||||
Average capital - TTM: [B] | $ | 1,136 | $ | 1,073 | $ | 1,090 | $ | 1,108 | $ | 1,132 | (0.3) | $ | 1,136 | $ | 1,132 | (0.3) | % | |||||||||||||||||||||||||||||||||||||||
Non-GAAP Operating ROC - TTM (1): [A/B] | 38.3 | % | 45.8 | % | 49.1 | % | 55.5 | % | 60.0 | % | 38.3 | % | 60.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Average Account Value (TTM) | $ | 36,708 | $ | 37,853 | $ | 40,553 | $ | 42,762 | $ | 44,469 | 21.1 | % | $ | 36,708 | $ | 44,469 | 21.1 | % | ||||||||||||||||||||||||||||||||||||||
| Return on assets (TTM) | 1.43 | % | 1.55 | % | 1.57 | % | 1.72 | % | 1.83 | % | 1.43 | % | 1.83 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows | $ | (93) | $ | 45 | $ | (51) | $ | 68 | $ | (135) | (45.2) | % | $ | 251 | $ | (118) | (147.0) | % | ||||||||||||||||||||||||||||||||||||||
| Gross premiums | $ | 706 | $ | 916 | $ | 905 | $ | 929 | $ | 831 | 17.7 | % | $ | 2,427 | $ | 2,665 | 9.8 | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 16 | |||||||
| Group Retirement - Select Operating Metrics | |||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| Gross premiums: | ||||||||||||||||||||||||||||||||||||||||||||
| First-year premiums | $ | 254 | $ | 332 | $ | 308 | $ | 306 | $ | 352 | $ | 844 | $ | 966 | ||||||||||||||||||||||||||||||
| Renewal premiums | 452 | 584 | 597 | 623 | 479 | 1,583 | 1,699 | |||||||||||||||||||||||||||||||||||||
| Group Retirement premiums | $ | 706 | $ | 916 | $ | 905 | $ | 929 | $ | 831 | $ | 2,427 | $ | 2,665 | ||||||||||||||||||||||||||||||
| Gross premiums by market: | ||||||||||||||||||||||||||||||||||||||||||||
| Tax-exempt | $ | 173 | $ | 175 | $ | 179 | $ | 187 | $ | 213 | $ | 549 | $ | 579 | ||||||||||||||||||||||||||||||
| Corporate | 72 | 130 | 119 | 107 | 128 | 262 | 354 | |||||||||||||||||||||||||||||||||||||
| Other | 9 | 27 | 10 | 12 | 11 | 33 | 33 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums | 254 | 332 | 308 | 306 | 352 | 844 | 966 | |||||||||||||||||||||||||||||||||||||
| Tax-exempt | 320 | 452 | 447 | 481 | 347 | 1,180 | 1,275 | |||||||||||||||||||||||||||||||||||||
| Corporate | 87 | 85 | 96 | 93 | 90 | 257 | 279 | |||||||||||||||||||||||||||||||||||||
| Other | 45 | 47 | 54 | 49 | 42 | 146 | 145 | |||||||||||||||||||||||||||||||||||||
| Total renewal premiums | 452 | 584 | 597 | 623 | 479 | 1,583 | 1,699 | |||||||||||||||||||||||||||||||||||||
| Group Retirement premiums by market | $ | 706 | $ | 916 | $ | 905 | $ | 929 | $ | 831 | $ | 2,427 | $ | 2,665 | ||||||||||||||||||||||||||||||
| Account Values | ||||||||||||||||||||||||||||||||||||||||||||
| General Account: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 12,420 | $ | 12,627 | $ | 12,826 | $ | 12,924 | $ | 12,983 | $ | 12,071 | $ | 12,826 | ||||||||||||||||||||||||||||||
| Gross premiums | 355 | 376 | 288 | 225 | 253 | 1,061 | 766 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (239) | (274) | (278) | (251) | (276) | (736) | (805) | |||||||||||||||||||||||||||||||||||||
| Net flows | 116 | 102 | 10 | (26) | (23) | 325 | (39) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | 91 | 97 | 88 | 87 | 82 | 231 | 257 | |||||||||||||||||||||||||||||||||||||
| Other (1) | — | — | — | (2) | — | — | (2) | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 12,627 | $ | 12,826 | $ | 12,924 | $ | 12,983 | $ | 13,042 | $ | 12,627 | $ | 13,042 | ||||||||||||||||||||||||||||||
| Separate Accounts | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 24,670 | $ | 26,088 | $ | 29,633 | $ | 31,026 | $ | 32,940 | $ | 25,809 | $ | 29,633 | ||||||||||||||||||||||||||||||
| Gross premiums | 351 | 540 | 617 | 703 | 578 | 1,366 | 1,898 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (560) | (597) | (678) | (609) | (690) | (1,440) | (1,977) | |||||||||||||||||||||||||||||||||||||
| Net flows | (209) | (57) | (61) | 94 | (112) | (74) | (79) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | 1,627 | 3,602 | 1,454 | 1,875 | (326) | 353 | 3,003 | |||||||||||||||||||||||||||||||||||||
| Other (1) | — | — | — | (55) | — | — | (55) | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 26,088 | $ | 29,633 | $ | 31,026 | $ | 32,940 | $ | 32,502 | $ | 26,088 | $ | 32,502 | ||||||||||||||||||||||||||||||
| Total: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 37,090 | $ | 38,715 | $ | 42,459 | $ | 43,950 | $ | 45,923 | $ | 37,880 | $ | 42,459 | ||||||||||||||||||||||||||||||
| Gross premiums | 706 | 916 | 905 | 928 | 831 | 2,427 | 2,664 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (799) | (871) | (956) | (860) | (966) | (2,176) | (2,782) | |||||||||||||||||||||||||||||||||||||
| Net flows | (93) | 45 | (51) | 68 | (135) | 251 | (118) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | 1,718 | 3,699 | 1,542 | 1,962 | (244) | 584 | 3,260 | |||||||||||||||||||||||||||||||||||||
| Other (1) | — | — | — | (57) | — | — | (57) | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 38,715 | $ | 42,459 | $ | 43,950 | $ | 45,923 | $ | 45,544 | $ | 38,715 | $ | 45,544 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) For the three and nine months ended September 30, 2021, amounts reflect AV transfer of GMxB closed block business from GR to IR. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 17 | |||||||
| Investment Management and Research - Operating Earnings (Loss) and Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | $ | 13 | $ | 19 | $ | — | $ | 12 | $ | (2) | (115.4) | % | $ | 12 | $ | 10 | (16.7) | % | ||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (14) | (21) | 2 | (11) | 2 | 114.3 | % | (15) | (7) | 53.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 900 | 1,055 | 1,002 | 1,071 | 1,093 | 21.4 | % | 2,653 | 3,166 | 19.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment Revenues | 899 | 1,053 | 1,004 | 1,072 | 1,093 | 21.6 | % | 2,650 | 3,169 | 19.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 148 | 155 | 162 | 168 | 187 | 26.4 | % | 414 | 517 | 24.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 531 | 599 | 580 | 629 | 622 | 17.1 | % | 1,612 | 1,831 | 13.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and financing fees | 1 | 1 | 1 | — | — | (100.0) | % | 5 | 1 | (80.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total benefits and other deductions | 680 | 755 | 743 | 797 | 809 | 19.0 | % | 2,031 | 2,349 | 15.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 219 | 298 | 261 | 275 | 284 | 29.7 | % | 619 | 820 | 32.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (40) | (52) | (44) | (49) | (49) | (22.5) | % | (109) | (142) | (30.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 179 | 246 | 217 | 226 | 235 | 31.3 | % | 510 | 678 | 32.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | (75) | (105) | (96) | (100) | (101) | (34.7) | % | (219) | (297) | (35.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 104 | $ | 141 | $ | 121 | $ | 126 | $ | 134 | 28.8 | % | $ | 291 | $ | 381 | 30.9 | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating margin (1) | 29.7 | % | 34.2 | % | 31.7 | % | 31.7 | % | 31.8 | % | 28.4 | % | 31.7 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows (in billions USD) | $ | 3.1 | $ | 3.2 | $ | 5.2 | $ | 6.2 | $ | 7.2 | $ | (5.8) | $ | 18.7 | ||||||||||||||||||||||||||||||||||||||||||
| Total AUM (in billions USD) | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | $ | 742.2 | $ | 630.8 | $ | 742.2 | ||||||||||||||||||||||||||||||||||||||||||
| Ownership Structure of AB | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holdings and its subsidiaries | 63.8 | % | 63.3 | % | 62.8 | % | 62.9 | % | 63.2 | % | 63.8 | % | 63.2 | % | ||||||||||||||||||||||||||||||||||||||||||
| AB Holding | 35.5 | % | 36.0 | % | 36.5 | % | 36.3 | % | 36.1 | % | 35.5 | % | 36.1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Unaffiliated holders | 0.7 | % | 0.7 | % | 0.7 | % | 0.8 | % | 0.7 | % | 0.7 | % | 0.7 | % | ||||||||||||||||||||||||||||||||||||||||||
| Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| EQH economic interest | 65.3 | % | 64.8 | % | 64.3 | % | 64.4 | % | 64.7 | % | 65.3 | % | 64.7 | % | ||||||||||||||||||||||||||||||||||||||||||
| EQH average economic interest | 65.2 | % | 65.1 | % | 64.2 | % | 64.4 | % | 64.6 | % | 65.1 | % | 64.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Units of limited partnership outstanding (in millions) | 268.4 | 270.5 | 272.7 | 272.0 | 270.9 | 268.4 | 270.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Adjusted Operating Margin is a non-GAAP financial measure used by AllianceBernstein L.P. (“AB”) management in evaluating AB’s financial performance on a standalone basis and to compare its performance, as reported by AB in its public filings. It is not comparable to any other non-GAAP financial measure used herein. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 18 | |||||||
| Investment Management and Research - Select Operating Metrics | ||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | ||||||||||||||||||||||||||||||||
| (in billions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | |||||||||||||||||||||||||||
| AUM Roll-forward | ||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 600.0 | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | ||||||||||||||||||||||
| Sales/new accounts | 29.3 | 31.3 | 33.3 | 45.0 | 32.3 | |||||||||||||||||||||||||||
| Redemptions/terminations | (23.2) | (22.0) | (24.2) | (32.4) | (21.5) | |||||||||||||||||||||||||||
| Cash flow/unreinvested dividends | (3.0) | (6.1) | (3.9) | (6.4) | (3.6) | |||||||||||||||||||||||||||
| Net long-term (outflows) inflows | 3.1 | 3.2 | 5.2 | 6.2 | 7.2 | |||||||||||||||||||||||||||
| Market appreciation (depreciation) | 27.7 | 51.9 | 6.1 | 35.0 | (3.4) | |||||||||||||||||||||||||||
| Net change | 30.8 | 55.1 | 11.3 | 41.2 | 3.8 | |||||||||||||||||||||||||||
| Balance as of end of period | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | $ | 742.2 | ||||||||||||||||||||||
| Ending Assets by distribution channel | ||||||||||||||||||||||||||||||||
| Institutions | $ | 289.5 | $ | 315.6 | $ | 314.7 | $ | 329.1 | $ | 327.5 | ||||||||||||||||||||||
| Retail | 242.9 | 265.3 | 272.3 | 293.7 | 298.8 | |||||||||||||||||||||||||||
| Private Wealth Management | 98.4 | 105.0 | 110.2 | 115.6 | 115.9 | |||||||||||||||||||||||||||
| Total | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | $ | 742.2 | ||||||||||||||||||||||
| Ending Assets by investment service | ||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||
| Actively Managed | $ | 188.8 | $ | 217.8 | $ | 231.8 | $ | 256.7 | $ | 260.3 | ||||||||||||||||||||||
| Passively Managed (1) | 57.5 | 64.5 | 66.3 | 69.5 | 69.1 | |||||||||||||||||||||||||||
| Total Equity | $ | 246.3 | $ | 282.3 | $ | 298.1 | $ | 326.2 | $ | 329.4 | ||||||||||||||||||||||
| Fixed Income | ||||||||||||||||||||||||||||||||
| Actively Managed | $ | 302.0 | $ | 313.5 | $ | 304.0 | $ | 306.3 | $ | 306.2 | ||||||||||||||||||||||
| Passively Managed (1) | 9.0 | 8.5 | 8.3 | 9.3 | 9.5 | |||||||||||||||||||||||||||
| Total Fixed Income | 311.0 | 322.0 | 312.3 | 315.6 | 315.7 | |||||||||||||||||||||||||||
| Total Alternatives/Multi-Asset Solutions (2) | 73.5 | 81.6 | 86.8 | 96.6 | 97.1 | |||||||||||||||||||||||||||
| Total | $ | 630.8 | $ | 685.9 | $ | 697.2 | $ | 738.4 | $ | 742.2 | ||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||
| (1) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||
| (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as “Other.” In order to reflect the increasing significance of our Alternatives and Multi-Asset Solutions services, we updated the investment service line to “Alternatives and Multi-Asset Solutions." | ||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 19 | |||||||
| Investment Management and Research - Net Flows | ||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in billions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| Net Flows by Distribution Channel | ||||||||||||||||||||||||||||||||||||||||||||
| Institutions | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | (0.6) | $ | 3.4 | $ | (1.7) | $ | (1.9) | $ | 1.8 | $ | (4.6) | $ | (1.7) | ||||||||||||||||||||||||||||||
| Global and Non-US | 2.7 | 1.6 | 2.5 | 2.8 | (1.6) | 0.7 | 3.7 | |||||||||||||||||||||||||||||||||||||
| Total Institutions | $ | 2.1 | $ | 5.0 | $ | 0.8 | $ | 0.9 | $ | 0.2 | $ | (3.9) | $ | 2.0 | ||||||||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 1.2 | $ | 1.0 | $ | 3.6 | $ | 5.2 | $ | 7.0 | $ | 2.0 | $ | 15.9 | ||||||||||||||||||||||||||||||
| Global and Non-US | (0.5) | (1.7) | (0.9) | — | (0.4) | (2.9) | (1.3) | |||||||||||||||||||||||||||||||||||||
| Total Retail | $ | 0.7 | $ | (0.7) | $ | 2.7 | $ | 5.2 | $ | 6.6 | $ | (0.9) | $ | 14.4 | ||||||||||||||||||||||||||||||
| Private Wealth | ||||||||||||||||||||||||||||||||||||||||||||
| US (4) | $ | 0.5 | $ | (1.2) | $ | 0.8 | $ | (0.7) | $ | (0.3) | $ | (0.1) | $ | (0.1) | ||||||||||||||||||||||||||||||
| Global and Non-US | (0.2) | 0.1 | 0.9 | 0.8 | 0.7 | (0.9) | 2.4 | |||||||||||||||||||||||||||||||||||||
| Total Private Wealth (4) | $ | 0.3 | $ | (1.1) | $ | 1.7 | $ | 0.1 | $ | 0.4 | $ | (1.0) | $ | 2.3 | ||||||||||||||||||||||||||||||
| Total Net Flows by Distribution Channel (4) | $ | 3.1 | $ | 3.2 | $ | 5.2 | $ | 6.2 | $ | 7.2 | $ | (5.8) | $ | 18.7 | ||||||||||||||||||||||||||||||
| Net Flows by Investment Service | ||||||||||||||||||||||||||||||||||||||||||||
| Equity Active | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 1.2 | $ | 0.5 | $ | 2.0 | $ | 4.3 | $ | 4.7 | $ | 3.0 | $ | 11.0 | ||||||||||||||||||||||||||||||
| Global and Non-US | 1.0 | 0.5 | 1.7 | 1.3 | 0.1 | 3.4 | 3.1 | |||||||||||||||||||||||||||||||||||||
| Total Equity Active | $ | 2.2 | $ | 1.0 | $ | 3.7 | $ | 5.6 | $ | 4.8 | $ | 6.4 | $ | 14.1 | ||||||||||||||||||||||||||||||
| Equity Passive (1) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | (1.8) | $ | (0.8) | $ | (1.6) | $ | (1.1) | $ | (0.5) | $ | (3.3) | $ | (3.2) | ||||||||||||||||||||||||||||||
| Global and Non-US | 0.8 | (0.1) | (0.4) | (0.6) | 0.2 | (0.5) | (0.8) | |||||||||||||||||||||||||||||||||||||
| Total Equity Passive (1) | $ | (1.0) | $ | (0.9) | $ | (2.0) | $ | (1.7) | $ | (0.3) | $ | (3.8) | $ | (4.0) | ||||||||||||||||||||||||||||||
| Fixed Income - Taxable (3) | ||||||||||||||||||||||||||||||||||||||||||||
| US (4) | $ | 1.1 | $ | 3.4 | $ | 0.2 | $ | (2.6) | $ | 2.2 | $ | (2.6) | $ | (0.1) | ||||||||||||||||||||||||||||||
| Global and Non-US | (1.3) | (1.4) | (1.0) | (2.7) | (2.1) | (9.1) | (5.8) | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Taxable (4) | $ | (0.2) | $ | 2.0 | $ | (0.8) | $ | (5.3) | $ | 0.1 | $ | (11.7) | $ | (5.9) | ||||||||||||||||||||||||||||||
| Fixed Income - Tax-Exempt | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 0.8 | $ | 0.5 | $ | 1.6 | $ | 1.5 | $ | 1.5 | $ | 0.5 | $ | 4.6 | ||||||||||||||||||||||||||||||
| Global and Non-US | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Tax-Exempt | $ | 0.8 | $ | 0.5 | $ | 1.6 | $ | 1.5 | $ | 1.5 | $ | 0.5 | $ | 4.6 | ||||||||||||||||||||||||||||||
| Fixed Income - Passive (1) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | (0.3) | $ | (0.4) | $ | 0.2 | $ | 0.1 | $ | 0.3 | $ | (0.6) | $ | 0.6 | ||||||||||||||||||||||||||||||
| Global and Non-US | (0.8) | (0.2) | — | 0.8 | (0.1) | (0.4) | 0.7 | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Passive (1) | $ | (1.1) | $ | (0.6) | $ | 0.2 | $ | 0.9 | $ | 0.2 | $ | (1.0) | $ | 1.3 | ||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 0.1 | $ | — | $ | 0.3 | $ | 0.4 | $ | 0.3 | $ | 0.3 | $ | 1.0 | ||||||||||||||||||||||||||||||
| Global and Non-US | 2.3 | 1.2 | 2.2 | 4.8 | 0.6 | 3.5 | 7.6 | |||||||||||||||||||||||||||||||||||||
| Total Alternatives/Multi-Asset Solutions (2) | $ | 2.4 | $ | 1.2 | $ | 2.5 | $ | 5.2 | $ | 0.9 | $ | 3.8 | $ | 8.6 | ||||||||||||||||||||||||||||||
| Total Net Flows by Investment Service | $ | 3.1 | $ | 3.2 | $ | 5.2 | $ | 6.2 | $ | 7.2 | $ | (5.8) | $ | 18.7 | ||||||||||||||||||||||||||||||
| Active vs. Passive Net Flows | ||||||||||||||||||||||||||||||||||||||||||||
| Actively Managed | ||||||||||||||||||||||||||||||||||||||||||||
| Equity | $ | 2.2 | $ | 1.0 | $ | 3.7 | $ | 5.6 | $ | 4.8 | $ | 6.4 | $ | 14.1 | ||||||||||||||||||||||||||||||
| Fixed Income (3) (4) | 0.6 | 2.5 | 0.8 | (3.8) | 1.6 | (11.2) | (1.3) | |||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) (4) | 2.3 | 1.0 | 2.0 | 4.9 | 0.3 | 3.5 | 7.1 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 5.1 | $ | 4.5 | $ | 6.5 | $ | 6.7 | $ | 6.7 | $ | (1.3) | $ | 19.9 | ||||||||||||||||||||||||||||||
| Passively Managed (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Equity | $ | (1.0) | $ | (0.9) | $ | (2.0) | $ | (1.7) | $ | (0.3) | $ | (3.8) | $ | (4.0) | ||||||||||||||||||||||||||||||
| Fixed Income | (1.1) | (0.6) | 0.2 | 0.9 | 0.2 | (1.0) | 1.3 | |||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) (4) | 0.1 | 0.2 | 0.5 | 0.3 | 0.6 | 0.3 | 1.5 | |||||||||||||||||||||||||||||||||||||
| Total (4) | $ | (2.0) | $ | (1.3) | $ | (1.3) | $ | (0.5) | $ | 0.5 | $ | (4.5) | $ | (1.2) | ||||||||||||||||||||||||||||||
| Total Active vs Passive Net Flows | $ | 3.1 | $ | 3.2 | $ | 5.2 | $ | 6.2 | $ | 7.2 | $ | (5.8) | $ | 18.7 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||||||||||||||
(2) Includes certain multi-asset solutions and services not included in equity or fixed income services. Prior to December 31, 2020, this investment service line was disclosed as “Other.” In order to reflect the increasing significance of Alternatives and Multi-Asset Solutions services, the investment service line was updated to “Alternatives and Multi-Asset Solutions." | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Fixed income – taxable investment service net flows include $1.3 billion of AXA's redemptions of certain low-fee fixed income mandates for the nine-month period ended September 30, 2021. Discrete quarterly outflows related to AXA's redemptions for periods presented were as follows: $2.2 billion and $0.7 billion for the third and fourth quarter of 2020, respectively, as well as $1.3 billion for the second quarter of 2021. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) AB line item does not cross foot for the nine months ended 2021 due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 20 | |||||||
| Protection Solutions - Operating Earnings (Loss) and Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | Change | 9/30/2020 | 9/30/2021 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 450 | $ | 490 | $ | 504 | $ | 507 | $ | 482 | 7.1 | % | $ | 1,480 | $ | 1,493 | 0.9 | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 240 | 256 | 262 | 271 | 294 | 22.5 | % | 688 | 827 | 20.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 3 | (5) | (1) | (10) | (7) | (333.3) | % | 10 | (18) | (280.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 58 | 59 | 61 | 64 | 69 | 19.0 | % | 166 | 194 | 16.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 751 | 800 | 826 | 832 | 838 | 11.6 | % | 2,344 | 2,496 | 6.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 455 | 460 | 509 | 469 | 392 | (13.8) | % | 1,415 | 1,370 | (3.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 130 | 120 | 123 | 134 | 126 | (3.1) | % | 394 | 383 | (2.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 40 | 45 | 34 | 42 | 44 | 10.0 | % | 115 | 120 | 4.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | (16) | 21 | 26 | 33 | 4 | 125.0 | % | 63 | 63 | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 82 | 86 | 85 | 78 | 78 | (4.9) | % | 251 | 241 | (4.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 691 | 732 | 777 | 756 | 644 | (6.8) | % | 2,238 | 2,177 | (2.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 60 | 68 | 49 | 76 | 194 | 223.3 | % | 106 | 319 | 200.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (9) | (10) | (8) | (13) | (34) | (277.8) | % | (18) | (55) | (205.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 51 | 58 | 41 | 63 | 160 | 213.7 | % | 88 | 264 | 200.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 51 | $ | 58 | $ | 41 | $ | 63 | $ | 160 | 213.7 | % | $ | 88 | $ | 264 | 200.0 | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 217 | $ | 146 | $ | 138 | $ | 213 | $ | 322 | 48.4 | % | $ | 217 | $ | 322 | 48.4 | % | ||||||||||||||||||||||||||||||||||||||
Average capital - TTM: [B] | $ | 2,370 | $ | 2,170 | $ | 2,145 | $ | 2,137 | $ | 2,150 | (9.3) | % | $ | 2,370 | $ | 2,150 | (9.3) | % | ||||||||||||||||||||||||||||||||||||||
Non-GAAP Operating ROC - TTM (1): [A/B] | 9.2 | % | 6.7 | % | 6.5 | % | 10.0 | % | 15.0 | % | 9.2 | % | 15.0 | % | ||||||||||||||||||||||||||||||||||||||||||
| Benefit ratio | 77.9 | % | 72.5 | % | 76.5 | % | 72.5 | % | 61.8 | % | 77.2 | % | 70.2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Gross written premiums | $ | 700 | $ | 748 | $ | 762 | $ | 748 | $ | 754 | 7.7 | % | $ | 2,171 | $ | 2,264 | 4.3 | % | ||||||||||||||||||||||||||||||||||||||
| Annualized premiums | $ | 49 | $ | 59 | $ | 69 | $ | 67 | $ | 67 | 36.7 | % | $ | 162 | $ | 203 | 25.3 | % | ||||||||||||||||||||||||||||||||||||||
| Total in-force face amount (in billions USD) (2) | $ | 419.9 | $ | 420.6 | $ | 421.3 | $ | 422.4 | $ | 422.4 | 0.6 | % | $ | 419.9 | $ | 422.4 | 0.6 | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Total in-force face amount presented on a gross basis including ceded policies. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 21 | |||||||
| Protection Solutions - Select Operating Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| First Year Premiums by Product Line: | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 28 | 26 | 21 | 10 | 7 | 118 | 38 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life | 31 | 49 | 52 | 67 | 66 | 95 | 185 | |||||||||||||||||||||||||||||||||||||
| Term | 5 | 4 | 5 | 4 | 3 | 14 | 12 | |||||||||||||||||||||||||||||||||||||
| Employee Benefits | 12 | 15 | 20 | 19 | 18 | 37 | 57 | |||||||||||||||||||||||||||||||||||||
| Other (1) | — | 1 | — | — | 1 | — | 1 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 76 | $ | 95 | $ | 98 | $ | 100 | $ | 95 | $ | 264 | $ | 293 | ||||||||||||||||||||||||||||||
| Renewals by Product Line: | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life | $ | 223 | $ | 205 | $ | 201 | $ | 204 | $ | 221 | $ | 640 | $ | 626 | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 63 | 74 | 76 | 75 | 79 | 202 | 230 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life | 226 | 253 | 256 | 238 | 224 | 694 | 718 | |||||||||||||||||||||||||||||||||||||
| Term | 81 | 91 | 97 | 94 | 90 | 284 | 281 | |||||||||||||||||||||||||||||||||||||
| Employee Benefits | 26 | 25 | 30 | 32 | 41 | 73 | 103 | |||||||||||||||||||||||||||||||||||||
| Other (1) | 5 | 5 | 4 | 5 | 4 | 14 | 13 | |||||||||||||||||||||||||||||||||||||
| Total | 624 | 653 | 664 | 648 | 659 | 1,907 | 1,971 | |||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 700 | $ | 748 | $ | 762 | $ | 748 | $ | 754 | $ | 2,171 | $ | 2,264 | ||||||||||||||||||||||||||||||
| In-force Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| In-force Face Amount by Product (2) (in billions): | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life (3) | $ | 49.5 | $ | 48.7 | $ | 48.0 | $ | 47.3 | $ | 46.7 | $ | 49.5 | $ | 46.7 | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 27.5 | 27.7 | 28.0 | 28.0 | 28.0 | 27.5 | 28.0 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life (4) | 126.7 | 127.7 | 128.5 | 129.8 | 130.9 | 126.7 | 130.9 | |||||||||||||||||||||||||||||||||||||
| Term | 214.9 | 215.2 | 215.5 | 216.0 | 215.6 | 214.9 | 215.6 | |||||||||||||||||||||||||||||||||||||
| Whole Life | 1.3 | 1.3 | 1.3 | 1.3 | 1.2 | 1.3 | 1.2 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 419.9 | $ | 420.6 | $ | 421.3 | $ | 422.4 | $ | 422.4 | $ | 419.9 | $ | 422.4 | ||||||||||||||||||||||||||||||
| In-force Policy Count by Product (2) (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life (3) | 147 | 144 | 142 | 140 | 138 | 147 | 138 | |||||||||||||||||||||||||||||||||||||
| Indexed Universal Life | 63 | 64 | 64 | 64 | 64 | 63 | 64 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life (4) | 292 | 291 | 290 | 290 | 291 | 292 | 291 | |||||||||||||||||||||||||||||||||||||
| Term | 268 | 268 | 268 | 268 | 267 | 268 | 267 | |||||||||||||||||||||||||||||||||||||
| Whole Life | 17 | 17 | 17 | 17 | 17 | 17 | 17 | |||||||||||||||||||||||||||||||||||||
| Total | 787 | 784 | 781 | 779 | 777 | 787 | 777 | |||||||||||||||||||||||||||||||||||||
| Protection Solutions Reserves | ||||||||||||||||||||||||||||||||||||||||||||
| General Account | $ | 18,691 | $ | 18,905 | $ | 18,401 | $ | 18,588 | $ | 18,584 | $ | 18,691 | $ | 18,584 | ||||||||||||||||||||||||||||||
| Separate Accounts | 13,190 | 14,771 | 15,387 | 16,281 | 16,080 | 13,190 | 16,080 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 31,881 | $ | 33,676 | $ | 33,788 | $ | 34,869 | $ | 34,664 | $ | 31,881 | $ | 34,664 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) For the individual life insurance premiums, Other includes Whole Life insurance and other products available-for-sale but not actively marketed. | ||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes individual life insurance and does not include Employee Benefits as it is a start-up business and therefore has immaterial in-force policies. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Universal Life includes Guaranteed Universal Life. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) Variable Universal Life includes variable life insurance and corporate-owned life insurance. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 22 | |||||||
Investments
| 3Q 2021 Financial Supplement | 23 | |||||||
| Consolidated Investment Portfolio Composition | ||||||||||||||||||||||||||
| Balances as of | ||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | December 31, 2020 | September 30, 2021 | ||||||||||||||||||||||||
| Amount (1) | % of Total | Amount (1) | % of Total | |||||||||||||||||||||||
| Composition of investment portfolio | ||||||||||||||||||||||||||
| Fixed maturities, available-for-sale, at fair value | $ | 81,638 | 70.8 | % | $ | 76,968 | 71.8 | % | ||||||||||||||||||
| Fixed maturities, at fair value using the fair value option | 389 | 0.3 | % | 1,334 | 1.2 | % | ||||||||||||||||||||
| Mortgage loans on real estate | 13,159 | 11.4 | % | 13,448 | 12.5 | % | ||||||||||||||||||||
| Policy loans | 4,118 | 3.6 | % | 4,027 | 3.8 | % | ||||||||||||||||||||
| Other equity investments (4) | 1,502 | 1.3 | % | 2,986 | 2.8 | % | ||||||||||||||||||||
| Other invested assets | 2,728 | 2.4 | % | 2,660 | 2.5 | % | ||||||||||||||||||||
| Subtotal investment assets | 103,534 | 89.8 | % | 101,423 | 94.6 | % | ||||||||||||||||||||
| Trading securities | 5,553 | 4.8 | % | 584 | 0.5 | % | ||||||||||||||||||||
| Total investments | 109,087 | 94.6 | % | 102,007 | 95.1 | % | ||||||||||||||||||||
| Cash and cash equivalents | 6,179 | 5.4 | % | 5,255 | 4.9 | % | ||||||||||||||||||||
| Total | $ | 115,266 | 100.0 | % | $ | 107,262 | 100.0 | % | ||||||||||||||||||
| General Account Fixed maturities by industry (Based on amortized cost) | ||||||||||||||||||||||||||
| Corporate securities: | ||||||||||||||||||||||||||
| Finance | $ | 14,411 | 20.1 | % | $ | 12,663 | 17.8 | % | ||||||||||||||||||
| Manufacturing | 13,040 | 18.2 | % | 12,360 | 17.4 | % | ||||||||||||||||||||
| Utilities | 6,352 | 8.9 | % | 6,016 | 8.4 | % | ||||||||||||||||||||
| Services | 7,830 | 10.9 | % | 7,959 | 11.2 | % | ||||||||||||||||||||
| Energy | 4,084 | 5.7 | % | 3,838 | 5.4 | % | ||||||||||||||||||||
| Retail and wholesale | 3,747 | 5.2 | % | 3,512 | 4.9 | % | ||||||||||||||||||||
| Transportation | 2,424 | 3.4 | % | 2,201 | 3.1 | % | ||||||||||||||||||||
| Other | 157 | 0.2 | % | 85 | 0.1 | % | ||||||||||||||||||||
| Total corporate securities | 52,045 | 72.5 | % | 48,634 | 68.3 | % | ||||||||||||||||||||
| U.S. government and agency | 12,660 | 17.6 | % | 13,487 | 18.9 | % | ||||||||||||||||||||
| Residential mortgage-backed (2) | 130 | 0.2 | % | 98 | 0.1 | % | ||||||||||||||||||||
| Preferred stock | 621 | 0.9 | % | 40 | 0.1 | % | ||||||||||||||||||||
| State & municipal | 536 | 0.7 | % | 558 | 0.8 | % | ||||||||||||||||||||
| Foreign governments | 1,011 | 1.4 | % | 977 | 1.4 | % | ||||||||||||||||||||
| Commercial mortgage-backed | 1,148 | 1.6 | % | 1,863 | 2.6 | % | ||||||||||||||||||||
| Asset-backed securities | 3,587 | 5.0 | % | 5,559 | 7.8 | % | ||||||||||||||||||||
| Total | $ | 71,738 | 100.0 | % | $ | 71,216 | 100.0 | % | ||||||||||||||||||
| General Account Fixed maturities credit quality (3) (Based on amortized cost) | ||||||||||||||||||||||||||
| Aaa, Aa, A (NAIC Designation 1) | $ | 44,146 | 61.5 | % | $ | 44,500 | 62.5 | % | ||||||||||||||||||
| Baa (NAIC Designation 2) | 25,285 | 35.2 | % | 23,931 | 33.6 | % | ||||||||||||||||||||
| Investment grade | 69,431 | 96.8 | % | 68,431 | 96.1 | % | ||||||||||||||||||||
| Below investment grade (NAIC Designation 3 and 4) | 2,307 | 3.2 | % | 2,785 | 3.9 | % | ||||||||||||||||||||
| Total | $ | 71,738 | 100.0 | % | $ | 71,216 | 100.0 | % | ||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||
| (1) Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings. | ||||||||||||||||||||||||||
| (2) Includes publicly traded agency pass-through securities and collateralized obligations. | ||||||||||||||||||||||||||
| (3) Credit quality based on NAIC rating. | ||||||||||||||||||||||||||
(4) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see 10-Q Note 2 Significant Accounting Policies – Investments). | ||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 24 | |||||||
| Consolidated Results of General Account Investment Portfolio | ||
| For the Nine Months Ended or As of | Years Ended or As of | |||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | September 30, 2020 | September 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||||||||||
| Yield | Amount (1) | Yield | Amount (1) | Yield | Amount (1) | |||||||||||||||||||||||||||||||||
| Fixed Maturities: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 3.49 | % | $ | 1,725 | 3.41 | % | $ | 1,822 | 3.46 | % | $ | 2,318 | ||||||||||||||||||||||||||
| Ending assets | 70,135 | 71,216 | 71,738 | |||||||||||||||||||||||||||||||||||
| Mortgages: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 4.15 | % | 384 | 4.07 | % | 407 | 4.13 | % | 517 | |||||||||||||||||||||||||||||
| Ending assets | 12,802 | 13,448 | 13,159 | |||||||||||||||||||||||||||||||||||
| Other Equity Investments (2): | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 0.21 | % | 2 | 22.97 | % | 433 | 6.14 | % | 95 | |||||||||||||||||||||||||||||
| Ending assets | 1,588 | 2,903 | 1,621 | |||||||||||||||||||||||||||||||||||
| Policy Loans: | ||||||||||||||||||||||||||||||||||||||
| Income | 5.38 | % | 153 | 5.28 | % | 161 | 5.28 | % | 204 | |||||||||||||||||||||||||||||
| Ending assets | 4,123 | 4,027 | 4,118 | |||||||||||||||||||||||||||||||||||
| Cash and Short-term Investments: | ||||||||||||||||||||||||||||||||||||||
| Income | 0.05 | % | 2 | (0.05) | % | (1) | 0.03 | % | 1 | |||||||||||||||||||||||||||||
| Ending assets | 3,931 | 1,215 | 2,095 | |||||||||||||||||||||||||||||||||||
| Funding Agreements: | ||||||||||||||||||||||||||||||||||||||
| Interest expense and other | (61) | (44) | (75) | |||||||||||||||||||||||||||||||||||
| Ending (liabilities) | (6,848) | (6,807) | (6,897) | |||||||||||||||||||||||||||||||||||
| Total invested Assets: | ||||||||||||||||||||||||||||||||||||||
| Income | 3.62 | % | 2,205 | 4.37 | % | 2,778 | 3.72 | % | 3,060 | |||||||||||||||||||||||||||||
| Ending assets | 85,731 | 86,002 | 85,834 | |||||||||||||||||||||||||||||||||||
| Short Duration Fixed Maturities: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 3.33 | % | 140 | 3.38 | % | 77 | 3.39 | % | 184 | |||||||||||||||||||||||||||||
| Ending assets | 5,448 | 142 | 4,704 | |||||||||||||||||||||||||||||||||||
| Total Net Investment Income: | ||||||||||||||||||||||||||||||||||||||
| Investment income | 3.60 | % | 2,345 | 4.34 | % | 2,855 | 3.70 | % | 3,244 | |||||||||||||||||||||||||||||
| Less: investment fees | (0.12) | % | (75) | (0.13) | % | (82) | (0.12) | % | (107) | |||||||||||||||||||||||||||||
| Investment income, net | 3.49 | % | $ | 2,270 | 4.25 | % | $ | 2,773 | 3.57 | % | $ | 3,137 | ||||||||||||||||||||||||||
| General Account Ending Net Assets | $ | 91,179 | $ | 86,144 | $ | 90,538 | ||||||||||||||||||||||||||||||||
| Operating Earnings adjustments: | ||||||||||||||||||||||||||||||||||||||
| Funding Agreements interest expense | 61 | 44 | 75 | |||||||||||||||||||||||||||||||||||
| AB and other non-General Account investment income | 73 | 169 | 151 | |||||||||||||||||||||||||||||||||||
| Operating Net investment income (loss) | $ | 2,404 | $ | 2,986 | $ | 3,363 | ||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||
| (1) Amount for fixed maturities and mortgages represents original cost, reduced by repayments, writedowns, adjusted amortization of premiums, accretion of discount, and for valuation allowances. Cost for equity securities represents original cost reduced by writedowns; cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions. | ||||||||||||||||||||||||||||||||||||||
(2) Effective January 1, 2021, certain preferred stock have been reclassified to other equity investments (see 10-Q Note 2 Significant Accounting Policies – Investments). | ||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 25 | |||||||
Additional Information
| 3Q 2021 Financial Supplement | 26 | |||||||
| Deferred Policy Acquisition Costs Rollforward | ||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| TOTAL | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance (1) | $ | 4,090 | $ | 4,171 | $ | 4,243 | $ | 4,943 | $ | 4,838 | $ | 5,840 | $ | 4,243 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 148 | 181 | 186 | 220 | 214 | 488 | 620 | |||||||||||||||||||||||||||||||||||||
| Amortization | (90) | (59) | (87) | (106) | (64) | (1,554) | (257) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 23 | (50) | 601 | (219) | 378 | (604) | 760 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 4,171 | $ | 4,243 | $ | 4,943 | $ | 4,838 | $ | 5,366 | $ | 4,171 | $ | 5,366 | ||||||||||||||||||||||||||||||
| Individual Retirement | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 3,134 | $ | 3,128 | $ | 3,178 | $ | 3,390 | $ | 3,393 | $ | 3,285 | $ | 3,178 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 90 | 110 | 123 | 149 | 142 | 295 | 414 | |||||||||||||||||||||||||||||||||||||
| Amortization | (91) | (41) | (61) | (58) | (96) | (280) | (215) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | (5) | (19) | 150 | (88) | 47 | (172) | 109 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 3,128 | $ | 3,178 | $ | 3,390 | $ | 3,393 | $ | 3,486 | $ | 3,128 | $ | 3,486 | ||||||||||||||||||||||||||||||
| Group Retirement | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 596 | $ | 601 | $ | 632 | $ | 705 | $ | 702 | $ | 659 | $ | 632 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 21 | 27 | 21 | 22 | 24 | 66 | 67 | |||||||||||||||||||||||||||||||||||||
| Amortization | (15) | 7 | (6) | (9) | 23 | (80) | 8 | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | (1) | (3) | 58 | (16) | 8 | (44) | 50 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 601 | $ | 632 | $ | 705 | $ | 702 | $ | 757 | $ | 601 | $ | 757 | ||||||||||||||||||||||||||||||
| Protection Solutions | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 344 | $ | 426 | $ | 418 | $ | 836 | $ | 732 | $ | 1,880 | $ | 418 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 37 | 44 | 42 | 49 | 48 | 127 | 139 | |||||||||||||||||||||||||||||||||||||
| Amortization | 15 | (24) | (27) | (34) | (4) | (1,197) | (65) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 30 | (28) | 403 | (119) | 337 | (385) | 621 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 426 | $ | 418 | $ | 836 | $ | 732 | $ | 1,113 | $ | 426 | $ | 1,113 | ||||||||||||||||||||||||||||||
| Corporate and Other | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance (1) | $ | 16 | $ | 16 | $ | 15 | $ | 12 | $ | 11 | $ | 16 | $ | 15 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Amortization | 1 | (1) | 7 | (5) | 13 | 3 | 15 | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | (1) | — | (10) | 4 | (14) | (3) | (20) | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 16 | $ | 15 | $ | 12 | $ | 11 | $ | 10 | $ | 16 | $ | 10 | ||||||||||||||||||||||||||||||
| (1) June 30, 2020 DAC beginning balance is $3 million more than December 31, 2019 ending balance due to impact of CECL. | ||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 27 | |||||||
| Use of Non-GAAP Financial Measures | ||||||||
In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP operating earnings, Non-GAAP Operating ROE, Non-GAAP Operating ROC by segment for our Individual Retirement, Group Retirement and Protection Solutions segments, and Non-GAAP operating common EPS, each of which is a measure that is not determined in accordance with U.S. GAAP. Management principally uses these non-GAAP financial measures in evaluating performance because they present a clearer picture of our operating performance and they allow management to allocate resources. Similarly, management believes that the use of these Non-GAAP financial measures, together with relevant U.S. GAAP measures, provide investors with a better understanding of our results of operations and the underlying profitability drivers and trends of our business. These non-GAAP financial measures are intended to remove from our results of operations the impact of market changes (where there is mismatch in the valuation of assets and liabilities) as well as certain other expenses which are not part of our underlying profitability drivers or likely to re-occur in the foreseeable future, as such items fluctuate from period-to-period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies. | |||||
We also discuss certain operating measures, including AUM, AUA, AV, Protection Solutions Reserves and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance. | |||||
| Non-GAAP Operating Earnings | |||||
Non-GAAP operating earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and are more sensitive to changes in market conditions than the variable annuity product liabilities as valued under U.S. GAAP. This is a large source of volatility in net income. | |||||
Non-GAAP operating earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items: | |||||
| • | Items related to variable annuity product features, which include: (i) certain changes in the fair value of the derivatives and other securities we use to hedge these features; (ii) the effect of benefit ratio unlock adjustments, including extraordinary economic conditions or events such as COVID-19; and (iii) changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization on our SCS product; | ||||
| • | Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances; | ||||
| • | Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation; | ||||
| • | Other adjustments, which primarily include restructuring costs related to severance and separation, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses associated with equity securities and certain legal accruals; and | ||||
| • | Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period. | ||||
Because Non-GAAP operating earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business. | |||||
| We use the prevailing corporate federal income tax rate of 21% while taking into account any non-recurring differences for events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP operating earnings. | |||||
| 3Q 2021 Financial Supplement | 28 | |||||||
| Use of Non-GAAP Financial Measures | |||||
| Non-GAAP Operating ROE and Non-GAAP Operating ROC by Segment | |||||
| We report Non-GAAP Operating ROE and Non-GAAP Operating ROC by segment for our Individual Retirement, Group Retirement and Protection Solutions segments, each of which is a Non-GAAP financial measure used to evaluate our profitability on a consolidated basis and by segment, respectively. | |||||
| We calculate Non-GAAP Operating ROE by dividing Non-GAAP operating earnings for the previous twelve calendar months by consolidated average equity attributable to Holdings’ common shareholders, excluding AOCI. We calculate Non-GAAP Operating ROC by segment by dividing Operating earnings (loss) on a segment basis for the previous twelve calendar months by average capital on a segment basis, excluding AOCI, as described below. AOCI fluctuates period-to-period in a manner inconsistent with our underlying profitability drivers as the majority of such fluctuation is related to the market volatility of the unrealized gains and losses associated with our AFS securities. | |||||
| Therefore, we believe excluding AOCI is more effective for analyzing the trends of our operations. We do not calculate Non-GAAP Operating ROC by segment for our Investment Management and Research segment because we do not manage that segment from a return of capital perspective. Instead, we use metrics more directly applicable to an asset management business, such as AUM, to evaluate and manage that segment. | |||||
| For Non-GAAP Operating ROC by segment, capital components pertaining directly to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels, reflecting the NAIC RBC framework adopted as of year-end 2019. To enhance the ability to analyze these measures across periods, interim periods are annualized. Non-GAAP Operating ROE and Non-GAAP Operating ROC by segment should not be used as substitutes for ROE. | |||||
| Book Value per common share, excluding AOCI | |||||
| We use the term “book value” to refer to “Total equity attributable to Holdings' common shareholders.” Book Value per common share, excluding AOCI, is our stockholder’s equity, excluding AOCI, divided by ending common shares outstanding. | |||||
| Non-GAAP Operating Earnings per common share | |||||
| Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred dividends by diluted common shares outstanding. | |||||
| 3Q 2021 Financial Supplement | 29 | |||||||
| Reconciliation of Non-GAAP Measures (1/3) | ||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 9/30/2020 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (779) | $ | (1,238) | $ | (1,488) | $ | 123 | $ | 672 | $ | 590 | $ | (693) | ||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features (1) | 1,620 | 3,439 | 2,267 | 1,193 | 172 | 473 | 3,632 | |||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (17) | (554) | (183) | (420) | (164) | (190) | (767) | |||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 31 | 23 | 34 | 26 | 27 | 86 | 87 | |||||||||||||||||||||||||||||||||||||
| Other adjustments (2) (3) (4) (5) | 66 | 116 | 524 | 7 | 141 | 836 | 672 | |||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments (6) | (357) | (635) | (555) | (171) | (35) | (253) | (761) | |||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 4 | (403) | 1 | — | 5 | 12 | 6 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 568 | $ | 748 | $ | 600 | $ | 758 | $ | 818 | $ | 1,554 | $ | 2,176 | ||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings (7) | $ | (1.74) | $ | (2.80) | $ | (3.43) | $ | 0.29 | $ | 1.62 | $ | 1.30 | $ | (1.64) | ||||||||||||||||||||||||||||||
| Less: Preferred stock dividends | 0.03 | 0.04 | 0.03 | 0.06 | 0.03 | 0.08 | 0.12 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | (1.77) | (2.84) | (3.46) | 0.23 | 1.59 | 1.22 | (1.76) | |||||||||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features (1) | 3.62 | 7.77 | 5.22 | 2.79 | 0.41 | 1.04 | 8.58 | |||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (0.04) | (1.25) | (0.42) | (0.98) | (0.41) | (0.42) | (1.81) | |||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 0.07 | 0.05 | 0.08 | 0.06 | 0.07 | 0.19 | 0.21 | |||||||||||||||||||||||||||||||||||||
| Other adjustments (2) (3) (4) (5) | 0.15 | 0.26 | 1.21 | 0.01 | 0.35 | 1.85 | 1.59 | |||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments (6) | (0.80) | (1.43) | (1.28) | (0.40) | (0.08) | (0.56) | (1.80) | |||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 0.01 | (0.91) | — | — | 0.01 | 0.03 | 0.01 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (loss) available to Holdings' common shareholders (7) | $ | 1.24 | $ | 1.65 | $ | 1.35 | $ | 1.71 | $ | 1.94 | $ | 3.35 | $ | 5.02 | ||||||||||||||||||||||||||||||
| Book Value per common share | ||||||||||||||||||||||||||||||||||||||||||||
| Book Value per common share | $ | 36.05 | $ | 32.46 | $ | 21.32 | $ | 24.20 | $ | 25.00 | $ | 36.05 | $ | 25.00 | ||||||||||||||||||||||||||||||
| Less: Per share impact of AOCI | 9.42 | 8.76 | 1.73 | 4.72 | 4.64 | 9.42 | 4.64 | |||||||||||||||||||||||||||||||||||||
| Book value per common share (ex. AOCI) | $ | 26.63 | $ | 23.70 | $ | 19.59 | $ | 19.48 | $ | 20.37 | $ | 26.63 | $ | 20.37 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes COVID-19 impact on Variable annuity product features due to a first quarter 2020 assumption update of $1.5 billion and other COVID-19 related impacts of $35 million for the nine months ended September 30, 2020. The impact per common share is $3.23 and other COVID-19 related impacts of $0.08 for the three and nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes separation costs of $25 million, $37 million, $62 million and $108 million for the three and nine months ended September 30, 2021 and 2020. The impact per common share is $0.06, $0.08, $0.15 and $0.24 for the three and nine months ended September 30, 2021 and 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Includes certain legal accruals related to the cost of insurance litigation of $180 million for the nine months ended September 30, 2021. The impact per common share is $0.43 for the nine months ended September 30, 2021. No adjustment was made to prior period operating earnings as the impact was immaterial. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) Includes COVID-19 impact on Other adjustments due to a first quarter 2020 assumption update of $1.0 billion and other COVID-19 related impacts of $86 million for the nine months ended September 30, 2020. The impact per common share is $2.31 for the nine months ended September 30, 2020 and other COVID-19 related impacts of $0.00 and $0.19 for the three and nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| (5) Includes Non-GMxB related derivative hedge losses of ($4) million, $10 million, $140 million, and ($461) million for the three and nine months ended September 30, 2021 and 2020. The impact per common share is ($0.01), $0.02, $0.31, and ($1.02) for the three and nine months ended September 30, 2021 and 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| (6) Includes income taxes of ($554) million for the above related COVID-19 items for the nine months ended September 30, 2020. The impact per common share is $0.00 and $(1.22) for the three and nine months ended September 30, 2020. | ||||||||||||||||||||||||||||||||||||||||||||
| (7) For periods with a net loss, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share or Non-GAAP Operating Earnings per common share as inclusion of such shares would have an anti-dilutive effect. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 30 | |||||||
| Reconciliation of Non-GAAP Measures (2/3) | ||||||||||||||||||||||||||||||||
| As of and for the Twelve Months Ended | ||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | |||||||||||||||||||||||||||
| Net Income to Non-GAAP Operating Earnings | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (356) | $ | (648) | $ | (7,524) | $ | (3,382) | $ | (1,931) | ||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||
| Variable annuity product features | 2,169 | 3,912 | 13,048 | 8,519 | 7,071 | |||||||||||||||||||||||||||
| Investment (gains) losses | (87) | (744) | (923) | (1,174) | (1,321) | |||||||||||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 113 | 109 | 116 | 114 | 110 | |||||||||||||||||||||||||||
| Other adjustments | 1,031 | 952 | 781 | 713 | 788 | |||||||||||||||||||||||||||
| Income tax (expense) benefits related to above adjustments | (665) | (888) | (2,735) | (1,718) | (1,396) | |||||||||||||||||||||||||||
| Non-recurring tax items | 2 | (391) | (396) | (398) | (397) | |||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 2,207 | $ | 2,302 | $ | 2,367 | $ | 2,674 | $ | 2,924 | ||||||||||||||||||||||
| Return on Equity and Non-GAAP Operating Return on Equity - Trailing twelve months | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (356) | $ | (648) | $ | (7,524) | $ | (3,382) | $ | (1,931) | ||||||||||||||||||||||
| Less: Preferred stock | (34) | (53) | (53) | (69) | (72) | |||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | $ | (390) | $ | (701) | $ | (7,577) | $ | (3,451) | $ | (2,003) | ||||||||||||||||||||||
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 13,348 | $ | 13,000 | $ | 10,868 | $ | 9,716 | $ | 8,816 | ||||||||||||||||||||||
| Return on Equity (ex. AOCI) | (2.9) | % | (5.4) | % | (69.7) | % | (35.5) | % | (22.7) | % | ||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 2,207 | $ | 2,302 | $ | 2,367 | $ | 2,674 | $ | 2,924 | ||||||||||||||||||||||
| Less: Preferred stock | (34) | (53) | (53) | (69) | (72) | |||||||||||||||||||||||||||
| Non-GAAP Operating Earnings available to Holdings' common shareholders | $ | 2,173 | $ | 2,249 | $ | 2,314 | $ | 2,605 | $ | 2,852 | ||||||||||||||||||||||
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 13,348 | $ | 13,000 | $ | 10,868 | $ | 9,716 | $ | 8,816 | ||||||||||||||||||||||
| Non-GAAP Operating Return on Equity (ex. AOCI) | 16.3 | % | 17.3 | % | 21.3 | % | 26.8 | % | 32.4 | % | ||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 31 | |||||||
| Reconciliation of Non-GAAP Measures (3/3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 12/31/2019 | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||||
| Equity Reconciliation - Quarter-end Balances | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | $ | 13,456 | $ | 19,981 | $ | 17,498 | $ | 17,300 | $ | 15,576 | $ | 10,693 | $ | 11,732 | $ | 11,680 | |||||||||||||||||||||||||||||||
| Less: Preferred Stock | 775 | 775 | 775 | 1,269 | 1,269 | 1,562 | 1,562 | 1,562 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 12,681 | 19,206 | 16,723 | 16,031 | 14,307 | 9,131 | 10,170 | 10,118 | |||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 844 | 2,289 | 3,928 | 4,188 | 3,863 | 740 | 1,983 | 1,876 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 11,837 | $ | 16,917 | $ | 12,795 | $ | 11,843 | $ | 10,444 | $ | 8,391 | $ | 8,187 | $ | 8,242 | |||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 12/31/2019 | 3/31/2020 | 6/30/2020 | 9/30/2020 | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | |||||||||||||||||||||||||||||||||||||||
| Equity Reconciliation - Twelve Month Rolling Average (2) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | 14,030 | 15,762 | 16,469 | 17,059 | 17,589 | 15,267 | 13,825 | 12,420 | |||||||||||||||||||||||||||||||||||||||
| Less: Preferred Stock | 194 | 388 | 581 | 899 | 1,022 | 1,219 | 1,416 | 1,489 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 13,836 | 15,375 | 15,888 | 16,160 | 16,567 | 14,048 | 12,410 | 10,932 | |||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 664 | 1,367 | 2,152 | 2,812 | 3,567 | 3,180 | 2,694 | 2,116 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 13,172 | $ | 14,008 | $ | 13,736 | $ | 13,348 | $ | 13,000 | $ | 10,868 | $ | 9,716 | $ | 8,816 | |||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 32 | |||||||
| Glossary of Selected Financial and Product Terms | ||
| Account Value (“AV”) - AV generally equals the aggregate policy account value of our retirement and protection products. General Account AV refers to account balances in investment options that are backed by the General Account while Separate Accounts AV refers to Separate Accounts investment assets. | ||
| Annualized premiums - 100% of first year recurring premiums (up to target) and 10% of excess first year premiums or first year premiums from single premium products. | ||
| Assets Under Administration (“AUA”) - AUA includes non-insurance client assets that are invested in our savings and investment products or serviced by our Equitable Advisors platform. We provide administrative services for these assets and generally record the revenues received as distribution fees. | ||
| Assets Under Management (“AUM”) - AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB; (ii) the assets in our General Account investment portfolio; and (iii) the Separate Account assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting. | ||
| Average Account Value (TTM) - Calculated as an average of the previous twelve calendar months total Account Value balance as of end of period | ||
| Average Capital - For average capital amounts by segment, capital components pertaining directly to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels (including CTE98). | ||
| Benefit base - A notional amount (not actual cash value) used to calculate the owner’s guaranteed benefits within an annuity contract. The death benefit and living benefit within the same contract may not have the same benefit base. | ||
| Current Product Offering (Individual Retirement) - Products sold 2011 and later. | ||
| Deferred policy acquisition costs (“DAC”) - Represents the incremental costs related directly to the successful acquisition of new and certain renewal insurance policies and annuity contracts and which have been deferred on the balance sheet as an asset. | ||
| Equitable Advisors - means AXA Advisors, LLC, a Delaware limited liability company, our retail broker/dealer for our retirement and protection businesses and a wholly-owned indirect subsidiary of Holdings. | ||
| Equitable America - means Equitable Financial Life Insurance Company of America, an Arizona corporation and a wholly-owned indirect subsidiary of Holdings. | ||
| Equitable Life - means AXA Equitable Life Insurance Company, a New York corporation, a life insurance company and a wholly-owned subsidiary of AEFS. | ||
| Fixed Rate (Individual Retirement) - Pre-2011 GMxB products. | ||
| FYP - First year premium and deposits. | ||
| GMxB - A general reference to all forms of variable annuity guaranteed benefits, including guaranteed minimum living benefits, or GMLBs (such as GMIBs, GMWBs and GMABs), and guaranteed minimum death benefits, or GMDBs (inclusive of return of premium death benefit guarantees). | ||
| Gross premiums - FYP and Renewal premium and deposits. | ||
| Guaranteed minimum death benefits (“GMDB”) - An optional benefit (available for an additional cost) that guarantees an annuitant’s beneficiaries are entitled to a minimum payment based on the benefit base, which could be greater than the underlying AV, upon the death of the annuitant. | ||
| Guaranteed minimum income benefits (“GMIB”) - An optional benefit (available for an additional cost) where an annuitant is entitled to annuitize the policy and receive a minimum payment stream based on the benefit base, which could be greater than the underlying AV. | ||
| Guaranteed minimum living benefits (“GMLB”) - A reference to all forms of guaranteed minimum living benefits, including GMIBs, GMWBs and GMABs (does not include GMDBs). | ||
| Invested assets - Includes fixed maturity securities, equity securities, mortgage loans, policy loans, alternative investments and short-term investments. | ||
| Inv Mgmt and Research - Abbreviation for Investment Management and Research. | ||
| Net flows - Net change in customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges. | ||
| Net long-term flows - Net change of assets under management in a period which includes new sales net of redemptions of mutual funds and terminations of separately managed accounts and cash flow which includes both cash invested or withdrawn by existing clients. In addition, cash flow includes fees received from certain clients. It excludes the impact of the markets. | ||
| Premiums and deposits - Amounts a policyholder agrees to pay for an insurance policy or annuity contract that may be paid in one or a series of payments as defined by the terms of the policy or contract. | ||
| Protection Solutions Benefit Ratio - Calculated as sum of policyholders’ benefits and interest credited to policyholders’ account balances dividend by segment revenues. | ||
| Protection Solutions Reserves - Equals the aggregate value of Policyholders’ account balances and future policy benefits for policies in our Protection Solutions segment. | ||
| Renewal premium and deposits - Premiums and deposits after the first twelve months of the policy or contract. | ||
| Return of premium (“ROP”) death benefit - This death benefit pays the greater of the account value at the time of a claim following the owner’s death or the total contributions to the contract (subject to adjustment for withdrawals). The charge for this benefit is usually included in the M&E fee that is deducted daily from the net assets in each variable investment option. We also refer to this death benefit as the Return of Principal death benefit. | ||
| Return on Assets - Calculated as trailing twelve months operating earnings, before income taxes, divided by trailing twelve months average account value. | ||
| Return on Equity (ex. AOCI) - Calculated as trailing twelve months net income (loss) attributable to Holdings' common shareholders divided by average equity attributable to Holdings' common shareholders, excluding Accumulated Other Comprehensive Income (“AOCI”). | ||
| Trailing Twelve Months ("TTM") - The twelve calendar months preceding the balance sheet date of a given reporting period. | ||
| 3Q 2021 Financial Supplement | 33 | |||||||
| Analyst Coverage, Ratings & Contact Information | ||||||||||||||||||||||||||||||||||||||
| Analyst Coverage | ||||||||||||||||||||||||||||||||||||||||||||
| Firm | Analyst | Phone Number | ||||||||||||||||||||||||||||||||||||||||||
| Barclays | Tracy Benguigui | 1 (212) 526-1561 | ||||||||||||||||||||||||||||||||||||||||||
| Credit Suisse | Andrew Kligerman | 1 (212) 325-5069 | ||||||||||||||||||||||||||||||||||||||||||
| Evercore ISI | Thomas Gallagher | 1 (212) 446-9439 | ||||||||||||||||||||||||||||||||||||||||||
| J.P. Morgan | Jimmy Bhullar | 1 (212) 622-6397 | ||||||||||||||||||||||||||||||||||||||||||
| Keefe, Bruyette, & Woods | Ryan Krueger | 1 (860) 722-5930 | ||||||||||||||||||||||||||||||||||||||||||
| Morgan Stanley | Nigel Dally | 1 (212) 761-4132 | ||||||||||||||||||||||||||||||||||||||||||
| RBC Capital Markets | Mark Dwelle | 1 (804) 782-4008 | ||||||||||||||||||||||||||||||||||||||||||
| Truist Securities | Mark Hughes | 1 (615) 748-4422 | ||||||||||||||||||||||||||||||||||||||||||
| UBS | Brian Meredith | 1 (212) 713-2492 | ||||||||||||||||||||||||||||||||||||||||||
| Wells Fargo Securities | Elyse Greenspan | 1 (212) 214-8031 | ||||||||||||||||||||||||||||||||||||||||||
| This list is provided for informational purposes only. Equitable Holdings does not endorse the analyses, conclusions or recommendations contained in any reports issued by these or any other analysts. | ||||||||||||||||||||||||||||||||||||||||||||
| Ratings | ||||||||||||||||||||||||||||||||||||||||||||
| A.M. Best | S&P | Moody’s | ||||||||||||||||||||||||||||||||||||||||||
| Last review date | Jan '21 | Jul '21 | Aug '21 | |||||||||||||||||||||||||||||||||||||||||
| Financial Strength Ratings: | ||||||||||||||||||||||||||||||||||||||||||||
| Equitable Financial Life Insurance Company | A | A+ | A2 | |||||||||||||||||||||||||||||||||||||||||
| Equitable Financial Life Insurance Company of America | A | A+ | A2 | |||||||||||||||||||||||||||||||||||||||||
| Credit Ratings: | ||||||||||||||||||||||||||||||||||||||||||||
| Equitable Holdings, Inc. | — | BBB+ | Baa2 | |||||||||||||||||||||||||||||||||||||||||
| AllianceBernstein L.P. (1) | — | A | A2 | |||||||||||||||||||||||||||||||||||||||||
| Investor and Media Contacts | ||||||||||||||||||||||||||||||||||||||||||||
| Contact Investor Relations | Contact Media Relations | |||||||||||||||||||||||||||||||||||||||||||
Işıl Müderrisoğlu | Thomas Lewis | Matt Asensio | ||||||||||||||||||||||||||||||||||||||||||
| (212) 314-2476 | (212) 314-4638 | (212) 314-2010 | ||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Last review dates: S&P as of Sep '21, Moody’s as of Jun '21. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2021 Financial Supplement | 34 | |||||||