EQH 8-K
Equitable Holdings, Inc. (EQH)
8-K
2022-11-02
For: 2022-11-02
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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 2, 2022
(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 2, 2022, Equitable Holdings, Inc. (“EQH”) issued a press release announcing its financial results for the quarter ended September 30, 2022. 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, 2022. A copy of the Financial Supplement for the quarter ended September 30, 2022 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, 2022, 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 3, 2022.
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 2, 2022 (furnished and not filed) | |||||
| Financial Supplement for the quarter ended September 30, 2022 (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 2, 2022 | By: | /s/ Ralph Petruzzo | |||||||||
Name: | Ralph Petruzzo | ||||||||||
Title: | Associate General Counsel | ||||||||||
EQUITABLE HOLDINGS REPORTS THIRD QUARTER 2022 RESULTS
_______________________________________
•Solid performance through continued market headwinds
•Net income of $273m; Net income per share of $0.69
•Non-GAAP operating earnings1 of $498m, or $1.28 per share; adjusting for notable items2, Non-GAAP operating earnings of $511m, or $1.32 per share
•Economic balance sheet, supported by fair value hedging and conservatively positioned investment portfolio, prove resilient in volatile markets
•Results benefited from a favorable assumption update as economic reserves incorporate emerging experience
•Prudent capital management with $2.0bn of cash at Holdings; continuing to deliver on 50-60% payout ratio target returning $0.3bn to shareholders in the quarter, and $1.0bn year to date3
_______________________________________
New York, NY, November 2, 2022 — Equitable Holdings, Inc. (“Equitable Holdings”, “Holdings”, or the “Company”) (NYSE: EQH) today announced financial results for the third quarter ended September 30, 2022.
“In the tough economic environment, we delivered solid results reporting third quarter Non-GAAP operating earnings of $1.28 per share which, after adjusting for a favorable assumption update in the quarter, were in line with our expectations reflecting a 5% decline in AUM this quarter. In asset management, we were not immune to industry-wide net outflows this quarter but flows remain positive for the year as we continue to benefit from a global distribution platform and continued growth in private markets with our strategic shift supporting a fee-rate improvement of 7% over the prior year. In retirement, we saw continued demand for our core tax-advantaged offerings with $1.2 billion of inflows in the quarter as clients turn to their advisors seeking protection and secure income amidst market volatility and an uncertain economic outlook,” said Mark Pearson, President and Chief Executive Officer.
Mr. Pearson continued, "Our fair value model and the strength of our capital management program proved resilient in the quarter protecting our balance sheet while we continue to deliver on our 50-60% payout ratio target. As markets continue to be challenged, we remain prudent, managing what we can control, with investment and productivity initiatives in place to drive growth and with our integrated business model pairing retirement, asset management and advice which are well-positioned to deliver long-term shareholder value."
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.
2 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
3 Year to date includes $112 million of repurchases accelerated from first quarter 2022 into fourth quarter 2021.
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| Consolidated Results | |||||||||||
| Third Quarter | |||||||||||
| (in millions, except per share amounts or unless otherwise noted) | 2022 | 2021 | |||||||||
| Total Assets Under Management (“AUM”, in billions) | $ | 716 | $ | 870 | |||||||
| Net income (loss) attributable to Holdings | 273 | 672 | |||||||||
| Net income (loss) attributable to Holdings per common share | 0.69 | 1.59 | |||||||||
| Non-GAAP operating earnings (loss) | 498 | 818 | |||||||||
| Non-GAAP operating earnings (loss) per common share (“EPS”) | 1.28 | 1.94 | |||||||||
As of September 30, 2022, total AUM was $716 billion, a year-over-year decrease of 17.7% driven by lower markets partially offset by net inflows over the prior twelve months.
The Net income attributable to Holdings for the third quarter of 2022 was $273 million compared to $672 million in the third quarter of 2021 driven primarily by non-economic market impacts from hedging under U.S. GAAP accounting.
Non-GAAP operating earnings in the third quarter of 2022 was $498 million compared to $818 million in the third quarter of 2021. Excluding notable items4 of $13 million, third quarter 2022 Non-GAAP operating earnings were $511 million or $1.32 per share.
As of September 30, 2022, book value per common share, including accumulated other comprehensive income (“AOCI”), was $4.84. Book value per common share, excluding AOCI, was $26.13.
4 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
2
Business Highlights
•Business segment highlights:
◦Individual Retirement (“IR”) reported record net inflows of $765 million, benefiting from the continued demand for our industry-leading Structured Capital Strategies (“SCS”) buffered annuity, with first year premiums up 7% over prior year, and lower outflows in the quarter.
◦Group Retirement (“GR”) reported total premiums of $861 million, up 1% on a year-over-year basis, led by the tax-exempt market with total premiums up 13% over prior year.
◦Investment Management and Research (AllianceBernstein or “AB”)5 reported net outflows of $10.5 billion, or $6.6 billion excluding expected outflows from AXA, with the CarVal acquisition supporting a 7% fee-rate improvement over prior year and institutional pipeline growth to $24.7 billion, up 142% from prior quarter.
◦Protection Solutions (“PS”) continues to benefit from our strategic shift to less interest-sensitive VUL with $315 million in VUL premiums, up 9% over prior year.
•Capital management program:
◦The Company returned $275 million in the quarter, including $75 million of quarterly cash dividends and $200 million of share repurchases, which is in line with our 50-60% payout target.
◦The Company reported cash and liquid assets of $2.0 billion at Holdings as of quarter-end which includes a $930 million dividend from Equitable Financial in July.
◦Fair value hedging program targets the Company’s economic liability while protecting the statutory balance sheet to CTE98 and maintained c. 95% hedging effectiveness through volatile markets.
.
•Delivering long-term shareholder value:
◦Organic cash flow growth paired with consistent capital return has resulted in free cash flow6 per share growth of c. 120% since IPO, providing significant value proposition to shareholders.
◦Continuing to deliver 8-10% long-term annualized EPS growth supported by the Company’s general account rebalancing efforts, realizing $167 million of $180 million incremental investment income target to date, and expense savings of $43 million of $80 million net expense savings target.
•Completed annual actuarial assumption review:
◦The Company completed its annual actuarial assumption update benefiting from reserving, which is based on emerging policyholder and market experience, resulting in a $144 million favorable impact to net income and a $23 million favorable impact to non-GAAP operating earnings on a post-tax basis.
5 Refers to AllianceBernstein L.P. and AllianceBernstein Holding L.P., collectively.
6 Free cash flow is annual dividends to Equitable Holdings from its subsidiaries less annual Holding Company expenses.
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Business Segment Results
Individual Retirement
| (in millions, unless otherwise noted) | Q3 2022 | Q3 2021 | |||||||||
| Account value (in billions) | $ | 90.5 | $ | 107.7 | |||||||
| Segment net flows | |||||||||||
| Current Product Offering | 1,263 | 702 | |||||||||
| Legacy (1) | (498) | (689) | |||||||||
| Total segment net flows | 765 | 13 | |||||||||
| Operating earnings (loss) | 270 | 316 | |||||||||
(1) Net flows of $(258) million and $(322) million not included in Q3 2022 and Q3 2021, respectively, as it relates to AV ceded to Venerable.
•Account value decreased by 16% primarily due to lower markets, partially offset by continued demand for protected equity products through volatile markets with $2 billion of SCS first year premiums, up 7% over prior year, and lower redemptions leading to record net inflows since our IPO.
•Net inflows of $765 million increased compared to the third quarter of 2021 led by net inflows of $1.3 billion from our current product offering of less capital-intensive products, which was partially offset outflows from the legacy VA block of $(498) million.
•Operating earnings decreased from $316 million in the prior year quarter to $270 million, primarily driven by lower fee-type revenue on lower average account values and lower net investment income from lower alternatives investments and prepayments partially offset by higher income from floating rate securities, higher SCS asset balances and general account optimization.
•In the current period, results were $28 million lower due to notable items which include an $11 million adjustment from assumption updates and $17 million of one-time items, primarily a higher tax rate. Operating earnings less notable items7 decreased from $338 million in the prior year quarter to $298 million.
Group Retirement
| (in millions, unless otherwise noted) | Q3 2022 | Q3 2021 | |||||||||
| Account value (in billions) | $ | 39.7 | $ | 45.9 | |||||||
| Segment net flows | (57) | (135) | |||||||||
| Operating earnings (loss) | 134 | 192 | |||||||||
•Account value decreased by 14% driven primarily by market performance over the prior twelve months.
•Net flows of $(57) million improved versus the prior year quarter primarily due to net inflows in our tax-exempt market which was supported by premium growth, including first year premiums up 29% over prior year, and strong persistency.
7 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
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•Operating earnings decreased from $192 million in the prior year quarter to $134 million, primarily due to lower net investment income, with lower alternatives income and prepayments, partially offset by higher income from floating rate securities and general account optimization, and lower fee-type revenue on lower average account values.
•In the current period, results were $17 million higher due to notable items which include a $28 million adjustment from a favorable assumption update partially offset by $11 million of one-time items, primarily non-recurring expenses. Operating earnings less notable items8 decreased from $149 million in the prior year quarter to $117 million.
AllianceBernstein
| (in millions, unless otherwise noted) | Q3 2022 | Q3 2021 | |||||||||
| Total AUM (in billions) | $ | 612.7 | $ | 742.2 | |||||||
| Segment net flows (in billions) | (10.5) | 7.2 | |||||||||
| Operating earnings (loss) | 94 | 134 | |||||||||
•AUM decreased by 17% due to market performance partially offset by net inflows over the prior twelve months.
•Third quarter net outflows of $10.5 billion, or $6.6 billion excluding expected AXA redemptions, were driven by net outflows in Retail and Institutional channels partially offset by net inflows in the Private Wealth channel.
•Operating earnings decreased from $134 million in the prior year quarter to $94 million, primarily due to lower base fees on lower average AUM.
Protection Solutions
| (in millions) | Q3 2022 | Q3 2021 | |||||||||
| Gross written premiums | $ | 769 | $ | 754 | |||||||
| Annualized premiums | 74 | 67 | |||||||||
| Operating earnings (loss) | 72 | 160 | |||||||||
•Gross written premiums increased 2% year-over-year with continued success in our strategic shift to less interest-sensitive VUL accumulation products with premiums up 9% year-over-year.
•Operating earnings decreased from $160 million in the prior year quarter to $72 million, primarily due to lower net investment income from lower alternatives income and prepayments partially offset by higher income from floating rate securities and general account optimization.
•In the current period, results were $8 million higher due to notable items which include $6 million of assumption updates and $2 million of one-time items, primarily favorable mortality partially offset by non-recurring expenses and a higher tax rate. Operating earnings excluding notable items6 decreased from $101 million in the prior year quarter to $64 million.
8 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
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Corporate and Other (“C&O”)
Operating loss of $72 million in the third quarter increased compared to operating gain of $16 million in the prior year quarter, primarily driven by lower net investment income from lower alternatives income and prepayments partially offset by general account optimization. Operating loss excluding notable items9 decreased from $63 million in the prior year quarter to $61 million.
9 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
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Exhibit 1: 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, | |||||||||||
| (in millions) | 2022 | 2021 | |||||||||
| Non-GAAP Operating Earnings | 498 | $ | 818 | ||||||||
| Post-tax Adjustments related to notable items: | |||||||||||
| Individual Retirement | 17 | (15) | |||||||||
| Group Retirement | 11 | (16) | |||||||||
| Investment Management and Research | — | — | |||||||||
| Protection Solutions | (2) | (43) | |||||||||
| Corporate & Other | 11 | (79) | |||||||||
| Notable items subtotal | 37 | (153) | |||||||||
| Less: impact of actuarial assumption update | (23) | (6) | |||||||||
| Non-GAAP Operating Earnings, less Notable Items | $ | 511 | $ | 660 | |||||||
Impact of notable items by item category:
| Three Months Ended September 30, | |||||||||||
| (in millions) | 2022 | 2021 | |||||||||
| Non-GAAP Operating Earnings | 498 | $ | 818 | ||||||||
| Pre-tax adjustments related to Notable Items: | |||||||||||
| Actuarial Updates/Reserve | — | — | |||||||||
| Mortality | (16) | (24) | |||||||||
| Expenses | 30 | — | |||||||||
| Net Investment Income | 11 | (162) | |||||||||
| Subtotal | 25 | (185) | |||||||||
| Post-tax impact of Notable Items | 37 | (153) | |||||||||
| Less: impact of actuarial assumption update | (23) | (6) | |||||||||
| Non-GAAP Operating Earnings, less Notable Items | $ | 511 | $ | 660 | |||||||
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Impact of Notable Items by segment and corporate & other:
| Three months ended 9/30/2022 ($m) | IR | GR | AB | PS | C&O | Consolidated | |||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | 270 | 134 | 94 | 72 | (72) | 498 | |||||||||||||||||||||||||||||
| Pre-tax adjustments related to Notable Items: | |||||||||||||||||||||||||||||||||||
| Actuarial Updates/Reserve | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Mortality | — | — | — | (16) | — | (16) | |||||||||||||||||||||||||||||
| Expenses | 2 | 6 | — | 5 | 17 | 30 | |||||||||||||||||||||||||||||
| Net Investment Income | 3 | 3 | — | 4 | 2 | 11 | |||||||||||||||||||||||||||||
| Pre-tax Subtotal | 4 | 9 | — | (7) | 19 | 25 | |||||||||||||||||||||||||||||
| Tax adjustment | 13 | 2 | — | 5 | (7) | 12 | |||||||||||||||||||||||||||||
| Post-tax impact of Notable Items | 17 | 11 | — | (2) | 11 | 37 | |||||||||||||||||||||||||||||
| Impact of Actuarial Assumption Update | 11 | (28) | — | (6) | — | (23) | |||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings, less Notable Items | 298 | 117 | 94 | 64 | (61) | 511 | |||||||||||||||||||||||||||||
| Three months ended 9/30/2021 ($m) | IR | GR | AB | PS | C&O | Consolidated | |||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | 316 | 192 | 134 | 160 | 16 | 818 | |||||||||||||||||||||||||||||
| Pre-tax adjustments related to Notable Items: | |||||||||||||||||||||||||||||||||||
| Actuarial Updates/Reserve | — | — | — | (24) | — | (24) | |||||||||||||||||||||||||||||
| Mortality | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Expenses | — | — | — | — | — | — | |||||||||||||||||||||||||||||
| Net Investment Income | (21) | (20) | — | (29) | (91) | (162) | |||||||||||||||||||||||||||||
| Pre-tax Subtotal | (21) | (20) | — | (53) | (91) | (185) | |||||||||||||||||||||||||||||
| Tax adjustment | 6 | 5 | — | 10 | 12 | 32 | |||||||||||||||||||||||||||||
| Post-tax impact of Notable Items | (15) | (16) | — | (43) | (79) | (153) | |||||||||||||||||||||||||||||
| Impact of Actuarial Assumption Update | 37 | (27) | — | (16) | — | (6) | |||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings, less Notable Items | 338 | 149 | 134 | 101 | (63) | 660 | |||||||||||||||||||||||||||||
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Earnings Conference Call
Equitable Holdings will host a conference call at 8 a.m. ET November 3, 2022 to discuss its third quarter 2022 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 2022 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, $716 billion in assets under management (as of 9/30/2022) and more than 5 million client relationships globally.
Contacts:
Investor Relations
Işıl Müderrisoğlu
(212) 314-2476
Media Relations
Todd Williamson
(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, catastrophic events, such as the outbreak of pandemic diseases including COVID-19, potential strategic transactions, and changes in accounting standards; (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’ 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; (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; and (iv) DAC amortization for the SCS variable annuity product arising from near-term fluctuations in index segment returns;
•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
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securities, certain legal accruals; and a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies; 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.
The table below presents a reconciliation of Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings for the three months and nine months ended September 30, 2022 and 2021:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
| (in millions) | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 273 | $ | 672 | $ | 2,574 | $ | (693) | ||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||
| Variable annuity product features | (114) | 172 | (2,639) | 3,632 | ||||||||||||||||||||||
| Investment (gains) losses | 333 | (164) | 890 | (767) | ||||||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 19 | 27 | 57 | 87 | ||||||||||||||||||||||
| Other adjustments (1) (2) (3) | 39 | 141 | 407 | 672 | ||||||||||||||||||||||
| Income tax expense (benefit) related to above adjustments | (59) | (35) | 270 | (761) | ||||||||||||||||||||||
| Non-recurring tax items | 7 | 5 | 13 | 6 | ||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 498 | $ | 818 | $ | 1,572 | $ | 2,176 | ||||||||||||||||||
_______________
1.Includes Separation Costs of $25 million and $62 million for the three months and nine months ended September 30, 2021, respectively. Separation costs were completed during 2021.
2.Includes certain gross legal expenses related to the cost of insurance litigation of $2 million and $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.
3.Includes Non-GMxB related derivative hedge losses of ($28) million, ($4) million, ($68) million and $140 million for the three and nine months ended September 30, 2022 and 2021, respectively.
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 months and nine months ended September 30, 2022 and 2021.
12
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| (per share amounts) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Net income (loss) attributable to Holdings (1) | $ | 0.72 | $ | 1.62 | $ | 6.72 | $ | (1.64) | |||||||||||||||
| Less: Preferred stock dividend | 0.03 | 0.03 | 0.14 | 0.12 | |||||||||||||||||||
| Net Income (loss) available to common shareholders | 0.69 | 1.59 | 6.58 | (1.76) | |||||||||||||||||||
| Adjustments related to: | |||||||||||||||||||||||
| Variable annuity product features | (0.31) | 0.41 | (6.89) | 8.58 | |||||||||||||||||||
| Investment (gains) losses | 0.87 | (0.41) | 2.32 | (1.81) | |||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 0.05 | 0.07 | 0.15 | 0.21 | |||||||||||||||||||
| Other adjustments (2) (3) (4) | 0.12 | 0.35 | 1.06 | 1.59 | |||||||||||||||||||
| Income tax expense (benefit) related to above adjustments | (0.16) | (0.08) | 0.71 | (1.80) | |||||||||||||||||||
| Non-recurring tax items | 0.02 | 0.01 | 0.03 | 0.01 | |||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 1.28 | $ | 1.94 | $ | 3.96 | $ | 5.02 | |||||||||||||||
_______________
(1)For periods presented with a net loss, basic shares are used for EPS .
(2)Includes separation costs of $0.06 and $0.15 for the three months and nine months ended September 30, 2021, respectively.
(3)Includes certain gross legal expenses related to the cost of insurance litigation of $2 million and $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market. The legal accruals impact per common share is $0.01 and $0.00, $0.44 and $0.43 for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0.00 and $0.20 for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market. No adjustments were made to prior period non-GAAP operating EPS as the impact was immaterial.
(4)Includes Non-GMxB related derivative hedge losses of ($0.07), ($0.01), ($0.18) and $0.31 for the three and nine months ended September 30, 2022 and 2021, respectively.
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, 2022 | December 31, 2021 | ||||||||||
| Book value per common share | $ | 4.84 | $ | 25.45 | |||||||
| Per share impact of AOCI | 21.29 | (5.12) | |||||||||
| Book Value per common share, excluding AOCI | $ | 26.13 | $ | 20.33 | |||||||
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.
Account Value (“AV”)
13
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.
14
Consolidated Statements of Income (Loss) (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| REVENUES | |||||||||||||||||||||||
| Policy charges and fee income | $ | 796 | $ | 867 | $ | 2,449 | $ | 2,755 | |||||||||||||||
| Premiums | 259 | 230 | 744 | 729 | |||||||||||||||||||
| Net derivative gains (losses) | 68 | (185) | 3,118 | (3,930) | |||||||||||||||||||
| Net investment income (loss) | 842 | 997 | 2,357 | 2,914 | |||||||||||||||||||
| Investment gains (losses), net: | |||||||||||||||||||||||
| Credit losses on available-for-sale debt securities and loans | (267) | (2) | (266) | 4 | |||||||||||||||||||
| Other investment gains (losses), net | (65) | 165 | (624) | 763 | |||||||||||||||||||
| Total investment gains (losses), net | (332) | 163 | (890) | 767 | |||||||||||||||||||
| Investment management and service fees | 1,179 | 1,323 | 3,731 | 3,898 | |||||||||||||||||||
| Other income | 197 | 220 | 612 | 585 | |||||||||||||||||||
| Total revenues | 3,009 | 3,615 | 12,121 | 7,718 | |||||||||||||||||||
| BENEFITS AND OTHER DEDUCTIONS | |||||||||||||||||||||||
| Policyholders’ benefits | 625 | 751 | 2,599 | 2,518 | |||||||||||||||||||
| Interest credited to policyholders’ account balances | 378 | 305 | 1,002 | 905 | |||||||||||||||||||
| Compensation and benefits | 566 | 614 | 1,679 | 1,762 | |||||||||||||||||||
| Commissions and distribution-related payments | 368 | 436 | 1,184 | 1,215 | |||||||||||||||||||
| Interest expense | 51 | 59 | 148 | 184 | |||||||||||||||||||
| Amortization of deferred policy acquisition costs | 105 | 64 | 446 | 257 | |||||||||||||||||||
| Other operating costs and expenses | 497 | 456 | 1,617 | 1,511 | |||||||||||||||||||
| Total benefits and other deductions | 2,590 | 2,685 | 8,675 | 8,352 | |||||||||||||||||||
| Income (loss) from continuing operations, before income taxes | 419 | 930 | 3,446 | (634) | |||||||||||||||||||
| Income tax (expense) benefit | (92) | (165) | (707) | 222 | |||||||||||||||||||
| Net income (loss) | 327 | 765 | 2,739 | (412) | |||||||||||||||||||
| Less: Net income (loss) attributable to the noncontrolling interest | 54 | 93 | 165 | 281 | |||||||||||||||||||
| Net income (loss) attributable to Holdings | 273 | 672 | 2,574 | (693) | |||||||||||||||||||
| Less: Preferred stock dividends | 14 | 14 | 54 | 53 | |||||||||||||||||||
| Net income (loss) available to Holdings’ common shareholders | $ | 259 | $ | 658 | $ | 2,520 | $ | (746) | |||||||||||||||
15
Earnings Per Common Share
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Earnings per common share | |||||||||||||||||||||||
| Basic | $ | 0.69 | $ | 1.60 | $ | 6.62 | $ | (1.76) | |||||||||||||||
| Diluted | $ | 0.69 | $ | 1.59 | $ | 6.58 | $ | (1.76) | |||||||||||||||
| Weighted average shares | |||||||||||||||||||||||
| Weighted average common stock outstanding for basic earnings per common share | 374.5 | 411.3 | 380.6 | 423.2 | |||||||||||||||||||
| Weighted average common stock outstanding for diluted earnings per common share (1) | 376.8 | 414.6 | 382.9 | 423.2 | |||||||||||||||||||
(1)Due to net loss for the nine months ended September 30, 2021 approximately 3.7 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, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Operating earnings (loss) by segment: | |||||||||||||||||||||||
| Individual Retirement | $ | 270 | $ | 316 | $ | 837 | $ | 1,093 | |||||||||||||||
| Group Retirement | 134 | 192 | 415 | 514 | |||||||||||||||||||
| Investment Management and Research | 94 | 134 | 330 | 381 | |||||||||||||||||||
| Protection Solutions | 72 | 160 | 208 | 264 | |||||||||||||||||||
| Corporate and Other (1) | (72) | 16 | (218) | (76) | |||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 498 | $ | 818 | $ | 1,572 | $ | 2,176 | |||||||||||||||
(1)Includes interest expense and financing fees of $51 million, $65 million, $156 million and $180 million for the three and nine months ended September 30, 2022,and 2021 respectively.
16
Select Balance Sheet Statistics
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in millions) | |||||||||||
| ASSETS | |||||||||||
| Total investments and cash and cash equivalents | $ | 96,656 | $ | 110,299 | |||||||
| Separate Accounts assets | 109,622 | 147,306 | |||||||||
| Total assets | 245,600 | 292,262 | |||||||||
| LIABILITIES | |||||||||||
| Short-term and long-term debt | $ | 4,088 | $ | 3,931 | |||||||
| Future policy benefits and other policyholders' liabilities | 34,225 | 36,717 | |||||||||
| Policyholders’ account balances | 79,999 | 79,357 | |||||||||
| Total liabilities | 240,413 | 278,699 | |||||||||
| EQUITY | |||||||||||
| Preferred stock | 1,562 | 1,562 | |||||||||
| Accumulated other comprehensive income (loss) | (7,876) | 2,004 | |||||||||
| Total equity attributable to Holdings | $ | 3,354 | $ | 11,519 | |||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | 9,668 | 7,953 | |||||||||
17
Assets Under Management (Unaudited)
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in billions) | |||||||||||
| Assets Under Management | |||||||||||
| AB AUM | $ | 612.7 | $ | 778.6 | |||||||
| Exclusion for General Account and other Affiliated Accounts | (66.8) | (79.7) | |||||||||
| Exclusion for Separate Accounts | (36.1) | (48.8) | |||||||||
| AB third party | $ | 509.8 | $ | 650.1 | |||||||
| Total company AUM | |||||||||||
| AB third party | $ | 509.8 | $ | 650.1 | |||||||
| General Account and other Affiliated Accounts (1) (3) | 96.7 | 110.3 | |||||||||
| Separate Accounts (2) (3) | 109.6 | 147.3 | |||||||||
| Total AUM | $ | 716.1 | $ | 907.7 | |||||||
_______________
(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 September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022, Separate Account and General Account AUM is inclusive of $16.3 billion, $64 million, $16.6 billion, $61 million, $15.1 billion, $60 million, $12.7 billion, $60 million, $11.7 billion and $58 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.
18
| 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' 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 2022 Financial Supplement | 2 | |||||||
Consolidated Financials
and Key Metrics
| 3Q 2022 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | 765 | $ | 388 | $ | 639 | $ | 1,773 | $ | 327 | (57.3) | % | $ | (412) | $ | 2,739 | 764.8 | % | ||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to the noncontrolling interest | (93) | (134) | (66) | (45) | (54) | 41.9 | % | (281) | (165) | 41.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 672 | $ | 254 | $ | 573 | $ | 1,728 | $ | 273 | (59.4) | % | $ | (693) | $ | 2,574 | 471.4 | % | ||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (1) | $ | 818 | $ | 649 | $ | 548 | $ | 526 | $ | 498 | (39.1) | % | $ | 2,176 | $ | 1,572 | (27.7) | % | ||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | $ | 11,680 | $ | 11,519 | $ | 7,954 | $ | 5,589 | $ | 3,354 | (71.3) | % | $ | 11,680 | $ | 3,354 | (71.3) | % | ||||||||||||||||||||||||||||||||||||||
| Less: Preferred Stock | 1,562 | 1,562 | 1,562 | 1,562 | 1,562 | — | % | 1,562 | 1,562 | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 10,118 | 9,957 | 6,392 | 4,027 | 1,792 | (82.3) | % | 10,118 | 1,792 | (82.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 1,876 | 2,004 | (1,787) | (5,548) | (7,876) | (519.8) | % | 1,876 | (7,876) | (519.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 8,242 | $ | 7,953 | $ | 8,179 | $ | 9,575 | $ | 9,668 | 17.3 | % | $ | 8,242 | $ | 9,668 | 17.3 | % | ||||||||||||||||||||||||||||||||||||||
| Return on Equity (ex. AOCI) - TTM | (22.7) | % | (6.3) | % | 18.9 | % | 37.1 | % | 31.1 | % | (22.7) | % | 31.1 | % | ||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating ROE (1) | 32.4 | % | 33.5 | % | 33.1 | % | 29.0 | % | 24.2 | % | 32.4 | % | 24.2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Debt to capital: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt to Capital (ex. AOCI) | 28.1 | % | 28.7 | % | 28.3 | % | 25.6 | % | 25.5 | % | 28.1 | % | 25.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Per common share: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Diluted earnings per common share: (2) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 1.59 | $ | 0.56 | $ | 1.43 | $ | 4.47 | $ | 0.69 | (56.7) | % | $ | (1.76) | $ | 6.58 | 473.3 | % | ||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (1) | $ | 1.94 | $ | 1.54 | $ | 1.36 | $ | 1.31 | $ | 1.28 | (33.8) | % | $ | 5.02 | $ | 3.96 | (21.0) | % | ||||||||||||||||||||||||||||||||||||||
| Book value per common share | $ | 25.00 | $ | 25.45 | $ | 16.64 | $ | 10.69 | $ | 4.84 | (80.6) | % | $ | 25.00 | $ | 4.84 | (80.6) | % | ||||||||||||||||||||||||||||||||||||||
| Book value per common share (ex. AOCI) | $ | 20.37 | $ | 20.33 | $ | 21.29 | $ | 25.41 | $ | 26.13 | 28.3 | % | $ | 20.37 | $ | 26.13 | 28.3 | % | ||||||||||||||||||||||||||||||||||||||
| Weighted-average common shares outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 411.3 | 400.4 | 388.6 | 378.9 | 374.5 | (9.0) | % | 423.2 | 380.6 | (10.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 414.6 | 404.3 | 391.7 | 380.6 | 376.8 | (9.1) | % | 423.2 | 382.9 | (9.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Ending common shares outstanding | 404.7 | 391.2 | 384.2 | 376.8 | 370.0 | (8.6) | % | 404.7 | 370.0 | (8.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Return to common shareholders: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividend | $ | 74 | $ | 72 | $ | 70 | $ | 75 | $ | 75 | $ | 224 | $ | 220 | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common shares (3) | 460 | 468 | 279 | 220 | 200 | 1,169 | 699 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total capital returned to common shareholders | $ | 534 | $ | 540 | $ | 349 | $ | 295 | $ | 275 | $ | 1,393 | $ | 919 | ||||||||||||||||||||||||||||||||||||||||||
| Market Values: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| S&P 500 | 4,308 | 4,766 | 4,530 | 3,785 | 3,586 | (16.8) | % | 4,308 | 3,586 | (16.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| US 10-Year Treasury | 1.5 | % | 1.5 | % | 2.3 | % | 3.0 | % | 3.8 | % | 1.5 | % | 3.8 | % | ||||||||||||||||||||||||||||||||||||||||||
| 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. 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Fourth quarter 2021 repurchase of common shares includes $112 million accelerated from first quarter 2022. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 4 | |||||||
| Consolidated Statements of Income (Loss) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges and fee income | $ | 867 | $ | 882 | $ | 840 | $ | 813 | $ | 796 | (8.2) | % | $ | 2,755 | $ | 2,449 | (11.1) | % | ||||||||||||||||||||||||||||||||||||||
| Premiums | 230 | 231 | 247 | 238 | 259 | 12.6 | % | 729 | 744 | 2.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (185) | (535) | 821 | 2,229 | 68 | 136.8 | % | (3,930) | 3,118 | 179.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 997 | 932 | 804 | 711 | 842 | (15.5) | % | 2,914 | 2,357 | (19.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | 163 | 101 | (326) | (232) | (332) | (303.7) | % | 767 | (890) | (216.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management and service fees | 1,323 | 1,497 | 1,355 | 1,197 | 1,179 | (10.9) | % | 3,898 | 3,731 | (4.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Other income | 220 | 210 | 203 | 212 | 197 | (10.5) | % | 585 | 612 | 4.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | 3,615 | 3,318 | 3,944 | 5,168 | 3,009 | (16.8) | % | 7,718 | 12,121 | 57.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 751 | 700 | 1,060 | 914 | 625 | (16.8) | % | 2,518 | 2,599 | 3.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 305 | 314 | 315 | 309 | 378 | 23.9 | % | 905 | 1,002 | 10.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits | 614 | 598 | 595 | 518 | 566 | (7.8) | % | 1,762 | 1,679 | (4.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 436 | 447 | 422 | 394 | 368 | (15.6) | % | 1,215 | 1,184 | (2.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 59 | 60 | 47 | 50 | 51 | (13.6) | % | 184 | 148 | (19.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 64 | 136 | 181 | 160 | 105 | 64.1 | % | 257 | 446 | 73.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Other operating costs and expenses | 456 | 598 | 537 | 583 | 497 | 9.0 | % | 1,511 | 1,617 | 7.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total benefits and other deductions | 2,685 | 2,853 | 3,157 | 2,928 | 2,590 | (3.5) | % | 8,352 | 8,675 | 3.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from operations, before income taxes | 930 | 465 | 787 | 2,240 | 419 | (54.9) | % | (634) | 3,446 | 643.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit | (165) | (77) | (148) | (467) | (92) | 44.2 | % | 222 | (707) | (418.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) | 765 | 388 | 639 | 1,773 | 327 | (57.3) | % | (412) | 2,739 | 764.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: net (income) loss attributable to the noncontrolling interest | (93) | (134) | (66) | (45) | (54) | 41.9 | % | (281) | (165) | 41.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 672 | $ | 254 | $ | 573 | $ | 1,728 | $ | 273 | (59.4) | % | $ | (693) | $ | 2,574 | 471.4 | % | ||||||||||||||||||||||||||||||||||||||
| Less: Preferred stock dividends | (14) | (26) | (14) | (26) | (14) | — | % | (53) | (54) | (1.9) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | $ | 658 | $ | 228 | $ | 559 | $ | 1,702 | $ | 259 | (60.6) | % | $ | (746) | $ | 2,520 | 437.8 | % | ||||||||||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features | $ | 172 | $ | 513 | $ | (601) | $ | (1,924) | $ | (114) | $ | 3,632 | $ | (2,639) | ||||||||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (164) | (100) | 326 | 231 | 333 | (767) | 890 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 27 | 33 | 19 | 19 | 19 | 87 | 57 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other adjustments (1) (2) (3) | 141 | 45 | 220 | 148 | 39 | 672 | 407 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments | (35) | (103) | 8 | 321 | (59) | (761) | 270 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 5 | 7 | 3 | 3 | 7 | 6 | 13 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating earnings (4) | $ | 818 | $ | 649 | $ | 548 | $ | 526 | $ | 498 | $ | 2,176 | $ | 1,572 | ||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes Separation Costs of $25 million and $62 million for the three months and nine months ended September 30, 2021, respectively. Separation costs were completed during 2021. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes certain gross legal expenses related to the cost of insurance litigation of $2 million and $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (3) Includes Non-GMxB related derivative hedge losses of ($28) million, ($4) million, ($68) million and $140 million for the three and nine months ended September 30, 2022 and 2021, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (4) 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 2022 Financial Supplement | 5 | |||||||
| Consolidated Balance Sheets | ||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | ||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||
| Total investments | $ | 102,007 | $ | 105,111 | $ | 98,776 | $ | 93,216 | $ | 92,517 | |||||||||||||||||||
| Cash and cash equivalents | 5,255 | 5,188 | 5,713 | 5,109 | 4,139 | ||||||||||||||||||||||||
| Cash and securities segregated, at fair value | 909 | 1,504 | 1,693 | 1,747 | 1,335 | ||||||||||||||||||||||||
| Broker-dealer related receivables | 2,639 | 2,599 | 2,744 | 2,666 | 2,539 | ||||||||||||||||||||||||
| Deferred policy acquisition costs | 5,366 | 5,491 | 6,592 | 7,541 | 8,244 | ||||||||||||||||||||||||
| Goodwill and other intangible assets, net | 4,734 | 4,728 | 4,723 | 4,721 | 5,635 | ||||||||||||||||||||||||
| Amounts due from reinsurers | 14,801 | 14,679 | 14,060 | 13,758 | 13,378 | ||||||||||||||||||||||||
| GMIB reinsurance contract asset, at fair value | 1,937 | 1,848 | 1,582 | 1,498 | 1,289 | ||||||||||||||||||||||||
| Current and deferred income taxes | 293 | 195 | 1,111 | 1,674 | 2,222 | ||||||||||||||||||||||||
| Other assets | 4,545 | 3,613 | 3,852 | 4,787 | 4,680 | ||||||||||||||||||||||||
| Separate Accounts assets | 142,093 | 147,306 | 136,812 | 116,765 | 109,622 | ||||||||||||||||||||||||
| Total assets | $ | 284,579 | $ | 292,262 | $ | 277,658 | $ | 253,482 | $ | 245,600 | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||
| Policyholders’ account balances | $ | 75,909 | $ | 79,357 | $ | 79,549 | $ | 78,766 | $ | 79,999 | |||||||||||||||||||
| Future policy benefits and other policyholders’ liabilities | 37,184 | 36,717 | 35,165 | 34,717 | 34,225 | ||||||||||||||||||||||||
| Broker-dealer related payables | 1,087 | 1,283 | 1,992 | 612 | 607 | ||||||||||||||||||||||||
| Customers related payables | 3,153 | 3,600 | 3,684 | 3,821 | 3,361 | ||||||||||||||||||||||||
| Amounts due to reinsurers | 1,466 | 1,381 | 1,331 | 1,353 | 1,348 | ||||||||||||||||||||||||
| Short-term and long-term debt | 3,839 | 3,931 | 4,044 | 4,085 | 4,088 | ||||||||||||||||||||||||
| Income taxes payable | — | — | — | — | — | ||||||||||||||||||||||||
| Notes issued by consolidated variable interest entities, at fair value using the fair value option | 1,190 | 1,191 | 1,182 | 1,150 | 1,165 | ||||||||||||||||||||||||
| Other liabilities | 5,343 | 3,933 | 4,030 | 4,866 | 5,998 | ||||||||||||||||||||||||
| Separate Accounts liabilities | 142,093 | 147,306 | 136,812 | 116,765 | 109,622 | ||||||||||||||||||||||||
| Total liabilities | 271,264 | 278,699 | 267,789 | 246,135 | 240,413 | ||||||||||||||||||||||||
| Redeemable noncontrolling interest | 143 | 468 | 386 | 348 | 354 | ||||||||||||||||||||||||
| Equity | |||||||||||||||||||||||||||||
| Preferred stock | 1,562 | 1,562 | 1,562 | 1,562 | 1,562 | ||||||||||||||||||||||||
| Common stock | 5 | 4 | 4 | 4 | 4 | ||||||||||||||||||||||||
| Additional paid-in capital | 1,917 | 1,919 | 1,933 | 1,918 | 2,027 | ||||||||||||||||||||||||
| Treasury shares | (2,537) | (2,850) | (3,070) | (3,065) | (3,202) | ||||||||||||||||||||||||
| Retained earnings | 8,857 | 8,880 | 9,312 | 10,718 | 10,839 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 1,876 | 2,004 | (1,787) | (5,548) | (7,876) | ||||||||||||||||||||||||
| Total equity attributable to Holdings | 11,680 | 11,519 | 7,954 | 5,589 | 3,354 | ||||||||||||||||||||||||
| Noncontrolling interest | 1,492 | 1,576 | 1,529 | 1,410 | 1,479 | ||||||||||||||||||||||||
| Total equity | 13,172 | 13,095 | 9,483 | 6,999 | 4,833 | ||||||||||||||||||||||||
| Total liabilities, redeemable noncontrolling interest and equity | $ | 284,579 | $ | 292,262 | $ | 277,658 | $ | 253,482 | $ | 245,600 | |||||||||||||||||||
| 3Q 2022 Financial Supplement | 6 | |||||||
| Consolidated Capital Structure | ||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | ||||||||||||||||||||||||
| Short-term and long-term debt: | |||||||||||||||||||||||||||||
| Short-term debt | |||||||||||||||||||||||||||||
| AB commercial paper | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
| AB revolving credit facility | — | — | — | — | — | ||||||||||||||||||||||||
| CLO Warehousing Debt (1) | 1 | 92 | 204 | 245 | 248 | ||||||||||||||||||||||||
| Senior Notes (3.9%, due 2023) | 519 | ||||||||||||||||||||||||||||
| Total short-term debt | 1 | 92 | 204 | 245 | 767 | ||||||||||||||||||||||||
| Total long-term debt | 3,838 | 3,839 | 3,840 | 3,840 | 3,321 | ||||||||||||||||||||||||
Total short-term and long-term debt: [A] | $ | 3,839 | $ | 3,931 | $ | 4,044 | $ | 4,085 | $ | 4,088 | |||||||||||||||||||
| Equity: | |||||||||||||||||||||||||||||
| Preferred stock | $ | 1,562 | $ | 1,562 | $ | 1,562 | $ | 1,562 | $ | 1,562 | |||||||||||||||||||
| Common stock | $ | 5 | $ | 4 | $ | 4 | $ | 4 | $ | 4 | |||||||||||||||||||
| Additional paid-in capital | 1,917 | 1,919 | 1,933 | 1,918 | 2,027 | ||||||||||||||||||||||||
| Treasury stock, at cost | (2,537) | (2,850) | (3,070) | (3,065) | (3,202) | ||||||||||||||||||||||||
| Retained earnings | 8,857 | 8,880 | 9,312 | 10,718 | 10,839 | ||||||||||||||||||||||||
| Accumulated other comprehensive income (loss) | 1,876 | 2,004 | (1,787) | (5,548) | (7,876) | ||||||||||||||||||||||||
| Total equity attributable to Holdings | 11,680 | 11,519 | 7,954 | 5,589 | 3,354 | ||||||||||||||||||||||||
| Noncontrolling interest | 1,492 | 1,576 | 1,529 | 1,410 | 1,479 | ||||||||||||||||||||||||
| Total equity | $ | 13,172 | $ | 13,095 | $ | 9,483 | $ | 6,999 | $ | 4,833 | |||||||||||||||||||
Total equity attributable to Holdings, (ex. AOCI): [B] | $ | 9,804 | $ | 9,515 | $ | 9,741 | $ | 11,137 | $ | 11,230 | |||||||||||||||||||
| Capital: | |||||||||||||||||||||||||||||
| Total capitalization (3) | $ | 15,518 | $ | 15,358 | $ | 11,794 | $ | 9,429 | $ | 7,194 | |||||||||||||||||||
Total capitalization (ex. AOCI): [A+B] (3) | $ | 13,642 | $ | 13,354 | $ | 13,581 | $ | 14,977 | $ | 15,070 | |||||||||||||||||||
| Debt to capital: | |||||||||||||||||||||||||||||
| Debt to capital (ex. AOCI) (2) | 28.1 | % | 28.7 | % | 28.3 | % | 25.6 | % | 25.5 | % | |||||||||||||||||||
| For the Three Months Ended | |||||||||||||||||||||||||||||
| Roll-forward of common shares outstanding (millions of shares): | |||||||||||||||||||||||||||||
| Beginning balance | 420.2 | 404.7 | 391.2 | 384.2 | 376.8 | ||||||||||||||||||||||||
| Repurchases | — | (9.6) | (7.9) | — | (4.7) | ||||||||||||||||||||||||
| Retirements | (15.6) | (4.0) | (0.7) | (7.6) | (2.3) | ||||||||||||||||||||||||
| Issuances | 0.1 | 0.1 | 1.6 | 0.2 | 0.2 | ||||||||||||||||||||||||
| Ending basic common shares outstanding | 404.7 | 391.2 | 384.2 | 376.8 | 370.0 | ||||||||||||||||||||||||
| Total potentially dilutive shares | — | — | 3.1 | 2.3 | 2.3 | ||||||||||||||||||||||||
| Ending common shares outstanding - maximum potential dilution | 404.7 | 391.2 | 387.3 | 379.1 | 372.3 | ||||||||||||||||||||||||
| 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 2022 Financial Supplement | 7 | |||||||
| Operating Earnings (Loss) by Segment and Corporate and Other (1/2) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
| (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 | $ | 385 | $ | 80 | $ | — | $ | 505 | $ | 85 | $ | 1,055 | ||||||||||||||||||||||||||
| Net investment income (loss) | 348 | 160 | (9) | 236 | 149 | 884 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 140 | (11) | 15 | (13) | 15 | 146 | ||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 144 | 60 | 990 | 63 | 114 | 1,371 | ||||||||||||||||||||||||||||||||
| Segment revenues | 1,017 | 289 | 996 | 791 | 363 | 3,456 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 300 | — | — | 414 | 160 | 874 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 101 | 79 | — | 130 | 68 | 378 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 61 | 12 | 152 | 46 | 97 | 368 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 109 | (20) | — | 14 | (18) | 85 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 105 | 47 | 636 | 96 | 93 | 977 | ||||||||||||||||||||||||||||||||
| Interest expense and financing fees | — | 1 | 5 | — | 51 | 57 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 676 | 119 | 793 | 700 | 451 | 2,739 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 341 | 170 | 203 | 91 | (89) | 717 | ||||||||||||||||||||||||||||||||
| Income Taxes | (71) | (36) | (35) | (19) | 19 | (142) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 270 | 134 | 168 | 72 | (70) | 575 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (75) | — | (2) | (77) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 270 | $ | 134 | $ | 94 | $ | 72 | $ | (72) | $ | 498 | ||||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 8 | |||||||
| Operating Earnings (Loss) by Segment and Corporate and Other (2/2) | ||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
| (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 | $ | 1,152 | $ | 257 | $ | — | $ | 1,544 | $ | 240 | $ | 3,193 | ||||||||||||||||||||||||||
| Net investment income (loss) | 933 | 503 | (58) | 760 | 433 | 2,571 | ||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 514 | (23) | 57 | (18) | 48 | 578 | ||||||||||||||||||||||||||||||||
| Investment Management, service fees and other income | 462 | 187 | 3,135 | 192 | 366 | 4,342 | ||||||||||||||||||||||||||||||||
| Segment revenues | 3,061 | 924 | 3,134 | 2,478 | 1,087 | 10,684 | ||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 998 | — | — | 1,364 | 452 | 2,814 | ||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 255 | 229 | — | 380 | 138 | 1,002 | ||||||||||||||||||||||||||||||||
| Commissions and distribution related payments | 208 | 43 | 487 | 132 | 314 | 1,184 | ||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 292 | 3 | — | 78 | 1 | 374 | ||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 272 | 134 | 1,930 | 266 | 301 | 2,903 | ||||||||||||||||||||||||||||||||
| Interest expense and financing fees | — | 1 | 9 | — | 156 | 166 | ||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 2,025 | 410 | 2,426 | 2,220 | 1,362 | 8,443 | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 1,036 | 514 | 708 | 258 | (275) | 2,241 | ||||||||||||||||||||||||||||||||
| Income Taxes | (199) | (99) | (121) | (50) | 55 | (414) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 837 | 415 | 587 | 208 | (220) | 1,827 | ||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | (257) | — | 2 | (255) | ||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 837 | $ | 415 | $ | 330 | $ | 208 | $ | (218) | $ | 1,572 | ||||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | ||||||||||||||||||||||||||||||||||||||
| 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 | ||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 9 | |||||||
| Assets Under Management and Administration | ||
| Balances as of | ||||||||||||||||||||||||||||||||
| (in billions USD, except for Equitable Headcount) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | |||||||||||||||||||||||||||
| Assets Under Management | ||||||||||||||||||||||||||||||||
| AB AUM | ||||||||||||||||||||||||||||||||
| Total AB | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | $ | 612.7 | ||||||||||||||||||||||
| Exclusion for General Account and other Affiliated Accounts | (77.7) | (79.7) | (75.1) | (69.4) | (66.8) | |||||||||||||||||||||||||||
| Exclusion for Separate Accounts | (43.5) | (48.8) | (45.3) | (38.4) | (36.1) | |||||||||||||||||||||||||||
| AB third party | $ | 621.0 | $ | 650.1 | $ | 615.0 | $ | 539.0 | $ | 509.8 | ||||||||||||||||||||||
| Total company AUM | ||||||||||||||||||||||||||||||||
| AB third party | $ | 621.0 | $ | 650.1 | $ | 615.0 | $ | 539.0 | $ | 509.8 | ||||||||||||||||||||||
| General Account and other Affiliated Accounts (1) (3) | 107.3 | 110.3 | 104.5 | 98.3 | 96.7 | |||||||||||||||||||||||||||
| Separate Accounts (2) (3) | 142.1 | 147.3 | 136.8 | 116.8 | 109.6 | |||||||||||||||||||||||||||
| Total AUM | $ | 870.4 | $ | 907.7 | $ | 856.3 | $ | 754.1 | $ | 716.1 | ||||||||||||||||||||||
| Total Assets Under Administration (AUA) (4) | $ | 77.4 | $ | 83.3 | $ | 79.3 | $ | 70.8 | $ | 68.8 | ||||||||||||||||||||||
| Equitable Advisor Headcount | ||||||||||||||||||||||||||||||||
| Total Number of Equitable Advisors | 4,263 | 4,382 | 4,252 | 4,166 | 4,129 | |||||||||||||||||||||||||||
| 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 September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022, Separate Account and General Account AUM is inclusive of $16.3 billion, $64 million, $16.6 billion, $61 million, $15.1 billion, $60 million, $12.7 billion, $60 million, $11.7 billion and $58 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 2022 Financial Supplement | 10 | |||||||
| Sales Metrics by Segment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Insurance Operations | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Individual Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 2,801 | $ | 3,043 | $ | 2,802 | $ | 3,054 | $ | 3,003 | 7.2 | % | $ | 7,940 | $ | 8,859 | 11.6 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits | 83 | 68 | 84 | 89 | 111 | 34.3 | % | 256 | 284 | 10.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 2,884 | $ | 3,111 | $ | 2,886 | $ | 3,143 | $ | 3,114 | 8.0 | % | $ | 8,196 | $ | 9,143 | 11.6 | % | ||||||||||||||||||||||||||||||||||||||
| Group Retirement | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 364 | $ | 452 | $ | 879 | $ | 476 | $ | 371 | 1.8 | % | $ | 1,049 | $ | 1,726 | 64.6 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits | 485 | 626 | 623 | 657 | 490 | 1.1 | % | 1,712 | 1,770 | 3.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 849 | $ | 1,078 | $ | 1,502 | $ | 1,133 | $ | 861 | 1.4 | % | $ | 2,761 | $ | 3,496 | 26.6 | % | ||||||||||||||||||||||||||||||||||||||
| Protection Solutions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 95 | $ | 133 | $ | 116 | $ | 99 | $ | 101 | 6.8 | % | $ | 293 | $ | 316 | 8.0 | % | ||||||||||||||||||||||||||||||||||||||
| Renewal premium and deposits (1) | 659 | 668 | 662 | 661 | 668 | 1.3 | % | 1,971 | 1,991 | 1.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total Gross Premiums (1) | $ | 754 | $ | 801 | $ | 778 | $ | 760 | $ | 769 | 2.0 | % | $ | 2,264 | $ | 2,307 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||
| Investment Management and Research (in billions USD) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gross Sales by distribution channel | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Institutional | $ | 2.6 | $ | 6.6 | $ | 14.3 | $ | 3.3 | $ | 1.9 | (26.9) | % | $ | 25.1 | $ | 19.5 | (22.3) | % | ||||||||||||||||||||||||||||||||||||||
| Retail | 25.6 | 27.6 | 20.6 | 17.3 | 13.8 | (46.1) | % | 72.4 | 51.7 | (28.6) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Private Wealth | 4.1 | 5.2 | 6.0 | 3.3 | 4.1 | — | % | 13.1 | 13.4 | 2.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Firmwide Gross Sales | $ | 32.3 | $ | 39.4 | $ | 40.9 | $ | 23.9 | $ | 19.8 | (38.7) | % | $ | 110.6 | $ | 84.6 | (23.5) | % | ||||||||||||||||||||||||||||||||||||||
| Gross sales by investment service | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Active | $ | 17.2 | $ | 21.8 | $ | 17.3 | $ | 11.4 | $ | 8.0 | (53.5) | % | $ | 51.1 | $ | 36.7 | (28.2) | % | ||||||||||||||||||||||||||||||||||||||
| Equity Passive (2) (4) | 0.5 | 0.3 | 0.2 | 1.1 | 0.4 | (20.0) | % | 1.1 | 1.6 | 45.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income - Taxable | 8.8 | 7.4 | 7.1 | 4.0 | 6.1 | (30.7) | % | 37.5 | 17.2 | (54.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income - Tax-Exempt | 3.3 | 3.6 | 4.0 | 5.2 | 3.2 | (3.0) | % | 9.9 | 12.4 | 25.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Fixed Income Passive (2) | 0.4 | 3.4 | (0.1) | — | — | (100.0) | % | 1.2 | (0.1) | (108.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (3) (4) | 2.1 | 2.9 | 12.4 | 2.2 | 2.1 | — | % | 9.8 | 16.8 | 71.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Firmwide Gross Sales | $ | 32.3 | $ | 39.4 | $ | 40.9 | $ | 23.9 | $ | 19.8 | (38.7) | % | $ | 110.6 | $ | 84.6 | (23.5) | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) 1Q'22 variable universal life renewals previously reported as $514M during first quarter 2022. Amount updated to $249M during second quarter 2022 to properly reflect variable universal life product renewals. This resulted in a change for gross written premiums from $1,033 to $778. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(2) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(3) Includes certain multi-asset solutions and services not included in equity or fixed income services | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (4) AB line item does not cross foot for the nine months ended 2022 due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 11 | |||||||
Business Segments:
Operating Earnings Results and Metrics
| 3Q 2022 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 439 | $ | 410 | $ | 394 | $ | 373 | $ | 385 | (12.3) | % | $ | 1,457 | $ | 1,152 | (20.9) | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 296 | 315 | 297 | 288 | 348 | 17.6 | % | 972 | 933 | (4.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 77 | (77) | 164 | 210 | 140 | 81.8 | % | (51) | 514 | N/M | ||||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 186 | 180 | 167 | 151 | 144 | (22.6) | % | 579 | 462 | (20.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 998 | 828 | 1,022 | 1,022 | 1,017 | 1.9 | % | 2,957 | 3,061 | 3.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 272 | 79 | 324 | 374 | 300 | 10.3 | % | 641 | 998 | 55.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 70 | 71 | 76 | 78 | 101 | 44.3 | % | 205 | 255 | 24.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 89 | 83 | 80 | 67 | 61 | (31.5) | % | 245 | 208 | (15.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 88 | 64 | 97 | 86 | 109 | 23.9 | % | 239 | 292 | 22.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 96 | 104 | 88 | 79 | 105 | 9.4 | % | 307 | 272 | (11.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 615 | 401 | 665 | 684 | 676 | 9.9 | % | 1,637 | 2,025 | 23.7 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 383 | 427 | 357 | 338 | 341 | (11.0) | % | 1,320 | 1,036 | (21.5) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (67) | (76) | (64) | (64) | (71) | (6.0) | % | (227) | (199) | 12.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 316 | 351 | 293 | 274 | 270 | (14.6) | % | 1,093 | 837 | (23.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 316 | $ | 351 | $ | 293 | $ | 274 | $ | 270 | (14.6) | % | $ | 1,093 | $ | 837 | (23.4) | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 1,535 | $ | 1,444 | $ | 1,374 | $ | 1,234 | $ | 1,188 | (22.6) | % | $ | 1,535 | $ | 1,188 | (22.6) | % | ||||||||||||||||||||||||||||||||||||||
| Average Account Value (TTM) | $ | 113,580 | $ | 112,208 | $ | 108,605 | $ | 105,062 | $ | 100,765 | (11.3) | % | $ | 113,580 | $ | 100,765 | (11.3) | % | ||||||||||||||||||||||||||||||||||||||
| Return on assets (TTM) | 1.61 | % | 1.56 | % | 1.54 | % | 1.43 | % | 1.45 | % | 1.61 | % | 1.45 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Product Offering | $ | 702 | $ | 574 | $ | 665 | $ | 1,166 | $ | 1,263 | 80.0 | % | $ | 2,023 | $ | 3,094 | 52.9 | % | ||||||||||||||||||||||||||||||||||||||
| Legacy | (689) | (787) | (613) | (532) | (498) | 27.7 | % | (2,704) | (1,643) | 39.2 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net flows | $ | 13 | $ | (213) | $ | 52 | $ | 634 | $ | 765 | N/M | $ | (681) | $ | 1,451 | 313.0 | % | |||||||||||||||||||||||||||||||||||||||
| First year premiums and deposits | $ | 2,801 | $ | 3,043 | $ | 2,802 | $ | 3,054 | $ | 3,003 | 7.2 | % | $ | 7,940 | $ | 8,859 | 11.6 | % | ||||||||||||||||||||||||||||||||||||||
| In-force Policy Count by Product (in thousands) (2): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current Product Offering | 568 | 571 | 573 | 578 | 583 | 568 | 583 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Legacy | 322 | 318 | 313 | 308 | 303 | 322 | 303 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 890 | 889 | 886 | 886 | 886 | 890 | 886 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022 and for the nine months ended September 30, 2021 and 2022 were $(322) million, $(388) million, $(316) million, $(266) million, $(258) million, $(442) million and $(840) million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) As of September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022, In-force Policy Count by Product presented on a gross basis includes 107 thousand, 106 thousand, 104 thousand, 102 thousand and 101 thousand ceded policies, respectively, related to the Venerable transaction. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| First Year Premiums and Deposits by Product: | ||||||||||||||||||||||||||||||||||||||||||||
| SCS | $ | 1,910 | $ | 2,060 | $ | 1,926 | $ | 2,183 | $ | 2,038 | $ | 5,567 | $ | 6,147 | ||||||||||||||||||||||||||||||
| Retirement Cornerstone | 531 | 597 | 481 | 390 | 421 | 1,354 | 1,292 | |||||||||||||||||||||||||||||||||||||
| Investment Edge | 274 | 289 | 241 | 289 | 271 | 759 | 801 | |||||||||||||||||||||||||||||||||||||
| Other | 86 | 97 | 154 | 192 | 273 | 260 | 619 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums and Deposits | $ | 2,801 | $ | 3,043 | $ | 2,802 | $ | 3,054 | $ | 3,003 | $ | 7,940 | $ | 8,859 | ||||||||||||||||||||||||||||||
| First Year Premiums and Deposits by Guarantee: | ||||||||||||||||||||||||||||||||||||||||||||
| Non-GMxB | $ | 2,186 | $ | 2,375 | $ | 2,231 | $ | 2,517 | $ | 2,357 | $ | 6,273 | $ | 7,105 | ||||||||||||||||||||||||||||||
| ROP death benefit only | 160 | 161 | 109 | 81 | 72 | 542 | 262 | |||||||||||||||||||||||||||||||||||||
| Total non-GMxB & ROP death benefit only | 2,346 | 2,536 | 2,340 | 2,598 | 2,429 | 6,815 | 7,367 | |||||||||||||||||||||||||||||||||||||
| Floating rate GMxB | 455 | 500 | 395 | 332 | 370 | 1,123 | 1,097 | |||||||||||||||||||||||||||||||||||||
| Fixed rate GMxB | — | 1 | — | — | — | 2 | — | |||||||||||||||||||||||||||||||||||||
| Other | — | 6 | 67 | 124 | 204 | — | 395 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums and Deposits | $ | 2,801 | $ | 3,043 | $ | 2,802 | $ | 3,054 | $ | 3,003 | $ | 7,940 | $ | 8,859 | ||||||||||||||||||||||||||||||
| Account Values | ||||||||||||||||||||||||||||||||||||||||||||
| General Account: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 34,090 | $ | 35,590 | $ | 37,698 | $ | 37,874 | $ | 35,574 | $ | 30,783 | $ | 37,698 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits (5) | 2,137 | 1,898 | 1,831 | 2,221 | 2,163 | 5,285 | 6,215 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (847) | (1,015) | (933) | (851) | (758) | (2,318) | (2,542) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | 1,290 | 883 | 898 | 1,370 | 1,405 | 2,967 | 3,673 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | 248 | 1,225 | (722) | (3,670) | (1,470) | 1,937 | (5,862) | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | — | — | (61) | — | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) | (38) | — | — | — | — | (36) | — | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 35,590 | $ | 37,698 | $ | 37,874 | $ | 35,574 | $ | 35,509 | $ | 35,590 | $ | 35,509 | ||||||||||||||||||||||||||||||
| Separate Accounts: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 74,345 | $ | 72,123 | $ | 74,206 | $ | 68,495 | $ | 58,689 | $ | 86,607 | $ | 74,206 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits (5) | 711 | 1,214 | 1,027 | 903 | 920 | 2,853 | 2,850 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (1,988) | (2,310) | (1,873) | (1,639) | (1,560) | (6,501) | (5,072) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | (1,277) | (1,096) | (846) | (736) | (640) | (3,648) | (2,222) | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | (945) | 3,179 | (4,865) | (9,070) | (3,036) | 5,975 | (16,971) | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | — | — | (16,866) | — | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) | — | — | — | — | — | 55 | — | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 72,123 | $ | 74,206 | $ | 68,495 | $ | 58,689 | $ | 55,013 | $ | 72,123 | $ | 55,013 | ||||||||||||||||||||||||||||||
| Total: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 108,435 | $ | 107,713 | $ | 111,904 | $ | 106,369 | $ | 94,263 | $ | 117,390 | $ | 111,904 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits (5) | 2,848 | 3,111 | 2,858 | 3,124 | 3,083 | 8,138 | 9,065 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (2,835) | (3,324) | (2,806) | (2,490) | (2,318) | (8,819) | (7,614) | |||||||||||||||||||||||||||||||||||||
| Net flows (1) | 13 | (213) | 52 | 634 | 765 | (681) | 1,451 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges (1) | (697) | 4,404 | (5,587) | (12,740) | (4,506) | 7,912 | (22,833) | |||||||||||||||||||||||||||||||||||||
| Ceded to Venerable (2) | — | — | — | — | — | (16,927) | — | |||||||||||||||||||||||||||||||||||||
| Other (3) (4) | (38) | — | — | — | — | 19 | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 107,713 | $ | 111,904 | $ | 106,369 | $ | 94,263 | $ | 90,522 | $ | 107,713 | $ | 90,522 | ||||||||||||||||||||||||||||||
| Net Amount at Risk (NAR) | ||||||||||||||||||||||||||||||||||||||||||||
| Total GMIB NAR | $ | 4,119 | $ | 3,910 | $ | 3,727 | $ | 4,232 | $ | 3,553 | $ | 4,119 | $ | 3,553 | ||||||||||||||||||||||||||||||
| Total GMDB NAR | 9,569 | 8,987 | 10,856 | 15,214 | 17,011 | 9,569 | 17,011 | |||||||||||||||||||||||||||||||||||||
| Reserves (Net of Reinsurance) | ||||||||||||||||||||||||||||||||||||||||||||
| GMIB Reserves | $ | 4,913 | $ | 4,613 | $ | 4,149 | $ | 3,977 | $ | 3,865 | $ | 4,913 | $ | 3,865 | ||||||||||||||||||||||||||||||
| GMDB Reserves | 2,765 | 2,737 | 2,792 | 2,824 | 2,965 | 2,765 | 2,965 | |||||||||||||||||||||||||||||||||||||
| Total GMDB/IB Variable Annuity Reserves (Net of Reinsurance) | $ | 7,678 | $ | 7,350 | $ | 6,941 | $ | 6,801 | $ | 6,830 | $ | 7,678 | $ | 6,830 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022, September 30, 2022 and for the nine months ended September 30, 2021 and 2022 were $(322) million, $(388) million, $(316) million, $(266) million, $(258) million, $(442) million and $(840) million, respectively. Investment performance, interest credited and policy charges of $(273) million, $714 million, $(1.2) billion, $(2.2) billion, $(721) million, $(125) million and $(4.1) billion, for the three months ended September 30, 2021, December 31, 2021, March 31, 2022, June 30, 2022 and September 30, 2022 and for the nine months ended September 30, 2021 and 2022, respectively, are not included as it excludes activity related to ceded AV to Venerable. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 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 months ended September 30, 2021, amounts reflect ($38) million transfer 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, amounts reflect $57 million of AV transfer of a closed block of GMxB business from GR to IR. | ||||||||||||||||||||||||||||||||||||||||||||
| (5) Includes deposits from certain other products not reported as first year premiums and deposits or renewal premiums and deposits elsewhere in this document. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 96 | $ | 98 | $ | 94 | $ | 83 | $ | 80 | (16.7) | % | $ | 273 | $ | 257 | (5.9) | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 189 | 188 | 180 | 163 | 160 | (15.3) | % | 564 | 503 | (10.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (11) | (3) | (5) | (7) | (11) | — | % | (16) | (23) | (43.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 69 | 71 | 65 | 62 | 60 | (13.0) | % | 197 | 187 | (5.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 343 | 354 | 334 | 301 | 289 | (15.7) | % | 1,018 | 924 | (9.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholder benefits | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 77 | 76 | 78 | 72 | 79 | 2.6 | % | 227 | 229 | 0.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 12 | 15 | 15 | 16 | 12 | — | % | 41 | 43 | 4.9 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | (24) | 11 | 16 | 7 | (20) | 16.7 | % | (11) | 3 | 127.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 45 | 108 | 42 | 45 | 47 | 4.4 | % | 140 | 134 | (4.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 110 | 210 | 151 | 140 | 119 | 8.2 | % | 397 | 410 | 3.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 233 | 144 | 183 | 161 | 170 | (27.0) | % | 621 | 514 | (17.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (41) | (27) | (33) | (30) | (36) | 12.2 | % | (107) | (99) | 7.5 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 192 | 117 | 150 | 131 | 134 | (30.2) | % | 514 | 415 | (19.3) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 192 | $ | 117 | $ | 150 | $ | 131 | $ | 134 | (30.2) | % | $ | 514 | $ | 415 | (19.3) | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 680 | $ | 631 | $ | 630 | $ | 590 | $ | 532 | (21.8) | $ | 680 | $ | 532 | (21.8) | % | |||||||||||||||||||||||||||||||||||||||
| Average Account Value (TTM) (1) | $ | 44,812 | $ | 46,075 | $ | 46,515 | $ | 45,232 | $ | 43,680 | (2.5) | % | $ | 44,812 | $ | 43,680 | (2.5) | % | ||||||||||||||||||||||||||||||||||||||
| Return on assets (TTM) (1) | 1.81 | % | 1.66 | % | 1.65 | % | 1.59 | % | 1.51 | % | 1.81 | % | 1.51 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows | $ | (135) | $ | (109) | $ | 523 | $ | 144 | $ | (57) | 57.8 | % | $ | (70) | $ | 610 | 973.1 | % | ||||||||||||||||||||||||||||||||||||||
| Gross premiums and deposits | $ | 849 | $ | 1,078 | $ | 1,502 | $ | 1,133 | $ | 861 | 1.4 | % | $ | 2,761 | $ | 3,496 | 26.6 | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) Amounts revised to include Mutual Fund AUA balances. Impact to average account value TTM for March 31 2021, June 30 2021, September 30 2021 and December 31 2021 are: $(260) million, $(307) million, $(343) million and $(383) million, respectively, and an impact on return on assets of (0.01)% per aforementioned periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| Gross premiums and deposits: (1) | ||||||||||||||||||||||||||||||||||||||||||||
| First-year premiums and deposits | $ | 364 | $ | 452 | $ | 879 | $ | 476 | $ | 371 | $ | 1,049 | $ | 1,726 | ||||||||||||||||||||||||||||||
| Renewal premiums and deposits | 485 | 626 | 623 | 657 | 490 | 1,712 | 1,770 | |||||||||||||||||||||||||||||||||||||
| Group Retirement premiums and deposits | $ | 849 | $ | 1,078 | $ | 1,502 | $ | 1,133 | $ | 861 | $ | 2,761 | $ | 3,496 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits by market: (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Tax-exempt | $ | 228 | $ | 346 | $ | 219 | $ | 231 | $ | 293 | $ | 671 | $ | 743 | ||||||||||||||||||||||||||||||
| Corporate | 128 | 97 | 89 | 62 | 69 | 354 | 220 | |||||||||||||||||||||||||||||||||||||
| Institutional | 2 | 2 | 565 | 179 | 3 | 7 | 747 | |||||||||||||||||||||||||||||||||||||
| Other | 6 | 7 | 6 | 4 | 6 | 17 | 16 | |||||||||||||||||||||||||||||||||||||
| Total First Year Premiums and Deposits | 364 | 452 | 879 | 476 | 371 | 1,049 | 1,726 | |||||||||||||||||||||||||||||||||||||
| Tax-exempt | 355 | 491 | 468 | 518 | 364 | 1,298 | 1,350 | |||||||||||||||||||||||||||||||||||||
| Corporate | 91 | 92 | 103 | 94 | 93 | 281 | 290 | |||||||||||||||||||||||||||||||||||||
| Institutional | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Other | 39 | 43 | 52 | 45 | 33 | 133 | 130 | |||||||||||||||||||||||||||||||||||||
| Total renewal premiums and deposits | 485 | 626 | 623 | 657 | 490 | 1,712 | 1,770 | |||||||||||||||||||||||||||||||||||||
| Group Retirement premiums and deposits by market | $ | 849 | $ | 1,078 | $ | 1,502 | $ | 1,133 | $ | 861 | $ | 2,761 | $ | 3,496 | ||||||||||||||||||||||||||||||
| Account Values and Assets under Administration | ||||||||||||||||||||||||||||||||||||||||||||
| General Account: | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 12,983 | $ | 13,042 | $ | 13,046 | $ | 13,171 | $ | 13,240 | $ | 12,826 | $ | 13,046 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits | 253 | 289 | 329 | 299 | 242 | 766 | 870 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (276) | (373) | (270) | (256) | (304) | (805) | (830) | |||||||||||||||||||||||||||||||||||||
| Net flows | (23) | (84) | 59 | 43 | (62) | (39) | 40 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | 82 | 88 | 66 | 26 | 56 | 257 | 148 | |||||||||||||||||||||||||||||||||||||
| Other (2) | — | — | — | — | — | (2) | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 13,042 | $ | 13,046 | $ | 13,171 | $ | 13,240 | $ | 13,234 | $ | 13,042 | $ | 13,234 | ||||||||||||||||||||||||||||||
| Separate Accounts and Mutual Funds (3) (4) (5) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 33,316 | $ | 32,875 | $ | 34,763 | $ | 32,864 | $ | 27,927 | $ | 29,930 | $ | 34,763 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits | 596 | 789 | 1,173 | 834 | 619 | 1,995 | 2,626 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (708) | (814) | (709) | (733) | (614) | (2,026) | (2,056) | |||||||||||||||||||||||||||||||||||||
| Net flows | (112) | (25) | 464 | 101 | 5 | (31) | 570 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | (329) | 1,913 | (2,363) | (5,038) | (1,456) | 3,031 | (8,857) | |||||||||||||||||||||||||||||||||||||
| Other (2) | — | — | — | — | — | (55) | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 32,875 | $ | 34,763 | $ | 32,864 | $ | 27,927 | $ | 26,476 | $ | 32,875 | $ | 26,476 | ||||||||||||||||||||||||||||||
| Total: (3) (4) | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 46,299 | $ | 45,917 | $ | 47,809 | $ | 46,035 | $ | 41,167 | $ | 42,756 | $ | 47,809 | ||||||||||||||||||||||||||||||
| Gross premiums and deposits | 849 | 1,078 | 1,502 | 1,133 | 861 | 2,761 | 3,496 | |||||||||||||||||||||||||||||||||||||
| Surrenders, withdrawals and benefits | (984) | (1,187) | (979) | (989) | (918) | (2,831) | (2,886) | |||||||||||||||||||||||||||||||||||||
| Net flows | (135) | (109) | 523 | 144 | (57) | (70) | 610 | |||||||||||||||||||||||||||||||||||||
| Investment performance, interest credited and policy charges | (247) | 2,001 | (2,297) | (5,012) | (1,400) | 3,288 | (8,709) | |||||||||||||||||||||||||||||||||||||
| Other (2) | — | — | — | — | — | (57) | — | |||||||||||||||||||||||||||||||||||||
| Balance as of end of period | $ | 45,917 | $ | 47,809 | $ | 46,035 | $ | 41,167 | $ | 39,710 | $ | 45,917 | $ | 39,710 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
(1) Includes both AUM and AUA. Prior period amounts related to the premiums and deposits were revised to include Mutual Fund AUA. Gross premium and deposits revisions for the discrete periods of June 30, 2021, September 30, 2021 and December 31, 2021 are $52 million, $17 million, and $120 million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
(2) For the nine months ended September 30, 2021, amounts reflect AV transfer of GMxB closed block business from GR to IR. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 17 | |||||||
(3) Prior period amounts related to the net flows were revised to include Mutual Fund AUA. Net Flow revisions for the discrete periods of June 30, 2021, September 30, 2021 and December 31, 2021 are $33 million, $1 million and $80 million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
(4) Prior period amounts related to Investment performance, interest credited and policy charges were revised to include Mutual Fund AUA. Investment performance, interest credited and policy charges revisions for the discrete periods of March 31, 2021, June 30, 2021, September 30, 2021 and December 31, 2021 are $11 million, $19 million, ($3 million) and $3 million, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
(5) June 30, 2021 beginning balance revision of $297 million to reflect inclusion of December 31, 2020 year-end Mutual Fund AUA ending balance. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 18 | |||||||
| 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | $ | (2) | $ | 3 | $ | (23) | $ | (26) | $ | (9) | (350.0) | % | $ | 10 | $ | (58) | (680.0) | % | ||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | 2 | (6) | 20 | 22 | 15 | 650.0 | % | (7) | 57 | 914.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 1,093 | 1,264 | 1,138 | 1,007 | 990 | (9.4) | % | 3,166 | 3,135 | (1.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment Revenues | 1,093 | 1,261 | 1,135 | 1,003 | 996 | (8.8) | % | 3,169 | 3,134 | (1.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 187 | 191 | 176 | 159 | 152 | (18.7) | % | 517 | 487 | (5.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation, benefits and other operating costs and expenses | 622 | 676 | 675 | 619 | 636 | 2.3 | % | 1,831 | 1,930 | 5.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest expense and financing fees | — | 4 | — | 4 | 5 | 100.0 | % | 1 | 9 | 800.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Total benefits and other deductions | 809 | 871 | 851 | 782 | 793 | (2.0) | % | 2,349 | 2,426 | 3.3 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 284 | 390 | 284 | 221 | 203 | (28.3) | % | 820 | 708 | (13.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (49) | (66) | (46) | (40) | (35) | 28.6 | % | (142) | (121) | 14.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 235 | 324 | 238 | 181 | 168 | (28.3) | % | 678 | 587 | (13.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | (101) | (141) | (102) | (80) | (75) | 26.1 | % | (297) | (257) | 13.6 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 134 | $ | 183 | $ | 136 | $ | 101 | $ | 94 | (30.0) | % | $ | 381 | $ | 330 | (13.3) | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjusted operating margin (1) | 31.8 | % | 38.5 | % | 31.5 | % | 27.7 | % | 25.1 | % | 31.7 | % | 28.2 | % | ||||||||||||||||||||||||||||||||||||||||||
| Net flows (in billions USD) (2) | $ | 7.2 | $ | 7.4 | $ | 11.4 | $ | (2.7) | $ | (10.5) | $ | 18.7 | $ | (1.8) | ||||||||||||||||||||||||||||||||||||||||||
| Total AUM (in billions USD) | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | $ | 612.7 | $ | 742.2 | $ | 612.7 | ||||||||||||||||||||||||||||||||||||||||||
| Ownership Structure of AB | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Holdings and its subsidiaries | 63.2 | % | 63.0 | % | 63.0 | % | 63.5 | % | 62.8 | % | 63.2 | % | 62.8 | % | ||||||||||||||||||||||||||||||||||||||||||
| AB Holding | 36.1 | % | 36.2 | % | 36.3 | % | 35.7 | % | 36.5 | % | 36.1 | % | 36.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Unaffiliated holders | 0.7 | % | 0.8 | % | 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 | 64.7 | % | 64.5 | % | 64.5 | % | 65.0 | % | 64.3 | % | 64.7 | % | 64.3 | % | ||||||||||||||||||||||||||||||||||||||||||
| EQH average economic interest | 64.6 | % | 64.7 | % | 64.5 | % | 64.8 | % | 64.3 | % | 64.4 | % | 64.5 | % | ||||||||||||||||||||||||||||||||||||||||||
| Units of limited partnership outstanding (in millions) | 270.9 | 271.5 | 271.8 | 269.4 | 272.6 | 270.9 | 272.6 | |||||||||||||||||||||||||||||||||||||||||||||||||
| 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Discrete quarterly outflows related to AXA's redemptions for periods presented were $0.6 billion and $3.9 billion for the second and third quarter of 2022, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 19 | |||||||
| Investment Management and Research - Select Operating Metrics | ||||||||||||||||||||||||||||||||
| For the Three Months Ended or As of | ||||||||||||||||||||||||||||||||
| (in billions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | |||||||||||||||||||||||||||
| AUM Roll-forward | ||||||||||||||||||||||||||||||||
| Balance as of beginning of period | $ | 738.4 | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | ||||||||||||||||||||||
| Sales/new accounts | 32.3 | 39.4 | 40.9 | 23.9 | 19.8 | |||||||||||||||||||||||||||
| Redemptions/terminations | (21.5) | (25.7) | (24.6) | (22.6) | (24.9) | |||||||||||||||||||||||||||
| Cash flow/unreinvested dividends | (3.6) | (6.3) | (4.9) | (4.0) | (5.4) | |||||||||||||||||||||||||||
| Net long-term (outflows) inflows (5) | 7.2 | 7.4 | 11.4 | (2.7) | (10.5) | |||||||||||||||||||||||||||
| Adjustment (3) | — | — | — | (0.4) | — | |||||||||||||||||||||||||||
| Acquisition (4) | — | — | — | — | 12.2 | |||||||||||||||||||||||||||
| Market appreciation (depreciation) | (3.4) | 29.0 | (54.6) | (85.5) | (35.8) | |||||||||||||||||||||||||||
| Net change | 3.8 | 36.4 | (43.2) | (88.6) | (34.1) | |||||||||||||||||||||||||||
| Balance as of end of period | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | $ | 612.7 | ||||||||||||||||||||||
| Ending Assets by distribution channel | ||||||||||||||||||||||||||||||||
| Institutions | $ | 327.5 | $ | 337.1 | $ | 325.9 | $ | 290.5 | $ | 279.4 | ||||||||||||||||||||||
| Retail | 298.8 | 319.9 | 292.6 | 251.0 | 232.3 | |||||||||||||||||||||||||||
| Private Wealth | 115.9 | 121.6 | 116.9 | 105.3 | 101.0 | |||||||||||||||||||||||||||
| Total | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | $ | 612.7 | ||||||||||||||||||||||
| Ending Assets by investment service | ||||||||||||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||||||||
| Actively Managed | $ | 260.3 | $ | 287.6 | $ | 265.2 | $ | 223.2 | $ | 202.9 | ||||||||||||||||||||||
| Passively Managed (1) | 69.1 | 71.6 | 66.2 | 55.7 | 52.1 | |||||||||||||||||||||||||||
| Total Equity | $ | 329.4 | $ | 359.2 | $ | 331.4 | $ | 278.9 | $ | 255.0 | ||||||||||||||||||||||
| Fixed Income | ||||||||||||||||||||||||||||||||
| Actively Managed | $ | 306.2 | $ | 303.4 | $ | 280.8 | $ | 254.7 | $ | 239.1 | ||||||||||||||||||||||
| Passively Managed (1) | 9.5 | 13.2 | 12.7 | 12.3 | 9.5 | |||||||||||||||||||||||||||
| Total Fixed Income | 315.7 | 316.6 | 293.5 | 267.0 | 248.6 | |||||||||||||||||||||||||||
| Total Alternatives/Multi-Asset Solutions (2) | 97.1 | 102.8 | 110.5 | 100.9 | 109.1 | |||||||||||||||||||||||||||
| Total | $ | 742.2 | $ | 778.6 | $ | 735.4 | $ | 646.8 | $ | 612.7 | ||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||
| (1) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||
| (2) Includes certain multi-asset solutions and services not included in equity or fixed income services | ||||||||||||||||||||||||||||||||
| (3) Approximately $0.4 billion of Institutional AUM was removed from our total assets under management during the second quarter of 2022 due to a change in the fee structure. | ||||||||||||||||||||||||||||||||
(4) The CarVal acquisition added approximately $12.2 billion of Institutional AUM in the third quarter of 2022. | ||||||||||||||||||||||||||||||||
(5) Discrete quarterly outflows related to AXA's redemptions for periods presented were as follows: $0.6 billion for the second quarter of 2022 and $3.9 billion for the third quarter of 2022. | ||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 20 | |||||||
| Investment Management and Research - Net Flows | ||||||||||||||||||||||||||||||||||||||||||||
| For the Three Months Ended | Nine Months Ended or As of | |||||||||||||||||||||||||||||||||||||||||||
| (in billions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| Net Flows by Distribution Channel | ||||||||||||||||||||||||||||||||||||||||||||
| Institutions | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 1.8 | $ | (2.0) | $ | 0.4 | $ | 0.6 | $ | (0.6) | $ | (1.7) | $ | 0.4 | ||||||||||||||||||||||||||||||
| Global and Non-US | (1.6) | 2.4 | 9.8 | 0.1 | (5.7) | 3.7 | 4.2 | |||||||||||||||||||||||||||||||||||||
| Total Institutions | $ | 0.2 | $ | 0.4 | $ | 10.2 | $ | 0.7 | $ | (6.3) | $ | 2.0 | $ | 4.6 | ||||||||||||||||||||||||||||||
| Retail | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 7.0 | $ | 9.4 | $ | 4.2 | $ | 2.3 | $ | (0.3) | $ | 15.9 | $ | 6.2 | ||||||||||||||||||||||||||||||
| Global and Non-US (4) | (0.4) | (3.1) | (5.2) | (4.6) | (4.7) | (1.3) | (14.4) | |||||||||||||||||||||||||||||||||||||
| Total Retail (4) | $ | 6.6 | $ | 6.3 | $ | (1.0) | $ | (2.3) | $ | (5.0) | $ | 14.4 | $ | (8.2) | ||||||||||||||||||||||||||||||
| Private Wealth | ||||||||||||||||||||||||||||||||||||||||||||
| US (4) | $ | (0.3) | $ | (0.4) | $ | 1.4 | $ | (1.1) | $ | 0.5 | $ | (0.1) | $ | 0.7 | ||||||||||||||||||||||||||||||
| Global and Non-US | 0.7 | 1.1 | 0.8 | — | 0.3 | 2.4 | 1.1 | |||||||||||||||||||||||||||||||||||||
| Total Private Wealth (4) | $ | 0.4 | $ | 0.7 | $ | 2.2 | $ | (1.1) | $ | 0.8 | $ | 2.3 | $ | 1.8 | ||||||||||||||||||||||||||||||
| Total Net Flows by Distribution Channel | $ | 7.2 | $ | 7.4 | $ | 11.4 | $ | (2.7) | $ | (10.5) | $ | 18.7 | $ | (1.8) | ||||||||||||||||||||||||||||||
| Net Flows by Investment Service | ||||||||||||||||||||||||||||||||||||||||||||
| Equity Active | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 4.7 | $ | 4.8 | $ | 4.7 | $ | 0.8 | $ | (0.3) | $ | 11.0 | $ | 5.2 | ||||||||||||||||||||||||||||||
| Global and Non-US | 0.1 | 3.1 | (0.1) | (0.5) | (4.7) | 3.1 | (5.3) | |||||||||||||||||||||||||||||||||||||
| Total Equity Active (4) | $ | 4.8 | $ | 7.9 | $ | 4.6 | $ | 0.3 | $ | (5.0) | $ | 14.1 | $ | (0.1) | ||||||||||||||||||||||||||||||
| Equity Passive (1) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | (0.5) | $ | (3.2) | $ | (0.7) | $ | 0.5 | $ | (0.2) | $ | (3.2) | $ | (0.4) | ||||||||||||||||||||||||||||||
| Global and Non-US (4) | 0.2 | (0.3) | (1.1) | (0.7) | (0.7) | (0.8) | (2.6) | |||||||||||||||||||||||||||||||||||||
| Total Equity Passive (1) (4) | $ | (0.3) | $ | (3.5) | $ | (1.8) | $ | (0.2) | $ | (0.9) | $ | (4.0) | $ | (3.0) | ||||||||||||||||||||||||||||||
| Fixed Income - Taxable (3) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 2.2 | $ | (0.9) | $ | 0.3 | $ | (1.3) | $ | (0.1) | $ | (0.1) | $ | (1.1) | ||||||||||||||||||||||||||||||
| Global and Non-US (4) | (2.1) | (3.1) | (5.0) | (4.3) | (3.5) | (5.8) | (12.9) | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Taxable (4) | $ | 0.1 | $ | (4.0) | $ | (4.7) | $ | (5.6) | $ | (3.6) | $ | (5.9) | $ | (14.0) | ||||||||||||||||||||||||||||||
| Fixed Income - Tax-Exempt | ||||||||||||||||||||||||||||||||||||||||||||
| US (4) | $ | 1.5 | $ | 1.4 | $ | 1.0 | $ | 0.6 | $ | — | $ | 4.6 | $ | 1.7 | ||||||||||||||||||||||||||||||
| Global and Non-US | — | — | — | 0.1 | — | — | 0.1 | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Tax-Exempt (4) | $ | 1.5 | $ | 1.4 | $ | 1.0 | $ | 0.7 | $ | — | $ | 4.6 | $ | 1.8 | ||||||||||||||||||||||||||||||
| Fixed Income - Passive (1) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 0.3 | $ | 3.8 | $ | (0.2) | $ | 0.5 | $ | (0.2) | $ | 0.6 | $ | 0.1 | ||||||||||||||||||||||||||||||
| Global and Non-US | (0.1) | (0.2) | 0.6 | 0.2 | (1.9) | 0.7 | (1.1) | |||||||||||||||||||||||||||||||||||||
| Total Fixed Income - Passive (1) | $ | 0.2 | $ | 3.6 | $ | 0.4 | $ | 0.7 | $ | (2.1) | $ | 1.3 | $ | (1.0) | ||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) | ||||||||||||||||||||||||||||||||||||||||||||
| US | $ | 0.3 | $ | 1.1 | $ | 0.9 | $ | 0.5 | $ | 0.4 | $ | 1.0 | $ | 1.8 | ||||||||||||||||||||||||||||||
| Global and Non-US (4) | 0.6 | 0.9 | 11.0 | 0.9 | 0.7 | 7.6 | 12.7 | |||||||||||||||||||||||||||||||||||||
| Total Alternatives/Multi-Asset Solutions (2) (4) | $ | 0.9 | $ | 2.0 | $ | 11.9 | $ | 1.4 | $ | 1.1 | $ | 8.6 | $ | 14.5 | ||||||||||||||||||||||||||||||
| Total Net Flows by Investment Service | $ | 7.2 | $ | 7.4 | $ | 11.4 | $ | (2.7) | $ | (10.5) | $ | 18.7 | $ | (1.8) | ||||||||||||||||||||||||||||||
| Active vs. Passive Net Flows | ||||||||||||||||||||||||||||||||||||||||||||
| Actively Managed | ||||||||||||||||||||||||||||||||||||||||||||
| Equity (4) | $ | 4.8 | $ | 7.9 | $ | 4.6 | $ | 0.3 | $ | (5.0) | $ | 14.1 | $ | (0.1) | ||||||||||||||||||||||||||||||
| Fixed Income (3) (4) | 1.6 | (2.6) | (3.7) | (4.8) | (3.6) | (1.3) | (12.2) | |||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) (4) | 0.3 | 1.1 | 11.3 | 1.1 | 0.8 | 7.1 | 13.3 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 6.7 | $ | 6.4 | $ | 12.2 | $ | (3.4) | $ | (7.8) | $ | 19.9 | $ | 1.0 | ||||||||||||||||||||||||||||||
| Passively Managed (1) | ||||||||||||||||||||||||||||||||||||||||||||
| Equity | $ | (0.3) | $ | (3.5) | $ | (1.8) | $ | (0.3) | $ | (0.9) | $ | (4.0) | $ | (3.0) | ||||||||||||||||||||||||||||||
| Fixed Income | 0.2 | 3.6 | 0.4 | 0.7 | (2.1) | 1.3 | (1.0) | |||||||||||||||||||||||||||||||||||||
| Alternatives/Multi-Asset Solutions (2) | 0.6 | 0.9 | 0.6 | 0.3 | 0.3 | 1.5 | 1.2 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 0.5 | $ | 1.0 | $ | (0.8) | $ | 0.7 | $ | (2.7) | $ | (1.2) | $ | (2.8) | ||||||||||||||||||||||||||||||
| Total Active vs Passive Net Flows | $ | 7.2 | $ | 7.4 | $ | 11.4 | $ | (2.7) | $ | (10.5) | $ | 18.7 | $ | (1.8) | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes index and enhanced index services. | ||||||||||||||||||||||||||||||||||||||||||||
(2) Includes certain multi-asset solutions and services not included in equity or fixed income services | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Discrete quarterly outflows related to AXA's redemptions for periods presented were as follows: $0.6 billion for the second quarter of 2022 and $3.9 billion for the third quarter of 2022. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) AB line item does not cross foot for the nine months ended 2022 due to rounding. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 21 | |||||||
| 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | Change | 9/30/2021 | 9/30/2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policy charges, fee income and premiums | $ | 482 | $ | 523 | $ | 514 | $ | 525 | $ | 505 | 4.8 | % | $ | 1,493 | $ | 1,544 | 3.4 | % | ||||||||||||||||||||||||||||||||||||||
| Net investment income (loss) | 294 | 275 | 272 | 252 | 236 | (19.7) | % | 827 | 760 | (8.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Net derivative gains (losses) | (7) | (2) | — | (5) | (13) | (85.7) | % | (18) | (18) | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Investment management, service fees and other income | 69 | 66 | 65 | 64 | 63 | (8.7) | % | 194 | 192 | (1.0) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment revenues | 838 | 862 | 851 | 836 | 791 | (5.6) | % | 2,496 | 2,478 | (0.7) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Benefits and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Policyholders’ benefits | 392 | 480 | 521 | 429 | 414 | 5.6 | % | 1,370 | 1,364 | (0.4) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Interest credited to policyholders’ account balances | 126 | 133 | 128 | 122 | 130 | 3.2 | % | 383 | 380 | (0.8) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Commissions and distribution-related payments | 44 | 50 | 41 | 45 | 46 | 4.5 | % | 120 | 132 | 10.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Amortization of deferred policy acquisition costs | 4 | 30 | 35 | 29 | 14 | 250.0 | % | 63 | 78 | 23.8 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | 78 | 104 | 84 | 86 | 96 | 23.1 | % | 241 | 266 | 10.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Segment benefits and other deductions | 644 | 797 | 809 | 711 | 700 | 8.7 | % | 2,177 | 2,220 | 2.0 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before income taxes | 194 | 65 | 42 | 125 | 91 | (53.1) | % | 319 | 258 | (19.1) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Income taxes | (34) | (12) | (7) | (24) | (19) | 44.1 | % | (55) | (50) | 9.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss), before noncontrolling interest | 160 | 53 | 35 | 101 | 72 | (55.0) | % | 264 | 208 | (21.2) | % | |||||||||||||||||||||||||||||||||||||||||||||
| Less: Operating (earnings) loss attributable to the noncontrolling interest | — | — | — | — | — | — | % | — | — | — | % | |||||||||||||||||||||||||||||||||||||||||||||
| Operating earnings (loss) | $ | 160 | $ | 53 | $ | 35 | $ | 101 | $ | 72 | (55.0) | % | $ | 264 | $ | 208 | (21.2) | % | ||||||||||||||||||||||||||||||||||||||
| Summary Metrics | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating earnings (loss) - TTM: [A] | $ | 322 | $ | 317 | $ | 311 | $ | 349 | $ | 261 | (18.9) | % | $ | 322 | $ | 261 | (18.9) | % | ||||||||||||||||||||||||||||||||||||||
| Benefit ratio | 61.8 | % | 71.1 | % | 76.3 | % | 65.9 | % | 68.8 | % | 70.2 | % | 70.4 | % | ||||||||||||||||||||||||||||||||||||||||||
| Gross written premiums (1) | $ | 754 | $ | 801 | $ | 778 | $ | 760 | $ | 769 | 2.0 | % | $ | 2,264 | $ | 2,307 | 1.9 | % | ||||||||||||||||||||||||||||||||||||||
| Annualized premiums | $ | 67 | $ | 84 | $ | 77 | $ | 67 | $ | 74 | 9.8 | % | $ | 203 | $ | 218 | 7.3 | % | ||||||||||||||||||||||||||||||||||||||
| Total in-force face amount (in billions USD) (2) | $ | 422.4 | $ | 423.2 | $ | 421.8 | $ | 420.6 | $ | 418.3 | (1.0) | % | $ | 422.4 | $ | 418.3 | (1.0) | % | ||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (1) 1Q'22 variable universal life renewals previously reported as $514M during first quarter 2022. Amount updated to $249M during second quarter 2022 to properly reflect variable universal life product renewals. This resulted in a change for gross written premiums from $1,033 to $778. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (2) Total in-force face amount presented on a gross basis including ceded policies. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 22 | |||||||
| 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| Sales Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| First Year Premiums and Deposits by Product Line: | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 7 | 7 | 6 | 4 | 4 | 38 | 14 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life | 66 | 102 | 85 | 76 | 71 | 185 | 232 | |||||||||||||||||||||||||||||||||||||
| Term | 3 | 4 | 4 | 3 | 3 | 12 | 10 | |||||||||||||||||||||||||||||||||||||
| Employee Benefits | 18 | 20 | 21 | 16 | 23 | 57 | 60 | |||||||||||||||||||||||||||||||||||||
| Other (1) | 1 | — | — | — | — | 1 | — | |||||||||||||||||||||||||||||||||||||
| Total | $ | 95 | $ | 133 | $ | 116 | $ | 99 | $ | 101 | $ | 293 | $ | 316 | ||||||||||||||||||||||||||||||
| Renewals by Product Line: | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life | $ | 221 | $ | 198 | $ | 193 | $ | 185 | $ | 207 | $ | 626 | $ | 585 | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 79 | 80 | 80 | 76 | 74 | 230 | 230 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life (2) | 224 | 250 | 249 | 239 | 244 | 718 | 732 | |||||||||||||||||||||||||||||||||||||
| Term | 90 | 98 | 93 | 94 | 90 | 281 | 277 | |||||||||||||||||||||||||||||||||||||
| Employee Benefits | 41 | 36 | 43 | 63 | 49 | 103 | 155 | |||||||||||||||||||||||||||||||||||||
| Other (1) | 4 | 6 | 4 | 4 | 4 | 13 | 12 | |||||||||||||||||||||||||||||||||||||
| Total | 659 | 668 | 662 | 661 | 668 | 1,971 | 1,991 | |||||||||||||||||||||||||||||||||||||
| Total Gross Premiums | $ | 754 | $ | 801 | $ | 778 | $ | 760 | $ | 769 | $ | 2,264 | $ | 2,307 | ||||||||||||||||||||||||||||||
| In-force Metrics | ||||||||||||||||||||||||||||||||||||||||||||
| In-force Face Amount by Product (3) (in billions): | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life (4) | $ | 46.7 | $ | 45.9 | $ | 44.9 | $ | 44.4 | $ | 43.7 | $ | 46.7 | $ | 43.7 | ||||||||||||||||||||||||||||||
| Indexed Universal Life | 28.0 | 27.9 | 27.9 | 27.7 | 27.6 | 28.0 | 27.6 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life (5) | 130.9 | 132.8 | 132.9 | 132.6 | 132.8 | 130.9 | 132.8 | |||||||||||||||||||||||||||||||||||||
| Term | 215.6 | 215.4 | 214.9 | 214.7 | 213.0 | 215.6 | 213.0 | |||||||||||||||||||||||||||||||||||||
| Whole Life | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 422.4 | $ | 423.2 | $ | 421.8 | $ | 420.6 | $ | 418.3 | $ | 422.4 | $ | 418.3 | ||||||||||||||||||||||||||||||
| In-force Policy Count by Product (3) (in thousands): | ||||||||||||||||||||||||||||||||||||||||||||
| Universal Life (4) | 138 | 136 | 134 | 132 | 130 | 138 | 130 | |||||||||||||||||||||||||||||||||||||
| Indexed Universal Life | 64 | 65 | 65 | 65 | 64 | 64 | 64 | |||||||||||||||||||||||||||||||||||||
| Variable Universal Life (5) | 291 | 293 | 293 | 293 | 293 | 291 | 293 | |||||||||||||||||||||||||||||||||||||
| Term | 267 | 266 | 264 | 262 | 259 | 267 | 259 | |||||||||||||||||||||||||||||||||||||
| Whole Life | 17 | 16 | 16 | 16 | 16 | 17 | 16 | |||||||||||||||||||||||||||||||||||||
| Total | 777 | 776 | 772 | 768 | 762 | 777 | 762 | |||||||||||||||||||||||||||||||||||||
| Protection Solutions Reserves | ||||||||||||||||||||||||||||||||||||||||||||
| General Account | $ | 18,584 | $ | 18,625 | $ | 18,432 | $ | 18,241 | $ | 18,243 | $ | 18,584 | $ | 18,243 | ||||||||||||||||||||||||||||||
| Separate Accounts | 16,080 | 17,012 | 15,883 | 13,524 | 12,783 | 16,080 | 12,783 | |||||||||||||||||||||||||||||||||||||
| Total | $ | 34,664 | $ | 35,637 | $ | 34,315 | $ | 31,765 | $ | 31,026 | $ | 34,664 | $ | 31,026 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) For the individual life insurance premiums, Other includes Whole Life insurance and other products available-for-sale but not actively marketed. | ||||||||||||||||||||||||||||||||||||||||||||
| (2) 1Q'22 variable universal life renewals previously reported as $514M during first quarter 2022. Amount updated to $249M during second quarter 2022 to properly reflect variable universal life product renewals. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Includes individual life insurance and does not include Employee Benefits as it is a start-up business and therefore has immaterial in-force policies. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) Universal Life includes Guaranteed Universal Life. | ||||||||||||||||||||||||||||||||||||||||||||
| (5) Variable Universal Life includes variable life insurance and corporate-owned life insurance. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 23 | |||||||
Investments
| 3Q 2022 Financial Supplement | 24 | |||||||
| Consolidated Investment Portfolio Composition | ||||||||||||||||||||||||||
| Balances as of | ||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | December 31, 2021 | September 30, 2022 | ||||||||||||||||||||||||
| Amount (1) | % of Total | Amount (1) | % of Total | |||||||||||||||||||||||
| Composition of investment portfolio | ||||||||||||||||||||||||||
| Fixed maturities, available-for-sale, at fair value | $ | 78,216 | 70.9 | % | $ | 64,600 | 66.8 | % | ||||||||||||||||||
| Fixed maturities, at fair value using the fair value option | 1,641 | 1.5 | % | 1,548 | 1.6 | % | ||||||||||||||||||||
| Mortgage loans on real estate | 14,033 | 12.7 | % | 15,688 | 16.2 | % | ||||||||||||||||||||
| Policy loans | 4,024 | 3.6 | % | 4,018 | 4.2 | % | ||||||||||||||||||||
| Other equity investments | 2,975 | 2.7 | % | 3,183 | 3.3 | % | ||||||||||||||||||||
| Other invested assets | 3,591 | 3.3 | % | 2,849 | 2.9 | % | ||||||||||||||||||||
| Subtotal investment assets | 104,480 | 94.7 | % | 91,886 | 95.1 | % | ||||||||||||||||||||
| Trading securities | 631 | 0.6 | % | 631 | 0.7 | % | ||||||||||||||||||||
| Total investments | 105,111 | 95.3 | % | 92,517 | 95.7 | % | ||||||||||||||||||||
| Cash and cash equivalents | 5,188 | 4.7 | % | 4,139 | 4.3 | % | ||||||||||||||||||||
| Total | $ | 110,299 | 100.0 | % | $ | 96,656 | 100.0 | % | ||||||||||||||||||
| General Account Fixed maturities by industry (Based on amortized cost) | ||||||||||||||||||||||||||
| Corporate securities: | ||||||||||||||||||||||||||
| Finance | $ | 12,954 | 17.9 | % | $ | 14,195 | 19.0 | % | ||||||||||||||||||
| Manufacturing | 12,212 | 16.8 | % | 12,421 | 16.7 | % | ||||||||||||||||||||
| Utilities | 6,446 | 8.9 | % | 7,015 | 9.4 | % | ||||||||||||||||||||
| Services | 8,191 | 11.3 | % | 8,320 | 11.2 | % | ||||||||||||||||||||
| Energy | 3,854 | 5.3 | % | 3,901 | 5.2 | % | ||||||||||||||||||||
| Retail and wholesale | 3,390 | 4.7 | % | 3,508 | 4.7 | % | ||||||||||||||||||||
| Transportation | 2,181 | 3.0 | % | 2,409 | 3.2 | % | ||||||||||||||||||||
| Other | 60 | 0.1 | % | 119 | 0.2 | % | ||||||||||||||||||||
| Total corporate securities | 49,288 | 67.9 | % | 51,888 | 69.6 | % | ||||||||||||||||||||
| U.S. government and agency | 13,056 | 18.0 | % | 7,241 | 9.7 | % | ||||||||||||||||||||
| Residential mortgage-backed (2) | 90 | 0.1 | % | 500 | 0.7 | % | ||||||||||||||||||||
| Preferred stock | 41 | 0.1 | % | 41 | 0.1 | % | ||||||||||||||||||||
| State & municipal | 586 | 0.8 | % | 668 | 0.9 | % | ||||||||||||||||||||
| Foreign governments | 1,124 | 1.5 | % | 1,114 | 1.5 | % | ||||||||||||||||||||
| Commercial mortgage-backed | 2,427 | 3.3 | % | 3,824 | 5.1 | % | ||||||||||||||||||||
| Asset-backed securities | 5,933 | 8.2 | % | 9,289 | 12.5 | % | ||||||||||||||||||||
| Total | $ | 72,545 | 100.0 | % | $ | 74,565 | 100.0 | % | ||||||||||||||||||
| General Account Fixed maturities credit quality (3) (Based on amortized cost) | ||||||||||||||||||||||||||
| Aaa, Aa, A (NAIC Designation 1) | $ | 44,653 | 61.6 | % | $ | 45,386 | 60.9 | % | ||||||||||||||||||
| Baa (NAIC Designation 2) | 25,141 | 34.7 | % | 26,373 | 35.4 | % | ||||||||||||||||||||
| Investment grade | 69,794 | 96.2 | % | 71,759 | 96.2 | % | ||||||||||||||||||||
| Below investment grade (NAIC Designation 3 and 4) | 2,751 | 3.8 | % | 2,806 | 3.8 | % | ||||||||||||||||||||
| Total | $ | 72,545 | 100.0 | % | $ | 74,565 | 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. | ||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 25 | |||||||
| 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, 2021 | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||
| Yield | Amount (2) | Yield | Amount (2) | Yield | Amount (2) | |||||||||||||||||||||||||||||||||
| Fixed Maturities: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 3.41 | % | $ | 1,822 | 3.52 | % | $ | 1,935 | 3.40 | % | $ | 2,429 | ||||||||||||||||||||||||||
| Ending assets | 71,216 | 74,565 | 72,545 | |||||||||||||||||||||||||||||||||||
| Mortgages: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 4.07 | % | 407 | 3.87 | % | 424 | 4.08 | % | 547 | |||||||||||||||||||||||||||||
| Ending assets | 13,448 | 15,688 | 14,033 | |||||||||||||||||||||||||||||||||||
| Other Equity Investments (1): | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 22.97 | % | 433 | 7.80 | % | 188 | 20.45 | % | 534 | |||||||||||||||||||||||||||||
| Ending assets | 2,903 | 3,468 | 2,901 | |||||||||||||||||||||||||||||||||||
| Policy Loans: | ||||||||||||||||||||||||||||||||||||||
| Income | 5.28 | % | 161 | 5.30 | % | 160 | 5.01 | % | 203 | |||||||||||||||||||||||||||||
| Ending assets | 4,027 | 4,018 | 4,024 | |||||||||||||||||||||||||||||||||||
| Cash and Short-term Investments: | ||||||||||||||||||||||||||||||||||||||
| Income | (0.05) | % | (1) | (0.83) | % | (12) | (0.13) | % | (2) | |||||||||||||||||||||||||||||
| Ending assets | 1,215 | 563 | 1,662 | |||||||||||||||||||||||||||||||||||
| Funding Agreements: | ||||||||||||||||||||||||||||||||||||||
| Interest expense and other | (44) | (82) | (56) | |||||||||||||||||||||||||||||||||||
| Ending (liabilities) | (6,807) | (7,830) | (6,647) | |||||||||||||||||||||||||||||||||||
| Total invested Assets: | ||||||||||||||||||||||||||||||||||||||
| Income | 4.37 | % | 2,778 | 3.86 | % | 2,613 | 4.28 | % | 3,655 | |||||||||||||||||||||||||||||
| Ending assets | 86,002 | 90,472 | 88,518 | |||||||||||||||||||||||||||||||||||
| Short Duration Fixed Maturities: | ||||||||||||||||||||||||||||||||||||||
| Income (loss) | 3.38 | % | 77 | 3.53 | % | 4 | 4.48 | % | 78 | |||||||||||||||||||||||||||||
| Ending assets | 142 | 117 | 142 | |||||||||||||||||||||||||||||||||||
| Total Net Investment Income: | ||||||||||||||||||||||||||||||||||||||
| Investment income | 4.34 | % | 2,855 | 3.86 | % | 2,617 | 4.28 | % | 3,733 | |||||||||||||||||||||||||||||
| Less: investment fees (3) | (0.13) | % | (82) | (0.15) | % | (101) | (0.14) | % | (118) | |||||||||||||||||||||||||||||
| Investment income, net | 4.25 | % | $ | 2,773 | 3.71 | % | $ | 2,516 | 4.15 | % | $ | 3,615 | ||||||||||||||||||||||||||
| General Account Ending Net Assets | $ | 86,144 | $ | 90,589 | $ | 88,660 | ||||||||||||||||||||||||||||||||
| Operating Earnings adjustments: | ||||||||||||||||||||||||||||||||||||||
| Funding Agreements interest expense | 44 | 82 | 56 | |||||||||||||||||||||||||||||||||||
| AB and other non-General Account investment income | 169 | (27) | 258 | |||||||||||||||||||||||||||||||||||
| Operating Net investment income (loss) | $ | 2,986 | $ | 2,571 | $ | 3,929 | ||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||
| (1) Includes, as of September 30, 2021, September 30, 2022 and December 31, 2021 $328 million, $370 million and $319 million of other invested assets. | ||||||||||||||||||||||||||||||||||||||
| (2) Amount for fixed maturities and mortgages represents original cost, reduced by repayments, write-downs, adjusted amortization of premiums, accretion of discount and allowances. Cost for equity securities represents original cost reduced by write-downs; cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions. | ||||||||||||||||||||||||||||||||||||||
| (3) Investment fees are inclusive of investment management fees paid to AB. | ||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 26 | |||||||
Additional Information
| 3Q 2022 Financial Supplement | 27 | |||||||
| 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| TOTAL | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 4,838 | $ | 5,366 | $ | 5,491 | $ | 6,592 | $ | 7,541 | $ | 4,243 | $ | 5,491 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 214 | 255 | 209 | 220 | 215 | 620 | 644 | |||||||||||||||||||||||||||||||||||||
| Amortization | (64) | (136) | (181) | (160) | (105) | (257) | (446) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 378 | 6 | 1,073 | 889 | 593 | 760 | 2,555 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 5,366 | $ | 5,491 | $ | 6,592 | $ | 7,541 | $ | 8,244 | $ | 5,366 | $ | 8,244 | ||||||||||||||||||||||||||||||
| Individual Retirement | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 3,393 | $ | 3,486 | $ | 3,639 | $ | 3,957 | $ | 4,426 | $ | 3,178 | $ | 3,639 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 142 | 159 | 140 | 151 | 147 | 414 | 438 | |||||||||||||||||||||||||||||||||||||
| Amortization | (96) | (80) | (121) | (117) | (131) | (215) | (369) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 47 | 74 | 299 | 435 | 247 | 109 | 981 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 3,486 | $ | 3,639 | $ | 3,957 | $ | 4,426 | $ | 4,689 | $ | 3,486 | $ | 4,689 | ||||||||||||||||||||||||||||||
| Group Retirement | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 702 | $ | 757 | $ | 776 | $ | 866 | $ | 991 | $ | 632 | $ | 776 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 24 | 33 | 22 | 22 | 21 | 67 | 65 | |||||||||||||||||||||||||||||||||||||
| Amortization | 23 | (10) | (14) | (8) | 22 | 8 | — | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 8 | (4) | 82 | 111 | 74 | 50 | 267 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 757 | $ | 776 | $ | 866 | $ | 991 | $ | 1,108 | $ | 757 | $ | 1,108 | ||||||||||||||||||||||||||||||
| Protection Solutions | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 732 | $ | 1,113 | $ | 1,066 | $ | 1,632 | $ | 1,902 | $ | 418 | $ | 1,066 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | 48 | 63 | 48 | 47 | 47 | 139 | 142 | |||||||||||||||||||||||||||||||||||||
| Amortization | (4) | (30) | (35) | (28) | (14) | (65) | (77) | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | 337 | (80) | 553 | 251 | 187 | 621 | 991 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 1,113 | $ | 1,066 | $ | 1,632 | $ | 1,902 | $ | 2,122 | $ | 1,113 | $ | 2,122 | ||||||||||||||||||||||||||||||
| Corporate and Other | ||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $ | 11 | $ | 10 | $ | 10 | $ | 137 | $ | 222 | $ | 15 | $ | 10 | ||||||||||||||||||||||||||||||
| Capitalization of commissions, sales and issue expenses | — | — | (1) | — | — | — | (1) | |||||||||||||||||||||||||||||||||||||
| Amortization | 13 | (16) | (11) | (7) | 18 | 15 | — | |||||||||||||||||||||||||||||||||||||
| Change in unrealized investment gains and losses | (14) | 16 | 139 | 92 | 85 | (20) | 316 | |||||||||||||||||||||||||||||||||||||
| Reclassified to Assets held-for-sale | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||
| Ending balance | $ | 10 | $ | 10 | $ | 137 | $ | 222 | $ | 325 | $ | 10 | $ | 325 | ||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 28 | |||||||
| 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, 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; (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; and (iv) DAC amortization for the SCS variable annuity product arising from near-term fluctuations in index segment returns; | ||||
| • | 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, certain legal accruals; and a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies; 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 2022 Financial Supplement | 29 | |||||||
| Use of Non-GAAP Financial Measures | |||||
| Non-GAAP Operating ROE | |||||
| 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. 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. | |||||
| 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 2022 Financial Supplement | 30 | |||||||
| 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) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | 9/30/2021 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | ||||||||||||||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | 672 | $ | 254 | $ | 573 | $ | 1,728 | $ | 273 | $ | (693) | $ | 2,574 | ||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features | 172 | 513 | (601) | (1,924) | (114) | 3,632 | (2,639) | |||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (164) | (100) | 326 | 231 | 333 | (767) | 890 | |||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 27 | 33 | 19 | 19 | 19 | 87 | 57 | |||||||||||||||||||||||||||||||||||||
| Other adjustments (1) (2) (3) | 141 | 45 | 220 | 148 | 39 | 672 | 407 | |||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments | (35) | (103) | 8 | 321 | (59) | (761) | 270 | |||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 5 | 7 | 3 | 3 | 7 | 6 | 13 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 818 | $ | 649 | $ | 548 | $ | 526 | $ | 498 | $ | 2,176 | $ | 1,572 | ||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings (4) | $ | 1.62 | $ | 0.63 | $ | 1.46 | $ | 4.54 | $ | 0.72 | $ | (1.64) | $ | 6.72 | ||||||||||||||||||||||||||||||
| Less: Preferred stock dividends | 0.03 | 0.07 | 0.03 | 0.07 | 0.03 | 0.12 | 0.14 | |||||||||||||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | 1.59 | 0.56 | 1.43 | 4.47 | 0.69 | (1.76) | 6.58 | |||||||||||||||||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||||||||||||||
| Variable annuity product features | 0.41 | 1.27 | (1.53) | (5.06) | (0.31) | 8.58 | (6.89) | |||||||||||||||||||||||||||||||||||||
| Investment gains (losses), net | (0.41) | (0.25) | 0.83 | 0.61 | 0.87 | (1.81) | 2.32 | |||||||||||||||||||||||||||||||||||||
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | 0.07 | 0.08 | 0.05 | 0.05 | 0.05 | 0.21 | 0.15 | |||||||||||||||||||||||||||||||||||||
| Other adjustments (1) (2) (3) | 0.35 | 0.11 | 0.55 | 0.39 | 0.12 | 1.59 | 1.06 | |||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit related to above adjustments | (0.08) | (0.25) | 0.02 | 0.84 | (0.16) | (1.80) | 0.71 | |||||||||||||||||||||||||||||||||||||
| Non-recurring tax items | 0.01 | 0.02 | 0.01 | 0.01 | 0.02 | 0.01 | 0.03 | |||||||||||||||||||||||||||||||||||||
| Non-GAAP Operating Earnings (loss) available to Holdings' common shareholders (4) | $ | 1.94 | $ | 1.54 | $ | 1.36 | $ | 1.31 | $ | 1.28 | $ | 5.02 | $ | 3.96 | ||||||||||||||||||||||||||||||
| Book Value per common share | ||||||||||||||||||||||||||||||||||||||||||||
| Book Value per common share | $ | 25.00 | $ | 25.45 | $ | 16.64 | $ | 10.69 | $ | 4.84 | $ | 25.00 | $ | 4.84 | ||||||||||||||||||||||||||||||
| Less: Per share impact of AOCI | 4.64 | 5.12 | (4.65) | (14.72) | (21.29) | 4.64 | (21.29) | |||||||||||||||||||||||||||||||||||||
| Book value per common share (ex. AOCI) | $ | 20.37 | $ | 20.33 | $ | 21.29 | $ | 25.41 | $ | 26.13 | $ | 20.37 | $ | 26.13 | ||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Includes Separation Costs of $25 million and $62 million for the three months and nine months ended September 30, 2021, respectively. Separation costs were completed during 2021. The impact per common share is $0.06 and $0.15 for the three months and nine months ended September 30, 2021. | ||||||||||||||||||||||||||||||||||||||||||||
| (2) Includes certain gross legal expenses related to the cost of insurance litigation of $2 million and $0 million, $168 million and $180 million for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0 million and $75 million for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market. The legal accruals impact per common share is $0.01 and $0.00, $0.44 and $0.43 for the three and nine months ended September 30, 2022 and 2021, respectively. Includes policyholder benefit costs of $0.00 and $0.20 for the three and nine months ended September 30, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market. No adjustments were made to prior period non-GAAP operating EPS as the impact was immaterial. | ||||||||||||||||||||||||||||||||||||||||||||
| (3) Includes Non-GMxB related derivative hedge losses of ($28) million, ($4) million, ($68) million and $140 million for the three and nine months ended September 30, 2022 and 2021, respectively. The impact per common share is ($0.07), ($0.01), ($0.18) and $0.31 for the three and nine months ended September 30, 2022 and 2021, respectively. | ||||||||||||||||||||||||||||||||||||||||||||
| (4) 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 2022 Financial Supplement | 31 | |||||||
| Reconciliation of Non-GAAP Measures (2/3) | ||||||||||||||||||||||||||||||||
| As of and for the Twelve Months Ended | ||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | |||||||||||||||||||||||||||
| Net Income to Non-GAAP Operating Earnings | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (1,931) | $ | (439) | $ | 1,622 | $ | 3,227 | $ | 2,828 | ||||||||||||||||||||||
| Adjustments related to: | ||||||||||||||||||||||||||||||||
| Variable annuity product features | 7,071 | 4,145 | 1,277 | (1,840) | (2,126) | |||||||||||||||||||||||||||
| Investment (gains) losses | (1,321) | (867) | (358) | 293 | 790 | |||||||||||||||||||||||||||
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 110 | 120 | 105 | 98 | 90 | |||||||||||||||||||||||||||
| Other adjustments | 788 | 717 | 413 | 554 | 452 | |||||||||||||||||||||||||||
| Income tax (expense) benefits related to above adjustments | (1,396) | (864) | (301) | 191 | 167 | |||||||||||||||||||||||||||
| Non-recurring tax items | (397) | 13 | 15 | 18 | 20 | |||||||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 2,924 | $ | 2,825 | $ | 2,773 | $ | 2,541 | $ | 2,221 | ||||||||||||||||||||||
| Return on Equity and Non-GAAP Operating Return on Equity - Trailing twelve months | ||||||||||||||||||||||||||||||||
| Net income (loss) attributable to Holdings | $ | (1,931) | $ | (439) | $ | 1,622 | $ | 3,227 | $ | 2,828 | ||||||||||||||||||||||
| Less: Preferred stock | (72) | (79) | (80) | (80) | (80) | |||||||||||||||||||||||||||
| Net income (loss) available to Holdings' common shareholders | $ | (2,003) | $ | (518) | $ | 1,542 | $ | 3,147 | $ | 2,748 | ||||||||||||||||||||||
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 8,816 | $ | 8,193 | $ | 8,140 | $ | 8,487 | $ | 8,844 | ||||||||||||||||||||||
| Return on Equity (ex. AOCI) | (22.7) | % | (6.3) | % | 18.9 | % | 37.1 | % | 31.1 | % | ||||||||||||||||||||||
| Non-GAAP Operating Earnings | $ | 2,924 | $ | 2,825 | $ | 2,773 | $ | 2,541 | $ | 2,221 | ||||||||||||||||||||||
| Less: Preferred stock | (72) | (79) | (80) | (80) | (80) | |||||||||||||||||||||||||||
| Non-GAAP Operating Earnings available to Holdings' common shareholders | $ | 2,852 | $ | 2,746 | $ | 2,693 | $ | 2,461 | $ | 2,141 | ||||||||||||||||||||||
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 8,816 | $ | 8,193 | $ | 8,140 | $ | 8,487 | $ | 8,844 | ||||||||||||||||||||||
| Non-GAAP Operating Return on Equity (ex. AOCI) | 32.4 | % | 33.5 | % | 33.1 | % | 29.0 | % | 24.2 | % | ||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 32 | |||||||
| Reconciliation of Non-GAAP Measures (3/3) | |||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||||
| Equity Reconciliation - Quarter-end Balances | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | $ | 15,576 | $ | 10,693 | $ | 11,732 | $ | 11,680 | $ | 11,519 | $ | 7,954 | $ | 5,589 | $ | 3,354 | |||||||||||||||||||||||||||||||
| Less: Preferred Stock | 1,269 | 1,562 | 1,562 | 1,562 | 1,562 | 1,562 | 1,562 | 1,562 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 14,307 | 9,131 | 10,170 | 10,118 | 9,957 | 6,392 | 4,027 | 1,792 | |||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 3,863 | 740 | 1,983 | 1,876 | 2,004 | (1,787) | (5,548) | (7,876) | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 10,444 | $ | 8,391 | $ | 8,187 | $ | 8,242 | $ | 7,953 | $ | 8,179 | $ | 9,575 | $ | 9,668 | |||||||||||||||||||||||||||||||
| Balances as of | |||||||||||||||||||||||||||||||||||||||||||||||
| (in millions USD, unless otherwise indicated) | 12/31/2020 | 3/31/2021 | 6/30/2021 | 9/30/2021 | 12/31/2021 | 3/31/2022 | 6/30/2022 | 9/30/2022 | |||||||||||||||||||||||||||||||||||||||
| Equity Reconciliation - Twelve Month Rolling Average (2) | |||||||||||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' shareholders | 17,589 | 15,267 | 13,825 | 12,420 | 11,406 | 10,721 | 9,186 | 7,104 | |||||||||||||||||||||||||||||||||||||||
| Less: Preferred Stock | 1,022 | 1,219 | 1,416 | 1,489 | 1,562 | 1,562 | 1,562 | 1,562 | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders | 16,567 | 14,048 | 12,410 | 10,932 | 9,844 | 9,159 | 7,624 | 5,542 | |||||||||||||||||||||||||||||||||||||||
| Less: Accumulated other comprehensive income (loss) | 3,567 | 3,180 | 2,694 | 2,116 | 1,651 | 1,019 | (864) | (3,302) | |||||||||||||||||||||||||||||||||||||||
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | $ | 13,000 | $ | 10,868 | $ | 9,716 | $ | 8,816 | $ | 8,193 | $ | 8,140 | $ | 8,487 | $ | 8,844 | |||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 33 | |||||||
| 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 | ||
| 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 2022 Financial Supplement | 34 | |||||||
| Analyst Coverage, Ratings & Contact Information | ||||||||||||||||||||||||||||||||||||||
| Analyst Coverage | ||||||||||||||||||||||||||||||||||||||||||||
| Firm | Analyst | Phone Number | ||||||||||||||||||||||||||||||||||||||||||
| Barclays | Tracy Benguigui | 1 (212) 526-1561 | ||||||||||||||||||||||||||||||||||||||||||
Citi | Michael Ward | 1 (212) 816-4269 | ||||||||||||||||||||||||||||||||||||||||||
| Credit Suisse | Andrew Kligerman | 1 (212) 325-5069 | ||||||||||||||||||||||||||||||||||||||||||
| Evercore ISI | Thomas Gallagher | 1 (212) 446-9439 | ||||||||||||||||||||||||||||||||||||||||||
| Goldman Sachs | Alex Scott | 1 (212) 902-9592 | ||||||||||||||||||||||||||||||||||||||||||
| Jefferies | Suneet Kamath | 1 (212) 778-8602 | ||||||||||||||||||||||||||||||||||||||||||
| 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 '22 | Jun '22 | Jul '22 | |||||||||||||||||||||||||||||||||||||||||
| Financial Strength Ratings: | ||||||||||||||||||||||||||||||||||||||||||||
| Equitable Financial Life Insurance Company | A | A+ | A1 | |||||||||||||||||||||||||||||||||||||||||
| Equitable Financial Life Insurance Company of America | A | A+ | A1 | |||||||||||||||||||||||||||||||||||||||||
| Credit Ratings: | ||||||||||||||||||||||||||||||||||||||||||||
| Equitable Holdings, Inc. | — | BBB+ | Baa1 | |||||||||||||||||||||||||||||||||||||||||
| AllianceBernstein L.P. (1) | — | A | A2 | |||||||||||||||||||||||||||||||||||||||||
| Investor and Media Contacts | ||||||||||||||||||||||||||||||||||||||||||||
| Contact Investor Relations | Contact Media Relations | |||||||||||||||||||||||||||||||||||||||||||
Işıl Müderrisoğlu | Thomas Lewis | Todd Williamson | ||||||||||||||||||||||||||||||||||||||||||
| (212) 314-2476 | (212) 314-4638 | (212) 314-2010 | ||||||||||||||||||||||||||||||||||||||||||
| Notes: | ||||||||||||||||||||||||||||||||||||||||||||
| (1) Last review dates: S&P as of Sep '22, Moody’s as of Jul '22. | ||||||||||||||||||||||||||||||||||||||||||||
| 3Q 2022 Financial Supplement | 35 | |||||||