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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): October 31, 2023
Equitable Holdings, Inc.
(Exact name of registrant as specified in its charter)
| | | | | | | | |
| Delaware | 001-38469 | 90-0226248 |
| (State or other jurisdiction of | (Commission File Number) | (I.R.S. Employer |
| incorporation or organization) | | Identification No.) |
1290 Avenue of the Americas, New York, New York 10104
(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:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| | | | | | | | | | | | | | |
| Title of each class | | Trading Symbol | | Name of Exchange on which registered |
| Common Stock | | EQH | | New York Stock Exchange |
| Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series A | | EQH PR A | | New York Stock Exchange |
| Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series C | | EQH PR C | | New York Stock Exchange |
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 October 31, 2023, Equitable Holdings, Inc. (“EQH”) issued a press release announcing its financial results for the quarter ended September 30, 2023. 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, 2023. A copy of the Financial Supplement for the quarter ended September 30, 2023 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, 2023, 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 4:15 p.m. ET on Tuesday, October 31, 2023.
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 October 31, 2023 (furnished and not filed) |
| Financial Supplement for the quarter ended September 30, 2023 (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: October 31, 2023 | By: | /s/ William Eckert |
| Name: | William Eckert |
| Title: | Chief Accounting Officer (Principal Accounting Officer) |
EQUITABLE HOLDINGS REPORTS THIRD QUARTER 2023 RESULTS
_______________________________________
•Momentum in Retirement1 and Wealth Management leading to combined net inflows of $3.0 billion; modest Asset Management net outflows of $1.9 billion, with active net flows nearly flat in the quarter
•Net income of $1.1 billion, or $3.02 per share
•Non-GAAP operating earnings2 of $413 million, or $1.15 per share; adjusting for notable items3, Non-GAAP operating earnings of $468 million, or $1.30 per share
•Cash generation4 of $1.0 billion year-to-date, on track for $1.3 billion 2023 guidance; cash at the Holding Company increased to $2.0 billion
•Returned $315 million to shareholders during the quarter, bringing year-to-date capital return to $905 million; consistently delivering on the 60-70% payout ratio target
•No material impact from the annual assumption review, underscoring the company’s conservative approach to setting initial assumptions
_______________________________________
New York, NY, October 31, 2023 — Equitable Holdings, Inc. (“Equitable Holdings”, “Holdings”, or the “Company”) (NYSE: EQH) today announced financial results for the third quarter ended September 30, 2023.
“We reported third quarter non-GAAP operating earnings of $1.15 per share, or $1.30 per share after adjusting for notable items. Adjusted results in the period were up 15% over the prior year quarter with organic growth in our businesses supported by favorable demographic trends and the highest interest rate levels we have seen in over 15 years. In Retirement, we reported another record quarter with $1.5 billion of net inflows driven by our industry-leading spread-based RILA product. In Wealth Management, our fastest growing business, we continue to see strong, organic growth with $1.6 billion of net inflows, or an 8% annualized organic growth rate. In Asset Management, while we were not immune to industry-wide outflows in the quarter, our retail channel delivered net inflows of $1.6 billion, and our institutional pipeline remains robust at $12.5 billion.” said Mark Pearson, President and Chief Executive Officer.
Mr. Pearson concluded, “Our businesses continue to provide an attractive value proposition for investors with diverse sources of earnings driving predictable cash generation of $1.0 billion year-to-date as we remain on track for our $1.3 billion 2023 guidance. This supports our capital management program as we continue to consistently deliver on our payout ratio target of 60-70% of Non-GAAP operating earnings.”
1 Includes Individual Retirement and Group Retirement segments.
2 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.
3 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
4 Cash generation is net dividends and distributions to Equitable Holdings from its subsidiaries.
| | | | | | | | | | | | | | | |
| Consolidated Results | | | | | | | |
| Third Quarter | | |
| (in millions, except per share amounts or unless otherwise noted) | 2023 | | 2022 | | | | |
| Total Assets Under Management/Administration (“AUM/A”, in billions) | $ | 860 | | | $ | 784 | | | | | |
| Net income attributable to Holdings | 1,064 | | | 594 | | | | | |
| Net income attributable to Holdings per common share | 3.02 | | | 1.54 | | | | | |
| Non-GAAP operating earnings | 413 | | | 386 | | | | | |
| Non-GAAP operating earnings per common share (“EPS”) | 1.15 | | | 0.99 | | | | | |
As of September 30, 2023, total AUM/A was $860 billion, a year-over-year increase of 10%, driven by higher markets over the prior twelve months.
Net income attributable to Holdings for the third quarter of 2023 was $1.1 billion compared to $594 million in the third quarter of 2022.
Non-GAAP operating earnings in the third quarter of 2023 was $413 million compared to $386 million in the third quarter of 2022. Adjusting for notable items5 of $55 million, third quarter 2023 Non-GAAP operating earnings were $468 million or $1.30 per share.
As of September 30, 2023, book value per common share, including accumulated other comprehensive income (“AOCI”), was $0.23. Book value per common share, excluding AOCI, was $28.90.
5 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
Business Highlights
•Business segment highlights:
◦Individual Retirement (“IR”) reported another record quarter with net inflows of $1.7 billion and first year premiums up 28% over prior year quarter attributable to record demand for spread-based RILA product.
◦Group Retirement (“GR”) reported net outflows of $175 million, primarily due to seasonality in the Company’s industry leading K-12 educators offering, while generating $817 million of gross premiums in the quarter.
◦Investment Management and Research (AllianceBernstein or “AB”)6 reported net outflows of $1.9 billion with active net flows nearly flat and $1.6 billion of net inflows in the Retail channel driven by taxable fixed income and municipals.
◦Protection Solutions (“PS”) reported $756 million in gross written premiums with accumulation-oriented VUL first year premiums and Employee Benefits first year premiums up 1% and 5%, respectively, over the prior year quarter.
◦Wealth Management (“WM”) reported net inflows of $1.6 billion, another quarter of organic growth, supported by a 2% increase in advisor productivity compared to the second quarter of 2023.
◦Legacy (“L”) reported $554 million of net outflows and continues to run-off at $2 to $3 billion per annum.
•Delivering shareholder value:
◦The Company’s Retirement business continues to benefit from higher interest rates with new money yields in its general account of 6.0% compared to an average portfolio yield of 4.3%.
◦The Company has deployed 80% of its initial $10 billion capital commitment to AB’s Private Markets platform. In May the Company made an additional $10 billion commitment and will invest $20 billion cumulatively by 2027, supporting growth in AB’s Private Markets business, which currently has $61 billion in assets under management.
◦The Company is ahead of plan on its productivity and yield enhancement programs and by year end expects to achieve more than $30 million of its $150 million net expense savings target and over $45 million of its $110 million incremental income target for the Company’s general account.
.
•Capital management program:
◦The Company returned $315 million to shareholders in the quarter, including $238 million of share repurchases, which is above the Company’s payout ratio target of 60-70% of Non-GAAP operating earnings and in line after adjusting Non-GAAP operating earnings for notable items7 in the quarter.
6 Refers to AllianceBernstein L.P. and AllianceBernstein Holding L.P., collectively.
7 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
◦The Company continues to benefit from diverse sources of earnings to drive predictable cash generation with $1.0 billion of net dividends and distributions from its subsidiaries year to date. The Company remains on track to achieve its $1.3 billion cash generation guidance for 2023.
◦The Company reported cash and liquid assets of $2.0 billion at Holdings, which remains above the $500 million minimum target, with a continued focus on maximizing financial flexibility to support consistent capital return.
•Completed annual actuarial assumption review:
◦The Company completed its annual actuarial assumption update resulting in minimal impacts with a $4 million loss to net income and $12 million benefit to non-GAAP operating earnings on a post-tax basis.
Business Segment Results
Individual Retirement
| | | | | | | | | | | |
| (in millions, unless otherwise noted) | Q3 2023 | | Q3 2022 |
| Account value (in billions) | $ | 83.2 | | | $ | 69.7 | |
| Segment net flows (in billions) | 1.7 | | | 1.3 | |
| Operating earnings (loss) | 210 | | | 183 | |
•Account value increased by 19% primarily due to market performance and net inflows over the prior twelve months.
•Net inflows of $1.7 billion in the quarter were higher over the prior year quarter with record sales of $3.8 billion.
•Operating earnings increased from $183 million in the prior year quarter to $210 million, primarily driven by higher net investment income due to higher interest rates and higher SCS asset balances.
•Operating earnings adjusting for notable items8 increased from $193 million in the prior year quarter to $221 million. Notable items of $11 million in the current period reflect the higher tax rate in the quarter and lower net investment income from alternatives and prepayments, partially offset by a favorable assumption update.
Group Retirement
| | | | | | | | | | | |
| (in millions, unless otherwise noted) | Q3 2023 | | Q3 2022 |
| Account value (in billions) (1) | $ | 33.8 | | | $ | 39.7 | |
| Segment net flows (2) | (175) | | | (57) | |
| Operating earnings (loss) | 105 | | | 99 | |
(1) Effective October 3, 2022, AV excludes activity related to ceded AV to Global Atlantic. In addition, roll-forward reflects the AV ceded to Global Atlantic as of the transaction date.
(2) For the three months ended September 30, 2023, net out flows of $172 million are excluded as these amounts are related to ceded AV to Global Atlantic.
•Account value decreased primarily due to the reinsurance transaction with Global Atlantic, which reduced account value by c.$9.4 billion, partially offset by market performance over the prior twelve months.
•Net outflows of $175 million primarily driven by seasonality in the tax-exempt channel with lower premiums from K-12 educators during the summer months.
•Operating earnings increased from $99 million in the prior year quarter to $105 million, primarily due to lower interest credited associated with policies ceded to Global Atlantic partially offset by lower net investment income due to lower assets following the transaction.
8 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
•Operating earnings adjusting for notable items9 increased from $107 million in the prior year quarter to $113 million. Notable items of $8 million reflect a higher tax rate in the quarter and lower net investment income from alternatives and prepayments, partially offset by a favorable assumption update.
AllianceBernstein
| | | | | | | | | | | | | |
| (in millions, unless otherwise noted) | Q3 2023 | | Q3 2022 | | |
| Total AUM (in billions) | $ | 669.0 | | | $ | 612.7 | | | |
| Segment net flows (in billions) | (1.9) | | | (10.5) | | | |
| Operating earnings (loss) | 99 | | | 94 | | | |
•AUM increased by 9% due to market performance over the prior twelve months.
•Third quarter net outflows of $1.9 billion with total active net outflows of $0.1 billion. Retail net inflows were $1.6 billion, led by taxable fixed income and municipals, partially offsetting institutional net outflows as growth in active equities was offset by outflows in fixed income and passive mandates.
•Operating earnings increased from $94 million in the prior year quarter to $99 million, primarily due to higher base fees on higher average AUM and higher performance fees.
Protection Solutions
| | | | | | | | | | | |
| (in millions) | Q3 2023 | | Q3 2022 |
| Gross written premiums | $ | 756 | | | $ | 769 | |
| Annualized premiums | 79 | | | 74 | |
| Operating earnings (loss) | 34 | | | 30 | |
•Annualized premiums increased 7% year-over-year driven by an 8% increase in Life and a 5% increase in Employee Benefits.
•Operating earnings increased from $30 million in the prior year quarter to $34 million, primarily due to higher net investment income, partially offset by higher-than-expected mortality.
•Operating earnings adjusting for notable items10 increased from $53 million in the prior year quarter to $62 million. Notable items of $28 million reflect elevated mortality and lower net investment income from alternatives and prepayments, partially offset by a favorable assumption update.
9 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
10 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
Wealth Management
| | | | | | | | | | | |
| (in millions, unless otherwise noted) | Q3 2023 | | Q3 2022 |
| Total AUA (in billions) | $ | 79.4 | | | $ | 68.4 | |
| Net Flows (in billions) | 1.6 | | | 1.1 | |
| Operating earnings (loss) | 40 | | | 22 | |
•AUA increased by 16% due to market performance and net inflows over the last twelve months.
•Net inflows of $1.6 billion in the quarter with focus on driving higher-fee advisory AUA.
•Operating earnings increased from $22 million in the prior year quarter to $40 million, primarily due to higher advisory fees on higher average asset balances and increased interest income from sweep accounts.
Legacy
| | | | | | | | | | | |
| (in millions) | Q3 2023 | | Q3 2022 |
| Account value (in billions) | $ | 20.9 | | | $ | 20.9 | |
| Net Flows (1) | (554) | | | (499) | |
| Operating earnings (loss) | 41 | | | 50 | |
(1) Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of September 30, 2023 and September 30, 2022 were $(263) million and $(312) million, respectively.
•Account value was flat year-over-year with expected net outflows offset by positive market performance over the prior twelve months.
•Net outflows of $554 million were in line with expectations as this business continues to run-off at $2 billion to $3 billion per annum.
•Operating earnings decreased from $50 million in the prior year quarter to $41 million, primarily due lower net investment income as the business continues to run off.
•Operating earnings adjusting for notable items11 decreased from $53 million in the prior year quarter to $41 million. Notable items of $0 million in the current period reflect lower net investment income from alternatives and prepayments and a higher tax rate in the quarter, offset by a favorable assumption update.
Corporate and Other (“C&O”)
Operating loss of $116 million in the third quarter increased from an operating loss of $92 million in the prior year quarter, primarily driven by higher interest credited partially offset by higher net investment
11 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
income, lower policyholder benefits and lower expenses compared to the prior year quarter. Operating loss after adjusting for notable items12 increased from $84 million in the prior year quarter to $109 million.
12 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
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) | 2023 | | 2022 | | | | |
| Non-GAAP Operating Earnings | 413 | | | $ | 386 | | | | | |
| Post-tax Adjustments related to notable items: | | | | | | | |
| Individual Retirement | 12 | | | 9 | | | | | |
| Group Retirement | 9 | | | 9 | | | | | |
| Investment Management and Research | — | | | — | | | | | |
| Protection Solutions | 36 | | | 19 | | | | | |
| Corporate & Other | 8 | | | 12 | | | | | |
| Wealth Management | — | | | — | | | | | |
| Legacy | 3 | | | 3 | | | | | |
| Notable items subtotal | 67 | | | 51 | | | | | |
| Less: impact of actuarial assumption update | (12) | | | 1 | | | | | |
| Non-GAAP Operating Earnings, less Notable Items | $ | 468 | | | $ | 438 | | | | | |
| | | | | | | |
Impact of notable items by item category:
| | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | |
| (in millions) | 2023 | | 2022 | | | | |
| Non-GAAP Operating Earnings | 413 | | | $ | 386 | | | | | |
| Pre-tax adjustments related to Notable Items: | | | | | | | |
| Actuarial Updates/Reserve | (4) | | | — | | | | | |
| Mortality | 43 | | | 12 | | | | | |
| Expenses | — | | | 30 | | | | | |
| Net Investment Income | 24 | | | 11 | | | | | |
| Subtotal | 63 | | | 53 | | | | | |
| Post-tax impact of Notable Items | 67 | | | 51 | | | | | |
| Less: impact of actuarial assumption update | (12) | | | 1 | | | | | |
| Non-GAAP Operating Earnings, less Notable Items | $ | 468 | | | $ | 438 | | | | | |
| | | | | | | |
Impact of Notable Items by segment and corporate & other:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended 9/30/2023 | IR | | GR | | AB | | PS | WM | | L | | C&O | | | | Consolidated |
| Non-GAAP Operating Earnings | 210 | | | 105 | | | 99 | | | 34 | | 40 | | | 41 | | | (116) | | | | | 413 | |
| Pre-tax adjustments related to Notable Items: | | | | | | | | | | | | | | | | |
| Actuarial Updates/Reserve | — | | | — | | | — | | | (9) | | — | | | — | | | 5 | | | | | (4) | |
| Mortality | — | | | — | | | — | | | 43 | | — | | | — | | | — | | | | | 43 | |
| Expenses | — | | | — | | | — | | | — | | — | | | — | | | — | | | | | — | |
| Net Investment Income | 2 | | | 5 | | | — | | | 10 | | — | | | 2 | | | 5 | | | | | 24 | |
| Pre-tax Subtotal | 2 | | | 5 | | | — | | | 44 | | — | | | 2 | | | 9 | | | | | 63 | |
| Tax adjustment | 9 | | | 4 | | | — | | | (7) | | — | | | — | | | (2) | | | | | 4 | |
| Post-tax impact of Notable Items | 12 | | | 9 | | | — | | | 36 | | — | | | 3 | | | 8 | | | | | 67 | |
| Impact of Actuarial Assumption Update | (1) | | | — | | | — | | | (9) | | — | | | (3) | | | — | | | | | (12) | |
| Non-GAAP Operating Earnings, less Notable Items | 221 | | | 113 | | | 99 | | | 62 | | 40 | | | 41 | | | (109) | | | | | 468 | |
| | | | | | | | 0 | | | | | | | | |
| Three Months Ended 9/30/2022 | IR | | GR | | AB | | PS | WM | | L | | C&O | | | | Consolidated |
| Non-GAAP Operating Earnings | 183 | | | 99 | | | 94 | | | 30 | | 22 | | | 50 | | | (92) | | | | | 386 | |
| Pre-tax adjustments related to Notable Items: | | | | | | | | | | | | | | | | |
| Actuarial Updates/Reserve | — | | | — | | | — | | | — | | — | | | — | | | — | | | | | — | |
| Mortality | — | | | — | | | — | | | 12 | | — | | | — | | | — | | | | | 12 | |
| Expenses | 2 | | | 6 | | | — | | | 5 | | — | | | — | | | 17 | | | | | 30 | |
| Net Investment Income | 1 | | | 3 | | | — | | | 4 | | — | | | 1 | | | 2 | | | | | 11 | |
| Pre-tax Subtotal | 3 | | | 9 | | | — | | | 21 | | — | | | 1 | | | 19 | | | | | 53 | |
| Tax adjustment | 6 | | | -0 | | — | | | (2) | | — | | | 1 | | | (7) | | | | | (2) | |
| Post-tax impact of Notable Items | 9 | | | 9 | | | — | | | 19 | | — | | | 3 | | | 12 | | | | | 51 | |
| Impact of Actuarial Assumption Update | 1 | | | — | | | — | | | 3 | | — | | | — | | | (3) | | | | | 1 | |
| Non-GAAP Operating Earnings, less Notable Items | 193 | | | 107 | | | 94 | | | 53 | | 22 | | | 53 | | | (84) | | | | | 438 | |
Earnings Conference Call
Equitable Holdings will host a conference call at 9 a.m. ET on November 1, 2023 to discuss its third quarter 2023 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 2023 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 12,300 employees and financial professionals, $860 billion in assets under management and administration (as of 9/30/2023) and more than 5 million client relationships globally.
Contacts:
Investor Relations
Erik Bass
(212) 314-2476
IR@equitable.com
Media Relations
Sophia Kim
(212) 314-2010
mediarelations@equitable.com
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 plateauing or decreasing economic growth and geopolitical conflicts 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, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) recruitment and retention of key employees and experienced and productive financial professionals; (ix) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (x) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (xi) risks related to our common stock and (xii) 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.
Forward-looking Non-GAAP Metrics
The Company has presented forward-looking statements regarding Non-GAAP operating earnings, Non-GAAP operating earnings per share and Adjusted Operating Margin at AB. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of forward-looking adjusted operating earnings per share and payout ratio targeted to non-GAAP operating earnings to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measures without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company’s future financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others changes in connection with quarter-end and year-end adjustments. Any variations between the Company’s actual results and preliminary financial data set forth above may be material.
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 the variable annuity product MRBs. 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) changes in the fair value of market risk benefits and purchased market risk benefits, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the market risk benefits which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk;
•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, lease write-offs related to non-recurring restructuring activities, 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 and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; 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, impact of the annual actuarial assumption updates attributable to LFPB; 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 and a decrease of deferred tax valuation allowance.
In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual actuarial assumption update attributable to LFPB as the majority of the earnings volatility attributable to these assumption updates relate to the Company’s Legacy and non-business segment products and as such do not represent the Company’s ongoing revenue generating activities or future business strategy, and impedes comparability of operating results period over period. Non-GAAP Operating Earnings were favorably impacted by this change in the amount of $61 million for the three and nine months ended September 30, 2023, respectively. The presentation of operating earnings in prior periods was not revised to reflect this modification because the impact to those periods was immaterial.
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, 2023 and 2022:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, | | Nine Months Ended September 30, |
| (in millions) | | 2023 | | 2022 | | 2023 | | 2022 |
| Net income (loss) attributable to Holdings | | $ | 1,064 | | | $ | 594 | | | $ | 2,000 | | | $ | 2,091 | |
| Adjustments related to: | | | | | | | | |
| Variable annuity product features (4) | | (1,380) | | | (675) | | | (584) | | | (2,322) | |
| Investment (gains) losses | | 411 | | | 333 | | | 554 | | | 890 | |
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | | 8 | | | 19 | | | 26 | | | 57 | |
| Other adjustments (1) (2) | | 91 | | | 50 | | | 198 | | | 455 | |
| Income tax expense (benefit) related to above adjustments | | 183 | | | 58 | | | (40) | | | 194 | |
| Non-recurring tax items (3) | | 36 | | | 7 | | | (936) | | | 13 | |
| Non-GAAP Operating Earnings | | $ | 413 | | | $ | 386 | | | $ | 1,218 | | | $ | 1,378 | |
| | | | | | | | |
_______________
(1)Includes certain gross legal expenses related to the cost of insurance litigation and claims related to a commercial relationship of $0 million and $35 million for the three and nine months ended September 30, 2023, respectively and $2 million and $168 million for the three and nine months ended September 30, 2022, respectively. Includes policyholder benefit costs of $75 million for the 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. Includes the impact of unfavorable annual actuarial assumptions updates related to LFPB of $61 million for the three and nine months ended September 30, 2023. Prior period impact was immaterial and was not revised.
(2)Includes Non-GMxB related derivative hedge losses of ($16) million and ($7) million for the three and nine months ended September 30, 2023, respectively and ($28) million and ($68) million for the three and nine months ended September 30, 2022, respectively.
(3) For the three and nine months ended September 30, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period and an increase to the tax valuation allowance of $20 million and a decrease of $970 million, respectively.
(4)Includes the impact of favorable assumption updates of $40 million for the three and nine months ended September 30, 2023. Includes the impact of unfavorable assumption updates of $204 million for the three and nine months ended September 30, 2022.
Non-GAAP Operating EPS
Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred stock 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, 2023 and 2022.
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| (per share amounts) | 2023 | | 2022 | | 2023 | | 2022 |
| Net income (loss) attributable to Holdings (1) | $ | 3.06 | | | $ | 1.58 | | | $ | 5.62 | | | $ | 5.45 | |
| Less: Preferred stock dividend | 0.04 | | | 0.04 | | | 0.15 | | | 0.14 | |
| Net Income (loss) available to common shareholders | 3.02 | | | 1.54 | | | 5.47 | | | 5.31 | |
| Adjustments related to: | | | | | | | |
| Variable annuity product features (5) | (3.97) | | | (1.79) | | | (1.64) | | | (6.06) | |
| Investment (gains) losses | 1.18 | | | 0.88 | | | 1.56 | | | 2.32 | |
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | 0.02 | | | 0.05 | | | 0.07 | | | 0.15 | |
| Other adjustments (2) (3) | 0.27 | | | 0.14 | | | 0.55 | | | 1.20 | |
| Income tax expense (benefit) related to above adjustments | 0.53 | | | 0.15 | | | (0.11) | | | 0.51 | |
| Non-recurring tax items (4) | 0.10 | | | 0.02 | | | (2.63) | | | 0.03 | |
| Non-GAAP Operating Earnings | $ | 1.15 | | | $ | 0.99 | | | $ | 3.27 | | | $ | 3.46 | |
| | | | | | | |
_______________
(1)For periods presented with a net loss, basic shares are used for EPS.
(2)The legal accruals impact per common share is $0.00 and $0.10 for the three and nine months ended September 30, 2023, respectively and $0.01 and $0.44 for the three and nine months ended September 30, 2022, respectively. Includes policyholder benefit costs of $0.20 for the 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. Includes the impact of unfavorable annual actuarial assumptions updates related to LFPB of $0.18 and $0.17 for the three and nine months ended September 30, 2023. Prior period impact was immaterial and was not revised.
(3)Includes Non-GMxB related derivative hedge losses of ($0.05) and ($0.02) for the three and nine months ended September 30, 2023, respectively and $(0.07) and $(0.18) for the three and nine months ended September 30, 2022, respectively.
(4)For the three and nine months ended September 30, 2023, non-recurring tax items per common share reflect primarily the effect of uncertain tax positions for a given audit period and a decrease of the deferred tax valuation allowance of $0.06 and $2.73, respectively.
(5)Includes the impact of favorable assumption updates of $0.11 and $0.67 for the three and nine months ended September 30, 2023. Includes the impact of unfavorable assumption updates of $0.54 and $0.53 million for the three and nine months ended September 30, 2022.
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,
2023 | | December 31, 2022 |
| Book value per common share | $ | 0.23 | | | $ | (0.44) | |
| Per share impact of AOCI | 28.67 | | | 24.63 | |
| Book Value per common share, excluding AOCI | $ | 28.90 | | | $ | 24.19 | |
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”)
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.
Assets Under Management (“AUA”)
AUA means advisory and brokerage investment assets included in the Company’s Wealth Management segment.
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.
Consolidated Statements of Income (Loss) (Unaudited)
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| (in millions) |
| REVENUES | | | | | | | |
| Policy charges and fee income | $ | 599 | | | $ | 603 | | | $ | 1,781 | | | $ | 1,873 | |
| Premiums | 267 | | | 259 | | | 823 | | | 744 | |
| Net derivative gains (losses) | 615 | | | 199 | | | (1,143) | | | 2,216 | |
| Net investment income (loss) | 1,071 | | | 842 | | | 3,097 | | | 2,357 | |
| Investment gains (losses), net: | | | | | | | |
| Credit losses on available-for-sale debt securities and loans | (65) | | | (267) | | | (145) | | | (266) | |
| Other investment gains (losses), net | (346) | | | (65) | | | (409) | | | (624) | |
| Total investment gains (losses), net | (411) | | | (332) | | | (554) | | | (890) | |
| Investment management and service fees | 1,217 | | | 1,179 | | | 3,579 | | | 3,731 | |
| Other income | 266 | | | 242 | | | 775 | | | 797 | |
| Total revenues | 3,624 | | | 2,992 | | | 8,358 | | | 10,828 | |
| BENEFITS AND OTHER DEDUCTIONS | | | | | | | |
| Policyholders’ benefits | 693 | | | 629 | | | 2,107 | | | 2,020 | |
| Remeasurement of liability for future policy benefits | 49 | | | 20 | | | 46 | | | 54 | |
| Change in market risk benefits and purchased market risk benefits | (817) | | | (491) | | | (1,772) | | | (144) | |
| Interest credited to policyholders’ account balances | 556 | | | 378 | | | 1,520 | | | 1,001 | |
| Compensation and benefits | 593 | | | 568 | | | 1,742 | | | 1,682 | |
| Commissions and distribution-related payments | 405 | | | 368 | | | 1,178 | | | 1,184 | |
| Interest expense | 55 | | | 51 | | | 171 | | | 148 | |
| Amortization of deferred policy acquisition costs | 165 | | | 148 | | | 472 | | | 436 | |
| Other operating costs and expenses | 450 | | | 496 | | | 1,339 | | | 1,613 | |
| Total benefits and other deductions | 2,149 | | | 2,167 | | | 6,803 | | | 7,994 | |
| Income (loss) from continuing operations, before income taxes | 1,475 | | | 825 | | | 1,555 | | | 2,834 | |
| Income tax (expense) benefit | (340) | | | (177) | | | 677 | | | (578) | |
| Net income (loss) | 1,135 | | | 648 | | | 2,232 | | | 2,256 | |
| Less: Net income (loss) attributable to the noncontrolling interest | 71 | | | 54 | | | 232 | | | 165 | |
| Net income (loss) attributable to Holdings | 1,064 | | | 594 | | | 2,000 | | | 2,091 | |
| Less: Preferred stock dividends | 14 | | | 14 | | | 54 | | | 54 | |
| Net income (loss) available to Holdings’ common shareholders | $ | 1,050 | | | $ | 580 | | | $ | 1,946 | | | $ | 2,037 | |
| | | | | | | |
Earnings Per Common Share
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, | | Nine Months Ended September 30, |
| | 2023 | | 2022 | | 2023 | | 2022 |
| (in millions) |
| Earnings per common share | | | | | | | |
| Basic | $ | 3.03 | | | $ | 1.55 | | | $ | 5.49 | | | $ | 5.35 | |
| Diluted | $ | 3.02 | | | $ | 1.54 | | | $ | 5.47 | | | $ | 5.32 | |
| Weighted average shares | | | | | | | |
| Weighted average common stock outstanding for basic earnings per common share | 346.4 | | | 374.5 | | | 354.4 | | | 380.6 | |
| Weighted average common stock outstanding for diluted earnings per common share (1) | 348.0 | | | 376.8 | | | 355.9 | | | 382.9 | |
| | | | | | | |
(1)Due to net loss for the nine months ended September 30, 2022 approximately 2.3 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, |
| 2023 | | 2022 | | 2023 | | 2022 |
| (in millions) |
| Operating earnings (loss) by segment: | | | | | | | |
| Individual Retirement | $ | 210 | | | $ | 183 | | | $ | 644 | | | $ | 572 | |
| Group Retirement | 105 | | | 99 | | | 301 | | | 354 | |
| Investment Management and Research | 99 | | | 94 | | | 297 | | | 331 | |
| Protection Solutions | 34 | | | 30 | | | 23 | | | 137 | |
| Wealth Management | 40 | | | 22 | | | 114 | | | 78 | |
| Legacy | 41 | | | 50 | | | 146 | | | 170 | |
| Corporate and Other (1) | (116) | | | (92) | | | (307) | | | (264) | |
| Non-GAAP Operating Earnings | $ | 413 | | | $ | 386 | | | $ | 1,218 | | | $ | 1,378 | |
| | | | | | | |
(1)Includes interest expense and financing fees of $54 million and $51 million for the three and nine months ended September 30, 2023, and 2022 respectively.
Select Balance Sheet Statistics
| | | | | | | | | | | |
| September 30,
2023 | | December 31,
2022 |
| | (in millions) |
| ASSETS | | | |
| | | |
| | | |
| Total investments and cash and cash equivalents | $ | 103,305 | | | $ | 97,378 | |
| Separate Accounts assets | 117,577 | | | 114,853 | |
| Total assets | 260,252 | | | 252,702 | |
| | | |
| LIABILITIES | | | |
| Long-term debt | $ | 3,820 | | | $ | 3,322 | |
| Future policy benefits and other policyholders' liabilities | 16,647 | | | 16,603 | |
| Policyholders’ account balances | 91,912 | | | 83,866 | |
| Total liabilities | 256,335 | | | 249,106 | |
| | | |
| EQUITY | | | |
| Preferred stock | 1,562 | | | 1,562 | |
| Accumulated other comprehensive income (loss) | (9,802) | | | (8,992) | |
| Total equity attributable to Holdings | $ | 1,642 | | | $ | 1,401 | |
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | 9,882 | | | 8,831 | |
Assets Under Management (Unaudited)
| | | | | | | | | | | |
| September 30,
2023 | | December 31,
2022 |
| (in billions) |
| Assets Under Management | | | |
| AB AUM | $ | 669.0 | | | $ | 646.4 | |
| Exclusion for General Account and other Affiliated Accounts | (69.8) | | | (66.8) | |
| Exclusion for Separate Accounts | (39.3) | | | (38.2) | |
| AB third party | $ | 559.9 | | | $ | 541.4 | |
| | | |
| Total company AUM | | | |
| AB third party | $ | 559.9 | | | $ | 541.4 | |
| General Account and other Affiliated Accounts (1) (3) (4) | 103.3 | | | 97.4 | |
| Separate Accounts (2) (3) (4) | 117.6 | | | 114.9 | |
| Total AUM | $ | 780.8 | | | $ | 753.6 | |
| | | |
_______________
(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, 2023 and March 31, 2023, Separate Account and General Account AUM is inclusive of $11.7 billion and $51 million as well as $12.3 billion and $54 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-K.
(4) As of September 30, 2023 and December 31, 2022, Separate Account is exclusive of $5.9 billion and $5.6 billion & General Account AUM is exclusive of $3.7 billion and $3.9 billion, respectively, Account Value ceded to Global Atlantic. For additional information on the Global Atlantic transaction see MD&A - Executive Summary “Global Atlantic Reinsurance Transaction" within the 10-K.
| | | | | | | | | | | |
| 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 (1) | |
| | 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 | |
| Wealth Management | |
| | Statements of Operating Earnings (Loss) and Summary Metrics | |
| | Select Operating Metrics | |
| Legacy | |
| | 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 | |
| | Notes: | |
| | (1) Refers to AllianceBernsten L.P. and AllianceBernstien Holding L.P., collectively | |
| | | |
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 2023 Financial Supplement | | 2 |
Consolidated Financials
and Key Metrics
| | | | | | | | |
3Q 2023 Financial Supplement | | 3 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 648 | | | $ | 138 | | | $ | 266 | | | $ | 831 | | | $ | 1,135 | | | 75.2 | % | | $ | 2,256 | | | $ | 2,232 | | | (1.1) | % |
| Net income (loss) attributable to the noncontrolling interest | | (54) | | | (76) | | | (89) | | | (72) | | | (71) | | | (31.5) | % | | (165) | | | (232) | | | (40.6) | % |
| Net income (loss) attributable to Holdings | | $ | 594 | | | $ | 62 | | | $ | 177 | | | $ | 759 | | | $ | 1,064 | | | 79.1 | % | | $ | 2,091 | | | $ | 2,000 | | | (4.4) | % |
| | | | | | | | | | | | | | | | | | |
| Non-GAAP Operating Earnings (1) | | $ | 386 | | | $ | 348 | | | $ | 364 | | | $ | 441 | | | $ | 413 | | | 7.0 | % | | $ | 1,378 | | | $ | 1,218 | | | (11.6) | % |
| | | | | | | | | | | | | | | | | | |
| Total equity attributable to Holdings' shareholders | | $ | 3,411 | | | $ | 1,401 | | | $ | 3,754 | | | $ | 3,553 | | | $ | 1,642 | | | (51.9) | % | | $ | 3,411 | | | $ | 1,642 | | | (51.9) | % |
| Less: Preferred Stock | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | | | — | % | | 1,562 | | | 1,562 | | | — | % |
| Total equity attributable to Holdings' common shareholders | | 1,849 | | | (161) | | | 2,192 | | | 1,991 | | | 80 | | | (95.7) | % | | 1,849 | | | 80 | | | (95.7) | % |
| Less: Accumulated other comprehensive income (loss) | | (6,870) | | | (8,992) | | | (6,516) | | | (7,142) | | | (9,802) | | | (42.7) | % | | (6,870) | | | (9,802) | | | (42.7) | % |
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | | $ | 8,719 | | | $ | 8,831 | | | $ | 8,708 | | | $ | 9,133 | | | $ | 9,882 | | | 13.3 | % | | $ | 8,719 | | | $ | 9,882 | | | 13.3 | % |
| | | | | | | | | | | | | | | | | | |
| Return on Equity (ex. AOCI) - TTM | | N/A | | 24.7 | % | | 19.9 | % | | 17.1 | % | | 21.7 | % | | | | N/A | | 21.7 | % | | |
| Non-GAAP Operating ROE (1) | | N/A | | 19.6 | % | | 17.5 | % | | 16.5 | % | | 16.3 | % | | | | N/A | | 16.3 | % | | |
| | | | | | | | | | | | | | | | | | |
| Debt to capital: | | | | | | | | | | | | | | | | | | |
| Debt to Capital (ex. AOCI) | | 27.2 | % | | 27.0 | % | | 29.7 | % | | 26.3 | % | | 25.0 | % | | | | 27.2 | % | | 25.0 | % | | |
| | | | | | | | | | | | | | | | | | |
| Per common share: | | | | | | | | | | | | | | | | | | |
| Diluted earnings per common share: (2) | | | | | | | | | | | | | | | | | | |
| Net income (loss) attributable to Holdings | | $ | 1.54 | | | $ | 0.10 | | | $ | 0.45 | | | $ | 2.06 | | | $ | 3.02 | | | 96.0 | % | | $ | 5.32 | | | $ | 5.47 | | | 2.8 | % |
| Non-GAAP Operating Earnings (1) | | $ | 0.99 | | | $ | 0.87 | | | $ | 0.96 | | | $ | 1.17 | | | $ | 1.15 | | | 16.1 | % | | $ | 3.46 | | | $ | 3.27 | | | (5.4) | % |
| Book value per common share | | $ | 5.00 | | | $ | (0.44) | | | $ | 6.10 | | | $ | 5.69 | | | $ | 0.23 | | | (95.3) | % | | $ | 5.00 | | | $ | 0.23 | | | (95.3) | % |
| Book value per common share (ex. AOCI) | | $ | 23.56 | | | $ | 24.19 | | | $ | 24.25 | | | $ | 26.08 | | | $ | 28.90 | | | 22.6 | % | | $ | 23.56 | | | $ | 28.90 | | | 22.6 | % |
| | | | | | | | | | | | | | | | | | |
| Weighted-average common shares outstanding: | | | | | | | | | | | | | | | | | | |
| Basic | | 374.5 | | | 368.6 | | | 361.9 | | | 355.2 | | | 346.4 | | | (7.5) | % | | 380.6 | | | 354.4 | | | (6.9) | % |
| Diluted | | 376.8 | | | 371.5 | | | 364.1 | | | 356.1 | | | 348.0 | | | (7.6) | % | | 382.9 | | | 355.9 | | | (7.1) | % |
| | | | | | | | | | | | | | | | | | |
| Ending common shares outstanding | | 370.0 | | | 365.0 | | | 359.1 | | | 350.2 | | | 342.0 | | | (7.6) | % | | 370.0 | | | 342.0 | | | (7.6) | % |
| | | | | | | | | | | | | | | | | | |
| Return to common shareholders: | | | | | | | | | | | | | | | | | | |
| Common stock dividend | | $ | 75 | | | $ | 74 | | | $ | 72 | | | $ | 78 | | | $ | 77 | | | | | $ | 220 | | | $ | 227 | | | |
| Repurchase of common shares | | 200 | | | 150 | | | 214 | | | 226 | | | 238 | | | | | 699 | | | 678 | | | |
| Total capital returned to common shareholders | | $ | 275 | | | $ | 224 | | | $ | 286 | | | $ | 304 | | | $ | 315 | | | | | $ | 919 | | | $ | 905 | | | |
| | | | | | | | | | | | | | | | | | |
| Market Values: | | | | | | | | | | | | | | | | | | |
| S&P 500 | | 3,586 | | | 3,840 | | | 4,109 | | | 4,450 | | | 4,288 | | | 19.6 | % | | 3,586 | | | 4,288 | | | 19.6 | % |
| US 10-Year Treasury | | 3.8 | % | | 3.9 | % | | 3.5 | % | | 3.8 | % | | 4.6 | % | | | | 3.8 | % | | 4.6 | % | | |
| | | | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
|
| (1) This measure is a Non-GAAP financial measure. For an explanation of our use of Non-GAAP financial measures, refer to the “Use of Non-GAAP Financial Measures” and "Glossary of Selected Financial and Product Terms" sections of this document. For a reconciliation of this item to the most directly comparable GAAP measure, refer to the “Non-GAAP Reconciliation” section in this document. |
| (2) For loss periods, dilutive shares were not included in the calculation of net income (loss) available to shareholders per common share or Non-GAAP Operating Earnings per common share as inclusion of such shares would have an anti-dilutive effect. |
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 4 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Statements of Income (Loss) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | Nine Months Ended |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges and fee income | | $ | 603 | | | $ | 581 | | | $ | 588 | | | $ | 594 | | | $ | 599 | | | (0.7) | % | | $ | 1,873 | | | $ | 1,781 | | | (4.9) | % |
| Premiums | | 259 | | | 250 | | | 276 | | | 280 | | | 267 | | | 3.1 | % | | 744 | | | 823 | | | 10.6 | % |
| Net derivative gains (losses) | | 199 | | | (1,309) | | | (841) | | | (917) | | | 615 | | | 209.0 | % | | 2,216 | | | (1,143) | | | (151.6) | % |
| Net investment income (loss) | | 842 | | | 958 | | | 990 | | | 1,036 | | | 1,071 | | | 27.2 | % | | 2,357 | | | 3,097 | | | 31.4 | % |
| Investment gains (losses), net | | (332) | | | (55) | | | (87) | | | (56) | | | (411) | | | (23.8) | % | | (890) | | | (554) | | | 37.8 | % |
| Investment management and service fees | | 1,179 | | | 1,160 | | | 1,180 | | | 1,182 | | | 1,217 | | | 3.2 | % | | 3,731 | | | 3,579 | | | (4.1) | % |
| Other income | | 242 | | | 231 | | | 251 | | | 258 | | | 266 | | | 9.9 | % | | 797 | | | 775 | | | (2.8) | % |
| Total revenues | | 2,992 | | | 1,816 | | | 2,357 | | | 2,377 | | | 3,624 | | | 21.1 | % | | 10,828 | | | 8,358 | | | (22.8) | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 629 | | | 696 | | | 730 | | | 684 | | | 693 | | | 10.2 | % | | 2,020 | | | 2,107 | | | 4.3 | % |
| Remeasurement of liability for future policy benefits | | 20 | | | 12 | | | 4 | | | (7) | | | 49 | | | 145.0 | % | | 54 | | | 46 | | | — | % |
| Change in market risk benefits and purchased market risk benefits | | (491) | | | (1,136) | | | 20 | | | (975) | | | (817) | | | (66.4) | % | | (144) | | | (1,772) | | | — | % |
| Interest credited to policyholders’ account balances | | 378 | | | 409 | | | 463 | | | 501 | | | 556 | | | 47.1 | % | | 1,001 | | | 1,520 | | | 51.8 | % |
| Compensation and benefits | | 568 | | | 519 | | | 583 | | | 566 | | | 593 | | | 4.4 | % | | 1,682 | | | 1,742 | | | 3.6 | % |
| Commissions and distribution related payments | | 368 | | | 383 | | | 380 | | | 393 | | | 405 | | | 10.1 | % | | 1,184 | | | 1,178 | | | (0.5) | % |
| Interest expense | | 51 | | | 53 | | | 61 | | | 55 | | | 55 | | | 7.8 | % | | 148 | | | 171 | | | 15.5 | % |
| Amortization of deferred policy acquisition costs | | 148 | | | 150 | | | 152 | | | 155 | | | 165 | | | 11.5 | % | | 436 | | | 472 | | | 8.3 | % |
| Other operating costs and expenses | | 496 | | | 572 | | | 423 | | | 466 | | | 450 | | | (9.3) | % | | 1,613 | | | 1,339 | | | (17.0) | % |
| Total benefits and other deductions | | 2,167 | | | 1,658 | | | 2,816 | | | 1,838 | | | 2,149 | | | (0.8) | % | | 7,994 | | | 6,803 | | | (14.9) | % |
| | | | | | | | | | | | | | | | | | |
| Income (loss) from operations, before income taxes | | 825 | | | 158 | | | (459) | | | 539 | | | 1,475 | | | 78.8 | % | | 2,834 | | | 1,555 | | | (45.1) | % |
| Income tax (expense) benefit | | (177) | | | (20) | | | 725 | | | 292 | | | (340) | | | (92.1) | % | | (578) | | | 677 | | | 217.1 | % |
| Net income (loss) | | 648 | | | 138 | | | 266 | | | 831 | | | 1,135 | | | 75.2 | % | | 2,256 | | | 2,232 | | | (1.1) | % |
| Less: net (income) loss attributable to the noncontrolling interest | | (54) | | | (76) | | | (89) | | | (72) | | | (71) | | | (31.5) | % | | (165) | | | (232) | | | (40.6) | % |
| Net income (loss) attributable to Holdings | | $ | 594 | | | $ | 62 | | | $ | 177 | | | $ | 759 | | | $ | 1,064 | | | 79.1 | % | | $ | 2,091 | | | $ | 2,000 | | | (4.4) | % |
| Less: Preferred stock dividends | | (14) | | | (26) | | | (14) | | | (26) | | | (14) | | | — | % | | (54) | | | (54) | | | — | % |
| Net income (loss) available to Holdings' common shareholders | | $ | 580 | | | $ | 36 | | | $ | 163 | | | $ | 733 | | | $ | 1,050 | | | 81.0 | % | | $ | 2,037 | | | $ | 1,946 | | | (4.5) | % |
| | | | | | | | | | | | | | | | | | |
| Adjustments related to: | | | | | | | | | | | | | | | | | | |
| Variable annuity product features | | $ | (675) | | | $ | 129 | | | $ | 861 | | | $ | (65) | | | $ | (1,380) | | | | | $ | (2,322) | | | $ | (584) | | | |
| Investment gains (losses), net | | 333 | | | 55 | | | 87 | | | 56 | | | 411 | | | | | 890 | | | 554 | | | |
| | | | | | | | | | | | | | | | | | |
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | | 19 | | | 25 | | | 9 | | | 9 | | | 8 | | | | | 57 | | | 26 | | | |
| Other adjustments (1) | | 50 | | | 150 | | | 45 | | | 62 | | | 91 | | | | | 455 | | | 198 | | | |
| Income tax (expense) benefit related to above adjustments | | 58 | | | (76) | | | (210) | | | (13) | | | 183 | | | | | 194 | | | (40) | | | |
| Non-recurring tax items (2) | | 7 | | | 3 | | | (605) | | | (367) | | | 36 | | | | | 13 | | | (936) | | | |
| Non-GAAP Operating earnings (3) | | $ | 386 | | | $ | 348 | | | $ | 364 | | | $ | 441 | | | $ | 413 | | | | | $ | 1,378 | | | $ | 1,218 | | | |
| | | | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
|
|
| (1) Includes certain gross legal expenses related to the cost of insurance litigation, and claims related to a commercial relationship of $0 million, $2 million, $35 million and $168 million for the three and nine months ended September 30, 2023 and 2022, respectively. Includes policyholder benefit costs of $75 million for the 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. |
|
| (2) For the three and nine months ended September 30, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period and an increase to the tax valuation allowance of $20 million and a decrease of $970 million. |
| (3) 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 2023 Financial Supplement | | 5 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Balance Sheets |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Balances as of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | |
| Assets | | | | | | | | | | |
| Total investments | | $ | 92,517 | | | $ | 93,097 | | | $ | 96,223 | | | $ | 97,722 | | | $ | 97,209 | |
| Cash and cash equivalents | | 4,139 | | | 4,281 | | | 5,018 | | | 7,693 | | | 6,096 | |
| Cash and securities segregated, at fair value | | 1,335 | | | 1,522 | | | 1,055 | | | 879 | | | 928 | |
| Broker-dealer related receivables | | 2,539 | | | 2,338 | | | 2,203 | | | 2,053 | | | 2,017 | |
| Deferred policy acquisition costs | | 6,322 | | | 6,369 | | | 6,419 | | | 6,512 | | | 6,599 | |
| Goodwill and other intangible assets, net | | 5,635 | | | 5,482 | | | 5,478 | | | 5,463 | | | 5,448 | |
| Amounts due from reinsurers | | 4,320 | | | 8,471 | | | 8,453 | | | 8,395 | | | 8,271 | |
| | | | | | | | | | |
| | | | | | | | | | |
| Current and deferred income taxes | | 2,207 | | | 781 | | | 1,294 | | | 1,726 | | | 2,035 | |
| Purchased market risk benefits | | 10,737 | | | 10,423 | | | 10,676 | | | 9,931 | | | 8,745 | |
| Other assets | | 4,678 | | | 4,033 | | | 3,629 | | | 3,391 | | | 3,945 | |
| Assets held-for-sale | | — | | | 562 | | | 671 | | | 566 | | | 681 | |
| Separate Accounts assets | | 109,622 | | | 114,853 | | | 119,752 | | | 123,898 | | | 117,577 | |
| Assets for market risk benefits | | 514 | | | 490 | | | 629 | | | 777 | | | 701 | |
| Total assets | | $ | 244,565 | | | $ | 252,702 | | | $ | 261,500 | | | $ | 269,006 | | | $ | 260,252 | |
| | | | | | | | | | |
| Liabilities | | | | | | | | | | |
| Policyholders’ account balances | | $ | 80,009 | | | $ | 83,866 | | | $ | 86,761 | | | $ | 91,595 | | | $ | 91,912 | |
| Liability for market risk benefits | | 15,569 | | | 15,766 | | | 15,061 | | | 13,642 | | | 13,011 | |
| Future policy benefits and other policyholders’ liabilities | | 16,305 | | | 16,603 | | | 16,738 | | | 16,786 | | | 16,647 | |
| Broker-dealer related payables | | 607 | | | 715 | | | 888 | | | 1,522 | | | 454 | |
| | | | | | | | | | |
| Customers related payables | | 3,361 | | | 3,323 | | | 2,595 | | | 2,526 | | | 2,321 | |
| Amounts due to reinsurers | | 1,348 | | | 1,533 | | | 1,428 | | | 1,404 | | | 1,424 | |
| Short-term debt | | 767 | | | 759 | | | 751 | | | — | | | — | |
| Long-term debt | | 3,321 | | | 3,322 | | | 3,819 | | | 3,819 | | | 3,820 | |
| | | | | | | | | | |
| | | | | | | | | | |
| | | | | | | | | | |
| Notes issued by consolidated variable interest entities, at fair value using the fair value option | | 1,165 | | | 1,150 | | | 1,169 | | | 1,484 | | | 1,541 | |
| Other liabilities | | 7,247 | | | 7,108 | | | 6,296 | | | 6,410 | | | 7,412 | |
| Liabilities held-for-sale | | — | | | 108 | | | 158 | | | 129 | | | 216 | |
| Separate Accounts liabilities | | 109,622 | | | 114,853 | | | 119,752 | | | 123,898 | | | 117,577 | |
| Total liabilities | | 239,321 | | | 249,106 | | | 255,416 | | | 263,215 | | | 256,335 | |
| Redeemable noncontrolling interest | | 354 | | | 455 | | | 613 | | | 531 | | | 636 | |
| | | | | | | | | | |
| Equity | | | | | | | | | | |
| Preferred stock | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | |
| Common stock | | 4 | | | 4 | | | 4 | | | 4 | | | 3 | |
| Additional paid-in capital | | 2,027 | | | 2,299 | | | 2,298 | | | 2,297 | | | 2,308 | |
| Treasury shares | | (3,202) | | | (3,297) | | | (3,400) | | | (3,493) | | | (3,592) | |
| Retained earnings | | 9,890 | | | 9,825 | | | 9,806 | | | 10,325 | | | 11,163 | |
| Accumulated other comprehensive income (loss) | | (6,870) | | | (8,992) | | | (6,516) | | | (7,142) | | | (9,802) | |
| Total equity attributable to Holdings | | 3,411 | | | 1,401 | | | 3,754 | | | 3,553 | | | 1,642 | |
| Noncontrolling interest | | 1,479 | | | 1,740 | | | 1,717 | | | 1,707 | | | 1,639 | |
| Total equity | | 4,890 | | | 3,141 | | | 5,471 | | | 5,260 | | | 3,281 | |
| Total liabilities, redeemable noncontrolling interest and equity | | $ | 244,565 | | | $ | 252,702 | | | $ | 261,500 | | | $ | 269,006 | | | $ | 260,252 | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 6 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated Capital Structure |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Balances as of |
| (in millions USD, unless otherwise indicated) | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | |
| Short-term and long-term debt: | | | | | | | | | |
| Short-term debt | | | | | | | | | |
| AB commercial paper | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| AB revolving credit facility | — | | | — | | | — | | | — | | | — | |
| CLO Warehousing Debt (1) | 248 | | | 239 | | | 231 | | | — | | | — | |
| | | | | | | | | |
| Current portion of Long-term debt | 519 | | | 520 | | | 520 | | | — | | | — | |
| Total short-term debt | 767 | | | 759 | | | 751 | | | — | | | — | |
| | | | | | | | | |
| Total long-term debt | 3,321 | | | 3,322 | | | 3,819 | | | 3,819 | | | 3,820 | |
| | | | | | | | | |
Total short-term and long-term debt: [A] | $ | 4,088 | | | $ | 4,081 | | | $ | 4,570 | | | $ | 3,819 | | | $ | 3,820 | |
| | | | | | | | | |
| Equity: | | | | | | | | | |
| Preferred stock | $ | 1,562 | | | $ | 1,562 | | | $ | 1,562 | | | $ | 1,562 | | | $ | 1,562 | |
| Common stock | 4 | | | 4 | | | 4 | | | 4 | | | 3 | |
| Additional paid-in capital | 2,027 | | | 2,299 | | | 2,298 | | | 2,297 | | | 2,308 | |
| Treasury stock, at cost | (3,202) | | | (3,297) | | | (3,400) | | | (3,493) | | | (3,592) | |
| Retained earnings | 9,890 | | | 9,825 | | | 9,806 | | | 10,325 | | | 11,163 | |
| Accumulated other comprehensive income (loss) | (6,870) | | | (8,992) | | | (6,516) | | | (7,142) | | | (9,802) | |
| Total equity attributable to Holdings | 3,411 | | | 1,401 | | | 3,754 | | | 3,553 | | | 1,642 | |
| Noncontrolling interest | 1,479 | | | 1,740 | | | 1,717 | | | 1,707 | | | 1,639 | |
| Total equity | $ | 4,890 | | | $ | 3,141 | | | $ | 5,471 | | | $ | 5,260 | | | $ | 3,281 | |
| | | | | | | | | |
Total equity attributable to Holdings, (ex. AOCI): [B] | $ | 10,281 | | | $ | 10,393 | | | $ | 10,270 | | | $ | 10,695 | | | $ | 11,444 | |
| | | | | | | | | |
| Capital: | | | | | | | | | |
| Total capitalization (2) | $ | 7,251 | | | $ | 5,243 | | | $ | 8,093 | | | $ | 7,372 | | | $ | 5,462 | |
Total capitalization (ex. AOCI): [A+B] (3) | $ | 14,121 | | | $ | 14,235 | | | $ | 14,609 | | | $ | 14,514 | | | $ | 15,264 | |
| | | | | | | | | |
| Debt to capital: | | | | | | | | | |
| Debt to capital (ex. AOCI) (3) | 27.2 | % | | 27.0 | % | | 29.7 | % | | 26.3 | % | | 25.0 | % |
| | | | | | | | | |
| For the Three Months Ended |
| Roll-forward of common shares outstanding (millions of shares): | | | | | | | | | |
| Beginning balance | 376.8 | | | 370.0 | | | 365.0 | | | 359.1 | | | 350.2 | |
| Repurchases | (4.7) | | | (3.1) | | | (4.5) | | | (3.6) | | | (3.4) | |
| Retirements | (2.3) | | | (1.9) | | | (2.8) | | | (5.3) | | | (4.9) | |
| Issuances | 0.2 | | | — | | | 1.3 | | | 0.1 | | | 0.1 | |
| Ending basic common shares outstanding | 370.0 | | | 365.0 | | | 359.1 | | | 350.2 | | | 342.0 | |
| Total potentially dilutive shares | 2.3 | | | 2.3 | | | 2.2 | | | 1.5 | | | 1.4 | |
| Ending common shares outstanding - maximum potential dilution | 372.3 | | | 367.3 | | | 361.3 | | | 351.7 | | | 343.4 | |
| Notes: | | | | | | | | | |
(1) CLO Warehousing Debt related to VIE consolidation of CLO investment.
(2) Total capitalization exclusive of CLO Warehousing Debt as the VIE debt is non-recourse.
(3) Debt to capital ratio exclusive of CLO Warehousing Debt as the VIE debt is non-recourse.
| | | | | | | | |
3Q 2023 Financial Supplement | | 7 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Earnings (Loss) by Segment and Corporate and Other (1/2) |
| | |
| | Three Months Ended September 30, 2023 |
| (in millions USD, unless otherwise indicated) | | Individual Retirement | | Group Retirement | | Inv Mgmt and Research | | Protection Solutions | | Wealth Management | | Legacy | | Corporate and Other | | Eliminations | | Consolidated |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 169 | | | $ | 71 | | | $ | — | | | $ | 516 | | | $ | — | | | $ | 40 | | | $ | 70 | | | $ | — | | | $ | 866 | |
| Net investment income (loss) | | 438 | | | 128 | | | (9) | | | 260 | | | 4 | | | 59 | | | 178 | | | 20 | | | 1,078 | |
| Net derivative gains (losses) | | (5) | | | — | | | 9 | | | 7 | | | — | | | — | | | 5 | | | 6 | | | 22 | |
| Investment management, service fees and other income | | 91 | | | 68 | | | 1,034 | | | 39 | | | 386 | | | 99 | | | 4 | | | (225) | | | 1,496 | |
| Segment revenues | | 693 | | | 267 | | | 1,034 | | | 822 | | | 390 | | | 198 | | | 257 | | | (199) | | | 3,462 | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 20 | | | — | | | — | | | 512 | | | — | | | 53 | | | 114 | | | — | | | 699 | |
| Remeasurement of liability for future policy benefits | | — | | | — | | | — | | | (16) | | | — | | | 1 | | | (1) | | | — | | | (16) | |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 186 | | | 55 | | | — | | | 137 | | | — | | | 12 | | | 166 | | | — | | | 556 | |
| Commissions and distribution related payments | | 69 | | | 35 | | | 156 | | | 37 | | | 244 | | | 45 | | | 4 | | | (185) | | | 405 | |
| Amortization of deferred policy acquisition costs | | 102 | | | 14 | | | — | | | 30 | | | — | | | 16 | | | 3 | | | — | | | 165 | |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 51 | | | 31 | | | 658 | | | 81 | | | 93 | | | 20 | | | 108 | | | (14) | | | 1,028 | |
| Segment benefits and other deductions | | 428 | | | 135 | | | 814 | | | 781 | | | 337 | | | 147 | | | 394 | | | (199) | | | 2,837 | |
| Operating earnings (loss), before income taxes | | 265 | | | 132 | | | 220 | | | 41 | | | 53 | | | 51 | | | (137) | | | — | | | 625 | |
| Income Taxes | | (55) | | | (27) | | | (36) | | | (7) | | | (13) | | | (10) | | | 29 | | | — | | | (119) | |
| Operating earnings (loss), before noncontrolling interest | | 210 | | | 105 | | | 184 | | | 34 | | | 40 | | | 41 | | | (108) | | | — | | | 506 | |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | (85) | | | — | | | — | | | — | | | (8) | | | — | | | (93) | |
| Operating earnings (loss) | | $ | 210 | | | $ | 105 | | | $ | 99 | | | $ | 34 | | | $ | 40 | | | $ | 41 | | | $ | (116) | | | $ | — | | | $ | 413 | |
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended September 30, 2022 |
| | Individual Retirement | | Group Retirement | | Inv Mgmt and Research | | Protection Solutions | | Wealth Management | | Legacy | | Corporate and Other | | Eliminations | | Consolidated |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 158 | | | $ | 80 | | | $ | — | | | $ | 502 | | | $ | — | | | $ | 37 | | | $ | 86 | | | $ | — | | | $ | 863 | |
| Net investment income (loss) | | 283 | | | 160 | | | (9) | | | 236 | | | 1 | | | 65 | | | 124 | | | 24 | | | 884 | |
| Net derivative gains (losses) | | (16) | | | (13) | | | 15 | | | (13) | | | — | | | — | | | 10 | | | 4 | | | (13) | |
| Investment Management, service fees and other income | | 87 | | | 60 | | | 990 | | | 34 | | | 352 | | | 102 | | | 2 | | | (212) | | | 1,415 | |
| Segment revenues | | 512 | | | 287 | | | 996 | | | 759 | | | 353 | | | 204 | | | 222 | | | (184) | | | 3,149 | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 14 | | | — | | | — | | | 430 | | | — | | | 45 | | | 141 | | | — | | | 630 | |
| Remeasurement of liability for future policy benefits | | (1) | | | — | | | — | | | 22 | | | — | | | (1) | | | (1) | | | — | | | 19 | |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 85 | | | 79 | | | — | | | 130 | | | — | | | 13 | | | 71 | | | — | | | 378 | |
| Commissions and distribution related payments | | 54 | | | 33 | | | 152 | | | 31 | | | 231 | | | 42 | | | 3 | | | (178) | | | 368 | |
| Amortization of deferred policy acquisition costs | | 85 | | | 14 | | | — | | | 29 | | | — | | | 16 | | | 4 | | | — | | | 148 | |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 47 | | | 37 | | | 641 | | | 79 | | | 92 | | | 26 | | | 117 | | | (6) | | | 1,033 | |
| Segment benefits and other deductions | | 284 | | | 163 | | | 793 | | | 721 | | | 323 | | | 141 | | | 335 | | | (184) | | | 2,576 | |
| Operating earnings (loss), before income taxes | | 228 | | | 124 | | | 203 | | | 38 | | | 30 | | | 63 | | | (113) | | | — | | | 573 | |
| Income Taxes | | (45) | | | (25) | | | (35) | | | (8) | | | (8) | | | (13) | | | 22 | | | — | | | (112) | |
| Operating earnings (loss), before noncontrolling interest | | 183 | | | 99 | | | 168 | | | 30 | | | 22 | | | 50 | | | (91) | | | — | | | 461 | |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | (75) | | | — | | | — | | | — | | | — | | | — | | | (75) | |
| Operating earnings (loss) | | $ | 183 | | | $ | 99 | | | $ | 94 | | | $ | 30 | | | $ | 22 | | | $ | 50 | | | $ | (92) | | | $ | — | | | $ | 386 | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 8 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Operating Earnings (Loss) by Segment and Corporate and Other (2/2) |
| | |
| | Nine Months Ended September 30, 2023 |
| (in millions USD, unless otherwise indicated) | | Individual Retirement | | Group Retirement | | Inv Mgmt and Research | | Protection Solutions | | Wealth Management | | Legacy | | Corporate and Other | | Eliminations | | Consolidated |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 497 | | | $ | 201 | | | $ | — | | | $ | 1,560 | | | $ | — | | | $ | 118 | | | $ | 228 | | | $ | — | | | $ | 2,604 | |
| Net investment income (loss) | | 1,169 | | | 372 | | | 2 | | | 719 | | | 9 | | | 185 | | | 562 | | | 62 | | | 3,080 | |
| Net derivative gains (losses) | | (15) | | | (1) | | | (2) | | | (11) | | | — | | | — | | | (6) | | | 14 | | | (21) | |
| Investment Management, service fees and other income | | 277 | | | 199 | | | 3,043 | | | 105 | | | 1,134 | | | 304 | | | 16 | | | (673) | | | 4,405 | |
| Segment revenues | | 1,928 | | | 771 | | | 3,043 | | | 2,373 | | | 1,143 | | | 607 | | | 800 | | | (597) | | | 10,068 | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 63 | | | — | | | — | | | 1,531 | | | — | | | 160 | | | 359 | | | — | | | 2,113 | |
| Remeasurement of liability for future policy benefits | | — | | | — | | | — | | | (12) | | | — | | | 1 | | | (8) | | | — | | | (19) | |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 475 | | | 157 | | | — | | | 392 | | | — | | | 36 | | | 460 | | | — | | | 1,520 | |
| Commissions and distribution related payments | | 192 | | | 119 | | | 454 | | | 107 | | | 715 | | | 131 | | | 13 | | | (553) | | | 1,178 | |
| Amortization of deferred policy acquisition costs | | 283 | | | 44 | | | — | | | 89 | | | — | | | 48 | | | 8 | | | — | | | 472 | |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 141 | | | 89 | | | 1,942 | | | 238 | | | 278 | | | 57 | | | 330 | | | (44) | | | 3,031 | |
| Segment benefits and other deductions | | 1,154 | | | 409 | | | 2,396 | | | 2,345 | | | 993 | | | 433 | | | 1,162 | | | (597) | | | 8,295 | |
| Operating earnings (loss), before income taxes | | 774 | | | 362 | | | 647 | | | 28 | | | 150 | | | 174 | | | (362) | | | — | | | 1,773 | |
| Income Taxes | | (130) | | | (61) | | | (96) | | | (5) | | | (36) | | | (28) | | | 68 | | | — | | | (288) | |
| Operating earnings (loss), before noncontrolling interest | | 644 | | | 301 | | | 551 | | | 23 | | | 114 | | | 146 | | | (294) | | | — | | | 1,485 | |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | (254) | | | — | | | — | | | — | | | (13) | | | — | | | (267) | |
| Operating earnings (loss) | | $ | 644 | | | $ | 301 | | | $ | 297 | | | $ | 23 | | | $ | 114 | | | $ | 146 | | | $ | (307) | | | $ | — | | | $ | 1,218 | |
| | | | | | | | | | | | | | | | | | |
| | Nine Months Ended September 30, 2022 |
| | Individual Retirement | | Group Retirement | | Inv Mgmt and Research | | Protection Solutions | | Wealth Management | | Legacy | | Corporate and Other | | Eliminations | | Consolidated |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 504 | | | $ | 257 | | | $ | — | | | $ | 1,507 | | | $ | — | | | $ | 109 | | | $ | 241 | | | $ | — | | | $ | 2,618 | |
| Net investment income (loss) | | 748 | | | 503 | | | (58) | | | 760 | | | 1 | | | 185 | | | 361 | | | 71 | | | 2,571 | |
| Net derivative gains (losses) | | (34) | | | (27) | | | 57 | | | (18) | | | — | | | — | | | 28 | | | 11 | | | 17 | |
| Investment Management, service fees and other income | | 272 | | | 187 | | | 3,135 | | | 108 | | | 1,096 | | | 324 | | | 15 | | | (661) | | | 4,476 | |
| Segment revenues | | 1,490 | | | 920 | | | 3,134 | | | 2,357 | | | 1,097 | | | 618 | | | 645 | | | (579) | | | 9,682 | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 45 | | | — | | | — | | | 1,376 | | | — | | | 119 | | | 411 | | | — | | | 1,951 | |
| Remeasurement of liability for future policy benefits | | (2) | | | — | | | — | | | 35 | | | — | | | 1 | | | 14 | | | — | | | 48 | |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 211 | | | 229 | | | — | | | 380 | | | — | | | 38 | | | 143 | | | — | | | 1,001 | |
| Commissions and distribution related payments | | 172 | | | 117 | | | 487 | | | 99 | | | 715 | | | 144 | | | 11 | | | (561) | | | 1,184 | |
| Amortization of deferred policy acquisition costs | | 247 | | | 44 | | | — | | | 87 | | | — | | | 49 | | | 9 | | | — | | | 436 | |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 118 | | | 97 | | | 1,939 | | | 212 | | | 276 | | | 59 | | | 385 | | | (18) | | | 3,068 | |
| Segment benefits and other deductions | | 791 | | | 487 | | | 2,426 | | | 2,189 | | | 991 | | | 410 | | | 973 | | | (579) | | | 7,688 | |
| Operating earnings (loss), before income taxes | | 699 | | | 433 | | | 708 | | | 168 | | | 106 | | | 208 | | | (328) | | | — | | | 1,994 | |
| Income Taxes | | (127) | | | (79) | | | (121) | | | (31) | | | (28) | | | (38) | | | 62 | | | — | | | (362) | |
| Operating earnings (loss), before noncontrolling interest | | 572 | | | 354 | | | 587 | | | 137 | | | 78 | | | 170 | | | (266) | | | — | | | 1,632 | |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | (256) | | | — | | | — | | | — | | | 2 | | | — | | | (254) | |
| Operating earnings (loss) | | $ | 572 | | | $ | 354 | | | $ | 331 | | | $ | 137 | | | $ | 78 | | | $ | 170 | | | $ | (264) | | | $ | — | | | $ | 1,378 | |
|
|
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 9 |
| | |
| Assets Under Management and Administration |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Balances as of |
| (in billions USD, except for Equitable Headcount) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | |
| Assets Under Management | | | | | | | | | | |
| | | | | | | | | | |
| AB AUM | | | | | | | | | | |
| Total AB | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | | | $ | 669.0 | |
| Exclusion for General Account and other Affiliated Accounts | | (66.8) | | | (66.8) | | | (69.3) | | | (73.7) | | | (69.8) | |
| Exclusion for Separate Accounts | | (36.1) | | | (38.2) | | | (39.5) | | | (41.0) | | | (39.3) | |
| AB third party | | $ | 509.8 | | | $ | 541.4 | | | $ | 567.2 | | | $ | 576.8 | | | $ | 559.9 | |
| | | | | | | | | | |
| Total company AUM | | | | | | | | | | |
| AB third party | | $ | 509.8 | | | $ | 541.4 | | | $ | 567.2 | | | $ | 576.8 | | | $ | 559.9 | |
| General Account and other Affiliated Accounts (1) (3) (4) | | 96.7 | | | 97.4 | | | 101.2 | | | 105.4 | | | 103.3 | |
| Separate Accounts (2) (3) (4) | | 109.6 | | | 114.9 | | | 119.8 | | | 123.9 | | | 117.6 | |
| Total AUM | | $ | 716.1 | | | $ | 753.6 | | | $ | 788.1 | | | $ | 806.1 | | | $ | 780.8 | |
| | | | | | | | | | |
| Total Assets Under Administration (AUA) (5) | | $ | 68.4 | | | $ | 72.4 | | | $ | 75.6 | | | $ | 80.4 | | | $ | 79.4 | |
| | | | | | | | | | |
| Equitable Advisor Headcount | | | | | | | | | | |
| Total Number of Equitable Advisors | | 4,129 | | | 4,258 | | | 4,124 | | | 4,101 | | | 4,141 | |
| | | | | | | | | | |
| 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, 2022, December 31, 2022, March 31, 2023, June 30, 2023 and September 30, 2023, Separate Account and General Account AUM is inclusive of $11.7 billion, $58 million, $12.1 billion, $56 million, $12.3 billion, $54 million, $12.6 billion, $52 million, $11.7 billion and $51 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-K. |
| (4) As of September 30, 2023 and December 31, 2022, Separate Account is exclusive of $5.9 billion and $5.6 billion & General Account AUM is exclusive of $3.7 billion and $3.9 billion, respectively, Account Value ceded to Global Atlantic. For additional information on the Global Atlantic transaction see MD&A - Executive Summary “Global Atlantic Reinsurance Transaction" within the 10-K. |
| (5) Includes Advisory and Brokerage AUA included in our Wealth Management segment. |
| | | | | | | | |
3Q 2023 Financial Supplement | | 10 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended | | Nine Months Ended |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Insurance Operations | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Individual Retirement | | | | | | | | | | | | | | | | | | |
| First year premiums and deposits | | $ | 2,975 | | | $ | 2,594 | | | $ | 2,843 | | | $ | 3,650 | | | $ | 3,804 | | | 27.9 | % | | $ | 8,769 | | | $ | 10,297 | | | 17.4 | % |
| Renewal premium and deposits | | 14 | | | 6 | | | 8 | | | 10 | | | 8 | | | (41.1) | % | | 37 | | | 26 | | | (28.2) | % |
| Total Gross Premiums | | $ | 2,989 | | | $ | 2,600 | | | $ | 2,851 | | | $ | 3,660 | | | $ | 3,812 | | | 27.5 | % | | $ | 8,806 | | | $ | 10,323 | | | 17.2 | % |
| | | | | | | | | | | | | | | | | | |
| Group Retirement | | | | | | | | | | | | | | | | | | |
| First year premiums and deposits | | $ | 371 | | | $ | 392 | | | $ | 323 | | | $ | 372 | | | $ | 343 | | | (7.5) | % | | $ | 1,726 | | | $ | 1,038 | | | (39.8) | % |
| Renewal premium and deposits | | 490 | | | 560 | | | 574 | | | 622 | | | 474 | | | (3.3) | % | | 1,770 | | | 1,670 | | | (5.7) | % |
| Total Gross Premiums | | $ | 861 | | | $ | 952 | | | $ | 897 | | | $ | 994 | | | $ | 817 | | | (5.1) | % | | $ | 3,496 | | | $ | 2,708 | | | (22.5) | % |
| | | | | | | | | | | | | | | | | | |
| Protection Solutions | | | | | | | | | | | | | | | | | | |
| First year premiums and deposits | | $ | 101 | | | $ | 108 | | | $ | 103 | | | $ | 107 | | | $ | 103 | | | 2.0 | % | | $ | 316 | | | $ | 313 | | | (1.1) | % |
| Renewal premium and deposits | | 668 | | | 668 | | | 683 | | | 662 | | | 653 | | | (2.2) | % | | 1,990 | | | 1,998 | | | 0.4 | % |
| Total Gross Premiums | | $ | 769 | | | $ | 776 | | | $ | 786 | | | $ | 769 | | | $ | 756 | | | (1.7) | % | | $ | 2,307 | | | $ | 2,311 | | | 0.2 | % |
| | | | | | | | | | | | | | | | | | |
| Investment Management and Research (in billions USD) | | | | | | | | | | | | | | | | | | |
| Gross Sales by distribution channel | | | | | | | | | | | | | | | | | | |
| Institutional | | $ | 1.9 | | | $ | 12.6 | | | $ | 3.0 | | | $ | 1.5 | | | $ | 4.3 | | | 126.3 | % | | $ | 19.5 | | | $ | 8.8 | | | (54.9) | % |
| Retail | | 13.8 | | | 14.2 | | | 16.8 | | | 16.5 | | | 16.9 | | | 22.5 | % | | 51.7 | | | 50.2 | | | (2.9) | % |
| Private Wealth | | 4.1 | | | 4.1 | | | 5.8 | | | 4.4 | | | 4.0 | | | (2.4) | % | | 13.4 | | | 14.2 | | | 6.0 | % |
| Firmwide Gross Sales | | $ | 19.8 | | | $ | 30.9 | | | $ | 25.6 | | | $ | 22.4 | | | $ | 25.2 | | | 27.3 | % | | $ | 84.6 | | | $ | 73.2 | | | (13.5) | % |
| | | | | | | | | | | | | | | | | | |
| Gross sales by investment service | | | | | | | | | | | | | | | | | | |
| Equity Active (3) | | $ | 8.0 | | | $ | 9.3 | | | $ | 8.5 | | | $ | 9.3 | | | $ | 10.3 | | | 28.8 | % | | $ | 36.7 | | | $ | 28.1 | | | (23.4) | % |
| Equity Passive (1) (3) | | 0.4 | | | 0.1 | | | 0.2 | | | 0.4 | | | 0.4 | | | — | % | | 1.6 | | | 1.0 | | | (37.5) | % |
| Fixed Income - Taxable (3) | | 6.1 | | | 8.3 | | | 11.1 | | | 7.6 | | | 7.6 | | | 24.6 | % | | 17.2 | | | 26.3 | | | 52.9 | % |
| Fixed Income - Tax-Exempt (3) | | 3.2 | | | 3.6 | | | 3.9 | | | 3.4 | | | 3.8 | | | 18.8 | % | | 12.4 | | | 11.1 | | | (10.5) | % |
| Fixed Income Passive (1) (3) | | — | | | — | | | — | | | — | | | 0.4 | | | 100.0 | % | | (0.1) | | | 0.4 | | | 500.0 | % |
| Alternatives/Multi-Asset Solutions (2) (3) | | 2.1 | | | 9.5 | | | 1.9 | | | 1.7 | | | 2.7 | | | 28.6 | % | | 16.8 | | | 6.3 | | | (62.5) | % |
| Firmwide Gross Sales | | $ | 19.8 | | | $ | 30.9 | | | $ | 25.6 | | | $ | 22.4 | | | $ | 25.2 | | | 27.3 | % | | $ | 84.6 | | | $ | 73.2 | | | (13.5) | % |
| | | | | | | | | | | | | | | | | | |
| Wealth Management | | | | | | | | | | | | | | | | | | |
| Sales by Product Type | | | | | | | | | | | | | | | | | | |
| Advisory | | $ | 2,114 | | | $ | 1,850 | | | $ | 2,316 | | | $ | 2,315 | | | $ | 2,369 | | | 12.0 | % | | $ | 7,239 | | | $ | 7,000 | | | (3.3) | % |
| Brokerage and Direct | | 805 | | | 907 | | | 1,099 | | | 1,172 | | | 1,272 | | | 58.0 | % | | 2,170 | | | 3,543 | | | 63.3 | % |
| Retirement, Premiums and Deposits | | 2,713 | | | 2,877 | | | 3,024 | | | 3,231 | | | 2,965 | | | 9.3 | % | | 7,870 | | | 9,220 | | | 17.2 | % |
| Total Sales | | $ | 5,632 | | | $ | 5,634 | | | $ | 6,439 | | | $ | 6,718 | | | $ | 6,606 | | | 17.3 | % | | $ | 17,278 | | | $ | 19,763 | | | 14.4 | % |
| 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) AB line item does not cross foot for the nine months ended 2023 due to rounding. | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 11 |
Business Segments:
Operating Earnings Results and Metrics
| | | | | | | | |
3Q 2023 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 158 | | | $ | 151 | | | $ | 163 | | | $ | 165 | | | $ | 169 | | | 7.0 | % | | $ | 504 | | | $ | 497 | | | (1.4) | % |
| Net investment income (loss) | | 283 | | | 308 | | | 340 | | | 391 | | | 438 | | | 54.8 | % | | 748 | | | 1,169 | | | 56.3 | % |
| Net derivative gains (losses) | | (16) | | | (8) | | | (5) | | | (5) | | | (5) | | | 68.8 | % | | (34) | | | (15) | | | 55.9 | % |
| Investment management, service fees and other income | | 87 | | | 87 | | | 90 | | | 96 | | | 91 | | | 4.6 | % | | 272 | | | 277 | | | 1.8 | % |
| Segment revenues | | 512 | | | 538 | | | 588 | | | 647 | | | 693 | | | 35.4 | % | | 1,490 | | | 1,928 | | | 29.4 | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 14 | | | 11 | | | 24 | | | 19 | | | 20 | | | 42.9 | % | | 45 | | | 63 | | | 40.0 | % |
| Remeasurement of liability for future policy benefits | | (1) | | | (1) | | | 1 | | | (1) | | | — | | | 100.0 | % | | (2) | | | — | | | 100.0 | % |
| Interest credited to policyholders’ account balances | | 85 | | | 107 | | | 129 | | | 160 | | | 186 | | | 118.8 | % | | 211 | | | 475 | | | 125.1 | % |
| Commissions and distribution-related payments | | 54 | | | 63 | | | 60 | | | 63 | | | 69 | | | 27.8 | % | | 172 | | | 192 | | | 11.6 | % |
| Amortization of deferred policy acquisition costs | | 85 | | | 87 | | | 89 | | | 92 | | | 102 | | | 20.0 | % | | 247 | | | 283 | | | 14.6 | % |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 47 | | | 47 | | | 47 | | | 43 | | | 51 | | | 6.4 | % | | 118 | | | 141 | | | 18.6 | % |
| Segment benefits and other deductions | | 284 | | | 314 | | | 350 | | | 376 | | | 428 | | | 50.7 | % | | 791 | | | 1,154 | | | 45.9 | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 228 | | | 224 | | | 238 | | | 271 | | | 265 | | | 16.2 | % | | 699 | | | 774 | | | 10.7 | % |
| Income taxes | | (45) | | | (34) | | | (38) | | | (37) | | | (55) | | | (22.2) | % | | (127) | | | (130) | | | (2.4) | % |
| Operating earnings (loss), before noncontrolling interest | | 183 | | | 190 | | | 200 | | | 234 | | | 210 | | | 14.8 | % | | 572 | | | 644 | | | 12.6 | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Operating earnings (loss) | | $ | 183 | | | $ | 190 | | | $ | 200 | | | $ | 234 | | | $ | 210 | | | 14.8 | % | | $ | 572 | | | $ | 644 | | | 12.6 | % |
| | | | | | | | | | | | | | | | | | |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating earnings (loss) - TTM: | | N/A | | $ | 762 | | | $ | 759 | | | $ | 807 | | | $ | 834 | | | (9.6) | % | | N/A | | $ | 834 | | | (9.6) | % |
| | | | | | | | | | | | | | | | | | |
| Average Account Value (TTM) | | $ | 75,911 | | | $ | 73,823 | | | $ | 73,620 | | | $ | 76,656 | | | $ | 80,031 | | | 5.4 | % | | $ | 75,911 | | | $ | 80,031 | | | 5.4 | % |
| | | | | | | | | | | | | | | | | | |
| Return on assets (TTM) | | N/A | | 1.25 | % | | 1.25 | % | | 1.25 | % | | 1.25 | % | | | | N/A | | 1.25 | % | | |
| | | | | | | | | | | | | | | | | | |
| Net flows | | $ | 1,262 | | | $ | 840 | | | $ | 932 | | | $ | 1,501 | | | $ | 1,663 | | | 31.8 | % | | $ | 3,093 | | | $ | 4,096 | | | 32.4 | % |
| | | | | | | | | | | | | | | | | | |
| First year premiums and deposits | | $ | 2,975 | | | $ | 2,594 | | | $ | 2,843 | | | $ | 3,650 | | | $ | 3,804 | | | 27.9 | % | | $ | 8,769 | | | $ | 10,297 | | | 17.4 | % |
| | | | | | | | | | | | | | | | | | |
| In-force Policy Count by Product (in thousands): | | 583 | | | 587 | | | 590 | | | 596 | | | 604 | | | | | 583 | | | 604 | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | |
3Q 2023 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 | | | | |
| | | | | | | | | | | | | | | | | | |
| Sales Metrics | | | | | | | | | | | | | | | | | | |
| First Year Premiums and Deposits by Product: | | | | | | | | | | | | | | | | | | |
| SCS | | $ | 2,038 | | | $ | 1,806 | | | $ | 1,997 | | | $ | 2,626 | | | $ | 2,847 | | | $ | 6,147 | | | $ | 7,470 | | | | | |
| SCS Income | | 204 | | | 186 | | | 243 | | | 258 | | | 214 | | | 395 | | | 715 | | | | | |
| Retirement Cornerstone | | 421 | | | 334 | | | 300 | | | 511 | | | 518 | | | 1,292 | | | 1,329 | | | | | |
| Investment Edge | | 271 | | | 235 | | | 253 | | | 216 | | | 190 | | | 801 | | | 659 | | | | | |
| Other | | 41 | | | 33 | | | 50 | | | 39 | | | 35 | | | 134 | | | 124 | | | | | |
| Total First Year Premiums and Deposits | | $ | 2,975 | | | $ | 2,594 | | | $ | 2,843 | | | $ | 3,650 | | | $ | 3,804 | | | $ | 8,769 | | | $ | 10,297 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Account Values | | | | | | | | | | | | | | | | | | |
| General Account: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 34,614 | | | $ | 34,562 | | | $ | 37,822 | | | $ | 41,166 | | | $ | 45,304 | | | $ | 36,709 | | | $ | 37,822 | | | | | |
| Gross premiums and deposits (1) | | 2,147 | | | 1,942 | | | 2,172 | | | 2,752 | | | 2,951 | | | 6,161 | | | 7,875 | | | | | |
| Surrenders, withdrawals and benefits | | (723) | | | (764) | | | (870) | | | (955) | | | (972) | | | (2,428) | | | (2,797) | | | | | |
| Net flows | | 1,424 | | | 1,178 | | | 1,302 | | | 1,797 | | | 1,979 | | | 3,733 | | | 5,078 | | | | | |
| Investment performance, interest credited and policy charges | | (1,476) | | | 2,082 | | | 2,039 | | | 2,341 | | | (951) | | | (5,880) | | | 3,429 | | | | | |
| Balance as of end of period | | $ | 34,562 | | | $ | 37,822 | | | $ | 41,166 | | | $ | 45,304 | | | $ | 46,332 | | | $ | 34,562 | | | $ | 46,332 | | | | | |
| Separate Accounts: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 37,137 | | | $ | 35,091 | | | $ | 36,455 | | | $ | 37,634 | | | $ | 38,589 | | | $ | 45,920 | | | $ | 36,455 | | | | | |
| Gross premiums and deposits (1) | | 872 | | | 669 | | | 699 | | | 923 | | | 881 | | | 2,716 | | | 2,502 | | | | | |
| Surrenders, withdrawals and benefits | | (1,034) | | | (1,007) | | | (1,069) | | | (1,219) | | | (1,197) | | | (3,356) | | | (3,484) | | | | | |
| Net flows | | (162) | | | (338) | | | (370) | | | (296) | | | (316) | | | (640) | | | (982) | | | | | |
| Investment performance, interest credited and policy charges | | (1,884) | | | 1,702 | | | 1,545 | | | 1,251 | | | (1,453) | | | (10,189) | | | 1,343 | | | | | |
| Balance as of end of period | | $ | 35,091 | | | $ | 36,455 | | | $ | 37,634 | | | $ | 38,589 | | | $ | 36,820 | | | $ | 35,091 | | | $ | 36,820 | | | | | |
| Total: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 71,751 | | | $ | 69,653 | | | $ | 74,277 | | | $ | 78,800 | | | $ | 83,893 | | | $ | 82,629 | | | $ | 74,277 | | | | | |
| Gross premiums and deposits (1) | | 3,019 | | | 2,611 | | | 2,871 | | | 3,675 | | | 3,832 | | | 8,877 | | | 10,377 | | | | | |
| Surrenders, withdrawals and benefits | | (1,757) | | | (1,771) | | | (1,939) | | | (2,174) | | | (2,169) | | | (5,784) | | | (6,281) | | | | | |
| Net flows | | 1,262 | | | 840 | | | 932 | | | 1,501 | | | 1,663 | | | 3,093 | | | 4,096 | | | | | |
| Investment performance, interest credited and policy charges | | (3,360) | | | 3,784 | | | 3,584 | | | 3,592 | | | (2,404) | | | (16,069) | | | 4,772 | | | | | |
| Other | | — | | | — | | | 7 | | | — | | | — | | | — | | | 7 | | | | | |
| Balance as of end of period | | $ | 69,653 | | | $ | 74,277 | | | $ | 78,800 | | | $ | 83,893 | | | $ | 83,152 | | | $ | 69,653 | | | $ | 83,152 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Net Amount at Risk (NAR) | | | | | | | | | | | | | | | | | | |
| Total GMIB NAR | | $ | 18 | | | $ | 18 | | | $ | 7 | | | $ | 12 | | | $ | 10 | | | $ | 18 | | | $ | 10 | | | | | |
| Total GMWB NAR | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | | | |
| Total GMDB NAR | | $ | 4,804 | | | $ | 4,248 | | | $ | 3,458 | | | $ | 3,294 | | | $ | 3,755 | | | $ | 4,804 | | | $ | 3,755 | | | | | |
| MRB Reserves (Net of Reinsurance) | | $ | 459 | | | $ | 588 | | | $ | 367 | | | $ | 168 | | | $ | 354 | | | $ | 459 | | | $ | 354 | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
| (1) Includes deposits from certain other products not reported as first year premiums and deposits or renewal premiums and deposits elsewhere in this document. | | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 14 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 80 | | | $ | 61 | | | $ | 64 | | | $ | 66 | | | $ | 71 | | | (11.3) | % | | $ | 257 | | | $ | 201 | | | (21.8) | % |
| Net investment income (loss) | | 160 | | | 121 | | | 112 | | | 132 | | | 128 | | | (20.0) | % | | 503 | | | 372 | | | (26.0) | % |
| Net derivative gains (losses) | | (13) | | | (3) | | | (1) | | | — | | | — | | | 100.0 | % | | (27) | | | (1) | | | 96.3 | % |
| Investment management, service fees and other income | | 60 | | | 59 | | | 62 | | | 69 | | | 68 | | | 13.3 | % | | 187 | | | 199 | | | 6.4 | % |
| Segment revenues | | 287 | | | 238 | | | 237 | | | 267 | | | 267 | | | (7.0) | % | | 920 | | | 771 | | | (16.2) | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholder benefits | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Remeasurement of liability for future policy benefits | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 79 | | | 52 | | | 50 | | | 52 | | | 55 | | | (30.4) | % | | 229 | | | 157 | | | (31.4) | % |
| Commissions and distribution-related payments | | 33 | | | 37 | | | 37 | | | 47 | | | 35 | | | 6.1 | % | | 117 | | | 119 | | | 1.7 | % |
| Amortization of deferred policy acquisition costs | | 14 | | | 15 | | | 15 | | | 15 | | | 14 | | | — | % | | 44 | | | 44 | | | — | % |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 37 | | | 27 | | | 29 | | | 29 | | | 31 | | | (16.2) | % | | 97 | | | 89 | | | (7.3) | % |
| Segment benefits and other deductions | | 163 | | | 131 | | | 131 | | | 143 | | | 135 | | | (17.2) | % | | 487 | | | 409 | | | (16.0) | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 124 | | | 107 | | | 106 | | | 124 | | | 132 | | | 6.5 | % | | 433 | | | 362 | | | (16.4) | % |
| Income taxes | | (25) | | | (15) | | | (17) | | | (17) | | | (27) | | | (8.0) | % | | (79) | | | (61) | | | 22.8 | % |
| Operating earnings (loss), before noncontrolling interest | | 99 | | | 92 | | | 89 | | | 107 | | | 105 | | | 6.1 | % | | 354 | | | 301 | | | (15.0) | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Operating earnings (loss) | | $ | 99 | | | $ | 92 | | | $ | 89 | | | $ | 107 | | | $ | 105 | | | 6.1 | % | | $ | 354 | | | $ | 301 | | | (15.0) | % |
| | | | | | | | | | | | | | | | | | |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating earnings (loss) - TTM: | | N/A | | $ | 446 | | | $ | 391 | | | $ | 387 | | | $ | 393 | | | (16.6) | | | N/A | | $ | 393 | | | (16.6) | % |
| | | | | | | | | | | | | | | | | | |
| Average Account Value (TTM) | | $ | 43,680 | | | $ | 39,729 | | | $ | 36,612 | | | $ | 35,067 | | | $ | 33,601 | | | (23.1) | % | | $ | 43,680 | | | $ | 33,601 | | | (23.1) | % |
| | | | | | | | | | | | | | | | | | |
| Return on assets (TTM) | | N/A | | 1.36 | % | | 1.29 | % | | 1.31 | % | | 1.40 | % | | | | N/A | | 1.40 | % | | |
| | | | | | | | | | | | | | | | | | |
| Net flows (1) | | $ | (57) | | | $ | 24 | | | $ | 30 | | | $ | (66) | | | $ | (175) | | | (207.0) | % | | $ | 610 | | | $ | (211) | | | (134.6) | % |
| | | | | | | | | | | | | | | | | | |
| Gross premiums and deposits | | $ | 861 | | | $ | 952 | | | $ | 897 | | | $ | 994 | | | $ | 817 | | | (5.1) | % | | $ | 3,496 | | | $ | 2,708 | | | (22.5) | % |
| | | | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
|
(1) For the three months ended March 31, 2023, three months ended June 30, 2023, three months ended September 30, 2023, and nine months ended September 30, 2023 net outflows of $180 million, $140 million, $172 million, and $492 million are excluded as these amounts are related to ceded AV to Global Atlantic. |
| | | | | | | | |
3Q 2023 Financial Supplement | | 15 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 | | | | |
| | | | | | | | | | | | | | | | | | |
| Sales Metrics | | | | | | | | | | | | | | | | | | |
| Gross premiums and deposits: | | | | | | | | | | | | | | | | | | |
| First-year premiums and deposits | | $ | 371 | | | $ | 392 | | | $ | 323 | | | $ | 372 | | | $ | 343 | | | $ | 1,726 | | | $ | 1,038 | | | | | |
| Renewal premiums and deposits | | 490 | | | 560 | | | 574 | | | 622 | | | 474 | | | 1,770 | | | 1,670 | | | | | |
| Group Retirement premiums and deposits | | $ | 861 | | | $ | 952 | | | $ | 897 | | | $ | 994 | | | $ | 817 | | | $ | 3,496 | | | $ | 2,708 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Gross premiums and deposits by market: | | | | | | | | | | | | | | | | | | |
| Tax-exempt | | $ | 293 | | | $ | 258 | | | $ | 211 | | | $ | 275 | | | $ | 259 | | | $ | 743 | | | $ | 745 | | | | | |
| Corporate | | 69 | | | 103 | | | 84 | | | 70 | | | 53 | | | 220 | | | 207 | | | | | |
| Institutional | | 3 | | | 25 | | | 25 | | | 23 | | | 27 | | | 747 | | | 75 | | | | | |
| Other | | 6 | | | 6 | | | 3 | | | 4 | | | 4 | | | 16 | | | 11 | | | | | |
| Total first year premiums and deposits | | 371 | | | 392 | | | 323 | | | 372 | | | 343 | | | 1,726 | | | 1,038 | | | | | |
| Tax-exempt | | 364 | | | 435 | | | 428 | | | 494 | | | 352 | | | 1,350 | | | 1,274 | | | | | |
| Corporate | | 93 | | | 87 | | | 105 | | | 88 | | | 94 | | | 290 | | | 287 | | | | | |
| Institutional | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
| Other | | 33 | | | 38 | | | 41 | | | 40 | | | 28 | | | 130 | | | 109 | | | | | |
| Total renewal premiums and deposits | | 490 | | | 560 | | | 574 | | | 622 | | | 474 | | | 1,770 | | | 1,670 | | | | | |
| Group Retirement premiums and deposits by market | | $ | 861 | | | $ | 952 | | | $ | 897 | | | $ | 994 | | | $ | 817 | | | $ | 3,496 | | | $ | 2,708 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Account Values and Assets under Administration | | | | | | | | | | | | | | | | | | |
| General Account: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 13,240 | | | $ | 13,234 | | | $ | 9,175 | | | $ | 9,133 | | | $ | 9,101 | | | $ | 13,046 | | | $ | 9,175 | | | | | |
| Gross premiums and deposits | | 242 | | | 239 | | | 201 | | | 242 | | | 198 | | | 870 | | | 641 | | | | | |
| Surrenders, withdrawals and benefits | | (304) | | | (333) | | | (331) | | | (352) | | | (326) | | | (830) | | | (1,009) | | | | | |
| Net flows (1) | | (62) | | | (94) | | | (130) | | | (110) | | | (128) | | | 40 | | | (368) | | | | | |
| Investment performance, interest credited and policy charges (1) | | 56 | | | 87 | | | 80 | | | 78 | | | 43 | | | 148 | | | 201 | | | | | |
| Ceded to Global Atlantic (2) | | — | | | (4,052) | | | — | | | — | | | — | | | — | | | — | | | | | |
| Other (3) | | — | | | — | | | 8 | | | — | | | — | | | — | | | 8 | | | | | |
| Balance as of end of period | | $ | 13,234 | | | $ | 9,175 | | | $ | 9,133 | | | $ | 9,101 | | | $ | 9,016 | | | $ | 13,234 | | | $ | 9,016 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Separate Accounts and Mutual Funds | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 27,927 | | | $ | 26,476 | | | $ | 22,830 | | | $ | 24,434 | | | $ | 25,884 | | | $ | 34,763 | | | $ | 22,830 | | | | | |
| Gross premiums and deposits | | 619 | | | 713 | | | 697 | | | 751 | | | 620 | | | 2,626 | | | 2,068 | | | | | |
| Surrenders, withdrawals and benefits | | (614) | | | (595) | | | (537) | | | (707) | | | (667) | | | (2,056) | | | (1,911) | | | | | |
| Net flows (1) | | 5 | | | 118 | | | 160 | | | 44 | | | (47) | | | 570 | | | 157 | | | | | |
| Investment performance, interest credited and policy charges (1) | | (1,456) | | | 1,547 | | | 1,422 | | | 1,406 | | | (1,004) | | | (8,857) | | | 1,824 | | | | | |
| Ceded to Global Atlantic (2) | | — | | | (5,311) | | | — | | | — | | | — | | | — | | | — | | | | | |
| Other (3) | | — | | | — | | | 22 | | | — | | | — | | | — | | | 22 | | | | | |
| Balance as of end of period | | $ | 26,476 | | | $ | 22,830 | | | $ | 24,434 | | | $ | 25,884 | | | $ | 24,833 | | | $ | 26,476 | | | $ | 24,833 | | | | | |
| | | | | | | | | | | | | | | | | | |
| Total: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 41,167 | | | $ | 39,710 | | | $ | 32,005 | | | $ | 33,567 | | | $ | 34,985 | | | $ | 47,809 | | | $ | 32,005 | | | | | |
| Gross premiums and deposits | | 861 | | | 952 | | | 898 | | | 993 | | | 818 | | | 3,496 | | | 2,709 | | | | | |
| Surrenders, withdrawals and benefits | | (918) | | | (928) | | | (868) | | | (1,059) | | | (993) | | | (2,886) | | | (2,920) | | | | | |
| Net flows (1) | | (57) | | | 24 | | | 30 | | | (66) | | | (175) | | | 610 | | | (211) | | | | | |
| Investment performance, interest credited and policy charges (1) | | (1,400) | | | 1,634 | | | 1,502 | | | 1,484 | | | (961) | | | (8,709) | | | 2,025 | | | | | |
| Ceded to Global Atlantic (2) | | — | | | (9,363) | | | — | | | — | | | — | | | — | | | — | | | | | |
| Other (3) | | — | | | — | | | 30 | | | — | | | — | | | — | | | 30 | | | | | |
| Balance as of end of period | | $ | 39,710 | | | $ | 32,005 | | | $ | 33,567 | | | $ | 34,985 | | | $ | 33,849 | | | $ | 39,710 | | | $ | 33,849 | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 16 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) For the three and nine months ended September 30, 2023, net outflows of $172 million and $492 million and investment performance, interest credited and policy charges of $275 million and $474 million, respectively, are excluded as these amounts are related to ceded AV to Global Atlantic. | | | |
(2) Effective October 3, 2022, AV excludes activity related to ceded AV to Global Atlantic. In addition, roll-forward reflects the AV ceded to Global Atlantic as of the transaction date. | | | |
(3) For the three months ended March 31, 2023 and nine months ended September 30, 2023, amounts reflect a total special payment applied to the accounts of active clients as part of a previously disclosed settlement agreement between Equitable Financial and the SEC. | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 17 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Management and Research - Operating Earnings (Loss) and Summary Metrics |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | (9) | | | $ | 15 | | | $ | 9 | | | $ | 2 | | | $ | (9) | | | — | % | | $ | (58) | | | $ | 2 | | | 103.4 | % |
| Net derivative gains (losses) | | 15 | | | (16) | | | (10) | | | (1) | | | 9 | | | (40.0) | % | | 57 | | | (2) | | | (103.5) | % |
| Investment management, service fees and other income | | 990 | | | 972 | | | 1,010 | | | 999 | | | 1,034 | | | 4.4 | % | | 3,135 | | | 3,043 | | | (2.9) | % |
| Segment revenues | | 996 | | | 971 | | | 1,009 | | | 1,000 | | | 1,034 | | | 3.8 | % | | 3,134 | | | 3,043 | | | (2.9) | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Commissions and distribution-related payments | | 152 | | | 143 | | | 148 | | | 150 | | | 156 | | | 2.6 | % | | 487 | | | 454 | | | (6.8) | % |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 641 | | | 598 | | | 637 | | | 647 | | | 658 | | | 0.5 | % | | 1,939 | | | 1,942 | | | (1.6) | % |
| Total benefits and other deductions | | 793 | | | 741 | | | 785 | | | 797 | | | 814 | | | 2.6 | % | | 2,426 | | | 2,396 | | | (1.2) | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 203 | | | 230 | | | 224 | | | 203 | | | 220 | | | 8.4 | % | | 708 | | | 647 | | | (8.6) | % |
| Income taxes | | (35) | | | (41) | | | (36) | | | (24) | | | (36) | | | (2.9) | % | | (121) | | | (96) | | | 20.7 | % |
| Operating earnings (loss), before noncontrolling interest | | 168 | | | 189 | | | 188 | | | 179 | | | 184 | | | 9.5 | % | | 587 | | | 551 | | | (6.1) | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | (75) | | | (95) | | | (89) | | | (80) | | | (85) | | | (13.3) | % | | (256) | | | (254) | | | 0.8 | % |
| Operating earnings (loss) | | $ | 94 | | | $ | 94 | | | $ | 99 | | | $ | 99 | | | $ | 99 | | | 5.3 | % | | $ | 331 | | | $ | 297 | | | (10.3) | % |
| | | | | | | | | | | | | | | | | | |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Adjusted operating margin (1) | | 25.8 | % | | 30.0 | % | | 28.7 | % | | 27.0 | % | | 28.0 | % | | | | 29.9 | % | | 27.9 | % | | |
| | | | | | | | | | | | | | | | | | |
| Net flows (in billions USD) | | $ | (10.5) | | | $ | (1.9) | | | $ | 0.8 | | | $ | (4.0) | | | $ | (1.9) | | | | | $ | (1.8) | | | $ | (5.2) | | | |
| | | | | | | | | | | | | | | | | | |
| Total AUM (in billions USD) | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | | | $ | 669.0 | | | | | $ | 612.7 | | | $ | 669.0 | | | |
| | | | | | | | | | | | | | | | | | |
| Ownership Structure of AB | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Holdings and its subsidiaries | | 62.8 | % | | 59.9 | % | | 60.0 | % | | 59.9 | % | | 60.3 | % | | | | 62.8 | % | | 60.3 | % | | |
| AB Holding | | 36.5 | % | | 39.4 | % | | 39.3 | % | | 39.3 | % | | 39.0 | % | | | | 36.5 | % | | 39.0 | % | | |
| Unaffiliated holders | | 0.7 | % | | 0.7 | % | | 0.7 | % | | 0.8 | % | | 0.7 | % | | | | 0.7 | % | | 0.7 | % | | |
| Total | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | 100.0 | % | | | | 100.0 | % | | 100.0 | % | | |
| | | | | | | | | | | | | | | | | | |
| EQH economic interest | | 64.3 | % | | 61.3 | % | | 61.4 | % | | 61.4 | % | | 61.7 | % | | | | 64.3 | % | | 61.7 | % | | |
| EQH average economic interest | | 64.3 | % | | 62.4 | % | | 61.4 | % | | 61.4 | % | | 61.5 | % | | | | 64.5 | % | | 61.4 | % | | |
| | | | | | | | | | | | | | | | | | |
| Units of limited partnership outstanding (in millions) | | 272.6 | | | 286.0 | | | 285.7 | | | 285.7 | | | 284.0 | | | | | 272.6 | | | 284.0 | | | |
| 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. During the second quarter of 2023, AB revised adjusted operating income to exclude interest on borrowings. We have recast prior periods presentation to align with the current period presentation. |
|
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3Q 2023 Financial Supplement | | 18 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Management and Research - Select Operating Metrics |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended or As of |
| (in billions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | |
| AUM Roll-forward | | | | | | | | | | |
| Balance as of beginning of period | | $ | 646.8 | | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | |
| Sales/new accounts | | 19.8 | | | 30.9 | | | 25.6 | | | 22.4 | | | 25.2 | |
| Redemptions/terminations | | (24.9) | | | (23.2) | | | (20.6) | | | (23.1) | | | (20.3) | |
| Cash flow/unreinvested dividends | | (5.4) | | | (9.6) | | | (4.2) | | | (3.3) | | | (6.8) | |
| Net long-term (outflows) inflows | | (10.5) | | | (1.9) | | | 0.8 | | | (4.0) | | | (1.9) | |
| | | | | | | | | | |
| Acquisition | | 12.2 | | | — | | | — | | | — | | | — | |
| Market appreciation (depreciation) | | (35.8) | | | 35.6 | | | 28.7 | | | 19.6 | | | (20.6) | |
| Net change | | (34.1) | | | 33.7 | | | 29.5 | | | 15.6 | | | (22.5) | |
| Balance as of end of period | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | | | $ | 669.0 | |
| | | | | | | | | | |
| Ending Assets by distribution channel | | | | | | | | | | |
| Institutions | | $ | 279.4 | | | $ | 297.3 | | | $ | 306.6 | | | $ | 309.2 | | | $ | 296.9 | |
| Retail | | 232.3 | | | 242.9 | | | 256.7 | | | 266.6 | | | 259.2 | |
| Private Wealth | | 101.0 | | | 106.2 | | | 112.6 | | | 115.7 | | | 112.9 | |
| Total | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | | | $ | 669.0 | |
| | | | | | | | | | |
| Ending Assets by investment service | | | | | | | | | | |
| Equity | | | | | | | | | | |
| Actively Managed | | $ | 202.9 | | | $ | 217.9 | | | $ | 229.1 | | | $ | 235.9 | | | $ | 226.8 | |
| Passively Managed (1) | | 52.1 | | | 53.8 | | | 56.6 | | | 60.5 | | | 56.0 | |
| Total Equity | | $ | 255.0 | | | $ | 271.7 | | | $ | 285.7 | | | $ | 296.4 | | | $ | 282.8 | |
| Fixed Income | | | | | | | | | | |
| Actively Managed | | $ | 239.1 | | | $ | 242.8 | | | $ | 253.7 | | | $ | 258.4 | | | $ | 250.6 | |
| Passively Managed (1) | | 9.5 | | | 9.4 | | | 9.5 | | | 9.4 | | | 9.4 | |
| Total Fixed Income | | 248.6 | | | 252.2 | | | 263.2 | | | 267.8 | | | 260.0 | |
| Total Alternatives/Multi-Asset Solutions (2) | | 109.1 | | | 122.5 | | | 127.0 | | | 127.3 | | | 126.2 | |
| Total | | $ | 612.7 | | | $ | 646.4 | | | $ | 675.9 | | | $ | 691.5 | | | $ | 669.0 | |
| | | | | | | | | | |
| Notes: | | | | | | | | | | |
|
| (1) Includes index and enhanced index services. |
| (2) Includes certain multi-asset solutions and services not included in equity or fixed income services. |
|
| | | | | | | | | | |
| | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 19 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Investment Management and Research - Net Flows |
| | For the Three Months Ended | | Nine Months Ended or As of |
| (in billions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 |
| Net Flows by Distribution Channel | | | | | | | | | | | | | | |
| Institutions | | | | | | | | | | | | | | |
| US | | $ | (0.6) | | | $ | (2.2) | | | $ | — | | | $ | 4.0 | | | $ | (1.6) | | | $ | 0.4 | | | $ | 2.4 | |
| Global and Non-US | | (5.7) | | | 3.9 | | | (2.7) | | | (7.2) | | | (1.9) | | | 4.2 | | | (11.8) | |
| Total Institutions | | $ | (6.3) | | | $ | 1.7 | | | $ | (2.7) | | | $ | (3.2) | | | $ | (3.5) | | | $ | 4.6 | | | $ | (9.4) | |
| Retail | | | | | | | | | | | | | | |
| US | | $ | (0.3) | | | $ | (0.7) | | | $ | — | | | $ | (1.0) | | | $ | 2.5 | | | $ | 6.2 | | | $ | 1.5 | |
| Global and Non-US | | (4.7) | | | (2.7) | | | 1.6 | | | 0.3 | | | (0.9) | | | (14.4) | | | 1.0 | |
| Total Retail | | $ | (5.0) | | | $ | (3.4) | | | $ | 1.6 | | | $ | (0.7) | | | $ | 1.6 | | | $ | (8.2) | | | $ | 2.5 | |
| Private Wealth | | | | | | | | | | | | | | |
| US | | $ | 0.5 | | | $ | 0.1 | | | $ | 2.0 | | | $ | 0.3 | | | $ | 0.1 | | | $ | 0.7 | | | $ | 2.4 | |
| Global and Non-US | | 0.3 | | | (0.3) | | | (0.1) | | | (0.4) | | | (0.1) | | | 1.1 | | | (0.7) | |
| Total Private Wealth | | $ | 0.8 | | | $ | (0.2) | | | $ | 1.9 | | | $ | (0.1) | | | $ | — | | | $ | 1.8 | | | $ | 1.7 | |
| Total Net Flows by Distribution Channel | | $ | (10.5) | | | $ | (1.9) | | | $ | 0.8 | | | $ | (4.0) | | | $ | (1.9) | | | $ | (1.8) | | | $ | (5.2) | |
| Net Flows by Investment Service | | | | | | | | | | | | | | |
| Equity Active | | | | | | | | | | | | | | |
| US | | $ | (0.3) | | | $ | — | | | $ | (1.4) | | | $ | (3.0) | | | $ | 1.4 | | | $ | 5.2 | | | $ | (3.0) | |
| Global and Non-US | | (4.7) | | | (2.6) | | | (2.0) | | | (3.8) | | | (1.6) | | | (5.3) | | | (7.5) | |
| Total Equity Active | | $ | (5.0) | | | $ | (2.6) | | | $ | (3.4) | | | $ | (6.8) | | | $ | (0.2) | | | $ | (0.1) | | | $ | (10.5) | |
| Equity Passive (1) | | | | | | | | | | | | | | |
| US | | $ | (0.2) | | | $ | (2.0) | | | $ | (0.6) | | | $ | — | | | $ | (2.6) | | | $ | (0.4) | | | $ | (3.2) | |
| Global and Non-US | | (0.7) | | | (0.3) | | | (0.2) | | | (0.3) | | | 0.2 | | | (2.6) | | | (0.3) | |
| Total Equity Passive (1) | | $ | (0.9) | | | $ | (2.3) | | | $ | (0.8) | | | $ | (0.3) | | | $ | (2.4) | | | $ | (3.0) | | | $ | (3.5) | |
| Fixed Income - Taxable | | | | | | | | | | | | | | |
| US | | $ | (0.1) | | | $ | (0.2) | | | $ | 2.5 | | | $ | 5.4 | | | $ | 0.2 | | | $ | (1.1) | | | $ | 8.1 | |
| Global and Non-US | | (3.5) | | | (3.8) | | | 1.0 | | | (0.5) | | | (2.6) | | | (12.9) | | | (2.1) | |
| Total Fixed Income - Taxable | | $ | (3.6) | | | $ | (4.0) | | | $ | 3.5 | | | $ | 4.9 | | | $ | (2.4) | | | $ | (14.0) | | | $ | 6.0 | |
| Fixed Income - Tax-Exempt | | | | | | | | | | | | | | |
| US | | $ | — | | | $ | (1.0) | | | $ | 1.6 | | | $ | 0.9 | | | $ | 1.3 | | | $ | 1.7 | | | $ | 3.8 | |
| Global and Non-US | | — | | | (0.1) | | | — | | | — | | | — | | | 0.1 | | | — | |
| Total Fixed Income - Tax-Exempt | | $ | — | | | $ | (1.1) | | | $ | 1.6 | | | $ | 0.9 | | | $ | 1.3 | | | $ | 1.8 | | | $ | 3.8 | |
| Fixed Income - Passive (1) | | | | | | | | | | | | | | |
| US | | $ | (0.2) | | | $ | (0.3) | | | $ | (0.1) | | | $ | (0.1) | | | $ | 0.5 | | | $ | 0.1 | | | $ | 0.3 | |
| Global and Non-US | | (1.9) | | | — | | | (0.1) | | | 0.2 | | | (0.1) | | | (1.1) | | | — | |
| Total Fixed Income - Passive (1) | | $ | (2.1) | | | $ | (0.3) | | | $ | (0.2) | | | $ | 0.1 | | | $ | 0.4 | | | $ | (1.0) | | | $ | 0.3 | |
| Alternatives/Multi-Asset Solutions (2) | | | | | | | | | | | | | | |
| US | | $ | 0.4 | | | $ | 0.7 | | | $ | — | | | $ | 0.1 | | | $ | 0.2 | | | $ | 1.8 | | | $ | 0.3 | |
| Global and Non-US | | 0.7 | | | 7.7 | | | 0.1 | | | (2.9) | | | 1.2 | | | 12.7 | | | (1.6) | |
| Total Alternatives/Multi-Asset Solutions (2) | | $ | 1.1 | | | $ | 8.4 | | | $ | 0.1 | | | $ | (2.8) | | | $ | 1.4 | | | $ | 14.5 | | | $ | (1.3) | |
| Total Net Flows by Investment Service | | $ | (10.5) | | | $ | (1.9) | | | $ | 0.8 | | | $ | (4.0) | | | $ | (1.9) | | | $ | (1.8) | | | $ | (5.2) | |
| Active vs. Passive Net Flows | | | | | | | | | | | | | | |
| Actively Managed | | | | | | | | | | | | | | |
| Equity | | $ | (5.0) | | | $ | (2.6) | | | $ | (3.4) | | | $ | (6.8) | | | $ | (0.2) | | | $ | (0.1) | | | $ | (10.5) | |
| Fixed Income | | (3.6) | | | (5.1) | | | 5.1 | | | 5.8 | | | (1.1) | | | (12.2) | | | 9.8 | |
| Alternatives/Multi-Asset Solutions (2) | | 0.8 | | | 7.6 | | | 0.1 | | | (3.0) | | | 1.2 | | | 13.3 | | | (1.7) | |
| Total | | $ | (7.8) | | | $ | (0.1) | | | $ | 1.8 | | | $ | (4.0) | | | $ | (0.1) | | | $ | 1.0 | | | $ | (2.4) | |
| Passively Managed (1) | | | | | | | | | | | | | | |
| Equity | | $ | (0.9) | | | $ | (2.3) | | | $ | (0.8) | | | $ | (0.3) | | | $ | (2.4) | | | $ | (3.0) | | | $ | (3.5) | |
| Fixed Income | | (2.1) | | | (0.3) | | | (0.2) | | | 0.1 | | | 0.4 | | | (1.0) | | | 0.3 | |
| Alternatives/Multi-Asset Solutions (2) | | 0.3 | | 0.8 | | | — | | | 0.2 | | 0.2 | | 1.2 | | 0.4 | |
| Total | | $ | (2.7) | | | $ | (1.8) | | | $ | (1.0) | | | $ | — | | | $ | (1.8) | | | $ | (2.8) | | | $ | (2.8) | |
| Total Active vs Passive Net Flows | | $ | (10.5) | | | $ | (1.9) | | | $ | 0.8 | | | $ | (4.0) | | | $ | (1.9) | | | $ | (1.8) | | | $ | (5.2) | |
| Notes: | | | | | | | | | | | | | | |
|
| (1) Includes index and enhanced index services. | | | | | | | | | | | | | | |
(2) Includes certain multi-asset solutions and services not included in equity or fixed income services. |
|
| | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 20 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Protection Solutions - Operating Earnings (Loss) and Summary Metrics |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 502 | | | $ | 511 | | | $ | 520 | | | $ | 524 | | | $ | 516 | | | 2.8 | % | | $ | 1,507 | | | $ | 1,560 | | | 3.5 | % |
| Net investment income (loss) | | 236 | | | 221 | | | 217 | | | 242 | | | 260 | | | 10.2 | % | | 760 | | | 719 | | | (5.4) | % |
| Net derivative gains (losses) | | (13) | | | (2) | | | (2) | | | (16) | | | 7 | | | 153.8 | % | | (18) | | | (11) | | | 38.9 | % |
| Investment management, service fees and other income | | 34 | | | 33 | | | 32 | | | 34 | | | 39 | | | 14.7 | % | | 108 | | | 105 | | | (2.8) | % |
| Segment revenues | | 759 | | | 763 | | | 767 | | | 784 | | | 822 | | | 8.3 | % | | 2,357 | | | 2,373 | | | 0.7 | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 430 | | | 520 | | | 535 | | | 484 | | | 512 | | | 19.1 | % | | 1,376 | | | 1,531 | | | 11.3 | % |
| Remeasurement of liability for future policy benefits | | 22 | | | 12 | | | 6 | | | (2) | | | (16) | | | (172.7) | % | | 35 | | | (12) | | | (134.3) | % |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 130 | | | 131 | | | 125 | | | 130 | | | 137 | | | 5.4 | % | | 380 | | | 392 | | | 3.2 | % |
| Commissions and distribution-related payments | | 31 | | | 43 | | | 34 | | | 36 | | | 37 | | | 19.4 | % | | 99 | | | 107 | | | 8.1 | % |
| Amortization of deferred policy acquisition costs | | 29 | | | 30 | | | 29 | | | 30 | | | 30 | | | 3.4 | % | | 87 | | | 89 | | | 2.3 | % |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 79 | | | 78 | | | 80 | | | 77 | | | 81 | | | — | % | | 212 | | | 238 | | | 11.3 | % |
| Segment benefits and other deductions | | 721 | | | 814 | | | 809 | | | 755 | | | 781 | | | 8.3 | % | | 2,189 | | | 2,345 | | | 7.1 | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 38 | | | (51) | | | (42) | | | 29 | | | 41 | | | 7.9 | % | | 168 | | | 28 | | | (83.3) | % |
| Income taxes | | (8) | | | 11 | | | 7 | | | (5) | | | (7) | | | 12.5 | % | | (31) | | | (5) | | | 83.9 | % |
| Operating earnings (loss), before noncontrolling interest | | 30 | | | (40) | | | (35) | | | 24 | | | 34 | | | 13.3 | % | | 137 | | | 23 | | | (83.2) | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | (1) | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Operating earnings (loss) | | $ | 30 | | | $ | (41) | | | $ | (35) | | | $ | 24 | | | $ | 34 | | | 13.3 | % | | $ | 137 | | | $ | 23 | | | (83.2) | % |
| | | | | | | | | | | | | | | | | | |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
Operating earnings (loss) - TTM: | | N/A | | $ | 97 | | | $ | 65 | | | $ | (21) | | | $ | (18) | | | (109.4) | % | | N/A | | $ | (18) | | | (109.4) | % |
| | | | | | | | | | | | | | | | | | |
| Benefit ratio | | 73.8 | % | | 85.3 | % | | 86.0 | % | | 78.3 | % | | 79.0 | % | | | | 74.5 | % | | 81.0 | % | | |
| | | | | | | | | | | | | | | | | | |
| Gross written premiums | | $ | 769 | | | $ | 776 | | | $ | 786 | | | $ | 769 | | | $ | 756 | | | (1.7) | % | | $ | 2,307 | | | $ | 2,311 | | | 0.2 | % |
| | | | | | | | | | | | | | | | | | |
| Annualized premiums | | $ | 74 | | | $ | 74 | | | $ | 76 | | | $ | 78 | | | $ | 79 | | | 7.3 | % | | $ | 218 | | | $ | 233 | | | 7.0 | % |
| | | | | | | | | | | | | | | | | | |
| Total in-force face amount (in billions USD) (1) | | $ | 418.3 | | | $ | 417.0 | | | $ | 415.5 | | | $ | 414.7 | | | $ | 413.2 | | | (1.2) | % | | $ | 418.3 | | | $ | 413.2 | | | (1.2) | % |
| | | | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | | | |
|
| (1) Total in-force face amount presented on a gross basis including ceded policies. |
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 21 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Protection Solutions - Select Operating Metrics |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 |
| | | | | | | | | | | | | | | | |
| Sales Metrics | | | | | | | | | | | | | | | | |
| First Year Premiums and Deposits by Product Line: | | | | | | | | | | | | | | | | |
| Universal Life | | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Indexed Universal Life | | | | 4 | | | 5 | | | 2 | | | 3 | | | 4 | | | 14 | | | 9 | |
| Variable Universal Life | | | | 71 | | | 77 | | | 72 | | | 76 | | | 72 | | | 232 | | | 220 | |
| Term | | | | 3 | | | 3 | | | 3 | | | 3 | | | 3 | | | 10 | | | 9 | |
| Employee Benefits | | | | 23 | | | 22 | | | 26 | | | 25 | | | 24 | | | 60 | | | 75 | |
| Other (1) | | | | — | | | 1 | | | — | | | — | | | — | | | — | | | — | |
| Total | | | | $ | 101 | | | $ | 108 | | | $ | 103 | | | $ | 107 | | | $ | 103 | | | $ | 316 | | | $ | 313 | |
| | | | | | | | | | | | | | | | |
| Renewals by Product Line: | | | | | | | | | | | | | | | | |
| Universal Life | | | | $ | 207 | | | $ | 179 | | | $ | 188 | | | $ | 179 | | | $ | 187 | | | $ | 584 | | | $ | 554 | |
| Indexed Universal Life | | | | 74 | | | 74 | | | 76 | | | 73 | | | 71 | | | 231 | | | 220 | |
| Variable Universal Life | | | | 244 | | | 257 | | | 258 | | | 251 | | | 236 | | | 732 | | | 745 | |
| Term | | | | 90 | | | 96 | | | 94 | | | 89 | | | 88 | | | 278 | | | 271 | |
| Employee Benefits | | | | 49 | | | 57 | | | 63 | | | 66 | | | 68 | | | 154 | | | 197 | |
| Other (1) | | | | 4 | | | 5 | | | 4 | | | 4 | | | 3 | | | 12 | | | 11 | |
| Total | | | | 668 | | | 668 | | | 683 | | | 662 | | | 653 | | | 1,990 | | | 1,998 | |
| Total Gross Premiums | | | | $ | 769 | | | $ | 776 | | | $ | 786 | | | $ | 769 | | | $ | 756 | | | $ | 2,307 | | | $ | 2,311 | |
| | | | | | | | | | | | | | | | |
| In-force Metrics | | | | | | | | | | | | | | | | |
| In-force Face Amount by Product (2) (in billions USD): | | | | | | | | | | | | | | | | |
| Universal Life (3) | | | | $ | 43.7 | | | $ | 43.1 | | | $ | 42.5 | | | $ | 42.0 | | | $ | 41.5 | | | $ | 43.7 | | | $ | 41.5 | |
| Indexed Universal Life | | | | 27.6 | | | 27.5 | | | 27.3 | | | 27.2 | | | 27.1 | | | 27.6 | | | 27.1 | |
| Variable Universal Life (4) | | | | 132.8 | | | 133.4 | | | 133.9 | | | 134.8 | | | 135.4 | | | 132.8 | | | 135.4 | |
| Term | | | | 213.0 | | | 211.9 | | | 210.5 | | | 209.6 | | | 208.1 | | | 213.0 | | | 208.1 | |
| Whole Life | | | | 1.2 | | | 1.1 | | | 1.2 | | | 1.1 | | | 1.1 | | | 1.2 | | | 1.1 | |
| Total | | | | $ | 418.3 | | | $ | 417.0 | | | $ | 415.5 | | | $ | 414.7 | | | $ | 413.2 | | | $ | 418.3 | | | $ | 413.2 | |
| | | | | | | | | | | | | | | | |
| In-force Policy Count by Product (2) (in thousands): | | | | | | | | | | | | | | | | |
| Universal Life (3) | | | | 130 | | | 129 | | | 127 | | | 125 | | | 123 | | | 130 | | | 123 | |
| Indexed Universal Life | | | | 64 | | | 64 | | | 64 | | | 63 | | | 63 | | | 64 | | | 63 | |
| Variable Universal Life (4) | | | | 293 | | | 293 | | | 292 | | | 292 | | | 292 | | | 293 | | | 292 | |
| Term | | | | 259 | | | 256 | | | 253 | | | 251 | | | 248 | | | 259 | | | 248 | |
| Whole Life | | | | 16 | | | 15 | | | 15 | | | 15 | | | 15 | | | 16 | | | 15 | |
| Total | | | | 762 | | | 757 | | | 751 | | | 746 | | | 741 | | | 762 | | | 741 | |
| | | | | | | | | | | | | | | | |
| Protection Solutions Reserves | | | | | | | | | | | | | | | | |
| General Account | | | | $ | 18,243 | | | $ | 18,208 | | | $ | 18,137 | | | $ | 18,071 | | | $ | 17,949 | | | $ | 18,243 | | | $ | 17,949 | |
| Separate Accounts | | | | 12,783 | | | 13,634 | | | 14,562 | | | 15,401 | | | 14,782 | | | 12,783 | | | 14,782 | |
| Total | | | | $ | 31,026 | | | $ | 31,842 | | | $ | 32,699 | | | $ | 33,472 | | | $ | 32,731 | | | $ | 31,026 | | | $ | 32,731 | |
| | | | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | | | |
|
| (1) For the individual life insurance premiums, Other includes Whole Life insurance and other products available-for-sale but not actively marketed. |
| (2) Includes individual life insurance and does not include Employee Benefits as it is a start-up business and therefore has immaterial in-force policies. |
| (3) Universal Life includes Guaranteed Universal Life. |
| (4) Variable Universal Life includes variable life insurance and corporate-owned life insurance. |
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 22 |
| | |
| Wealth Management - 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | 1 | | | $ | 1 | | | $ | 2 | | | $ | 3 | | | $ | 4 | | | 300.0 | % | | $ | 1 | | | $ | 9 | | | 800.0 | % |
| Net derivative gains (losses) | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Investment management, service fees and other income | | 352 | | | 348 | | | 360 | | | 388 | | | 386 | | | 9.7 | % | | 1,096 | | | 1,134 | | | 3.5 | % |
| Segment revenues | | 353 | | | 349 | | | 362 | | | 391 | | | 390 | | | 10.5 | % | | 1,097 | | | 1,143 | | | 4.2 | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Commissions and distribution-related payments | | 231 | | | 225 | | | 228 | | | 243 | | | 244 | | | 5.6 | % | | 715 | | | 715 | | | — | % |
| | | | | | | | | | | | | | | | | | |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 92 | | | 94 | | | 91 | | | 94 | | | 93 | | | 1.1 | % | | 276 | | | 278 | | | 0.7 | % |
| Segment benefits and other deductions | | 323 | | | 319 | | | 319 | | | 337 | | | 337 | | | 4.3 | % | | 991 | | | 993 | | | 0.2 | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 30 | | | 30 | | | 43 | | | 54 | | | 53 | | | 76.7 | % | | 106 | | | 150 | | | 41.5 | % |
| Income taxes | | (8) | | | (7) | | | (11) | | | (12) | | | (13) | | | (62.5) | % | | (28) | | | (36) | | | (28.6) | % |
| Operating earnings (loss), before noncontrolling interest | | 22 | | | 23 | | | 32 | | | 42 | | | 40 | | | 81.8 | % | | 78 | | | 114 | | | 46.2 | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Operating earnings (loss) | | $ | 22 | | | $ | 23 | | | $ | 32 | | | $ | 42 | | | $ | 40 | | | 81.8 | % | | $ | 78 | | | $ | 114 | | | 46.2 | % |
| | | | | | | | | | | | 1.2824427480916 | | | | | | 1.2824427480916 |
| Revenue by Activity Type | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Investment management, service fees and other income : | | | | | | | | | | | | | | | | | | |
| Investment management and advisory fees | | $ | 125 | | | $ | 120 | | | $ | 127 | | | $ | 134 | | | $ | 141 | | | 13.0 | % | | $ | 399 | | | $ | 402 | | | 0.8 | % |
| Distribution fees | | 219 | | | 213 | | | 218 | | | 239 | | | 229 | | | 4.6 | % | | 679 | | | 685 | | | 0.8 | % |
| Interest income | | 5 | | | 8 | | | 11 | | | 13 | | | 13 | | | 184.9 | % | | 7 | | | 37 | | | 469.2 | % |
| Service and other income | | 3 | | | 6 | | | 4 | | | 3 | | | 3 | | | (10.3) | % | | 12 | | | 10 | | | (14.6) | % |
| | | | | | | | | | | | | | | | | | |
| Total Investment management, service fees and other income | | $ | 351 | | | $ | 347 | | | $ | 360 | | | $ | 388 | | | $ | 386 | | | 9.8 | % | | $ | 1,096 | | | $ | 1,134 | | | 3.4 | % |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| Pre-tax operating margin | | 8.50 | % | | 8.60 | % | | 11.88 | % | | 13.81 | % | | 13.59 | % | | | | 9.66 | % | | 13.12 | % | | |
| | | | | | | | | | | | | | | | | | |
| Net flows | | $ | 1,117 | | | $ | 575 | | | $ | 1,418 | | | $ | 1,345 | | | $ | 1,560 | | | 39.7 | % | | $ | 3,937 | | | $ | 4,323 | | | 9.8 | % |
| | | | | | | | | | | | | | | | | | |
| Total AUA | | $ | 68,393 | | | $ | 72,406 | | | $ | 75,640 | | | $ | 80,421 | | | $ | 79,359 | | | 16.0 | % | | $ | 68,393 | | | $ | 79,359 | | | 16.0 | % |
| | | | | | | | | | | | | | | | | | |
|
| | | | | | | | |
3Q 2023 Financial Supplement | | 23 |
| | |
Wealth Management - Select Operating Metrics |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 |
| | | | | | | | | | | | | | |
| AUA Roll-forward | | | | | | | | | | | | | | |
| Advisory assets : | | | | | | | | | | | | | | |
| Beginning assets | | $ | 43,994 | | | $ | 42,645 | | | $ | 45,544 | | | $ | 47,844 | | | $ | 50,862 | | | $ | 50,575 | | | $ | 45,544 | |
| Net flows | | 809 | | | 186 | | | 828 | | | 697 | | | 909 | | | 3,328 | | | 2,434 | |
| Market appreciation (depreciation) and other | | (2,157) | | | 2,713 | | | 1,473 | | | 2,321 | | | (1,654) | | | (11,257) | | | 2,140 | |
| Total advisory ending assets | | $ | 42,645 | | | $ | 45,544 | | | $ | 47,845 | | | $ | 50,862 | | | $ | 50,118 | | | $ | 42,645 | | | $ | 50,118 | |
| | | | | | | | | | | | | | |
| Brokerage and direct assets | | $ | 25,748 | | | $ | 26,862 | | | $ | 27,796 | | | $ | 29,559 | | | $ | 29,241 | | | $ | 25,748 | | | $ | 29,241 | |
| | | | | | | | | | | | | | |
| Total Wealth Management assets | | | | | | | | | | | | | | |
| Beginning assets | | $ | 70,411 | | | $ | 68,393 | | | $ | 72,406 | | | $ | 75,640 | | | $ | 80,421 | | | $ | 82,794 | | | $ | 72,406 | |
| Net flows | | 1,117 | | | 575 | | | 1,418 | | | 1,345 | | | 1,560 | | | 3,937 | | | 4,323 | |
| Market appreciation (depreciation) and other | | (3,135) | | | 3,437 | | | 1,816 | | | 3,436 | | | (2,622) | | | (18,338) | | | 2,630 | |
| Total Wealth Management ending assets | | $ | 68,393 | | | $ | 72,406 | | | $ | 75,640 | | | $ | 80,421 | | | $ | 79,359 | | | $ | 68,393 | | | $ | 79,359 | |
| | | | | | | | | | | | | | |
| Cash balances | | $ | 3,672 | | | $ | 3,566 | | | $ | 3,200 | | | $ | 2,926 | | | $ | 2,771 | | | $ | 3,672 | | | $ | 2,771 | |
| | | | | | | | | | | | | | |
| Advisors | | | | | | | | | | | | | | |
| Advisors | | 4,129 | | | 4,258 | | | 4,124 | | | 4,101 | | | 4,141 | | | 4,129 | | | 4,141 | |
| Revenue per advisor TTM (in thousands USD) | | N/A | | N/A | | $ | 343 | | | $ | 350 | | | $ | 359 | | | N/A | | $ | 359 | |
| | | | | | | | | | | | | | |
| Sales by Product Type | | | | | | | | | | | | | | |
| Advisory | | $ | 2,114 | | | $ | 1,850 | | | $ | 2,316 | | | $ | 2,315 | | | $ | 2,369 | | | $ | 7,239 | | | $ | 7,000 | |
| Brokerage and direct | | 805 | | | 907 | | | 1,099 | | | 1,172 | | | 1,272 | | | 2,170 | | | 3,543 | |
| Retirement, premiums and deposits | | 2,713 | | | 2,877 | | | 3,024 | | | 3,231 | | | 2,965 | | | 7,870 | | | 9,220 | |
| Total sales | | $ | 5,632 | | | $ | 5,634 | | | $ | 6,439 | | | $ | 6,718 | | | $ | 6,606 | | | $ | 17,278 | | | $ | 19,763 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | |
3Q 2023 Financial Supplement | | 24 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Legacy - 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | Change | | 9/30/2022 | | 9/30/2023 | | Change |
| | | | | | | | | | | | | | | | | | |
| Revenues | | | | | | | | | | | | | | | | | | |
| Policy charges, fee income and premiums | | $ | 37 | | | $ | 30 | | | $ | 34 | | | $ | 44 | | | $ | 40 | | | 8.1 | % | | $ | 109 | | | $ | 118 | | | 8.3 | % |
| Net investment income (loss) | | 65 | | | 67 | | | 66 | | | 60 | | | 59 | | | (9.2) | % | | 185 | | | 185 | | | — | % |
| Net derivative gains (losses) | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Investment management, service fees and other income | | 102 | | | 104 | | | 106 | | | 99 | | | 99 | | | (2.9) | % | | 324 | | | 304 | | | (6.2) | % |
| Segment revenues | | 204 | | | 201 | | | 206 | | | 203 | | | 198 | | | (2.9) | % | | 618 | | | 607 | | | (1.8) | % |
| | | | | | | | | | | | | | | | | | |
| Benefits and other deductions | | | | | | | | | | | | | | | | | | |
| Policyholders’ benefits | | 45 | | | 48 | | | 46 | | | 61 | | | 53 | | | 17.8 | % | | 119 | | | 160 | | | 34.5 | % |
| Remeasurement of liability for future policy benefits | | (1) | | | (1) | | | — | | | — | | | 1 | | | 200.0 | % | | 1 | | | 1 | | | — | % |
| | | | | | | | | | | | | | | | | | |
| Interest credited to policyholders’ account balances | | 13 | | | 11 | | | 12 | | | 12 | | | 12 | | | (7.7) | % | | 38 | | | 36 | | | (5.3) | % |
| Commissions and distribution-related payments | | 42 | | | 43 | | | 43 | | | 43 | | | 45 | | | 7.1 | % | | 144 | | | 131 | | | (9.0) | % |
| Amortization of deferred policy acquisition costs | | 16 | | | 16 | | | 16 | | | 16 | | | 16 | | | — | % | | 49 | | | 48 | | | (2.0) | % |
| Compensation and benefits, interest expense and financing fees and other operating costs and expense | | 26 | | | 7 | | | 18 | | | 19 | | | 20 | | | (23.1) | % | | 59 | | | 57 | | | (3.4) | % |
| Segment benefits and other deductions | | 141 | | | 124 | | | 135 | | | 151 | | | 147 | | | 4.3 | % | | 410 | | | 433 | | | 5.6 | % |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss), before income taxes | | 63 | | | 77 | | | 71 | | | 52 | | | 51 | | | (19.0) | % | | 208 | | | 174 | | | (16.3) | % |
| Income taxes | | (13) | | | (12) | | | (11) | | | (7) | | | (10) | | | 23.1 | % | | (38) | | | (28) | | | 26.3 | % |
| Operating earnings (loss), before noncontrolling interest | | 50 | | | 65 | | | 60 | | | 45 | | | 41 | | | (18.0) | % | | 170 | | | 146 | | | (14.1) | % |
| Less: Operating (earnings) loss attributable to the noncontrolling interest | | — | | | — | | | — | | | — | | | — | | | — | % | | — | | | — | | | — | % |
| Operating earnings (loss) | | $ | 50 | | | $ | 65 | | | $ | 60 | | | $ | 45 | | | $ | 41 | | | (18.0) | % | | $ | 170 | | | $ | 146 | | | (14.1) | % |
| | | | | | | | | | | | | | | | | | |
| Summary Metrics | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Operating earnings (loss) - TTM: | | N/A | | $ | 235 | | | $ | 232 | | | $ | 220 | | | $ | 211 | | | N/A | | N/A | | $ | 211 | | | N/A |
| | | | | | | | | | | | | | | | | | |
| Average Account Value (TTM) | | $ | 24,854 | | | $ | 22,905 | | | $ | 21,721 | | | $ | 21,686 | | | $ | 21,696 | | | N/A | | $ | 24,854 | | | $ | 21,696 | | | N/A |
| | | | | | | | | | | | | | | | | | |
| Return on assets (TTM) | | N/A | | 1.24 | % | | 1.29 | % | | 1.21 | % | | 1.16 | % | | | | N/A | | 1.16 | % | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
| Net flows (1) | | $ | (499) | | | $ | (589) | | | $ | (523) | | | $ | (569) | | | $ | (554) | | | (11.0) | % | | $ | (1,643) | | | $ | (1,646) | | | (0.2) | % |
| | | | | | | | | | | | | | | | | | |
| In-force Policy Count by Product (in thousands) (2): | | 303 | | 299 | | 293 | | 287 | | 281 | | | | 303 | | 281 | | |
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| Notes: | | | | | | | | | | | | | | | | | | |
| Some financial metrics have been revised for prior periods; for additional information, please refer to the 10-Q |
| (1) Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and for the nine months ended September 30, 2022 and 2023 were $(312) million, $(292) million, $(292) million, $(269) million, $(263) million, $(840) million and $(824) million, respectively. |
| (2) As of September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023 and September 30, 2023, In-force Policy Count by Product presented on a gross basis includes 101 thousand, 99 thousand, 98 thousand, 96 thousand and 94 thousand ceded policies, respectively, related to the Venerable transaction. |
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3Q 2023 Financial Supplement | | 25 |
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| Legacy - Select Operating Metrics | | | | |
| | For the Three Months Ended or As of | | Nine Months Ended or As of | | | | |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 | | | | |
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| Account Values | | | | | | | | | | | | | | | | | | |
| General Account: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 960 | | | $ | 947 | | | $ | 925 | | | $ | 905 | | | $ | 887 | | | $ | 988 | | | $ | 925 | | | | | |
| Net flows (1) | | (20) | | | (27) | | | (26) | | | (24) | | | (18) | | | (60) | | | (68) | | | | | |
| Investment performance, interest credited and policy charges (2) | | 7 | | | 5 | | | 6 | | | 6 | | | 7 | | | 19 | | | 19 | | | | | |
| Ceded to Venerable | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
| Balance as of end of period | | $ | 947 | | | $ | 925 | | | $ | 905 | | | $ | 887 | | | $ | 876 | | | $ | 947 | | | $ | 876 | | | | | |
| Separate Accounts: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 21,553 | | | $ | 19,922 | | | $ | 20,557 | | | $ | 21,115 | | | $ | 21,485 | | | $ | 28,287 | | | $ | 20,557 | | | | | |
| Net flows (1) | | (479) | | | (562) | | | (497) | | | (545) | | | (536) | | | (1,583) | | | (1,578) | | | | | |
| Investment performance, interest credited and policy charges (2) | | (1,152) | | | 1,197 | | | 1,055 | | | 915 | | | (916) | | | (6,782) | | | 1,054 | | | | | |
| Ceded to Venerable | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
| Balance as of end of period | | $ | 19,922 | | | $ | 20,557 | | | $ | 21,115 | | | $ | 21,485 | | | $ | 20,033 | | | $ | 19,922 | | | $ | 20,033 | | | | | |
| Total: | | | | | | | | | | | | | | | | | | |
| Balance as of beginning of period | | $ | 22,513 | | | $ | 20,869 | | | $ | 21,482 | | | $ | 22,020 | | | $ | 22,372 | | | $ | 29,275 | | | $ | 21,482 | | | | | |
| Net flows (1) | | (499) | | | (589) | | | (523) | | | (569) | | | (554) | | | (1,643) | | | (1,646) | | | | | |
| Investment performance, interest credited and policy charges (2) | | (1,145) | | | 1,202 | | | 1,061 | | | 921 | | | (909) | | | (6,763) | | | 1,073 | | | | | |
| Ceded to Venerable | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | |
| Balance as of end of period | | $ | 20,869 | | | $ | 21,482 | | | $ | 22,020 | | | $ | 22,372 | | | $ | 20,909 | | | $ | 20,869 | | | $ | 20,909 | | | | | |
| Net Amount at Risk (NAR) | | | | | | | | | | | | | | | | | | |
| Total GMIB NAR (3) | | $ | 3,535 | | | $ | 3,211 | | | $ | 3,135 | | | $ | 2,992 | | | $ | 2,767 | | | $ | 3,535 | | | $ | 2,767 | | | | | |
| Total GMDB NAR (3) | | $ | 12,207 | | | $ | 11,428 | | | $ | 10,696 | | | $ | 10,082 | | | $ | 10,690 | | | $ | 12,207 | | | $ | 10,690 | | | | | |
| MRB Reserves (Net of Reinsurance) | | $ | 3,877 | | | $ | 4,287 | | | $ | 3,414 | | | $ | 2,797 | | | $ | 3,243 | | | $ | 3,877 | | | $ | 3,243 | | | | | |
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| Notes: | | | | | | | | | | | | | | | | | | |
| (1) Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and for the nine months ended September 30, 2022 and 2023 were $(312) million, $(292) million, $(292) million, $(269) million, $(263) million, $(840) million and $(824) million, respectively. | | | | |
| (2) Investment performance, interest credited and policy charges of $(721) million, $689 million, $575 million, 508 million, $(586) million, $(4.1) billion, and $497 million for the three months ended September 30, 2022, December 31, 2022, March 31, 2023, June 30, 2023, September 30, 2023 and for the nine months ended September 30, 2022 and 2023, respectively, are not included as it excludes activity related to ceded AV to Venerable. |
| (3) Balance for the three months ended March 31, 2023 was revised from previously filed financial statement supplement. |
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3Q 2023 Financial Supplement | | 26 |
Investments
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3Q 2023 Financial Supplement | | 27 |
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| Consolidated Investment Portfolio Composition |
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| | Balances as of |
| (in millions USD, unless otherwise indicated) | | December 31, 2022 | | September 30, 2023 |
| | Amount (1) | | % of Total | | Amount (1) | | % of Total |
| Composition of investment portfolio | | | | | | | | |
| Fixed maturities, available-for-sale, at fair value | | $ | 63,361 | | | 65.1 | % | | $ | 63,470 | | | 61.4 | % |
| Fixed maturities, at fair value using the fair value option | | 1,508 | | | 1.5 | % | | 1,634 | | | 1.6 | % |
| Mortgage loans on real estate | | 16,481 | | | 16.9 | % | | 17,655 | | | 17.1 | % |
| Policy loans | | 4,033 | | | 4.1 | % | | 4,089 | | | 4.0 | % |
| Other equity investments | | 3,152 | | | 3.2 | % | | 3,272 | | | 3.2 | % |
| Other invested assets | | 3,885 | | | 4.0 | % | | 6,080 | | | 5.9 | % |
| Subtotal investment assets | | 92,420 | | | 94.9 | % | | 96,200 | | | 93.1 | % |
| Trading securities | | 677 | | | 0.7 | % | | 1,009 | | | 1.0 | % |
| Total investments | | 93,097 | | | 95.6 | % | | 97,209 | | | 94.1 | % |
| Cash and cash equivalents | | 4,281 | | | 4.4 | % | | 6,096 | | | 5.9 | % |
| Total | | $ | 97,378 | | | 100.0 | % | | $ | 103,305 | | | 100.0 | % |
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| General Account AFS Fixed maturities by industry (Based on amortized cost) | | | | | | | | |
| Corporate securities: | | | | | | | | |
| Finance | | $ | 13,537 | | | 18.7 | % | | $ | 13,792 | | | 18.7 | % |
| Manufacturing | | 11,797 | | | 16.3 | % | | 11,458 | | | 15.5 | % |
| Utilities | | 6,808 | | | 9.4 | % | | 6,786 | | | 9.2 | % |
| Services | | 8,299 | | | 11.5 | % | | 8,339 | | | 11.3 | % |
| Energy | | 3,740 | | | 5.2 | % | | 3,836 | | | 5.2 | % |
| Retail and wholesale | | 3,394 | | | 4.7 | % | | 3,419 | | | 4.6 | % |
| Transportation | | 2,277 | | | 3.2 | % | | 2,459 | | | 3.3 | % |
| Other | | 124 | | | 0.2 | % | | 132 | | | 0.2 | % |
| Total corporate securities | | 49,976 | | | 69.2 | % | | 50,221 | | | 68.1 | % |
| U.S. government and agency | | 7,054 | | | 9.8 | % | | 5,744 | | | 7.8 | % |
| Residential mortgage-backed (2) | | 908 | | | 1.3 | % | | 1,791 | | | 2.4 | % |
| Preferred stock | | 41 | | | 0.1 | % | | 41 | | | 0.1 | % |
| State & municipal | | 609 | | | 0.8 | % | | 615 | | | 0.8 | % |
| Foreign governments | | 985 | | | 1.4 | % | | 821 | | | 1.1 | % |
| Commercial mortgage-backed | | 3,823 | | | 5.3 | % | | 4,051 | | | 5.5 | % |
| Asset-backed securities | | 8,859 | | | 12.3 | % | | 10,466 | | | 14.2 | % |
| Total | | $ | 72,255 | | | 100.0 | % | | $ | 73,750 | | | 100.0 | % |
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| General Account AFS Fixed maturities credit quality (3) (Based on amortized cost) | | | | | | | | |
| Aaa, Aa, A (NAIC Designation 1) | | $ | 44,612 | | | 61.7 | % | | $ | 46,888 | | | 63.6 | % |
| Baa (NAIC Designation 2) | | 24,843 | | | 34.4 | % | | 24,299 | | | 32.9 | % |
| Investment grade | | 69,455 | | | 96.1 | % | | 71,187 | | | 96.5 | % |
| Below investment grade (NAIC Designation 3 and 4) | | 2,800 | | | 3.9 | % | | 2,563 | | | 3.5 | % |
| Total | | $ | 72,255 | | | 100.0 | % | | $ | 73,750 | | | 100.0 | % |
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| Notes: | | | | | | | | |
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| (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. |
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3Q 2023 Financial Supplement | | 28 |
| | |
| Consolidated Results of General Account Investment Portfolio |
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| | For the Nine Months Ended or As of | | Years Ended or As of |
| (in millions USD, unless otherwise indicated) | | September 30, 2022 | | September 30, 2023 | | December 31, 2022 |
| | Yield | | Amount (2) | | Yield | | Amount (2) | | Yield | | Amount (2) |
| Fixed Maturities: | | | | | | | | | | | | |
| Income (loss) | | 3.52 | % | | $ | 1,935 | | | 4.11 | % | | $ | 2,251 | | | 3.57 | % | | $ | 2,619 | |
| Ending assets | | | | 74,565 | | | | | 73,776 | | | | | 72,255 | |
| Mortgages: | | | | | | | | | | | | |
| Income (loss) | | 3.87 | % | | 424 | | | 4.66 | % | | 599 | | | 3.92 | % | | 587 | |
| Ending assets | | | | 15,688 | | | | | 17,655 | | | | | 16,481 | |
| Other Equity Investments (1): | | | | | | | | | | | | |
| Income (loss) | | 7.80 | % | | 188 | | | 3.40 | % | | 89 | | | 5.21 | % | | 171 | |
| Ending assets | | | | 3,468 | | | | | 3,389 | | | | | 3,433 | |
| Policy Loans: | | | | | | | | | | | | |
| Income | | 5.30 | % | | 160 | | | 5.21 | % | | 158 | | | 5.35 | % | | 215 | |
| Ending assets | | | | 4,018 | | | | | 4,089 | | | | | 4,033 | |
| Cash and Short-term Investments: (3) | | | | | | | | | | | | |
| Income (loss) | | (0.83) | % | | (12) | | | (2.88) | % | | (66) | | | (1.44) | % | | (24) | |
| Ending assets | | | | 563 | | | | | 2,822 | | | | | 1,419 | |
| Funding Agreements: | | | | | | | | | | | | |
| Interest expense and other | | | | (82) | | | | | (326) | | | | | (156) | |
| Ending (liabilities) | | | | (7,830) | | | | | (8,175) | | | | | (8,501) | |
| Total invested Assets: | | | | | | | | | | | | |
| Income (loss) | | 3.86 | % | | 2,613 | | | 3.92 | % | | 2,706 | | | 3.79 | % | | 3,412 | |
| Ending assets | | | | 90,472 | | | | | 93,557 | | | | | 89,120 | |
| Short Duration Fixed Maturities: | | | | | | | | | | | | |
| Income (loss) | | 3.53 | % | | 4 | | | 3.96 | % | | 2 | | | 3.62 | % | | 5 | |
| Ending assets | | | | 117 | | | | | 62 | | | | | 87 | |
| Total Net Investment Income: | | | | | | | | | | | | |
| Investment income | | 3.86 | % | | 2,617 | | | 3.92 | % | | 2,708 | | | 3.79 | % | | 3,417 | |
| Less: investment fees (4) | | (0.15) | % | | (101) | | | (0.18) | % | | (123) | | | (0.15) | % | | (138) | |
| Investment income, net | | 3.71 | % | | $ | 2,516 | | | 3.74 | % | | $ | 2,585 | | | 3.63 | % | | $ | 3,279 | |
| General Account Ending Net Assets | | | | $ | 90,589 | | | | | $ | 93,619 | | | | | $ | 89,207 | |
| Operating Earnings adjustments: | | | | | | | | | | | | |
| Funding Agreements interest expense | | | | 82 | | | | | 326 | | | | | 156 | |
| AB and other non-General Account investment income | | | | (27) | | | | | 170 | | | | | 84 | |
| Operating Net investment income (loss) | | | | $ | 2,571 | | | | | $ | 3,080 | | | | | $ | 3,519 | |
| Notes: | | | | | | | | | | | | |
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| (1) Includes, as of September 30, 2022, September 30, 2023 and December 31, 2022, $370 million, $436 million and $400 million of other invested assets. Amounts for certain consolidated VIE investments are shown net of associated non-controlling interest. |
| (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) Cash and Short-term net of collateral expense. |
| (4) Investment fees are inclusive of investment management fees paid to AB. |
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3Q 2023 Financial Supplement | | 29 |
Additional Information
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3Q 2023 Financial Supplement | | 30 |
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| Deferred Policy Acquisition Costs Rollforward |
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| | For the Three Months Ended or As of | | Nine Months Ended or As of |
| (in millions USD, unless otherwise indicated) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 |
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| TOTAL | | | | | | | | | | | | | | |
| Beginning balance | | $ | 6,254 | | | $ | 6,322 | | | $ | 6,369 | | | $ | 6,419 | | | $ | 6,512 | | | $ | 6,113 | | | $ | 6,369 | |
| Capitalization of commissions, sales and issue expenses | | 215 | | | 198 | | | 202 | | | 248 | | | 252 | | | 644 | | | 702 | |
| Amortization | | (147) | | | (151) | | | (152) | | | (155) | | | (165) | | | (435) | | | (472) | |
| Ending balance | | $ | 6,322 | | | $ | 6,369 | | | $ | 6,419 | | | $ | 6,512 | | | $ | 6,599 | | | $ | 6,322 | | | $ | 6,599 | |
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| Individual Retirement | | | | | | | | | | | | | | |
| Beginning balance | | $ | 3,127 | | | $ | 3,180 | | | $ | 3,219 | | | $ | 3,264 | | | $ | 3,347 | | | $ | 3,013 | | | $ | 3,219 | |
| Capitalization of commissions, sales and issue expenses | | 137 | | | 126 | | | 134 | | | 175 | | | 181 | | | 413 | | | 490 | |
| Amortization | | (84) | | | (87) | | | (89) | | | (92) | | | (102) | | | (246) | | | (283) | |
| Ending balance | | $ | 3,180 | | | $ | 3,219 | | | $ | 3,264 | | | $ | 3,347 | | | $ | 3,426 | | | $ | 3,180 | | | $ | 3,426 | |
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| Group Retirement | | | | | | | | | | | | | | |
| Beginning balance | | $ | 785 | | | $ | 792 | | | $ | 800 | | | $ | 804 | | | $ | 808 | | | $ | 771 | | | $ | 800 | |
| Capitalization of commissions, sales and issue expenses | | 22 | | | 23 | | | 19 | | | 19 | | | 20 | | | 65 | | | 58 | |
| Amortization | | (15) | | | (15) | | | (15) | | | (15) | | | (14) | | | (44) | | | (44) | |
| Ending balance | | $ | 792 | | | $ | 800 | | | $ | 804 | | | $ | 808 | | | $ | 814 | | | $ | 792 | | | $ | 814 | |
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| Protection Solutions | | | | | | | | | | | | | | |
| Beginning balance | | $ | 1,596 | | | $ | 1,614 | | | $ | 1,630 | | | $ | 1,644 | | | $ | 1,660 | | | $ | 1,559 | | | $ | 1,630 | |
| Capitalization of commissions, sales and issue expenses | | 47 | | | 46 | | | 43 | | | 46 | | | 46 | | | 142 | | | 135 | |
| Amortization | | (29) | | | (30) | | | (29) | | | (30) | | | (30) | | | (87) | | | (89) | |
| Ending balance | | $ | 1,614 | | | $ | 1,630 | | | $ | 1,644 | | | $ | 1,660 | | | $ | 1,676 | | | $ | 1,614 | | | $ | 1,676 | |
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| Legacy | | | | | | | | | | | | | | |
| Beginning balance | | $ | 614 | | | $ | 606 | | | $ | 593 | | | $ | 583 | | | $ | 575 | | | $ | 631 | | | $ | 593 | |
| Capitalization of commissions, sales and issue expenses | | 9 | | | 3 | | | 6 | | | 8 | | | 5 | | | 25 | | | 19 | |
| Amortization | | (17) | | | (16) | | | (16) | | | (16) | | | (16) | | | (50) | | | (48) | |
| Ending balance | | $ | 606 | | | $ | 593 | | | $ | 583 | | | $ | 575 | | | $ | 564 | | | $ | 606 | | | $ | 564 | |
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| Corporate and Other | | | | | | | | | | | | | | |
| Beginning balance | | $ | 132 | | | $ | 130 | | | $ | 127 | | | $ | 124 | | | $ | 122 | | | $ | 139 | | | $ | 127 | |
| Capitalization of commissions, sales and issue expenses | | — | | | — | | | — | | | — | | | — | | | (1) | | | — | |
| Amortization | | (2) | | | (3) | | | (3) | | | (2) | | | (3) | | | (8) | | | (8) | |
| Ending balance | | $ | 130 | | | $ | 127 | | | $ | 124 | | | $ | 122 | | | $ | 119 | | | $ | 130 | | | $ | 119 | |
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3Q 2023 Financial Supplement | | 31 |
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| Use of Non-GAAP Financial Measures |
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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 a 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 the variable annuity product MRBs. 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) changes in the fair value of market risk benefits and purchased market risk benefits, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the market risk benefits which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk; |
| • | 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, lease write-offs related to non-recurring restructuring activities, 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 and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; 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, impact of the annual actuarial assumption updates attributable to LFPB; 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 and a decrease of deferred tax valuation allowance. |
| |
| In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual actuarial assumption update attributable to LFPB as the majority of the earnings volatility attributable to these assumption updates relate to the Company’s Legacy and non-business segment products and as such do not represent the Company’s ongoing revenue generating activities or future business strategy, and impedes comparability of operating results period over period. Non-GAAP Operating Earnings were favorably impacted by this change in the amount of $61 million for the three and nine months ended September 30, 2023, respectively. The presentation of operating earnings in prior periods was not revised to reflect this modification because the impact to those periods was immaterial. |
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. |
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| | | | | | | | |
3Q 2023 Financial Supplement | | 32 |
| | | | | |
|
|
|
|
| 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 stock dividends by diluted common shares outstanding. |
| | | | | | | | |
3Q 2023 Financial Supplement | | 33 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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) | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 | | 9/30/2022 | | 9/30/2023 |
| | | | | | | | | | | | | | |
| Net income (loss) attributable to Holdings | | | | | | | | | | | | | | |
| Net income (loss) attributable to Holdings | | $ | 594 | | | $ | 62 | | | $ | 177 | | | $ | 759 | | | $ | 1,064 | | | $ | 2,091 | | | $ | 2,000 | |
| Adjustments related to: | | | | | | | | | | | | | | |
| Variable annuity product features (4) | | (675) | | | 129 | | | 861 | | | (65) | | | (1,380) | | | (2,322) | | | (584) | |
| Investment gains (losses), net | | 333 | | | 55 | | | 87 | | | 56 | | | 411 | | | 890 | | | 554 | |
| | | | | | | | | | | | | | |
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | | 19 | | | 25 | | | 9 | | | 9 | | | 8 | | | 57 | | | 26 | |
| Other adjustments (1) (5) | | 50 | | | 150 | | | 45 | | | 62 | | | 91 | | | 455 | | | 198 | |
| Income tax (expense) benefit related to above adjustments | | 58 | | | (76) | | | (210) | | | (13) | | | 183 | | | 194 | | | (40) | |
| Non-recurring tax items (3) | | 7 | | | 3 | | | (605) | | | (367) | | | 36 | | | 13 | | | (936) | |
| Non-GAAP Operating Earnings | | $ | 386 | | | $ | 348 | | | $ | 364 | | | $ | 441 | | | $ | 413 | | | $ | 1,378 | | | $ | 1,218 | |
| | | | | | | | | | | | | | |
| Net income (loss) attributable to Holdings (2) | | $ | 1.58 | | | $ | 0.17 | | | $ | 0.49 | | | $ | 2.13 | | | $ | 3.06 | | | $ | 5.45 | | | $ | 5.62 | |
| Less: Preferred stock dividends | | 0.04 | | | 0.07 | | | 0.04 | | | 0.07 | | | 0.04 | | | 0.14 | | | 0.15 | |
| Net income (loss) available to Holdings' common shareholders | | 1.54 | | | 0.10 | | | 0.45 | | | 2.06 | | | 3.02 | | | 5.31 | | | 5.47 | |
| Adjustments related to: | | | | | | | | | | | | | | |
| Variable annuity product features (4) | | (1.79) | | | 0.35 | | | 2.36 | | | (0.18) | | | (3.97) | | | (6.06) | | | (1.64) | |
| Investment gains (losses), net | | 0.88 | | | 0.15 | | | 0.24 | | | 0.16 | | | 1.18 | | | 2.32 | | | 1.56 | |
| | | | | | | | | | | | | | |
| Net actuarial gains (losses) related to pension and other postretirement benefit obligations | | 0.05 | | | 0.07 | | | 0.02 | | | 0.03 | | | 0.02 | | | 0.15 | | | 0.07 | |
| Other adjustments (1) (5) | | 0.13 | | | 0.39 | | | 0.13 | | | 0.17 | | | 0.27 | | | 1.20 | | | 0.55 | |
| Income tax (expense) benefit related to above adjustments | | 0.15 | | | (0.20) | | | (0.58) | | | (0.04) | | | 0.53 | | | 0.51 | | | (0.11) | |
| Non-recurring tax items (3) | | 0.02 | | | 0.01 | | | (1.66) | | | (1.03) | | | 0.10 | | | 0.03 | | | (2.63) | |
| Non-GAAP Operating Earnings (loss) available to Holdings' common shareholders | | $ | 0.99 | | | $ | 0.87 | | | $ | 0.96 | | | $ | 1.17 | | | $ | 1.15 | | | $ | 3.46 | | | $ | 3.27 | |
| | | | | | | | | | | | | | |
| Book Value per common share | | | | | | | | | | | | | | |
| Book Value per common share | | $ | 5.00 | | | $ | (0.44) | | | $ | 6.10 | | | $ | 5.69 | | | $ | 0.23 | | | $ | 5.00 | | | $ | 0.23 | |
| Less: Per share impact of AOCI | | (18.57) | | | (24.63) | | | (18.15) | | | (20.39) | | | (28.66) | | | (18.57) | | | (28.66) | |
| Book value per common share (ex. AOCI) | | $ | 23.56 | | | $ | 24.19 | | | $ | 24.25 | | | $ | 26.08 | | | $ | 28.90 | | | $ | 23.56 | | | $ | 28.90 | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Notes: | | | | | | | | | | | | | | |
|
| (1) Includes certain gross legal expenses related to the cost of insurance litigation and claims related to a commercial relationship of $0 million and $35 million for the three and nine months ended September 30, 2023, respectively and $2 million and $168 million for the three and nine months ended September 30, 2022, respectively. Includes policyholder benefit costs of $75 million for the 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.Includes the impact of unfavorable annual actuarial assumptions updates related to LFPB of $61 million for the three and nine months ended September 30, 2023. Prior period impact was immaterial and was not revised. The legal accruals impact per common share is $0.00 and $0.10 for the three and nine months ended September 30, 2023, respectively and $0.01 and $0.44 for the three and nine months ended September 30, 2022, respectively. Includes policyholder benefit costs of $0.20 for the 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. Includes the impact of unfavorable annual actuarial assumptions updates related to LFPB of $0.18 and $0.17 for the three and nine months ended September 30, 2023. Prior period impact was immaterial and was not revised. |
|
| (2) 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. |
| (3)For the three and nine months ended September 30, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period and an increase to the tax valuation allowance of $20 million and a decrease of $970 million, respectively, as well as $0.06 and $2.73, respectively. |
(4) Includes the impact of favorable assumption updates of $40 million or $0.11 and $0.67 for the three and nine months ended September 30, 2023. Includes the impact of unfavorable assumption updates of $204 million or $0.54 and $0.53 for the three and nine months ended September 30, 2022. |
| (5) Includes Non-GMxB related derivative hedge losses of ($16) million and ($7) million for the three and nine months ended September 30, 2023, respectively and ($28) million and ($68) million for the three and nine months ended September 30, 2022, respectively. Includes Non-GMxB related derivative hedge losses of ($0.05) and ($0.02) for the three and nine months ended September 30, 2023, respectively and $(0.07) and $(0.18) for the three and nine months ended September 30, 2022, respectively. |
|
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| | | | | | | | |
3Q 2023 Financial Supplement | | 34 |
| | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of Non-GAAP Measures (2/3) |
| | | | | | | | | | |
| | | | | | As of and for the Twelve Months Ended |
| (in millions USD, unless otherwise indicated) | | | | | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | |
| Net Income to Non-GAAP Operating Earnings | | | | | | | | | | |
| Net income (loss) attributable to Holdings | | | | | | $ | 1,800 | | | $ | 1,592 | | | $ | 2,062 | |
| Adjustments related to: | | | | | | | | | | |
| Variable annuity product features | | | | | | (716) | | | 250 | | | (455) | |
| Investment (gains) losses | | | | | | 706 | | | 531 | | | 609 | |
| | | | | | | | | | |
| Net actuarial (gains) losses related to pension and other postretirement benefit obligations | | | | | | 72 | | | 62 | | | 51 | |
| Other adjustments | | | | | | 422 | | | 307 | | | 348 | |
| Income tax (expense) benefits related to above adjustments | | | | | | (101) | | | (241) | | | (116) | |
| Non-recurring tax items | | | | | | (592) | | | (962) | | | (933) | |
| Non-GAAP Operating Earnings | | | | | | $ | 1,591 | | | $ | 1,539 | | | $ | 1,566 | |
| | | | | | | | | | |
| Return on Equity and Non-GAAP Operating Return on Equity - Trailing twelve months | | | | | | | | | | |
| Net income (loss) attributable to Holdings | | | | | | $ | 1,800 | | | $ | 1,592 | | | $ | 2,062 | |
| Less: Preferred stock | | | | | | (80) | | | (80) | | | (80) | |
| Net income (loss) available to Holdings' common shareholders | | | | | | $ | 1,720 | | | $ | 1,512 | | | $ | 1,982 | |
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | | | | | | $ | 8,641 | | | $ | 8,848 | | | $ | 9,139 | |
| | | | | | | | | | |
| Return on Equity (ex. AOCI) | | | | | | 19.9 | % | | 17.1 | % | | 21.7 | % |
| | | | | | | | | | |
| Non-GAAP Operating Earnings | | | | | | $ | 1,591 | | | $ | 1,539 | | | $ | 1,566 | |
| Less: Preferred stock | | | | | | (80) | | | (80) | | | (80) | |
| Non-GAAP Operating Earnings available to Holdings' common shareholders | | | | | | $ | 1,511 | | | $ | 1,459 | | | $ | 1,486 | |
| Average equity attributable to Holdings' common shareholders (ex. AOCI) | | | | | | $ | 8,641 | | | $ | 8,848 | | | $ | 9,139 | |
| | | | | | | | | | |
| Non-GAAP Operating Return on Equity (ex. AOCI) | | | | | | 17.5 | % | | 16.5 | % | | 16.3 | % |
| | | | | | | | |
3Q 2023 Financial Supplement | | 35 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Reconciliation of Non-GAAP Measures (3/3) |
| | | | | |
| | | | | Balances as of |
| (in millions USD, unless otherwise indicated) | | | | | 6/30/2022 | | 9/30/2022 | | 12/31/2022 | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | | | | | | |
| Equity Reconciliation - Quarter-end Balances | | | | | | | | | | | | | | | |
| Total equity attributable to Holdings' shareholders | | | | | $ | 5,702 | | | $ | 3,411 | | | $ | 1,401 | | | $ | 3,754 | | | $ | 3,553 | | | $ | 1,642 | |
| Less: Preferred Stock | | | | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | | | 1,562 | |
| Total equity attributable to Holdings' common shareholders | | | | | 4,140 | | | 1,849 | | | (161) | | | 2,192 | | | 1,991 | | | 80 | |
| Less: Accumulated other comprehensive income (loss) | | | | | (4,165) | | | (6,870) | | | (8,992) | | | (6,516) | | | (7,142) | | | (9,802) | |
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | | | | | $ | 8,305 | | | $ | 8,719 | | | $ | 8,831 | | | $ | 8,708 | | | $ | 9,133 | | | $ | 9,882 | |
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| | | | | | | | | | | Balances as of |
| (in millions USD, unless otherwise indicated) | | | | | | | | | | | 3/31/2023 | | 6/30/2023 | | 9/30/2023 |
| | | | | | | | | | | | | | | |
| Equity Reconciliation - Twelve Month Rolling Average (2) | | | | | | | | | | | | | | | |
| Total equity attributable to Holdings' shareholders | | | | | | | | | | | $ | 3,567 | | | $ | 3,030 | | | $ | 2,588 | |
| Less: Preferred Stock | | | | | | | | | | | 1,562 | | | 1,562 | | | 1,562 | |
| Total equity attributable to Holdings' common shareholders | | | | | | | | | | | 2,005 | | | 1,468 | | | 1,026 | |
| Less: Accumulated other comprehensive income (loss) | | | | | | | | | | | (6,636) | | | (7,380) | | | (8,113) | |
| Total equity attributable to Holdings' common shareholders (ex. AOCI) | | | | | | | | | | | $ | 8,641 | | | $ | 8,848 | | | $ | 9,139 | |
| | | | | | | | | | | | | | | |
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3Q 2023 Financial Supplement | | 36 |
| | |
| 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. AV reflected net of reinsurance. |
| Advisory Assets - Assets invested in a variety of investments using an asset allocation model designed for the client’s objectives. The client is charged a fee based on the value of the assets in the account. |
| 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. |
| Brokerage Assets - Brokerage accounts which allow clients a variety of investments, including mutual funds, exchange traded Products, equities and fixed income, to be managed in one account. The client is charged for all buy and sell transactions. |
| 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. |
| Direct Assets - Mutual Funds purchased through and registered directly with an Asset Management Company, no other agents, such as brokers or distributors, are involved in the transactions. |
| 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. |
| Legacy - The Legacy segment consists of our fixed-rate GMxB business written prior to 2011. In 2023, we began reporting this business separately from our Individual Retirement business. |
| Liability for future policy benefits - the liability related to life insurance policies such as non-participating traditional life insurance policies (Term) and limited pay contracts (Payout, Pension). |
| Market risk benefits - (“MRBs”) are contracts or contract features that provide protection to the contract holder from other than nominal capital market risk and expose the Company to other than nominal capital market risk. Market risk benefits include contract features that provide minimum guarantees to policyholders and include GMIB, GMDB, GMWB, GMAB, and ROP DB benefits. |
| 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. |
| Pre-tax operating margin - Calculated as operating earnings, before income taxes, divided by revenue. |
| 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. |
| | | | | | | | |
3Q 2023 Financial Supplement | | 37 |
| | |
| 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”). |
| Revenue per advisor - Calculated as trailing twelve months revenue, divided by the average number of advisors for each of the most recent four quarters |
| Trailing Twelve Months ("TTM") - The twelve calendar months preceding the balance sheet date of a given reporting period. |
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3Q 2023 Financial Supplement | | 38 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 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 |
| Deutsche Bank | | | | | | | | Cave Montazeri | | | | | | 1 (212) 250-2798 |
| Dowling & Partners | | | | | | | | Joel Hurwitz | | | | | | 1 (860) 676-7312 |
| 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 |
| Raymond James | | | | Wilma Burdis | | | | | | 1 (727) 567-9371 |
| 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 | | Feb '23 | | Jun '23 | | May '23 |
| | | | | | | | | | | | | | |
| 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+ | | BBB+ | | Baa1 |
| | | | | | |
| AllianceBernstein L.P. (1) | | — | | A | | A2 |
| | | | | | | | | | | | | | |
| Investor and Media Contacts | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
| Contact Investor Relations | | | | | | | | | | | | Contact Media Relations |
| Erik Bass | | Thomas Lewis | | Jake Miller | | | | | | | | Sophia Kim |
| (212) 314-2476 | | | | | | | | | | | | (212) 314-2010 |
| | | | | | | | | | | | |
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| Notes: | | | | | | | | | | | | | | |
| (1) Last review dates: S&P as of Sep '23, Moody’s as of Aug '23. |
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3Q 2023 Financial Supplement | | 39 |
COVER
|
Oct. 31, 2023 |
| Entity Information [Line Items] |
|
| Document Type |
8-K
|
| Document Period End Date |
Oct. 31, 2023
|
| Entity Registrant Name |
Equitable Holdings, Inc.
|
| Entity Incorporation, State or Country Code |
DE
|
| Entity File Number |
001-38469
|
| Entity Tax Identification Number |
90-0226248
|
| Entity Address, Address Line One |
1290 Avenue of the Americas
|
| Entity Address, City or Town |
New York
|
| Entity Address, State or Province |
NY
|
| Entity Address, Postal Zip Code |
10104
|
| City Area Code |
212
|
| Local Phone Number |
554-1234
|
| Written Communications |
false
|
| Soliciting Material |
false
|
| Pre-commencement Tender Offer |
false
|
| Pre-commencement Issuer Tender Offer |
false
|
| Entity Emerging Growth Company |
false
|
| Entity Central Index Key |
0001333986
|
| Amendment Flag |
false
|
| Common Stock | New York Stock Exchange |
|
| Entity Information [Line Items] |
|
| Title of 12(b) Security |
Common Stock
|
| Trading Symbol |
EQH
|
| Security Exchange Name |
NYSE
|
| Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series A | New York Stock Exchange |
|
| Entity Information [Line Items] |
|
| Title of 12(b) Security |
Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series A
|
| Trading Symbol |
EQH PR A
|
| Security Exchange Name |
NYSE
|
| Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series C | New York Stock Exchange |
|
| Entity Information [Line Items] |
|
| Title of 12(b) Security |
Depositary Shares, each representing a 1/1,000th interest in a share of Fixed Rate Noncumulative Perpetual Preferred Stock, Series C
|
| Trading Symbol |
EQH PR C
|
| Security Exchange Name |
NYSE
|
| X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
| Name: |
dei_AmendmentFlag |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
| Name: |
dei_DocumentPeriodEndDate |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:dateItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
| Name: |
dei_DocumentType |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:submissionTypeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
| Name: |
dei_EntityAddressAddressLine1 |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Definition
+ References
+ Details
| Name: |
dei_EntityAddressCityOrTown |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCode for the postal or zip code
| Name: |
dei_EntityAddressPostalZipCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the state or province.
| Name: |
dei_EntityAddressStateOrProvince |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:stateOrProvinceItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityCentralIndexKey |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:centralIndexKeyItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionIndicate if registrant meets the emerging growth company criteria. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityEmergingGrowthCompany |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
| Name: |
dei_EntityFileNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:fileNumberItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
| Name: |
dei_EntityIncorporationStateCountryCode |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarStateCountryItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityRegistrantName |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b-2
| Name: |
dei_EntityTaxIdentificationNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:employerIdItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionLocal phone number for entity.
| Name: |
dei_LocalPhoneNumber |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:normalizedStringItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 13e
-Subsection 4c
| Name: |
dei_PreCommencementIssuerTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 14d
-Subsection 2b
| Name: |
dei_PreCommencementTenderOffer |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTitle of a 12(b) registered security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection b
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dei_Security12bTitle |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:securityTitleItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionName of the Exchange on which a security is registered. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Number 240
-Section 12
-Subsection d1-1
| Name: |
dei_SecurityExchangeName |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:edgarExchangeCodeItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Exchange Act
-Section 14a
-Number 240
-Subsection 12
| Name: |
dei_SolicitingMaterial |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionTrading symbol of an instrument as listed on an exchange.
| Name: |
dei_TradingSymbol |
| Namespace Prefix: |
dei_ |
| Data Type: |
dei:tradingSymbolItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act. Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Securities Act
-Number 230
-Section 425
| Name: |
dei_WrittenCommunications |
| Namespace Prefix: |
dei_ |
| Data Type: |
xbrli:booleanItemType |
| Balance Type: |
na |
| Period Type: |
duration |
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_CommonClassAMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
| X |
- Details
| Name: |
dei_EntityListingsExchangeAxis=exch_XNYS |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_SeriesAPreferredStockMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
| X |
- Details
| Name: |
us-gaap_StatementClassOfStockAxis=us-gaap_SeriesCPreferredStockMember |
| Namespace Prefix: |
|
| Data Type: |
na |
| Balance Type: |
|
| Period Type: |
|
|
Equitable (NYSE:EQH-C)
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From Jun 2023 to Jun 2024
