Equitable Holdings Reports Third Quarter 2022 Results
Equitable Holdings (EQH) reported a net income of $273 million for Q3 2022, with earnings per share of $0.69, significantly down from $672 million and $1.59 in Q3 2021. Non-GAAP operating earnings were $498 million or $1.28 per share, adjusting for notable items yields $511 million or $1.32 per share. Total assets under management declined 17.7% year-over-year to $716 billion, primarily due to market performance. Despite a challenging environment, the firm returned $275 million to shareholders, maintaining a payout ratio of 50-60%. Investments and prudent management practices helped mitigate risks.
- Returned $275 million to shareholders, including $75 million in cash dividends and $200 million in share repurchases.
- Achieved a favorable actuarial assumption update yielding a $144 million positive impact on net income.
- Continued demand for retirement products with $1.2 billion inflows, showcasing strong client interest amid market volatility.
- Organic cash flow growth resulted in approximately 120% free cash flow per share growth since IPO.
- Net income decreased significantly from $672 million in Q3 2021 to $273 million in Q3 2022.
- Non-GAAP operating earnings fell from $818 million to $498 million year-over-year.
- Total AUM dropped 17.7% due to lower market conditions, adversely affecting revenue.
- Investment Management segment reported net outflows of $10.5 billion, impacting overall performance.
- Solid performance through continued market headwinds
-
Net income of
; Net income per share of$273m $0.69
-
Non-GAAP operating earnings1 of
, or$498m per share; adjusting for notable items2, Non-GAAP operating earnings of$1.28 , or$511m per share$1.32
- Economic balance sheet, supported by fair value hedging and conservatively positioned investment portfolio, prove resilient in volatile markets
- Results benefited from a favorable assumption update as economic reserves incorporate emerging experience
-
Prudent capital management with
of cash at Holdings; continuing to deliver on 50$2.0b n-60% payout ratio target returning to shareholders in the quarter, and$0.3b n year to date3$1.0b n
“In the tough economic environment, we delivered solid results reporting third quarter Non-GAAP operating earnings of
Consolidated Results |
|
|
|
|||
|
Third Quarter |
|||||
(in millions, except per share amounts or unless otherwise noted) |
2022 |
|
2021 |
|||
Total Assets Under Management (“AUM”, in billions) |
$ |
716 |
|
$ |
870 |
|
Net income (loss) attributable to Holdings |
|
273 |
|
|
672 |
|
Net income (loss) attributable to Holdings per common share |
|
0.69 |
|
|
1.59 |
|
Non-GAAP operating earnings (loss) |
|
498 |
|
|
818 |
|
Non-GAAP operating earnings (loss) per common share (“EPS”) |
|
1.28 |
|
|
1.94 |
As of
The Net income attributable to Holdings for the third quarter of 2022 was
Non-GAAP operating earnings in the third quarter of 2022 was
As of
Business Highlights
-
Business segment highlights:
-
Individual Retirement (“IR”) reported record net inflows of
, benefiting from the continued demand for our industry-leading Structured Capital Strategies (“SCS”) buffered annuity, with first year premiums up$765 million 7% over prior year, and lower outflows in the quarter. -
Group Retirement (“GR”) reported total premiums of
, up$861 million 1% on a year-over-year basis, led by the tax-exempt market with total premiums up13% over prior year. -
Investment Management and Research (AllianceBernstein or “AB”)5 reported net outflows of
, or$10.5 billion excluding expected outflows from AXA, with the CarVal acquisition supporting a$6.6 billion 7% fee-rate improvement over prior year and institutional pipeline growth to , up$24.7 billion 142% from prior quarter. -
Protection Solutions (“PS”) continues to benefit from our strategic shift to less interest-sensitive VUL with
in VUL premiums, up$315 million 9% over prior year.
-
Individual Retirement (“IR”) reported record net inflows of
-
Capital management program:
-
The Company returned
in the quarter, including$275 million of quarterly cash dividends and$75 million of share repurchases, which is in line with our 50$200 million -60% payout target. -
The Company reported cash and liquid assets of
at Holdings as of quarter-end which includes a$2.0 billion dividend from Equitable Financial in July.$930 million -
Fair value hedging program targets the Company’s economic liability while protecting the statutory balance sheet to CTE98 and maintained c.
95% hedging effectiveness through volatile markets.
-
The Company returned
-
Delivering long-term shareholder value:
-
Organic cash flow growth paired with consistent capital return has resulted in free cash flow6 per share growth of c.
120% since IPO, providing significant value proposition to shareholders. -
Continuing to deliver 8
-10% long-term annualized EPS growth supported by the Company’s general account rebalancing efforts, realizing of$167 million incremental investment income target to date, and expense savings of$180 million of$43 million net expense savings target.$80 million
-
Organic cash flow growth paired with consistent capital return has resulted in free cash flow6 per share growth of c.
-
Completed annual actuarial assumption review:
-
The Company completed its annual actuarial assumption update benefiting from reserving, which is based on emerging policyholder and market experience, resulting in a
favorable impact to net income and a$144 million favorable impact to non-GAAP operating earnings on a post-tax basis.$23 million
-
The Company completed its annual actuarial assumption update benefiting from reserving, which is based on emerging policyholder and market experience, resulting in a
Business Segment Results
Individual Retirement
(in millions, unless otherwise noted) |
Q3 2022 |
|
Q3 2021 |
|||||
Account value (in billions) |
$ |
90.5 |
|
|
$ |
107.7 |
|
|
Segment net flows |
|
|
|
|||||
Current Product Offering |
|
1,263 |
|
|
|
702 |
|
|
Legacy (1) |
|
(498 |
) |
|
|
(689 |
) |
|
Total segment net flows |
|
765 |
|
|
|
13 |
|
|
Operating earnings (loss) |
|
270 |
|
|
|
316 |
|
(1) Net flows of
-
Account value decreased by
16% primarily due to lower markets, partially offset by continued demand for protected equity products through volatile markets with of SCS first year premiums, up$2 billion 7% over prior year, and lower redemptions leading to record net inflows since our IPO. -
Net inflows of
increased compared to the third quarter of 2021 led by net inflows of$765 million from our current product offering of less capital-intensive products, which was partially offset outflows from the legacy$1.3 billion VA block of .$(498) million -
Operating earnings decreased from
in the prior year quarter to$316 million , primarily driven by lower fee-type revenue on lower average account values and lower net investment income from lower alternatives investments and prepayments partially offset by higher income from floating rate securities, higher SCS asset balances and general account optimization.$270 million -
In the current period, results were
lower due to notable items which include an$28 million adjustment from assumption updates and$11 million of one-time items, primarily a higher tax rate. Operating earnings less notable items7 decreased from$17 million in the prior year quarter to$338 million .$298 million
Group Retirement
(in millions, unless otherwise noted) |
Q3 2022 |
|
Q3 2021 |
|||||
Account value (in billions) |
$ |
39.7 |
|
|
$ |
45.9 |
|
|
Segment net flows |
|
(57 |
) |
|
|
(135 |
) |
|
Operating earnings (loss) |
|
134 |
|
|
|
192 |
|
-
Account value decreased by
14% driven primarily by market performance over the prior twelve months. -
Net flows of
improved versus the prior year quarter primarily due to net inflows in our tax-exempt market which was supported by premium growth, including first year premiums up$(57) million 29% over prior year, and strong persistency. -
Operating earnings decreased from
in the prior year quarter to$192 million , primarily due to lower net investment income, with lower alternatives income and prepayments, partially offset by higher income from floating rate securities and general account optimization, and lower fee-type revenue on lower average account values.$134 million -
In the current period, results were
higher due to notable items which include a$17 million adjustment from a favorable assumption update partially offset by$28 million of one-time items, primarily non-recurring expenses. Operating earnings less notable items8 decreased from$11 million in the prior year quarter to$149 million .$117 million
AllianceBernstein
(in millions, unless otherwise noted) |
Q3 2022 |
|
Q3 2021 |
||||
Total AUM (in billions) |
$ |
612.7 |
|
|
$ |
742.2 |
|
Segment net flows (in billions) |
|
(10.5 |
) |
|
|
7.2 |
|
Operating earnings (loss) |
|
94 |
|
|
|
134 |
-
AUM decreased by
17% due to market performance partially offset by net inflows over the prior twelve months. -
Third quarter net outflows of
, or$10.5 billion excluding expected AXA redemptions, were driven by net outflows in Retail and Institutional channels partially offset by net inflows in the Private Wealth channel.$6.6 billion -
Operating earnings decreased from
in the prior year quarter to$134 million , primarily due to lower base fees on lower average AUM.$94 million
Protection Solutions
(in millions) |
Q3 2022 |
|
Q3 2021 |
|||
Gross written premiums |
$ |
769 |
|
$ |
754 |
|
Annualized premiums |
|
74 |
|
|
67 |
|
Operating earnings (loss) |
|
72 |
|
|
160 |
-
Gross written premiums increased
2% year-over-year with continued success in our strategic shift to less interest-sensitive VUL accumulation products with premiums up9% year-over-year. -
Operating earnings decreased from
in the prior year quarter to$160 million , primarily due to lower net investment income from lower alternatives income and prepayments partially offset by higher income from floating rate securities and general account optimization.$72 million -
In the current period, results were
higher due to notable items which include$8 million of assumption updates and$6 million of one-time items, primarily favorable mortality partially offset by non-recurring expenses and a higher tax rate. Operating earnings excluding notable items6 decreased from$2 million in the prior year quarter to$101 million .$64 million
Corporate and Other (“C&O”)
Operating loss of
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
|
|||||||
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
Non-GAAP Operating Earnings |
|
498 |
|
|
$ |
818 |
|
|
Post-tax Adjustments related to notable items: |
|
|
|
|||||
Individual Retirement |
|
17 |
|
|
|
(15 |
) |
|
Group Retirement |
|
11 |
|
|
|
(16 |
) |
|
Investment Management and Research |
|
— |
|
|
|
— |
|
|
Protection Solutions |
|
(2 |
) |
|
|
(43 |
) |
|
Corporate & Other |
|
11 |
|
|
|
(79 |
) |
|
Notable items subtotal |
|
37 |
|
|
|
(153 |
) |
|
Less: impact of actuarial assumption update |
|
(23 |
) |
|
|
(6 |
) |
|
Non-GAAP Operating Earnings, less Notable Items |
$ |
511 |
|
|
$ |
660 |
|
|
|
|
|
|
Impact of notable items by item category:
|
Three Months Ended
|
|||||||
(in millions) |
|
2022 |
|
|
|
2021 |
|
|
Non-GAAP Operating Earnings |
|
498 |
|
|
$ |
818 |
|
|
Pre-tax adjustments related to Notable Items: |
|
|
|
|||||
Actuarial Updates/Reserve |
|
— |
|
|
|
— |
|
|
Mortality |
|
(16 |
) |
|
|
(24 |
) |
|
Expenses |
|
30 |
|
|
|
— |
|
|
Net Investment Income |
|
11 |
|
|
|
(162 |
) |
|
Subtotal |
|
25 |
|
|
|
(185 |
) |
|
Post-tax impact of Notable Items |
|
37 |
|
|
|
(153 |
) |
|
Less: impact of actuarial assumption update |
|
(23 |
) |
|
|
(6 |
) |
|
Non-GAAP Operating Earnings, less Notable Items |
$ |
511 |
|
|
$ |
660 |
|
|
|
|
|
|
Impact of Notable Items by segment and corporate & other:
Three months ended |
IR |
|
GR |
|
AB |
|
PS |
|
C&O |
|
Consolidated |
||||||
Non-GAAP Operating Earnings |
270 |
|
|
134 |
|
|
94 |
|
72 |
|
|
(72 |
) |
|
498 |
|
|
Pre-tax adjustments related to Notable Items: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial Updates/Reserve |
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
Mortality |
— |
|
|
— |
|
|
— |
|
(16 |
) |
|
— |
|
|
(16 |
) |
|
Expenses |
2 |
|
|
6 |
|
|
— |
|
5 |
|
|
17 |
|
|
30 |
|
|
Net Investment Income |
3 |
|
|
3 |
|
|
— |
|
4 |
|
|
2 |
|
|
11 |
|
|
Pre-tax Subtotal |
4 |
|
|
9 |
|
|
— |
|
(7 |
) |
|
19 |
|
|
25 |
|
|
Tax adjustment |
13 |
|
|
2 |
|
|
— |
|
5 |
|
|
(7 |
) |
|
12 |
|
|
Post-tax impact of Notable Items |
17 |
|
|
11 |
|
|
— |
|
(2 |
) |
|
11 |
|
|
37 |
|
|
Impact of Actuarial Assumption Update |
11 |
|
|
(28 |
) |
|
— |
|
(6 |
) |
|
— |
|
|
(23 |
) |
|
Non-GAAP Operating Earnings, less Notable Items |
298 |
|
|
117 |
|
|
94 |
|
64 |
|
|
(61 |
) |
|
511 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Three months ended |
IR |
|
GR |
|
AB |
|
PS |
|
C&O |
|
Consolidated |
||||||
Non-GAAP Operating Earnings |
316 |
|
|
192 |
|
|
134 |
|
160 |
|
|
16 |
|
|
818 |
|
|
Pre-tax adjustments related to Notable Items: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Actuarial Updates/Reserve |
— |
|
|
— |
|
|
— |
|
(24 |
) |
|
— |
|
|
(24 |
) |
|
Mortality |
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
Expenses |
— |
|
|
— |
|
|
— |
|
— |
|
|
— |
|
|
— |
|
|
Net Investment Income |
(21 |
) |
|
(20 |
) |
|
— |
|
(29 |
) |
|
(91 |
) |
|
(162 |
) |
|
Pre-tax Subtotal |
(21 |
) |
|
(20 |
) |
|
— |
|
(53 |
) |
|
(91 |
) |
|
(185 |
) |
|
Tax adjustment |
6 |
|
|
5 |
|
|
— |
|
10 |
|
|
12 |
|
|
32 |
|
|
Post-tax impact of Notable Items |
(15 |
) |
|
(16 |
) |
|
— |
|
(43 |
) |
|
(79 |
) |
|
(153 |
) |
|
Impact of Actuarial Assumption Update |
37 |
|
|
(27 |
) |
|
— |
|
(16 |
) |
|
— |
|
|
(6 |
) |
|
Non-GAAP Operating Earnings, less Notable Items |
338 |
|
|
149 |
|
|
134 |
|
101 |
|
|
(63 |
) |
|
660 |
|
Earnings Conference Call
To register for the conference call, please use the following link:
EQH Third Quarter 2022 Earnings Call
After registering, you will receive an email confirmation including dial in details and a unique conference call code for entry. Registration is open through the live call. To ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call.
A webcast replay will be made available on the Equitable Holdings Investor Relations website at ir.equitableholdings.com.
About
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
These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy, including the impact of COVID-19 and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, catastrophic events, such as the outbreak of pandemic diseases including COVID-19, potential strategic transactions, and changes in accounting standards; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (ix) risks related to our common stock and (x) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property.
Forward-looking statements should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Holdings’ filings with the
Use of Non-GAAP Financial Measures
In addition to our results presented in accordance with
We also discuss certain operating measures, including AUM, AV, and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and are more sensitive to changes in market conditions than the variable annuity product liabilities as valued under
Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:
- Items related to variable annuity product features, which include: (i) certain changes in the fair value of the derivatives and other securities we use to hedge these features; (ii) the effect of benefit ratio unlock adjustments, including extraordinary economic conditions or events such as COVID-19; (iii) changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization on our SCS product; and (iv) DAC amortization for the SCS variable annuity product arising from near-term fluctuations in index segment returns;
- Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
- Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
- Other adjustments, which primarily include restructuring costs related to severance and separation, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses associated with equity securities, certain legal accruals; and a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies; and
- Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period.
Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of
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
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) attributable to Holdings |
|
$ |
273 |
|
|
$ |
672 |
|
|
$ |
2,574 |
|
|
$ |
(693 |
) |
Adjustments related to: |
|
|
|
|
|
|
|
|
||||||||
Variable annuity product features |
|
|
(114 |
) |
|
|
172 |
|
|
|
(2,639 |
) |
|
|
3,632 |
|
Investment (gains) losses |
|
|
333 |
|
|
|
(164 |
) |
|
|
890 |
|
|
|
(767 |
) |
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
|
19 |
|
|
|
27 |
|
|
|
57 |
|
|
|
87 |
|
Other adjustments (1) (2) (3) |
|
|
39 |
|
|
|
141 |
|
|
|
407 |
|
|
|
672 |
|
Income tax expense (benefit) related to above adjustments |
|
|
(59 |
) |
|
|
(35 |
) |
|
|
270 |
|
|
|
(761 |
) |
Non-recurring tax items |
|
|
7 |
|
|
|
5 |
|
|
|
13 |
|
|
|
6 |
|
Non-GAAP Operating Earnings |
|
$ |
498 |
|
|
$ |
818 |
|
|
$ |
1,572 |
|
|
$ |
2,176 |
|
|
|
|
|
|
|
|
|
|
_______________ | ||
(1) |
Includes Separation Costs of |
|
(2) |
Includes certain gross legal expenses related to the cost of insurance litigation of |
|
(3) |
Includes Non-GMxB related derivative hedge losses of |
Non-GAAP Operating EPS
Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred dividends by diluted common shares outstanding. The table below presents a reconciliation of GAAP EPS to Non-GAAP Operating EPS for the three months and nine months ended
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
(per share amounts) |
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
Net income (loss) attributable to Holdings (1) |
$ |
0.72 |
|
|
$ |
1.62 |
|
|
$ |
6.72 |
|
|
$ |
(1.64 |
) |
|
Less: Preferred stock dividend |
|
0.03 |
|
|
|
0.03 |
|
|
|
0.14 |
|
|
|
0.12 |
|
|
Net Income (loss) available to common shareholders |
|
0.69 |
|
|
|
1.59 |
|
|
|
6.58 |
|
|
|
(1.76 |
) |
|
Adjustments related to: |
|
|
|
|
|
|
|
|||||||||
Variable annuity product features |
|
(0.31 |
) |
|
|
0.41 |
|
|
|
(6.89 |
) |
|
|
8.58 |
|
|
Investment (gains) losses |
|
0.87 |
|
|
|
(0.41 |
) |
|
|
2.32 |
|
|
|
(1.81 |
) |
|
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
0.05 |
|
|
|
0.07 |
|
|
|
0.15 |
|
|
|
0.21 |
|
|
Other adjustments (2) (3) (4) |
|
0.12 |
|
|
|
0.35 |
|
|
|
1.06 |
|
|
|
1.59 |
|
|
Income tax expense (benefit) related to above adjustments |
|
(0.16 |
) |
|
|
(0.08 |
) |
|
|
0.71 |
|
|
|
(1.80 |
) |
|
Non-recurring tax items |
|
0.02 |
|
|
|
0.01 |
|
|
|
0.03 |
|
|
|
0.01 |
|
|
Non-GAAP Operating Earnings |
$ |
1.28 |
|
|
$ |
1.94 |
|
|
$ |
3.96 |
|
|
$ |
5.02 |
|
|
|
|
|
|
|
|
|
|
_______________ | ||
(1) | For periods presented with a net loss, basic shares are used for EPS . |
|
(2) |
Includes separation costs of |
|
(3) |
Includes certain gross legal expenses related to the cost of insurance litigation of |
|
(4) |
Includes Non-GMxB related derivative hedge losses of ( |
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.
|
2022 |
|
2021 |
||||
Book value per common share |
$ |
4.84 |
|
$ |
25.45 |
|
|
Per share impact of AOCI |
|
21.29 |
|
|
(5.12 |
) |
|
Book Value per common share, excluding AOCI |
$ |
26.13 |
|
$ |
20.33 |
|
Other Operating Measures
We also use certain operating measures which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Account Value (“AV”)
Account value generally equals the aggregate policy account value of our retirement products.
Assets Under Management (“AUM”)
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our general account investment portfolio and (iii) the separate account assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.
Segment net flows
Net change in segment customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.
Consolidated Statements of Income (Loss) (Unaudited)
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
(in millions) |
|||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|||||||||
Policy charges and fee income |
$ |
796 |
|
|
$ |
867 |
|
|
$ |
2,449 |
|
|
$ |
2,755 |
|
|
Premiums |
|
259 |
|
|
|
230 |
|
|
|
744 |
|
|
|
729 |
|
|
Net derivative gains (losses) |
|
68 |
|
|
|
(185 |
) |
|
|
3,118 |
|
|
|
(3,930 |
) |
|
Net investment income (loss) |
|
842 |
|
|
|
997 |
|
|
|
2,357 |
|
|
|
2,914 |
|
|
Investment gains (losses), net: |
|
|
|
|
|
|
|
|||||||||
Credit losses on available-for-sale debt securities and loans |
|
(267 |
) |
|
|
(2 |
) |
|
|
(266 |
) |
|
|
4 |
|
|
Other investment gains (losses), net |
|
(65 |
) |
|
|
165 |
|
|
|
(624 |
) |
|
|
763 |
|
|
Total investment gains (losses), net |
|
(332 |
) |
|
|
163 |
|
|
|
(890 |
) |
|
|
767 |
|
|
Investment management and service fees |
|
1,179 |
|
|
|
1,323 |
|
|
|
3,731 |
|
|
|
3,898 |
|
|
Other income |
|
197 |
|
|
|
220 |
|
|
|
612 |
|
|
|
585 |
|
|
Total revenues |
|
3,009 |
|
|
|
3,615 |
|
|
|
12,121 |
|
|
|
7,718 |
|
|
BENEFITS AND OTHER DEDUCTIONS |
|
|
|
|
|
|
|
|||||||||
Policyholders’ benefits |
|
625 |
|
|
|
751 |
|
|
|
2,599 |
|
|
|
2,518 |
|
|
Interest credited to policyholders’ account balances |
|
378 |
|
|
|
305 |
|
|
|
1,002 |
|
|
|
905 |
|
|
Compensation and benefits |
|
566 |
|
|
|
614 |
|
|
|
1,679 |
|
|
|
1,762 |
|
|
Commissions and distribution-related payments |
|
368 |
|
|
|
436 |
|
|
|
1,184 |
|
|
|
1,215 |
|
|
Interest expense |
|
51 |
|
|
|
59 |
|
|
|
148 |
|
|
|
184 |
|
|
Amortization of deferred policy acquisition costs |
|
105 |
|
|
|
64 |
|
|
|
446 |
|
|
|
257 |
|
|
Other operating costs and expenses |
|
497 |
|
|
|
456 |
|
|
|
1,617 |
|
|
|
1,511 |
|
|
Total benefits and other deductions |
|
2,590 |
|
|
|
2,685 |
|
|
|
8,675 |
|
|
|
8,352 |
|
|
Income (loss) from continuing operations, before income taxes |
|
419 |
|
|
|
930 |
|
|
|
3,446 |
|
|
|
(634 |
) |
|
Income tax (expense) benefit |
|
(92 |
) |
|
|
(165 |
) |
|
|
(707 |
) |
|
|
222 |
|
|
Net income (loss) |
|
327 |
|
|
|
765 |
|
|
|
2,739 |
|
|
|
(412 |
) |
|
Less: Net income (loss) attributable to the noncontrolling interest |
|
54 |
|
|
|
93 |
|
|
|
165 |
|
|
|
281 |
|
|
Net income (loss) attributable to Holdings |
|
273 |
|
|
|
672 |
|
|
|
2,574 |
|
|
|
(693 |
) |
|
Less: Preferred stock dividends |
|
14 |
|
|
|
14 |
|
|
|
54 |
|
|
|
53 |
|
|
Net income (loss) available to Holdings’ common shareholders |
$ |
259 |
|
|
$ |
658 |
|
|
$ |
2,520 |
|
|
$ |
(746 |
) |
|
|
|
|
|
|
|
|
|
Earnings Per Common Share
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||
|
(in millions) |
||||||||||||
Earnings per common share |
|
|
|
|
|
|
|
||||||
Basic |
$ |
0.69 |
|
$ |
1.60 |
|
$ |
6.62 |
|
$ |
(1.76 |
) |
|
Diluted |
$ |
0.69 |
|
$ |
1.59 |
|
$ |
6.58 |
|
$ |
(1.76 |
) |
|
Weighted average shares |
|
|
|
|
|
|
|
||||||
Weighted average common stock outstanding for basic earnings per common share |
|
374.5 |
|
|
411.3 |
|
|
380.6 |
|
|
423.2 |
|
|
Weighted average common stock outstanding for diluted earnings per common share (1) |
|
376.8 |
|
|
414.6 |
|
|
382.9 |
|
|
423.2 |
|
|
|
|
|
|
|
|
|
|
(1) |
Due to net loss for the nine months ended |
Results of Operations by Segment
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
|
2021 |
|
||
|
(in millions) |
||||||||||||||
Operating earnings (loss) by segment: |
|
|
|
|
|
|
|
||||||||
Individual Retirement |
$ |
270 |
|
|
$ |
316 |
|
$ |
837 |
|
|
$ |
1,093 |
|
|
Group Retirement |
|
134 |
|
|
|
192 |
|
|
415 |
|
|
|
514 |
|
|
Investment Management and Research |
|
94 |
|
|
|
134 |
|
|
330 |
|
|
|
381 |
|
|
Protection Solutions |
|
72 |
|
|
|
160 |
|
|
208 |
|
|
|
264 |
|
|
Corporate and Other (1) |
|
(72 |
) |
|
|
16 |
|
|
(218 |
) |
|
|
(76 |
) |
|
Non-GAAP Operating Earnings |
$ |
498 |
|
|
$ |
818 |
|
$ |
1,572 |
|
|
$ |
2,176 |
|
|
|
|
|
|
|
|
|
|
(1) |
Includes interest expense and financing fees of |
Select Balance Sheet Statistics
|
2022 |
|
2021 |
||||
|
(in millions) |
||||||
ASSETS |
|
|
|
||||
Total investments and cash and cash equivalents |
$ |
96,656 |
|
|
$ |
110,299 |
|
Separate Accounts assets |
|
109,622 |
|
|
|
147,306 |
|
Total assets |
|
245,600 |
|
|
|
292,262 |
|
|
|
|
|
||||
LIABILITIES |
|
|
|
||||
Short-term and long-term debt |
$ |
4,088 |
|
|
$ |
3,931 |
|
Future policy benefits and other policyholders' liabilities |
|
34,225 |
|
|
|
36,717 |
|
Policyholders’ account balances |
|
79,999 |
|
|
|
79,357 |
|
Total liabilities |
|
240,413 |
|
|
|
278,699 |
|
|
|
|
|
||||
EQUITY |
|
|
|
||||
Preferred stock |
|
1,562 |
|
|
|
1,562 |
|
Accumulated other comprehensive income (loss) |
|
(7,876 |
) |
|
|
2,004 |
|
Total equity attributable to Holdings |
$ |
3,354 |
|
|
$ |
11,519 |
|
Total equity attributable to Holdings' common shareholders (ex. AOCI) |
|
9,668 |
|
|
|
7,953 |
Assets Under Management (Unaudited)
|
2022 |
|
2021 |
|||||
|
(in billions) |
|||||||
Assets Under Management |
|
|
|
|||||
|
$ |
612.7 |
|
|
$ |
778.6 |
|
|
Exclusion for General Account and other Affiliated Accounts |
|
(66.8 |
) |
|
|
(79.7 |
) |
|
Exclusion for Separate Accounts |
|
(36.1 |
) |
|
|
(48.8 |
) |
|
AB third party |
$ |
509.8 |
|
|
$ |
650.1 |
|
|
|
|
|
|
|||||
Total company AUM |
|
|
|
|||||
AB third party |
$ |
509.8 |
|
|
$ |
650.1 |
|
|
General Account and other Affiliated Accounts (1) (3) |
|
96.7 |
|
|
|
110.3 |
|
|
Separate Accounts (2) (3) |
|
109.6 |
|
|
|
147.3 |
|
|
Total AUM |
$ |
716.1 |
|
|
$ |
907.7 |
|
|
|
|
|
|
_______________ | ||
(1) |
“General Account and Other Affiliated Accounts” refers to assets held in the general accounts of our insurance companies and other assets on which we bear the investment risk. |
|
(2) |
“Separate Accounts” refers to the separate account investment assets of our insurance subsidiaries excluding any assets on which we bear the investment risk. |
|
(3) |
As of |
____________________
1 This press release includes certain Non-GAAP financial measures. More information on these measures and reconciliations to the most comparable
2 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
3 Year to date includes
4 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
5 Refers to
6 Free cash flow is annual dividends to
7 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
8 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
9 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
View source version on businesswire.com: https://www.businesswire.com/news/home/20221102005907/en/
Investor Relations
Işıl Müderrisoğlu
(212) 314-2476
IR@equitable.com
Media Relations
(212) 314-2010
mediarelations@equitable.com
Source: EQH Investor Relations
FAQ
What were Equitable Holdings' Q3 2022 earnings per share?
How much did Equitable Holdings return to shareholders in Q3 2022?
What is the current total AUM for Equitable Holdings as of Q3 2022?
What was the impact of the actuarial assumption update on Equitable Holdings' financials?