Equitable Holdings Reports Third Quarter 2024 Results
Equitable Holdings (NYSE: EQH) reported Q3 2024 results with mixed performance. The company achieved record assets under management and administration of $1.0 trillion, up 20% year-over-year, driven by strong organic growth with net inflows across segments: $1.7B in Retirement, $1.9B in Wealth Management, and $1.1B in Asset Management. However, the company recorded a net loss of $134 million, or $(0.47) per share. Non-GAAP operating earnings were $501 million ($1.53 per share), or $521 million ($1.59 per share) excluding notable items. The company returned $330 million to shareholders and expects 2024 cash generation at the high end of its $1.4-1.5 billion guidance.
Equitable Holdings (NYSE: EQH) ha riportato i risultati del terzo trimestre 2024 con una performance mista. L'azienda ha raggiunto un patrimonio gestito e amministrato record di 1,0 trilioni di dollari, in aumento del 20% rispetto all'anno precedente, sostenuto da una forte crescita organica con afflussi netti nei vari segmenti: 1,7 miliardi di dollari nel settore Pensionistico, 1,9 miliardi di dollari nella Gestione Patrimoniale e 1,1 miliardi di dollari nella Gestione degli Investimenti. Tuttavia, l'azienda ha registrato una perdita netta di 134 milioni di dollari, pari a $(0,47) per azione. Gli utili operativi non-GAAP sono stati di 501 milioni di dollari (1,53 dollari per azione), o 521 milioni di dollari (1,59 dollari per azione) escludendo elementi straordinari. L'azienda ha restituito 330 milioni di dollari agli azionisti e prevede che la generazione di cassa per il 2024 si attesti nella parte alta della sua guida tra 1,4 e 1,5 miliardi di dollari.
Equitable Holdings (NYSE: EQH) reportó los resultados del tercer trimestre de 2024 con un desempeño mixto. La compañía logró un récord de activos bajo gestión y administración de 1.0 trillones de dólares, un aumento del 20% interanual, impulsado por un fuerte crecimiento orgánico con entradas netas en todos los segmentos: 1.7 mil millones en Jubilación, 1.9 mil millones en Gestión de Patrimonio y 1.1 mil millones en Gestión de Activos. Sin embargo, la compañía registró una pérdida neta de 134 millones de dólares, o $(0.47) por acción. Las ganancias operativas no-GAAP fueron de 501 millones de dólares ($1.53 por acción), o 521 millones de dólares ($1.59 por acción) excluyendo elementos notables. La compañía devolvió 330 millones de dólares a los accionistas y espera que la generación de efectivo en 2024 esté en el extremo alto de su guía de 1.4 a 1.5 mil millones de dólares.
Equitable Holdings (NYSE: EQH)는 2024년 3분기 실적을 발표하며 엇갈린 성과를 보였습니다. 이 회사는 관리 및 운영 자산이 1조 달러에 달하는 기록을 달성했으며, 이는 전년 대비 20% 증가한 수치로, 강력한 유기적 성장과 모든 부문에서의 순유입에 의해 주도되었습니다: 퇴직 부문에서 17억 달러, 자산 관리에서 11억 달러, 자산 관리에서 19억 달러의 유입이 있었습니다. 하지만 이 회사는 1억 3천4백만 달러의 순손실을 기록했으며, 주당 $(0.47)에 해당합니다. 비-GAAP 운영 수익은 5억 1백만 달러(주당 1.53달러)였으며, 주목할 만한 항목을 제외하면 5억 2천1백만 달러(주당 1.59달러)였습니다. 이 회사는 주주에게 3억 3천만 달러를 반환했으며, 2024년 현금 생성이 14억에서 15억 달러 지침의 상위 범위에 이를 것으로 예상하고 있습니다.
Equitable Holdings (NYSE: EQH) a annoncé des résultats pour le troisième trimestre 2024 avec des performances mitigées. L'entreprise a atteint un chiffre record d'actifs sous gestion et administration de 1,0 trillion de dollars, en hausse de 20 % par rapport à l'année précédente, grâce à une forte croissance organique avec des entrées nettes dans tous les segments : 1,7 milliard de dollars en Retraite, 1,9 milliard de dollars en Gestion de Patrimoine et 1,1 milliard de dollars en Gestion d'Actifs. Cependant, l'entreprise a enregistré une perte nette de 134 millions de dollars, soit $(0,47) par action. Les bénéfices d'exploitation non-GAAP étaient de 501 millions de dollars (1,53 dollar par action), ou 521 millions de dollars (1,59 dollar par action) en excluant les éléments notables. L'entreprise a restitué 330 millions de dollars aux actionnaires et s'attend à ce que la génération de trésorerie pour 2024 soit dans la partie supérieure de son guidage de 1,4 à 1,5 milliard de dollars.
Equitable Holdings (NYSE: EQH) hat die Ergebnisse für das 3. Quartal 2024 mit gemischtem Erfolg bekannt gegeben. Das Unternehmen erzielte einen Rekord an verwalteten und administrierten Vermögen von 1,0 Billionen Dollar, was einem Anstieg von 20 % im Jahresvergleich entspricht, angetrieben durch starkes organisches Wachstum mit Nettoneuaufkommen in den Bereichen: 1,7 Milliarden Dollar in der Altersvorsorge, 1,9 Milliarden Dollar im Vermögensmanagement und 1,1 Milliarden Dollar im Asset Management. Allerdings verzeichnete das Unternehmen einen netto Verlust von 134 Millionen Dollar, oder $(0,47) pro Aktie. Die operativen Gewinne nach Non-GAAP beliefen sich auf 501 Millionen Dollar (1,53 Dollar pro Aktie) oder 521 Millionen Dollar (1,59 Dollar pro Aktie) ohne außergewöhnliche Posten. Das Unternehmen hat 330 Millionen Dollar an die Aktionäre zurückgegeben und erwartet, dass die Barmittelerzeugung 2024 im oberen Bereich seiner Prognose von 1,4 bis 1,5 Milliarden Dollar liegen wird.
- Record AUM/A of $1.0 trillion, up 20% YoY
- Strong net inflows across segments totaling $4.7 billion
- Non-GAAP operating earnings increased 34% YoY to $501 million
- Cash generation guidance raised to high end of $1.4-1.5 billion range
- Returned $330 million to shareholders, maintaining 65% payout ratio
- Net loss of $134 million ($0.47 per share) in Q3 2024
- Group Retirement reported net outflows of $246 million
- Legacy segment experienced $712 million in net outflows
Insights
The Q3 results demonstrate solid performance with mixed signals. Assets under management reached a milestone of
However, the net loss of
The Individual Retirement segment shows particularly strong momentum with
The wealth management industry trends are clearly visible in these results. The record
The company's strategic focus on private markets through AllianceBernstein, now with
-
Strong organic growth momentum with net inflows of
in Retirement1,$1.7 billion in Wealth Management and$1.9 billion in Asset Management$1.1 billion -
Record assets under management and administration of
, up$1.0 trillion 20% year-over-year -
Net loss of
, or$134 million per share, Non-GAAP operating earnings2 of$(0.47) , or$501 million per share; adjusting for notable items3, Non-GAAP operating earnings of$1.53 , or$521 million per share$1.59 -
Returned
to shareholders, in-line with 60$330 million -70% payout ratio target -
Expect 2024 cash generation4 at the high end of the Company’s
to$1.4 billion guidance$1.5 billion
“Our third quarter results highlight sustained organic growth momentum across the company. Non-GAAP operating earnings per share of
Mr. Pearson concluded, “Turning to capital, we returned
Consolidated Results |
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Third Quarter |
||||||
(in millions, except per share amounts or unless otherwise noted) |
|
2024 |
|
|
|
2023 |
|
Total Assets Under Management/Administration (“AUM/A”, in billions) |
$ |
1,034 |
|
|
$ |
860 |
|
Net income (loss) attributable to Holdings |
|
(134 |
) |
|
|
1,064 |
|
Net income (loss) attributable to Holdings per common share |
|
(0.47 |
) |
|
|
3.02 |
|
Non-GAAP operating earnings |
|
501 |
|
|
|
413 |
|
Non-GAAP operating earnings per common share (“EPS”) |
|
1.53 |
|
|
|
1.15 |
|
As of September 30, 2024, total AUM/A was
Net income (loss) attributable to Holdings for the third quarter of 2024 was
Non-GAAP operating earnings in the third quarter of 2024 was
As of September 30, 2024, book value per common share including accumulated other comprehensive income (“AOCI”) was
Business Highlights
-
Business segment highlights:
-
Individual Retirement (“IR”) reported third quarter net inflows of
, and first year premiums were up$1.9 billion 27% over the prior year quarter, with growth across all products. On a trailing twelve month basis, organic growth was9% . -
Group Retirement (“GR”) reported third quarter net outflows of
, including$246 million of outflows in the tax-exempt channel, which reflects seasonality in the business.$87 million -
Asset Management (AllianceBernstein or “AB”)6 reported net inflows of
. Active net inflows of$1.1 billion were primarily driven by the retail channel.$2.2 billion -
Protection Solutions (“PS”) reported
of gross written premiums with accumulation-oriented VUL first year premiums up$793 million 25% and Employee Benefits first year premiums up32% over the prior year quarter. -
Wealth Management (“WM”) reported record advisory net inflows of
, with total assets under administration reaching$1.9 billion . On a trailing twelve month basis, advisory organic growth was$100 billion 8% . -
Legacy (“L”) had
of net outflows and continues to run-off at$712 million annually.$2 -$3 billion
-
Individual Retirement (“IR”) reported third quarter net inflows of
-
Capital management program:
-
The Company returned
to shareholders in the third quarter, including$330 million of quarterly cash dividends and$76 million of share repurchases. This was consistent with our payout ratio target of 60$254 million -70% of Non-GAAP operating earnings. -
The Company reported cash and liquid assets of
at Holdings7 as of quarter end, which remains above the$2.0 billion minimum target.$500 million
-
The Company returned
-
Delivering shareholder value:
-
The Company has deployed
of its$11 billion capital commitment to AB. This supports growth in AB’s Private Markets business, which currently has$20 billion in assets under management.$68 billion -
The Company remains on track to achieve its 2027 strategic targets of
of net expense savings and$150 million of incremental general account investment income.$110 million
-
The Company has deployed
-
Completed annual actuarial assumption review:
-
The Company completed its annual actuarial assumption update, which resulted in post-tax benefits of
to net income and$16 million to Non-GAAP operating earnings.$3 million
-
The Company completed its annual actuarial assumption update, which resulted in post-tax benefits of
Business Segment Results
Individual Retirement
(in millions, unless otherwise noted) |
Q3 2024 |
|
Q3 2023 |
||||
Account value (in billions) |
$ |
108.9 |
|
|
$ |
83.5 |
|
Segment net flows (in billions) |
|
1.9 |
|
|
1.7 |
||
Operating earnings (loss) |
|
225 |
|
|
|
220 |
|
-
Account value increased by
30% , driven by positive market performance and net inflows over the prior twelve months. -
Net inflows of
in the quarter were higher versus the prior year quarter, and first year premiums of$1.9 billion increased by$4.9 billion 27% . -
Operating earnings of
, were up year-over-year primarily due to higher net interest margin and fee-type revenue partially offset by higher commissions and distribution-related payments.$225 million -
Operating earnings adjusted for notable items8 decreased from
in the prior year quarter to$233 million . Notable items of$231 million in the current period reflects lower net investment income from alternatives and a true-up commission adjustment.$6 million
Group Retirement
(in millions, unless otherwise noted) |
Q3 2024 |
|
Q3 2023 |
||||
Account value (in billions) |
$ |
40.9 |
|
|
$ |
33.9 |
|
Segment net flows |
|
(246 |
) |
|
|
(130 |
) |
Operating earnings (loss) |
|
141 |
|
|
|
105 |
|
-
Account value increased by
21% , primarily due to market performance over the prior twelve months. -
Net outflows of
in the third quarter, including$246 million of net outflows from the tax-exempt channel due to seasonality in the K-12 educators offering. Institutional net inflows were limited in the quarter, in line with expectations, with additional plans expected to fund in 1H’25.$87 million -
Operating earnings increased from
in the prior year quarter to$105 million , primarily due to higher fee-based revenue and higher net interest margin.$141 million -
Operating earnings adjusted for notable items8 increased from
in the prior year quarter to$113 million . Notable items were$134 million in the quarter and reflect an annual assumption update partially offset by lower net investment income from alternatives and one-time model updates.$(8) million
Asset Management
(in millions, unless otherwise noted) |
Q3 2024 |
|
Q3 2023 |
||||
Total AUM (in billions) |
$ |
805.9 |
|
|
$ |
669.0 |
|
Segment net flows (in billions) |
|
1.1 |
|
|
|
(1.9 |
) |
Operating earnings (loss) |
|
111 |
|
|
99 |
|
-
AUM increased by
20% due to market performance over the prior twelve months. -
Net inflows of
in the quarter as net inflows of$1.1 billion in the Retail channel and$5.4 billion in Private Wealth were partially offset by net outflows of$0.1 billion in the Institutional channel.$4.4 billion -
Operating earnings increased from
in the prior year quarter to$99 million , primarily due to higher base fees on higher average AUM and lower expenses, partially offset by higher commissions and distribution related expenses.$111 million
Protection Solutions
(in millions) |
Q3 2024 |
|
Q3 2023 |
||||
Gross written premiums |
$ |
793 |
|
|
$ |
756 |
|
Annualized premiums |
|
88 |
|
|
79 |
||
Operating earnings (loss) |
|
46 |
|
|
|
34 |
|
-
Annualized premiums increased
11% year-over-year, driven by VUL and Employee Benefits. -
Operating earnings increased from
in the prior year quarter to$34 million , primarily due to improved net mortality experience, partially offset by annual assumption and one-time model updates.$46 million -
Operating earnings adjusted for notable items9 increased from
in the prior year quarter to$62 million . Notable items of$73 million this period reflect the impact from annual assumption and one-time model updates and lower net investment income from alternatives.$27 million
Wealth Management
(in millions, unless otherwise noted) |
Q3 2024 |
|
Q3 2023 |
||||
Total AUA (in billions) |
$ |
100.4 |
|
|
$ |
79.4 |
|
Advisory Net Flows (in billions) |
|
1.9 |
|
|
|
0.9 |
|
Operating earnings (loss) |
|
50 |
|
|
40 |
-
AUA increased by
27% due to market performance and net inflows over the last twelve months. -
Record advisory net inflows of
in the quarter, primarily attributable to increased sales.$1.9 billion -
Operating earnings increased from
in the prior year quarter to$40 million , primarily due to higher advisory and distribution fees partially offset by higher commissions and distribution-related payments.$50 million
Legacy
(in millions) |
Q3 2024 |
|
Q3 2023 |
||||
Account value (in billions) |
$ |
22.3 |
|
|
$ |
20.6 |
|
Net Flows |
|
(712 |
) |
|
|
(560 |
) |
Operating earnings (loss) |
|
27 |
|
|
|
31 |
|
-
Account value increased
8% versus the prior year period as positive market performance was partially offset by outflows as the block runs off. -
Net outflows of
were in line with expectations as this business continues to run-off at$712 million to$2 billion annually.$3 billion -
Operating earnings decreased from
in the prior year quarter to$31 million , primarily due to lower net investment income as a result from lower average asset balances.$27 million -
Operating earnings adjusted for notable items10 increased from
in the prior year quarter to$29 million . Notable items of$34 million in the current period include the impact from the annual assumption update and lower net investment income.$6 million
Corporate and Other (“C&O”)
The 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 give 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) |
|
2024 |
|
|
|
2023 |
|
Non-GAAP Operating Earnings |
$ |
501 |
|
|
$ |
413 |
|
Post-tax Adjustments related to notable items: |
|
|
|
||||
Individual Retirement |
|
6 |
|
|
|
13 |
|
Group Retirement |
|
9 |
|
|
|
9 |
|
Asset Management |
|
— |
|
|
|
— |
|
Protection Solutions |
|
18 |
|
|
|
37 |
|
Wealth Management |
|
— |
|
|
|
— |
|
Legacy |
|
— |
|
|
|
1 |
|
Corporate & Other |
|
(10 |
) |
|
|
8 |
|
Notable items subtotal |
|
23 |
|
|
|
68 |
|
Impact of Actuarial Assumption Update |
|
(3 |
) |
|
|
(13 |
) |
Non-GAAP Operating Earnings, less Notable Items |
$ |
521 |
|
|
$ |
468 |
|
|
|
|
|
Impact of notable items by item category:
|
Three Months Ended
|
||||||
(in millions) |
|
2024 |
|
|
|
2023 |
|
Non-GAAP Operating Earnings |
$ |
501 |
|
|
$ |
413 |
|
Pre-tax adjustments related to Notable Items: |
|
|
|
||||
Model Updates/True-Up Adjustments |
|
12 |
|
|
|
4 |
|
Mortality |
|
— |
|
|
|
35 |
|
Expenses |
|
— |
|
|
|
— |
|
Net Investment Income |
|
16 |
|
|
|
24 |
|
Subtotal |
|
27 |
|
|
|
63 |
|
Post-tax impact of Notable Items |
|
23 |
|
|
|
68 |
|
Impact of Actuarial Assumption Update |
|
(3 |
) |
|
|
(13 |
) |
Non-GAAP Operating Earnings, less Notable Items |
$ |
521 |
|
|
$ |
468 |
|
|
|
|
|
Earnings Conference Call
Equitable Holdings will host a conference call at 9 a.m. ET on November 5, 2024 to discuss its third quarter 2024 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 2024 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 leading financial services holding company comprised of complementary and well-established businesses, Equitable, AllianceBernstein and Equitable Advisors. Equitable Holdings has
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. These forward-looking statements include, but are not limited to, statements regarding projections, estimates, forecasts and other financial and performance metrics and projections of market expectations. “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 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 Asset Management 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, including any financial guidance, 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
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 MRB and purchased MRB, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the MRB 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 when the majority of the impact relates to the non-core business; 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 changes to the deferred tax valuation allowance.
In the fourth quarter of 2023, the Company updated its operating earnings measure to exclude the impact of realized amounts related to equity classified instruments. The recognition of the realized capital gains and losses from investments in current Net investment income is generally considered distortive and not reflective of the ongoing core business activities of the segments. The presentation of operating earnings in prior periods was not revised to reflect this modification. The impact to operating earnings was immaterial for the three and nine months ended September 30, 2023.
In the first quarter of 2024, the Company began allocating to its business segments collateral expense resulting from a designated rate to be paid on the collateral held back to counterparties. The new segment allocation methodology for collateral expense is based on the income earned on cash equivalents held in the surplus segments and income earned in portfolios backing collateral expenses, such that the collateral expense would be allocated to the segments up to that amount. Any remaining amount is included within Corporate and Other. This expense was previously recorded in Corporate and Other with no allocation to our business segments in prior reporting periods.
The presentation of operating earnings in prior periods was not revised to reflect this modification, however, the Company estimated that allocating collateral expense to the segments for the twelve months ended December 31, 2023 and 2022, respectively, would have resulted in a decrease to operating earnings of
During the third quarter 2024, the Company moved revenues and expenses related to payout annuitizations from the Legacy segment to the Individual Retirement segment. Now all payout annuities will be reported within the Individual Retirement segment as the block is managed on an aggregate basis. Prior periods have been recast to reflect this change.
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 and nine months ended September 30, 2024 and 2023:
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions) |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) attributable to Holdings |
|
$ |
(134 |
) |
|
$ |
1,064 |
|
|
$ |
408 |
|
|
$ |
2,000 |
|
Adjustments related to: |
|
|
|
|
|
|
|
|
||||||||
Variable annuity product features (1) |
|
|
738 |
|
|
|
(1,380 |
) |
|
|
1,136 |
|
|
|
(584 |
) |
Investment (gains) losses |
|
|
46 |
|
|
|
411 |
|
|
|
101 |
|
|
|
554 |
|
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
|
13 |
|
|
|
8 |
|
|
|
44 |
|
|
|
26 |
|
Other adjustments (2) (3) (4) |
|
|
— |
|
|
|
91 |
|
|
|
59 |
|
|
|
198 |
|
Income tax expense (benefit) related to above adjustments |
|
|
(167 |
) |
|
|
183 |
|
|
|
(281 |
) |
|
|
(40 |
) |
Non-recurring tax items (5) |
|
|
5 |
|
|
|
36 |
|
|
|
18 |
|
|
|
(936 |
) |
Non-GAAP Operating Earnings |
|
$ |
501 |
|
|
$ |
413 |
|
|
$ |
1,485 |
|
|
$ |
1,218 |
|
|
|
|
|
|
|
|
|
|
_______________ |
||
(1) |
|
Includes the impact of favorable assumption updates of |
(2) |
|
Includes certain gross legal expenses related to the COI litigation of |
(3) |
|
For the nine months ended September 30, 2024, includes |
(4) |
|
For the three and nine months ended September 30, 2024, includes |
(5) |
|
For the three and nine months ended September 30, 2024 and 2023, respectively, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period. An increase of the deferred tax valuation allowance of |
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 and nine months ended September 30, 2024 and 2023.
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Net income (loss) attributable to Holdings |
$ |
(0.42 |
) |
|
$ |
3.06 |
|
|
$ |
1.25 |
|
|
$ |
5.62 |
|
Less: Preferred stock dividend |
|
0.05 |
|
|
|
0.04 |
|
|
|
0.17 |
|
|
|
0.15 |
|
Net Income (loss) available to common shareholders |
|
(0.47 |
) |
|
|
3.02 |
|
|
|
1.08 |
|
|
|
5.47 |
|
Adjustments related to: |
|
|
|
|
|
|
|
||||||||
Variable annuity product features (1) |
|
2.32 |
|
|
|
(3.97 |
) |
|
|
3.47 |
|
|
|
(1.64 |
) |
Investment (gains) losses |
|
0.14 |
|
|
|
1.18 |
|
|
|
0.31 |
|
|
|
1.56 |
|
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
0.04 |
|
|
|
0.02 |
|
|
|
0.13 |
|
|
|
0.07 |
|
Other adjustments (2) (3) (4) |
|
— |
|
|
|
0.27 |
|
|
|
0.19 |
|
|
|
0.55 |
|
Income tax expense (benefit) related to above adjustments |
|
(0.52 |
) |
|
|
0.53 |
|
|
|
(0.86 |
) |
|
|
(0.11 |
) |
Non-recurring tax items (5) |
|
0.02 |
|
|
|
0.10 |
|
|
|
0.05 |
|
|
|
(2.63 |
) |
Non-GAAP Operating Earnings |
$ |
1.53 |
|
|
$ |
1.15 |
|
|
$ |
4.37 |
|
|
$ |
3.27 |
|
|
|
|
|
|
|
|
|
_______________ |
||
(1) |
|
Includes the impact of favorable assumption updates of |
(2) |
|
Includes certain gross legal expenses related to the COI litigation of |
(3) |
|
For the nine months ended September 30, 2024, includes |
(4) |
|
For the three and nine months ended September 30, 2024 includes |
(5) |
|
For the three and nine months ended September 30, 2024 and 2023, respectively, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period. An increase of the deferred tax valuation allowance 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.
|
September 30,
|
|
December 31,
|
||||
Book value per common share |
$ |
5.26 |
|
|
$ |
3.26 |
|
Per share impact of AOCI |
|
20.90 |
|
|
23.30 |
||
Book Value per common share, excluding AOCI |
$ |
26.16 |
|
|
$ |
26.56 |
|
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
|
|
Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in millions) |
||||||||||||||
REVENUES |
|
|
|
|
|
|
|
||||||||
Policy charges and fee income |
$ |
626 |
|
|
$ |
599 |
|
|
$ |
1,857 |
|
|
$ |
1,781 |
|
Premiums |
|
313 |
|
|
|
267 |
|
|
|
870 |
|
|
|
823 |
|
Net derivative gains (losses) |
|
(714 |
) |
|
|
615 |
|
|
|
(2,298 |
) |
|
|
(1,143 |
) |
Net investment income (loss) |
|
1,309 |
|
|
|
1,071 |
|
|
|
3,694 |
|
|
|
3,097 |
|
Investment gains (losses), net: |
|
|
|
|
|
|
|
||||||||
Credit losses on available-for-sale debt securities and loans |
|
(28 |
) |
|
|
(65 |
) |
|
|
(63 |
) |
|
|
(145 |
) |
Other investment gains (losses), net |
|
(18 |
) |
|
|
(346 |
) |
|
|
(38 |
) |
|
|
(409 |
) |
Total investment gains (losses), net |
|
(46 |
) |
|
|
(411 |
) |
|
|
(101 |
) |
|
|
(554 |
) |
Investment management and service fees |
|
1,287 |
|
|
|
1,217 |
|
|
|
3,805 |
|
|
|
3,579 |
|
Other income |
|
301 |
|
|
|
266 |
|
|
|
989 |
|
|
|
775 |
|
Total revenues |
|
3,076 |
|
|
|
3,624 |
|
|
|
8,816 |
|
|
|
8,358 |
|
BENEFITS AND OTHER DEDUCTIONS |
|
|
|
|
|
|
|
||||||||
Policyholders’ benefits |
|
663 |
|
|
|
693 |
|
|
|
2,007 |
|
|
|
2,107 |
|
Remeasurement of liability for future policy benefits |
|
16 |
|
|
|
49 |
|
|
|
9 |
|
|
|
46 |
|
Change in market risk benefits and purchased market risk benefits |
|
79 |
|
|
|
(817 |
) |
|
|
(1,154 |
) |
|
|
(1,772 |
) |
Interest credited to policyholders’ account balances |
|
708 |
|
|
|
556 |
|
|
|
1,879 |
|
|
|
1,520 |
|
Compensation and benefits |
|
571 |
|
|
|
593 |
|
|
|
1,768 |
|
|
|
1,742 |
|
Commissions and distribution-related payments |
|
485 |
|
|
|
405 |
|
|
|
1,385 |
|
|
|
1,178 |
|
Interest expense |
|
55 |
|
|
|
55 |
|
|
|
174 |
|
|
|
171 |
|
Amortization of deferred policy acquisition costs |
|
184 |
|
|
|
165 |
|
|
|
525 |
|
|
|
472 |
|
Other operating costs and expenses |
|
329 |
|
|
|
450 |
|
|
|
1,309 |
|
|
|
1,339 |
|
Total benefits and other deductions |
|
3,090 |
|
|
|
2,149 |
|
|
|
7,902 |
|
|
|
6,803 |
|
Income (loss) from continuing operations, before income taxes |
|
(14 |
) |
|
|
1,475 |
|
|
|
914 |
|
|
|
1,555 |
|
Income tax (expense) benefit |
|
40 |
|
|
|
(340 |
) |
|
|
(106 |
) |
|
|
677 |
|
Net income (loss) |
|
26 |
|
|
|
1,135 |
|
|
|
808 |
|
|
|
2,232 |
|
Less: Net income (loss) attributable to the noncontrolling interest |
|
160 |
|
|
|
71 |
|
|
|
400 |
|
|
|
232 |
|
Net income (loss) attributable to Holdings |
|
(134 |
) |
|
|
1,064 |
|
|
|
408 |
|
|
|
2,000 |
|
Less: Preferred stock dividends |
|
14 |
|
|
|
14 |
|
|
|
54 |
|
|
|
54 |
|
Net income (loss) available to Holdings’ common shareholders |
$ |
(148 |
) |
|
$ |
1,050 |
|
|
$ |
354 |
|
|
$ |
1,946 |
|
|
|
|
|
|
|
|
|
Earnings Per Common Share
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in millions) |
||||||||||||||
Earnings per common share |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
(0.47 |
) |
|
$ |
3.03 |
|
|
$ |
1.09 |
|
|
$ |
5.49 |
|
Diluted |
$ |
(0.47 |
) |
|
$ |
3.02 |
|
|
$ |
1.08 |
|
|
$ |
5.47 |
|
Weighted average shares |
|
|
|
|
|
|
|
||||||||
Weighted average common stock outstanding for basic earnings per common share |
|
318.2 |
|
|
|
346.4 |
|
|
|
324.2 |
|
|
|
354.4 |
|
Weighted average common stock outstanding for diluted earnings per common share (1) |
|
318.2 |
|
|
|
348.0 |
|
|
|
327.7 |
|
|
|
355.9 |
|
|
|
|
|
|
|
|
|
(1) |
|
For the three and nine months ended September 30, 2024 and 2023, 6.4 million, 3.0 million, 3.5 million and 2.4 million, respectively, of outstanding stock awards, were not included in the computation of diluted earnings per share because their effect was anti-dilutive. |
Results of Operations by Segment
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in millions) |
||||||||||||||
Operating earnings (loss) by segment: |
|
|
|
|
|
|
|
||||||||
Individual Retirement |
$ |
225 |
|
|
$ |
220 |
|
|
$ |
713 |
|
|
$ |
671 |
|
Group Retirement |
|
141 |
|
|
|
105 |
|
|
|
390 |
|
|
|
301 |
|
Asset Management |
|
111 |
|
|
|
99 |
|
|
|
318 |
|
|
|
297 |
|
Protection Solutions |
|
46 |
|
|
|
34 |
|
|
|
154 |
|
|
|
23 |
|
Wealth Management |
|
50 |
|
|
|
40 |
|
|
|
137 |
|
|
|
114 |
|
Legacy |
|
27 |
|
|
|
31 |
|
|
|
93 |
|
|
|
119 |
|
Corporate and Other (1) |
|
(99 |
) |
|
|
(116 |
) |
|
|
(320 |
) |
|
|
(307 |
) |
Non-GAAP Operating Earnings |
$ |
501 |
|
|
$ |
413 |
|
|
$ |
1,485 |
|
|
$ |
1,218 |
|
|
|
|
|
|
|
|
|
_______________ |
||
(1) |
|
Includes interest expense and financing fees of |
Select Balance Sheet Statistics
|
September 30,
|
|
December 31,
|
||||
|
(in millions) |
||||||
ASSETS |
|
|
|
||||
Total investments and cash and cash equivalents |
$ |
123,825 |
|
|
$ |
110,412 |
|
Separate Accounts assets |
|
137,407 |
|
|
|
127,251 |
|
Total assets |
|
298,989 |
|
|
|
276,814 |
|
|
|
|
|
||||
LIABILITIES |
|
|
|
||||
Long-term debt |
$ |
3,831 |
|
|
$ |
3,820 |
|
Future policy benefits and other policyholders' liabilities |
|
17,936 |
|
|
|
17,363 |
|
Policyholders’ account balances |
|
107,433 |
|
|
|
95,673 |
|
Total liabilities |
|
292,791 |
|
|
|
271,656 |
|
|
|
|
|
||||
EQUITY |
|
|
|
||||
Preferred stock |
|
1,562 |
|
|
|
1,562 |
|
Accumulated other comprehensive income (loss) |
|
(6,595 |
) |
|
|
(7,777 |
) |
Total equity attributable to Holdings |
$ |
3,220 |
|
|
$ |
2,649 |
|
Total equity attributable to Holdings' common shareholders (ex. AOCI) |
|
8,253 |
|
|
|
8,864 |
|
Assets Under Management (Unaudited)
|
September 30,
|
|
December 31,
|
||||
|
(in billions) |
||||||
Assets Under Management |
|
|
|
||||
AB AUM |
$ |
805.9 |
|
|
$ |
725.2 |
|
Exclusion for General Account and other Affiliated Accounts |
|
(71.7 |
) |
|
|
(75.0 |
) |
Exclusion for Separate Accounts |
|
(61.7 |
) |
|
|
(44.5 |
) |
AB third party |
$ |
672.6 |
|
|
$ |
605.7 |
|
|
|
|
|
||||
Total company AUM |
|
|
|
||||
AB third party |
$ |
672.6 |
|
|
$ |
605.7 |
|
General Account and other Affiliated Accounts (1) (3) (4) |
|
123.8 |
|
|
|
110.4 |
|
Separate Accounts (2) (3) (4) |
|
137.4 |
|
|
|
127.3 |
|
Total AUM |
$ |
933.8 |
|
|
$ |
843.4 |
|
|
|
|
|
_______________ |
||
(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, 2024 and December 31, 2023, Separate Account is inclusive of |
(4) |
|
As of September 30, 2024 and December 31, 2023, Separate Account is inclusive of |
_________________________ |
1 Includes Individual Retirement and Group Retirement |
2 This press release includes certain Non-GAAP financial measures. More information on these measures and reconciliations to the most comparable |
3 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items. |
4 Cash generation is the cash flow from asset and wealth management subsidiaries, along with capital generated in excess of the target combined NAIC RBC ratio at the insurance subsidiaries; Financial guidance assumes normal market conditions including |
5 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items. |
6 Refers to AllianceBernstein L.P. and AllianceBernstein Holding L.P., collectively. |
7 Excludes c. |
8 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items. |
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. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20241104527114/en/
Investor Relations
Erik Bass
(212) 314-2476
IR@equitable.com
Media Relations
Sophia Kim
(212) 314-2010
mediarelations@equitable.com
Source: Equitable Holdings, Inc.
FAQ
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