Genworth Financial Announces Second Quarter 2022 Results
Genworth Financial reported Q2 2022 net income of $181 million, down 25% from $240 million in Q2 2021, and adjusted operating income of $176 million, a 9% decline year-over-year. Enact segment adjusted operating income grew to $167 million with a 9% increase in insurance in-force. The company executed $30 million in share repurchases and received a two-notch credit rating upgrade from Moody’s. However, U.S. Life Insurance's adjusted operating income fell to $21 million, influenced by unfavorable life insurance results despite $52 million in premium rate increases approved.
- Enact segment adjusted operating income increased to $167 million, up from $135 million in both the prior quarter and year.
- $52 million in annual premium rate increases approved, enhancing the net present value by approximately $300 million.
- Cash and liquid assets of $228 million at quarter-end, improving liquidity.
- First quarterly dividend from Enact of $19 million received.
- Net income decreased by 25% to $181 million compared to $240 million in Q2 2021.
- Adjusted operating income declined by 9% from $194 million in Q2 2021.
- U.S. Life Insurance segment reported an adjusted operating income of $21 million, significantly lower than $71 million in the prior year, influenced by unfavorable life insurance results.
- Long-term care insurance adjusted operating income declined to $34 million, down from $98 million in the prior year.
Net Income of
-
Enact segment adjusted operating income of
, with nine percent annual growth in insurance in-force and strong loss performance$167 million -
Received first quarterly dividend from Enact of
$19 million -
U.S. Life Insurance segment adjusted operating income of driven by solid long-term care insurance (LTC) and fixed annuity performance, partially offset by unfavorable life insurance results$21 million -
in annual premium rate increases approved, increasing net present value from achieved LTC rate actions since 2012 by approximately$52 million , bringing the total to$300 million $20.7 billion -
U.S. life insurance companies’ risk-based capital ratio estimated at 290 percent -
Retired
of debt, bringing holding company total debt to$48 million ; cash and liquid assets of$1,052 million $228 million -
Executed
in share repurchases through$30 million July 2022 -
Received a two-notch credit rating upgrade from Moody’s Investors Service in
July 2022
“Despite a very challenging macroeconomic environment,
Financial Performance
Consolidated Net Income & Adjusted Operating Income |
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Three months ended |
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2022 |
2021 |
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Per |
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Per |
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diluted |
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diluted |
Total |
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(Amounts in millions, except per share) |
Total |
share |
Total |
share |
% change |
||||||||||
Net income available to |
$ |
181 |
$ |
0.35 |
$ |
240 |
$ |
0.47 |
(25 |
)% |
|||||
Adjusted operating income |
$ |
176 |
$ |
0.34 |
$ |
194 |
$ |
0.38 |
(9 |
)% |
|||||
Weighted-average diluted shares |
|
514.2 |
|
|
515.0 |
|
|
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As of |
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|||||||||||||
|
2022 |
2021 |
|
||||||||||||
Book value per share |
|
$ |
23.28 |
|
$ |
29.89 |
|
||||||||
Book value per share, excluding accumulated other comprehensive income (loss) |
|
$ |
23.56 |
|
$ |
22.33 |
|
Net investment gains, net of taxes and other adjustments, increased net income by
Net investment income was
Genworth’s effective tax rate on income from continuing operations for the current quarter was approximately 24.9 percent. As in past quarters, the effective tax rate was increased by the tax effect on certain forward starting swap gains that are taxed at 35 percent when amortized into net investment income.
The table below shows adjusted operating income (loss) by segment and for Corporate and Other activities:
Adjusted Operating Income (Loss) |
|
|
|
|||||||||
(Amounts in millions) |
Q2 22 |
Q1 22 |
Q2 21 |
|||||||||
Enact3 |
$ |
167 |
|
$ |
135 |
|
$ |
135 |
|
|||
|
|
21 |
|
|
(4 |
) |
|
71 |
|
|||
Runoff |
|
2 |
|
|
9 |
|
|
15 |
|
|||
Corporate and Other |
|
(14 |
) |
|
(9 |
) |
|
(27 |
) |
|||
Total Adjusted Operating Income |
$ |
176 |
|
$ |
131 |
|
$ |
194 |
|
Adjusted operating income (loss) represents income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and other adjustments. A reconciliation of net income to adjusted operating income is included at the end of this press release.
Enact
Operating Metrics |
|
|
|
||||||||||||
(Dollar amounts in millions) |
Q2 22 |
Q1 22 |
Q2 21 |
||||||||||||
Adjusted operating income3 |
$ |
167 |
|
$ |
135 |
|
$ |
135 |
|
||||||
Primary new insurance written |
$ |
17,448 |
|
$ |
18,823 |
|
$ |
26,657 |
|
||||||
Loss ratio |
|
(26 |
)% |
|
(4 |
)% |
|
12 |
% |
Enact reported adjusted operating income of
Enact’s current quarter results reflected a benefit of
Adjusted Operating Income (Loss) |
|
|
|
|||||||||
(Amounts in millions) |
Q2 22 |
Q1 22 |
Q2 21 |
|||||||||
|
$ |
34 |
|
$ |
59 |
|
$ |
98 |
|
|||
Life Insurance |
|
(34 |
) |
|
(79 |
) |
|
(40 |
) |
|||
Fixed Annuities |
|
21 |
|
|
16 |
|
|
13 |
|
|||
|
$ |
21 |
|
$ |
(4 |
) |
$ |
71 |
|
|||
|
|
|
|
|||||||||
Long-Term Care Insurance In-Force Rate Action Performance |
|
|
|
|||||||||
(Amounts in millions) |
Q2 22 |
Q1 22 |
Q2 21 |
|||||||||
Adjusted Operating Income from In-Force Rate Actions4, 5 |
$ |
255 |
|
$ |
304 |
|
$ |
310 |
|
Long-term care insurance reported adjusted operating income of
In the current quarter, claim terminations and healthy life mortality were lower versus the prior quarter from a seasonal decrease in mortality and lower pandemic impacts. New claims increased versus the prior quarter and prior year driven by both higher severity and frequency as the legacy blocks age.
LTC results reflected higher net investment income of
Renewal premiums decreased versus the prior year driven by policy terminations and policies entering paid-up status because of higher non-forfeiture and reduced benefit elections by policyholders.
Life Insurance
Life insurance reported an adjusted operating loss of
Current quarter results included a lower charge of
Fixed Annuities
Fixed annuities reported adjusted operating income of
Runoff
Runoff reported adjusted operating income of
Corporate And Other
Corporate and Other reported an adjusted operating loss of
Capital & Liquidity
|
|
|
|
|||||||||
(Dollar amounts in millions) |
Q2 22 |
Q1 22 |
Q2 21 |
|||||||||
Enact |
|
|
|
|||||||||
Combined Risk-To-Capital Ratio7 |
12.6:1 |
12.0:1 |
11.8:1 |
|||||||||
Enact Mortgage Insurance Corporation Risk-To-Capital Ratio7 |
12.6:1 |
12.1:1 |
12.0:1 |
|||||||||
Private Mortgage Insurer Eligibility Requirements (PMIERs) Sufficiency Ratio7, 8 |
|
166 |
% |
|
176 |
% |
|
165 |
% |
|||
|
|
|
|
|||||||||
Consolidated Risk-Based Capital Ratio7 |
|
290 |
% |
|
296 |
% |
|
272 |
% |
|||
Holding Company Cash and Liquid Assets9,10 |
$ |
228 |
|
$ |
215 |
|
$ |
842 |
|
-
Enact’s PMIERs sufficiency ratio is estimated to be 166 percent,
above published PMIERs requirements11. The PMIERs sufficiency ratio decreased 10 points, or by$2,047 million , sequentially, driven by Enact’s operating company distribution to its holding company,$214 million Enact Holdings, Inc. , NIW and amortization of existing reinsurance transactions, partially offset by lapses, business cash flows and lower delinquencies; -
PMIERs sufficiency benefited from a 0.30 multiplier applied to the risk based required asset factor for certain non-performing loans, which resulted in a reduction of the published PMIERs required assets by an estimated
at the end of the current quarter, compared to$178 million at the end of the prior quarter and$272 million at the end of the second quarter of 2021. These amounts are gross of incremental reinsurance benefits from the elimination of the 0.30 multiplier;$760 million -
Enact paid its first quarterly dividend of
per share during the current quarter, with$0.14 paid to$19 million Genworth ; -
Enact executed a five-year
revolving credit facility to enhance its future financial flexibility;$200 million -
U.S. life insurance companies’ consolidated statutory risk-based capital ratio is estimated to be 290 percent at the end of the current quarter, down from 296 percent in the prior quarter, primarily from the impact of declining equity markets in the closed variable annuity product line; -
Genworth’s holding company ended the quarter with
of cash and liquid assets. Cash sources in the quarter included$228 million from net intercompany tax payments and a$58 million dividend from Enact. During the current quarter, the company reduced its$19 million February 2024 debt obligation by through open market repurchases, leaving$48 million of principal remaining on the 2024 debt. Genworth’s parent holding company public debt outstanding was$152 million as of$1,052 million June 30, 2022 ; -
The company repurchased
of its common stock at an average price below$15 million per share in the second quarter and repurchased an additional$3.90 in$15 million July 2022 at an average price below per share. The company authorized a$3.75 share repurchase program in$350 million May 2022 and expects the majority of share repurchases to occur following the repayment of its remaining 2024 debt; and -
In
July 2022 , Moody’s Investors Services upgraded the senior unsecured debt rating ofGenworth Holdings, Inc. by two notches, from B1 to Ba2. The outlook for the rating is stable.
About
Conference Call And Financial Supplement Information
Investors are encouraged to read this press release, summary presentation and financial supplement, which are now posted on the company’s website, http://investor.genworth.com.
-
Telephone: 888-208-1820 or 323-794-2110 (outside the
U.S. ); conference ID # 5586482; or - Webcast: http://investor.genworth.com
Allow at least 15 minutes prior to the call time to register for the call. A replay of the call will be available at 888-203-1112 or 719-457-0820 (outside the
Prior to Genworth’s conference call, Enact will hold a conference call on
-
Telephone: 866-634-2594 or 412-902-4104 (outside the
U.S. ); participants should ask to be joined into theEnact Holdings, Inc. call; or - Webcast: http://ir.enactmi.com/news-and-events/events
Allow at least 15 minutes prior to the call time to register for the call.
Use of Non-GAAP Measures
This press release includes the non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Initial gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or initial gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the company's segments and Corporate and Other activities. A component of the company's net investment gains (losses) is the result of estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company's discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company's opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the company's opinion, they are not indicative of overall operating trends.
While some of these items may be significant components of net income (loss) available to
Adjustments to reconcile net income (loss) available to
In the second and first quarters of 2022, the company repurchased
The company recorded a pre-tax expense of
The tables at the end of this press release provide a reconciliation of net income available to
This press release includes the non-GAAP financial measure entitled "core yield" as a measure of investment yield. The company defines core yield as the investment yield adjusted for items that do not reflect the underlying performance of the investment portfolio. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield is not a substitute for investment yield determined in accordance with
Definition of Selected Operating Performance Measures
The company taxes its businesses at the
The annually-determined tax rates and adjustments to each segment’s provision for income taxes are estimates which are subject to review and could change from year to year.
The company reports selected operating performance measures including "sales" and "insurance in-force" or "risk in-force" which are commonly used in the insurance industry as measures of operating performance.
Management regularly monitors and reports sales metrics as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance products included in the company's Enact segment. The company considers new insurance written to be a measure of the operating performance of its Enact segment because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.
Management regularly monitors and reports insurance in-force and risk in-force for the company’s Enact segment. Insurance in-force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by the company’s
Management also regularly monitors and reports a loss ratio for the company's businesses. For the mortgage insurance businesses included in the company’s Enact segment, the loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. For the long-term care insurance business included in the company’s
Management also regularly monitors and reports adjusted operating income from in-force rate actions in the long-term care insurance business included in the company’s
These operating performance measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.
Statutory Accounting Data
The company presents certain supplemental statutory data for
This supplemental statutory data includes risk-based capital ratios for GLIC and its consolidating life insurance subsidiaries as well as statutory earnings. Management uses and provides this supplemental statutory data because it believes it provides a useful measure of among other things the adequacy of capital. Management uses this data to measure against its policy to manage the
Cautionary Note Regarding Forward-Looking Statements
This press release contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as "expects," "intends," "anticipates," "plans," "believes," "seeks," "estimates," "will" or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company's future business and financial performance. Examples of forward-looking statements include statements the company makes relating to future reductions of debt, potential dividends or share repurchases, future
-
the company may be unable to successfully execute its strategic plans: to strengthen the company’s financial position and create long-term shareholder value, including with respect to reducing debt of
Genworth Holdings ; maximizing the value ofEnact Holdings ; achieving economic breakeven on and stabilizing the legacy long-term care insurance in-force block; advancing the company’s long-term care growth initiatives, including launching either unilaterally or with a strategic partner new product and service offerings designed to assist individuals with navigating and financing long-term care; and returning capital toGenworth Financial shareholders, due to numerous risks and constraints, including but not limited to: Enact Holdings’ ability to pay dividends, including as a result of the GSEs amendments to PMIERs in response to COVID-19 as well as additional PMIERs requirements or other restrictions that the GSEs may place on the ability ofEnact Holdings to pay dividends; an inability to increase the capital needed in the company’s businesses in a timely manner and on anticipated terms, including through improved business performance, reinsurance or similar transactions, asset sales, debt issuances, securities offerings or otherwise, in each case as and when required; the company's strategic priorities change or become more costly or difficult to successfully achieve than currently anticipated or the benefits achieved being less than anticipated; an inability to identify and contract with a strategic partner regarding a new long-term care insurance business; an inability to establish a new long-term care insurance business or product offerings due to commercial and/or regulatory challenges; an inability to reduce costs proportionate with Genworth’s reduced business activity, including as forecasted and in a timely manner; and adverse tax or accounting charges, including new accounting guidance (that is effective for the company onJanuary 1, 2023 ) related to long-duration insurance contracts; -
risks relating to estimates, assumptions and valuations including: inadequate reserves and the need to increase reserves (including as a result of any changes the company may make in the future to its assumptions, methodologies or otherwise in connection with periodic or other reviews); risks related to the impact of the company’s annual review of assumptions and methodologies related to its long-term care insurance claim reserves and margin reviews, including risks that additional information obtained in the future or other changes to assumptions or methodologies materially affect margins; or other changes to assumptions or methodologies materially affect margins; the inability to accurately estimate the impacts of COVID-19 and other novel diseases; inaccurate models; the need to increase the company’s reserves as a result of deviations from its estimates and actuarial assumptions or other reasons; accelerated amortization of DAC and present value of future profits (including as a result of any future changes it may make to its assumptions, methodologies or otherwise in connection with periodic or other reviews); adverse impact on the company's financial results as a result of projected profits followed by projected losses (as is currently the case with its long-term care insurance business); changes in valuation of fixed maturity and equity securities; and the benefits
Enact Holdings realizes from its future loss mitigation actions or programs may be limited; -
liquidity, financial strength and credit ratings, and counterparty and credit risks including: the impact on Genworth Financial’s and Genworth Holdings’ liquidity caused by the inability to receive dividends or other returns of capital from
Enact Holdings , including as a result of COVID-19; limited sources of capital and financing, including under certain conditions the company may seek additional capital on unfavorable terms; future adverse rating agency actions against the company orEnact Holdings , including with respect to rating downgrades or potential downgrades or being put on review for potential downgrade, all of which could have adverse implications, including with respect to key business relationships, product offerings, business results of operations, financial condition and capital needs, strategic plans, collateral obligations and availability and terms of hedging, reinsurance and borrowings; defaults by counterparties to reinsurance arrangements or derivative instruments; and defaults or other events impacting the value of the company's invested assets, including but not limited to, its fixed maturity and equity securities, commercial mortgage loans, policy loans and limited partnership investments; -
risks relating to economic, market and political conditions including: downturns and volatility in global economies and equity and credit markets, including as a result of inflation and supply chain disruptions, a potential recession, continued labor shortages and other displacements caused by COVID-19; interest rates and changes in rates could adversely affect the company's business and profitability; deterioration in economic conditions (including as a result of the Russian invasion of
Ukraine ) or a decline in home prices or home sales that adversely affect Enact Holdings’ loss experience and/or business levels; political and economic instability or changes in government policies; and fluctuations in international securities markets; -
regulatory and legal risks including: extensive regulation of the company's businesses and changes in applicable laws and regulations (including changes to tax laws and regulations); litigation and regulatory investigations or other actions, including commercial and contractual disputes with counterparties; heightened regulatory restrictions and other insurance, regulatory or corporate law restrictions; the inability to successfully seek in-force rate action increases (including increased premiums and associated benefit reductions) in the company’s long-term care insurance business, including as a result of COVID-19; adverse changes in regulatory requirements, including risk-based capital; inability of
Enact Holdings to continue to meet the requirements mandated by PMIERs, including as a result of increased delinquencies caused by COVID-19; inability of Enact Holdings’U.S. mortgage insurance subsidiaries to meet minimum statutory capital requirements; the influence of Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and a small number of large mortgage lenders in theU.S. mortgage insurance market and adverse changes to the role or structure of Fannie Mae and Freddie Mac; adverse changes in regulations affectingEnact Holdings , including any additional restrictions placed onEnact Holdings by government and government-owned enterprises and the GSEs in connection with additional capital transactions; inability to continue to implement actions to mitigate the impact of statutory reserve requirements; changes in accounting and reporting standards, including new accounting guidance (that is effective for the company onJanuary 1, 2023 ) related to long-duration insurance contracts; -
operational risks including: the inability to retain, attract and motivate qualified employees or senior management; Enact Holdings’ reliance on, and loss of, key customers or distribution relationships; competition with government-owned and government-sponsored enterprises may put
Enact Holdings at a competitive disadvantage on pricing and other terms and conditions; the design and effectiveness of the company’s disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations; and failure or any compromise of the security of the company's computer systems, disaster recovery systems, business continuity plans and failures to safeguard or breaches of confidential information; -
insurance and product-related risks including: Enact Holdings’ inability to maintain or increase capital in its mortgage insurance subsidiaries in a timely manner; the company’s inability to increase premiums and reduce benefits sufficiently, and in a timely manner, on its in-force long-term care insurance policies, in each case, as currently anticipated and as may be required from time to time in the future (including as a result of a delay or failure to obtain any necessary regulatory approvals, including as a result of COVID-19, or unwillingness or inability of policyholders to pay increased premiums and/or accept reduced benefits), including to offset any negative impact on the company's long-term care insurance margins; availability, affordability and adequacy of reinsurance to protect the company against losses; decreases in the volume of mortgage originations or increases in mortgage insurance cancellations; increases in the use of alternatives to private mortgage insurance and reductions in the level of coverage selected; potential liabilities in connection with Enact Holdings’
U.S. contract underwriting services; Enact Holdings’ delegated underwriting program may subject its mortgage insurance subsidiaries to unanticipated claims; and medical advances, such as genetic research and diagnostic imaging, and related legislation that impact policyholder behavior in ways adverse to the company; -
other general risks including: the occurrence of natural or man-made disasters, including geopolitical tensions and war (including the Russian invasion of
Ukraine ), or a public health emergency, including pandemics, climate change or cyber security breaches, could materially adversely affect the company’s financial condition and results of operations.
The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. This press release does not constitute an offering of any securities.
Condensed Consolidated Statements of Income |
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(Amounts in millions, except per share amounts) |
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(Unaudited) |
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Three months |
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Three months ended |
ended |
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|
2022 |
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|
2021 |
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|
2022 |
|
|||
Revenues: |
|
|
|
|||||||||
Premiums |
$ |
927 |
|
|
$ |
947 |
|
|
$ |
931 |
|
|
Net investment income |
|
787 |
|
|
|
844 |
|
|
|
764 |
|
|
Net investment gains (losses) |
|
8 |
|
|
|
70 |
|
|
|
28 |
|
|
Policy fees and other income |
|
159 |
|
|
|
180 |
|
|
|
169 |
|
|
Total revenues |
|
1,881 |
|
|
|
2,041 |
|
|
|
1,892 |
|
|
Benefits and expenses: |
|
|
|
|
|
|||||||
Benefits and other changes in policy reserves |
|
764 |
|
|
|
1,161 |
|
|
|
1,139 |
|
|
Interest credited |
|
125 |
|
|
|
127 |
|
|
|
125 |
|
|
Acquisition and operating expenses, net of deferrals |
|
589 |
|
|
|
304 |
|
|
|
271 |
|
|
Amortization of deferred acquisition costs and intangibles |
|
84 |
|
|
|
86 |
|
|
|
92 |
|
|
Interest expense |
|
26 |
|
|
|
43 |
|
|
|
26 |
|
|
Total benefits and expenses |
|
1,588 |
|
|
|
1,721 |
|
|
|
1,653 |
|
|
Income from continuing operations before income taxes |
|
293 |
|
|
|
320 |
|
|
|
239 |
|
|
Provision for income taxes |
|
73 |
|
|
|
75 |
|
|
|
58 |
|
|
Income from continuing operations |
|
220 |
|
|
|
245 |
|
|
|
181 |
|
|
Loss from discontinued operations, net of taxes |
|
(1 |
) |
|
|
(5 |
) |
|
|
(2 |
) |
|
Net income |
|
219 |
|
|
|
240 |
|
|
|
179 |
|
|
Less: net income from continuing operations attributable to noncontrolling interests |
|
38 |
|
|
|
— |
|
|
|
30 |
|
|
Net income available to |
$ |
181 |
|
|
$ |
240 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|||||||
Net income available to |
|
|
|
|
|
|||||||
Income from continuing operations available to |
$ |
182 |
|
|
$ |
245 |
|
|
$ |
151 |
|
|
Loss from discontinued operations available to |
|
(1 |
) |
|
|
(5 |
) |
|
|
(2 |
) |
|
Net income available to |
$ |
181 |
|
|
$ |
240 |
|
|
$ |
149 |
|
|
|
|
|
|
|
|
|||||||
Income from continuing operations available to |
|
|
|
|
|
|||||||
Basic |
$ |
0.36 |
|
|
$ |
0.48 |
|
|
$ |
0.30 |
|
|
Diluted |
$ |
0.36 |
|
|
$ |
0.47 |
|
|
$ |
0.29 |
|
|
Net income available to |
|
|
|
|
|
|||||||
Basic |
$ |
0.36 |
|
|
$ |
0.47 |
|
|
$ |
0.29 |
|
|
Diluted |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.29 |
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|||||||
Basic |
|
509.0 |
|
|
|
507.0 |
|
|
|
508.3 |
|
|
Diluted |
|
514.2 |
|
|
|
515.0 |
|
|
|
517.4 |
|
Reconciliation of Net Income to Adjusted Operating Income |
||||||||||||
(Amounts in millions, except per share amounts) |
||||||||||||
(Unaudited) |
||||||||||||
|
Three |
|
Three |
|||||||||
|
months ended |
|
months ended |
|||||||||
|
|
|
|
|||||||||
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
Net income available to |
$ |
181 |
|
|
$ |
240 |
|
|
$ |
149 |
|
|
Add: net income from continuing operations attributable to noncontrolling interests |
|
38 |
|
|
|
— |
|
|
|
30 |
|
|
Net income |
|
219 |
|
|
|
240 |
|
|
|
179 |
|
|
Less: loss from discontinued operations, net of taxes |
|
(1 |
) |
|
|
(5 |
) |
|
|
(2 |
) |
|
Income from continuing operations |
|
220 |
|
|
|
245 |
|
|
|
181 |
|
|
Less: net income from continuing operations attributable to noncontrolling interests |
|
38 |
|
|
|
— |
|
|
|
30 |
|
|
Income from continuing operations available to |
|
182 |
|
|
|
245 |
|
|
|
151 |
|
|
Adjustments to income from continuing operations available to |
|
|
|
|
|
|||||||
Net investment (gains) losses, net12 |
|
(10 |
) |
|
|
(70 |
) |
|
|
(28 |
) |
|
(Gains) losses on early extinguishment of debt |
|
1 |
|
|
|
— |
|
|
|
3 |
|
|
Expenses related to restructuring |
|
1 |
|
|
|
5 |
|
|
|
— |
|
|
Taxes on adjustments |
|
2 |
|
|
|
14 |
|
|
|
5 |
|
|
Adjusted operating income |
$ |
176 |
|
|
$ |
194 |
|
|
$ |
131 |
|
|
|
|
|
|
|
|
|||||||
Adjusted operating income (loss): |
|
|
|
|
|
|||||||
Enact segment |
$ |
167 |
|
|
$ |
135 |
|
|
$ |
135 |
|
|
|
|
|
|
|
|
|||||||
|
|
34 |
|
|
|
98 |
|
|
|
59 |
|
|
Life Insurance |
|
(34 |
) |
|
|
(40 |
) |
|
|
(79 |
) |
|
Fixed Annuities |
|
21 |
|
|
|
13 |
|
|
|
16 |
|
|
|
|
21 |
|
|
|
71 |
|
|
|
(4 |
) |
|
Runoff segment |
|
2 |
|
|
|
15 |
|
|
|
9 |
|
|
Corporate and Other |
|
(14 |
) |
|
|
(27 |
) |
|
|
(9 |
) |
|
Adjusted operating income |
$ |
176 |
|
|
$ |
194 |
|
|
$ |
131 |
|
|
|
|
|
|
|
|
|||||||
Net income available to |
|
|
|
|
|
|||||||
Basic |
$ |
0.36 |
|
|
$ |
0.47 |
|
|
$ |
0.29 |
|
|
Diluted |
$ |
0.35 |
|
|
$ |
0.47 |
|
|
$ |
0.29 |
|
|
Adjusted operating income per share: |
|
|
|
|
|
|||||||
Basic |
$ |
0.35 |
|
|
$ |
0.38 |
|
|
$ |
0.26 |
|
|
Diluted |
$ |
0.34 |
|
|
$ |
0.38 |
|
|
$ |
0.25 |
|
|
Weighted-average common shares outstanding: |
|
|
|
|
|
|||||||
Basic |
|
509.0 |
|
|
|
507.0 |
|
|
|
508.3 |
|
|
Diluted |
|
514.2 |
|
|
|
515.0 |
|
|
|
517.4 |
|
Condensed Consolidated Balance Sheets |
||||||||
(Amounts in millions) |
||||||||
|
|
|
||||||
|
|
|
||||||
|
|
2022 |
|
|
2021 |
|
||
|
(Unaudited) |
|
||||||
Assets |
|
|
||||||
Cash, cash equivalents, restricted cash and invested assets |
$ |
63,745 |
|
$ |
74,496 |
|
||
Deferred acquisition costs |
|
2,314 |
|
|
1,146 |
|
||
Intangible assets |
|
236 |
|
|
143 |
|
||
Reinsurance recoverable, net |
|
16,631 |
|
|
16,813 |
|
||
Deferred tax and other assets |
|
1,459 |
|
|
507 |
|
||
Separate account assets |
|
4,683 |
|
|
6,066 |
|
||
Total assets |
$ |
89,068 |
|
$ |
99,171 |
|
||
Liabilities and equity |
|
|
||||||
Liabilities: |
|
|
||||||
Future policy benefits |
$ |
38,133 |
|
$ |
41,528 |
|
||
Policyholder account balances |
|
17,907 |
|
|
19,354 |
|
||
Liability for policy and contract claims |
|
11,915 |
|
|
11,841 |
|
||
Unearned premiums |
|
614 |
|
|
672 |
|
||
Other liabilities |
|
1,468 |
|
|
1,511 |
|
||
Long-term borrowings |
|
1,773 |
|
|
1,899 |
|
||
Separate account liabilities |
|
4,683 |
|
|
6,066 |
|
||
Liabilities related to discontinued operations |
|
4 |
|
|
34 |
|
||
Total liabilities |
|
76,497 |
|
|
82,905 |
|
||
Equity: |
|
|
||||||
Common stock |
|
1 |
|
|
1 |
|
||
Additional paid-in capital |
|
11,859 |
|
|
11,858 |
|
||
Accumulated other comprehensive income (loss) |
|
(145 |
) |
|
3,861 |
|
||
Retained earnings |
|
2,820 |
|
|
2,490 |
|
||
|
|
(2,715 |
) |
|
(2,700 |
) |
||
|
|
11,820 |
|
|
15,510 |
|
||
Noncontrolling interests |
|
751 |
|
|
756 |
|
||
Total equity |
|
12,571 |
|
|
16,266 |
|
||
Total liabilities and equity |
$ |
89,068 |
|
$ |
99,171 |
|
Reconciliation of Reported Yield to Core Yield |
||||||||
|
Three |
|||||||
|
months ended |
|||||||
|
|
|
||||||
(Assets - amounts in billions) |
|
2022 |
|
|
2022 |
|
||
Reported Total Invested Assets and Cash |
$ |
63.2 |
|
$ |
68.2 |
|
||
Subtract: |
|
|
||||||
Unrealized gains (losses) |
|
(1.9 |
) |
|
3.0 |
|
||
Adjusted End of Period Invested Assets and Cash |
$ |
65.1 |
|
$ |
65.2 |
|
||
|
|
|
||||||
Average Invested Assets and Cash Used in Reported and Core Yield Calculation |
$ |
65.2 |
|
$ |
65.4 |
|
||
|
|
|
||||||
(Income - amounts in millions) |
|
|
||||||
Reported Net Investment Income |
$ |
787 |
|
$ |
764 |
|
||
Subtract: |
|
|
||||||
Bond calls and commercial mortgage loan prepayments |
|
7 |
|
|
10 |
|
||
Core Net Investment Income |
$ |
780 |
|
$ |
754 |
|
||
|
|
|
||||||
Reported Yield |
|
4.83 |
% |
|
4.67 |
% |
||
Core Yield |
|
4.79 |
% |
|
4.61 |
% |
1 Unless otherwise stated, all references in this press release to net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share and book value per share should be read as net income (loss) available to
2 This is a financial measure that is not calculated based on
3 Reflects Genworth’s ownership amount excluding noncontrolling interests of
4 Excludes reserve updates resulting from profits followed by losses.
5 Adjusted operating income from in-force rate actions includes estimated impacts from a legal settlement, net of tax and litigation expenses, of
6 Includes universal life and term universal life insurance products.
7 Company estimate for the second quarter of 2022 due to timing of the preparation and filing of statutory statements.
8 The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within the published PMIERs. As of
9 Holding company cash and liquid assets comprises assets held in
10
11 The government-sponsored enterprises (GSEs) have imposed certain capital restrictions which remain in effect until certain conditions are met. These restrictions required
12 For the three months ended
View source version on businesswire.com: https://www.businesswire.com/news/home/20220801005245/en/
Investors:
InvestorInfo@genworth.com
Media:
Amy.Rein@genworth.com
Source:
FAQ
What were Genworth Financial's Q2 2022 net income results?
How did Genworth's adjusted operating income perform in Q2 2022?
What impact did premium rate increases have for Genworth in Q2 2022?
Did Genworth Financial execute any share repurchases in 2022?