Equitable Holdings Reports Full Year and Fourth Quarter 2023 Results
-
Solid business results with full year cash flow1 of
$1.3 billion , in line with guidance
-
Strong organic growth momentum with
$5.3 billion of Retirement2 net inflows and$3.0 billion in Wealth Management advisory net inflows
-
Asset Management’s Retail and Private Wealth channels delivered full year net inflows, which was offset by Institutional net outflows; Institutional pipeline remains strong with
$12 billion
-
Full year Net income of
$1.3 billion , or$3.48 per share; fourth quarter Net loss of$698 million , or$2.15 per share
-
Non-GAAP operating earnings3 of
$1.7 billion , or$4.59 per share, for the full year and$476 million , or$1.33 per share, for the fourth quarter 2023. Adjusting for notable items4, Non-GAAP operating earnings of$1.9 billion , or$5.13 per share, for the full year and$479 million , or$1.34 per share, for the fourth quarter 2023
-
Returned
$1.2 billion to shareholders this year, including$315 million in the quarter, delivering on the 60-70% payout ratio target; Board approved a new$1.3 billion share repurchase authorization5
“2023 was a momentous year for
Consolidated Results |
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Fourth Quarter |
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Full Year |
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(in millions, except per share amounts or unless otherwise noted) |
|
2023 |
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|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Total Assets Under Management/Administration (“AUM/A”, in billions) |
$ |
930 |
|
|
$ |
826 |
|
$ |
930 |
|
$ |
826 |
|||
Net income attributable to Holdings |
|
(698 |
) |
|
|
62 |
|
|
1,302 |
|
|
2,153 |
|||
Net income attributable to Holdings per common share |
|
(2.15 |
) |
|
|
0.10 |
|
|
3.48 |
|
|
5.46 |
|||
Non-GAAP operating earnings |
|
476 |
|
|
|
348 |
|
|
1,694 |
|
|
1,726 |
|||
Non-GAAP operating earnings per common share (“EPS”) |
|
1.33 |
|
|
|
0.87 |
|
|
4.59 |
|
|
4.33 |
As of
On a full year basis, Net income attributable to Holdings was
Full year Non-GAAP operating earnings were
Net income attributable to Holdings for the fourth quarter of 2023 was
Non-GAAP operating earnings in the fourth quarter of 2023 was
As of
Business Highlights
-
Full year 2023 business segment highlights:
-
Individual Retirement (“IR”) reported record full year net inflows of
$5.6 billion , and first year premiums were up 24% over prior year, attributable to growth in our industry leading spread-based RILA product. -
Group Retirement (“GR”) reported full year net outflows of
$256 million . The tax-exempt channel, which includes Equitable’s industry leading K-12 educators offering, reported net inflows of$365 million . -
Investment Management and Research (AllianceBernstein or “AB”)8 reported full year net outflows of
$7.0 billion , with Institutional channel outflows partially offset by organic growth in Retail and Private Wealth. -
Protection Solutions (“PS”) reported
$3.1 billion of full year gross written premiums with accumulation-oriented VUL first year premiums up 10% and Employee Benefits first year premiums up 27% over the prior year. -
Wealth Management (“WM”) reported full year advisory net inflows of
$3.0 billion with a continued shift toward fee-based advice supported by approximately 750 dedicated wealth planners, up 7% over prior year. -
Legacy (“L”) reported
$2.3 billion of full year net outflows and continues to run-off at$2-$3 billion annually.
-
Individual Retirement (“IR”) reported record full year net inflows of
-
Capital management program:
-
The Company returned
$1.2 billion to shareholders, including$315 million in the fourth quarter of 2023, delivering on its payout ratio target of 60-70% of Non-GAAP operating earnings. Looking ahead, the Board of Directors authorized a new$1.3 billion share repurchase program9. -
The Company continues to benefit from diverse businesses which drive predictable cash flow with
$1.3 billion to the Holding company this year, in line with 2023 guidance. The Company expects$1.4 billion to$1.5 billion of cash generation in 202410, supported by organic growth across retirement, asset and wealth management. -
The Company reported cash and liquid assets of
$2.0 billion at Holdings, which remains above the$500 million minimum target. The combined NAIC RBC ratio was approximately 400%-425% at year end, above the Company’s target of 375-400%.
-
The Company returned
-
Delivering shareholder value:
-
The Company has deployed
$9 billion of its$20 billion capital commitment to AB, supporting growth in AB’s Private Markets business, which currently has$61 billion in assets under management. -
The Company achieved
$38 million of its targeted$150 million of net expense savings by 2027 and$52 million of its targeted$110 million of incremental income for the Company’s general account by 2027.
-
The Company has deployed
Business Segment Results
Individual Retirement
(in millions, unless otherwise noted) |
Q4 2023 |
|
Q4 2022 |
|||
Account value (in billions) |
$ |
91.7 |
|
$ |
74.3 |
|
Segment net flows (in billions) |
|
1.5 |
|
|
0.8 |
|
Operating earnings (loss) |
|
206 |
|
|
190 |
- Account value increased by 23% primarily due to market performance and net inflows over the prior twelve months.
-
Net inflows of
$1.5 billion in the quarter were higher over the prior year quarter with sales of$3.8 billion .
-
Operating earnings increased from
$190 million in the prior year quarter to$206 million , primarily driven by higher net interest margin due to higher interest rates and higher SCS asset balances.
-
Operating earnings adjusting for notable items11 increased from
$188 million in the prior year quarter to$211 million . Notable items of$5 million in the current period reflects lower net investment income from alternatives and prepayments.
Group Retirement
(in millions, unless otherwise noted) |
Q4 2023 |
|
Q4 2022 |
||||
Account value (in billions) |
$ |
36.5 |
|
|
$ |
32.0 |
|
Segment net flows |
|
(135 |
) |
|
|
24 |
|
Operating earnings (loss) |
|
98 |
|
|
|
92 |
- Account value increased by 14% primarily due to market performance over the prior twelve months.
-
Net outflows of
$135 million in the fourth quarter, primarily attributable to non-core channels; the core tax-exempt channel delivered$115 million of net inflows.
-
Operating earnings increased from
$92 million in the prior year quarter to$98 million , primarily due to higher net investment income and higher fee income, partially offset by higher interest credited.
-
Operating earnings adjusting for notable items11 increased from
$98 million in the prior year quarter to$109 million . Notable items of$11 million reflect lower net investment income from alternatives and prepayments.
AllianceBernstein
(in millions, unless otherwise noted) |
Q4 2023 |
|
Q4 2022 |
|||||
Total AUM (in billions) |
$ |
725.2 |
|
|
$ |
646.4 |
|
|
Segment net flows (in billions) |
|
(1.8 |
) |
|
|
(1.9 |
) |
|
Operating earnings (loss) |
|
114 |
|
|
|
94 |
|
- AUM increased by 12% due to market performance over the prior twelve months.
-
Net outflows of
$1.8 billion in the quarter, with net inflows in the Retail channel of$1.3 billion , led by taxable fixed income and municipals, partially offset by Institutional channel net outflows of$2.5 billion and Private Wealth net outflows of$0.6 billion .
-
Operating earnings increased from
$94 million in the prior year quarter to$114 million , primarily due to higher base fees on higher average AUM, higher performance fees and a lower tax rate.
-
Operating earnings adjusting for notable items12 increased from
$94 million in the prior year quarter to$100 million . Notable items of$14 million reflects a favorable tax item in the quarter.
Protection Solutions
(in millions) |
Q4 2023 |
|
Q4 2022 |
||||
Gross written premiums |
$ |
821 |
|
$ |
776 |
|
|
Annualized premiums |
|
102 |
|
|
74 |
|
|
Operating earnings (loss) |
|
28 |
|
|
(41 |
) |
- Annualized premiums increased 38% year-over-year, driven by an 40% increase in Life and a 32% increase in Employee Benefits.
-
Operating earnings increased from a
$41 million loss in the prior year quarter to$28 million , primarily due to improved mortality compared to the prior year quarter and higher fee type revenue from Employee Benefits premium growth.
-
Operating earnings adjusting for notable items12 increased from
$58 million in the prior year quarter to$68 million . Notable items of$40 million reflect lower net investment income from alternatives and prepayments and a one-time model update.
Wealth Management
(in millions, unless otherwise noted) |
Q4 2023 |
|
Q4 2022 |
|||
Total AUA (in billions) |
$ |
87.0 |
|
$ |
72.4 |
|
Advisory Net Flows (in billions) |
|
0.5 |
|
|
0.2 |
|
Operating earnings (loss) |
|
45 |
|
|
23 |
- AUA increased by 20% due to market performance and net inflows over the last twelve months.
-
Advisory net inflows of
$0.5 billion in the quarter.
-
Operating earnings increased from
$23 million in the prior year quarter to$45 million , primarily due to higher distribution fees and increased advisory fees on higher average asset balances.
Legacy
(in millions) |
Q4 2023 |
|
Q4 2022 |
|||||
Account value (in billions) |
$ |
22.2 |
|
|
$ |
21.5 |
|
|
Net Flows (1) |
|
(643 |
) |
|
|
(589 |
) |
|
Operating earnings (loss) |
|
40 |
|
|
|
65 |
|
(1) |
Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of |
- Account value was flat year-over-year with expected net outflows offset by positive market performance over the prior twelve months.
-
Net outflows of
$643 million were in line with expectations as this business continues to run-off at$2 billion to$3 billion annually.
-
Operating earnings decreased from
$65 million in the prior year quarter to$40 million , primarily due to higher operating expenses and lower net investment income as the business continues to run off.
-
Operating earnings adjusting for notable items13 decreased from
$67 million in the prior year quarter to$41 million . Notable items of$1 million in the current period reflects lower net investment income from alternatives and prepayments partially offset by a one-time model update.
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 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
|
|
Year Ended
|
||||||||||||
(in millions) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Non-GAAP Operating Earnings |
|
476 |
|
|
$ |
348 |
|
|
$ |
1,694 |
|
|
$ |
1,726 |
|
Post-tax Adjustments related to notable items: |
|
|
|
|
|
|
|
||||||||
Individual Retirement |
|
5 |
|
|
|
(2 |
) |
|
|
10 |
|
|
|
23 |
|
Group Retirement |
|
11 |
|
|
|
6 |
|
|
|
24 |
|
|
|
16 |
|
Investment Management and Research |
|
(14 |
) |
|
|
— |
|
|
|
(23 |
) |
|
|
— |
|
Protection Solutions |
|
40 |
|
|
|
99 |
|
|
|
211 |
|
|
|
213 |
|
Wealth Management |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Legacy |
|
1 |
|
|
|
2 |
|
|
|
10 |
|
|
|
(1 |
) |
Corporate & Other |
|
(40 |
) |
|
|
(14 |
) |
|
|
(31 |
) |
|
|
(8 |
) |
Notable items subtotal |
|
3 |
|
|
|
91 |
|
|
|
201 |
|
|
|
243 |
|
Less: impact of actuarial assumption update |
|
— |
|
|
|
— |
|
|
|
(12 |
) |
|
|
1 |
|
Non-GAAP Operating Earnings, less Notable Items |
$ |
479 |
|
|
$ |
439 |
|
|
$ |
1,883 |
|
|
$ |
1,970 |
|
|
|
|
|
|
|
|
|
Impact of notable items by item category:
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in millions) |
2023 |
|
2022 |
|
|
2023 |
|
|
|
2022 |
|
||||
Non-GAAP Operating Earnings |
|
476 |
|
$ |
348 |
|
$ |
1,694 |
|
|
$ |
1,726 |
|||
Pre-tax adjustments related to Notable Items: |
|
|
|
|
|
|
|
||||||||
Actuarial and Model Updates |
|
14 |
|
|
1 |
|
|
(2 |
) |
|
|
6 |
|||
Mortality |
|
— |
|
|
84 |
|
|
151 |
|
|
|
209 |
|||
Expenses |
|
— |
|
|
— |
|
|
— |
|
|
|
42 |
|||
Net Investment Income |
|
9 |
|
|
27 |
|
|
117 |
|
|
|
30 |
|||
Subtotal |
|
23 |
|
|
112 |
|
|
265 |
|
|
|
287 |
|||
Post-tax impact of Notable Items |
|
3 |
|
|
91 |
|
|
201 |
|
|
|
243 |
|||
Less: impact of actuarial assumption update |
|
— |
|
|
— |
|
|
(12 |
) |
|
|
1 |
|||
Non-GAAP Operating Earnings, less Notable Items |
$ |
479 |
|
$ |
439 |
|
$ |
1,883 |
|
|
$ |
1,970 |
|||
|
|
|
|
|
|
|
|
Earnings Conference Call
To register for the conference call, please use the following link:
EQH Full Year and Fourth Quarter 2023 Earnings Call
After registering, you will receive an email confirmation including dial in details and a unique conference call code for entry. Registration is open through the live call. To ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call.
A webcast replay will be made available on the Equitable Holdings Investor Relations website at ir.equitableholdings.com.
About
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 plateauing or decreasing economic growth and geopolitical conflicts and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) recruitment and retention of key employees and experienced and productive financial professionals; (ix) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (x) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (xi) risks related to our common stock and (xii) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property.
Forward-looking statements, 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
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, AV, and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Non-GAAP Operating Earnings
Non-GAAP Operating Earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and the variable annuity product MRBs. This is a large source of volatility in net income.
Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:
- Items related to variable annuity product features, which include: (i) changes in the fair value of market risk benefits and purchased market risk benefits, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the market risk benefits which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk;
- Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances;
- Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation;
- Other adjustments, which primarily include restructuring costs related to severance and separation, lease write-offs related to non-recurring restructuring activities, COVID-19 related impacts, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies, impact of the annual actuarial assumption updates attributable to LFPB; and
- Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period and a decrease of deferred tax valuation allowance.
In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual actuarial assumption update attributable to LFPB as the majority of the earnings volatility attributable to these assumption updates relate to the Company’s Legacy and non-business segment products and as such do not represent the Company’s ongoing revenue generating activities or future business strategy, and impedes comparability of operating results period over period. Operating earnings were favorably impacted by this change in the amount of
Also, 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. Operating earnings were favorably impacted in the amount of
Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company’s underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.
We use the prevailing corporate federal income tax rate of 21% while taking into account any non-recurring differences for events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings.
The table below presents a reconciliation of Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings for the three months and years ended
|
|
Three Months Ended
|
|
Year Ended
|
||||||||||||
(in millions) |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Net income (loss) attributable to Holdings |
|
$ |
(698 |
) |
|
$ |
62 |
|
|
$ |
1,302 |
|
|
$ |
2,153 |
|
Adjustments related to: |
|
|
|
|
|
|
|
|
||||||||
Variable annuity product features |
|
|
1,191 |
|
|
|
129 |
|
|
|
607 |
|
|
|
(2,193 |
) |
Investment (gains) losses |
|
|
159 |
|
|
|
55 |
|
|
|
713 |
|
|
|
945 |
|
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
|
13 |
|
|
|
25 |
|
|
|
39 |
|
|
|
82 |
|
Other adjustments (1) (2) |
|
|
153 |
|
|
|
150 |
|
|
|
351 |
|
|
|
605 |
|
Income tax expense (benefit) related to above adjustments |
|
|
(319 |
) |
|
|
(76 |
) |
|
|
(359 |
) |
|
|
118 |
|
Non-recurring tax items (3) |
|
|
(23 |
) |
|
|
3 |
|
|
|
(959 |
) |
|
|
16 |
|
Non-GAAP Operating Earnings |
|
$ |
476 |
|
|
$ |
348 |
|
|
$ |
1,694 |
|
|
$ |
1,726 |
|
|
|
|
|
|
|
|
|
|
_______________ |
||
(1) |
|
Includes certain gross legal expenses related to the cost of insurance litigation, and claims related to a commercial relationship of |
(2) |
|
Includes Non-GMxB related derivative hedge losses of |
(3) |
|
For the three and twelve months ended |
Non-GAAP Operating EPS
Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred stock dividends by diluted common shares outstanding. The table below presents a reconciliation of GAAP EPS to Non-GAAP Operating EPS for the three months and years ended
|
Three Months Ended
|
|
Year Ended
|
|||||||||||||
(per share amounts) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
Net income (loss) attributable to Holdings (1) |
$ |
(2.07 |
) |
|
$ |
0.17 |
|
|
$ |
3.70 |
|
|
$ |
5.67 |
|
|
Less: Preferred stock dividend |
|
0.08 |
|
|
|
0.07 |
|
|
|
0.22 |
|
|
|
0.21 |
|
|
Net Income (loss) available to common shareholders |
|
(2.15 |
) |
|
|
0.10 |
|
|
|
3.48 |
|
|
|
5.46 |
|
|
Adjustments related to: |
|
|
|
|
|
|
|
|||||||||
Variable annuity product features |
|
3.53 |
|
|
|
0.35 |
|
|
|
1.73 |
|
|
|
(5.77 |
) |
|
Investment (gains) losses |
|
0.47 |
|
|
|
0.15 |
|
|
|
2.03 |
|
|
|
2.49 |
|
|
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |
|
0.04 |
|
|
|
0.07 |
|
|
|
0.11 |
|
|
|
0.22 |
|
|
Other adjustments (2) (3) |
|
0.46 |
|
|
|
0.39 |
|
|
|
0.99 |
|
|
|
1.58 |
|
|
Income tax expense (benefit) related to above adjustments |
|
(0.95 |
) |
|
|
(0.20 |
) |
|
|
(1.02 |
) |
|
|
0.31 |
|
|
Non-recurring tax items (4) |
|
(0.07 |
) |
|
|
0.01 |
|
|
|
(2.73 |
) |
|
|
0.04 |
|
|
Non-GAAP Operating Earnings |
$ |
1.33 |
|
|
$ |
0.87 |
|
|
$ |
4.59 |
|
|
$ |
4.33 |
|
|
|
|
|
|
|
|
|
|
_______________ |
||
(1) |
|
For periods presented with a net loss, basic shares are used for EPS. |
(2) |
|
The legal accruals impact per common share is |
(3) |
|
Includes Non-GMxB related derivative hedge losses impact per common share is |
(4) |
|
For the three and twelve months ended |
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.
|
2 023 |
|
2022 |
||||
Book value per common share |
$ |
3.26 |
|
$ |
(0.44 |
) |
|
Per share impact of AOCI |
|
23.30 |
|
|
24.63 |
|
|
Book Value per common share, excluding AOCI |
$ |
26.56 |
|
$ |
24.19 |
|
Other Operating Measures
We also use certain operating measures which management believes provide useful information about our businesses and the operational factors underlying our financial performance.
Account Value (“AV”)
Account value generally equals the aggregate policy account value of our retirement products.
Assets Under Management (“AUM”)
AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our general account investment portfolio and (iii) the separate account assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.
Assets Under Management (“AUA”)
AUA means advisory and brokerage investment assets included in the Company’s Wealth Management segment.
Segment net flows
Net change in segment customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.
Consolidated Statements of Income (Loss) (Unaudited)
|
Three Months Ended
|
|
Year Ended
|
|||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in millions) |
|||||||||||||||
REVENUES |
|
|
|
|
|
|
|
|||||||||
Policy charges and fee income |
$ |
599 |
|
|
$ |
581 |
|
|
$ |
2,380 |
|
|
$ |
2,454 |
|
|
Premiums |
|
281 |
|
|
|
250 |
|
|
|
1,104 |
|
|
|
994 |
|
|
Net derivative gains (losses) |
|
(1,254 |
) |
|
|
(1,309 |
) |
|
|
(2,397 |
) |
|
|
907 |
|
|
Net investment income (loss) |
|
1,223 |
|
|
|
958 |
|
|
|
4,320 |
|
|
|
3,315 |
|
|
Investment gains (losses), net: |
|
|
|
|
|
|
|
|||||||||
Credit losses on available-for-sale debt securities and loans |
|
(75 |
) |
|
|
(48 |
) |
|
|
(220 |
) |
|
|
(314 |
) |
|
Other investment gains (losses), net |
|
(84 |
) |
|
|
(7 |
) |
|
|
(493 |
) |
|
|
(631 |
) |
|
Total investment gains (losses), net |
|
(159 |
) |
|
|
(55 |
) |
|
|
(713 |
) |
|
|
(945 |
) |
|
Investment management and service fees |
|
1,241 |
|
|
|
1,160 |
|
|
|
4,820 |
|
|
|
4,891 |
|
|
Other income |
|
239 |
|
|
|
231 |
|
|
|
1,014 |
|
|
|
1,028 |
|
|
Total revenues |
|
2,170 |
|
|
|
1,816 |
|
|
|
10,528 |
|
|
|
12,644 |
|
|
BENEFITS AND OTHER DEDUCTIONS |
|
|
|
|
|
|
|
|||||||||
Policyholders’ benefits |
|
647 |
|
|
|
696 |
|
|
|
2,754 |
|
|
|
2,716 |
|
|
Remeasurement of liability for future policy benefits |
|
29 |
|
|
|
12 |
|
|
|
75 |
|
|
|
66 |
|
|
Change in market risk benefits and purchased market risk benefits |
|
(35 |
) |
|
|
(1,136 |
) |
|
|
(1,807 |
) |
|
|
(1,280 |
) |
|
Interest credited to policyholders’ account balances |
|
563 |
|
|
|
409 |
|
|
|
2,083 |
|
|
|
1,410 |
|
|
Compensation and benefits |
|
586 |
|
|
|
519 |
|
|
|
2,328 |
|
|
|
2,201 |
|
|
Commissions and distribution-related payments |
|
412 |
|
|
|
383 |
|
|
|
1,590 |
|
|
|
1,567 |
|
|
Interest expense |
|
57 |
|
|
|
53 |
|
|
|
228 |
|
|
|
201 |
|
|
Amortization of deferred policy acquisition costs |
|
169 |
|
|
|
150 |
|
|
|
641 |
|
|
|
586 |
|
|
Other operating costs and expenses |
|
559 |
|
|
|
572 |
|
|
|
1,898 |
|
|
|
2,185 |
|
|
Total benefits and other deductions |
|
2,987 |
|
|
|
1,658 |
|
|
|
9,790 |
|
|
|
9,652 |
|
|
Income (loss) from continuing operations, before income taxes |
|
(817 |
) |
|
|
158 |
|
|
|
738 |
|
|
|
2,992 |
|
|
Income tax (expense) benefit |
|
228 |
|
|
|
(20 |
) |
|
|
905 |
|
|
|
(598 |
) |
|
Net income (loss) |
|
(589 |
) |
|
|
138 |
|
|
|
1,643 |
|
|
|
2,394 |
|
|
Less: Net income (loss) attributable to the noncontrolling interest |
|
109 |
|
|
|
76 |
|
|
|
341 |
|
|
|
241 |
|
|
Net income (loss) attributable to Holdings |
|
(698 |
) |
|
|
62 |
|
|
|
1,302 |
|
|
|
2,153 |
|
|
Less: Preferred stock dividends |
|
26 |
|
|
|
26 |
|
|
|
80 |
|
|
|
80 |
|
|
Net income (loss) available to Holdings’ common shareholders |
$ |
(724 |
) |
|
$ |
36 |
|
|
$ |
1,222 |
|
|
$ |
2,073 |
|
|
|
|
|
|
|
|
|
|
Earnings Per Common Share
|
Three Months Ended
|
|
Year Ended
|
|||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
||
|
(in millions) |
|||||||||||||||
Earnings per common share |
|
|
|
|
|
|
|
|||||||||
Basic |
$ |
(2.15 |
) |
|
$ |
0.10 |
|
$ |
3.49 |
|
$ |
5.49 |
||||
Diluted |
$ |
(2.15 |
) |
|
$ |
0.10 |
|
$ |
3.48 |
|
$ |
5.46 |
||||
Weighted average shares |
|
|
|
|
|
|
|
|||||||||
Weighted average common stock outstanding for basic earnings per common share |
|
337.2 |
|
|
|
368.6 |
|
|
350.1 |
|
|
377.6 |
||||
Weighted average common stock outstanding for diluted earnings per common share (1) |
|
337.2 |
|
|
|
371.5 |
|
|
351.6 |
|
|
379.9 |
||||
|
|
|
|
|
|
|
|
(1) |
|
Due to net loss for the three months ended |
Results of Operations by Segment
|
Three Months Ended
|
|
Year Ended
|
|||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
(in millions) |
|||||||||||||||
Operating earnings (loss) by segment: |
|
|
|
|
|
|
|
|||||||||
Individual Retirement |
$ |
206 |
|
|
$ |
190 |
|
|
$ |
850 |
|
|
$ |
762 |
|
|
Group Retirement |
|
98 |
|
|
|
92 |
|
|
|
399 |
|
|
|
446 |
|
|
Investment Management and Research |
|
114 |
|
|
|
94 |
|
|
|
411 |
|
|
|
424 |
|
|
Protection Solutions |
|
28 |
|
|
|
(41 |
) |
|
|
51 |
|
|
|
97 |
|
|
Wealth Management |
|
45 |
|
|
|
23 |
|
|
|
159 |
|
|
|
101 |
|
|
Legacy |
|
40 |
|
|
|
65 |
|
|
|
186 |
|
|
|
235 |
|
|
Corporate and Other (1) |
|
(55 |
) |
|
|
(75 |
) |
|
|
(362 |
) |
|
|
(339 |
) |
|
Non-GAAP Operating Earnings |
$ |
476 |
|
|
$ |
348 |
|
|
$ |
1,694 |
|
|
$ |
1,726 |
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes interest expense and financing fees of |
Select Balance Sheet Statistics
|
2 023 |
|
2022 |
|||||
|
(in millions) |
|||||||
ASSETS |
|
|
|
|||||
Total investments and cash and cash equivalents |
$ |
110,412 |
|
|
$ |
97,378 |
|
|
Separate Accounts assets |
|
127,251 |
|
|
|
114,853 |
|
|
Total assets |
|
276,814 |
|
|
|
252,702 |
|
|
|
|
|
|
|||||
LIABILITIES |
|
|
|
|||||
Long-term debt |
$ |
3,820 |
|
|
$ |
3,322 |
|
|
Future policy benefits and other policyholders' liabilities |
|
17,363 |
|
|
|
16,603 |
|
|
Policyholders’ account balances |
|
95,673 |
|
|
|
83,866 |
|
|
Total liabilities |
|
271,656 |
|
|
|
249,106 |
|
|
|
|
|
|
|||||
EQUITY |
|
|
|
|||||
Preferred stock |
|
1,562 |
|
|
|
1,562 |
|
|
Accumulated other comprehensive income (loss) |
|
(7,777 |
) |
|
|
(8,992 |
) |
|
Total equity attributable to Holdings |
$ |
2,649 |
|
|
$ |
1,401 |
|
|
Total equity attributable to Holdings' common shareholders (ex. AOCI) |
|
8,864 |
|
|
|
8,831 |
|
Assets Under Management (Unaudited)
|
2023 |
|
2022 |
|||||
|
(in billions) |
|||||||
Assets Under Management |
|
|
|
|||||
|
$ |
725.2 |
|
|
$ |
646.4 |
|
|
Exclusion for General Account and other Affiliated Accounts |
|
(75.0 |
) |
|
|
(66.8 |
) |
|
Exclusion for Separate Accounts |
|
(44.5 |
) |
|
|
(38.2 |
) |
|
AB third party |
$ |
605.7 |
|
|
$ |
541.4 |
|
|
|
|
|
|
|||||
Total company AUM |
|
|
|
|||||
AB third party |
$ |
605.7 |
|
|
$ |
541.4 |
|
|
General Account and other Affiliated Accounts (1) (3) (4) |
|
110.4 |
|
|
|
97.4 |
|
|
Separate Accounts (2) (3) (4) |
|
127.3 |
|
|
|
114.9 |
|
|
Total AUM |
$ |
843.4 |
|
|
$ |
753.6 |
|
|
|
|
|
|
_______________ |
||
(1) |
|
“General Account and Other Affiliated Accounts” refers to assets held in the general accounts of our insurance companies and other assets on which we bear the investment risk. |
(2) |
|
“Separate Accounts” refers to the separate account investment assets of our insurance subsidiaries excluding any assets on which we bear the investment risk. |
(3) |
|
As of |
(4) |
|
As of |
_______________
1 Cash flow is net dividends and distributions to
2 Includes Individual Retirement and Group Retirement segments.
3 This press release includes certain Non-GAAP financial measures. More information on these measures and reconciliations to the most comparable
4 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
5 Under this authorization, the Company may, from time to time, purchase shares of its common stock through various means including open market transactions, privately negotiated transactions, forward, derivative, accelerated repurchase, or automatic share repurchase transactions, or tender offers. The authorization for the share repurchase program may be terminated, increased or decreased by the board of directors at any time.
6 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 6% equity return, 2% dividend yield and interest rates following the forward curve.
7 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
8 Refers to
9 Under this authorization, the Company may, from time to time, purchase shares of its common stock through various means including open market transactions, privately negotiated transactions, forward, derivative, accelerated repurchase, or automatic share repurchase transactions, or tender offers. The authorization for the share repurchase program may be terminated, increased or decreased by the board of directors at any time.
10 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 6% equity return, 2% dividend yield and interest rates following the forward curve.
11 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
12 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
13 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/20240206677619/en/
Investor Relations
(212) 314-2476
IR@equitable.com
Media Relations
(212) 314-2010
mediarelations@equitable.com
Source: EQH Investor Relations