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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Equitable Holdings Inc | NYSE:EQH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.24 | -0.65% | 36.89 | 37.30 | 36.845 | 37.21 | 2,171,756 | 00:17:58 |
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x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Delaware
|
|
90-0226248
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1290 Avenue of the Americas, New York, New York
|
|
10104
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
|
Trading Symbol
|
|
Name of Exchange on which registered
|
Common Stock
|
|
EQH
|
|
New York Stock Exchange
|
|
|
Page
|
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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||
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Item 1.
|
||
Item 1A.
|
||
Item 2.
|
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Item 3.
|
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Item 4.
|
||
Item 5.
|
||
Item 6.
|
||
|
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in millions, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities available-for-sale, at fair value (amortized cost of $49,117 and $46,801)
|
$
|
50,305
|
|
|
$
|
46,279
|
|
Mortgage loans on real estate (net of valuation allowance of $0 and $7)
|
12,117
|
|
|
11,835
|
|
||
Real estate held for production of income (1)
|
68
|
|
|
52
|
|
||
Policy loans
|
3,766
|
|
|
3,779
|
|
||
Other equity investments (1)
|
1,321
|
|
|
1,334
|
|
||
Trading securities, at fair value
|
13,127
|
|
|
16,017
|
|
||
Other invested assets (1)
|
2,244
|
|
|
2,037
|
|
||
Total investments
|
82,948
|
|
|
81,333
|
|
||
Cash and cash equivalents (1)
|
5,129
|
|
|
4,469
|
|
||
Cash and securities segregated, at fair value
|
1,262
|
|
|
1,170
|
|
||
Broker-dealer related receivables
|
2,122
|
|
|
2,209
|
|
||
Deferred policy acquisition costs
|
6,018
|
|
|
6,745
|
|
||
Goodwill and other intangible assets, net
|
4,769
|
|
|
4,780
|
|
||
Amounts due from reinsurers
|
4,850
|
|
|
4,895
|
|
||
GMIB reinsurance contract asset, at fair value
|
1,740
|
|
|
1,732
|
|
||
Other assets
|
3,787
|
|
|
3,127
|
|
||
Separate Accounts assets
|
120,194
|
|
|
110,337
|
|
||
Total Assets
|
$
|
232,819
|
|
|
$
|
220,797
|
|
LIABILITIES
|
|
|
|
||||
Policyholders’ account balances
|
$
|
52,197
|
|
|
$
|
49,923
|
|
Future policy benefits and other policyholders' liabilities
|
31,462
|
|
|
30,998
|
|
||
Broker-dealer related payables
|
494
|
|
|
431
|
|
||
Securities sold under agreements to repurchase
|
—
|
|
|
573
|
|
||
Customer related payables
|
2,999
|
|
|
3,095
|
|
||
Amounts due to reinsurers
|
1,372
|
|
|
1,438
|
|
||
Short-term and long-term debt
|
4,949
|
|
|
4,955
|
|
||
Current and deferred income taxes
|
482
|
|
|
68
|
|
||
Other liabilities (1)
|
3,781
|
|
|
3,360
|
|
||
Separate Accounts liabilities
|
120,194
|
|
|
110,337
|
|
||
Total Liabilities
|
$
|
217,930
|
|
|
$
|
205,178
|
|
Redeemable noncontrolling interest (1)
|
$
|
207
|
|
|
$
|
187
|
|
Commitments and contingent liabilities
|
|
|
|
||||
EQUITY
|
|
|
|
||||
Equity attributable to Holdings:
|
|
|
|
||||
Common stock, $0.01 par value, 2,000,000,000 shares authorized, 552,896,328 and 561,000,000 shares issued, 491,015,901 and 528,861,758 shares outstanding, respectively
|
$
|
5
|
|
|
$
|
5
|
|
Additional paid-in capital
|
1,881
|
|
|
1,908
|
|
||
Treasury stock, at cost, 61,880,427 and 32,138,242 shares, respectively
|
(1,234
|
)
|
|
(640
|
)
|
||
Retained earnings
|
13,004
|
|
|
13,989
|
|
||
Accumulated other comprehensive income (loss)
|
(513
|
)
|
|
(1,396
|
)
|
||
Total equity attributable to Holdings
|
13,143
|
|
|
13,866
|
|
||
Noncontrolling interest
|
1,539
|
|
|
1,566
|
|
||
Total Equity
|
14,682
|
|
|
15,432
|
|
||
Total Liabilities, Redeemable Noncontrolling Interest and Equity
|
$
|
232,819
|
|
|
$
|
220,797
|
|
(1)
|
See
Note 2
for details of balances with variable interest entities.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions, except per share data)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges and fee income
|
$
|
931
|
|
|
$
|
966
|
|
Premiums
|
283
|
|
|
279
|
|
||
Net derivative gains (losses)
|
(1,630
|
)
|
|
(236
|
)
|
||
Net investment income (loss)
|
1,015
|
|
|
591
|
|
||
Investment gains (losses), net
|
(11
|
)
|
|
102
|
|
||
Investment management and service fees
|
999
|
|
|
1,055
|
|
||
Other income
|
127
|
|
|
117
|
|
||
Total revenues
|
1,714
|
|
|
2,874
|
|
||
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
880
|
|
|
594
|
|
||
Interest credited to policyholders’ account balances
|
304
|
|
|
271
|
|
||
Compensation and benefits
|
509
|
|
|
579
|
|
||
Commissions and distribution-related payments
|
281
|
|
|
291
|
|
||
Interest expense
|
56
|
|
|
46
|
|
||
Amortization of deferred policy acquisition costs
|
198
|
|
|
172
|
|
||
Other operating costs and expenses
|
410
|
|
|
493
|
|
||
Total benefits and other deductions
|
2,638
|
|
|
2,446
|
|
||
Income (loss) from continuing operations, before income taxes
|
(924
|
)
|
|
428
|
|
||
Income tax (expense) benefit
|
215
|
|
|
(91
|
)
|
||
Net income (loss)
|
(709
|
)
|
|
337
|
|
||
Less: Net (income) loss attributable to the noncontrolling interest
|
(66
|
)
|
|
(123
|
)
|
||
Net income (loss) attributable to Holdings
|
$
|
(775
|
)
|
|
$
|
214
|
|
|
|
|
|
||||
EARNINGS PER SHARE
|
|
|
|
||||
Earnings per share - Common stock:
|
|
|
|
||||
Basic
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Diluted
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Weighted average common shares outstanding:
|
|
|
|
||||
Basic
|
518.0
|
|
|
561.0
|
|
||
Diluted
|
518.0
|
|
|
561.0
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
||||
Net income (loss)
|
$
|
(709
|
)
|
|
$
|
337
|
|
Other comprehensive income (loss) net of income taxes:
|
|
|
|
||||
Change in unrealized gains (losses), net of reclassification adjustment (1)
|
834
|
|
|
(962
|
)
|
||
Changes in defined benefit plan related items not yet recognized in periodic benefit cost, net of reclassification adjustment
|
49
|
|
|
133
|
|
||
Foreign currency translation adjustment (1)
|
(1
|
)
|
|
(3
|
)
|
||
Total other comprehensive income (loss), net of income taxes
|
882
|
|
|
(832
|
)
|
||
Comprehensive income (loss)
|
173
|
|
|
(495
|
)
|
||
Less: Comprehensive (income) loss attributable to the noncontrolling interest
|
(65
|
)
|
|
(129
|
)
|
||
Comprehensive income (loss) attributable to Holdings
|
$
|
108
|
|
|
$
|
(624
|
)
|
(1)
|
A reclassification of
$2 million
has been made to the previously reported amounts for the three months ended March 31, 2018 to conform to the current period’s presentation.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||||||||||
|
Equity Attributable to Holdings
|
|
|
|
|
||||||||||||||||||||||||||
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Treasury Stock
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Holdings Equity
|
|
Noncontrolling Interest
|
|
Total Equity
|
||||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||||||
January 1, 2019
|
$
|
5
|
|
|
$
|
1,908
|
|
|
$
|
(640
|
)
|
|
$
|
13,989
|
|
|
$
|
(1,396
|
)
|
|
$
|
13,866
|
|
|
$
|
1,566
|
|
|
$
|
15,432
|
|
Stock compensation and other
|
—
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(19
|
)
|
|
9
|
|
|
(10
|
)
|
||||||||
Purchase of treasury stock
|
—
|
|
|
—
|
|
|
(594
|
)
|
|
—
|
|
|
—
|
|
|
(594
|
)
|
|
—
|
|
|
(594
|
)
|
||||||||
Retirement of common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
(142
|
)
|
|
—
|
|
|
(142
|
)
|
||||||||
Repurchase of AB Holding units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
(21
|
)
|
||||||||
Dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
(68
|
)
|
||||||||
Stockholder dividends (cash dividends declared per common share of $0.13 in 2019)
|
—
|
|
|
—
|
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
(68
|
)
|
|
—
|
|
|
(68
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
(775
|
)
|
|
—
|
|
|
(775
|
)
|
|
54
|
|
|
(721
|
)
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
883
|
|
|
883
|
|
|
(1
|
)
|
|
882
|
|
||||||||
Other
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|
(8
|
)
|
||||||||
March 31, 2019
|
$
|
5
|
|
|
$
|
1,881
|
|
|
$
|
(1,234
|
)
|
|
$
|
13,004
|
|
|
$
|
(513
|
)
|
|
$
|
13,143
|
|
|
$
|
1,539
|
|
|
$
|
14,682
|
|
January 1, 2018
|
$
|
5
|
|
|
$
|
1,299
|
|
|
$
|
—
|
|
|
$
|
12,225
|
|
|
$
|
(108
|
)
|
|
$
|
13,421
|
|
|
$
|
3,097
|
|
|
$
|
16,518
|
|
Cumulative effect of adoption of revenue recognition standard ASC 606
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
—
|
|
|
13
|
|
|
19
|
|
|
32
|
|
||||||||
Capital contribution from parent
|
—
|
|
|
695
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
695
|
|
|
—
|
|
|
695
|
|
||||||||
Stock compensation and other
|
—
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||||||
Repurchase of AB Holding units
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||||||
Dividends paid to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(135
|
)
|
|
(135
|
)
|
||||||||
Stockholder dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|
(15
|
)
|
||||||||
Net income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
214
|
|
|
—
|
|
|
214
|
|
|
103
|
|
|
317
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(838
|
)
|
|
(838
|
)
|
|
6
|
|
|
(832
|
)
|
||||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
||||||||
March 31, 2018
|
$
|
5
|
|
|
$
|
2,051
|
|
|
$
|
—
|
|
|
$
|
12,437
|
|
|
$
|
(946
|
)
|
|
$
|
13,547
|
|
|
$
|
3,035
|
|
|
$
|
16,582
|
|
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
|
(in millions)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
(709
|
)
|
|
$
|
337
|
|
Adjustments to reconcile Net income (loss) to Net cash provided by (used in) operating activities:
|
|
|
|
||||
Interest credited to policyholders’ account balances
|
304
|
|
|
271
|
|
||
Policy charges and fee income
|
(931
|
)
|
|
(966
|
)
|
||
Net derivative (gains) losses
|
1,630
|
|
|
236
|
|
||
Investment (gains) losses, net
|
11
|
|
|
(102
|
)
|
||
Realized and unrealized (gains) losses on trading securities
|
(294
|
)
|
|
120
|
|
||
Non-cash long term incentive compensation expense (1)
|
42
|
|
|
12
|
|
||
Non-cash pension plan restructuring
|
—
|
|
|
102
|
|
||
Amortization and depreciation (1)
|
239
|
|
|
164
|
|
||
Equity (income) loss from limited partnerships
|
(13
|
)
|
|
(38
|
)
|
||
Changes in:
|
|
|
|
|
|||
Net broker-dealer and customer related receivables/payables
|
(221
|
)
|
|
283
|
|
||
Reinsurance recoverable (1)
|
(18
|
)
|
|
29
|
|
||
Segregated cash and securities, net
|
(93
|
)
|
|
(208
|
)
|
||
Capitalization of deferred policy acquisition costs (1)
|
(173
|
)
|
|
(162
|
)
|
||
Future policy benefits
|
22
|
|
|
(248
|
)
|
||
Current and deferred income taxes
|
183
|
|
|
115
|
|
||
Other, net (1)
|
(88
|
)
|
|
(192
|
)
|
||
Net cash provided by (used in) operating activities
|
$
|
(109
|
)
|
|
$
|
(247
|
)
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
||||
Proceeds from the sale/maturity/prepayment of:
|
|
|
|
||||
Fixed maturities, available-for-sale
|
$
|
2,900
|
|
|
$
|
4,288
|
|
Mortgage loans on real estate
|
216
|
|
|
68
|
|
||
Trading account securities
|
3,843
|
|
|
1,629
|
|
||
Real estate joint ventures
|
1
|
|
|
140
|
|
||
Short-term investments (1)
|
794
|
|
|
1,684
|
|
||
Other
|
48
|
|
|
54
|
|
||
Payment for the purchase/origination of:
|
|
|
|
||||
Fixed maturities, available-for-sale
|
(5,187
|
)
|
|
(3,245
|
)
|
||
Mortgage loans on real estate
|
(517
|
)
|
|
(447
|
)
|
||
Trading account securities
|
(536
|
)
|
|
(2,613
|
)
|
||
Short-term investments (1)
|
(685
|
)
|
|
(731
|
)
|
||
Other
|
(74
|
)
|
|
(48
|
)
|
||
Cash settlements related to derivative instruments
|
(1,005
|
)
|
|
(674
|
)
|
||
Repayments of loans to affiliates
|
—
|
|
|
346
|
|
||
Investment in capitalized software, leasehold improvements and EDP equipment
|
(16
|
)
|
|
(24
|
)
|
||
Other, net (1)
|
148
|
|
|
(311
|
)
|
||
Net cash provided by (used in) investing activities
|
$
|
(70
|
)
|
|
$
|
116
|
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
||||
Policyholders’ account balances:
|
|
|
|
||||
Deposits
|
$
|
2,430
|
|
|
$
|
2,041
|
|
Withdrawals
|
(1,067
|
)
|
|
(1,100
|
)
|
||
Transfers (to) from Separate Accounts
|
424
|
|
|
431
|
|
||
Change in short-term financings
|
(6
|
)
|
|
167
|
|
||
Repayment of loans from affiliates
|
—
|
|
|
(470
|
)
|
||
Change in collateralized pledged assets
|
(6
|
)
|
|
17
|
|
||
Change in collateralized pledged liabilities
|
631
|
|
|
56
|
|
||
Increase (decrease) in overdrafts payable
|
(65
|
)
|
|
7
|
|
|
Three Months Ended March 31,
|
||||||
2019
|
|
2018
|
|||||
|
(in millions)
|
||||||
Cash contribution from parent company
|
—
|
|
|
8
|
|
||
Shareholder dividend paid
|
(68
|
)
|
|
(15
|
)
|
||
Cash paid to repurchase common stock
|
(744
|
)
|
|
—
|
|
||
Repurchase of AB Holding units from noncontrolling interest
|
—
|
|
|
(1
|
)
|
||
Purchases (redemptions) of noncontrolling interests of consolidated company-sponsored investment funds
|
—
|
|
|
373
|
|
||
Distribution to noncontrolling interest of consolidated subsidiaries
|
(68
|
)
|
|
(135
|
)
|
||
Increase (decrease) in securities sold under agreement to repurchase
|
(573
|
)
|
|
17
|
|
||
Other, net
|
(50
|
)
|
|
4
|
|
||
Net cash provided by (used in) financing activities
|
$
|
838
|
|
|
$
|
1,400
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
|
|
8
|
|
||
Change in cash and cash equivalents
|
660
|
|
|
1,277
|
|
||
Cash and cash equivalents, beginning of year
|
4,469
|
|
|
4,814
|
|
||
Cash and cash equivalents, end of period
|
$
|
5,129
|
|
|
$
|
6,091
|
|
|
|
|
|
||||
Non-cash transactions during the period:
|
|
|
|
||||
Capital contribution from parent company
|
$
|
—
|
|
|
$
|
622
|
|
(Settlement) issuance of long-term debt
|
$
|
—
|
|
|
$
|
(202
|
)
|
Transfer of assets to reinsurer
|
$
|
—
|
|
|
$
|
(604
|
)
|
Contribution of 0.5% minority interest in AXA Financial
|
$
|
—
|
|
|
$
|
65
|
|
Repayment of loans from affiliates
|
$
|
—
|
|
|
$
|
(622
|
)
|
•
|
The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
|
•
|
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities as well as small and medium-sized businesses.
|
•
|
The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through three main client channels—Institutional, Retail and Private Wealth Management—and distributes its institutional research products and solutions through Bernstein Research Services. The Investment Management and Research segment reflects the business of AllianceBernstein Holding L.P. (“AB Holding”), AllianceBernstein L.P. (“ABLP”) and their subsidiaries (collectively, “AB”).
|
•
|
The Protection Solutions segment includes the Company’s life insurance and group employee benefits businesses. The life insurance business offers a variety of variable universal life, indexed universal life and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of life, short- and long-term disability, dental and vision insurance products to small and medium-size businesses across the United States.
|
Description
|
Effective Date and Method of Adoption
|
Effect on the Financial Statement or Other Significant Matters
|
ASU 2018-12:
Financial Services—Insurance (Topic 944), Continued
|
||
Expanded footnote disclosures. The ASU requires additional disclosures including disaggregated rollforwards of beginning to ending balances of the liability for future policy benefits, policyholder account balances, MRBs, Separate Accounts liabilities and deferred policy acquisition costs. Companies will also be required to disclose information about significant inputs, judgements, assumptions and methods used in measurement.
|
For deferred policy acquisition costs, companies can elect one of two adoption methods. Companies can either elect a modified retrospective transition method applied to contracts in force as of the beginning of the earliest period presented on the basis of their existing carrying amounts, adjusted for the removal of any related amounts in AOCI or a full retrospective transition method using actual historical experience information as of contract inception. The same adoption method must be used for the liability for future policyholder benefits for traditional and limited payment contracts.
|
|
ASU 2016-13:
Financial Instruments—Credit Losses (Topic 326)
|
||
This ASU contains new guidance which introduces an approach based on expected losses to estimate credit losses on certain types of financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination.
|
Effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. These amendments should be applied through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective.
|
Management currently is evaluating the impact that adoption of this guidance will have on the Company’s consolidated financial statements.
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
Individual Retirement
|
|
Group Retirement
|
|
Protection Solutions
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Reductions to expense line items:
|
|
|
|
|
|
|
|
||||||||
Compensation and benefits
|
$
|
19
|
|
|
$
|
7
|
|
|
$
|
15
|
|
|
$
|
41
|
|
Commissions and distribution-related payments
|
72
|
|
|
14
|
|
|
34
|
|
|
120
|
|
||||
Other operating costs and expenses
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
||||
Total reductions
|
$
|
91
|
|
|
$
|
21
|
|
|
$
|
50
|
|
|
$
|
162
|
|
|
|
|
|
|
|
|
|
||||||||
Increase to expense line item:
|
|
|
|
|
|
|
|
||||||||
Amortization of deferred policy acquisition costs
|
$
|
91
|
|
|
$
|
21
|
|
|
$
|
50
|
|
|
$
|
162
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Investment management, advisory and service fees:
|
|
|
|
||||
Base fees
|
$
|
705
|
|
|
$
|
724
|
|
Performance-based fees
|
4
|
|
|
6
|
|
||
Research services
|
90
|
|
|
114
|
|
||
Distribution services
|
172
|
|
|
180
|
|
||
Shareholder services
|
18
|
|
|
20
|
|
||
Other
|
4
|
|
|
6
|
|
||
Total investment management and service fees
|
$
|
993
|
|
|
$
|
1,050
|
|
|
|
|
|
||||
Other income
|
$
|
120
|
|
|
$
|
112
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
OTTI in AOCI (4)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate (1)
|
$
|
33,984
|
|
|
$
|
936
|
|
|
$
|
233
|
|
|
$
|
34,687
|
|
|
$
|
—
|
|
U.S. Treasury, government and agency
|
12,969
|
|
|
602
|
|
|
214
|
|
|
13,357
|
|
|
—
|
|
|||||
States and political subdivisions
|
414
|
|
|
56
|
|
|
—
|
|
|
470
|
|
|
—
|
|
|||||
Foreign governments
|
485
|
|
|
28
|
|
|
7
|
|
|
506
|
|
|
—
|
|
|||||
Residential mortgage-backed (2)
|
217
|
|
|
11
|
|
|
—
|
|
|
228
|
|
|
—
|
|
|||||
Asset-backed (3)
|
620
|
|
|
1
|
|
|
4
|
|
|
617
|
|
|
2
|
|
|||||
Redeemable preferred stock
|
428
|
|
|
16
|
|
|
4
|
|
|
440
|
|
|
—
|
|
|||||
Total at March 31, 2019
|
$
|
49,117
|
|
|
$
|
1,650
|
|
|
$
|
462
|
|
|
$
|
50,305
|
|
|
$
|
2
|
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
OTTI in AOCI (4)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate (1)
|
$
|
30,572
|
|
|
$
|
406
|
|
|
$
|
800
|
|
|
$
|
30,178
|
|
|
$
|
—
|
|
U.S. Treasury, government and agency
|
14,004
|
|
|
295
|
|
|
470
|
|
|
13,829
|
|
|
—
|
|
|||||
States and political subdivisions
|
415
|
|
|
47
|
|
|
1
|
|
|
461
|
|
|
—
|
|
|||||
Foreign governments
|
524
|
|
|
19
|
|
|
13
|
|
|
530
|
|
|
—
|
|
|||||
Residential mortgage-backed (2)
|
225
|
|
|
10
|
|
|
1
|
|
|
234
|
|
|
—
|
|
|||||
Asset-backed (3)
|
612
|
|
|
1
|
|
|
12
|
|
|
601
|
|
|
2
|
|
|||||
Redeemable preferred stock
|
449
|
|
|
15
|
|
|
18
|
|
|
446
|
|
|
—
|
|
|||||
Total at December 31, 2018
|
$
|
46,801
|
|
|
$
|
793
|
|
|
$
|
1,315
|
|
|
$
|
46,279
|
|
|
$
|
2
|
|
(1)
|
Corporate fixed maturities include both public and private issues.
|
(2)
|
Includes publicly traded agency pass-through securities and collateralized obligations.
|
(3)
|
Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
|
(4)
|
Amounts represent OTTI losses in AOCI, which were not included in Net income (loss).
|
|
Amortized Cost
|
|
Fair Value
|
||||
|
(in millions)
|
||||||
March 31, 2019:
|
|
|
|
||||
Due in one year or less
|
$
|
2,234
|
|
|
$
|
2,246
|
|
Due in years two through five
|
11,686
|
|
|
11,900
|
|
||
Due in years six through ten
|
17,060
|
|
|
17,505
|
|
||
Due after ten years
|
16,872
|
|
|
17,369
|
|
||
Subtotal
|
47,852
|
|
|
49,020
|
|
||
Residential mortgage-backed
|
217
|
|
|
228
|
|
||
Asset-backed
|
620
|
|
|
617
|
|
||
Redeemable preferred stock
|
428
|
|
|
440
|
|
||
Total at March 31, 2019
|
$
|
49,117
|
|
|
$
|
50,305
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Proceeds from sales
|
$
|
1,450
|
|
|
$
|
3,880
|
|
Gross gains on sales
|
$
|
8
|
|
|
$
|
155
|
|
Gross losses on sales
|
$
|
(18
|
)
|
|
$
|
(52
|
)
|
|
|
|
|
||||
Total OTTI
|
$
|
—
|
|
|
$
|
—
|
|
Non-credit losses recognized in OCI
|
—
|
|
|
—
|
|
||
Credit losses recognized in Net income (loss)
|
$
|
—
|
|
|
$
|
—
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Balances at January 1,
|
$
|
(58
|
)
|
|
$
|
(18
|
)
|
Previously recognized impairments on securities that matured, paid, prepaid or sold
|
32
|
|
|
—
|
|
||
Recognized impairments on securities impaired to fair value this period (1)
|
—
|
|
|
—
|
|
||
Impairments recognized this period on securities not previously impaired
|
—
|
|
|
—
|
|
||
Additional impairments this period on securities previously impaired
|
—
|
|
|
—
|
|
||
Increases due to passage of time on previously recorded credit losses
|
—
|
|
|
—
|
|
||
Accretion of previously recognized impairments due to increases in expected cash flows
|
—
|
|
|
—
|
|
||
Balances at March 31,
|
$
|
(26
|
)
|
|
$
|
(18
|
)
|
(1)
|
Represents circumstances where the Company determined in the current period that it intends to sell the security, or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.
|
|
Net Unrealized Gains (Losses) on Investments
|
|
DAC
|
|
Policyholders’ Liabilities
|
|
Deferred Income Tax Asset (Liability)
|
|
AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balances at January 1, 2019
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Net investment gains (losses) arising during the period
|
(11
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11
|
)
|
|||||
Reclassification adjustment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in Net income (loss)
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12
|
|
|||||
Excluded from Net income (loss) (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impact of net unrealized investment gains (losses) on:
|
|
|
|
|
|
|
|
|
|
||||||||||
DAC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Policyholders’ liabilities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Balances at March 31, 2019
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balances at January 1, 2018
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
(1
|
)
|
|
$
|
—
|
|
|
$
|
1
|
|
Net investment gains (losses) arising during the period
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Reclassification adjustment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in Net income (loss)
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Excluded from Net income (loss) (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impact of net unrealized investment gains (losses) on:
|
|
|
|
|
|
|
|
|
|
||||||||||
DAC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Policyholders’ liabilities
|
—
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
1
|
|
|||||
Balances at March 31, 2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
(1)
|
Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in Net income (loss) for securities with no prior OTTI loss.
|
|
Net Unrealized Gains (Losses) on Investments
|
|
DAC
|
|
Policyholders’
Liabilities |
|
Deferred
Income Tax Asset (Liability) |
|
AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balances at January 1, 2019
|
$
|
(522
|
)
|
|
$
|
100
|
|
|
$
|
(73
|
)
|
|
$
|
104
|
|
|
$
|
(391
|
)
|
Net investment gains (losses) arising during the period
|
1,710
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,710
|
|
|||||
Reclassification adjustment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in Net income (loss)
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||
Excluded from Net income (loss) (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impact of net unrealized investment gains (losses) on:
|
|
|
|
|
|
|
|
|
|
||||||||||
DAC
|
—
|
|
|
(701
|
)
|
|
—
|
|
|
—
|
|
|
(701
|
)
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(230
|
)
|
|
(230
|
)
|
|||||
Policyholders’ liabilities
|
—
|
|
|
—
|
|
|
85
|
|
|
—
|
|
|
85
|
|
|
Net Unrealized Gains (Losses) on Investments
|
|
DAC
|
|
Policyholders’
Liabilities |
|
Deferred
Income Tax Asset (Liability) |
|
AOCI Gain (Loss) Related to Net Unrealized Investment Gains (Losses)
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Balances at March 31, 2019
|
$
|
1,187
|
|
|
$
|
(601
|
)
|
|
$
|
12
|
|
|
$
|
(126
|
)
|
|
$
|
472
|
|
Balances at January 1, 2018
|
$
|
1,871
|
|
|
$
|
(358
|
)
|
|
$
|
(238
|
)
|
|
$
|
(397
|
)
|
|
$
|
878
|
|
Net investment gains (losses) arising during the period
|
(1,546
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,546
|
)
|
|||||
Reclassification adjustment:
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in Net income (loss)
|
(109
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(109
|
)
|
|||||
Excluded from Net income (loss) (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Impact of net unrealized investment gains (losses) on:
|
|
|
|
|
|
|
|
|
|
||||||||||
DAC
|
—
|
|
|
341
|
|
|
—
|
|
|
—
|
|
|
341
|
|
|||||
Deferred income taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
253
|
|
|
253
|
|
|||||
Policyholders’ liabilities
|
—
|
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
|||||
Balances at March 31, 2018
|
$
|
216
|
|
|
$
|
(17
|
)
|
|
$
|
(128
|
)
|
|
$
|
(144
|
)
|
|
$
|
(73
|
)
|
(1)
|
Represents “transfers out” related to the portion of OTTI losses during the period that were not recognized in Net income (loss) for securities with no prior OTTI losses.
|
|
Less Than 12 Months
|
|
12 Months or Longer
|
|
Total
|
||||||||||||||||||
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Gross Unrealized Losses
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate
|
$
|
658
|
|
|
$
|
6
|
|
|
$
|
6,529
|
|
|
$
|
227
|
|
|
$
|
7,187
|
|
|
$
|
233
|
|
U.S. Treasury, government and agency
|
—
|
|
|
—
|
|
|
3,392
|
|
|
214
|
|
|
3,392
|
|
|
214
|
|
||||||
Foreign governments
|
6
|
|
|
—
|
|
|
67
|
|
|
7
|
|
|
73
|
|
|
7
|
|
||||||
Asset-backed
|
344
|
|
|
2
|
|
|
112
|
|
|
2
|
|
|
456
|
|
|
4
|
|
||||||
Redeemable preferred stock
|
48
|
|
|
2
|
|
|
37
|
|
|
2
|
|
|
85
|
|
|
4
|
|
||||||
Total at March 31, 2019
|
$
|
1,056
|
|
|
$
|
10
|
|
|
$
|
10,137
|
|
|
$
|
452
|
|
|
$
|
11,193
|
|
|
$
|
462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate
|
$
|
8,964
|
|
|
$
|
313
|
|
|
$
|
8,244
|
|
|
$
|
487
|
|
|
$
|
17,208
|
|
|
$
|
800
|
|
U.S. Treasury, government and agency
|
1,077
|
|
|
53
|
|
|
4,306
|
|
|
417
|
|
|
5,383
|
|
|
470
|
|
||||||
States and political subdivisions
|
—
|
|
|
—
|
|
|
19
|
|
|
1
|
|
|
19
|
|
|
1
|
|
||||||
Foreign governments
|
109
|
|
|
3
|
|
|
76
|
|
|
10
|
|
|
185
|
|
|
13
|
|
||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
29
|
|
|
1
|
|
|
29
|
|
|
1
|
|
||||||
Asset-backed
|
563
|
|
|
11
|
|
|
13
|
|
|
1
|
|
|
576
|
|
|
12
|
|
||||||
Redeemable preferred stock
|
165
|
|
|
13
|
|
|
33
|
|
|
5
|
|
|
198
|
|
|
18
|
|
||||||
Total at December 31, 2018
|
$
|
10,878
|
|
|
$
|
393
|
|
|
$
|
12,720
|
|
|
$
|
922
|
|
|
$
|
23,598
|
|
|
$
|
1,315
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net investment gains (losses) recognized during the period on securities held at the end of the period
|
$
|
318
|
|
|
$
|
(121
|
)
|
Net investment gains (losses) recognized on securities sold during the period
|
(24
|
)
|
|
1
|
|
||
Net investment gains (losses) on trading securities arising during the period
|
294
|
|
|
(120
|
)
|
||
Interest and dividend income from trading securities
|
92
|
|
|
76
|
|
||
Net investment income (loss) from trading securities
|
$
|
386
|
|
|
$
|
(44
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Allowance for credit losses:
|
|
|
|
||||
Beginning balance, January 1,
|
$
|
7
|
|
|
$
|
8
|
|
Charge-offs
|
(7
|
)
|
|
—
|
|
||
Recoveries
|
—
|
|
|
(1
|
)
|
||
Provision
|
—
|
|
|
—
|
|
||
Ending balance, March 31,
|
$
|
—
|
|
|
$
|
7
|
|
|
|
|
|
||||
March 31, Individually Evaluated for Impairment
|
$
|
—
|
|
|
$
|
7
|
|
|
Debt Service Coverage Ratio (1)
|
|
Total Mortgage Loans
|
||||||||||||||||||||||||
Loan-to-Value Ratio: (2)
|
Greater than 2.0x
|
|
1.8x to 2.0x
|
|
1.5x to 1.8x
|
|
1.2x to 1.5x
|
|
1.0x to 1.2x
|
|
Less than 1.0x
|
|
|||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
781
|
|
|
$
|
21
|
|
|
$
|
215
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,041
|
|
50% - 70%
|
4,933
|
|
|
806
|
|
|
1,284
|
|
|
474
|
|
|
—
|
|
|
—
|
|
|
7,497
|
|
|||||||
70% - 90%
|
266
|
|
|
—
|
|
|
117
|
|
|
334
|
|
|
132
|
|
|
—
|
|
|
849
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Commercial Mortgage Loans
|
$
|
5,980
|
|
|
$
|
827
|
|
|
$
|
1,616
|
|
|
$
|
832
|
|
|
$
|
132
|
|
|
$
|
—
|
|
|
$
|
9,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Agricultural Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
278
|
|
|
$
|
130
|
|
|
$
|
276
|
|
|
$
|
563
|
|
|
$
|
350
|
|
|
$
|
49
|
|
|
$
|
1,646
|
|
50% - 70%
|
119
|
|
|
70
|
|
|
248
|
|
|
357
|
|
|
237
|
|
|
34
|
|
|
1,065
|
|
|||||||
70% - 90%
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Agricultural Mortgage Loans
|
$
|
397
|
|
|
$
|
200
|
|
|
$
|
524
|
|
|
$
|
939
|
|
|
$
|
587
|
|
|
$
|
83
|
|
|
$
|
2,730
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
1,059
|
|
|
$
|
151
|
|
|
$
|
491
|
|
|
$
|
587
|
|
|
$
|
350
|
|
|
$
|
49
|
|
|
$
|
2,687
|
|
50% - 70%
|
5,052
|
|
|
876
|
|
|
1,532
|
|
|
831
|
|
|
237
|
|
|
34
|
|
|
8,562
|
|
|||||||
70% - 90%
|
266
|
|
|
—
|
|
|
117
|
|
|
353
|
|
|
132
|
|
|
—
|
|
|
868
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Mortgage Loans
|
$
|
6,377
|
|
|
$
|
1,027
|
|
|
$
|
2,140
|
|
|
$
|
1,771
|
|
|
$
|
719
|
|
|
$
|
83
|
|
|
$
|
12,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Service Coverage Ratio (1)
|
|
Total Mortgage Loans
|
||||||||||||||||||||||||
Loan-to-Value Ratio: (2)
|
Greater than 2.0x
|
|
1.8x to 2.0x
|
|
1.5x to 1.8x
|
|
1.2x to 1.5x
|
|
1.0x to 1.2x
|
|
Less than 1.0x
|
|
|||||||||||||||
|
(in millions)
|
||||||||||||||||||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
797
|
|
|
$
|
21
|
|
|
$
|
247
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,089
|
|
50% - 70%
|
4,908
|
|
|
656
|
|
|
1,146
|
|
|
325
|
|
|
151
|
|
|
—
|
|
|
7,186
|
|
|||||||
70% - 90%
|
260
|
|
|
—
|
|
|
117
|
|
|
370
|
|
|
98
|
|
|
—
|
|
|
845
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||||
Total Commercial Mortgage Loans
|
$
|
5,965
|
|
|
$
|
677
|
|
|
$
|
1,510
|
|
|
$
|
746
|
|
|
$
|
249
|
|
|
$
|
—
|
|
|
$
|
9,147
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Agricultural Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
282
|
|
|
$
|
147
|
|
|
$
|
267
|
|
|
$
|
543
|
|
|
$
|
321
|
|
|
$
|
51
|
|
|
$
|
1,611
|
|
50% - 70%
|
112
|
|
|
46
|
|
|
246
|
|
|
379
|
|
|
224
|
|
|
31
|
|
|
1,038
|
|
|||||||
70% - 90%
|
—
|
|
|
—
|
|
|
—
|
|
|
19
|
|
|
27
|
|
|
—
|
|
|
46
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Total Agricultural Mortgage Loans
|
$
|
394
|
|
|
$
|
193
|
|
|
$
|
513
|
|
|
$
|
941
|
|
|
$
|
572
|
|
|
$
|
82
|
|
|
$
|
2,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total Mortgage Loans
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
0% - 50%
|
$
|
1,079
|
|
|
$
|
168
|
|
|
$
|
514
|
|
|
$
|
567
|
|
|
$
|
321
|
|
|
$
|
51
|
|
|
$
|
2,700
|
|
50% - 70%
|
5,020
|
|
|
702
|
|
|
1,392
|
|
|
704
|
|
|
375
|
|
|
31
|
|
|
8,224
|
|
|||||||
70% - 90%
|
260
|
|
|
—
|
|
|
117
|
|
|
389
|
|
|
125
|
|
|
—
|
|
|
891
|
|
|||||||
90% plus
|
—
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|
—
|
|
|
—
|
|
|
27
|
|
|||||||
Total Mortgage Loans
|
$
|
6,359
|
|
|
$
|
870
|
|
|
$
|
2,023
|
|
|
$
|
1,687
|
|
|
$
|
821
|
|
|
$
|
82
|
|
|
$
|
11,842
|
|
(1)
|
The debt service coverage ratio is calculated using the most recently reported operating income results from property operations divided by annual debt service.
|
(2)
|
The loan-to-value ratio is derived from current loan balance divided by the fair market value of the property. The fair market value of the underlying commercial properties is updated annually.
|
|
30-59 Days
|
|
60-89 Days
|
|
90 Days or More
|
|
Total
|
|
Current
|
|
Total Financing Receivables
|
|
Recorded Investment 90 Days or More and Accruing
|
||||||||||||||
|
|
|
|
|
|
|
(in millions)
|
|
|
|
|
||||||||||||||||
March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,387
|
|
|
$
|
9,387
|
|
|
$
|
—
|
|
Agricultural
|
9
|
|
|
26
|
|
|
55
|
|
|
90
|
|
|
2,640
|
|
|
2,730
|
|
|
54
|
|
|||||||
Total Mortgage Loans
|
$
|
9
|
|
|
$
|
26
|
|
|
$
|
55
|
|
|
$
|
90
|
|
|
$
|
12,027
|
|
|
$
|
12,117
|
|
|
$
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
December 31, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Commercial
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
27
|
|
|
$
|
27
|
|
|
$
|
9,120
|
|
|
$
|
9,147
|
|
|
$
|
—
|
|
Agricultural
|
18
|
|
|
8
|
|
|
42
|
|
|
68
|
|
|
2,627
|
|
|
2,695
|
|
|
40
|
|
|||||||
Total Mortgage Loans
|
$
|
18
|
|
|
$
|
8
|
|
|
$
|
69
|
|
|
$
|
95
|
|
|
$
|
11,747
|
|
|
$
|
11,842
|
|
|
$
|
40
|
|
|
Recorded Investment
|
|
Unpaid Principal Balance
|
|
Related Allowance
|
|
Average Recorded Investment (1)
|
|
Interest Income Recognized
|
||||||||||
|
(in millions)
|
||||||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Agricultural mortgage loans
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
Total
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
With related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage loans - other
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
13
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
With no related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Agricultural mortgage loans
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Total
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
With related allowance recorded:
|
|
|
|
|
|
|
|
|
|
||||||||||
Commercial mortgage loans - other
|
$
|
27
|
|
|
$
|
31
|
|
|
$
|
(7
|
)
|
|
$
|
27
|
|
|
$
|
—
|
|
Total
|
$
|
27
|
|
|
$
|
31
|
|
|
$
|
(7
|
)
|
|
$
|
27
|
|
|
$
|
—
|
|
(1)
|
Represents a two-quarter and five-quarter average of recorded amortized cost at
March 31, 2019
and
December 31, 2018
, respectively.
|
|
At March 31, 2019
|
|
Gains (Losses) Reported in Net Income (Loss) Three Months Ended March 31, 2019
|
||||||||||||
|
|
|
Fair Value
|
|
|||||||||||
|
Notional
Amount
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|
|||||||||
|
(in millions)
|
||||||||||||||
Freestanding Derivatives (1) (2):
|
|
|
|
|
|
|
|
||||||||
Equity contracts:
|
|
|
|
|
|
|
|
||||||||
Futures
|
$
|
7,514
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
(762
|
)
|
Swaps
|
8,158
|
|
|
6
|
|
|
371
|
|
|
(985
|
)
|
||||
Options
|
37,544
|
|
|
3,494
|
|
|
1,311
|
|
|
1,111
|
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Swaps
|
28,253
|
|
|
912
|
|
|
211
|
|
|
648
|
|
||||
Futures
|
16,758
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||
Credit contracts:
|
|
|
|
|
|
|
|
||||||||
Credit default swaps
|
1,338
|
|
|
23
|
|
|
3
|
|
|
7
|
|
||||
Other freestanding contracts:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
1,853
|
|
|
31
|
|
|
8
|
|
|
10
|
|
||||
Margin
|
—
|
|
|
38
|
|
|
—
|
|
|
—
|
|
||||
Collateral
|
—
|
|
|
9
|
|
|
2,575
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Embedded Derivatives (2):
|
|
|
|
|
|
|
|
||||||||
GMIB reinsurance contracts
|
—
|
|
|
1,740
|
|
|
—
|
|
|
18
|
|
||||
GMxB derivative features liability (3)
|
—
|
|
|
—
|
|
|
6,126
|
|
|
(408
|
)
|
||||
SCS, SIO, MSO and IUL indexed features (4)
|
—
|
|
|
—
|
|
|
2,067
|
|
|
(1,325
|
)
|
||||
Total
|
$
|
101,418
|
|
|
$
|
6,253
|
|
|
$
|
12,674
|
|
|
$
|
(1,630
|
)
|
(1)
|
Reported in Other invested assets in the consolidated balance sheets.
|
(2)
|
Reported in Net derivative gains (losses) in the consolidated statements of income (loss).
|
(3)
|
Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
|
(4)
|
SCS, SIO, MSO and IUL indexed features are reported in Policyholders’ account balances in the consolidated balance sheets.
|
|
At December 31, 2018
|
|
Gains (Losses) Reported in Net Income (Loss) Three Months Ended March 31, 2018
|
||||||||||||
|
|
|
Fair Value
|
|
|||||||||||
|
Notional
Amount
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
|
|||||||||
|
(in millions)
|
||||||||||||||
Freestanding Derivatives (1) (2):
|
|
|
|
|
|
|
|
||||||||
Equity contracts:
|
|
|
|
|
|
|
|
||||||||
Futures
|
$
|
11,143
|
|
|
$
|
2
|
|
|
$
|
3
|
|
|
$
|
(23
|
)
|
Swaps
|
7,796
|
|
|
143
|
|
|
168
|
|
|
114
|
|
||||
Options
|
21,821
|
|
|
2,133
|
|
|
1,164
|
|
|
(18
|
)
|
||||
Interest rate contracts:
|
|
|
|
|
|
|
|
||||||||
Swaps
|
27,116
|
|
|
634
|
|
|
196
|
|
|
(671
|
)
|
||||
Futures
|
11,792
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||
Credit contracts:
|
|
|
|
|
|
|
|
||||||||
Credit default swaps
|
1,376
|
|
|
20
|
|
|
3
|
|
|
—
|
|
||||
Other freestanding contracts:
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
2,184
|
|
|
35
|
|
|
22
|
|
|
(51
|
)
|
||||
Margin
|
—
|
|
|
18
|
|
|
5
|
|
|
—
|
|
||||
Collateral
|
—
|
|
|
8
|
|
|
1,581
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Embedded Derivatives:
|
|
|
|
|
|
|
|
||||||||
GMIB reinsurance contracts (2)
|
—
|
|
|
1,732
|
|
|
—
|
|
|
(159
|
)
|
||||
GMxB derivative features liability (2) (3)
|
—
|
|
|
—
|
|
|
5,614
|
|
|
505
|
|
||||
SCS, SIO, MSO and IUL indexed features (2) (4)
|
—
|
|
|
—
|
|
|
715
|
|
|
27
|
|
||||
Net derivative gains (loss)
|
|
|
|
|
|
|
(236
|
)
|
|||||||
Cross currency swaps (5) (6)
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
||||
Total
|
$
|
83,228
|
|
|
$
|
4,725
|
|
|
$
|
9,471
|
|
|
$
|
(227
|
)
|
(1)
|
Reported in Other invested assets in the consolidated balance sheets.
|
(2)
|
Reported in Net derivative gains (losses) in the consolidated statements of income (loss).
|
(3)
|
Reported in Future policy benefits and other policyholders’ liabilities in the consolidated balance sheets.
|
(4)
|
SCS, SIO, MSO and IUL indexed features are reported in Policyholders’ account balances in the consolidated balance sheets.
|
(5)
|
Reported in Other assets or Other liabilities in the consolidated balance sheets.
|
(6)
|
Reported in Other income in the consolidated statements of income (loss).
|
|
Gross Amount Recognized
|
|
Gross Amount Offset in the Balance Sheets
|
|
Net Amount Presented in the Balance Sheets
|
||||||
|
(in millions)
|
||||||||||
Assets (1)
|
|
|
|
|
|
||||||
Total derivatives
|
$
|
4,514
|
|
|
$
|
4,434
|
|
|
$
|
80
|
|
Other financial instruments
|
2,164
|
|
|
—
|
|
|
2,164
|
|
|||
Other invested assets
|
$
|
6,678
|
|
|
$
|
4,434
|
|
|
$
|
2,244
|
|
|
|
|
|
|
|
||||||
Liabilities (2)
|
|
|
|
|
|
||||||
Total derivatives
|
$
|
4,434
|
|
|
$
|
4,387
|
|
|
$
|
47
|
|
Other financial liabilities
|
3,734
|
|
|
—
|
|
|
3,734
|
|
|||
Other liabilities
|
$
|
8,168
|
|
|
$
|
4,387
|
|
|
$
|
3,781
|
|
(1)
|
Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
|
(2)
|
Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
|
|
Net Amount Presented in the Balance Sheets
|
|
Collateral (Received)/Held
|
|
|
||||||||||
|
Financial Instruments
|
|
Cash
|
|
Net Amount
|
||||||||||
|
(in millions)
|
||||||||||||||
Assets (1)
|
|
|
|
|
|
|
|||||||||
Total derivatives
|
$
|
2,561
|
|
|
$
|
367
|
|
|
$
|
2,114
|
|
|
$
|
80
|
|
Other financial instruments
|
2,164
|
|
|
—
|
|
|
—
|
|
|
2,164
|
|
||||
Other invested assets
|
$
|
4,725
|
|
|
$
|
367
|
|
|
$
|
2,114
|
|
|
$
|
2,244
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
(2)
|
|
|
|
|
|
|
|
||||||||
Total derivatives
|
$
|
47
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
47
|
|
Other financial liabilities
|
3,734
|
|
|
—
|
|
|
—
|
|
|
3,734
|
|
||||
Other liabilities
|
$
|
3,781
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,781
|
|
(1)
|
Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
|
(2)
|
Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs
.
|
|
Gross Amount Recognized
|
|
Gross Amount Offset in the Balance Sheets
|
|
Net Amount Presented in the Balance Sheets
|
||||||
|
(in millions)
|
||||||||||
Assets (1)
|
|
|
|
|
|
||||||
Total derivatives
|
$
|
2,993
|
|
|
$
|
2,945
|
|
|
$
|
48
|
|
Other financial instruments
|
1,989
|
|
|
—
|
|
|
1,989
|
|
|||
Other invested assets
|
$
|
4,982
|
|
|
$
|
2,945
|
|
|
$
|
2,037
|
|
|
|
|
|
|
|
||||||
Liabilities (2)
|
|
|
|
|
|
||||||
Total derivatives
|
$
|
3,142
|
|
|
$
|
2,945
|
|
|
$
|
197
|
|
Other financial liabilities
|
3,163
|
|
|
—
|
|
|
3,163
|
|
|||
Other liabilities
|
$
|
6,305
|
|
|
$
|
2,945
|
|
|
$
|
3,360
|
|
|
|
|
|
|
|
||||||
Securities sold under agreement to repurchase (3)
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
571
|
|
(1)
|
Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
|
(2)
|
Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
|
(3)
|
Excludes expense of
$2 million
in Securities sold under agreement to repurchase on the consolidated balance sheets.
|
|
Net Amount Presented in the Balance Sheets
|
|
Collateral (Received)/Held
|
|
|
||||||||||
|
Financial Instruments
|
|
Cash
|
|
Net Amount
|
||||||||||
|
(in millions)
|
||||||||||||||
Assets (1)
|
|
|
|
|
|
|
|
||||||||
Total derivatives
|
$
|
1,411
|
|
|
$
|
—
|
|
|
$
|
(1,363
|
)
|
|
$
|
48
|
|
Other financial instruments
|
1,989
|
|
|
—
|
|
|
—
|
|
|
1,989
|
|
||||
Other invested assets
|
$
|
3,400
|
|
|
$
|
—
|
|
|
$
|
(1,363
|
)
|
|
$
|
2,037
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities (2)
|
|
|
|
|
|
|
|
||||||||
Total derivatives
|
$
|
197
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
197
|
|
Other financial liabilities
|
3,163
|
|
|
—
|
|
|
—
|
|
|
3,163
|
|
||||
Other liabilities
|
$
|
3,360
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,360
|
|
|
|
|
|
|
|
|
|
||||||||
Securities sold under agreement to repurchase (3) (4) (5)
|
$
|
571
|
|
|
$
|
(588
|
)
|
|
$
|
—
|
|
|
$
|
(17
|
)
|
(1)
|
Excludes Investment Management and Research segment’s derivative assets of consolidated VIEs/VOEs.
|
(2)
|
Excludes Investment Management and Research segment’s derivative liabilities of consolidated VIEs/VOEs.
|
(3)
|
Excludes expense of
$2 million
in Securities sold under agreement to repurchase.
|
(4)
|
U.S. Treasury and agency securities are in Fixed maturities available-for-sale on the consolidated balance sheets.
|
(5)
|
Cash is included in Cash and cash equivalents on consolidated balance sheets.
|
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight
and
Continuous
|
|
Up to 30 days
|
|
30–90 days
|
|
Greater
Than 90 days
|
|
Total
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Securities sold under agreement to repurchase
(1)
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. Treasury and agency securities
|
$
|
—
|
|
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
571
|
|
Total
|
$
|
—
|
|
|
$
|
571
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
571
|
|
(1)
|
Excludes expense of
$2 million
in Securities sold under agreement to repurchase on the consolidated balance sheets.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Revenues:
|
|
|
|
||||
Premiums and other income
|
$
|
48
|
|
|
$
|
51
|
|
Net investment income (loss)
|
67
|
|
|
73
|
|
||
Investment gains (losses), net
|
(1
|
)
|
|
1
|
|
||
Total revenues
|
114
|
|
|
125
|
|
||
|
|
|
|
||||
Benefits and Other Deductions:
|
|
|
|
||||
Policyholders’ benefits and dividends
|
121
|
|
|
126
|
|
||
Other operating costs and expenses
|
1
|
|
|
1
|
|
||
Total benefits and other deductions
|
122
|
|
|
127
|
|
||
Net income (loss) before income taxes
|
(8
|
)
|
|
(2
|
)
|
||
Income tax (expense) benefit
|
(1
|
)
|
|
—
|
|
||
Net income (loss)
|
$
|
(9
|
)
|
|
$
|
(2
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Balances, beginning of year
|
$
|
—
|
|
|
$
|
19
|
|
Unrealized investment gains (losses), net of DAC
|
—
|
|
|
(19
|
)
|
||
Balances, end of period
|
$
|
—
|
|
|
$
|
—
|
|
•
|
Return of Premium: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals);
|
•
|
Ratchet: the benefit is the greatest of current account value, premiums paid (adjusted for withdrawals), or the highest account value on any anniversary up to contractually specified ages (adjusted for withdrawals);
|
•
|
Roll-Up: the benefit is the greater of current account value or premiums paid (adjusted for withdrawals) accumulated at contractually specified interest rates up to specified ages;
|
•
|
Combo: the benefit is the greater of the ratchet benefit or the roll-up benefit, which may include either a five year or an annual reset; or
|
•
|
Withdrawal: the withdrawal is guaranteed up to a maximum amount per year for life.
|
|
Guarantee Type
|
||||||||||||||||||
|
Return of
Premium
|
|
Ratchet
|
|
Roll-Up
|
|
Combo
|
|
Total
|
||||||||||
|
(in millions, except age and interest rate)
|
||||||||||||||||||
Variable annuity contracts with GMDB features
|
|
|
|
|
|
|
|
|
|
||||||||||
Account Values invested in:
|
|
|
|
|
|
|
|
|
|
||||||||||
General Account
|
$
|
14,178
|
|
|
$
|
98
|
|
|
$
|
60
|
|
|
$
|
181
|
|
|
$
|
14,517
|
|
Separate Accounts
|
45,599
|
|
|
9,001
|
|
|
3,134
|
|
|
32,609
|
|
|
90,343
|
|
|||||
Total Account Values
|
$
|
59,777
|
|
|
$
|
9,099
|
|
|
$
|
3,194
|
|
|
$
|
32,790
|
|
|
$
|
104,860
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net amount at risk, gross
|
$
|
143
|
|
|
$
|
143
|
|
|
$
|
2,025
|
|
|
$
|
18,389
|
|
|
$
|
20,700
|
|
Net amount at risk, net of amounts reinsured
|
$
|
143
|
|
|
$
|
138
|
|
|
$
|
1,414
|
|
|
$
|
18,389
|
|
|
$
|
20,084
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average attained age of policyholders (in years)
|
51.4
|
|
|
67.1
|
|
|
73.8
|
|
|
69.2
|
|
|
55.3
|
|
|||||
Percentage of policyholders over age 70
|
10.2
|
%
|
|
43.5
|
%
|
|
66.1
|
%
|
|
50.7
|
%
|
|
19.0
|
%
|
|||||
Range of contractually specified interest rates
|
N/A
|
|
|
N/A
|
|
|
3% - 6%
|
|
|
3% - 6.5%
|
|
|
3% - 6.5%
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Variable annuity contracts with GMIB features
|
|
|
|
|
|
|
|
|
|
||||||||||
Account Values invested in:
|
|
|
|
|
|
|
|
|
|
||||||||||
General Account
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
19
|
|
|
$
|
245
|
|
|
$
|
264
|
|
Separate Accounts
|
—
|
|
|
—
|
|
|
21,923
|
|
|
35,745
|
|
|
57,668
|
|
|||||
Total Account Values
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
21,942
|
|
|
$
|
35,990
|
|
|
$
|
57,932
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net amount at risk, gross
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
898
|
|
|
$
|
8,287
|
|
|
$
|
9,185
|
|
Net amount at risk, net of amounts reinsured
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
281
|
|
|
$
|
7,515
|
|
|
$
|
7,796
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average attained age of policyholders (in years)
|
N/A
|
|
N/A
|
|
69.0
|
|
|
69.0
|
|
|
69.0
|
|
|||||||
Weighted average years remaining until annuitization
|
N/A
|
|
N/A
|
|
1.7
|
|
|
0.5
|
|
|
0.5
|
|
|||||||
Range of contractually specified interest rates
|
N/A
|
|
N/A
|
|
3% - 6%
|
|
|
3% - 6.5%
|
|
|
3% - 6.5%
|
|
|
Guarantee Type
|
||||||||||||||||||
|
Return of
Premium
|
|
Ratchet
|
|
Roll-Up
|
|
Combo
|
|
Total
|
||||||||||
|
(in millions, except age and interest rates)
|
||||||||||||||||||
Variable annuity contracts with GMDB features
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsured account values
|
$
|
932
|
|
|
$
|
5,327
|
|
|
$
|
271
|
|
|
$
|
1,700
|
|
|
$
|
8,230
|
|
Net amount at risk assumed
|
$
|
6
|
|
|
$
|
286
|
|
|
$
|
20
|
|
|
$
|
273
|
|
|
$
|
585
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average attained age of policyholders (in years)
|
67
|
|
|
72
|
|
|
77
|
|
|
75
|
|
|
73
|
|
|||||
Percentage of policyholders over age 70
|
43.9
|
%
|
|
62.6
|
%
|
|
78.9
|
%
|
|
75.5
|
%
|
|
63.7
|
%
|
|||||
Range of contractually specified interest rates (1)
|
N/A
|
|
N/A
|
|
3%-10%
|
|
|
5%-10%
|
|
|
3%-10%
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Variable annuity contracts with GMIB features
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsured account values
|
$
|
898
|
|
|
$
|
45
|
|
|
$
|
244
|
|
|
$
|
1,205
|
|
|
$
|
2,392
|
|
Net amount at risk assumed
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
36
|
|
|
$
|
267
|
|
|
$
|
304
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Average attained age of policyholders (in years)
|
71
|
|
|
74
|
|
|
72
|
|
|
69
|
|
|
70
|
|
|||||
Percentage of policyholders over age 70
|
63.1
|
%
|
|
64.1
|
%
|
|
59.3
|
%
|
|
50.7
|
%
|
|
56.5
|
%
|
|||||
Range of contractually specified interest rates
|
N/A
|
|
N/A
|
|
3.3%-6.5%
|
|
|
6%-6%
|
|
|
3.3%-6.5%
|
|
(1)
|
In general, for policies with the highest contractual interest rate shown (
10%
), the rate applied only for the first
10
years after issue, which has now elapsed.
|
|
As of March 31, 2019
|
|
As of December 31, 2018
|
||||||||||||
|
GMDB
|
|
GMIB
|
|
GMDB
|
|
GMIB
|
||||||||
|
(in millions)
|
||||||||||||||
Equity
|
$
|
39,856
|
|
|
$
|
17,692
|
|
|
$
|
35,541
|
|
|
$
|
15,759
|
|
Fixed income
|
5,206
|
|
|
2,825
|
|
|
5,173
|
|
|
2,812
|
|
||||
Balanced
|
44,433
|
|
|
36,855
|
|
|
41,588
|
|
|
33,974
|
|
||||
Other
|
848
|
|
|
296
|
|
|
852
|
|
|
290
|
|
||||
Total
|
$
|
90,343
|
|
|
$
|
57,668
|
|
|
$
|
83,154
|
|
|
$
|
52,835
|
|
|
Direct Liability (1)
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Balance at January 1,
|
$
|
812
|
|
|
$
|
709
|
|
Paid guaranteed benefits
|
(7
|
)
|
|
(8
|
)
|
||
Other changes in reserves
|
20
|
|
|
3
|
|
||
Balance at March 31,
|
$
|
825
|
|
|
$
|
704
|
|
(1)
|
There were
no
amounts of reinsurance ceded in any period presented.
|
Level 1
|
Unadjusted quoted prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
|
Level 2
|
Observable inputs other than Level 1 prices, such as quoted prices for similar instruments, quoted prices in markets that are not active, and inputs to model-derived valuations that are directly observable or can be corroborated by observable market data.
|
Level 3
|
Unobservable inputs supported by little or no market activity and often requiring significant management judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Corporate (1)
|
$
|
—
|
|
|
$
|
33,507
|
|
|
$
|
1,180
|
|
|
$
|
34,687
|
|
U.S. Treasury, government and agency
|
—
|
|
|
13,357
|
|
|
—
|
|
|
13,357
|
|
||||
States and political subdivisions
|
—
|
|
|
430
|
|
|
40
|
|
|
470
|
|
||||
Foreign governments
|
—
|
|
|
506
|
|
|
—
|
|
|
506
|
|
||||
Residential mortgage-backed (2)
|
—
|
|
|
228
|
|
|
—
|
|
|
228
|
|
||||
Asset-backed (3)
|
—
|
|
|
83
|
|
|
534
|
|
|
617
|
|
||||
Redeemable preferred stock
|
159
|
|
|
281
|
|
|
—
|
|
|
440
|
|
||||
Total fixed maturities, available-for-sale
|
159
|
|
|
48,392
|
|
|
1,754
|
|
|
50,305
|
|
||||
Other equity investments
|
12
|
|
|
—
|
|
|
74
|
|
|
86
|
|
||||
Trading securities
|
484
|
|
|
12,608
|
|
|
35
|
|
|
13,127
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
—
|
|
|
258
|
|
|
—
|
|
|
258
|
|
||||
Assets of consolidated VIEs/VOEs
|
112
|
|
|
270
|
|
|
28
|
|
|
410
|
|
||||
Swaps
|
—
|
|
|
359
|
|
|
—
|
|
|
359
|
|
||||
Credit default swaps
|
—
|
|
|
20
|
|
|
—
|
|
|
20
|
|
||||
Futures
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Options
|
—
|
|
|
2,183
|
|
|
—
|
|
|
2,183
|
|
||||
Total other invested assets
|
111
|
|
|
3,090
|
|
|
28
|
|
|
3,229
|
|
||||
Cash equivalents
|
4,021
|
|
|
—
|
|
|
—
|
|
|
4,021
|
|
||||
Segregated securities
|
—
|
|
|
1,262
|
|
|
—
|
|
|
1,262
|
|
||||
GMIB reinsurance contract asset
|
—
|
|
|
—
|
|
|
1,740
|
|
|
1,740
|
|
||||
Separate Accounts assets
|
116,829
|
|
|
2,764
|
|
|
383
|
|
|
119,976
|
|
||||
Total Assets
|
$
|
121,616
|
|
|
$
|
68,116
|
|
|
$
|
4,014
|
|
|
$
|
193,746
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
GMxB derivative features’ liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
6,126
|
|
|
$
|
6,126
|
|
SCS, SIO, MSO and IUL indexed features’ liability
|
—
|
|
|
2,067
|
|
|
—
|
|
|
2,067
|
|
||||
Liabilities of consolidated VIEs/VOEs
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Contingent payment arrangements
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
2,073
|
|
|
$
|
6,133
|
|
|
$
|
8,206
|
|
(1)
|
Corporate fixed maturities includes both public and private issues.
|
(2)
|
Includes publicly traded agency pass-through securities and collateralized obligations.
|
(3)
|
Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(in millions)
|
||||||||||||||
Assets
|
|
|
|
|
|
|
|
||||||||
Investments
|
|
|
|
|
|
|
|
||||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
||||||||
Corporate (1)
|
$
|
—
|
|
|
$
|
28,992
|
|
|
$
|
1,186
|
|
|
$
|
30,178
|
|
U.S. Treasury, government and agency
|
—
|
|
|
13,829
|
|
|
—
|
|
|
13,829
|
|
||||
States and political subdivisions
|
—
|
|
|
422
|
|
|
39
|
|
|
461
|
|
||||
Foreign governments
|
—
|
|
|
530
|
|
|
—
|
|
|
530
|
|
||||
Residential mortgage-backed (2)
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
||||
Asset-backed (3)
|
—
|
|
|
82
|
|
|
519
|
|
|
601
|
|
||||
Redeemable preferred stock
|
167
|
|
|
279
|
|
|
—
|
|
|
446
|
|
||||
Total fixed maturities, available-for-sale
|
167
|
|
|
44,368
|
|
|
1,744
|
|
|
46,279
|
|
||||
Other equity investments
|
11
|
|
|
—
|
|
|
74
|
|
|
85
|
|
||||
Trading securities
|
446
|
|
|
15,507
|
|
|
64
|
|
|
16,017
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
||||||||
Short-term investments
|
—
|
|
|
515
|
|
|
—
|
|
|
515
|
|
||||
Assets of consolidated VIEs/VOEs
|
92
|
|
|
259
|
|
|
27
|
|
|
378
|
|
||||
Swaps
|
—
|
|
|
426
|
|
|
—
|
|
|
426
|
|
||||
Credit default swaps
|
—
|
|
|
17
|
|
|
—
|
|
|
17
|
|
||||
Futures
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Options
|
—
|
|
|
968
|
|
|
—
|
|
|
968
|
|
||||
Total other invested assets
|
91
|
|
|
2,185
|
|
|
27
|
|
|
2,303
|
|
||||
Cash equivalents
|
3,482
|
|
|
—
|
|
|
—
|
|
|
3,482
|
|
||||
Segregated securities
|
—
|
|
|
1,170
|
|
|
—
|
|
|
1,170
|
|
||||
GMIB reinsurance contracts asset
|
—
|
|
|
—
|
|
|
1,732
|
|
|
1,732
|
|
||||
Separate Accounts assets
|
106,994
|
|
|
2,747
|
|
|
374
|
|
|
110,115
|
|
||||
Total Assets
|
$
|
111,191
|
|
|
$
|
65,977
|
|
|
$
|
4,015
|
|
|
$
|
181,183
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities
|
|
|
|
|
|
|
|
||||||||
GMxB derivative features’ liability
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
5,614
|
|
|
$
|
5,614
|
|
SCS, SIO, MSO and IUL indexed features’ liability
|
—
|
|
|
715
|
|
|
—
|
|
|
715
|
|
||||
Liabilities of consolidated VIEs/VOEs
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||
Contingent payment arrangements
|
—
|
|
|
—
|
|
|
7
|
|
|
7
|
|
||||
Total Liabilities
|
$
|
—
|
|
|
$
|
722
|
|
|
$
|
5,621
|
|
|
$
|
6,343
|
|
(1)
|
Corporate fixed maturities includes both public and private issues.
|
(2)
|
Includes publicly traded agency pass-through securities and collateralized obligations.
|
(3)
|
Includes credit-tranched securities collateralized by sub-prime mortgages and other asset types and credit tenant loans.
|
|
Corporate
|
|
State and Political Subdivisions
|
|
Asset-backed
|
||||||
|
(in millions)
|
||||||||||
Balance, January 1, 2019
|
$
|
1,186
|
|
|
$
|
39
|
|
|
$
|
519
|
|
Total gains (losses), realized and unrealized, included in:
|
|
|
|
|
|
||||||
Income (loss) as:
|
|
|
|
|
|
||||||
Net investment income (loss)
|
1
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
9
|
|
|
1
|
|
|
4
|
|
|||
Purchases
|
70
|
|
|
—
|
|
|
11
|
|
|||
Sales
|
(34
|
)
|
|
—
|
|
|
—
|
|
|||
Transfers into Level 3 (1)
|
17
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3 (1)
|
(69
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, March 31, 2019
|
$
|
1,180
|
|
|
$
|
40
|
|
|
$
|
534
|
|
|
|
|
|
|
|
||||||
Balance, January 1, 2018
|
$
|
1,150
|
|
|
$
|
40
|
|
|
$
|
541
|
|
Total gains (losses), realized and unrealized, included in:
|
|
|
|
|
|
||||||
Income (loss) as:
|
|
|
|
|
|
||||||
Net investment income (loss)
|
1
|
|
|
—
|
|
|
—
|
|
|||
Other comprehensive income (loss)
|
(21
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Purchases
|
189
|
|
|
—
|
|
|
—
|
|
|||
Sales
|
(117
|
)
|
|
—
|
|
|
(1
|
)
|
|||
Transfers into Level 3 (1)
|
67
|
|
|
—
|
|
|
—
|
|
|||
Transfers out of Level 3 (1)
|
(16
|
)
|
|
—
|
|
|
—
|
|
|||
Balance, March 31, 2018
|
$
|
1,253
|
|
|
$
|
39
|
|
|
$
|
540
|
|
(1)
|
Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.
|
|
Redeemable
Preferred
Stock
|
|
Other
Equity
Investments (2)
|
|
GMIB
Reinsurance
Contract Asset
|
|
Separate
Accounts
Assets
|
|
GMxB Derivative Features Liability
|
|
Contingent
Payment
Arrangement
|
||||||||||||
|
(in millions)
|
||||||||||||||||||||||
Balance, January 1, 2019
|
$
|
—
|
|
|
$
|
165
|
|
|
$
|
1,732
|
|
|
$
|
374
|
|
|
$
|
(5,614
|
)
|
|
$
|
(7
|
)
|
Total gains (losses), realized and unrealized, included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Net derivative gains (losses), excluding non-performance risk
|
—
|
|
|
—
|
|
|
(11
|
)
|
|
—
|
|
|
63
|
|
|
—
|
|
||||||
Non-performance risk (1)
|
—
|
|
|
—
|
|
|
29
|
|
|
—
|
|
|
(470
|
)
|
|
—
|
|
||||||
Subtotal
|
—
|
|
|
—
|
|
|
18
|
|
|
7
|
|
|
(407
|
)
|
|
—
|
|
||||||
Purchases (2)
|
—
|
|
|
2
|
|
|
11
|
|
|
4
|
|
|
(111
|
)
|
|
—
|
|
||||||
Sales (3)
|
—
|
|
|
—
|
|
|
(21
|
)
|
|
—
|
|
|
6
|
|
|
—
|
|
||||||
Settlements (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
Activity related to consolidated VIEs/VOEs
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Transfers out of Level 3 (5)
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
||||||
Balance, March 31, 2019
|
$
|
—
|
|
|
$
|
137
|
|
|
$
|
1,740
|
|
|
$
|
383
|
|
|
$
|
(6,126
|
)
|
|
$
|
(7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Balance, January 1, 2018
|
$
|
1
|
|
|
$
|
99
|
|
|
$
|
1,894
|
|
|
$
|
349
|
|
|
(4,451
|
)
|
|
$
|
(15
|
)
|
|
Total gains (losses), realized and unrealized, included in:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income (loss) as:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment gains (losses), net
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
—
|
|
||||||
Net derivative gains (losses), excluding non-performance risk
|
—
|
|
|
—
|
|
|
(155
|
)
|
|
—
|
|
|
457
|
|
|
—
|
|
||||||
Non-performance risk (1)
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
48
|
|
|
—
|
|
||||||
Subtotal
|
—
|
|
|
—
|
|
|
(159
|
)
|
|
7
|
|
|
505
|
|
|
—
|
|
||||||
Other comprehensive income (loss)
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchases (2)
|
—
|
|
|
4
|
|
|
10
|
|
|
3
|
|
|
(96
|
)
|
|
—
|
|
||||||
Sales (3)
|
(1
|
)
|
|
—
|
|
|
(11
|
)
|
|
(1
|
)
|
|
5
|
|
|
—
|
|
||||||
Settlements (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
1
|
|
||||||
Activity related to consolidated VIEs/VOEs
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Transfers into Level 3 (5)
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Balance, March 31, 2018
|
$
|
—
|
|
|
$
|
110
|
|
|
$
|
1,734
|
|
|
$
|
357
|
|
|
(4,037
|
)
|
|
$
|
(14
|
)
|
(1)
|
The Company’s non-performance risk is recorded through Net derivative gains (losses).
|
(2)
|
For the GMIB reinsurance contract asset and GMxB derivative features liability, represents attributed fee.
|
(3)
|
For the GMIB reinsurance contract asset, represents recoveries from reinsurers and for the GMxB derivative features liability, represents benefits paid.
|
(4)
|
For contingent payment arrangements, represents payments under the arrangement.
|
(5)
|
Transfers into/out of Level 3 classification are reflected at beginning-of-period fair values.
|
|
Income (Loss)
|
|
|||||||||
|
Investment Gains (Losses), Net
|
|
Net Derivative Gains (Losses)
|
|
OCI
|
||||||
|
(in millions)
|
||||||||||
Held at March 31, 2019:
|
|
|
|
|
|
||||||
Change in unrealized gains (losses):
|
|
|
|
|
|
||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
||||||
Corporate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9
|
|
State and political subdivisions
|
—
|
|
|
—
|
|
|
1
|
|
|||
Asset-backed
|
—
|
|
|
—
|
|
|
4
|
|
|||
Subtotal
|
—
|
|
|
—
|
|
|
14
|
|
|||
GMIB reinsurance contracts
|
—
|
|
|
18
|
|
|
—
|
|
|||
Separate Accounts assets (1)
|
7
|
|
|
—
|
|
|
—
|
|
|||
GMxB derivative features liability
|
—
|
|
|
(408
|
)
|
|
—
|
|
|||
Total
|
$
|
7
|
|
|
$
|
(390
|
)
|
|
$
|
14
|
|
|
|
|
|
|
|
||||||
Held at March 31, 2018:
|
|
|
|
|
|
||||||
Change in unrealized gains (losses):
|
|
|
|
|
|
||||||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
||||||
Corporate
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(19
|
)
|
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Subtotal
|
—
|
|
|
—
|
|
|
(20
|
)
|
|||
GMIB reinsurance contracts
|
—
|
|
|
(159
|
)
|
|
—
|
|
|||
Separate Accounts assets (1)
|
7
|
|
|
—
|
|
|
—
|
|
|||
GMxB derivative features liability
|
—
|
|
|
505
|
|
|
—
|
|
|||
Total
|
$
|
7
|
|
|
$
|
346
|
|
|
$
|
(20
|
)
|
(1)
|
There is an investment expense that offsets this investment gain (loss).
|
|
Fair
Value |
|
Valuation
Technique |
|
Significant
Unobservable Input |
|
Range
|
|
Weighted Average
|
||
|
(in millions)
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||
Investments:
|
|
|
|
|
|
|
|
|
|
||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
||
Corporate
|
$
|
102
|
|
|
Matrix pricing model
|
|
Spread over benchmark
|
|
15 - 580 bps
|
|
115 bps
|
|
891
|
|
|
Market
comparable companies |
|
EBITDA multiples
Discount rate Cash flow multiples |
|
3.9x - 25.5x
6.1% - 16.5% 1.6x - 18.0x |
|
12.7x
10.6% 11.4x |
|
Other equity investments
|
35
|
|
|
Discounted cash flow
|
|
Earnings multiple
Discount factor Discount years |
|
9.4x
10.0% 12 |
|
|
|
Separate Accounts assets
|
359
|
|
|
Third party appraisal
|
|
Capitalization rate
Exit capitalization rate Discount rate |
|
4.4%
5.5% 6.4% |
|
|
|
|
1
|
|
|
Discounted cash flow
|
|
Spread over U.S. Treasury curve
Discount factor |
|
248 bps
4.8% |
|
|
|
GMIB reinsurance contract asset
|
1,740
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Non-performance risk Volatility rates - Equity Mortality rates (1): Ages 0 - 40 Ages 41 - 60 Ages 60 - 115 |
|
1% - 6.27%
0% - 8% 0% - 16% 52 - 129 bps 7% - 32% 0.01% - 0.18% 0.07% - 0.54% 0.42% - 42.0% |
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||
GMIBNLG
|
5,847
|
|
|
Discounted cash flow
|
|
Non-performance risk
Lapse rates
Withdrawal rates
Annuitization
Mortality rates (1):
Ages 0 - 40
Ages 41 - 60
Ages 60 - 115
|
|
149 bps
0.8% - 26.2% 0.0% - 12.144% 0.0% - 100.0% 0.01% - 0.19% 0.06% - 0.53% 0.41% - 41.2% |
|
|
|
Assumed GMIB Reinsurance Contracts
|
182
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates (Age 0 - 85) Withdrawal rates (Age 86+) Utilization rates Non-performance risk Volatility rates - Equity |
|
1.1% - 11.2%
0.7% - 22.2% 1.3% - 100.0% 0.0% - 30.0% 0.75% to 1.99% 10.0% - 34.0% |
|
|
|
GWBL/GMWB
|
137
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Volatility rates - Equity |
|
0.5% - 5.7%
0.0% - 7.0% 100% after delay 7.0% - 32.0% |
|
|
|
GIB
|
(44
|
)
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Volatility rates - Equity |
|
0.5% - 5.7%
0.0% - 8.0% 0.0% - 16.0% 7.0% - 32.0% |
|
|
|
GMAB
|
4
|
|
|
Discounted cash flow
|
|
Lapse rates
Volatility rates - Equity |
|
0.5% - 11.0%
7.0% - 32.0% |
|
|
(1)
|
Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.
|
|
Fair
Value |
|
Valuation
Technique |
|
Significant
Unobservable Input |
|
Range
|
|
Weighted Average
|
||
|
(in millions)
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||
Investments:
|
|
|
|
|
|
|
|
|
|
||
Fixed maturities, available-for-sale:
|
|
|
|
|
|
|
|
|
|
||
Corporate
|
$
|
99
|
|
|
Matrix pricing model
|
|
Spread over benchmark
|
|
15 - 580 bps
|
|
109 bps
|
|
881
|
|
|
Market comparable companies
|
|
EBITDA multiples
Discount rate Cash flow multiples |
|
4.1x - 37.8x
6.4% - 16.5% 1.8x - 18.0x |
|
12.1x
10.7% 11.4x |
|
Other equity investments
|
35
|
|
|
Discounted cash flow
|
|
Earnings multiple
Discount factor Discount years |
|
9.4x
10.0% 12 |
|
|
|
Separate Accounts assets
|
352
|
|
|
Third party appraisal
|
|
Capitalization rate
Exit capitalization rate Discount rate |
|
4.4%
5.6% 6.5% |
|
|
|
|
1
|
|
|
Discounted cash flow
|
|
Spread over U.S. Treasury curve
Discount factor |
|
248bps
5.1% |
|
|
|
GMIB reinsurance contract asset
|
1,732
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Non-performance risk Volatility rates - Equity Mortality rates (1): Ages 0 - 40 Ages 41 - 60 Ages 60 - 115 |
|
1% - 6.27%
0% - 8% 0% - 16% 74 - 159 bps 10% - 34% 0.01% - 0.18% 0.07% - 0.54% 0.42% - 42.0% |
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||
GMIBNLG
|
5,341
|
|
|
Discounted cash flow
|
|
Non-performance risk
Lapse rates Withdrawal rates Annuitization Mortality rates (1): Ages 0 - 40 Ages 41 - 60 Ages 60 - 115 |
|
189 bps
0.8% - 26.2% 0.0% - 12.1% 0.0% - 100.0% 0.01% - 0.19% 0.06% - 0.53% 0.41% - 41.2% |
|
|
|
Assumed GMIB Reinsurance Contracts
|
183
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates (Age 0 - 85) Withdrawal rates (Age 86+) Utilization rates Non-performance risk Volatility rates - Equity |
|
1.1% - 11.2%
0.7% - 22.2% 1.3% - 100.0% 0.0% - 30.0% 1.1% - 2.4% 10.0% - 34.0% |
|
|
|
GWBL/GMWB
|
130
|
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Volatility rates - Equity |
|
0.5% - 5.7%
0.0% - 7.0% 100% after delay 10.0% - 34.0% |
|
|
|
GIB
|
(48
|
)
|
|
Discounted cash flow
|
|
Lapse rates
Withdrawal rates Utilization rates Volatility rates - Equity |
|
0.5% - 5.7%
0.0% - 8.0% 0.0% - 16.0% 10.0% - 34.0% |
|
|
|
GMAB
|
7
|
|
|
Discounted cash flow
|
|
Lapse rates
Volatility rates - Equity |
|
0.5% - 11.0%
10.0% - 34.0% |
|
|
(1)
|
Mortality rates vary by age and demographic characteristic such as gender. Mortality rate assumptions are based on a combination of company and industry experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuating the embedded derivatives.
|
|
Carrying Value
|
|
Fair Value
|
||||||||||||||||
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||||
|
(in millions)
|
||||||||||||||||||
March 31, 2019:
|
|
|
|
|
|
|
|
|
|||||||||||
Mortgage loans on real estate
|
$
|
12,117
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,019
|
|
|
$
|
12,019
|
|
FHLBNY Funding Agreements
|
$
|
4,001
|
|
|
$
|
—
|
|
|
$
|
4,011
|
|
|
$
|
—
|
|
|
$
|
4,011
|
|
Policy loans
|
$
|
3,766
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,611
|
|
|
$
|
4,611
|
|
Policyholders’ liabilities: Investment contracts
|
$
|
2,132
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,248
|
|
|
$
|
2,248
|
|
Short-term and long-term debt
|
$
|
4,949
|
|
|
$
|
—
|
|
|
$
|
5,023
|
|
|
$
|
—
|
|
|
$
|
5,023
|
|
Separate Accounts liabilities
|
$
|
8,173
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,173
|
|
|
$
|
8,173
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
December 31, 2018:
|
|
|
|
|
|
|
|
|
|
||||||||||
Mortgage loans on real estate
|
$
|
11,835
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,494
|
|
|
$
|
11,494
|
|
FHLBNY Funding Agreements
|
$
|
4,002
|
|
|
$
|
—
|
|
|
$
|
3,956
|
|
|
$
|
—
|
|
|
$
|
3,956
|
|
Policy loans
|
$
|
3,779
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,183
|
|
|
$
|
4,183
|
|
Policyholders’ liabilities: Investment contracts
|
$
|
2,127
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,174
|
|
|
$
|
2,174
|
|
Short-term and long-term debt
|
$
|
4,955
|
|
|
$
|
—
|
|
|
$
|
4,749
|
|
|
$
|
—
|
|
|
$
|
4,749
|
|
Separate Accounts liabilities
|
$
|
7,406
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7,406
|
|
|
$
|
7,406
|
|
|
|
Balance Sheet Line Item
|
|
March 31, 2019
|
||
|
|
|
|
(in millions)
|
||
Assets
|
|
|
|
|
||
Operating lease asset
|
|
Other Assets
|
|
$
|
760
|
|
Liabilities
|
|
|
|
|
||
Operating lease liability
|
|
Other Liabilities
|
|
$
|
974
|
|
|
|
Three Months Ended March 31, 2019
|
||
|
|
(in millions)
|
||
Operating lease cost
|
|
$
|
81
|
|
Variable operating lease cost
|
|
$
|
13
|
|
Sublease income
|
|
$
|
(19
|
)
|
Short-term lease expense
|
|
$
|
1
|
|
|
|
March 31, 2019
|
||
|
|
(in millions)
|
||
Operating Leases:
|
|
|
||
2019
|
|
$
|
183
|
|
2020
|
|
203
|
|
|
2021
|
|
190
|
|
|
2022
|
|
172
|
|
|
2023
|
|
158
|
|
|
Thereafter
|
|
204
|
|
|
Total lease payments
|
|
1,110
|
|
|
Less: Interest
|
|
(136
|
)
|
|
Present value of lease liabilities
|
|
$
|
974
|
|
|
|
March 31, 2019
|
|
Weighted-average remaining operating lease term (years)
|
|
5.8
|
|
Weighted-average discount rate for operating leases
|
|
3.32
|
%
|
|
|
Three Months Ended March 31, 2019
|
||
|
|
(in millions)
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows from operating leases
|
|
$
|
58
|
|
Non-cash transactions:
|
|
|
||
Leased assets obtained in exchange for new operating lease liabilities
|
|
$
|
3
|
|
|
|
December 31, 2018
|
||
Calendar Year
|
|
(in millions)
|
||
2019
|
|
$
|
212
|
|
2020
|
|
$
|
186
|
|
2021
|
|
$
|
181
|
|
2022
|
|
$
|
166
|
|
2023
|
|
$
|
155
|
|
Thereafter
|
|
$
|
293
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net Periodic Pension Expense (Qualified Plans):
|
|
|
|
||||
Service cost
|
$
|
2
|
|
|
$
|
2
|
|
Interest cost
|
22
|
|
|
21
|
|
||
Expected return on assets
|
(38
|
)
|
|
(43
|
)
|
||
Actuarial (gain) loss
|
—
|
|
|
—
|
|
||
Net amortization
|
20
|
|
|
26
|
|
||
Partial settlement
|
—
|
|
|
99
|
|
||
Total
|
$
|
6
|
|
|
$
|
105
|
|
|
March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Unrealized gains (losses) on investments (1)
|
$
|
430
|
|
|
$
|
(137
|
)
|
Defined benefit pension plans
|
(919
|
)
|
|
(822
|
)
|
||
Foreign currency translation adjustments (1)
|
(63
|
)
|
|
(33
|
)
|
||
Total accumulated other comprehensive income (loss)
|
(552
|
)
|
|
(992
|
)
|
||
Less: Accumulated other comprehensive (income) loss attributable to noncontrolling interest
|
39
|
|
|
46
|
|
||
Accumulated other comprehensive income (loss) attributable to Holdings
|
$
|
(513
|
)
|
|
$
|
(946
|
)
|
(1)
|
A reclassification of
$7 million
has been made to the March 31, 2018 previously reported balances to conform to the current period’s presentation.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Change in net unrealized gains (losses) on investments:
|
|
|
|
||||
Net unrealized gains (losses) arising during the period
|
$
|
1,342
|
|
|
$
|
(1,221
|
)
|
(Gains) losses reclassified to Net income (loss) during the period (1)
|
9
|
|
|
(88
|
)
|
||
Net unrealized gains (losses) on investments
|
1,351
|
|
|
(1,309
|
)
|
||
Adjustments for policyholders’ liabilities, DAC, insurance liability loss recognition and other (2)
|
(517
|
)
|
|
347
|
|
||
Change in unrealized gains (losses), net of adjustments (net of deferred income tax expense (benefit) of $218, and $(255))
|
834
|
|
|
(962
|
)
|
||
Change in defined benefit plans:
|
|
|
|
||||
Less: Reclassification to Net income (loss) of amortization of net prior service credit included in net periodic cost (3)
|
49
|
|
|
133
|
|
||
Change in defined benefit plans (net of deferred income tax expense (benefit) of $12 and $35)
|
49
|
|
|
133
|
|
||
Foreign currency translation adjustments:
|
|
|
|
||||
Foreign currency translation gains (losses) arising during the period (2)
|
(1
|
)
|
|
(3
|
)
|
||
Foreign currency translation adjustment
|
(1
|
)
|
|
(3
|
)
|
||
Total other comprehensive income (loss), net of income taxes
|
882
|
|
|
(832
|
)
|
||
Less: Other comprehensive (income) loss attributable to noncontrolling interest
|
1
|
|
|
(6
|
)
|
||
Other comprehensive income (loss) attributable to Holdings
|
$
|
883
|
|
|
$
|
(838
|
)
|
(1)
|
See “Reclassification adjustments” in
Note 3
. Reclassification amounts presented net of income tax expense (benefit) of
$2 million
, and
$(23) million
for the
three months ended March 31, 2019 and 2018
, respectively.
|
(2)
|
A reclassification of
$2 million
has been made to the previously reported amounts for the three months ended March 31, 2018 to conform to the current period’s presentation.
|
(3)
|
These AOCI components are included in the computation of net periodic pension expenses. See
Note 9
for further information.
|
|
Outstanding Balance at December 31, 2018
|
|
Issued During the Period
|
|
Repaid During the Period
|
|
Outstanding Balance at March 31, 2019
|
||||||||
|
(in millions)
|
||||||||||||||
Short-term funding agreements:
|
|
|
|
|
|
|
|
||||||||
Due in one year or less
|
$
|
1,640
|
|
|
$
|
4,470
|
|
|
$
|
4,470
|
|
|
$
|
1,640
|
|
Long-term funding agreements:
|
|
|
|
|
|
|
|
||||||||
Due in years two through five
|
1,569
|
|
|
—
|
|
|
—
|
|
|
1,569
|
|
||||
Due in more than five years
|
781
|
|
|
—
|
|
|
—
|
|
|
781
|
|
||||
Total long-term funding agreements
|
2,350
|
|
|
—
|
|
|
—
|
|
|
2,350
|
|
||||
Total funding agreements (1)
|
$
|
3,990
|
|
|
$
|
4,470
|
|
|
$
|
4,470
|
|
|
$
|
3,990
|
|
(1)
|
The
$11 million
and
$12 million
difference between the funding agreements carrying value shown in fair value table at
March 31, 2019
and
December 31, 2018
, respectively, reflects the remaining amortization of a hedge implemented and closed, which locked in the funding agreements’ borrowing rates.
|
•
|
The Individual Retirement segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income.
|
•
|
The Group Retirement segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities and not-for-profit entities as well as small and medium-sized businesses.
|
•
|
The Investment Management and Research segment provides diversified investment management, research and related solutions globally to a broad range of clients through
three
main client channels - Institutional, Retail and Private Wealth Management and distributes its institutional research products and solutions through Bernstein Research Services.
|
•
|
The Protection Solutions segment includes our life insurance and group employee benefits businesses. Our life insurance business offers a variety of variable universal life, universal life and term life products to help affluent and high net worth individuals, as well as small and medium-sized business owners, with their wealth protection, wealth transfer and corporate needs. Our group employee benefits business offers a suite of dental, vision, life, and short- and long-term disability and other insurance products to small and medium-size businesses across the United States.
|
•
|
Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization;
|
•
|
Investment (gains) losses, which includes other-than-temporary impairments of securities, 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 includes restructuring costs related to severance, lease write-offs related to non-recurring restructuring activities, and separation costs; 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 the impact of the Tax Reform Act.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net income (loss) attributable to Holdings
|
$
|
(775
|
)
|
|
$
|
214
|
|
Adjustments related to:
|
|
|
|
||||
Variable annuity product features (1)
|
1,540
|
|
|
176
|
|
||
Investment (gains) losses
|
11
|
|
|
(102
|
)
|
||
Net actuarial (gains) losses related to pension and other postretirement benefit obligations
|
24
|
|
|
131
|
|
||
Other adjustments (2)
|
40
|
|
|
91
|
|
||
Income tax expense (benefit) related to above adjustments (3)
|
(337
|
)
|
|
(55
|
)
|
||
Non-recurring tax items
|
6
|
|
|
28
|
|
||
Non-GAAP Operating Earnings (4)
|
$
|
509
|
|
|
$
|
483
|
|
|
|
|
|
||||
Operating earnings (loss) by segment:
|
|
|
|
||||
Individual Retirement (5)
|
$
|
370
|
|
|
$
|
368
|
|
Group Retirement
|
$
|
81
|
|
|
$
|
76
|
|
Investment Management and Research
|
$
|
77
|
|
|
$
|
81
|
|
Protection Solutions
|
$
|
49
|
|
|
$
|
35
|
|
Corporate and Other (6)
|
$
|
(68
|
)
|
|
$
|
(77
|
)
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Variable annuity product features for the three months ended March 31, 2018 would have been
$124 million
.
|
(2)
|
Other adjustments include separation costs of
$24 million
and
$61 million
for the
three months ended March 31, 2019 and 2018
, respectively.
|
(3)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Income tax expense (benefit) related to above adjustments for the three months ended March 31, 2018 would have been
$(44) million
.
|
(4)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating Earnings for the three months ended March 31, 2018 would have been
$442 million
.
|
(5)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Operating earnings for the three months ended March 31, 2018 for the Individual Retirement segment would have been
$327 million
.
|
(6)
|
Includes interest expense of
$52 million
and
$44 million
for the
three months ended March 31, 2019 and 2018
, respectively.
|
•
|
Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features and changes in the fair value of the embedded derivatives reflected within the net derivative results of variable annuity product features;
|
•
|
Investment gains (losses), net, which include other-than-temporary impairments of securities, sales or disposals of securities/investments, realized capital gains/losses, and valuation allowances; and
|
•
|
Other adjustments, which includes investment income (loss) from certain derivative instruments, excluding derivative instruments used to hedge risks associated with interest margins on interest sensitive life and annuity contracts and freestanding and embedded derivatives associated with products with GMxB features.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Segment revenues:
|
|
|
|
||||
Individual Retirement (1)
|
$
|
1,007
|
|
|
$
|
729
|
|
Group Retirement (1)
|
251
|
|
|
238
|
|
||
Investment Management and Research (2)
|
780
|
|
|
909
|
|
||
Protection Solutions (1)
|
831
|
|
|
814
|
|
||
Corporate and Other (1)
|
312
|
|
|
288
|
|
||
Adjustments related to:
|
|
|
|
||||
Variable annuity product features
|
(1,478
|
)
|
|
(161
|
)
|
||
Investment gains (losses), net
|
(11
|
)
|
|
102
|
|
||
Other adjustments to segment revenues
|
22
|
|
|
(45
|
)
|
||
Total revenues
|
$
|
1,714
|
|
|
$
|
2,874
|
|
(1)
|
Includes investment expenses charged by AB of approximately
$18 million
for both of the
three months ended March 31, 2019 and 2018
for services provided to the Company.
|
(2)
|
Inter-segment investment management and other fees of approximately
$25 million
for both of the
three months ended March 31, 2019 and 2018
are included in total revenues of the Investment Management and Research segment.
|
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Total assets by segment:
|
|
|
|
||||
Individual Retirement
|
$
|
116,833
|
|
|
$
|
105,532
|
|
Group Retirement
|
38,965
|
|
|
38,874
|
|
||
Investment Management and Research
|
10,348
|
|
|
10,294
|
|
||
Protection Solutions
|
42,122
|
|
|
44,633
|
|
||
Corporate and Other
|
24,551
|
|
|
21,464
|
|
||
Total assets
|
$
|
232,819
|
|
|
$
|
220,797
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net income (loss) attributable to Holdings common shareholders:
|
|
|
|
||||
Net income (loss) attributable to Holdings common shareholders (basic)
|
$
|
(775
|
)
|
|
$
|
214
|
|
Net income (loss) attributable to Holdings common shareholders (diluted)
|
$
|
(775
|
)
|
|
$
|
214
|
|
|
Three Months Ended March 31,
|
||||
|
2019
|
|
2018
|
||
|
(number of shares, in millions)
|
||||
Weighted Average Shares:
|
|
|
|
||
Weighted average common stock outstanding for basic earnings per common share
|
518.0
|
|
|
561.0
|
|
Weighted average common stock outstanding for diluted earnings per common share
|
518.0
|
|
|
561.0
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(dollars per share)
|
||||||
Net income (loss) attributable to Holdings per common share:
|
|
|
|
||||
Basic
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Diluted
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
|
March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported
|
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deferred policy acquisition costs
|
$
|
6,288
|
|
|
$
|
—
|
|
|
$
|
6,288
|
|
|
$
|
(45
|
)
|
|
$
|
6,243
|
|
Current and deferred income taxes
|
225
|
|
|
—
|
|
|
225
|
|
|
7
|
|
|
232
|
|
|||||
Total Assets
|
$
|
232,294
|
|
|
$
|
—
|
|
|
$
|
232,294
|
|
|
$
|
(38
|
)
|
|
$
|
232,256
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Future policy benefits and other policyholders’ liabilities
|
29,586
|
|
|
—
|
|
|
29,586
|
|
|
(20
|
)
|
|
29,566
|
|
|||||
Total Liabilities
|
$
|
214,670
|
|
|
$
|
—
|
|
|
$
|
214,670
|
|
|
$
|
(20
|
)
|
|
$
|
214,650
|
|
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Retained earnings
|
12,455
|
|
|
—
|
|
|
12,455
|
|
|
(18
|
)
|
|
12,437
|
|
|||||
Total equity attributable to Holdings
|
13,565
|
|
|
—
|
|
|
13,565
|
|
|
(18
|
)
|
|
13,547
|
|
|||||
Total Equity
|
16,600
|
|
|
—
|
|
|
16,600
|
|
|
(18
|
)
|
|
16,582
|
|
|||||
Total Liabilities, Redeemable Noncontrolling Interest and Equity
|
$
|
232,294
|
|
|
$
|
—
|
|
|
$
|
232,294
|
|
|
$
|
(38
|
)
|
|
$
|
232,256
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported |
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Consolidated Statement of Income (Loss):
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Policy charges and fee income
|
$
|
972
|
|
|
$
|
—
|
|
|
$
|
972
|
|
|
$
|
(6
|
)
|
|
$
|
966
|
|
Net derivative gains (losses)
|
(281
|
)
|
|
—
|
|
|
(281
|
)
|
|
45
|
|
|
(236
|
)
|
|||||
Total revenues
|
2,835
|
|
|
—
|
|
|
2,835
|
|
|
39
|
|
|
2,874
|
|
|||||
Benefits and other deductions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholders’ benefits
|
608
|
|
|
—
|
|
|
608
|
|
|
(14
|
)
|
|
594
|
|
|||||
Amortization of deferred policy acquisition costs
|
15
|
|
|
162
|
|
|
177
|
|
|
(5
|
)
|
|
172
|
|
|||||
Total benefits and other deductions
|
2,465
|
|
|
—
|
|
|
2,465
|
|
|
(19
|
)
|
|
2,446
|
|
|||||
Income (loss) from continuing operations, before income taxes
|
370
|
|
|
—
|
|
|
370
|
|
|
58
|
|
|
428
|
|
|||||
Income tax (expense) benefit
|
(79
|
)
|
|
—
|
|
|
(79
|
)
|
|
(12
|
)
|
|
(91
|
)
|
|||||
Net income (loss)
|
291
|
|
|
—
|
|
|
291
|
|
|
46
|
|
|
337
|
|
|||||
Net income (loss) attributable to Holdings
|
$
|
168
|
|
|
$
|
—
|
|
|
$
|
168
|
|
|
$
|
46
|
|
|
$
|
214
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported |
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Statement of Comprehensive Income (Loss)
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
291
|
|
|
$
|
46
|
|
|
$
|
337
|
|
Comprehensive income (loss)
|
(541
|
)
|
|
—
|
|
|
(541
|
)
|
|
46
|
|
|
(495
|
)
|
|||||
Comprehensive income (loss) attributable to Holdings
|
$
|
(670
|
)
|
|
$
|
—
|
|
|
$
|
(670
|
)
|
|
$
|
46
|
|
|
$
|
(624
|
)
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported |
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Consolidated Statement of Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Retained earnings, beginning of year
|
$
|
12,289
|
|
|
$
|
—
|
|
|
$
|
12,289
|
|
|
$
|
(64
|
)
|
|
$
|
12,225
|
|
Net income (loss) attributable to Holdings
|
168
|
|
|
—
|
|
|
168
|
|
|
46
|
|
|
214
|
|
|||||
Retained earnings, end of period
|
$
|
12,455
|
|
|
$
|
—
|
|
|
$
|
12,455
|
|
|
$
|
(18
|
)
|
|
$
|
12,437
|
|
Total Holdings’ equity, end of period
|
$
|
13,565
|
|
|
$
|
—
|
|
|
$
|
13,565
|
|
|
$
|
(18
|
)
|
|
$
|
13,547
|
|
Total Equity, End of Period
|
$
|
16,600
|
|
|
$
|
—
|
|
|
$
|
16,600
|
|
|
$
|
(18
|
)
|
|
$
|
16,582
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported |
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Consolidated Statement of Cash Flows:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
291
|
|
|
$
|
—
|
|
|
$
|
291
|
|
|
$
|
46
|
|
|
$
|
337
|
|
Adjustments to reconcile Net income (loss) to Net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
||||||||||||||||||
|
As Pre-viously
Reported |
|
Presentation Reclassifi-cations
|
|
As Adjusted
|
|
Impact of Revisions
|
|
As Revised
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Policy charges and fee income
|
(972
|
)
|
|
—
|
|
|
(972
|
)
|
|
6
|
|
|
(966
|
)
|
|||||
Net derivative (gains) losses
|
281
|
|
|
—
|
|
|
281
|
|
|
(45
|
)
|
|
236
|
|
|||||
Amortization of deferred sales commission
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Amortization and depreciation
|
(20
|
)
|
|
189
|
|
|
169
|
|
|
(5
|
)
|
|
164
|
|
|||||
Amortization of deferred cost of reinsurance asset
|
5
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Distributions from joint ventures and limited partnerships
|
25
|
|
|
(25
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Equity (income) loss from limited partnerships
|
—
|
|
|
(38
|
)
|
|
(38
|
)
|
|
—
|
|
|
(38
|
)
|
|||||
Changes in:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Reinsurance recoverable
|
32
|
|
|
—
|
|
|
32
|
|
|
(3
|
)
|
|
29
|
|
|||||
Capitalization of deferred policy acquisition costs
|
15
|
|
|
(177
|
)
|
|
(162
|
)
|
|
—
|
|
|
(162
|
)
|
|||||
Future policy benefits
|
(254
|
)
|
|
—
|
|
|
(254
|
)
|
|
6
|
|
|
(248
|
)
|
|||||
Current and deferred income taxes
|
103
|
|
|
—
|
|
|
103
|
|
|
12
|
|
|
115
|
|
|||||
Other, net
|
(255
|
)
|
|
63
|
|
|
(192
|
)
|
|
—
|
|
|
(192
|
)
|
|||||
Net cash provided by (used in) operating activities
|
$
|
(264
|
)
|
|
$
|
—
|
|
|
$
|
(264
|
)
|
|
$
|
17
|
|
|
$
|
(247
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from the sale/maturity/prepayment of:
|
|
|
|
|
|
|
|
|
|
||||||||||
Real estate joint ventures
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140
|
|
|
$
|
140
|
|
Short-term investments
|
—
|
|
|
1,607
|
|
|
1,607
|
|
|
77
|
|
|
1,684
|
|
|||||
Payment for the purchase/origination of:
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term investments
|
—
|
|
|
(731
|
)
|
|
(731
|
)
|
|
—
|
|
|
(731
|
)
|
|||||
Cash settlements related to derivative instruments
|
(54
|
)
|
|
—
|
|
|
(54
|
)
|
|
(620
|
)
|
|
(674
|
)
|
|||||
Change in short-term investments
|
876
|
|
|
(876
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other, net
|
(371
|
)
|
|
—
|
|
|
(371
|
)
|
|
60
|
|
|
(311
|
)
|
|||||
Net cash provided by (used in) investing activities
|
$
|
459
|
|
|
$
|
—
|
|
|
$
|
459
|
|
|
$
|
(343
|
)
|
|
$
|
116
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Policyholders’ account balances:
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits
|
$
|
2,532
|
|
|
$
|
—
|
|
|
$
|
2,532
|
|
|
$
|
(491
|
)
|
|
$
|
2,041
|
|
Withdrawals
|
(1,384
|
)
|
|
—
|
|
|
(1,384
|
)
|
|
284
|
|
|
(1,100
|
)
|
|||||
Transfers (to) from Separate Accounts
|
(102
|
)
|
|
—
|
|
|
(102
|
)
|
|
533
|
|
|
431
|
|
|||||
Net cash provided by (used in) financing activities
|
$
|
1,074
|
|
|
$
|
—
|
|
|
$
|
1,074
|
|
|
$
|
326
|
|
|
$
|
1,400
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Non-cash transactions during the period:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital contribution from parent
|
$
|
630
|
|
|
$
|
—
|
|
|
$
|
630
|
|
|
$
|
(8
|
)
|
|
$
|
622
|
|
(Settlement) issuance of long-term debt
|
$
|
202
|
|
|
$
|
—
|
|
|
$
|
202
|
|
|
$
|
(404
|
)
|
|
$
|
(202
|
)
|
Transfer of assets to reinsurer
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(604
|
)
|
|
$
|
(604
|
)
|
•
|
fee income derived from our retirement and protection products and our investment management and research services;
|
•
|
premiums from our traditional life insurance and annuity products; and
|
•
|
investment income from our General Account investment portfolio.
|
•
|
policyholders’ benefits and interest credited to policyholders’ account balances;
|
•
|
sales commissions and compensation paid to intermediaries and advisors that distribute our products and services; and
|
•
|
compensation and benefits provided to our employees and other operating expenses.
|
•
|
Variable annuity hedging programs.
We use a dynamic hedging program (within this program, generally, we reevaluate our economic exposure at least daily and rebalance our hedge positions accordingly) to mitigate certain risks associated with the GMxB features that are embedded in our liabilities for our variable annuity products. This program utilizes various derivative instruments that are managed in an effort to reduce the economic impact of unfavorable changes in GMxB features’ exposures attributable to movements in the equity markets and interest rates. Although this program is designed to provide a measure of economic protection against the impact of adverse market conditions, it does not qualify for hedge accounting treatment. Accordingly, changes in value of the derivatives will be recognized in the period in which they occur with offsetting changes in reserves partially recognized in the current period, resulting in net income volatility. In addition to our dynamic hedging program, we have a hedging program using static hedge positions (derivative positions intended to be held to maturity with less frequent re-balancing) to protect our statutory capital against stress scenarios. This program in addition to our dynamic hedge program has increased the size of our derivative positions, resulting in an increase in net income volatility. The impacts are most pronounced for variable annuity products in our Individual Retirement segment.
|
•
|
GMIB reinsurance contracts.
Historically, GMIB reinsurance contracts were used to cede to non-affiliated reinsurers a portion of our exposure to variable annuity products that offer a GMIB feature. We account for the GMIB reinsurance contracts as derivatives and report them at fair value. Gross reserves for GMIB reserves are
|
•
|
Certain of our variable annuity and life insurance products pay guaranteed minimum interest crediting rates. We are required to pay these guaranteed minimum rates even if earnings on our investment portfolio decline, with the resulting investment margin compression negatively impacting earnings. In addition, we expect more policyholders to hold policies with comparatively high guaranteed rates longer (lower lapse rates) in a low interest rate environment. Conversely, a rise in average yield on our investment portfolio should positively impact earnings. Similarly, we expect policyholders would be less likely to hold policies with existing guaranteed rates (higher lapse rates) as interest rates rise.
|
•
|
A prolonged low interest rate environment also may subject us to increased hedging costs or an increase in the amount of statutory reserves that our insurance subsidiaries are required to hold for GMxB features, lowering their statutory surplus, which would adversely affect their ability to pay dividends to us. In addition, it may also increase the perceived value of GMxB features to our policyholders, which in turn may lead to a higher rate of annuitization and higher persistency of those products over time. Finally, low interest rates may continue to cause an acceleration of DAC amortization or reserve increase due to loss recognition for interest sensitive products, primarily for our Protection Solutions segment.
|
•
|
National Association of Insurance Commissioners (“NAIC”)
. In 2015, the NAIC Financial Condition (E) Committee established a working group to study and address, as appropriate, regulatory issues resulting from variable annuity captive reinsurance transactions, including reforms that would improve the current statutory reserve and RBC framework for insurance companies that sell variable annuity products. In August 2018, the NAIC adopted the new framework developed and proposed by this working group, expected to take effect January 2020, and which has now been referred to various other NAIC committees to develop the expected full implementation details. Among other changes, the new framework includes new prescriptions for reflecting hedge effectiveness, investment returns, interest rates, mortality and policyholder behavior in calculating statutory reserves and RBC. Once effective, it could materially change the level of variable annuity reserves and RBC requirements as well as their sensitivity to capital markets including interest rate, equity markets, volatility and credit spreads. Overall, we believe the NAIC reform is moving variable annuity capital standards towards an economic framework and is consistent with how we manage our business. However, we cannot predict whether the NYDFS or other state insurance regulators will adopt standards different from the NAIC framework.
|
•
|
Fiduciary Rules/ “Best Interest” Standards of Conduct
. In the wake of the March 2018 federal appeals court decision to vacate the DOL Rule, the SEC and NAIC as well as state regulators are currently considering whether to apply an impartial conduct standard similar to the DOL Rule to recommendations made in connection with certain annuities and, in one case, to life insurance policies. For example, the NAIC is actively working on a proposal to raise the advice standard for annuity sales and in July 2018, the NYDFS issued a final version of Regulation 187 that adopts a “best interest” standard for recommendations regarding the sale of life insurance and annuity products in New York. Regulation 187 takes effect on August 1, 2019 with respect to annuity sales and February 1, 2020 for life insurance sales and is applicable to sales of life insurance and annuity products in New
|
•
|
In April 2018, the SEC released a set of proposed rules that would, among other things, enhance the existing standard of conduct for broker-dealers to require them to act in the best interest of their clients; clarify the nature of the fiduciary obligations owed by registered investment advisers to their clients; impose new disclosure requirements aimed at ensuring investors understand the nature of their relationship with their investment professionals; and restrict certain broker-dealers and their financial professionals from using the terms “adviser” or “advisor”. Public comments were due by August 7, 2018. Although the full impact of the proposed rules can only be measured when the implementing regulations are adopted, the intent of this provision is to authorize the SEC to impose on broker-dealers’ fiduciary duties to their customers similar to those that apply to investment advisers under existing law. We are currently assessing these proposed rules to determine the impact they may have on our business.
|
•
|
Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features, the effect of benefit ratio unlock adjustments and changes in the fair value of the embedded derivatives reflected within variable annuity products’ net derivative results and the impact of these items on DAC amortization;
|
•
|
Investment (gains) losses, which includes other-than-temporary impairments of securities, 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 includes restructuring costs related to severance, lease write-offs related to non-recurring restructuring activities, and separation costs; 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 the impact of the Tax Reform Act.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net income (loss) attributable to Holdings
|
$
|
(775
|
)
|
|
$
|
214
|
|
Adjustments related to:
|
|
|
|
||||
Variable annuity product features (1)
|
1,540
|
|
|
176
|
|
||
Investment (gains) losses
|
11
|
|
|
(102
|
)
|
||
Net actuarial (gains) losses related to pension and other postretirement benefit obligations
|
24
|
|
|
131
|
|
||
Other adjustments (2)
|
40
|
|
|
91
|
|
||
Income tax expense (benefit) related to above adjustments (3)
|
(337
|
)
|
|
(55
|
)
|
||
Non-recurring tax items
|
6
|
|
|
28
|
|
||
Non-GAAP Operating Earnings (4)
|
$
|
509
|
|
|
$
|
483
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Variable annuity product features for the three months ended March 31, 2018 would have been
$124 million
.
|
(2)
|
“Other adjustments” includes separation costs of
$24 million
and
$61 million
, for the
three months ended March 31, 2019 and 2018
, respectively.
|
(3)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Income tax expense (benefit) related to above adjustments for the three months ended March 31, 2018 would have been
$(44) million
.
|
(4)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating Earnings for the three months ended March 31, 2018 would have been
$442 million
.
|
|
Trailing Twelve Months Ended March 31, 2019
|
||||||||||
|
Individual Retirement
|
|
Group Retirement
|
|
Protection Solutions
|
||||||
|
(in millions)
|
||||||||||
Operating earnings (1)
|
$
|
1,558
|
|
|
$
|
394
|
|
|
$
|
211
|
|
Average capital (2)
|
$
|
6,881
|
|
|
$
|
1,256
|
|
|
$
|
2,762
|
|
Non-GAAP Operating ROC (3)
|
22.6
|
%
|
|
31.3
|
%
|
|
7.6
|
%
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Operating earnings for the trailing twelve months ended March 31, 2019 for the Individual Retirement segment would have been
$1,555 million
.
|
(2)
|
For average capital amounts by segment, capital components pertaining directly to specific segments such as DAC along with targeted capital are directly attributed to these segments. Targeted capital for each segment is established using assumptions supporting statutory capital adequacy levels (including CTE98).
|
(3)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating ROC for the trailing twelve months ended March 31, 2019 for the Individual Retirement segment would have been
22.6%
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(per share amounts)
|
||||||
Net income (loss) attributable to Holdings
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Adjustments related to:
|
|
|
|
||||
Variable annuity product features (1)
|
2.97
|
|
|
0.31
|
|
||
Investment (gains) losses
|
0.02
|
|
|
(0.18
|
)
|
||
Net actuarial (gains) losses related to pension and other postretirement benefit obligations
|
0.05
|
|
|
0.23
|
|
||
Other adjustments (2)
|
0.08
|
|
|
0.17
|
|
||
Income tax expense (benefit) related to above adjustments (3)
|
(0.65
|
)
|
|
(0.10
|
)
|
||
Non-recurring tax items
|
0.01
|
|
|
0.05
|
|
||
Non-GAAP Operating Earnings (4)
|
$
|
0.98
|
|
|
$
|
0.86
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Variable annuity product features for the three months ended March 31, 2018 would have been
$0.22
.
|
(2)
|
“Other adjustments” includes separation costs of
$0.05
and
$0.11
, for the
three months ended March 31, 2019 and 2018
, respectively.
|
(3)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, the adjustment related to Income tax expense (benefit) related to above adjustments for the three months ended March 31, 2018 would have been
$(0.08)
.
|
(4)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating Earnings for the three months ended March 31, 2018 would have been
$0.79
.
|
|
Three Months Ended March 31, 2018
|
||||||||||||||
|
Individual Retirement
|
|
Group Retirement
|
|
Protection Solutions
|
|
Consolidated
|
||||||||
|
(in millions)
|
||||||||||||||
Reductions to expense line items:
|
|
|
|
|
|
|
|
||||||||
Commissions and distribution-related payments
|
$
|
72
|
|
|
$
|
14
|
|
|
$
|
34
|
|
|
$
|
120
|
|
Compensation and benefits, interest expense, and other operating costs and expenses
|
19
|
|
|
7
|
|
|
16
|
|
|
42
|
|
||||
Total reductions
|
$
|
91
|
|
|
$
|
21
|
|
|
$
|
50
|
|
|
$
|
162
|
|
|
|
|
|
|
|
|
|
||||||||
Increase to expense line item:
|
|
|
|
|
|
|
|
||||||||
Amortization of deferred policy acquisition costs
|
$
|
91
|
|
|
$
|
21
|
|
|
$
|
50
|
|
|
$
|
162
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions, except earnings per share amounts)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges and fee income
|
$
|
931
|
|
|
$
|
966
|
|
Premiums
|
283
|
|
|
279
|
|
||
Net derivative gains (losses)
|
(1,630
|
)
|
|
(236
|
)
|
||
Net investment income (loss)
|
1,015
|
|
|
591
|
|
||
Investment gains (losses), net
|
(11
|
)
|
|
102
|
|
||
Investment management and service fees
|
999
|
|
|
1,055
|
|
||
Other income
|
127
|
|
|
117
|
|
||
Total revenues
|
1,714
|
|
|
2,874
|
|
||
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
880
|
|
|
594
|
|
||
Interest credited to policyholders’ account balances
|
304
|
|
|
271
|
|
||
Compensation and benefits
|
509
|
|
|
579
|
|
||
Commissions and distribution-related payments
|
281
|
|
|
291
|
|
||
Interest expense
|
56
|
|
|
46
|
|
||
Amortization of deferred policy acquisition costs
|
198
|
|
|
172
|
|
||
Other operating costs and expenses
|
410
|
|
|
493
|
|
||
Total benefits and other deductions
|
2,638
|
|
|
2,446
|
|
||
Income (loss) from continuing operations, before income taxes
|
(924
|
)
|
|
428
|
|
||
Income tax (expense) benefit
|
215
|
|
|
(91
|
)
|
||
Net income (loss)
|
(709
|
)
|
|
337
|
|
||
Less: Net (income) loss attributable to the noncontrolling interest
|
(66
|
)
|
|
(123
|
)
|
||
Net income (loss) attributable to Holdings
|
$
|
(775
|
)
|
|
$
|
214
|
|
|
|
|
|
||||
EARNINGS PER SHARE
|
|
|
|
||||
Earnings per share - Common stock:
|
|
|
|
||||
Basic
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Diluted
|
$
|
(1.50
|
)
|
|
$
|
0.38
|
|
Weighted average common shares outstanding: (in millions)
|
|
|
|
||||
Basic
|
518.0
|
|
|
561.0
|
|
||
Diluted
|
518.0
|
|
|
561.0
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Non-GAAP Operating Earnings (1)
|
$
|
509
|
|
|
$
|
483
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating Earnings for the three months ended March 31, 2018 would have been
$442 million
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(earnings per share amounts)
|
||||||
Non-GAAP Operating EPS - common stock:
|
|
|
|
||||
Basic (1)
|
$
|
0.98
|
|
|
$
|
0.86
|
|
Diluted (2)
|
$
|
0.98
|
|
|
$
|
0.86
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating EPS - common stock, basic for the three months ended March 31, 2018 would have been
$0.79
.
|
(2)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating EPS - common stock, diluted for the three months ended March 31, 2018 would have been
$0.79
.
|
•
|
Net derivative gains (losses) decreased by $1,394 million mainly due to the higher freestanding derivative losses and increases in the fair value of the GMIBNLG liability.
|
•
|
Policyholders’ benefits increased by $286 million mainly due to our Individual Retirement and Protection Solutions segments. The increase in our Individual Retirement segment was primarily due to the favorable impact of higher interest rates in the first quarter of 2018. The assumption updates in the third quarter of 2018 reduced the impact of interest rates on GMxB policyholders’ benefits in the first quarter of 2019. The increase in the Protection Solutions segment mainly reflected higher mortality experience.
|
•
|
Investment gains (losses), net decreased by $113 million primarily due to realized losses on the sale of fixed maturities in the first three months of 2019 compared to realized gains on the sale of fixed maturities in first three months of 2018.
|
•
|
Revenue from fees and related items ("Fee-type revenue"), including Policy charges and fee income, Premiums, Investment Management service fees and Other income, decreased by $77 million mainly driven by our Investment Management and Research and Individual Retirement segments. The decrease in our Investment Management segment was primarily due to lower performance-based fees and lower Bernstein Research Services revenues. The decrease in the Individual Retirement segment was mainly due to lower average Separate Accounts AV in 2019 compared to 2018 as a result of a decline in equity markets in the fourth quarter of 2018.
|
•
|
Interest credited to policyholders’ account balances increased by $33 million mainly driven by our Individual Retirement segment, reflecting an increase in SCS AV and by our Protection Solutions segment, mainly reflecting an increase in Indexed Universal Life products AV due to new business growth, partially offset by higher Net derivative gains (losses).
|
•
|
Amortization of DAC increased by $26 million mainly due to higher amortization in our Individual Retirement segment, primarily due to the impact of non-repeating favorable DAC amortization in our SCS product in the first three months of 2018, partially offset by lower amortization in our Protection Solutions segment resulting from no longer being in loss recognition.
|
•
|
Interest expense increased by $10 million due to the incurrence of $3.8 billion of indebtedness in April 2018, partially offset by lower repurchase agreement costs.
|
•
|
Net investment income (loss) increased by $424 million mainly due to a change in the market value of trading securities supporting our variable annuity products due to lower interest rates.
|
•
|
Compensation, benefits and other operating expenses decreased by $153 million mainly due to the partial settlement of the employee pension plan in the first three months of 2018 and lower separation costs.
|
•
|
Earnings attributable to noncontrolling interest decreased by $57 million due to lower AB net income and from the increase in our ownership percentage of AB that reduced the noncontrolling interest's share of AB's net income.
|
•
|
Commissions and distribution-related payments decreased by $10 million mainly driven by higher capitalization of commissions.
|
•
|
Income tax expense decreased by $306 million driven primarily by a pre-tax loss in the first three months of 2019 compared to pre-tax income in the first three months of 2018.
|
•
|
Net derivative gains (losses) increased by
$265 million
mainly due to a $279 million increase in our Individual Retirement segment due to decreasing interest rates in 2019 compared to 2018.
|
•
|
Net investment income increased by
$91 million
mainly due to the positive impacts of higher asset balances and yields on our trading securities and seed money and from our General Account investment portfolio optimization, partially offset by lower income from alternative investments.
|
•
|
Earnings attributable to the noncontrolling interest decreased by
$71 million
in our Investment Management and Research segment due to lower AB Operating earnings and from the increase in our ownership percentage of AB that reduced the noncontrolling interest’s share of AB’s Operating earnings.
|
•
|
Compensation, benefits and other operating costs and expenses decreased by
$56 million
mainly due to a decrease in our Investment Management and Research segment driven by the non-recurrence of a $43 million expense related to the impact of adopting revenue recognition standard ASC 606 in 2018 and lower incentive compensation expenses. Excluding our Investment Management and Research segment, these expenses decreased by $3 million driven by our productivity initiatives.
|
•
|
Amortization of DAC decreased by
$25 million
mainly driven by our Protection Solutions segment as this segment is no longer in loss recognition, partially offset by an increase in our Individual Retirement segment, due to the impact of interest rate movements on our SCS block. During the first quarter of 2019, we prospectively modified our Non-GAAP Operating Earnings measure to exclude the impact of timing differences on the Amortization of DAC resulting from SCS market value adjustments. Had the treatment in our Non-GAAP Operating Earnings measure of the Amortization of DAC for SCS been modified in the first quarter of 2018, the SCS-related DAC amortization excluded from Non-GAAP Operating Earnings would have been
$52 million
lower, decreasing Non-GAAP Operating Earnings. See Note 14, “Business Segment Information” in the Notes to the Consolidated Financial Statements for further details of this prospective change in our Non-GAAP Operating Earnings measure.
|
•
|
Income tax expense decreased by
$5 million
mainly driven by a lower effective tax rate. Had the treatment in our Non-GAAP Operating Earnings measure of the Amortization of DAC for SCS been modified in the first quarter of 2018, income tax benefit excluded from Non-GAAP Operating Earnings would have been
$11 million
lower. See Note 14, “Business Segment Information” in the Notes to the Consolidated Financial Statements for further details of this prospective change in our Non-GAAP Operating Earnings measure.
|
•
|
Policyholders’ benefits increased by
$302 million
mainly due to our Individual Retirement and Protection Solutions segment. The increase in our Individual Retirement segment, which was offset by an increase in Net derivatives gains (losses), was primarily due to the favorable impact of higher interest rates in the first three months of 2018. The assumption updates in the third quarter of 2018 reduced the impact of interest rates on GMxB policyholders’ benefits in the first quarter of 2019. The increase in the Protection Solutions segment mainly reflected higher mortality experience.
|
•
|
Fee-type revenue decreased by
$153 million
mainly driven by our Investment Management and Research and Individual Retirement segments. The decrease in our Investment Management and Research segment was primarily due to lower performance-based fees, lower Bernstein Research Services revenues and the non-recurrence of a $78 million increase in revenues in the first three months of 2018 from the impact of adopting revenue recognition standard ASC 606 in 2018. The decrease in the Individual Retirement segment was mainly due to lower average Separate Accounts AV in 2019 compared to 2018 as a result of the decline in equity markets in the fourth quarter of 2018.
|
•
|
Interest credited to policyholders’ account balances increased by
$32 million
mainly driven by our Individual Retirement segment, reflecting an increase in SCS AV due to higher sales, and by our Protection Solutions segment, mainly due to our Indexed Universal Life products (partially offset by higher Net derivative gains (losses)).
|
•
|
Interest expense in Corporate and Other increased by
$10 million
due to the incurrence of $3.8 billion of indebtedness in April 2018, partially offset by lower repurchase agreement costs.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings (loss):
|
|
|
|
||||
Individual Retirement (1)
|
$
|
370
|
|
|
$
|
368
|
|
Group Retirement
|
81
|
|
|
76
|
|
||
Investment Management and Research
|
77
|
|
|
81
|
|
||
Protection Solutions
|
49
|
|
|
35
|
|
||
Corporate and Other
|
(68
|
)
|
|
(77
|
)
|
||
Non-GAAP Operating Earnings (2)
|
$
|
509
|
|
|
$
|
483
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Operating earnings for the three months ended March 31, 2018 for the Individual Retirement segment would have been
$327 million
.
|
(2)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Non-GAAP Operating Earnings for the three months ended March 31, 2018 would have been
$442 million
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings (1)
|
$
|
370
|
|
|
$
|
368
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Operating earnings for the three months ended March 31, 2018 for the Individual Retirement segment would have been
$327 million
.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges, fee income and premiums
|
$
|
498
|
|
|
$
|
529
|
|
Net investment income
|
268
|
|
|
228
|
|
||
Net derivative gains (losses)
|
63
|
|
|
(216
|
)
|
||
Investment management, service fees and other income
|
178
|
|
|
188
|
|
||
Segment revenues
|
$
|
1,007
|
|
|
$
|
729
|
|
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
$
|
244
|
|
|
$
|
(9
|
)
|
Interest credited to policyholders’ account balances
|
62
|
|
|
59
|
|
||
Commissions and distribution-related payments
|
66
|
|
|
72
|
|
||
Amortization of deferred policy acquisition costs (1)
|
83
|
|
|
44
|
|
||
Compensation, benefits and other operating costs and expenses
|
111
|
|
|
106
|
|
||
Interest expense
|
—
|
|
|
—
|
|
||
Segment benefits and other deductions (2)
|
$
|
566
|
|
|
$
|
272
|
|
(1)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Amortization of deferred policy acquisition costs for the three months ended March 31, 2018 for the Individual Retirement segment would have been
$96 million
.
|
(2)
|
Had we modified the treatment of the amortization of DAC for SCS starting in the first quarter of 2018, Segment benefits and other deductions for the three months ended March 31, 2018 for the Individual Retirement segment would have been
$324 million
.
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
AV
|
|
|
|
||||
General Account
|
$
|
22,677
|
|
|
$
|
20,631
|
|
Separate Accounts
|
79,821
|
|
|
73,958
|
|
||
Total AV
|
$
|
102,498
|
|
|
$
|
94,589
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Balance as of beginning of period
|
$
|
94,589
|
|
|
$
|
103,423
|
|
Gross premiums
|
2,038
|
|
|
1,786
|
|
||
Surrenders, withdrawals and benefits
|
(2,126
|
)
|
|
(2,248
|
)
|
||
Net flows
|
(88
|
)
|
|
(462
|
)
|
||
Investment performance, interest credited and policy charges
|
7,997
|
|
|
(1,172
|
)
|
||
Balance as of end of period
|
$
|
102,498
|
|
|
$
|
101,789
|
|
•
|
Increase in Net investment income of
$40 million
resulting from the positive impact on SCS AV of higher asset balances and yields and from our General Account investment portfolio optimization.
|
•
|
Improvement in GMxB results of
$9 million
primarily due to assumption updates in the third quarter of 2018. GMxB results include Policy charges and fee income, Net derivative gains (losses) and Policyholders’ benefits.
|
•
|
Decrease in Income tax expense of
$16 million
driven by a lower effective tax rate. Had the treatment in our Non-GAAP Operating Earnings measure of the Amortization of DAC for SCS been modified in the first quarter of 2018, income tax benefit excluded from Operating earnings would have been
$11 million
lower. See Note 14, “Business Segment Information” in the Notes to the Consolidated Financial Statements for further details of this prospective change in our Non-GAAP Operating Earnings measure.
|
•
|
Increase in Amortization of DAC of
$39 million
, primarily due to the impact of interest rate movements on our SCS block. During the first quarter of 2019, we prospectively modified our Operating earnings measure to exclude the impact of timing differences on the Amortization of DAC resulting from SCS market value adjustments. Had the treatment in our Operating earnings measure of the Amortization of DAC for SCS been modified in the first quarter of 2018, the SCS-related DAC amortization excluded from Operating earnings would have been
$52 million
lower. See Note 14, “Business Segment Information” in the Notes to the Consolidated Financial Statements for further details of this prospective change in our Operating earnings measure.
|
•
|
Fee-type revenue decreased by
$30 million
mainly due to lower average Separate Accounts AV in 2019 compared to 2018 as a result of the sharp decline in equity markets in the fourth quarter of 2018.
|
•
|
The increase in AV of
$7.9 billion
was mainly due to the positive impact of higher equity markets offsetting net outflows in our older fixed-rate GMxB block.
|
•
|
Net outflows of
$88 million
improved by
$374 million
compared to 2018, driven by higher deposits in our current product offerings and lower surrenders in our older fixed-rate GMxB block.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings
|
$
|
81
|
|
|
$
|
76
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges, fee income and premiums
|
$
|
65
|
|
|
$
|
64
|
|
Net investment income
|
134
|
|
|
131
|
|
||
Net derivative gains (losses)
|
4
|
|
|
(1
|
)
|
||
Investment management, service fees and other income
|
48
|
|
|
44
|
|
||
Segment revenues
|
$
|
251
|
|
|
$
|
238
|
|
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
$
|
—
|
|
|
$
|
—
|
|
Interest credited to policyholders’ account balances
|
73
|
|
|
70
|
|
||
Commissions and distribution-related payments
|
10
|
|
|
10
|
|
||
Amortization of deferred policy acquisition costs
|
12
|
|
|
11
|
|
||
Compensation, benefits and other operating costs and expenses
|
60
|
|
|
54
|
|
||
Interest expense
|
—
|
|
|
—
|
|
||
Segment benefits and other deductions
|
$
|
155
|
|
|
$
|
145
|
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
AV
|
|
|
|
||||
General Account
|
$
|
11,752
|
|
|
$
|
11,619
|
|
Separate Accounts
|
23,325
|
|
|
20,782
|
|
||
Total AV
|
$
|
35,077
|
|
|
$
|
32,401
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Balance as of beginning of period
|
$
|
32,401
|
|
|
$
|
33,906
|
|
Gross premiums
|
840
|
|
|
837
|
|
||
Surrenders, withdrawals and benefits
|
(733
|
)
|
|
(736
|
)
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Net flows
|
107
|
|
|
101
|
|
||
Investment performance, interest credited and policy charges
|
2,569
|
|
|
(89
|
)
|
||
Balance as of end of period
|
$
|
35,077
|
|
|
$
|
33,918
|
|
•
|
Increase in fee-type revenue of
$5 million
due to a 1% increase in the average Separate Accounts AV reflecting higher equity markets.
|
•
|
Increase in net investment income of
$3 million
due to our General Account investment portfolio optimization.
|
•
|
Increase in Compensation and benefits and other operating costs and expenses of
$6 million
to support new business.
|
•
|
Increase in Interest credited to policyholders’ account balances of
$3 million
due to AV growth.
|
•
|
The increase in the AV of
$2.7 billion
was primarily due to higher equity markets and positive net flows.
|
•
|
Net inflows of
$107 million
improved by $6 million compared to 2018, driven by strong inflows and improved surrenders.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings
|
$
|
77
|
|
|
$
|
81
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges, fee income and premiums
|
$
|
—
|
|
|
$
|
—
|
|
Net investment income
|
24
|
|
|
3
|
|
||
Net derivative gains (losses)
|
(20
|
)
|
|
2
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Investment management, service fees and other income
|
776
|
|
|
904
|
|
||
Segment revenues
|
$
|
780
|
|
|
$
|
909
|
|
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
$
|
—
|
|
|
$
|
—
|
|
Interest credited to policyholders’ account balances
|
—
|
|
|
—
|
|
||
Commissions and distribution-related payments
|
106
|
|
|
110
|
|
||
Amortization of deferred policy acquisition costs
|
—
|
|
|
—
|
|
||
Compensation, benefits and other operating costs and expenses
|
509
|
|
|
562
|
|
||
Interest expense
|
4
|
|
|
2
|
|
||
Segment benefits and other deductions
|
$
|
619
|
|
|
$
|
674
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in billions)
|
||||||
Balance as of beginning of period
|
$
|
516.4
|
|
|
$
|
554.5
|
|
Long-term flows:
|
|
|
|
||||
Sales/new accounts
|
23.1
|
|
|
34.1
|
|
||
Redemptions/terminations
|
(18.2
|
)
|
|
(31.2
|
)
|
||
Cash flow/unreinvested dividends
|
(3.8
|
)
|
|
(5.3
|
)
|
||
Net long-term (outflows) inflows
|
1.1
|
|
|
(2.4
|
)
|
||
Market appreciation (depreciation)
|
37.2
|
|
|
(2.6
|
)
|
||
Net change
|
38.3
|
|
|
(5.0
|
)
|
||
Balance as of end of period
|
$
|
554.7
|
|
|
$
|
549.5
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in billions)
|
||||||
Distribution Channel:
|
|
|
|
||||
Institutions
|
$
|
252.2
|
|
|
$
|
269.3
|
|
Retail
|
193.4
|
|
|
194.0
|
|
||
Private Wealth Management
|
93.6
|
|
|
93.8
|
|
||
Total
|
$
|
539.2
|
|
|
$
|
557.1
|
|
|
|
|
|
||||
Investment Service:
|
|
|
|
||||
Equity Actively Managed
|
$
|
148.5
|
|
|
$
|
142.9
|
|
Equity Passively Managed (1)
|
53.9
|
|
|
54.3
|
|
||
Fixed Income Actively Managed – Taxable
|
223.4
|
|
|
243.3
|
|
||
Fixed Income Actively Managed – Tax-exempt
|
42.6
|
|
|
40.6
|
|
||
Fixed Income Passively Managed
(1)
|
9.4
|
|
|
10.0
|
|
||
Other (2)
|
61.4
|
|
|
66.0
|
|
||
Total
|
$
|
539.2
|
|
|
$
|
557.1
|
|
(1)
|
Includes index and enhanced index services.
|
(2)
|
Includes multi-asset solutions and services, and certain alternative investments.
|
•
|
Decrease in Fee-type revenue of
$128 million
primarily due to lower performance-based fees, lower Bernstein Research Services revenues and the non-recurrence of a $78 million increase in revenues in the first three months of 2018 from the impact of adopting revenue recognition standard ASC 606 in 2018.
|
•
|
Net derivative gains (losses) decreased
$22 million
primarily due to derivative losses mainly offsetting the increase in Net investment income.
|
•
|
Earnings attributable to the noncontrolling interest decreased by
$72 million
due to lower AB Operating earnings and from the increase in our ownership percentage of AB that reduced the noncontrolling interest’s share of AB’s Operating earnings.
|
•
|
Decrease in Compensation, benefits, interest expense and other operating costs of
$51 million
primarily due to the non-recurrence of a $43 million expense related to the impact of adopting revenue recognition standard ASC 606 in 2018 and lower incentive compensation expenses.
|
•
|
Increase in Net investment income of
$21 million
mainly offsetting the decrease in Net derivative gains (losses).
|
•
|
Total AUM as of March 31, 2019 was
$554.7 billion
, up
$38.3 billion
, or
7.4%
, compared to December 31, 2018. The increase was driven by market appreciation of
$37.2 billion
and net inflows of
$1.1 billion
(net inflows of
$5.3 billion
and
$0.5 billion
for Retail and Private Wealth Management, respectively, offset by Institutional net outflows of
$4.7 billion
).
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings
|
$
|
49
|
|
|
$
|
35
|
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
REVENUES
|
|
|
|
||||
Policy charges, fee income and premiums
|
$
|
542
|
|
|
$
|
540
|
|
Net investment income
|
224
|
|
|
220
|
|
||
Net derivative gains (losses)
|
10
|
|
|
(1
|
)
|
||
Investment management, service fees and other income
|
55
|
|
|
55
|
|
||
Segment revenues
|
$
|
831
|
|
|
$
|
814
|
|
|
|
|
|
||||
BENEFITS AND OTHER DEDUCTIONS
|
|
|
|
||||
Policyholders’ benefits
|
$
|
452
|
|
|
$
|
409
|
|
Interest credited to policyholders’ account balances
|
138
|
|
|
122
|
|
||
Commissions and distribution-related payments
|
38
|
|
|
32
|
|
||
Amortization of deferred policy acquisition costs
|
50
|
|
|
113
|
|
||
Compensation, benefits and other operating costs and expenses
|
95
|
|
|
96
|
|
||
Interest expense
|
—
|
|
|
—
|
|
||
Segment benefits and other deductions
|
$
|
773
|
|
|
$
|
772
|
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in millions)
|
||||||
Protection Solutions Reserves (1)
|
|
|
|
||||
General Account
|
$
|
17,731
|
|
|
$
|
17,562
|
|
Separate Accounts
|
12,572
|
|
|
11,393
|
|
||
Total Protection Solutions Reserves
|
$
|
30,303
|
|
|
$
|
28,955
|
|
(1)
|
Does not include Protection Solutions Reserves for our Employee Benefits business as it is a start-up business and therefore has immaterial in-force policies.
|
|
As of
|
||||||
|
March 31, 2019
|
|
December 31, 2018
|
||||
|
(in billions)
|
||||||
In-force face amount by product: (1)
|
|
|
|
||||
Universal Life (2)
|
$
|
55.1
|
|
|
$
|
55.9
|
|
Indexed Universal Life
|
23.6
|
|
|
22.9
|
|
||
Variable Universal Life (3)
|
127.4
|
|
|
127.3
|
|
||
Term
|
235.1
|
|
|
234.9
|
|
||
Whole Life
|
1.5
|
|
|
1.4
|
|
||
Total in-force face amount
|
$
|
442.7
|
|
|
$
|
442.4
|
|
(1)
|
Includes individual life insurance and does not include Employee Benefits as it is a start-up business and therefore has immaterial in-force policies.
|
(2)
|
Universal Life includes Guaranteed Universal Life.
|
(3)
|
Variable Universal Life includes VL and COLI.
|
•
|
Decrease in Amortization of DAC of
$63 million
as the Protection Solutions segment is no longer in loss recognition.
|
•
|
Net derivative gains (losses) increased
$11 million
primarily attributable to our Indexed Universal Life hedging program, partially offset by the increase in Interest credited to policyholders’ account balances.
|
•
|
Increase in Net investment income of
$4 million
primarily due to the positive impact of our General Account investment portfolio optimization, partially offset by lower income from alternative investments.
|
•
|
Increase in Policyholders’ benefits of
$43 million
mainly due to higher mortality experience.
|
•
|
Interest credited to policyholders’ account balances increased
$16 million
primarily due to our Indexed Universal Life products (partially offset by higher Net derivative gains (losses)).
|
•
|
Increase in Commissions and distribution-related payments of
$6 million
due to higher sales in our Individual Life and Employee Benefits businesses.
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Operating earnings (loss)
|
$
|
(68
|
)
|
|
$
|
(77
|
)
|
|
Three Months Ended March 31,
|
|
Year Ended December 31, 2018 (2)
|
||||||||||||||
|
2019
|
|
2018
|
|
|||||||||||||
|
Yield
|
|
Amount (2)
|
|
Yield
|
|
Amount (2)
|
|
|||||||||
|
(Dollars in millions)
|
||||||||||||||||
Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
3.65
|
%
|
|
$
|
435
|
|
|
3.72
|
%
|
|
$
|
417
|
|
|
$
|
1,732
|
|
Ending assets
|
|
|
48,767
|
|
|
|
|
43,953
|
|
|
46,447
|
|
|||||
Mortgages:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
4.41
|
%
|
|
132
|
|
|
4.18
|
%
|
|
116
|
|
|
494
|
|
|||
Ending assets
|
|
|
12,117
|
|
|
|
|
11,333
|
|
|
11,835
|
|
|||||
Real Estate Held for the Production of Income:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense and other
|
(1.67
|
)%
|
|
(1
|
)
|
|
(1.91
|
)%
|
|
(4
|
)
|
|
(6
|
)
|
|||
Ending assets
|
|
|
68
|
|
|
|
|
52
|
|
|
52
|
|
|||||
Other Equity Investments (1):
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
4.76
|
%
|
|
16
|
|
|
12.59
|
%
|
|
41
|
|
|
133
|
|
|||
Ending assets
|
|
|
1,336
|
|
|
|
|
1,298
|
|
|
1,354
|
|
|||||
Policy Loans:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
5.62
|
%
|
|
53
|
|
|
5.71
|
%
|
|
54
|
|
|
215
|
|
|||
Ending assets
|
|
|
3,766
|
|
|
|
|
3,776
|
|
|
3,779
|
|
|||||
Cash and Short-Term Investments:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
—
|
%
|
|
—
|
|
|
0.38
|
%
|
|
4
|
|
|
21
|
|
|||
Ending assets
|
|
|
3,243
|
|
|
|
|
4,220
|
|
|
3,332
|
|
|||||
Repurchase and Funding Agreements:
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense and other
|
|
|
(25
|
)
|
|
|
|
(24
|
)
|
|
(104
|
)
|
|||||
Ending assets (liabilities)
|
|
|
(4,001
|
)
|
|
|
|
(4,897
|
)
|
|
(4,561
|
)
|
|||||
Total Invested Assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
3.83
|
%
|
|
610
|
|
|
3.98
|
%
|
|
604
|
|
|
2,485
|
|
|||
Ending assets
|
|
|
65,296
|
|
|
|
|
59,735
|
|
|
62,238
|
|
|||||
Short Duration Fixed Maturities:
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss)
|
2.98
|
%
|
|
101
|
|
|
2.16
|
%
|
|
67
|
|
|
333
|
|
|||
Ending assets
|
|
|
12,262
|
|
|
|
|
12,802
|
|
|
14,818
|
|
|||||
Total:
|
|
|
|
|
|
|
|
|
|
||||||||
Investment income (loss)
|
3.68
|
%
|
|
711
|
|
|
3.67
|
%
|
|
671
|
|
|
2,818
|
|
|||
Less: investment fees
|
(0.08
|
)%
|
|
(16
|
)
|
|
(0.08
|
)%
|
|
(15
|
)
|
|
(62
|
)
|
|||
Investment income, net
|
3.60
|
%
|
|
$
|
695
|
|
|
3.59
|
%
|
|
$
|
656
|
|
|
$
|
2,756
|
|
Ending Net Assets
|
|
|
$
|
77,558
|
|
|
|
|
$
|
72,537
|
|
|
$
|
77,056
|
|
(1)
|
Includes Other invested assets of
$209 million
,
$170 million
and
$211 million
as of
March 31, 2019
,
March 31, 2018
and
December 31, 2018
respectively,
|
(2)
|
Amount for fixed maturities and mortgages represents original cost, reduced by repayments, write-downs, adjusted amortization of premiums, accretion of discount and valuation allowances. Cost for equity securities represents original cost reduced by write-downs. Cost for other limited partnership interests represents original cost adjusted for equity in earnings and reduced by distributions.
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Percentage of Total (%)
|
|||||||||
|
(in millions)
|
|||||||||||||||||
As of March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Finance
|
$
|
7,452
|
|
|
$
|
180
|
|
|
$
|
31
|
|
|
$
|
7,601
|
|
|
15
|
%
|
Manufacturing
|
10,244
|
|
|
251
|
|
|
83
|
|
|
10,412
|
|
|
21
|
%
|
||||
Utilities
|
4,440
|
|
|
148
|
|
|
39
|
|
|
4,549
|
|
|
9
|
%
|
||||
Services
|
4,927
|
|
|
145
|
|
|
34
|
|
|
5,038
|
|
|
10
|
%
|
||||
Energy
|
2,499
|
|
|
91
|
|
|
14
|
|
|
2,576
|
|
|
5
|
%
|
||||
Retail and wholesale
|
2,476
|
|
|
64
|
|
|
13
|
|
|
2,527
|
|
|
5
|
%
|
||||
Transportation
|
1,447
|
|
|
51
|
|
|
20
|
|
|
1,478
|
|
|
3
|
%
|
||||
Other
|
164
|
|
|
5
|
|
|
—
|
|
|
169
|
|
|
—
|
%
|
||||
Total corporate securities
|
33,649
|
|
|
935
|
|
|
234
|
|
|
34,350
|
|
|
68
|
%
|
||||
U.S. government
|
12,954
|
|
|
602
|
|
|
214
|
|
|
13,342
|
|
|
27
|
%
|
||||
Residential mortgage-backed (2)
|
217
|
|
|
11
|
|
|
—
|
|
|
228
|
|
|
1
|
%
|
||||
Preferred stock
|
428
|
|
|
16
|
|
|
4
|
|
|
440
|
|
|
1
|
%
|
||||
State & municipal
|
414
|
|
|
56
|
|
|
—
|
|
|
470
|
|
|
1
|
%
|
||||
Foreign governments
|
485
|
|
|
28
|
|
|
7
|
|
|
506
|
|
|
1
|
%
|
||||
Asset-backed securities
|
620
|
|
|
1
|
|
|
4
|
|
|
617
|
|
|
1
|
%
|
||||
Total
|
$
|
48,767
|
|
|
$
|
1,649
|
|
|
$
|
463
|
|
|
$
|
49,953
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As of December 31, 2018
|
|
|
|
|
|
|
|
|
|
|||||||||
Corporate Securities:
|
|
|
|
|
|
|
|
|
|
|||||||||
Finance
|
$
|
6,343
|
|
|
$
|
77
|
|
|
$
|
124
|
|
|
$
|
6,296
|
|
|
14
|
%
|
Manufacturing
|
9,123
|
|
|
105
|
|
|
273
|
|
|
8,955
|
|
|
20
|
%
|
||||
Utilities
|
4,413
|
|
|
80
|
|
|
121
|
|
|
4,372
|
|
|
9
|
%
|
||||
Services
|
4,317
|
|
|
52
|
|
|
102
|
|
|
4,267
|
|
|
9
|
%
|
||||
Energy
|
2,347
|
|
|
40
|
|
|
75
|
|
|
2,312
|
|
|
5
|
%
|
||||
Retail and wholesale
|
2,163
|
|
|
19
|
|
|
49
|
|
|
2,133
|
|
|
5
|
%
|
||||
Transportation
|
1,357
|
|
|
29
|
|
|
54
|
|
|
1,332
|
|
|
3
|
%
|
||||
Other
|
171
|
|
|
4
|
|
|
2
|
|
|
173
|
|
|
—
|
%
|
||||
Total corporate securities
|
30,234
|
|
|
406
|
|
|
800
|
|
|
29,840
|
|
|
65
|
%
|
||||
U.S. government and agency
|
13,989
|
|
|
295
|
|
|
470
|
|
|
13,814
|
|
|
30
|
%
|
||||
Residential mortgage-backed (2)
|
225
|
|
|
9
|
|
|
—
|
|
|
234
|
|
|
1
|
%
|
||||
Preferred stock
|
448
|
|
|
15
|
|
|
18
|
|
|
445
|
|
|
1
|
%
|
||||
State & municipal
|
415
|
|
|
48
|
|
|
1
|
|
|
462
|
|
|
1
|
%
|
||||
Foreign governments
|
524
|
|
|
19
|
|
|
13
|
|
|
530
|
|
|
1
|
%
|
||||
Asset-backed securities
|
612
|
|
|
1
|
|
|
12
|
|
|
601
|
|
|
1
|
%
|
||||
Total
|
$
|
46,447
|
|
|
$
|
793
|
|
|
$
|
1,314
|
|
|
$
|
45,926
|
|
|
100
|
%
|
(1)
|
Investment data has been classified based on standard industry categorizations for domestic public holdings and similar classifications by industry for all other holdings.
|
(2)
|
Includes publicly traded agency pass-through securities and collateralized obligations.
|
NAIC Designation
|
|
Rating Agency Equivalent
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|||||||||
|
|
|
|
(in millions)
|
|||||||||||||||
As of March 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1
|
|
Aaa, Aa, A
|
|
$
|
32,436
|
|
|
$
|
1,189
|
|
|
$
|
299
|
|
|
$
|
33,326
|
|
|
2
|
|
Baa
|
|
15,169
|
|
|
452
|
|
|
143
|
|
|
15,478
|
|
|||||
|
|
Investment grade
|
|
47,605
|
|
|
1,641
|
|
|
442
|
|
|
48,804
|
|
|||||
3
|
|
Ba
|
|
657
|
|
|
4
|
|
|
8
|
|
|
653
|
|
|||||
4
|
|
B
|
|
485
|
|
|
2
|
|
|
11
|
|
|
476
|
|
|||||
5
|
|
Caa
|
|
16
|
|
|
1
|
|
|
1
|
|
|
16
|
|
|||||
6
|
|
Ca, C
|
|
4
|
|
|
1
|
|
|
1
|
|
|
4
|
|
|||||
|
|
Below investment grade
|
|
1,162
|
|
|
8
|
|
|
21
|
|
|
1,149
|
|
|||||
Total Fixed Maturities
|
|
$
|
48,767
|
|
|
$
|
1,649
|
|
|
$
|
463
|
|
|
$
|
49,953
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
|
|
|
|||||||||
1
|
|
Aaa, Aa, A
|
|
$
|
30,805
|
|
|
$
|
587
|
|
|
$
|
835
|
|
|
$
|
30,557
|
|
|
2
|
|
Baa
|
|
14,541
|
|
|
202
|
|
|
437
|
|
|
14,306
|
|
|||||
|
|
Investment grade
|
|
45,346
|
|
|
789
|
|
|
1,272
|
|
|
44,863
|
|
|||||
3
|
|
Ba
|
|
589
|
|
|
1
|
|
|
18
|
|
|
572
|
|
|||||
4
|
|
B
|
|
489
|
|
|
1
|
|
|
22
|
|
|
468
|
|
|||||
5
|
|
Caa
|
|
18
|
|
|
1
|
|
|
1
|
|
|
18
|
|
|||||
6
|
|
Ca, C
|
|
5
|
|
|
1
|
|
|
1
|
|
|
5
|
|
|||||
|
|
Below investment grade
|
|
1,101
|
|
|
4
|
|
|
42
|
|
|
1,063
|
|
|||||
Total Fixed Maturities
|
|
$
|
46,447
|
|
|
$
|
793
|
|
|
$
|
1,314
|
|
|
$
|
45,926
|
|
|
March 31, 2019
|
|
December 31, 2018
|
||||||||||
|
Amortized
Cost
|
|
% of Total
|
|
Amortized
Cost
|
|
% of Total
|
||||||
|
(in millions)
|
||||||||||||
By Region:
|
|
|
|
|
|
|
|
||||||
U.S. Regions:
|
|
|
|
|
|
|
|
||||||
Pacific
|
$
|
3,385
|
|
|
27.8
|
%
|
|
$
|
3,288
|
|
|
27.7
|
%
|
Middle Atlantic
|
3,201
|
|
|
26.4
|
|
|
3,183
|
|
|
26.9
|
|
||
South Atlantic
|
1,366
|
|
|
11.3
|
|
|
1,207
|
|
|
10.2
|
|
||
East North Central
|
979
|
|
|
8.1
|
|
|
963
|
|
|
8.1
|
|
||
Mountain
|
1,017
|
|
|
8.4
|
|
|
1,014
|
|
|
8.6
|
|
||
West North Central
|
904
|
|
|
7.5
|
|
|
910
|
|
|
7.7
|
|
||
West South Central
|
567
|
|
|
4.7
|
|
|
578
|
|
|
4.9
|
|
||
New England
|
555
|
|
|
4.6
|
|
|
556
|
|
|
4.7
|
|
||
East South Central
|
143
|
|
|
1.2
|
|
|
143
|
|
|
1.2
|
|
||
Total Mortgage Loans
|
$
|
12,117
|
|
|
100.0
|
%
|
|
$
|
11,842
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
||||||
By Property Type:
|
|
|
|
|
|
|
|
||||||
Office
|
$
|
3,971
|
|
|
32.8
|
%
|
|
$
|
3,977
|
|
|
33.6
|
%
|
Multifamily
|
3,608
|
|
|
29.8
|
|
|
3,440
|
|
|
29.0
|
|
||
Agricultural loans
|
2,730
|
|
|
22.5
|
|
|
2,695
|
|
|
22.8
|
|
||
Retail
|
667
|
|
|
5.5
|
|
|
667
|
|
|
5.6
|
|
||
Industrial
|
413
|
|
|
3.4
|
|
|
333
|
|
|
2.8
|
|
||
Hospitality
|
383
|
|
|
3.2
|
|
|
384
|
|
|
3.3
|
|
||
Other
|
345
|
|
|
2.8
|
|
|
346
|
|
|
2.9
|
|
||
Total Mortgage Loans
|
$
|
12,117
|
|
|
100.0
|
%
|
|
$
|
11,842
|
|
|
100.0
|
%
|
Owner
|
|
Percentage Ownership
|
|
Holdings and its non-insurance subsidiaries
|
|
63.0
|
%
|
MLOA
|
|
1.0
|
%
|
AB Holding
|
|
35.2
|
%
|
Unaffiliated holders
|
|
0.8
|
%
|
Total
|
|
100.0
|
%
|
|
Three Months Ended March 31,
|
||||||
|
2019
|
|
2018
|
||||
|
(in millions)
|
||||||
Cash and Cash Equivalents, beginning of period
|
$
|
4,469
|
|
|
$
|
4,814
|
|
Net cash provided by (used in) operating activities
|
(109
|
)
|
|
(247
|
)
|
||
Net cash provided by (used in) investing activities
|
(70
|
)
|
|
116
|
|
||
Net cash provided by (used in) financing activities
|
838
|
|
|
1,400
|
|
||
Net increase (decrease)
|
659
|
|
|
1,269
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
1
|
|
|
8
|
|
||
Cash and Cash Equivalents, end of period
|
$
|
5,129
|
|
|
$
|
6,091
|
|
|
March 31, 2019
|
||||||||||
|
Holdings
|
|
AB
|
|
Consolidated
|
||||||
|
(in millions)
|
||||||||||
Short-term debt:
|
|
|
|
|
|
||||||
AB commercial paper (with interest rate of 2.7%)
|
$
|
—
|
|
|
$
|
540
|
|
|
$
|
540
|
|
Total short-term debt
|
—
|
|
|
540
|
|
|
540
|
|
|||
|
|
|
|
|
|
||||||
Long-term debt:
|
|
|
|
|
|
||||||
Senior Notes (5.00%, due 2048)
|
1,480
|
|
|
—
|
|
|
1,480
|
|
|||
Senior Notes (4.35%, due 2028)
|
1,486
|
|
|
—
|
|
|
1,486
|
|
|||
Senior Notes (3.90%, due 2023)
|
794
|
|
|
—
|
|
|
794
|
|
|||
Delayed Draw Term Loan (3-month LIBOR + 1.125%, due 2021)
|
300
|
|
|
—
|
|
|
300
|
|
|||
Senior Debentures, 7.0%, due 2028
|
349
|
|
|
—
|
|
|
349
|
|
|||
Total long-term debt
|
4,409
|
|
|
—
|
|
|
4,409
|
|
|||
Total borrowings
|
$
|
4,409
|
|
|
$
|
540
|
|
|
$
|
4,949
|
|
|
December 31, 2018
|
||||||||||
|
Holdings
|
|
AB
|
|
Consolidated
|
||||||
|
(in millions)
|
||||||||||
Short-term debt:
|
|
|
|
|
|
||||||
AB commercial paper (with interest rate of 2.7%)
|
$
|
—
|
|
|
$
|
521
|
|
|
$
|
521
|
|
AB revolving credit facility (with interest rate of 3.4%)
|
—
|
|
|
25
|
|
|
25
|
|
|||
Total short-term debt
|
—
|
|
|
546
|
|
|
546
|
|
|
AM Best
|
|
S&P
|
|
Moody’s
|
Last review date
|
12/17/2018
|
|
12/11/2018
|
|
9/18/2018
|
Financial Strength Ratings:
|
|
|
|
|
|
AXA Equitable Life
|
A
|
|
A+
|
|
A2
|
MLOA
|
A
|
|
A+
|
|
A2
|
|
|
|
|
|
|
Credit Ratings:
|
|
|
|
|
|
Holdings
|
bbb+
|
|
BBB+
|
|
Baa2
|
|
|
|
|
|
|
Last Review Date
|
|
|
11/9/2018
|
|
10/05/2018
|
AB
|
—
|
|
A/Stable/A-1
|
|
A2
|
•
|
liabilities for future policy benefits;
|
•
|
accounting for reinsurance;
|
•
|
capitalization and amortization of DAC and policyholder bonus interest credits;
|
•
|
estimated fair values of investments in the absence of quoted market values and investment impairments;
|
•
|
estimated fair values of freestanding derivatives and the recognition and estimated fair value of embedded derivatives requiring bifurcation;
|
•
|
goodwill and related impairment;
|
•
|
measurement of income taxes and the valuation of deferred tax assets; and
|
•
|
liabilities for litigation and regulatory matters.
|
(i)
|
maintain effective controls to timely validate that actuarial models are properly configured to capture all relevant product features and provide reasonable assurance timely reviews of assumptions and data have occurred, and, as a result, errors were identified in future policyholders’ benefits and deferred policy acquisition costs balances; and
|
(ii)
|
maintain sufficient experienced personnel to prepare the Company’s consolidated financial statements and to verify consolidating and adjusting journal entries are completely and accurately recorded to the appropriate accounts or segments and, as a result, errors were identified in the consolidated financial statements, including in the presentation and disclosure between sections of the statements of cash flows.
|
(iv)
|
the restatements of the interim financial statements for the nine and six months ended September 30, 2017 and June 30, 2017, respectively, the restatement of the annual financial statements for the year ended December 31, 2016, the revision of the interim financial statements for the nine and six months ended September 30, 2016 and June 30, 2016, respectively, and the revision of the annual financial statements for the year ended December 31, 2015; and
|
(v)
|
the restatement of the interim financial statements for the six months ended June 30, 2017 and the revision of the annual financial statements for the years ended December 31, 2016, 2015 and 2014, respectively, and the interim financial statements for the six months ended June 30, 2016.
|
•
|
We have designed and implemented an enhanced model validation control framework, including a rotational schedule to periodically re-validate all U.S. GAAP models.
|
•
|
We have designed and implemented enhanced controls and governance processes for new model implementations.
|
•
|
We have designed and implemented enhanced controls for model changes.
|
•
|
We have designed and implemented enhanced controls over the annual assumption setting process, including a comprehensive master assumption inventory and risk framework.
|
•
|
We have completed a current state assessment of significant data flows feeding actuarial models and assumptions. We have initiated a validation review and a control design assessment of these data flows.
|
•
|
We are in the process of completing a comprehensive plan for enhancing the process and controls over the reliability of data feeding significant actuarial models.
|
•
|
With respect to insufficient personnel, we have strengthened our finance team by adding approximately 25 employees to the Accounting and Financial Reporting areas. Of these additional resources, eleven have a CPA license, eight have worked at a “Big 4” public accounting firm and the remainder have worked in a finance area within a public company. We have conducted both specific job-related training and general training on SOX controls and U.S. GAAP related technical topics to new and existing staff.
|
•
|
To improve controls over journal entries, a less controlled secondary process that was used for consolidating certain entities, reflecting adjustments to prior periods, and generating the business segment disclosures has been eliminated. Beginning with third quarter 2018, all journal entries are recorded in the Company’s general ledger and the secondary process is no longer necessary.
|
•
|
We have enhanced the controls over journal entries through the implementation of new standards designed to ensure effective review and approval of journal entries with sufficient supporting documentation.
|
•
|
We have designed and implemented new management review controls within the period end financial reporting process that will operate at a level of precision sufficient to detect errors that could result in a material misstatement.
|
•
|
any merger, consolidation or similar transaction (or any amendment to or termination of an agreement to enter into such a transaction) involving us or any of our subsidiaries, on the one hand, and any other person, on the other hand, subject to certain specified exceptions;
|
•
|
any change in our authorized capital stock or the creation of any new class or series of our capital stock;
|
•
|
any issuance or acquisition of capital stock (including stock buy-backs, redemptions or other reductions of capital), or securities convertible into or exchangeable or exercisable for capital stock or equity-linked securities, subject to certain specified exceptions;
|
•
|
any issuance or acquisition of debt securities involving an aggregate principal amount exceeding $250 million;
|
•
|
any amendment (or approval or recommendation of any amendment) to our certificate of incorporation or by-laws; and
|
•
|
the election, appointment, hiring, dismissal or removal (other than for cause) of the Company’s CEO or CFO.
|
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (1) (2)
|
||||||
1/1/19 through 1/31/19
|
6,956,522
|
|
|
$
|
18.51
|
|
|
6,956,522
|
|
|
$
|
1,185,479
|
|
2/1/19 through 2/28/19
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
801,185,479
|
|
3/1/19 through 3/31/19
|
31,147,150
|
|
|
$
|
19.93
|
|
|
31,147,150
|
|
|
$
|
200,375,000
|
|
Total
|
38,103,672
|
|
|
$
|
19.67
|
|
|
38,103,672
|
|
|
$
|
200,375,000
|
|
(1)
|
In January 2019, Holdings entered into an Accelerated Share Repurchase agreement (the “ASR”) with a third-party financial institution to repurchase an aggregate of $150 million of Holdings’ common stock. As such, $150 million in cash was delivered at the time of the agreement along with the first tranche of shares. The ASR closed on March 1, 2019, with a second tranche of shares delivered on that date.
|
(2)
|
On February 27, 2019, Holdings’ Board of Directors authorized an $800 million share repurchase program replacing the previous authorization.
|
Number
|
Description and Method of Filing
|
10.1
†
|
AXA Equitable Holdings, Inc. 2019 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.61 of AXA Equitable Holdings, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2018, as filed on March 8, 2019 (the “2018 Form 10-K”)).
|
10.2
†
|
Amendment to the AXA Equitable Post-2004 Variable Deferred Compensation Plan for Executives, effective as of January 1, 2019 (incorporated by reference to Exhibit 10.69 of the 2018 Form 10-K).
|
10.3
†
|
Form of Performance Shares Award Agreement under the 2018 Omnibus Incentive Plan, effective as of February 14, 2019 (incorporated by reference to Exhibit 10.70 of the 2018 Form 10-K).
|
10.4
†
|
Form of Restricted Stock Unit Award Agreement under the 2018 Omnibus Incentive Plan, effective as of February 14, 2019 (incorporated by reference to Exhibit 10.71 of the 2018 Form 10-K).
|
10.5
†
|
Form of Stock Option Award Agreement under the 2018 Omnibus Incentive Plan, effective as of February 14, 2019 (incorporated by reference to Exhibit 10.72 of the 2018 Form 10-K).
|
Number
|
Description and Method of Filing
|
Share Repurchase Agreement between AXA S.A. and AXA Equitable Holdings, Inc. (incorporated by reference to Exhibit 10.73 to the Registration Statement on Form S-1 of AXA Equitable Holdings, Inc., File No. 333-230367).
|
|
31.1
#
|
Certification of the Registrant’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
#
|
Certification of the Registrant’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
#
|
Certification of the Registrant’s Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
#
|
Certification of the Registrant’s Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101.INS
|
XBRL Instance Document
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Date: May 10, 2019
|
AXA EQUITABLE HOLDINGS, INC.
|
||
|
|
|
|
|
By:
|
/s/ Anders Malmström
|
|
|
|
Name:
|
Anders Malmström
|
|
|
Title:
|
Senior Executive Vice President and Chief Financial Officer
|
|
|
|
|
Date: May 10, 2019
|
|
/s/ William Eckert
|
|
|
|
Name:
|
William Eckert
|
|
|
Title:
|
Senior Vice President, Chief Accounting Officer and Controller
|
1 Year Equitable Chart |
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