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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Genworth Financial Inc | NYSE:GNW | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.02 | 0.31% | 6.53 | 6.55 | 6.47 | 6.50 | 1,744,667 | 21:26:26 |
Net Income of $29 Million and Adjusted Operating Income of $42 Million
Genworth Financial, Inc. (NYSE: GNW) today reported results for the quarter ended September 30, 2023.
“I am very pleased with Enact’s continued strong financial performance, and as expected, we experienced volatility in our LTC results due to the required liability remeasurement,” said Tom McInerney, President & CEO. “Genworth continues to execute on its strategy to maximize shareholder value, with capital returns from Enact fueling our share repurchase program, investments in growth, and opportunistic debt reduction.”
Consolidated Metrics
Q3 2023 Q2 2023 Q3 2022
(Amounts in millions, except per share data)
Net income5
$
29
$
137
$
136
Earnings per diluted share5
$
0.06
$
0.29
$
0.27
Adjusted operating income5,6
$
42
$
85
$
158
Adjusted operating income per diluted share5,6
$
0.09
$
0.18
$
0.31
Weighted-average diluted shares
466.0
478.1
509.3
Consolidated GAAP Financial Highlights
Enact
GAAP Operating Metrics
Q3 2023
Q2 2023
Q3 2022
(Dollar amounts in millions)
Adjusted operating income7
$
134
$
146
$
156
Primary new insurance written
$
14,391
$
15,083
$
15,069
Loss ratio
7%
(2)%
(17)%
Capital Metric
Q3 2023
Q2 2023
Q3 2022
PMIERs Sufficiency Ratio2,8
162
%
162
%
174
%
Long-Term Care Insurance
GAAP Operating Metrics
Q3 2023
Q2 2023
Q3 2022
(Amounts in millions)
Adjusted operating income (loss)
$
(71)
$
(43)
$
26
Premiums
$
621
$
611
$
637
Net investment income
$
482
$
470
$
497
Liability remeasurement gains (losses)
$
(104)
$
(61)
$
(3)
Cash flow assumption updates
6
24
10
Actual to expected experience
(110)
(85)
(13)
Life and Annuities
GAAP Adjusted Operating Income (Loss)
Q3 2023
Q2 2023
Q3 2022
(Amounts in millions)
Life Insurance
$
(25)
$
(17)
$
(28)
Fixed Annuities
$
17
$
10
$
15
Variable Annuities
$
5
$
9
$
7
Total Life and Annuities
$
(3)
$
2
$
(6)
Life Insurance
Annuities
U.S. Life Insurance Companies Statutory Results and RBC
(Dollar amounts in millions)
Q3 2023
Q2 2023
Q3 2022
Statutory Pre-Tax Income (Loss)2,9
$
30
$
63
$
59
Long-Term Care Insurance
21
(71)
50
Life Insurance
(40)
26
(18)
Fixed Annuities
32
14
28
Variable Annuities
17
94
(1)
GLIC Consolidated RBC Ratio2
291%
293%
286%
Corporate and Other
Holding Company Cash and Liquid Assets
(Amounts in millions)
Q3 2023
Q2 2023
Q3 2022
Holding Company Cash and Liquid Assets10,11
$
232
$
222
$
145
Returns to Shareholders
About Genworth Financial Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 company focused on empowering families to navigate the aging journey with confidence, now and in the future. Headquartered in Richmond, Virginia, Genworth provides guidance, products, and services that help people understand their caregiving options and fund their long-term care needs. Genworth is also the parent company of publicly traded Enact Holdings, Inc. (Nasdaq: ACT), a leading U.S. mortgage insurance provider. For more information on Genworth, visit genworth.com, and for more information on Enact Holdings, Inc. visit enactmi.com.
Conference Call Information Investors are encouraged to read this press release, summary presentation and financial supplement which are now posted on the company’s website, http://investor.genworth.com.
Genworth will conduct a conference call on November 9, 2023 at 9:00 a.m. (ET) to discuss its third quarter results, which will be accessible via:
Allow at least 15 minutes prior to the call time to register for the call. A replay of the webcast will be available on the company’s website for one year.
Use of Non-GAAP Measures This press release includes the non-GAAP financial measures entitled "adjusted operating income (loss)" and "adjusted operating income (loss) per share." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The company’s President and Chief Executive Officer (Principal Executive Officer), who serves as the chief operating decision maker, evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual non-operating items. A component of the company’s net investment gains (losses) is the result of estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. The company excludes net investment gains (losses), changes in fair value of market risk benefits and associated hedges, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, restructuring costs and infrequent or unusual non-operating items from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating performance.
While some of these items may be significant components of net income (loss) in accordance with GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) or net income (loss) per share on a basic and diluted basis determined in accordance with GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.
Adjustments to reconcile net income (loss) to adjusted operating income (loss) assume a 21 percent tax rate and are net of the portion attributable to noncontrolling interests. Changes in fair value of market risk benefits and associated hedges are adjusted to exclude changes in reserves, attributed fees and benefit payments.
The tables at the end of this press release provide a reconciliation of net income available to Genworth Financial, Inc.'s common stockholders to adjusted operating income for the three months ended September 30, 2023 and 2022, as well as the three months ended June 30, 2023 and reflect adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.
Long-Duration Targeted Improvements On January 1, 2023, the company adopted new GAAP accounting guidance that significantly changed the recognition and measurement of long-duration insurance contracts, commonly known as LDTI. This accounting guidance impacted the company’s LTC, life insurance and annuity products and was applied as of January 1, 2021. While the new guidance has had a significant impact on existing GAAP financial statements and disclosures, it does not impact the cash flows or underlying economics of the business, business strategy, statutory net income (loss) or RBC of the U.S. life insurance companies, and it does not have an impact on the Enact segment, Corporate and Other or management of capital. All prior period information herein has been re-presented to reflect the adoption of LDTI.
All financial information in this press release is based on the company's implementation of LDTI and is currently unaudited. It is possible that the final audited financial results may differ, perhaps materially, from the information included in this press release.
Statutory Accounting Data The company presents certain supplemental statutory data for GLIC and its consolidating life insurance subsidiaries that has been prepared on the basis of statutory accounting principles (SAP). GLIC and its consolidating life insurance subsidiaries file financial statements with state insurance regulatory authorities and the National Association of Insurance Commissioners that are prepared using SAP, an accounting basis either prescribed or permitted by such authorities. Due to differences in methodology between SAP and GAAP, the values for assets, liabilities and equity, and the recognition of income and expenses, reflected in financial statements prepared in accordance with GAAP are materially different from those reflected in financial statements prepared under SAP. This supplemental statutory data should not be viewed as an alternative to, or used in lieu of, GAAP.
This supplemental statutory data includes company action level RBC ratios for GLIC and its consolidating life insurance subsidiaries as well as combined statutory pre-tax earnings from the principal U.S. life insurance companies, GLIC, GLAIC and GLICNY. Statutory pre-tax earnings represent the net gain from operations, including the impact from in-force rate actions, before dividends to policyholders, refunds to members and federal income taxes and before realized capital gains or (losses). Management uses and provides this supplemental statutory data because it believes it provides a useful measure of, among other things, statutory pre-tax earnings and the adequacy of capital. Management uses this data to measure against its policy to manage the U.S. life insurance companies with internally generated capital.
Cautionary Note Regarding Forward-Looking Statements This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company’s future business and financial performance. Examples of forward-looking statements include statements the company makes relating to potential dividends or share repurchases; future return of capital by Enact Holdings, Inc. (Enact Holdings), including share repurchases, and quarterly and special dividends; the cumulative amount of rate action benefits required for the company’s long-term care insurance business to achieve economic break-even status; future financial performance and condition of the company’s businesses; liquidity and future strategic investments, including new senior care services and products; future business and financial performance of CareScout LLC (CareScout); as well as statements the company makes regarding the potential of a recession.
Forward-looking statements are based on management’s current expectations and assumptions, which are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Actual outcomes and results may differ materially from those in the forward-looking statements due to global political, economic, inflation, business, competitive, market, regulatory and other factors and risks, including but not limited to, the following:
The company provides additional information regarding these risks and uncertainties in its Annual Report on Form 10-K. Unlisted factors may present significant additional obstacles to the realization of forward-looking statements. Accordingly, for the foregoing reasons, the company cautions you against relying on any forward-looking statements. The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required under applicable securities laws.
Condensed Consolidated Statements of Income
(Amounts in millions, except per share amounts)
(Unaudited)
Three months
Three months ended
ended
September 30,
June 30,
2023
2022
2023
Revenues:
Premiums
$
915
$
929
$
902
Net investment income
801
808
785
Net investment gains (losses)
(43
)
(58
)
39
Policy fees and other income
158
169
166
Total revenues
1,831
1,848
1,892
Benefits and expenses:
Benefits and other changes in policy reserves
1,199
1,159
1,175
Liability remeasurement (gains) losses
116
17
70
Changes in fair value of market risk benefits and associated hedges
(24
)
(27
)
(19
)
Interest credited
127
128
126
Acquisition and operating expenses, net of deferrals
228
245
226
Amortization of deferred acquisition costs and intangibles
65
80
64
Interest expense
30
26
29
Total benefits and expenses
1,741
1,628
1,671
Income from continuing operations before income taxes
90
220
221
Provision for income taxes
30
54
55
Income from continuing operations
60
166
166
Income from discontinued operations, net of taxes
—
5
2
Net income
60
171
168
Less: net income from continuing operations attributable to noncontrolling
interests
31
35
31
Less: net income from discontinued operations attributable to noncontrolling
interests
—
—
—
Net income available to Genworth Financial, Inc.'s common stockholders
$
29
$
136
$
137
Net income available to Genworth Financial, Inc.'s common stockholders:
Income from continuing operations available to Genworth Financial, Inc.'s
common stockholders
$
29
$
131
$
135
Income from discontinued operations available to Genworth Financial, Inc.'s
common stockholders
—
5
2
Net income available to Genworth Financial, Inc.'s common stockholders
$
29
$
136
$
137
Income from continuing operations available to Genworth Financial, Inc.'s
common stockholders per share:
Basic
$
0.06
$
0.26
$
0.28
Diluted
$
0.06
$
0.26
$
0.28
Net income available to Genworth Financial, Inc.'s common stockholders
per share:
Basic
$
0.06
$
0.27
$
0.29
Diluted
$
0.06
$
0.27
$
0.29
Weighted-average common shares outstanding:
Basic
460.5
503.8
473.2
Diluted
466.0
509.3
478.1
Reconciliation of Net Income to Adjusted Operating Income
(Amounts in millions, except per share amounts)
(Unaudited)
Three
Three
months ended
months ended
September 30,
June 30,
2023
2022
2023
Net income available to Genworth Financial, Inc.'s common stockholders
$
29
$
136
$
137
Add: net income from continuing operations attributable to noncontrolling interests
31
35
31
Add: net income from discontinued operations attributable to noncontrolling
interests
—
—
—
Net income
60
171
168
Less: income from discontinued operations, net of taxes
—
5
2
Income from continuing operations
60
166
166
Less: net income from continuing operations attributable to noncontrolling interests
31
35
31
Income from continuing operations available to Genworth Financial, Inc.'s
common stockholders
29
131
135
Adjustments to income from continuing operations available to Genworth
Financial, Inc.'s common stockholders:
Net investment (gains) losses, net12
43
58
(41
)
Changes in fair value of market risk benefits attributable to interest rates, equity
markets and associated hedges13
(26
)
(32
)
(23
)
(Gains) losses on early extinguishment of debt
—
3
—
Expenses related to restructuring
—
—
1
Pension plan termination costs
—
6
—
Taxes on adjustments
(4
)
(8
)
13
Adjusted operating income
$
42
$
158
$
85
Adjusted operating income (loss):
Enact segment
$
134
$
156
$
146
Long-Term Care Insurance segment
(71
)
26
(43
)
Life and Annuities segment:
Life Insurance
(25
)
(28
)
(17
)
Fixed Annuities
17
15
10
Variable Annuities
5
7
9
Total Life and Annuities segment
(3
)
(6
)
2
Corporate and Other
(18
)
(18
)
(20
)
Adjusted operating income
$
42
$
158
$
85
Net income available to Genworth Financial, Inc.'s common stockholders
per share:
Basic
$
0.06
$
0.27
$
0.29
Diluted
$
0.06
$
0.27
$
0.29
Adjusted operating income per share:
Basic
$
0.09
$
0.31
$
0.18
Diluted
$
0.09
$
0.31
$
0.18
Weighted-average common shares outstanding:
Basic
460.5
503.8
473.2
Diluted
466.0
509.3
478.1
_____________________________
1 Private Mortgage Insurer Eligibility Requirements.
2 Company estimate for the third quarter of 2023 due to timing of the preparation of the filing(s).
3 Net gain from operations before dividends to policyholders, refunds to members and federal income taxes for Genworth Life Insurance Company (GLIC), Genworth Life and Annuity Insurance Company (GLAIC) and Genworth Life Insurance Company of New York (GLICNY), and before realized capital gains or (losses).
4 Risk-based capital ratio based on company action level for GLIC consolidated.
5 All references reflect amounts available to Genworth’s common stockholders excluding noncontrolling interests.
6 This is a financial measure that is not calculated based on U.S. Generally Accepted Accounting Principles (GAAP). See the Use of Non-GAAP Measures section of this press release for additional information.
7 Reflects Genworth’s ownership excluding noncontrolling interests of $31 million, $31 million and $35 million in the third and second quarters of 2023 and third quarter of 2022, respectively.
8 The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs.
9 Genworth’s principal U.S. life insurance companies: GLIC, GLAIC and GLICNY.
10 Holding company cash and liquid assets comprises assets held in Genworth Holdings, Inc. (the issuer of outstanding public debt) which is a wholly-owned subsidiary of Genworth Financial, Inc.
11 Genworth Holdings, Inc. held no short-term investments or U.S. government securities as of September 30, 2023, June 30, 2023 and September 30, 2022.
12 Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests of $2 million for the three months ended June 30, 2023.
13 Changes in fair value of market risk benefits and associated hedges were adjusted to exclude changes in reserves, attributed fees and benefit payments of $(2) million and $(5) million for the three months ended September 30, 2023 and 2022, respectively, and $(4) million for the three months June 30, 2023.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231107945561/en/
Investors: Brian Johnson InvestorInfo@genworth.com
Media: Amy Rein Amy.Rein@genworth.com
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