RICHMOND, Va., May 1, 2018 /PRNewswire/ --
- As Disclosed On April 24, 2018,
Genworth And China Oceanwide Holdings Group Co., Ltd. (Oceanwide)
Refiled Their Joint Voluntary Notice With The Committee On Foreign
Investment In The United States (CFIUS)
- U.S. Mortgage Insurance (MI) Adjusted Operating Income Of
$111 Million, Increased 52 Percent
Compared To First Quarter Of 2017
- U.S. MI's PMIERs1 Sufficiency Ratio At 124 Percent,
In Excess Of $600 Million Above
Requirements
- Strong Performance For Canada MI, Adjusted Operating Income Of
$49 Million, Up 28
Percent2 Versus First Quarter Of 2017
- U.S. Life Insurance Adjusted Operating Loss Of $(5) Million Compared To Adjusted Operating
Income Of $53 Million In First
Quarter Of 2017
- Holding Company Cash And Liquid Assets Of Approximately
$1.2 Billion Reflecting Recently
Completed $450 Million Senior Secured
Term Loan
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended March 31, 2018. The
company reported net income3 of $112 million, or $0.22 per diluted share, in the first quarter of
2018, compared with net income of $155
million, or $0.31 per diluted
share, in the first quarter of 2017. The adjusted operating
income4 for the first quarter of 2018 was $125 million, or $0.25 per diluted share, compared with adjusted
operating income of $143 million, or
$0.29 per diluted share, in the first
quarter of 2017.
Genworth's effective tax rate for the quarter was approximately
28 percent. Beginning January 1,
2018, the company taxed its international businesses at
their local statutory rates and its domestic businesses at the new
enacted tax rate of 21 percent. However, gains on forward
starting swaps settled prior to the change in the corporate tax
rate will continue to be tax effected at 35 percent as they are
amortized into net investment income.
Strategic Update
Genworth and Oceanwide continue to work towards
closing their previously announced proposed transaction as quickly
as possible.
In order to allow for additional time for regulatory reviews of
the transaction, Genworth and Oceanwide agreed to a fourth
waiver and agreement of each party's right to terminate the
previously announced merger agreement, extending the deadline to
July 1, 2018.
Due to the delay in receiving necessary regulatory approvals,
Genworth successfully closed a $450
million senior secured term loan in March. The proceeds of
the term loan will be used, together with cash on hand, to repay
existing indebtedness due May 2018.
Oceanwide was the lead investor in the term loan with a
$60 million allocation as it remains
committed to supporting Genworth.
As announced on April 24, 2018,
Genworth and Oceanwide have re-filed their joint
voluntary notice with CFIUS to provide CFIUS additional time to
review and discuss the proposed transaction between Genworth and
Oceanwide. In connection with the re-filing, CFIUS has agreed to
proceed directly to a 45-day investigation period following a
one-day review period. Additional information about the CFIUS
review process can be found in the definitive proxy statement filed
by Genworth with the Securities and Exchange
Commission on January 25, 2017. There can be no
assurances that CFIUS will ultimately agree to clear the
transaction.
In addition to clearance by CFIUS, the closing of the proposed
transaction remains subject to the receipt of required regulatory
approvals in the U.S., China, and other international
jurisdictions and other closing
conditions. Genworth and Oceanwide continue to
be actively engaged with the relevant regulators regarding the
pending applications.
"Genworth's continued strong operating performance and progress
against our strategic initiatives is a result of our unwavering
focus on maximizing the company's value," said Tom McInerney,
president and CEO of Genworth. "We continue to believe the
transaction with Oceanwide represents the greatest and
most certain value for our stockholders, and are encouraged by the
meaningful progress we have made towards achieving the necessary
regulatory approvals."
LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide
continues to work diligently with Genworth towards
closing the transaction as soon as possible. We remain committed to
the transaction, which would provide Oceanwide with the
opportunity to enhance our global insurance expertise and bring
better insurance market solutions to China."
Financial Performance
Consolidated Net
Income &
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Adjusted Operating
Income
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Three months ended
March 31
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2018
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2017
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Per
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Per
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diluted
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diluted
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Total
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(Amounts in
millions, except per share)
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Total
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share
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Total
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share
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%
change
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Net income available
to Genworth's common stockholders
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$
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112
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$
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0.22
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$
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155
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$
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0.31
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(28)%
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Adjusted operating
income
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$
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125
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$
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0.25
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$
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143
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$
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0.29
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(13)%
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Weighted-average
diluted shares
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502.7
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501.0
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As of March
31
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2018
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2017
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Book value per common
share
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$
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26.00
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$
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25.68
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Book value per common
share, excluding accumulated other comprehensive
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income
(loss)
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$
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20.76
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$
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19.47
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Net income in the first quarter of 2018 was reduced by net
investment losses, net of taxes and other adjustments, of
$13 million in the quarter. Net
income in the first quarter of 2017 benefitted from net investment
gains, net of taxes and other adjustments, of $13 million.
Net investment income was $804
million in the quarter, down from $812 million in the prior quarter and up from
$790 million in the prior year.
Net investment income decreased versus the prior quarter due
to lower income from limited partnerships and increased versus
prior year from higher average invested assets. The reported yield
and the core yield4 for the quarter were 4.55 percent
and 4.50 percent, respectively.
Adjusted operating income (loss) by segment are summarized in
the table below:
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q1
18
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Q4
17
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Q1
17
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U.S. Mortgage
Insurance
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$
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111
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$
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74
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$
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73
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Canada Mortgage
Insurance
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49
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43
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36
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Australia Mortgage
Insurance
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19
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(125)
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13
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U.S. Life
Insurance
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(5)
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(69)
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53
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Runoff
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10
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13
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14
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Corporate and
Other
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(59)
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390
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(46)
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Total Adjusted
Operating Income
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$
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125
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$
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326
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$
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143
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Adjusted operating income (loss) represents income (loss) from
continuing operations excluding net investment gains (losses),
gains (losses) on the sale of businesses, gains (losses) on the
early extinguishment of debt, gains (losses) on insurance block
transactions, restructuring costs and other adjustments, net of
taxes. A reconciliation of net income (loss) to adjusted operating
income (loss) by segments and Corporate and Other activities is
included at the end of this press release.
Unless specifically noted in the discussion of results for the
MI businesses in Canada and
Australia, references to
percentage changes exclude the impact of translating foreign
denominated activity into U.S. dollars (foreign exchange).
Percentage changes, which include the impact of foreign exchange,
are found in a table at the end of this press release.
U.S. Mortgage Insurance
Operating
Metrics
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|
(Dollar amounts in
millions)
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|
Q1
18
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|
Q4
17
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|
Q1
17
|
Adjusted operating
income
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$
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111
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|
$
|
74
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|
$
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73
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New insurance
written
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Primary
Flow
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$
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9,000
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$
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10,200
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$
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7,600
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Loss ratio
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9%
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22%
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17%
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U.S. MI reported adjusted operating income of $111 million, compared with $74 million in the prior quarter and $73 million in the prior year. The loss
ratio in the current quarter was nine percent, down 13 points
sequentially and down eight points from the prior year.
Losses in the quarter benefitted from lower new delinquencies,
seasonally higher cures and favorable aging. Results in the
quarter also benefitted from a lower corporate tax rate.
There were no material incremental incurred losses from areas
impacted by hurricanes in the quarter, although the company had
reserved approximately $5 million
pre-tax for hurricane-related delinquencies in the prior
quarter.
Flow New Insurance Written (NIW) of $9.0
billion decreased 12 percent from the prior quarter
primarily from a seasonally smaller purchase originations market
and lower refinance originations, and increased 18 percent versus
the prior year primarily from a larger mortgage insurance
market. During the first quarter of 2018, the company's
concentration of single premium flow NIW was down four points from
the prior quarter and down slightly from the prior year as it
continues its selective participation in this market. U.S.
MI's flow insurance in force increased 12 percent versus the prior
year driven primarily by strong NIW and persistency.
Canada Mortgage Insurance
Operating
Metrics
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|
(Dollar amounts in
millions)
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Q1
18
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|
Q4
17
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Q1
17
|
Adjusted operating
income
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$
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49
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$
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43
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$
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36
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New insurance
written
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Flow
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$
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2,500
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$
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3,600
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$
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2,300
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Bulk
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$
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900
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$
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800
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$
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8,000
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Loss ratio
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13%
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9%
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16%
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Canada MI reported adjusted operating income of $49 million versus $43
million in the prior quarter and $36
million in the prior year. The loss ratio in the quarter was
13 percent, up four points sequentially primarily from higher
severity on new delinquencies. The loss ratio was down three
points compared to the prior year from a decrease in new
delinquencies, net of cures, and a lower average reserve per
delinquency reflecting the ongoing housing market strength and
underlying economic conditions. Results in the quarter also
reflected a lower effective tax rate of approximately 27
percent.
Flow NIW was down 31 percent2 sequentially primarily
from a seasonally smaller originations market and up four
percent2 from the prior year. Bulk NIW decreased
versus the prior year as a result of regulatory changes introduced
in 2016 and 2017.
Australia Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q1
18
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Q4
17
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Q1
17
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Adjusted operating
income (loss)
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$
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19
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$
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(125)
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$
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13
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New insurance
written
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Flow
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$
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3,400
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$
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4,200
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$
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4,100
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Bulk
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$
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—
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$
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—
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$
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1,000
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Loss ratio
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30%
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(7)%
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35%
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Australia MI reported adjusted operating income of $19
million, compared with an adjusted operating loss of $125 million in the prior quarter
and adjusted operating income of $13 million in the prior year. The
prior quarter results included a $141
million unfavorable impact from an annual review of its
premium earnings pattern. Results in the quarter also
reflected a lower effective tax rate of approximately 30
percent.
The loss ratio in the quarter was 30 percent. The change in the
premium earnings pattern reduced the prior quarter loss ratio by 35
points. Excluding this impact, the loss ratio was up two
points sequentially from delinquency aging and lower seasonal cures
and down five points from the prior year primarily from a higher
level of earned premiums.
Flow NIW was down 19 percent2 sequentially from
lower activity with certain customers and down 20
percent2 from the prior year primarily from lower
market penetration.
U.S. Life Insurance
Adjusted Operating
Income (Loss)
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|
|
|
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(Amounts in
millions)
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|
Q1
18
|
|
Q4
17
|
|
Q1
17
|
Adjusted operating
income (loss)
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|
|
|
|
|
|
|
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|
|
Long Term Care
Insurance
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$
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(32)
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$
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17
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$
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14
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Life
Insurance
|
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(1)
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|
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(85)
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16
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Fixed
Annuities
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28
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(1)
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23
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|
Total U.S. Life
Insurance
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$
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(5)
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$
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(69)
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$
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53
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Long Term Care Insurance
Long term care insurance reported an adjusted operating loss of
$32 million, compared with adjusted
operating income of $17 million in
the prior quarter and adjusted operating income of $14 million in the prior year. Results versus the
prior quarter reflected lower earnings from the acquired block,
higher utilization of available benefits and lower renewal premiums
due to the timing of policy anniversary dates partially offset by
seasonally higher active policy and existing claim termination
experience. Prior quarter results included an after-tax
reduction to claim reserves of $20
million primarily driven by assumption changes related to
claims administrative expenses. Compared to the prior year,
results reflected less favorable existing claims performance,
including higher utilization of available benefits, and lower
earnings from the acquired block, partially offset by higher
in-force rate action premiums. Results in the prior year
included a $14 million after-tax
accrual for state guaranty fund assessments relating to the Penn
Treaty Network American Insurance Company and American Network
Insurance Company plan of liquidation.
The change in the corporate tax rate had a negative impact on
the results given LTC had a pre-tax loss for the quarter. In
addition, current quarter results also include an incremental tax
expense of $5 million above the 21
percent corporate tax rate related to the amortization of
forward starting swap gains settled prior to the change in the
corporate tax rate.
Life Insurance
Life insurance reported an adjusted operating loss of
$1 million, compared with an adjusted
operating loss of $85 million in the
prior quarter and adjusted operating income of $16 million in the prior year. During the
prior quarter, the company completed its annual review of life
insurance assumptions and recorded an after-tax charge of
$74 million primarily driven by
assumption changes due to emerging mortality experience as well as
adjustments from lower forward interest rates. Results versus
the prior quarter also reflect higher seasonal premiums in the
company's term life block of business offset by unfavorable
mortality in the company's universal life insurance block of
business. Compared to the prior year, the current quarter reflected
higher lapses resulting in lower insurance premiums and accelerated
write-off of deferred acquisition costs (DAC) primarily associated
with the large 20-year term life insurance blocks entering their
post-level premium periods and unfavorable mortality in the
company's universal life insurance block of business.
Fixed Annuities
Fixed annuities reported adjusted operating income of
$28 million, compared with an
adjusted operating loss of $1 million
in the prior quarter and adjusted operating income of $23 million in the prior year. Current
quarter results reflect favorable mortality and a lower tax
rate. Results in the prior quarter included a net after-tax
charge of $30 million from loss
recognition testing and assumption updates.
Runoff
Runoff reported adjusted operating income of $10 million, compared with $13 million in the prior quarter and $14 million in the prior year, reflecting
unfavorable equity market performance supporting the company's
variable annuity business versus the prior quarter and prior
year.
Corporate And Other
Corporate and Other reported an adjusted operating loss of
$59 million, compared with adjusted
operating income of $390 million in
the prior quarter and an adjusted operating loss of $46 million in the prior year. Given the
change in the corporate tax rate, the current period results
reflect a lower tax benefit offsetting the Corporate and Other
pre-tax loss. Results in the prior quarter included a net
favorable impact of $456 million
related to deferred taxes due to the combination of tax reform,
business forecast improvements and other items. Results in
the prior quarter also included an unfavorable $11 million tax charge related to the Australia
MI premium earnings pattern review. The first quarter of 2017
included a favorable $7 million
after-tax correction to the company's Tax Matters Agreement
liability.
Capital & Liquidity
Genworth maintains the following capital positions in its
operating subsidiaries:
Key Capital &
Liquidity Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q1
18
|
|
Q4
17
|
|
Q1
17
|
U.S.
MI
|
|
|
|
|
|
|
|
|
|
|
|
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|
Consolidated
Risk-To-Capital Ratio5
|
|
|
12.5:1
|
|
|
|
12.7:1
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|
|
|
13.6:1
|
|
|
Genworth Mortgage
Insurance Corporation Risk-To-Capital Ratio5
|
|
|
12.7:1
|
|
|
|
12.9:1
|
|
|
|
13.7:1
|
|
|
Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency
Ratio6
|
|
|
124
|
%
|
|
|
121
|
%
|
|
|
118
|
%
|
Canada
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum Capital Test
(MCT) Ratio5
|
|
|
170
|
%
|
|
|
172
|
%
|
|
|
162
|
%
|
Australia
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prescribed Capital
Amount (PCA) Ratio5
|
|
|
185
|
%
|
|
|
193
|
%
|
|
|
171
|
%
|
U.S. Life Insurance
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Risk-Based Capital (RBC) Ratio5
|
|
|
280
|
%
|
|
|
282
|
%
|
|
|
326
|
%
|
Holding
Company7 Cash and Liquid Assets8
|
|
$
|
1,204
|
|
|
$
|
870
|
|
|
$
|
999
|
|
Key Points
- U.S. MI's PMIERs sufficiency ratio increased to 124 percent as
an increase in operating cash flows and lower non-performing
required assets were partially offset by higher required assets
associated with strong new business written. The PMIERs
sufficiency ratio remained negatively impacted by approximately
four points related to the incremental hurricane delinquency
inventory;
- Canada MI's MCT ratio as of March 31,
2018 is estimated to be 170 percent, above both the
regulatory minimum requirement of 150 percent and an operating
range of 160 to 165 percent;
- Australia MI's capital levels decreased sequentially to 185
percent driven primarily by lower levels of reinsurance and capital
returns to shareholders; and
- The holding company ended the quarter with $1,204 million of cash and liquid assets, of
which approximately $600 million is
dedicated to pay the May 2018 debt
maturity.
About Genworth Financial
Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 insurance
holding company committed to helping families achieve the dream of
homeownership and address the financial challenges of aging through
its leadership positions in mortgage insurance and long term care
insurance. Headquartered in Richmond, Virginia, Genworth traces its roots
back to 1871 and became a public company in 2004. For more
information, visit genworth.com.
From time to time, Genworth releases important information via
postings on its corporate website. Accordingly, investors and other
interested parties are encouraged to enroll to receive automatic
email alerts and Really Simple Syndication (RSS) feeds regarding
new postings. Enrollment information is found under the "Investors"
section of genworth.com. From time to time, Genworth's
publicly traded subsidiaries, Genworth MI Canada Inc. and Genworth
Mortgage Insurance Australia Limited, separately release financial
and other information about their operations. This information can
be found at http://genworth.ca and
http://www.genworth.com.au.
Conference Call And Financial Supplement Information
This press release and the first quarter 2018 financial
supplement are now posted on the company's website. Additional
information regarding business results will be posted on the
company's website, http://investor.genworth.com, by 7:00 a.m. on May 2,
2018. Investors are encouraged to review these
materials.
Genworth will conduct a conference call on May 2, 2018 at 8:00 a.m.
(ET) to discuss business results and provide an update on
strategic objectives including the pending transaction with China
Oceanwide Holdings Group Co., Ltd. The conference call will
be accessible via telephone and the Internet. The dial-in number
for the conference call is 888 208.1820 or 323 794.2110 (outside
the U.S.); conference ID # 5788286. To participate in the call by
webcast, register at http://investor.genworth.com at least 15
minutes prior to the webcast to download and install any necessary
software.
Replays of the call will be available through May 16, 2018 at 888 203.1112 or 719 457.0820
(outside the U.S.); conference ID # 5788286. The webcast will also
be archived 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 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) attributable to noncontrolling interests,
net investment gains (losses), goodwill impairments, gains (losses)
on the sale of businesses, gains (losses) on the early
extinguishment of debt, gains (losses) on insurance block
transactions, restructuring costs and infrequent or unusual
non-operating items. Gains (losses) on insurance block transactions
are defined as gains (losses) on the early extinguishment of
non-recourse funding obligations, early termination fees for other
financing restructuring and/or resulting gains (losses) on
reinsurance restructuring for certain blocks of business. The
company excludes net investment gains (losses) and infrequent or
unusual non-operating items because the company does not consider
them to be related to the operating performance of the company's
segments and Corporate and Other activities. A component of the
company's net investment gains (losses) is the result of
impairments, 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. Goodwill impairments,
gains (losses) on the sale of businesses, gains (losses) on the
early extinguishment of debt, gains (losses) on insurance block
transactions and restructuring costs are also excluded from
adjusted operating income (loss) because, in the company's opinion,
they are not indicative of overall operating trends. Infrequent or
unusual non-operating items are also excluded from adjusted
operating income (loss) if, in the company's opinion, they are not
indicative of overall operating trends.
While some of these items may be significant components of net
income (loss) available to Genworth Financial, Inc.'s common
stockholders in accordance with U.S. 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) available to Genworth Financial, Inc.'s common
stockholders or net income (loss) available to Genworth Financial,
Inc.'s common stockholders per share on a basic and diluted basis
determined in accordance with U.S. GAAP. In addition, the company's
definition of adjusted operating income (loss) may differ from the
definitions used by other companies.
On December 22, 2017, the Tax Cuts
and Jobs Act ("TCJA") was signed into law. The TCJA reduced the
U.S. corporate federal income tax rate to 21 percent effective for
taxable years beginning on January 1, 2018 and migrated the
worldwide tax system to a territorial international tax system.
Therefore, beginning on January 1,
2018, the company taxed its international businesses at
their local statutory tax rates and its domestic businesses at the
new enacted tax rate of 21 percent. The company allocates its
consolidated provision for income taxes to its operating segments.
The company's allocation methodology applies a specific tax rate to
the pre-tax income (loss) of each segment, which is then adjusted
in each segment to reflect the tax attributes of items unique to
that segment such as foreign income. The difference between the
consolidated provision for income taxes and the sum of the
provision for income taxes in each segment is reflected in
Corporate and Other activities.
The annually-determined tax rates and adjustments to each
segment's provision for income taxes are estimates which are
subject to review and could change from year to year.
In the first quarter of 2018, the company assumed a tax rate of
21 percent on certain adjustments to reconcile net income available
to Genworth Financial Inc.'s common stockholders and adjusted
operating income and in the explanation of specific variances of
operating performance (unless otherwise indicated). In the prior
year, the company assumed a tax rate of 35 percent, the previous
U.S. corporate federal income tax rate prior to the enactment of
the TCJA, on certain adjustments to reconcile net income available
to Genworth Financial Inc.'s common stockholders and adjusted
operating income and in the explanation of specific variances of
operating performance. These adjustments are also net of the
portion attributable to noncontrolling interests and net investment
gains (losses) are adjusted for DAC and other intangible
amortization and certain benefit reserves.
The company recorded a pre-tax expense of $1 million in the first quarter of 2017 related
to restructuring costs as the company continued to evaluate and
appropriately size its organizational needs and expenses. There
were no infrequent or unusual items excluded from adjusted
operating income during the periods presented.
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 March 31, 2018 and
2017, as well as for the three months ended December 31, 2017, and reflect adjusted operating
income (loss) as determined in accordance with accounting guidance
related to segment reporting.
This press release includes the non-GAAP financial measure
entitled "core yield" as a measure of investment yield. The company
defines core yield as the investment yield adjusted for items that
do not reflect the underlying performance of the investment
portfolio. Management believes that analysis of core yield enhances
understanding of the investment yield of the company. However, core
yield is not a substitute for investment yield determined in
accordance with U.S. GAAP. In addition, the company's definition of
core yield may differ from the definitions used by other companies.
A reconciliation of core yield to reported U.S. GAAP yield is
included in a table at the end of this press release.
Definition of Selected Operating Performance Measures
The company reports selected operating performance measures
including "sales" and "insurance in force" or "risk in force" which
are commonly used in the insurance industry as measures of
operating performance.
Management regularly monitors and reports sales metrics as a
measure of volume of new business generated in a period. Sales
refer to new insurance written for mortgage insurance. The company
considers new insurance written to be a measure of the company's
operating performance because it represents a measure of new sales
of insurance policies during a specified period, rather than a
measure of the company's revenues or profitability during that
period.
Management regularly monitors and reports insurance in force and
risk in force. Insurance in force for the company's mortgage
insurance business is a measure of the aggregate original loan
balance for outstanding insurance policies as of the respective
reporting date. Risk in force for the company's U.S. mortgage
insurance business is based on the coverage percentage applied to
the estimated current outstanding loan balance. The company
considers insurance in force and risk in force to be measures of
its operating performance because they represent measures of the
size of its business at a specific date which will generate
revenues and profits in a future period, rather than measures of
its revenues or profitability during that period.
Management also regularly monitors and reports a loss ratio for
the company's businesses. For the mortgage insurance businesses,
the loss ratio is the ratio of benefits and other changes in policy
reserves to net earned premiums. For the long term care insurance
business, the loss ratio is the ratio of benefits and other changes
in reserves less tabular interest on reserves less loss adjustment
expenses to net earned premiums. The company considers the loss
ratio to be a measure of underwriting performance in these
businesses and helps to enhance the understanding of the operating
performance of the businesses.
These operating performance measures enable the company to
compare its operating performance across periods without regard to
revenues or profitability related to policies or contracts sold in
prior periods or from investments or other sources.
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 the transaction with China Oceanwide
Holdings Group Co., Ltd. (China Oceanwide) and the company's
discussions with regulators in connection therewith.
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, business, competitive, market,
regulatory and other factors and risks, including, but not limited
to, the following:
- risks related to the proposed transaction with China
Oceanwide including: the company's inability to complete the
transaction in a timely manner or at all; the parties'
inability to obtain regulatory approvals, including from the
Committee on Foreign Investment in the
United States (CFIUS), or the possibility that such
regulatory approvals may further delay the transaction or will not
be received prior to July 1, 2018
(and either or both of the parties may not be willing to further
waive their end date termination rights beyond July 1, 2018) or that materially burdensome or
adverse regulatory conditions may be imposed or undesirable
measures may be required in connection with any such regulatory
approvals, including any mitigation approaches that may be
necessary to obtain CFIUS approval (including conditions or
measures that either or both of the parties may be unwilling to
accept or undertake, as applicable); the risk that the parties will
not be able to obtain other regulatory approvals or regulatory
approvals may further delay the transaction; existing and potential
legal proceedings may be instituted against the company in
connection with the transaction that may delay the transaction,
make it more costly or ultimately preclude it; the risk that the
proposed transaction disrupts the company's current plans and
operations as a result of the announcement and consummation of the
transaction; certain restrictions during the pendency of the
transaction that may impact the company's ability to pursue certain
business opportunities or strategic transactions; continued
availability of capital and financing to the company before, or in
the absence of, the consummation of the transaction; further rating
agency actions and downgrades in the company's debt or financial
strength ratings; changes in applicable laws or regulations; the
company's ability to recognize the anticipated benefits of the
transaction; the amount of the costs, fees, expenses and other
charges related to the transaction; the risks related to diverting
management's attention from the company's ongoing business
operations; the merger agreement may be terminated in circumstances
that would require the company to pay China Oceanwide a fee; the
company's ability to attract, recruit, retain and motivate current
and prospective employees may be adversely affected; and
disruptions and uncertainty relating to the transaction, whether or
not it is completed, may harm the company's relationships with its
employees, customers, distributors, vendors or other business
partners, and may result in a negative impact on the company's
business;
- strategic risks in the event the proposed transaction with
China Oceanwide is not consummated including: the company's
inability to successfully execute alternative strategic plans to
effectively address its current business challenges (including with
respect to its U.S. life insurance businesses, debt obligations,
cost savings, ratings and capital); the company's ability to
continue to sell long term care insurance policies; the company's
inability to attract buyers for any businesses or other assets it
may seek to sell, or securities it may seek to issue, in each case,
in a timely manner and on anticipated terms; failure to obtain any
required regulatory, stockholder and/or noteholder approvals or
consents for such alternative strategic plans, or the company's
challenges changing or being more costly or difficult to
successfully address than currently anticipated or the benefits
achieved being less than anticipated; inability to achieve
anticipated cost-savings in a timely manner; and adverse tax or
accounting charges; and the company's ability to increase the
capital needed in its businesses in a timely manner and on
anticipated terms, including through improved business performance,
reinsurance or similar transactions, asset sales, securities
offerings or otherwise, in each case as and when required;
- risks relating to estimates, assumptions and valuations
including: inadequate reserves and the need to increase reserves
(including as a result of any changes the company may make to its
assumptions, methodologies or otherwise in connection with periodic
or other reviews); inaccurate models; deviations from the company's
estimates and actuarial assumptions or other reasons in its
long-term care insurance, life insurance and/or annuity businesses;
accelerated amortization of deferred acquisition costs ("DAC") and
present value of future profits ("PVFP") (including as a result of
any changes it may make to its assumptions, methodologies or
otherwise in connection with periodic or other reviews); adverse
impact on the company's financial results as a result of projected
profits followed by projected losses (as is currently the case with
its long-term care insurance business); adverse impact on the
company's results of operations and changes in valuation of fixed
maturity, and equity securities;
- risks relating to economic, market and political
conditions including: downturns and volatility in global
economies and equity and credit markets; interest rates and changes
in rates (particularly given the historically low interest rate
environment) have adversely impacted, and may continue to
materially adversely impact, the company's business and
profitability; deterioration in economic conditions or a decline in
home prices that adversely affect the company's loss experience in
mortgage insurance; political and economic instability or changes
in government policies; and fluctuations in foreign currency
exchange rates and international securities markets;
- regulatory and legal risks including: extensive
regulation of the company's businesses and changes in applicable
laws and regulations (including changes to tax laws and
regulations); litigation and regulatory investigations or other
actions; dependence on dividends and other distributions from the
company's subsidiaries (particularly its international
subsidiaries) and the inability of any subsidiaries to pay
dividends or make other distributions to the company, including as
a result of the performance of its subsidiaries and insurance,
regulatory or corporate law restrictions; adverse change in
regulatory requirements, including risk-based capital; changes in
regulations adversely affecting the company's international
operations; inability to continue to maintain the private mortgage
insurer eligibility requirements ("PMIERs"); inability of the
company's U.S. mortgage insurance subsidiaries to meet minimum
statutory capital requirements and hazardous financial condition
standards; the influence of Federal National Mortgage Association
("Fannie Mae"), Federal Home Loan Mortgage Corporation ("Freddie
Mac") and a small number of large mortgage lenders on the U.S.
mortgage insurance market and adverse changes to the role or
structure of Fannie Mae and Freddie Mac; adverse changes in
regulations affecting the company's mortgage insurance businesses;
inability to continue to implement actions to mitigate the impact
of statutory reserve requirements; impact of additional regulations
pursuant to the Dodd-Frank Wall Street Reform and Consumer
Protection Act; changes in tax laws; and changes in accounting and
reporting standards;
- liquidity, financial strength ratings, credit and
counterparty risks including: insufficient internal sources to
meet liquidity needs and limited or no access to capital (including
the ability to obtain further financing under an additional secured
term loan or credit facility); future adverse rating agency
actions, including with respect to rating downgrades or potential
downgrades or being put on review for potential downgrade, all of
which could have adverse implications for the company, including
with respect to key business relationships, product offerings,
business results of operations, financial condition and capital
needs, strategic plans, collateral obligations and availability and
terms of hedging, reinsurance and borrowings; defaults by
counterparties to reinsurance arrangements or derivative
instruments; defaults or other events impacting the value of the
company's fixed maturity securities portfolio; and defaults on the
company's commercial mortgage loans or the mortgage loans
underlying its investments in commercial mortgage-backed securities
and volatility in performance;
- operational risks including: inability to retain,
attract and motivate qualified employees or senior management;
ineffective or inadequate risk management in identifying,
controlling or mitigating risks; reliance on, and loss of, key
customer or distribution relationships; competition,
including in the company's mortgage insurance businesses from
government and government-owned and government-sponsored
enterprises ("GSEs") offering mortgage insurance; the design and
effectiveness of its disclosure controls and procedures and
internal control over financial reporting may not prevent all
errors, misstatements or misrepresentations; and failure or any
compromise of the security of the company's computer systems,
disaster recovery systems and business continuity plans and
failures to safeguard, or breaches of, its confidential
information;
- insurance and product-related risks including: the
company's inability to increase sufficiently, and in a timely
manner, premiums on in force long term care insurance policies
and/or reduce in force benefits, and charge higher premiums on new
policies, in each case, as currently anticipated and as may be
required from time to time in the future (including as a result of
the company's failure to obtain any necessary regulatory approvals
or unwillingness or inability of policyholders to pay increased
premiums), including to offset any impact on the company's margins;
failure to sufficiently increase new sales for the company's long
term care insurance products; availability, affordability and
adequacy of reinsurance to protect the company against losses;
inability to realize anticipated benefits of the company's
rescissions, curtailments, loan modifications or other similar
programs in its mortgage insurance businesses; premiums for the
significant portion of the company's mortgage insurance risk in
force with high loan-to-value ratios may not be sufficient to
compensate the company for the greater risks associated with those
policies; decreases in the volume of high loan-to-value mortgage
originations or increases in mortgage insurance cancellations;
increases in the use of alternatives to private mortgage insurance
and reductions in the level of coverage selected; potential
liabilities in connection with the company's U.S. contract
underwriting services; and medical advances, such as genetic
research and diagnostic imaging, and related legislation that
impact policyholder behavior in ways adverse to the
company;
- other risks including: occurrence of natural or man-made
disasters or a pandemic; impairments of or valuation allowances
against the company's deferred tax assets; the possibility that in
certain circumstances the company will be obligated to make
payments to General Electric Company (GE) under the tax matters
agreement with GE even if its corresponding tax savings are never
realized and payments could be accelerated in the event of certain
changes in control; and provisions of the company's certificate of
incorporation and bylaws and the tax matters agreement with GE may
discourage takeover attempts and business combinations that
stockholders might consider in their best interests; and
- risks relating to the company's common stock including:
the continued suspension of payment of dividends; and stock price
fluctuations.
The company undertakes no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise.
Condensed
Consolidated Statements of Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Three months
ended
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
1,140
|
|
$
|
1,136
|
|
$
|
622
|
|
Net investment
income
|
|
|
804
|
|
|
790
|
|
|
812
|
|
Net investment gains
(losses)
|
|
|
(31)
|
|
|
34
|
|
|
45
|
|
Policy fees and other
income
|
|
|
202
|
|
|
211
|
|
|
207
|
|
|
Total
revenues
|
|
|
2,115
|
|
|
2,171
|
|
|
1,686
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,311
|
|
|
1,246
|
|
|
1,383
|
|
Interest
credited
|
|
|
156
|
|
|
167
|
|
|
152
|
|
Acquisition and
operating expenses, net of deferrals
|
|
|
240
|
|
|
270
|
|
|
247
|
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
104
|
|
|
94
|
|
|
119
|
|
Interest
expense
|
|
|
76
|
|
|
62
|
|
|
75
|
|
|
Total benefits and
expenses
|
|
|
1,887
|
|
|
1,839
|
|
|
1,976
|
|
Income (loss) from
continuing operations before income taxes
|
|
|
228
|
|
|
332
|
|
|
(290)
|
|
Provision (benefit)
for income taxes
|
|
|
63
|
|
|
116
|
|
|
(555)
|
|
Income from
continuing operations
|
|
|
165
|
|
|
216
|
|
|
265
|
|
Loss from
discontinued operations, net of taxes
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
income
|
|
|
165
|
|
|
216
|
|
|
265
|
|
Less: net income
(loss) attributable to noncontrolling interests
|
|
|
53
|
|
|
61
|
|
|
(88)
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
112
|
|
$
|
155
|
|
$
|
353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.71
|
|
|
|
Diluted
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.70
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.71
|
|
|
|
Diluted
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.70
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
499.6
|
|
|
498.6
|
|
|
499.2
|
|
|
|
Diluted
|
|
|
502.7
|
|
|
501.0
|
|
|
502.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Operating Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
112
|
|
$
|
155
|
|
$
|
353
|
Add: net income
(loss) attributable to noncontrolling interests
|
|
|
53
|
|
|
61
|
|
|
(88)
|
Net
income
|
|
|
165
|
|
|
216
|
|
|
265
|
Loss from
discontinued operations, net of taxes
|
|
|
—
|
|
|
—
|
|
|
—
|
Income from
continuing operations
|
|
|
165
|
|
|
216
|
|
|
265
|
Less: income (loss)
from continuing operations attributable to
noncontrolling
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
53
|
|
|
61
|
|
|
(88)
|
Income from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders
|
|
|
112
|
|
|
155
|
|
|
353
|
Adjustments to income
from continuing operations available to Genworth
|
|
|
|
|
|
|
|
|
|
|
Financial, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net9
|
|
|
17
|
|
|
(20)
|
|
|
(41)
|
Expenses related to
restructuring
|
|
|
—
|
|
|
1
|
|
|
—
|
Taxes on
adjustments
|
|
|
(4)
|
|
|
7
|
|
|
14
|
Adjusted operating
income
|
|
$
|
125
|
|
$
|
143
|
|
$
|
326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
U.S. Mortgage
Insurance segment
|
|
$
|
111
|
|
$
|
73
|
|
$
|
74
|
Canada Mortgage
Insurance segment
|
|
|
49
|
|
|
36
|
|
|
43
|
Australia Mortgage
Insurance segment
|
|
|
19
|
|
|
13
|
|
|
(125)
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long Term Care
Insurance
|
|
|
(32)
|
|
|
14
|
|
|
17
|
|
Life
Insurance
|
|
|
(1)
|
|
|
16
|
|
|
(85)
|
|
Fixed
Annuities
|
|
|
28
|
|
|
23
|
|
|
(1)
|
|
Total U.S. Life
Insurance segment
|
|
|
(5)
|
|
|
53
|
|
|
(69)
|
Runoff
segment
|
|
|
10
|
|
|
14
|
|
|
13
|
Corporate and
Other
|
|
|
(59)
|
|
|
(46)
|
|
|
390
|
Adjusted operating
income
|
|
$
|
125
|
|
$
|
143
|
|
$
|
326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.71
|
|
|
Diluted
|
|
$
|
0.22
|
|
$
|
0.31
|
|
$
|
0.70
|
Adjusted operating
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.25
|
|
$
|
0.29
|
|
$
|
0.65
|
|
|
Diluted
|
|
$
|
0.25
|
|
$
|
0.29
|
|
$
|
0.65
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
499.6
|
|
|
498.6
|
|
|
499.2
|
|
|
Diluted
|
|
|
502.7
|
|
|
501.0
|
|
|
502.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Cash, cash
equivalents, restricted cash and invested assets
|
|
$
|
75,318
|
|
$
|
76,911
|
|
Deferred acquisition
costs
|
|
|
2,699
|
|
|
2,329
|
|
Intangible assets and
goodwill
|
|
|
339
|
|
|
301
|
|
Reinsurance
recoverable
|
|
|
17,482
|
|
|
17,569
|
|
Deferred tax and
other assets
|
|
|
1,033
|
|
|
957
|
|
Separate account
assets
|
|
|
6,902
|
|
|
7,230
|
|
|
|
|
Total
assets
|
|
$
|
103,773
|
|
$
|
105,297
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
37,946
|
|
$
|
38,472
|
|
|
Policyholder account
balances
|
|
|
23,751
|
|
|
24,195
|
|
|
Liability for policy
and contract claims
|
|
|
9,651
|
|
|
9,594
|
|
|
Unearned
premiums
|
|
|
3,797
|
|
|
3,967
|
|
|
Deferred tax and
other liabilities
|
|
|
1,868
|
|
|
1,937
|
|
|
Borrowings related to
securitization entities
|
|
|
32
|
|
|
40
|
|
|
Non-recourse funding
obligations
|
|
|
310
|
|
|
310
|
|
|
Long-term
borrowings
|
|
|
4,654
|
|
|
4,224
|
|
|
Separate account
liabilities
|
|
|
6,902
|
|
|
7,230
|
|
|
|
|
Total
liabilities
|
|
|
88,911
|
|
|
89,969
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
11,979
|
|
|
11,977
|
|
|
Accumulated other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
(losses) on securities not other-than-temporarily
impaired
|
|
|
905
|
|
|
1,075
|
|
|
|
|
|
Net unrealized gains
(losses) on other-than-temporarily impaired securities
|
|
|
12
|
|
|
10
|
|
|
|
|
Net unrealized
investment gains (losses)
|
|
|
917
|
|
|
1,085
|
|
|
|
|
Derivatives
qualifying as hedges
|
|
|
1,927
|
|
|
2,065
|
|
|
|
|
Foreign currency
translation and other adjustments
|
|
|
(217)
|
|
|
(123)
|
|
|
Total accumulated
other comprehensive income (loss)
|
|
|
2,627
|
|
|
3,027
|
|
|
Retained
earnings
|
|
|
1,111
|
|
|
1,113
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
13,018
|
|
|
13,418
|
|
|
Noncontrolling
interests
|
|
|
1,844
|
|
|
1,910
|
|
|
|
|
Total
equity
|
|
|
14,862
|
|
|
15,328
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
103,773
|
|
$
|
105,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Foreign
Exchange on Adjusted Operating Income and Flow New Insurance
Written10
Three months ended
March 31, 2018
|
|
|
|
|
|
|
|
|
|
Percentages
|
|
|
Percentages
|
|
|
|
Including
Foreign
|
|
|
Excluding
Foreign
|
|
|
|
Exchange
|
|
|
Exchange11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada Mortgage
Insurance (MI):
|
|
|
|
|
|
|
Adjusted operating
income
|
|
36
|
%
|
|
28
|
%
|
Flow new insurance
written
|
|
9
|
%
|
|
4
|
%
|
Flow new insurance
written (1Q18 vs. 4Q17)
|
|
(31)
|
%
|
|
(31)
|
%
|
|
|
|
|
|
|
|
Australia
MI:
|
|
|
|
|
|
|
Adjusted operating
income
|
|
46
|
%
|
|
38
|
%
|
Flow new insurance
written
|
|
(17)
|
%
|
|
(20)
|
%
|
Flow new insurance
written (1Q18 vs. 4Q17)
|
|
(19)
|
%
|
|
(19)
|
%
|
|
|
|
|
|
|
|
Reconciliation of
Core Yield to Reported Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
|
March
31,
|
|
(Assets - amounts
in billions)
|
|
2018
|
|
Reported Total
Invested Assets and Cash
|
|
$
|
74.6
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
0.2
|
|
|
|
Unrealized gains
(losses)
|
|
|
3.7
|
|
|
Adjusted end of
period invested assets
|
|
$
|
70.7
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets Used in Reported Yield Calculation
|
|
$
|
70.7
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Restricted commercial
mortgage loans related to securitization
entities12
|
|
|
0.1
|
|
|
Average Invested
Assets Used in Core Yield Calculation
|
|
$
|
70.6
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
804
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
11
|
|
|
|
Other non-core
items13
|
|
|
(2)
|
|
|
|
Restricted commercial
mortgage loans related to securitization
entities12
|
|
|
1
|
|
|
Core Net Investment
Income
|
|
$
|
794
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
4.55
|
%
|
|
Core Yield
|
|
|
4.50
|
%
|
|
1 Private Mortgage Insurer Eligibility
Requirements.
2 Percent change excludes the impact of foreign
exchange.
3 Unless otherwise stated, all references in this press
release to net income (loss), net income (loss) per share, adjusted
operating income (loss), adjusted operating income (loss) per share
and book value per share should be read as net income (loss)
available to Genworth's common stockholders, net income (loss)
available to Genworth's common stockholders per diluted share,
adjusted operating income (loss) available to Genworth's common
stockholders, adjusted operating income (loss) available to
Genworth's common stockholders per diluted share and book value
available to Genworth's common stockholders per share,
respectively.
4 This is a financial measure that is not calculated
based on U.S. Generally Accepted Accounting Principles
(Non-GAAP). See the Use of Non-GAAP Measures section of this
press release for additional information.
5 Company estimate for the first quarter of 2018 due to
timing of the filing of statutory statements.
6 Calculated as available assets divided by required
assets as defined within PMIERs. As of March
31, 2018, December 31, 2017
and March 31, 2017, the PMIERs
sufficiency ratios were in excess of approximately $600 million, $550
million and $400 million,
respectively, of available assets above the PMIERs requirements.
Company estimate for the first quarter of 2018.
7 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.
8 Genworth Holdings had $1,129
million, $795 million and
$849 million of cash, cash
equivalents and restricted cash as of March 31, 2018,
December 31, 2017 and March 31, 2017, respectively, which included
approximately $4 million,
$4 million, and $33 million of restricted cash,
respectively. Genworth Holdings also held $75 million, $75
million and $150 million in
U.S. government securities as of March 31,
2018, December 31, 2017 and
March 31, 2017, respectively, which
included approximately $37 million,
$41 million, and $41 million, respectively, of restricted
assets.
9 For the three months ended March 31, 2018 and 2017 and the three months
ended December 31, 2017, net
investment gains (losses) were adjusted for DAC and intangible
assets amortization and certain benefit reserves of $(3) million, zero and $(3) million, respectively, and adjusted for net
investment gains (losses) attributable to noncontrolling interests
of $(11) million, $14 million and $7
million, respectively.
10 All percentages are comparing the first
quarter of 2018 to the first quarter of 2017 unless otherwise
stated.
11 The impact of foreign exchange was calculated using
the comparable prior period exchange rates.
12 Represents the incremental assets and investment
income related to restricted commercial mortgage loans and other
invested assets.
13 Includes cost basis adjustments on structured
securities and various other immaterial items.
View original
content:http://www.prnewswire.com/news-releases/genworth-financial-announces-first-quarter-2018-results-300640241.html
SOURCE Genworth Financial, Inc.