RICHMOND, Va., July 31, 2018 /PRNewswire/ --
- As Announced On June 9, 2018, The
Committee On Foreign Investment In The
United States (CFIUS) Completed Its Review Of The Proposed
Transaction Between Genworth And China Oceanwide Holdings Group
Co., Ltd (Oceanwide) And Concluded That There Are No Unresolved
National Security Concerns
- U.S. Mortgage Insurance (MI) Adjusted Operating Income Of
$137 Million Which Included A
Favorable $22 Million After-Tax
Reserve Adjustment
- U.S. MI's PMIERs1 Sufficiency Ratio At 129 Percent,
In Excess Of $700 Million Above
Requirements Following A $50 Million
Dividend
- Strong Loss Ratio Performance And Capital Levels For Canada
MI
- U.S. Life Insurance Adjusted Operating Income Of $57 Million Compared To Adjusted Operating Income
Of $39 Million In The Prior Year
- Holding Company Cash And Liquid Assets Of $622 Million; Company Redeemed Its May 2018 Debt Of $597
Million
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended June 30, 2018. The
company reported net income2 of $190 million, or $0.38 per diluted share, in the second quarter of
2018, compared with net income of $202
million, or $0.40 per diluted
share, in the second quarter of 2017. Adjusted operating
income3 for the second quarter of 2018 was $200 million, or $0.40 per diluted share, compared with adjusted
operating income of $151 million, or
$0.30 per diluted share, in the
second quarter of 2017.
Genworth's effective tax rate for the quarter was approximately
31 percent. Beginning January 1,
2018, the company taxed 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. In addition, this quarter's
result also includes a provisional tax expense related to a
revaluation of deferred tax assets and liabilities on foreign
subsidiaries in light of the Tax Cuts and Jobs Act.
Strategic Update
Genworth and Oceanwide continue to work towards closing their
previously announced proposed transaction as quickly as
possible.
During the quarter, CFIUS completed its review of the proposed
transaction and concluded that there are no unresolved national
security concerns. In connection with the CFIUS review of the
proposed transaction, Genworth and Oceanwide entered into a
mitigation agreement which, among other things, requires Genworth
to use a U.S.-based, third-party service provider to manage and
protect the personal data of Genworth's U.S. policyholders.
As previously announced, the parties are seeking approval of the
transaction without unstacking Genworth Life and Annuity Insurance
Company from Genworth Life Insurance Company, and Genworth's debt
obligations due May 2018 were
redeemed with the proceeds from a term loan and cash on hand.
As a result, Oceanwide and Genworth are developing a new capital
investment plan whereby Oceanwide would contribute an aggregate of
$1.5 billion to Genworth over time
following the closing of the transaction. The contribution
would be used to further improve Genworth's financial stability,
which may include retiring Genworth's debt due in 2020 and 2021 or
enabling future growth opportunities.
Given these updates to the proposed transaction, Genworth and
Oceanwide continue to provide regulators with updated information
to facilitate their review of the transaction. The parties
therefore entered into a fifth waiver and agreement on June 28, 2018, extending the deadline of each
party's right to terminate the previously announced transaction to
August 15, 2018.
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.
"I am pleased with Genworth's continued strong performance while
we make significant progress towards closing the transaction with
Oceanwide," said Tom McInerney,
president and CEO of Genworth. "We are working as quickly as
possible to secure the necessary regulatory approvals in order to
create the greatest and most certain value for our
stockholders."
LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide remains
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 &
|
Adjusted Operating
Income
|
|
|
|
Three months ended
June 30
|
|
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|
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|
2018
|
|
2017
|
|
|
|
|
|
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|
Per
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Per
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|
|
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|
|
|
|
diluted
|
|
|
|
|
diluted
|
|
Total
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(Amounts in
millions, except per share)
|
|
Total
|
|
share
|
|
Total
|
|
share
|
|
% change
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
Net income available
to Genworth's common stockholders
|
|
$
|
190
|
|
$
|
0.38
|
|
$
|
202
|
|
$
|
0.40
|
|
(6)%
|
Adjusted operating
income
|
|
$
|
200
|
|
$
|
0.40
|
|
$
|
151
|
|
$
|
0.30
|
|
32 %
|
Weighted-average
diluted shares
|
|
|
502.6
|
|
|
|
|
|
501.2
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As of June
30
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
Book value per
share
|
|
|
|
|
$
|
25.78
|
|
|
|
|
$
|
26.08
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|
|
|
Book value per share,
excluding accumulated other comprehensive
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|
|
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|
|
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|
|
|
|
|
income
|
|
|
|
|
$
|
21.14
|
|
|
|
|
$
|
19.88
|
|
|
|
Net income in the second quarter of 2018 was impacted by net
investment losses, net of taxes and other adjustments, of
$10 million in the quarter. Net
income in the second quarter of 2017 benefitted from net investment
gains, net of taxes and other adjustments, of $51 million.
Net investment income was $828
million in the quarter, up from $804
million in the prior quarter and up from $801 million in the prior year. Net
investment income increased versus the prior quarter and prior year
due to higher investment yields, limited partnership income, and
inflation impact on U.S. Government Treasury Inflation Protection
Securities. The reported yield and the core yield3 for
the quarter were 4.70 percent and 4.64 percent, respectively.
Adjusted operating income (loss) results by business line are
summarized in the table below:
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Q2
18
|
|
Q1
18
|
|
Q2
17
|
U.S. Mortgage
Insurance
|
|
$
|
137
|
|
$
|
111
|
|
$
|
91
|
Canada Mortgage
Insurance
|
|
|
46
|
|
|
49
|
|
|
41
|
Australia Mortgage
Insurance
|
|
|
22
|
|
|
19
|
|
|
12
|
U.S. Life
Insurance
|
|
|
57
|
|
|
(5)
|
|
|
39
|
Runoff
|
|
|
13
|
|
|
10
|
|
|
11
|
Corporate and
Other
|
|
|
(75)
|
|
|
(59)
|
|
|
(43)
|
Total Adjusted
Operating Income
|
|
$
|
200
|
|
$
|
125
|
|
$
|
151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 to adjusted operating income
and a summary of adjusted operating income (loss) for the company's
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
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q2
18
|
|
Q1
18
|
|
Q2
17
|
Adjusted operating
income
|
|
$
|
137
|
|
$
|
111
|
|
$
|
91
|
New insurance
written
|
|
|
|
|
|
|
|
|
|
|
Primary
Flow
|
|
$
|
11,400
|
|
$
|
9,000
|
|
$
|
9,800
|
Loss ratio
|
|
|
(8)%
|
|
|
9%
|
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S. MI reported adjusted operating income of $137 million, compared with $111 million in the prior quarter and
$91 million in the prior year.
The loss ratio in the current quarter was negative eight percent,
down 17 points sequentially and down ten points from the prior
year. Losses in the quarter included a favorable $28 million pre-tax loss reserve adjustment,
which reduced the loss ratio by 15 points. This compares to a
favorable $15 million pre-tax loss
reserve adjustment in the prior year which reduced that period's
loss ratio by eight points. In addition, losses in the
quarter benefitted from lower new delinquencies, continued strong
cure performance, and favorable aging. Results in the quarter
also benefitted from a lower corporate tax rate compared to the
prior year. There were no material incremental incurred
losses from areas impacted by hurricanes in the quarter, and
delinquencies in those areas are curing in line with the company's
original loss expectations.
Flow New Insurance Written (NIW) of $11.4
billion increased 27 percent from the prior quarter
primarily from a seasonally larger purchase originations market
partially offset by lower refinance originations, and increased 16
percent versus the prior year primarily from a larger mortgage
insurance market. During the second quarter of 2018, the
company's concentration of single premium flow NIW was 15 percent,
down four points from the prior quarter and 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
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q2
18
|
|
Q1
18
|
|
Q2
17
|
Adjusted operating
income
|
|
$
|
46
|
|
$
|
49
|
|
$
|
41
|
New insurance
written
|
|
|
|
|
|
|
|
|
|
|
Flow
|
|
$
|
3,700
|
|
$
|
2,500
|
|
$
|
3,700
|
|
Bulk
|
|
$
|
900
|
|
$
|
900
|
|
$
|
800
|
Loss ratio
|
|
|
15%
|
|
|
13%
|
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada MI reported adjusted operating income of $46 million versus $49
million in the prior quarter and $41
million in the prior year. The loss ratio in the quarter was
15 percent, up two points sequentially primarily from a higher
concentration of Alberta
delinquencies. The loss ratio was up 11 points compared to
the prior year from lower favorable reserve development and an
increase in new delinquencies, net of cures.
Flow NIW was up 52 percent4 sequentially primarily
from a seasonally larger originations market and down five
percent4 from the prior year primarily from a smaller
market size from regulatory changes and housing affordability
pressure.
Australia Mortgage Insurance
Operating
Metrics
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q2
18
|
|
Q1
18
|
|
Q2
17
|
Adjusted operating
income
|
|
$
|
22
|
|
$
|
19
|
|
$
|
12
|
New insurance
written
|
|
|
|
|
|
|
|
|
|
|
Flow
|
|
$
|
3,700
|
|
$
|
3,400
|
|
$
|
4,100
|
|
Bulk
|
|
$
|
900
|
|
$
|
—
|
|
$
|
600
|
Loss ratio
|
|
|
28%
|
|
|
30%
|
|
|
34%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Australia MI reported adjusted operating income of $22
million, compared to $19
million in the prior quarter and $12 million in the
prior year. Results for the quarter were favorably impacted
by approximately $4 million after-tax
as a result of increased recognition of premiums driven by higher
policy cancellations. Results also increased versus the
prior year due to the impact of the premium earnings pattern review
that occurred in the fourth quarter of 2017.
The loss ratio in the quarter was 28 percent, down two points
sequentially from higher earned premiums due to an increase in
policy cancellations and down six points compared to the prior year
primarily due to an increase in earned premiums mainly due to the
premium earnings pattern review.
Flow NIW was up 12 percent4 sequentially from a
larger market size and down 12 percent4 from the
prior year primarily from lower market penetration attributable to
a change in customer mix.
U.S. Life Insurance
Adjusted Operating
Income (Loss)
|
|
|
|
|
|
|
|
|
|
(Amounts in
millions)
|
|
Q2
18
|
|
Q1
18
|
|
Q2
17
|
Long Term Care
Insurance
|
|
$
|
22
|
|
$
|
(32)
|
|
$
|
33
|
Life
Insurance
|
|
|
4
|
|
|
(1)
|
|
|
(1)
|
Fixed
Annuities
|
|
|
31
|
|
|
28
|
|
|
7
|
Total U.S. Life
Insurance
|
|
$
|
57
|
|
$
|
(5)
|
|
$
|
39
|
Long Term Care Insurance
Long term care insurance reported adjusted operating income of
$22 million, compared with an
adjusted operating loss of $32
million in the prior quarter and adjusted operating income
of $33 million in the prior year.
Results versus the prior quarter reflect higher earnings from the
acquired block, favorable existing claim experience and increased
investment income. Compared to the prior year, results
reflect growth in new claims severity and frequency, partially
offset by higher earnings from the acquired block and increased
investment income. Results in the prior year were favorably
impacted by reserve corrections, net of profits followed by losses
reserves, associated with recorded initial claim dates of
$13 million after-tax. Current
and prior quarter results also include an incremental tax expense
of $6 million and $5 million, respectively, 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 adjusted operating income of
$4 million, compared with an adjusted
operating loss of $1 million in both
the prior quarter and prior year. Results versus the prior
quarter reflect favorable mortality in the company's term life
insurance block of business, partially offset by higher
amortization of deferred acquisition costs (DAC) primarily
associated with lapses that have been higher than originally
assumed in the term life insurance blocks entering their post-level
premium periods. Results in the prior year included a
negative impact of $14 million
after-tax, which was the net effect of a charge from model
corrections related to updating mortality tables for term
conversion policies that was partially offset by a net favorable
refinement related to reinsurance rates. Results versus the prior
year also reflect lower in force earnings in the term life
insurance block of business from increased reinsurance as well as
runoff of the block. The company also continues to experience
unfavorable mortality in its universal and term universal life
insurance products.
Fixed Annuities
Fixed annuities reported adjusted operating income of
$31 million, compared with
$28 million in the prior quarter and
$7 million in the prior year.
Results versus the prior quarter reflect higher variable investment
income partially offset by less favorable mortality. Results
in the prior year included a $10
million after-tax charge for loss recognition testing on the
single premium immediate annuity block related to lower interest
rates. Results versus the prior year also reflect favorable
mortality and lower taxes.
Runoff
Runoff reported adjusted operating income of $13 million, compared with $10 million in the prior quarter and $11 million in the prior year. Results
versus the prior quarter and prior year reflect favorable mortality
in the corporate owned life insurance product. Results also
reflect favorable equity market performance supporting the
company's variable annuity business versus the prior quarter and
less favorable equity market performance versus the prior
year.
Corporate And Other
Corporate and Other reported an adjusted operating loss of
$75 million, compared with
$59 million in the prior quarter and
$43 million in the prior year.
Results in the current quarter include a provisional tax expense of
$19 million related to a revaluation
of deferred tax assets and liabilities on foreign
subsidiaries. Given the change in the corporate tax rate,
results in the current quarter also reflect a lower tax benefit
offsetting the Corporate and Other pre-tax loss compared to the
prior year.
Capital & Liquidity
Genworth maintains the following capital positions in its
operating subsidiaries:
Key Capital &
Liquidity Metrics
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollar amounts in
millions)
|
|
Q2
18
|
|
Q1 18
|
|
Q2
17
|
U.S.
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Risk-To-Capital Ratio5
|
|
|
|
12.6:1
|
|
|
|
12.5:1
|
|
|
|
13.0:1
|
|
|
Genworth Mortgage
Insurance Corporation Risk-To-Capital Ratio5
|
|
|
|
12.8:1
|
|
|
|
12.7:1
|
|
|
|
13.1:1
|
|
|
Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency
Ratio6
|
|
|
|
129
|
%
|
|
|
124
|
%
|
|
|
122
|
%
|
Canada
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum Capital Test
(MCT) Ratio5
|
|
|
|
170
|
%
|
|
|
170
|
%
|
|
|
167
|
%
|
Australia
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prescribed Capital
Amount (PCA) Ratio5
|
|
|
|
190
|
%
|
|
|
184
|
%
|
|
|
181
|
%
|
U.S. Life Insurance
Companies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Risk-Based Capital (RBC) Ratio5
|
|
|
|
275
|
%
|
|
|
279
|
%
|
|
|
331
|
%
|
Holding Company
Cash7 and Liquid Assets8
|
|
|
$
|
622
|
|
|
$
|
1,204
|
|
|
$
|
858
|
|
Key Points
- U.S. MI's PMIERs sufficiency ratio increased to 129 percent as
an increase in operating cash flows and lower non-performing
required assets were partially offset by a $50 million dividend payment and higher required
assets associated with strong new business written. The PMIERs
sufficiency ratio impact from hurricane delinquency inventory
declined from four points to two points as cures from those areas
continue as expected;
- Canada MI's MCT ratio as of June 30,
2018 is estimated to be 170 percent, above both the
regulatory minimum requirement of 150 percent and our operating
range of 160 to 165 percent;
- Australia MI's PCA ratio increased sequentially to 190 percent
driven primarily by continued portfolio seasoning;
- The holding company ended the quarter with $622 million of cash and liquid assets. During
the quarter the company redeemed its debt maturing in May 2018.
About Genworth Financial
This press
release and the second 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 8:00
a.m. on August 1, 2018.
Investors are encouraged to review these materials.
Genworth will conduct a conference call on August 1, 2018 at 9:00
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 # 5093670. 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 August 15, 2018 at 888 203.1112 or 719 457.0820
(outside the U.S.); conference ID # 5093670. 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. Therefore,
beginning 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.
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 June 30, 2018 and
2017, as well as for the three months ended March 31, 2018, 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. The company considers the loss
ratio to be a measure of underwriting performance in these
businesses and help 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. (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 Oceanwide
including: the company's inability to complete the transaction in a
timely manner or at all; the parties' inability to obtain
regulatory approvals or the possibility that such regulatory
approvals may further delay the transaction or will not be received
prior to August 15, 2018 (and either
or both of the parties may not be willing to further waive their
end date termination rights beyond August
15, 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 those 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, including in connection with the parties'
intent to seek approval of the Oceanwide transaction with no
unstacking; the parties' inability to agree on a new capital plan;
the risk that a closing condition of the transaction may not be
satisfied; 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 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
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
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
1,136
|
|
$
|
1,111
|
|
$
|
1,140
|
|
Net investment
income
|
|
|
828
|
|
|
801
|
|
|
804
|
|
Net investment gains
(losses)
|
|
|
(14)
|
|
|
101
|
|
|
(31)
|
|
Policy fees and other
income
|
|
|
209
|
|
|
210
|
|
|
202
|
|
|
Total
revenues
|
|
|
2,159
|
|
|
2,223
|
|
|
2,115
|
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,205
|
|
|
1,206
|
|
|
1,311
|
|
Interest
credited
|
|
|
152
|
|
|
163
|
|
|
156
|
|
Acquisition and
operating expenses, net of deferrals
|
|
|
253
|
|
|
240
|
|
|
240
|
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
112
|
|
|
139
|
|
|
104
|
|
Interest
expense
|
|
|
77
|
|
|
74
|
|
|
76
|
|
|
Total benefits and
expenses
|
|
|
1,799
|
|
|
1,822
|
|
|
1,887
|
|
Income from
continuing operations before income taxes
|
|
|
360
|
|
|
401
|
|
|
228
|
|
Provision for income
taxes
|
|
|
111
|
|
|
130
|
|
|
63
|
|
Income from
continuing operations
|
|
|
249
|
|
|
271
|
|
|
165
|
|
Loss from
discontinued operations, net of taxes
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
income
|
|
|
249
|
|
|
271
|
|
|
165
|
|
Less: net income
attributable to noncontrolling interests
|
|
|
59
|
|
|
69
|
|
|
53
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
190
|
|
$
|
202
|
|
$
|
112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
continuing operations available to Genworth Financial, Inc.'s
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
|
|
|
Diluted
|
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
|
|
|
Diluted
|
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
500.6
|
|
|
499.0
|
|
|
499.6
|
|
|
|
Diluted
|
|
|
|
502.6
|
|
|
501.2
|
|
|
502.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income to Adjusted Operating Income
|
(Amounts in
millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
|
|
|
|
2018
|
|
2017
|
|
2018
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
$
|
190
|
|
$
|
202
|
|
$
|
112
|
Add: net income
attributable to noncontrolling interests
|
|
|
59
|
|
|
69
|
|
|
53
|
Net
income
|
|
|
249
|
|
|
271
|
|
|
165
|
Loss from
discontinued operations, net of taxes
|
|
|
—
|
|
|
—
|
|
|
—
|
Income from
continuing operations
|
|
|
249
|
|
|
271
|
|
|
165
|
Less: income from
continuing operations attributable to
noncontrolling
|
|
|
|
|
|
|
|
|
|
|
interests
|
|
|
59
|
|
|
69
|
|
|
53
|
Income from
continuing operations available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders
|
|
|
190
|
|
|
202
|
|
|
112
|
Adjustments to income
from continuing operations available to Genworth
|
|
|
|
|
|
|
|
|
|
|
Financial, Inc.'s
common stockholders:
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net9
|
|
|
12
|
|
|
(79)
|
|
|
17
|
Taxes on
adjustments
|
|
|
(2)
|
|
|
28
|
|
|
(4)
|
Adjusted operating
income
|
|
$
|
200
|
|
$
|
151
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
U.S. Mortgage
Insurance segment
|
|
$
|
137
|
|
$
|
91
|
|
$
|
111
|
Canada Mortgage
Insurance segment
|
|
|
46
|
|
|
41
|
|
|
49
|
Australia Mortgage
Insurance segment
|
|
|
22
|
|
|
12
|
|
|
19
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long
Term Care Insurance
|
|
|
22
|
|
|
33
|
|
|
(32)
|
|
Life
Insurance
|
|
|
4
|
|
|
(1)
|
|
|
(1)
|
|
Fixed
Annuities
|
|
|
31
|
|
|
7
|
|
|
28
|
|
Total U.S. Life
Insurance segment
|
|
|
57
|
|
|
39
|
|
|
(5)
|
Runoff
segment
|
|
|
13
|
|
|
11
|
|
|
10
|
Corporate and
Other
|
|
|
(75)
|
|
|
(43)
|
|
|
(59)
|
Adjusted operating
income
|
|
$
|
200
|
|
$
|
151
|
|
$
|
125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income available
to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
|
|
Diluted
|
|
$
|
0.38
|
|
$
|
0.40
|
|
$
|
0.22
|
Adjusted operating
income per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.40
|
|
$
|
0.30
|
|
$
|
0.25
|
|
|
Diluted
|
|
$
|
0.40
|
|
$
|
0.30
|
|
$
|
0.25
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
500.6
|
|
|
499.0
|
|
|
499.6
|
|
|
Diluted
|
|
|
502.6
|
|
|
501.2
|
|
|
502.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
Cash, cash
equivalents, restricted cash and invested assets
|
|
$
|
73,727
|
|
$
|
76,911
|
|
Deferred acquisition
costs
|
|
|
3,086
|
|
|
2,329
|
|
Intangible assets and
goodwill
|
|
|
354
|
|
|
301
|
|
Reinsurance
recoverable
|
|
|
17,385
|
|
|
17,569
|
|
Deferred tax and
other assets
|
|
|
1,175
|
|
|
957
|
|
Separate account
assets
|
|
|
6,750
|
|
|
7,230
|
|
|
|
|
Total
assets
|
|
$
|
102,477
|
|
$
|
105,297
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
37,913
|
|
$
|
38,472
|
|
|
Policyholder account
balances
|
|
|
23,366
|
|
|
24,195
|
|
|
Liability for policy
and contract claims
|
|
|
9,665
|
|
|
9,594
|
|
|
Unearned
premiums
|
|
|
3,669
|
|
|
3,967
|
|
|
Deferred tax and
other liabilities
|
|
|
1,988
|
|
|
1,937
|
|
|
Borrowings related to
securitization entities
|
|
|
28
|
|
|
40
|
|
|
Non-recourse funding
obligations
|
|
|
310
|
|
|
310
|
|
|
Long-term
borrowings
|
|
|
4,047
|
|
|
4,224
|
|
|
Separate account
liabilities
|
|
|
6,750
|
|
|
7,230
|
|
|
|
|
Total
liabilities
|
|
|
87,736
|
|
|
89,969
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
11,981
|
|
|
11,977
|
|
|
Accumulated other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
(losses) on securities not other-than-temporarily
impaired
|
|
|
726
|
|
|
1,075
|
|
|
|
|
|
Net unrealized gains
(losses) on other-than-temporarily impaired securities
|
|
|
10
|
|
|
10
|
|
|
|
|
Net unrealized
investment gains (losses)
|
|
|
736
|
|
|
1,085
|
|
|
|
|
Derivatives
qualifying as hedges
|
|
|
1,863
|
|
|
2,065
|
|
|
|
|
Foreign currency
translation and other adjustments
|
|
|
(272)
|
|
|
(123)
|
|
|
Total accumulated
other comprehensive income (loss)
|
|
|
2,327
|
|
|
3,027
|
|
|
Retained
earnings
|
|
|
1,301
|
|
|
1,113
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
12,910
|
|
|
13,418
|
|
|
Noncontrolling
interests
|
|
|
1,831
|
|
|
1,910
|
|
|
|
|
Total
equity
|
|
|
14,741
|
|
|
15,328
|
|
|
|
|
Total liabilities and
equity
|
|
$
|
102,477
|
|
$
|
105,297
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Foreign
Exchange on Adjusted Operating Income And Flow New Insurance
Written10
Three months ended
June 30, 2018
|
|
|
Percentages
|
|
|
Percentages
|
|
|
|
Including
Foreign
|
|
|
Excluding
Foreign
|
|
|
|
Exchange
|
|
|
Exchange11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canada Mortgage
Insurance (MI):
|
|
|
|
|
|
|
Adjusted operating
income
|
|
12
|
%
|
|
7
|
%
|
Flow new insurance
written
|
|
―
|
%
|
|
(5)
|
%
|
Flow new insurance
written (2Q18 vs. 1Q18)
|
|
48
|
%
|
|
52
|
%
|
|
|
|
|
|
|
|
Australia
MI:
|
|
|
|
|
|
|
Adjusted operating
income
|
|
83
|
%
|
|
83
|
%
|
Flow new insurance
written
|
|
(10)
|
%
|
|
(12)
|
%
|
Flow new insurance
written (2Q18 vs. 1Q18)
|
|
9
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
Reconciliation of
Core Yield to Reported Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
|
June
30,
|
|
(Assets - amounts
in billions)
|
|
2018
|
|
Reported Total
Invested Assets and Cash
|
|
$
|
73.1
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
0.2
|
|
|
|
Unrealized gains
(losses)
|
|
|
2.7
|
|
|
Adjusted end of
period invested assets
|
|
$
|
70.2
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets Used in Reported Yield Calculation
|
|
$
|
70.4
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Restricted commercial
mortgage loans related to securitization
entities12
|
|
|
―
|
|
|
Average Invested
Assets Used in Core Yield Calculation
|
|
$
|
70.4
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
828
|
|
|
Subtract:
|
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
9
|
|
|
|
Other non-core
items13
|
|
|
2
|
|
|
|
Restricted commercial
mortgage loans related to securitization
entities12
|
|
|
―
|
|
|
Core Net Investment
Income
|
|
$
|
817
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
4.70
|
%
|
|
Core Yield
|
|
|
4.64
|
%
|
|
1 Private Mortgage Insurer Eligibility
Requirements
2 Unless otherwise stated, all references in this press
release to net income, net income per share, adjusted operating
income, adjusted operating income per share and book value per
share should be read as net income available to Genworth's common
stockholders, net income available to Genworth's common
stockholders per diluted share, adjusted operating income available
to Genworth's common stockholders, adjusted operating income
available to Genworth's common stockholders per diluted share and
book value available to Genworth's common stockholders per share,
respectively.
3 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.
4 Percent change excludes the impact of foreign
exchange
5 Company estimate for the second 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 June
30, 2018, March 31, 2018 and
June 30, 2017, the PMIERs sufficiency
ratios were in excess of approximately $700
million, $600 million and
$500 million, respectively, of
available assets above the PMIERs requirements. Company estimate
for the second 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, Inc had $547
million, $1,129 million and
$758 million of cash, cash
equivalents and restricted cash as of June 30, 2018,
March 31, 2018 and June 30, 2017, respectively, which included
approximately $16 million,
$4 million, and $4 million of restricted cash,
respectively. Genworth Holdings also held $75 million, $75
million and $100 million in
U.S. government securities as of June 30,
2018, March 31, 2018 and
June 30, 2017, respectively, which
included approximately $36 million,
$37 million, and $41 million, respectively, of restricted
assets.
9 For the three months ended June
30, 2018 and 2017 and the three months ended March 31, 2018, net investment gains (losses)
were adjusted for DAC and intangible assets amortization and
certain benefit reserves of $(1)
million, zero and $(3)
million, respectively, and adjusted for net investment gains
(losses) attributable to noncontrolling interests of $(1) million, $22
million and $(11) million,
respectively.
10 All percentages are comparing the second quarter of
2018 to the second 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.
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-second-quarter-2018-results-300689340.html
SOURCE Genworth Financial, Inc.