RICHMOND, Va., April 30, 2019 /PRNewswire/ --
- Merger Agreement With China Oceanwide Holdings Group Co., LTD
(Oceanwide) Extended To June 30,
2019; Parties Diligently Pursuing Canadian Approval
- U.S. Mortgage Insurance (MI) Adjusted Operating Income Of
$124 Million, With $9.6 Billion In New Insurance Written (NIW) And
Strong Loss Ratio Performance
- U.S. MI's PMIERs1 Sufficiency Ratio
At 123 Percent, More Than $600
Million Above The Revised Standards Effective March 31, 2019
- Strong Capital Levels With Substantial Capital Above Management
Targets In Canada And Australia
MI
- Approximately $150 Million
Incremental Annual Long Term Care Insurance (LTC) In Force Rate
Actions Approved In First Quarter 2019, With A Net Present Value
(NPV) Benefit Of Approximately $500
Million
- Holding Company Cash And Liquid Assets Of $405 Million
Genworth Financial, Inc. (NYSE: GNW) today reported results for
the quarter ended March 31, 2019. The
company reported net income2 of $174 million, or $0.34 per diluted share, in the first quarter of
2019, compared with net income of $112
million, or $0.22 per diluted
share, in the first quarter of 2018. The company reported
adjusted operating income3 of $121 million, or $0.24 per diluted share, in the first quarter of
2019, compared with adjusted operating income of $125 million, or $0.25 per diluted share, in the first quarter of
2018.
Genworth's effective tax rate for the quarter was approximately
33 percent. This included $12
million of unfavorable charges related to the Global
Intangible Low Taxed Income (GILTI) provision of the 2017 Tax Cuts
and Jobs Act. These charges are reflected in the Corporate
& Other segment and are expected to continue throughout 2019
and into 2020. The effective tax rate was also impacted by
the tax effect of forward starting swap gains settled prior to the
change in the corporate tax rate, which 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 the
previously announced proposed transaction as soon as possible.
The parties continue to diligently pursue approval of the
transaction by Canadian regulators. To date, the Canadian review
has centered around national security matters, including data
protections and the safeguarding of our customers' personally
identifiable information, consistent with the Enhanced Data
Security Program that Genworth and Oceanwide have undertaken in
connection with the clearance of the transaction by the Committee
on Foreign Investment in the United
States (CFIUS). While Genworth and Oceanwide have fully
responded to all information requests received to date, the
Canadian regulators have not outlined a timeframe for the
completion of their review of the transaction or requested any
additional information at this time.
To allow additional time for Canada's ongoing review, Genworth and
Oceanwide announced on April 29, 2019
that the parties have agreed to a tenth waiver and extension of the
merger agreement from April 30, 2019
to June 30, 2019.
The parties have received approvals from all necessary U.S.
regulators. Oceanwide will also need to receive clearance in
China for currency conversion and
the transfer of funds. Oceanwide is actively engaged in transaction
discussions with the relevant Chinese authorities. Given the
extension of the merger agreement, the timing of the various
tranches of both the previously announced $1.5 billion Oceanwide post-closing capital plan
and the $175 million post-closing
capital commitment to Genworth Life Insurance Company (GLIC) from
Genworth Holdings, Inc. will be deferred to reflect the later
closing date.
"The merger agreement extension allows us additional time to
continue our pursuit of regulatory approval in Canada, which is taking additional time and
involves the complexities associated with national security related
issues including the safeguarding of our customers' personally
identifiable information," said Tom
McInerney, president and CEO of Genworth. "We remain fully
committed to obtaining Canada's
regulatory approval and completing the transaction with Oceanwide
as soon as possible, which we believe represents the greatest and
most certain value for our stockholders."
LU Zhiqiang, chairman of Oceanwide, added: "Oceanwide remains
committed to the transaction, including the $1.5 billion contribution to Genworth over time
following the consummation of the transaction. We believe the
transaction will bring financial stability to Genworth's businesses
in the U.S. and enable us to bring insurance expertise and
solutions to China. We look
forward to closing the transaction as soon as possible."
Financial Performance
Consolidated Net
Income & Adjusted Operating Income
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Three months ended
March 31
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2019
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2018
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Per
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Per
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diluted
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diluted
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Total
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(Amounts in
millions, except per share)
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Total
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share
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Total
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share
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% change
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Net income available
to Genworth's common stockholders
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$
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174
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$
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0.34
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$
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112
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$
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0.22
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55 %
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Adjusted operating
income
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$
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121
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$
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0.24
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$
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125
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$
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0.25
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(3)%
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Weighted-average
diluted common shares
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508.6
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502.7
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As of March
31
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2019
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2018
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Book value per
share
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$
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25.98
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$
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26.00
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Book value per share,
excluding accumulated other comprehensive
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income
(loss)
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$
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21.03
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$
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20.76
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Net income in the first quarter of 2019 benefitted from net
investment gains, net of taxes and other adjustments, of
$56 million in the quarter, driven by
a combination of net mark-to-market gains primarily from limited
partnerships and gains from the sales, exchanges and tenders of
certain securities. Net income in the first quarter of 2018
was reduced by net investment losses, net of taxes and other
adjustments, of $13 million.
Net investment income was $829
million in the quarter, up from $815
million in the prior quarter and $804
million in the prior year. Net investment income
increased compared to the prior quarter and the prior year due to
higher purchase yields on new investments and higher income from
limited partnerships. The reported yield and the core
yield3 for the quarter were 4.71 percent and 4.67
percent, respectively, compared to 4.64 percent and 4.58 percent,
respectively, in the prior quarter.
Adjusted operating income (loss) results by business line are
summarized in the table below:
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q1
19
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Q4
18
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Q1
18
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U.S. Mortgage
Insurance
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$
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124
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$
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124
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$
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111
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Canada Mortgage
Insurance
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41
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48
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49
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Australia Mortgage
Insurance
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14
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18
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19
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U.S. Life
Insurance
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(5)
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(425)
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(5)
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Runoff
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20
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(2)
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10
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Corporate and
Other
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(73)
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(54)
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(59)
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Total Adjusted
Operating Income (Loss)
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$
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121
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$
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(291)
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$
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125
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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) 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
19
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Q4
18
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Q1
18
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Adjusted operating
income
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$
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124
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$
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124
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$
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111
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New insurance
written
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Primary
Flow
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$
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9,600
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$
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9,300
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$
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9,000
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Loss ratio
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8%
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7%
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9%
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U.S. MI reported adjusted operating income of $124 million, compared with $124 million in the prior quarter and
$111 million in the prior year.
U.S. MI's flow insurance in force increased 10 percent versus the
prior year from strong New Insurance Written (NIW) and persistency,
driving continued growth in earned premiums. The loss ratio
in the current quarter was eight percent, up one point sequentially
and down one point from the prior year, as favorable loss
performance continues along with premium growth.
The company achieved $9.6 billion
in Flow NIW in the quarter, up three percent from the prior quarter
driven by an increase in estimated market share despite a
seasonally smaller purchase originations market and up seven
percent versus the prior year driven primarily by an estimated
increase in market share.
Canada Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q1
19
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Q4
18
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Q1
18
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Adjusted operating
income
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$
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41
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$
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48
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$
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49
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New insurance
written
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Flow
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$
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2,200
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$
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3,300
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$
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2,500
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Bulk
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$
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700
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$
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900
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$
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900
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Loss ratio
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15%
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18%
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13%
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Canada MI reported adjusted operating income of $41 million versus $48
million in the prior quarter and $49
million in the prior year. The loss ratio in the quarter was
15 percent, down three points sequentially primarily from lower
average reserves on delinquencies in Alberta and the Atlantic region and up two
points from the prior year primarily from higher new delinquencies,
net of cures. Despite lower losses sequentially, adjusted
operating income declined due to favorable taxes in the prior
quarter that did not recur. Compared to the prior year,
results declined due to unfavorable foreign exchange impacts
combined with slightly higher losses and expenses.
Flow NIW decreased 33
percent4 sequentially
primarily from a seasonally smaller originations market and
decreased eight percent4 from the prior year primarily
from regulatory changes and ongoing housing affordability
pressure. Bulk NIW for the quarter declined slightly versus
the prior quarter and prior year driven by lower lender demand.
Australia Mortgage Insurance
Operating
Metrics
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(Dollar amounts in
millions)
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Q1
19
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Q4
18
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Q1
18
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Adjusted operating
income
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$
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14
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$
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18
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$
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19
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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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4,000
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$
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3,400
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Bulk
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$
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500
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$
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800
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$
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—
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Loss ratio
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34%
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29%
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30%
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Australia MI reported adjusted operating income of $14
million versus $18 million in
the prior quarter and $19 million in the prior
year. The loss ratio in the quarter was 34 percent, up five
points sequentially from seasonally higher new delinquencies, net
of cures.
Flow NIW declined 15 percent4 sequentially from
a seasonally smaller originations market and increased nine
percent4 from the prior year primarily due to
increased mortgage origination activity with certain key
customers.
U.S. Life Insurance
Adjusted Operating
Income (Loss)
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(Amounts in
millions)
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Q1
19
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Q4
18
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Q1
18
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Long Term Care
Insurance
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$
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(20)
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$
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(314)
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$
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(32)
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Life
Insurance
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(2)
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(108)
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(1)
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Fixed
Annuities
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17
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(3)
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28
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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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(425)
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$
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(5)
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Long Term Care Insurance
LTC reported an adjusted operating loss of $20 million,
compared with $314 million in
the prior quarter and $32
million in the prior year. Compared to the prior quarter and
the prior year, results reflected earnings improvement from in
force rate actions. New claims in the current quarter reflected
higher severity and frequency compared to the prior quarter and
prior year, offset by favorable development on prior year incurred
but not reported claims. Claim terminations were seasonally
favorable compared to the prior quarter and less favorable than the
prior year. Results in the prior quarter reflected an
after-tax charge to earnings of $258
million from the 2018 LTC assumption updates driven
primarily by increasing later duration utilization assumptions for
claims with lifetime benefits.
Life Insurance
Life insurance reported an adjusted operating loss of
$2 million, compared with
$108 million in the prior quarter and
$1 million in the prior year.
Results versus the prior quarter and prior year reflected
lower mortality primarily in the term life insurance product,
although mortality experience remains higher than original pricing
assumptions in universal life insurance blocks. Results
versus the prior year and prior quarter also reflected higher
lapses resulting in higher amortization of deferred acquisition
costs (DAC) primarily associated with larger 20-year level-premium
term life insurance blocks entering their post-level premium
periods. Current quarter results also included model
corrections resulting in an unfavorable after-tax impact of
$11 million. Results in the
prior quarter also included an after-tax charge of $91 million following the company's annual review
of life insurance assumptions, primarily driven by assumption
changes due to lower expected growth in interest rates and emerging
mortality experience primarily in term universal life insurance
products.
Fixed Annuities
Fixed annuities reported adjusted operating income of
$17 million, compared with an
adjusted operating loss of $3 million
in the prior quarter and adjusted operating income of $28 million in the prior year. During the
first quarter of 2019, the company recorded unfavorable after-tax
charges of $13 million from loss
recognition testing on the single premium immediate annuity block.
Fourth quarter 2018 results included $17
million of unfavorable after-tax charges also primarily
related to loss recognition testing. Results versus the prior
quarter and prior year reflected favorable mortality in the single
premium immediate annuity block. Results versus the prior
quarter also reflected favorable reserve impacts associated with
fixed index annuity products due to the increase in equity markets
in the current quarter.
Runoff
Runoff reported adjusted operating income of $20 million, compared with an adjusted operating
loss of $2 million in the prior
quarter and adjusted operating income of $10
million in the prior year. Results reflected impacts
on the company's variable annuity business from favorable equity
market performance in the current quarter compared to the prior
quarter and prior year.
Corporate And Other
Corporate and Other reported an adjusted operating loss of
$73 million, compared with
$54 million in the prior quarter and
$59 million in the prior year.
Results in the current quarter reflected the previously mentioned
unfavorable tax reform impacts related to GILTI which are expected
to continue throughout 2019 and into 2020. Results in the
current quarter also reflected approximately $13 million of unfavorable tax timing adjustments
required for interim reporting that are expected to reverse by
year-end.
Capital & Liquidity
Genworth maintains the following capital positions in its
operating subsidiaries:
Key Capital &
Liquidity Metrics
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(Dollar amounts in
millions)
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Q1
19
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Q4
18
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Q1
18
|
|
U.S.
MI
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|
|
|
|
|
|
|
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Consolidated
Risk-To-Capital Ratio5
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11.9:1
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12.2:1
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12.5:1
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|
Genworth Mortgage
Insurance Corporation Risk-To-Capital
Ratio5
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12.1:1
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12.5:1
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|
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12.7:1
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|
|
Private Mortgage
Insurer Eligibility Requirements (PMIERs) Sufficiency
Ratio6
|
|
|
123
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%
|
|
|
129
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%
|
|
|
124
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%
|
Canada
MI
|
|
|
|
|
|
|
|
|
|
|
|
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|
Mortgage Insurer
Capital Adequacy Test (MICAT) Ratio5, 7
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172
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%
|
|
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172
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%
|
|
|
170
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%
|
Australia
MI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prescribed Capital
Amount (PCA) Ratio5
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|
201
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%
|
|
|
194
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%
|
|
|
185
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%
|
U.S. Life Insurance
Companies
|
|
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Consolidated
Risk-Based Capital (RBC) Ratio5
|
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195
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%
|
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|
199
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%
|
|
|
279
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%
|
Holding Company Cash
and Liquid Assets 8, 9
|
|
$
|
405
|
|
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$
|
504
|
|
|
$
|
1,204
|
|
|
|
|
|
|
|
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|
|
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|
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|
Key Points
- U.S. MI's PMIERs sufficiency ratio is estimated to be 123
percent under the revised standards effective March 31, 2019, more than $600 million above requirements;
- Canada MI's MICAT ratio is estimated to be 172 percent, above
both the regulatory minimum requirement of 150 percent and the
company's operating range of 160 to 165 percent;
- Australia MI's PCA ratio increased sequentially to 201 percent,
above the company's target operating range of 132 to 144
percent. The increase in the quarter was driven primarily by
lower required capital from seasoning of the in-force
portfolio;
- The holding company ended the quarter with $405 million of cash and liquid assets, which is
approximately $100 million below the
company's target of two times expected annual debt interest
payments excluding restricted cash and assets and declined
$99 million in the quarter due to the
timing of semi-annual interest and employee benefit payments.
Holding company cash is expected to benefit from the $1.5 billion of capital from Oceanwide after the
closing of the transaction.
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 2019 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 1,
2019. Investors are encouraged to review these
materials.
Genworth will conduct a conference call on May 1, 2019 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 # 5793696. 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 15, 2019 at 888 203.1112 or 719 457.0820
(outside the U.S.); conference ID # 5793696. 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.
In the first quarter of 2019, the company revised how it taxes
the adjustments to reconcile net income (loss) available to
Genworth Financial, Inc.'s common stockholders to adjusted
operating income (loss) to align the tax rate used in the
reconciliation to each segment's local jurisdictional tax rate.
Beginning in the first quarter of 2019, the company used a tax rate
of 27 percent and 30 percent for its Canada and Australia Mortgage Insurance
segments, respectively, to tax effect their adjustments. Its
domestic segments remain at a 21 percent tax rate. In 2018, the
company assumed a flat 21 percent tax rate on adjustments for all
of its segments to reconcile net income (loss) available to
Genworth Financial, Inc.'s common stockholders and adjusted
operating income (loss). 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.
Prior year amounts have not been re-presented to reflect this
revised presentation; however, the previous methodology would not
have resulted in a materially different segment-level adjusted
operating income (loss).
The company recorded a pre-tax expense of $4 million in the first quarter of 2019 related
to restructuring costs as it continues to evaluate and
appropriately size its organizational needs and
expenses. There were no infrequent or unusual items excluded
from adjusted operating income (loss) during the periods presented
other than fees incurred during the fourth quarter of 2018 related
to Genworth Holdings, Inc.'s bond consent solicitation of
$6 million for broker, advisor and
investment banking fees.
The tables at the end of this press release provide a
reconciliation of net income (loss) available to Genworth
Financial, Inc.'s common stockholders to adjusted operating income
(loss) for the three months ended March 31,
2019 and March 31, 2018, as
well as for the three months ended December
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 reported U.S. GAAP yield to core yield is
included in a table at the end of this press release.
Definition of Selected Operating Performance Measures
The company taxes its international businesses at their local
jurisdictional tax rates and its domestic businesses at the U.S.
corporate federal income tax rate of 21 percent. The company's tax
methodology applies the respective jurisdictional or domestic tax
rate to the pretax 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 withholding taxes and
permanent differences between U.S. GAAP and local tax law. 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.
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 businesses 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. For risk in-force
in the mortgage insurance businesses in Canada and Australia, the company has computed an
"effective" risk in-force amount, which recognizes that the loss on
any particular loan will be reduced by the net proceeds received
upon sale of the property. Effective risk in-force has been
calculated by applying to insurance in-force a factor of 35% that
represents the highest expected average per-claim payment for any
one underwriting year over the life of the mortgage insurance
businesses in Canada and
Australia. In Australia, the company has certain risk share
arrangements where it provides pro-rata coverage of certain loans
rather than 100% coverage. As a result, for loans with these risk
share arrangements, the applicable pro-rata coverage amount
provided is used when applying the factor. 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. (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 clearances, or the
possibility that such regulatory approvals may further delay the
transaction or will not be received prior to June 30, 2019 (and either or both of the parties
may not be willing to further waive their end date termination
rights beyond June 30, 2019) or that
materially burdensome or adverse regulatory conditions may be
imposed or undesirable measures may be required in connection with
any such regulatory approvals or clearances (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 or
clearances, including in connection with a potential alternative
funding structure or the current geo-political environment; the
parties' inability to obtain any necessary regulatory approvals or
clearances for the post-closing capital plan; the risk that a
closing condition of the transaction may not be satisfied; existing
and potential legal proceedings that 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, including
costs and expenses related to conditions imposed in connection with
regulatory approvals or clearances, which may be material; 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
stabilizing its U.S. life insurance businesses, debt obligations,
cost savings, ratings and capital); 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 mortgage
insurance 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 in the
future to its assumptions, methodologies or otherwise in connection
with periodic or other reviews); risks related to the impact of the
company's annual review of assumptions and methodologies relating
to its long term care insurance claim reserves and margin reviews,
including risks that additional information obtained in the future
or other changes to assumptions or methodologies materially affect
margins; 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, including the outcome of its annual review
of the premium earnings pattern for its mortgage insurance
businesses; 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 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 the
company's 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 premiums and associated benefit reductions sufficiently,
and in a timely manner, on in force long term care insurance
policies, and charge higher premiums on 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 and/or accept
reduced benefits), including to offset any negative impact on the
company's long term care insurance margins; 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: 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,
|
|
|
|
|
|
2019
|
|
2018
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Premiums
|
|
$
|
1,114
|
|
$
|
1,140
|
|
$
|
1,121
|
Net investment
income
|
|
|
829
|
|
|
804
|
|
|
815
|
Net investment gains
(losses)
|
|
|
74
|
|
|
(31)
|
|
|
(114)
|
Policy fees and other
income
|
|
|
187
|
|
|
202
|
|
|
191
|
Total
revenues
|
|
|
2,204
|
|
|
2,115
|
|
|
2,013
|
Benefits and
expenses:
|
|
|
|
|
|
|
|
|
|
Benefits and other
changes in policy reserves
|
|
|
1,301
|
|
|
1,311
|
|
|
1,847
|
Interest
credited
|
|
|
147
|
|
|
156
|
|
|
152
|
Acquisition and
operating expenses, net of deferrals
|
|
|
251
|
|
|
240
|
|
|
261
|
Amortization of
deferred acquisition costs and intangibles
|
|
|
91
|
|
|
104
|
|
|
92
|
Interest
expense
|
|
|
72
|
|
|
76
|
|
|
74
|
Total benefits and
expenses
|
|
|
1,862
|
|
|
1,887
|
|
|
2,426
|
Income (loss) before
income taxes
|
|
|
342
|
|
|
228
|
|
|
(413)
|
Provision (benefit)
for income taxes
|
|
|
112
|
|
|
63
|
|
|
(86)
|
Net income
(loss)
|
|
|
230
|
|
|
165
|
|
|
(327)
|
Less: net income
attributable to noncontrolling interests
|
|
|
56
|
|
|
53
|
|
|
2
|
Net income (loss)
available to Genworth Financial, Inc.'s common
|
|
|
|
|
|
|
|
|
|
stockholders
|
|
$
|
174
|
|
$
|
112
|
|
$
|
(329)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common
|
|
|
|
|
|
|
|
|
|
stockholders per
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.35
|
|
$
|
0.22
|
|
$
|
(0.66)
|
Diluted
|
|
$
|
0.34
|
|
$
|
0.22
|
|
$
|
(0.66)
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
501.2
|
|
|
499.6
|
|
|
500.8
|
Diluted 10
|
|
|
508.6
|
|
|
502.7
|
|
|
500.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Income (Loss) to Adjusted Operating Income
(Loss)
|
|
(Amounts in
millions, except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
Three
|
|
Three
|
|
|
|
|
|
|
months
ended
|
|
months
ended
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2018
|
|
Net income
(loss)
|
|
$
|
230
|
|
$
|
165
|
|
$
|
(327)
|
|
Less: net income
attributable to noncontrolling interest
|
|
|
56
|
|
|
53
|
|
|
2
|
|
Net Net income (loss)
available to Genworth Financial, Inc.'s common
stockholders
|
|
|
174
|
|
|
112
|
|
|
(329)
|
|
Adjustments to net
income (loss) available to Genworth Financial,
Inc.'s
|
|
|
|
|
|
|
|
|
|
|
common
stockholders:
|
|
|
|
|
|
|
|
|
|
|
Net investment
(gains) losses, net11
|
|
|
(71)
|
|
|
17
|
|
|
42
|
|
Expenses related to
restructuring
|
|
|
4
|
|
|
—
|
|
|
—
|
|
Fees associated with
bond consent solicitation
|
|
|
—
|
|
|
—
|
|
|
6
|
|
Taxes on
adjustments
|
|
|
14
|
|
|
(4)
|
|
|
(10)
|
|
Adjusted operating
income (loss)
|
|
$
|
121
|
|
$
|
125
|
|
$
|
(291)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating
income (loss):
|
|
|
|
|
|
|
|
|
|
|
U.S. Mortgage
Insurance segment
|
|
$
|
124
|
|
$
|
111
|
|
$
|
124
|
|
Canada Mortgage
Insurance segment
|
|
|
41
|
|
|
49
|
|
|
48
|
|
Australia Mortgage
Insurance segment
|
|
|
14
|
|
|
19
|
|
|
18
|
|
U.S. Life Insurance
segment:
|
|
|
|
|
|
|
|
|
|
|
Long Term Care
Insurance
|
|
|
(20)
|
|
|
(32)
|
|
|
(314)
|
|
Life
Insurance
|
|
|
(2)
|
|
|
(1)
|
|
|
(108)
|
|
Fixed
Annuities
|
|
|
17
|
|
|
28
|
|
|
(3)
|
|
Total U.S. Life
Insurance segment
|
|
|
(5)
|
|
|
(5)
|
|
|
(425)
|
|
Runoff
segment
|
|
|
20
|
|
|
10
|
|
|
(2)
|
|
Corporate and
Other
|
|
|
(73)
|
|
|
(59)
|
|
|
(54)
|
|
Adjusted operating
income (loss)
|
|
$
|
121
|
|
$
|
125
|
|
$
|
(291)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to Genworth Financial, Inc.'s common stockholders
|
|
|
|
|
|
|
|
|
|
|
per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.35
|
|
$
|
0.22
|
|
$
|
(0.66)
|
|
Diluted
|
|
$
|
0.34
|
|
$
|
0.22
|
|
$
|
(0.66)
|
|
Adjusted operating
income (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.24
|
|
$
|
0.25
|
|
$
|
(0.58)
|
|
Diluted
|
|
$
|
0.24
|
|
$
|
0.25
|
|
$
|
(0.58)
|
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
501.2
|
|
|
499.6
|
|
|
500.8
|
|
Diluted10
|
|
|
508.6
|
|
|
502.7
|
|
|
500.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets
|
(Amounts in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
Assets
|
|
(Unaudited)
|
|
|
|
Cash, cash
equivalents, restricted cash and invested assets
|
|
$
|
75,132
|
|
$
|
72,966
|
|
Deferred acquisition
costs
|
|
|
2,219
|
|
|
3,263
|
|
Intangible assets and
goodwill
|
|
|
265
|
|
|
347
|
|
Reinsurance
recoverable
|
|
|
17,257
|
|
|
17,278
|
|
Deferred tax and
other assets
|
|
|
1,105
|
|
|
1,210
|
|
Separate account
assets
|
|
|
6,210
|
|
|
5,859
|
|
|
Total
assets
|
|
|
|
|
$
|
102,188
|
|
$
|
100,923
|
Liabilities and
equity
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
Future policy
benefits
|
|
$
|
38,369
|
|
$
|
37,940
|
|
|
Policyholder account
balances
|
|
|
22,651
|
|
|
22,968
|
|
|
Liability for policy
and contract claims
|
|
|
10,536
|
|
|
10,379
|
|
|
Unearned
premiums
|
|
|
3,482
|
|
|
3,546
|
|
|
Deferred tax and
other liabilities
|
|
|
1,712
|
|
|
1,706
|
|
|
Non-recourse funding
obligations
|
|
|
311
|
|
|
311
|
|
|
Long-term
borrowings
|
|
|
4,035
|
|
|
4,025
|
|
|
Separate account
liabilities
|
|
|
6,210
|
|
|
5,859
|
|
|
|
Total
liabilities
|
|
|
|
87,306
|
|
|
86,734
|
|
Equity:
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
1
|
|
|
1
|
|
|
Additional paid-in
capital
|
|
|
11,989
|
|
|
11,987
|
|
|
Accumulated other
comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|
Net unrealized
investment gains (losses):
|
|
|
|
|
|
|
|
|
|
Net unrealized gains
(losses) on securities not other-than-temporarily
impaired
|
|
|
932
|
|
|
585
|
|
|
|
Net unrealized gains
(losses) on other-than-temporarily impaired securities
|
|
|
11
|
|
|
10
|
|
|
|
Net unrealized
investment gains (losses)
|
|
|
943
|
|
|
595
|
|
|
|
Derivatives
qualifying as hedges
|
|
|
1,850
|
|
|
1,781
|
|
|
|
Foreign currency
translation and other adjustments
|
|
|
(301)
|
|
|
(332)
|
|
|
Total accumulated
other comprehensive income (loss)
|
|
|
2,492
|
|
|
2,044
|
|
|
Retained
earnings
|
|
|
1,292
|
|
|
1,118
|
|
|
Treasury stock, at
cost
|
|
|
(2,700)
|
|
|
(2,700)
|
|
|
|
Total Genworth
Financial, Inc.'s stockholders' equity
|
|
|
13,074
|
|
|
12,450
|
|
|
Noncontrolling
interests
|
|
|
1,808
|
|
|
1,739
|
|
|
|
Total
equity
|
|
|
14,882
|
|
|
14,189
|
|
|
|
Total liabilities and
equity
|
|
$
|
102,188
|
|
$
|
100,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact of Foreign
Exchange on Adjusted Operating Income and Flow New Insurance
Written 12
Three months ended
March 31, 2019
|
|
|
|
|
|
|
|
|
|
Percentages
|
|
|
Percentages
|
|
|
|
Including
Foreign
|
|
|
Excluding
Foreign
|
|
|
|
Exchange
|
|
|
Exchange13
|
|
Canada Mortgage
Insurance (MI):
|
|
|
|
|
|
|
Adjusted operating
income
|
|
(16)
|
%
|
|
(10)
|
%
|
Flow new insurance
written
|
|
(12)
|
%
|
|
(8)
|
%
|
Flow new insurance
written (1Q19 vs. 4Q18)
|
|
(33)
|
%
|
|
(33)
|
%
|
|
|
|
|
|
|
|
Australia
MI:
|
|
|
|
|
|
|
Adjusted operating
income
|
|
(26)
|
%
|
|
(26)
|
%
|
Flow new insurance
written
|
|
--
|
%
|
|
9
|
%
|
Flow new insurance
written (1Q19 vs. 4Q18)
|
|
(15)
|
%
|
|
(15)
|
%
|
|
|
|
|
|
|
|
Reconciliation of
Reported Yield to Core Yield
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
|
|
|
|
|
|
|
months
ended
|
|
|
|
|
|
|
March
31,
|
|
(Assets - amounts
in billions)
|
|
2019
|
|
Reported Total
Invested Assets and Cash
|
|
$
|
74.4
|
|
|
Subtract:
|
|
|
|
|
|
|
|
Securities
lending
|
|
|
0.1
|
|
|
Unrealized gains
(losses)
|
|
|
3.8
|
|
|
Adjusted End of
Period Invested Assets and Cash
|
|
$
|
70.5
|
|
|
|
|
|
|
|
|
|
|
|
Average Invested
Assets and Cash Used in Reported Yield Calculation
|
|
$
|
70.4
|
|
|
Subtract:
|
|
|
|
|
|
|
|
Restricted commercial
mortgage loans related to a securitization
entity14
|
|
|
0.1
|
|
|
Average Invested
Assets and Cash Used in Core Yield Calculation
|
|
$
|
70.3
|
|
|
|
|
|
|
|
|
|
|
|
(Income - amounts
in
millions)
|
|
|
|
|
|
Reported Net
Investment Income
|
|
$
|
829
|
|
|
Subtract:
|
|
|
|
|
|
|
|
Bond calls and
commercial mortgage loan prepayments
|
|
|
6
|
|
|
Other non-core
items15
|
|
|
2
|
|
|
Restricted commercial
mortgage loans related to a securitization
entity14
|
|
|
-
|
|
|
Core Net Investment
Income
|
|
$
|
821
|
|
|
|
|
|
|
|
|
|
|
|
Reported
Yield
|
|
|
4.71
|
%
|
|
Core Yield
|
|
|
4.67
|
%
|
|
1
|
Private Mortgage
Insurer Eligibility Requirements
|
2
|
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.
|
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 first quarter of 2019 due to timing of the preparation and
filing of statutory statements.
|
6
|
The PMIERs
sufficiency ratio is calculated as available assets divided by
required assets as defined within PMIERs. The current period PMIERs
sufficiency ratio is an estimate due to the timing of the PMIERs
filing for the U.S. mortgage insurance business and reflects
revised PMIERs standards effective March 31, 2019. As of March 31,
2019, December 31, 2018 and March 31, 2018, the PMIERs sufficiency
ratios were in excess of $600 million, $750 million and $600
million, respectively, of available assets above the applicable
PMIERs requirements.
|
7
|
MICAT requirements
implemented January 1, 2019; prior periods reflect Minimum Capital
Test (MCT) ratio.
|
8
|
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.
|
9
|
Genworth Holdings,
Inc. had $361 million, $429 million and $1,129 million of cash,
cash equivalents and restricted cash as of March 31, 2019, December
31, 2018 and March 31, 2018, respectively, which included
approximately $16 million, $16 million and $4 million of restricted
cash, respectively. Genworth Holdings, Inc. also held $44 million,
$75 million and $75 million in U.S. government securities as of
March 31, 2019, December 31, 2018 and March 31, 2018, respectively,
which included $37 million, $42 million and $37 million,
respectively, of restricted assets.
|
10
|
Under applicable
accounting guidance, companies in a loss position are required to
use basic weighted-average common shares outstanding in the
calculation of diluted loss per share. Therefore, as a result of
the net loss for the three months ended December 31, 2018, the
company was required to use basic weighted-average common shares
outstanding in the calculation of diluted loss per share for the
three months ended December 31, 2018, as the inclusion of shares
for stock options, restricted stock units and stock appreciation
rights of 7.6 million would have been antidilutive to the
calculation. If the company had not incurred a net loss for the
three months ended December 31, 2018, dilutive potential
weighted-average common shares outstanding would have been 508.4
million.
|
11
|
For the three
months ended March 31, 2019, March 31, 2018 and December 31, 2018,
net investment gains (losses) were adjusted for DAC and other
intangible amortization and certain benefit reserves of $(2)
million, $(3) million and $(5) million, respectively, and adjusted
for net investment gains (losses) attributable to non-controlling
interests of $5 million, $(11) million and $(67) million,
respectively.
|
12
|
All percentages are
comparing the first quarter of 2019 to the first quarter of 2018
unless otherwise stated.
|
13
|
The impact of foreign
exchange was calculated using the comparable prior period exchange
rates.
|
14
|
Represents the
incremental assets and investment income related to restricted
commercial mortgage loans.
|
15
|
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-2019-results-300840934.html
SOURCE Genworth Financial, Inc.