Le Lézard
Classified in: Business, Covid-19 virus
Subjects: EARNINGS, Conference Call, Webcast

Equitable Holdings Reports Full Year and Fourth Quarter 2023 Results


Equitable Holdings, Inc. ("Equitable Holdings", "Holdings", or the "Company") (NYSE: EQH) today announced financial results for the full year and fourth quarter ended December 31, 2023.

"2023 was a momentous year for Equitable Holdings. We celebrated our fifth anniversary as a public company while also holding our inaugural investor day in May, where we highlighted our growth strategy and financial goals for the next five years. Equitable delivered solid financial results despite an uncertain macro environment, and our businesses continue to drive predictable cash flow to Holdings, with $1.3 billion in 2023, in line with our full year guidance. This, in combination with $2.0 billion of cash at Holdings, enabled us to deliver capital return consistent with our 60-70% payout ratio target and was recognized by S&P Global's upgrade of Equitable Holdings to A-. Higher interest rates and favorable demographic trends have led clients to seek our advice-centric solutions, resulting in $8.3 billion of Retirement and Wealth Management advisory net inflows over the past year. In asset management, we were not immune to industry-wide pressures on net flows, but AB remains well-positioned with a global distribution platform, strong performance track record and strategic focus on higher-growth segments like Private Markets," said Mark Pearson, President and Chief Executive Officer.

Mr. Pearson concluded, "While we faced some short-term headwinds this past year, we expect non-GAAP operating earnings per share growth to accelerate in 2024 and project increased cash generation of $1.4 billion to $1.5 billion6. This momentum is supported by the combination of organic growth within our Retirement and Wealth Management businesses and continued execution against our strategic initiatives."

Consolidated Results

 

 

 

 

 

 

 

 

Fourth Quarter

 

Full Year

(in millions, except per share amounts or unless otherwise noted)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

Total Assets Under Management/Administration ("AUM/A", in billions)

$

930

 

 

$

826

 

$

930

 

$

826

Net income attributable to Holdings

 

(698

)

 

 

62

 

 

1,302

 

 

2,153

Net income attributable to Holdings per common share

 

(2.15

)

 

 

0.10

 

 

3.48

 

 

5.46

Non-GAAP operating earnings

 

476

 

 

 

348

 

 

1,694

 

 

1,726

Non-GAAP operating earnings per common share ("EPS")

 

1.33

 

 

 

0.87

 

 

4.59

 

 

4.33

As of December 31, 2023, total AUM/A was $930 billion, a year-over-year increase of 13%, driven by higher markets over the prior twelve months.

On a full year basis, Net income attributable to Holdings was $1.3 billion in 2023 compared to $2.2 billion in 2022.

Full year Non-GAAP operating earnings were $1.7 billion in 2023 compared to $1.7 billion in 2022. Adjusting for notable items7 of $189 million, 2023 Non-GAAP operating earnings were $1.9 billion or $5.13 per share.

Net income attributable to Holdings for the fourth quarter of 2023 was $(698) million compared to $62 million in the fourth quarter of 2022.

Non-GAAP operating earnings in the fourth quarter of 2023 was $476 million compared to $348 million in the fourth quarter of 2022. Adjusting for notable items7 of $3 million, fourth quarter 2023 Non-GAAP operating earnings were $479 million or $1.34 per share.

As of December 31, 2023, book value per common share, including accumulated other comprehensive income ("AOCI"), was $3.26. Book value per common share, excluding AOCI, was $26.56.

Business Highlights

Business Segment Results

Individual Retirement

(in millions, unless otherwise noted)

Q4 2023

 

Q4 2022

Account value (in billions)

$

91.7

 

$

74.3

Segment net flows (in billions)

 

1.5

 

 

0.8

Operating earnings (loss)

 

206

 

 

190

Group Retirement

(in millions, unless otherwise noted)

Q4 2023

 

Q4 2022

Account value (in billions)

$

36.5

 

 

$

32.0

Segment net flows

 

(135

)

 

 

24

Operating earnings (loss)

 

98

 

 

 

92

AllianceBernstein

(in millions, unless otherwise noted)

Q4 2023

 

Q4 2022

Total AUM (in billions)

$

725.2

 

 

$

646.4

 

Segment net flows (in billions)

 

(1.8

)

 

 

(1.9

)

Operating earnings (loss)

 

114

 

 

 

94

 

Protection Solutions

(in millions)

Q4 2023

 

Q4 2022

Gross written premiums

$

821

 

$

776

 

Annualized premiums

 

102

 

 

74

 

Operating earnings (loss)

 

28

 

 

(41

)

Wealth Management

(in millions, unless otherwise noted)

Q4 2023

 

Q4 2022

Total AUA (in billions)

$

87.0

 

$

72.4

Advisory Net Flows (in billions)

 

0.5

 

 

0.2

Operating earnings (loss)

 

45

 

 

23

Legacy

(in millions)

Q4 2023

 

Q4 2022

Account value (in billions)

$

22.2

 

 

$

21.5

 

Net Flows (1)

 

(643

)

 

 

(589

)

Operating earnings (loss)

 

40

 

 

 

65

 

(1)

Net flows excluded as it relates to AV ceded to Venerable for the discrete periods of December 31, 2023 and December 31, 2022 were $(324) million and $(292) million, respectively.

Corporate and Other ("C&O")

The operating loss of $55 million in the fourth quarter decreased from an operating loss of $75 million in the prior year quarter, primarily driven by the benefit from a favorable out-of-period adjustment related to derivatives reporting. Operating loss after adjusting for notable items13 increased from $89 million in the prior year quarter to $95 million.

Exhibit 1: Notable Items

Notable items represent the impact on results from our annual actuarial assumption review, approximate impacts attributable to significant variances from the Company's expectations, and other items that the Company believes may not be indicative of future performance. The Company chooses to highlight the impact of these items and Non-GAAP measures, less notable items to provide a better understanding of our results of operations in a given period. Certain figures may not sum due to rounding.

Impact of notable items by segment and Corporate & Other:

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in millions)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Non-GAAP Operating Earnings

 

476

 

 

$

348

 

 

$

1,694

 

 

$

1,726

 

Post-tax Adjustments related to notable items:

 

 

 

 

 

 

 

Individual Retirement

 

5

 

 

 

(2

)

 

 

10

 

 

 

23

 

Group Retirement

 

11

 

 

 

6

 

 

 

24

 

 

 

16

 

Investment Management and Research

 

(14

)

 

 

?

 

 

 

(23

)

 

 

?

 

Protection Solutions

 

40

 

 

 

99

 

 

 

211

 

 

 

213

 

Wealth Management

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Legacy

 

1

 

 

 

2

 

 

 

10

 

 

 

(1

)

Corporate & Other

 

(40

)

 

 

(14

)

 

 

(31

)

 

 

(8

)

Notable items subtotal

 

3

 

 

 

91

 

 

 

201

 

 

 

243

 

Less: impact of actuarial assumption update

 

?

 

 

 

?

 

 

 

(12

)

 

 

1

 

Non-GAAP Operating Earnings, less Notable Items

$

479

 

 

$

439

 

 

$

1,883

 

 

$

1,970

 

 

 

 

 

 

 

 

 

Impact of notable items by item category:

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in millions)

2023

 

2022

 

 

2023

 

 

 

2022

 

Non-GAAP Operating Earnings

 

476

 

$

348

 

$

1,694

 

 

$

1,726

Pre-tax adjustments related to Notable Items:

 

 

 

 

 

 

 

Actuarial and Model Updates

 

14

 

 

1

 

 

(2

)

 

 

6

Mortality

 

?

 

 

84

 

 

151

 

 

 

209

Expenses

 

?

 

 

?

 

 

?

 

 

 

42

Net Investment Income

 

9

 

 

27

 

 

117

 

 

 

30

Subtotal

 

23

 

 

112

 

 

265

 

 

 

287

Post-tax impact of Notable Items

 

3

 

 

91

 

 

201

 

 

 

243

Less: impact of actuarial assumption update

 

?

 

 

?

 

 

(12

)

 

 

1

Non-GAAP Operating Earnings, less Notable Items

$

479

 

$

439

 

$

1,883

 

 

$

1,970

 

 

 

 

 

 

 

 

Earnings Conference Call

Equitable Holdings will host a conference call at 8 a.m. ET on February 7, 2024 to discuss its full year and fourth quarter 2023 results. The conference call webcast, along with additional earnings materials, will be accessible on the company's investor relations website at ir.equitableholdings.com. Please log on to the webcast at least 15 minutes prior to the call to download and install any necessary software.

To register for the conference call, please use the following link:
EQH Full Year and Fourth Quarter 2023 Earnings Call

After registering, you will receive an email confirmation including dial in details and a unique conference call code for entry. Registration is open through the live call. To ensure you are connected for the full call we suggest registering a day in advance or at minimum 10 minutes before the start of the call.

A webcast replay will be made available on the Equitable Holdings Investor Relations website at ir.equitableholdings.com.

About Equitable Holdings

Equitable Holdings, Inc. (NYSE: EQH) is a financial services holding company comprised of two complementary and well-established principal franchises, Equitable and AllianceBernstein. Founded in 1859, Equitable provides advice, protection and retirement strategies to individuals, families and small businesses. AllianceBernstein is a global investment management firm that offers high-quality research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets. Equitable Holdings has approximately 9,100 employees and financial professionals, $930 billion in assets under management and administration (as of 12/31/2023) and more than 5 million client relationships globally.

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as "expects," "believes," "anticipates," "intends," "seeks," "aims," "plans," "assumes," "estimates," "projects," "should," "would," "could," "may," "will," "shall" or variations of such words are generally part of forward-looking statements. Forward-looking statements are made based on management's current expectations and beliefs concerning future developments and their potential effects upon Equitable Holdings, Inc. ("Holdings") and its consolidated subsidiaries. These forward-looking statements include, but not limited to, statements regarding projections, estimates, forecasts and other financial and performance metrics and projections of market expectations."We," "us" and "our" refer to Holdings and its consolidated subsidiaries, unless the context refers only to Holdings as a corporate entity. There can be no assurance that future developments affecting Holdings will be those anticipated by management. Forward-looking statements include, without limitation, all matters that are not historical facts.

These forward-looking statements are not a guarantee of future performance and involve risks and uncertainties, and there are certain important factors that could cause actual results to differ, possibly materially, from expectations or estimates reflected in such forward-looking statements, including, among others: (i) conditions in the financial markets and economy, including the impact of plateauing or decreasing economic growth and geopolitical conflicts and related economic conditions, equity market declines and volatility, interest rate fluctuations, impacts on our goodwill and changes in liquidity and access to and cost of capital; (ii) operational factors, including reliance on the payment of dividends to Holdings by its subsidiaries, protection of confidential customer information or proprietary business information, operational failures by us or our service providers, potential strategic transactions, changes in accounting standards, and catastrophic events, such as the outbreak of pandemic diseases including COVID-19; (iii) credit, counterparties and investments, including counterparty default on derivative contracts, failure of financial institutions, defaults by third parties and affiliates and economic downturns, defaults and other events adversely affecting our investments; (iv) our reinsurance and hedging programs; (v) our products, structure and product distribution, including variable annuity guaranteed benefits features within certain of our products, variations in statutory capital requirements, financial strength and claims-paying ratings, state insurance laws limiting the ability of our insurance subsidiaries to pay dividends and key product distribution relationships; (vi) estimates, assumptions and valuations, including risk management policies and procedures, potential inadequacy of reserves and experience differing from pricing expectations, amortization of deferred acquisition costs and financial models; (vii) our Investment Management and Research segment, including fluctuations in assets under management and the industry-wide shift from actively-managed investment services to passive services; (viii) recruitment and retention of key employees and experienced and productive financial professionals; (ix) subjectivity of the determination of the amount of allowances and impairments taken on our investments; (x) legal and regulatory risks, including federal and state legislation affecting financial institutions, insurance regulation and tax reform; (xi) risks related to our common stock and (xii) general risks, including strong industry competition, information systems failing or being compromised and protecting our intellectual property.

Forward-looking statements, including any financial guidance, should be read in conjunction with the other cautionary statements, risks, uncertainties and other factors identified in Holdings' filings with the Securities and Exchange Commission. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, except as otherwise may be required by law.

Forward-looking Non-GAAP Metrics

The Company has presented forward-looking statements regarding Non-GAAP operating earnings, Non-GAAP operating earnings per share and Adjusted Operating Margin at AB. These non-GAAP financial measures are derived by excluding certain amounts, expenses or income, from the corresponding financial measures determined in accordance with GAAP. The determination of the amounts that are excluded from these non-GAAP financial measures is a matter of management judgment and depends upon, among other factors, the nature of the underlying expense or income amounts recognized in a given period. We are unable to present a quantitative reconciliation of forward-looking adjusted operating earnings per share and payout ratio targeted to non-GAAP operating earnings to their most directly comparable forward-looking GAAP financial measures because such information is not available, and management cannot reliably predict all of the necessary components of such GAAP measures without unreasonable effort or expense. In addition, we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors. The unavailable information could have a significant impact on the Company's future financial results. These non-GAAP financial measures are preliminary estimates and are subject to risks and uncertainties, including, among others changes in connection with quarter-end and year-end adjustments. Any variations between the Company's actual results and preliminary financial data set forth above may be material.

Use of Non-GAAP Financial Measures

In addition to our results presented in accordance with U.S. GAAP, we report Non-GAAP Operating Earnings, Non-GAAP Operating EPS, and Book Value per common share, excluding AOCI, each of which is a measure that is not determined in accordance with U.S. GAAP. Management principally uses these non-GAAP financial measures in evaluating performance because they present a clearer picture of our operating performance and they allow management to allocate resources. Similarly, management believes that the use of these Non-GAAP financial measures, together with relevant U.S. GAAP measures, provide investors with a better understanding of our results of operations and the underlying profitability drivers and trends of our business. These non-GAAP financial measures are intended to remove from our results of operations the impact of market changes (where there is mismatch in the valuation of assets and liabilities) as well as certain other expenses which are not part of our underlying profitability drivers or likely to re-occur in the foreseeable future, as such items fluctuate from period-to-period in a manner inconsistent with these drivers. These measures should be considered supplementary to our results that are presented in accordance with U.S. GAAP and should not be viewed as a substitute for the U.S. GAAP measures. Other companies may use similarly titled non-GAAP financial measures that are calculated differently from the way we calculate such measures. Consequently, our non-GAAP financial measures may not be comparable to similar measures used by other companies.

We also discuss certain operating measures, including AUM, AV, and certain other operating measures, which management believes provide useful information about our businesses and the operational factors underlying our financial performance.

Non-GAAP Operating Earnings

Non-GAAP Operating Earnings is an after-tax non-GAAP financial measure used to evaluate our financial performance on a consolidated basis that is determined by making certain adjustments to our consolidated after-tax net income attributable to Holdings. The most significant of such adjustments relates to our derivative positions, which protect economic value and statutory capital, and the variable annuity product MRBs. This is a large source of volatility in net income.

Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of the following items:

In the third quarter 2023, the Company updated its operating earnings measure to exclude the impact of the annual actuarial assumption update attributable to LFPB as the majority of the earnings volatility attributable to these assumption updates relate to the Company's Legacy and non-business segment products and as such do not represent the Company's ongoing revenue generating activities or future business strategy, and impedes comparability of operating results period over period. Operating earnings were favorably impacted by this change in the amount of $61 million for the year ended December 31, 2023. The presentation of operating earnings in prior periods was not revised to reflect this modification because the impact to those periods was immaterial.

Also, in the fourth quarter of 2023, the Company updated its operating earnings measure to exclude the impact of realized amounts related to equity classified instruments. The recognition of the realized capital gains and losses from investments in current net investment income is generally considered distortive and not reflective of the ongoing core business activities of the segments. Operating earnings were favorably impacted in the amount of $8 million for the year ended December 31, 2023. The presentation of operating earnings in prior periods was not revised to reflect this modification. The impact to operating earnings would have been $36 million favorable for the year ended December 31, 2022 and $50 million unfavorable for the year ended December 31, 2021.

Because Non-GAAP Operating Earnings excludes the foregoing items that can be distortive or unpredictable, management believes that this measure enhances the understanding of the Company's underlying drivers of profitability and trends in our business, thereby allowing management to make decisions that will positively impact our business.

We use the prevailing corporate federal income tax rate of 21% while taking into account any non-recurring differences for events recognized differently in our financial statements and federal income tax returns as well as partnership income taxed at lower rates when reconciling Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings.

The table below presents a reconciliation of Net income (loss) attributable to Holdings to Non-GAAP Operating Earnings for the three months and years ended December 31, 2023 and 2022:

 

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(in millions)

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss) attributable to Holdings

 

$

(698

)

 

$

62

 

 

$

1,302

 

 

$

2,153

 

Adjustments related to:

 

 

 

 

 

 

 

 

Variable annuity product features

 

 

1,191

 

 

 

129

 

 

 

607

 

 

 

(2,193

)

Investment (gains) losses

 

 

159

 

 

 

55

 

 

 

713

 

 

 

945

 

Net actuarial (gains) losses related to pension and other postretirement benefit obligations

 

 

13

 

 

 

25

 

 

 

39

 

 

 

82

 

Other adjustments (1) (2)

 

 

153

 

 

 

150

 

 

 

351

 

 

 

605

 

Income tax expense (benefit) related to above adjustments

 

 

(319

)

 

 

(76

)

 

 

(359

)

 

 

118

 

Non-recurring tax items (3)

 

 

(23

)

 

 

3

 

 

 

(959

)

 

 

16

 

Non-GAAP Operating Earnings

 

$

476

 

 

$

348

 

 

$

1,694

 

 

$

1,726

 

 

 

 

 

 

 

 

 

 

_______________

(1)

 

Includes certain gross legal expenses related to the cost of insurance litigation, and claims related to a commercial relationship of $109 million, $50 million, $144 million and $218 million for the three months and years ended December 31, 2023 and 2022, respectively. Includes policyholder benefit costs of $75 million for the year ended December 31, 2022, stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.

(2)

 

Includes Non-GMxB related derivative hedge losses of $33 million, $26 million, $34 million and ($34) million for the three months and years ended December 31, 2023 and 2022, respectively.

(3)

 

For the three and twelve months ended December 31, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period and tax valuation allowance decreases of $30 million and $1 billion, respectively.

Non-GAAP Operating EPS

Non-GAAP Operating Earnings per common share is calculated by dividing Non-GAAP Operating Earnings less preferred stock dividends by diluted common shares outstanding. The table below presents a reconciliation of GAAP EPS to Non-GAAP Operating EPS for the three months and years ended December 31, 2023 and 2022.

 

Three Months Ended

December 31,

 

Year Ended

December 31,

(per share amounts)

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss) attributable to Holdings (1)

$

(2.07

)

 

$

0.17

 

 

$

3.70

 

 

$

5.67

 

Less: Preferred stock dividend

 

0.08

 

 

 

0.07

 

 

 

0.22

 

 

 

0.21

 

Net Income (loss) available to common shareholders

 

(2.15

)

 

 

0.10

 

 

 

3.48

 

 

 

5.46

 

Adjustments related to:

 

 

 

 

 

 

 

Variable annuity product features

 

3.53

 

 

 

0.35

 

 

 

1.73

 

 

 

(5.77

)

Investment (gains) losses

 

0.47

 

 

 

0.15

 

 

 

2.03

 

 

 

2.49

 

Net actuarial (gains) losses related to pension and other postretirement benefit obligations

 

0.04

 

 

 

0.07

 

 

 

0.11

 

 

 

0.22

 

Other adjustments (2) (3)

 

0.46

 

 

 

0.39

 

 

 

0.99

 

 

 

1.58

 

Income tax expense (benefit) related to above adjustments

 

(0.95

)

 

 

(0.20

)

 

 

(1.02

)

 

 

0.31

 

Non-recurring tax items (4)

 

(0.07

)

 

 

0.01

 

 

 

(2.73

)

 

 

0.04

 

Non-GAAP Operating Earnings

$

1.33

 

 

$

0.87

 

 

$

4.59

 

 

$

4.33

 

 

 

 

 

 

 

 

 

_______________

(1)

 

For periods presented with a net loss, basic shares are used for EPS.

(2)

 

The legal accruals impact per common share is $0.32, $0.13, $0.41 and $0.57 for the three months and years ended December 31, 2023 and 2022, respectively. Includes policyholder benefit costs of $0.20 per common share for the year ended December 31, 2022 stemming from a deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market.

(3)

 

Includes Non-GMxB related derivative hedge losses impact per common share is $0.10, $0.07, $0.09 and $(0.09) for the three months and years ended December 31, 2023 and 2022, respectively.

(4)

 

For the three and twelve months ended December 31, 2023, non-recurring tax items reflect primarily the effect of uncertain tax positions for a given audit period and tax valuation allowance decreases of $0.09 and $2.84 per common share, respectively.

Book Value per common share, excluding AOCI

We use the term "book value" to refer to total equity attributable to Holdings' common shareholders. Book Value per common share, excluding AOCI, is our total equity attributable to Holdings, excluding AOCI and preferred stock, divided by ending common shares outstanding.

 

December 31,

2023

 

December 31,

2022

Book value per common share

$

3.26

 

$

(0.44

)

Per share impact of AOCI

 

23.30

 

 

24.63

 

Book Value per common share, excluding AOCI

$

26.56

 

$

24.19

 

Other Operating Measures

We also use certain operating measures which management believes provide useful information about our businesses and the operational factors underlying our financial performance.

Account Value ("AV")

Account value generally equals the aggregate policy account value of our retirement products.

Assets Under Management ("AUM")

AUM means investment assets that are managed by one of our subsidiaries and includes: (i) assets managed by AB, (ii) the assets in our general account investment portfolio and (iii) the separate account assets of our Individual Retirement, Group Retirement and Protection Solutions businesses. Total AUM reflects exclusions between segments to avoid double counting.

Assets Under Management ("AUA")

AUA means advisory and brokerage investment assets included in the Company's Wealth Management segment.

Segment net flows

Net change in segment customer account balances in a period including, but not limited to, gross premiums, surrenders, withdrawals and benefits. It excludes investment performance, interest credited to customer accounts and policy charges.

Consolidated Statements of Income (Loss) (Unaudited)

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(in millions)

REVENUES

 

 

 

 

 

 

 

Policy charges and fee income

$

599

 

 

$

581

 

 

$

2,380

 

 

$

2,454

 

Premiums

 

281

 

 

 

250

 

 

 

1,104

 

 

 

994

 

Net derivative gains (losses)

 

(1,254

)

 

 

(1,309

)

 

 

(2,397

)

 

 

907

 

Net investment income (loss)

 

1,223

 

 

 

958

 

 

 

4,320

 

 

 

3,315

 

Investment gains (losses), net:

 

 

 

 

 

 

 

Credit losses on available-for-sale debt securities and loans

 

(75

)

 

 

(48

)

 

 

(220

)

 

 

(314

)

Other investment gains (losses), net

 

(84

)

 

 

(7

)

 

 

(493

)

 

 

(631

)

Total investment gains (losses), net

 

(159

)

 

 

(55

)

 

 

(713

)

 

 

(945

)

Investment management and service fees

 

1,241

 

 

 

1,160

 

 

 

4,820

 

 

 

4,891

 

Other income

 

239

 

 

 

231

 

 

 

1,014

 

 

 

1,028

 

Total revenues

 

2,170

 

 

 

1,816

 

 

 

10,528

 

 

 

12,644

 

BENEFITS AND OTHER DEDUCTIONS

 

 

 

 

 

 

 

Policyholders' benefits

 

647

 

 

 

696

 

 

 

2,754

 

 

 

2,716

 

Remeasurement of liability for future policy benefits

 

29

 

 

 

12

 

 

 

75

 

 

 

66

 

Change in market risk benefits and purchased market risk benefits

 

(35

)

 

 

(1,136

)

 

 

(1,807

)

 

 

(1,280

)

Interest credited to policyholders' account balances

 

563

 

 

 

409

 

 

 

2,083

 

 

 

1,410

 

Compensation and benefits

 

586

 

 

 

519

 

 

 

2,328

 

 

 

2,201

 

Commissions and distribution-related payments

 

412

 

 

 

383

 

 

 

1,590

 

 

 

1,567

 

Interest expense

 

57

 

 

 

53

 

 

 

228

 

 

 

201

 

Amortization of deferred policy acquisition costs

 

169

 

 

 

150

 

 

 

641

 

 

 

586

 

Other operating costs and expenses

 

559

 

 

 

572

 

 

 

1,898

 

 

 

2,185

 

Total benefits and other deductions

 

2,987

 

 

 

1,658

 

 

 

9,790

 

 

 

9,652

 

Income (loss) from continuing operations, before income taxes

 

(817

)

 

 

158

 

 

 

738

 

 

 

2,992

 

Income tax (expense) benefit

 

228

 

 

 

(20

)

 

 

905

 

 

 

(598

)

Net income (loss)

 

(589

)

 

 

138

 

 

 

1,643

 

 

 

2,394

 

Less: Net income (loss) attributable to the noncontrolling interest

 

109

 

 

 

76

 

 

 

341

 

 

 

241

 

Net income (loss) attributable to Holdings

 

(698

)

 

 

62

 

 

 

1,302

 

 

 

2,153

 

Less: Preferred stock dividends

 

26

 

 

 

26

 

 

 

80

 

 

 

80

 

Net income (loss) available to Holdings' common shareholders

$

(724

)

 

$

36

 

 

$

1,222

 

 

$

2,073

 

 

 

 

 

 

 

 

 

Earnings Per Common Share

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

(in millions)

Earnings per common share

 

 

 

 

 

 

 

Basic

$

(2.15

)

 

$

0.10

 

$

3.49

 

$

5.49

Diluted

$

(2.15

)

 

$

0.10

 

$

3.48

 

$

5.46

Weighted average shares

 

 

 

 

 

 

 

Weighted average common stock outstanding for basic earnings per common share

 

337.2

 

 

 

368.6

 

 

350.1

 

 

377.6

Weighted average common stock outstanding for diluted earnings per common share (1)

 

337.2

 

 

 

371.5

 

 

351.6

 

 

379.9

 

 

 

 

 

 

 

 

(1)

 

Due to net loss for the three months ended December 31, 2023 approximately 2.0 million share awards were excluded from the diluted EPS calculation.

Results of Operations by Segment

 

Three Months Ended

December 31,

 

Year Ended

December 31,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

 

(in millions)

Operating earnings (loss) by segment:

 

 

 

 

 

 

 

Individual Retirement

$

206

 

 

$

190

 

 

$

850

 

 

$

762

 

Group Retirement

 

98

 

 

 

92

 

 

 

399

 

 

 

446

 

Investment Management and Research

 

114

 

 

 

94

 

 

 

411

 

 

 

424

 

Protection Solutions

 

28

 

 

 

(41

)

 

 

51

 

 

 

97

 

Wealth Management

 

45

 

 

 

23

 

 

 

159

 

 

 

101

 

Legacy

 

40

 

 

 

65

 

 

 

186

 

 

 

235

 

Corporate and Other (1)

 

(55

)

 

 

(75

)

 

 

(362

)

 

 

(339

)

Non-GAAP Operating Earnings

$

476

 

 

$

348

 

 

$

1,694

 

 

$

1,726

 

 

 

 

 

 

 

 

 

(1)

 

Includes interest expense and financing fees of $56 million, $49 million, $229 million and $205 million for the three months and year ended December 31, 2023, and 2022 respectively.

Select Balance Sheet Statistics

 

December 31,

2023

 

December 31,

2022

 

(in millions)

ASSETS

 

 

 

Total investments and cash and cash equivalents

$

110,412

 

 

$

97,378

 

Separate Accounts assets

 

127,251

 

 

 

114,853

 

Total assets

 

276,814

 

 

 

252,702

 

 

 

 

 

LIABILITIES

 

 

 

Long-term debt

$

3,820

 

 

$

3,322

 

Future policy benefits and other policyholders' liabilities

 

17,363

 

 

 

16,603

 

Policyholders' account balances

 

95,673

 

 

 

83,866

 

Total liabilities

 

271,656

 

 

 

249,106

 

 

 

 

 

EQUITY

 

 

 

Preferred stock

 

1,562

 

 

 

1,562

 

Accumulated other comprehensive income (loss)

 

(7,777

)

 

 

(8,992

)

Total equity attributable to Holdings

$

2,649

 

 

$

1,401

 

Total equity attributable to Holdings' common shareholders (ex. AOCI)

 

8,864

 

 

 

8,831

 

Assets Under Management (Unaudited)

 

December 31,

2023

 

December 31,

2022

 

(in billions)

Assets Under Management

 

 

 

AB AUM

$

725.2

 

 

$

646.4

 

Exclusion for General Account and other Affiliated Accounts

 

(75.0

)

 

 

(66.8

)

Exclusion for Separate Accounts

 

(44.5

)

 

 

(38.2

)

AB third party

$

605.7

 

 

$

541.4

 

 

 

 

 

Total company AUM

 

 

 

AB third party

$

605.7

 

 

$

541.4

 

General Account and other Affiliated Accounts (1) (3) (4)

 

110.4

 

 

 

97.4

 

Separate Accounts (2) (3) (4)

 

127.3

 

 

 

114.9

 

Total AUM

$

843.4

 

 

$

753.6

 

 

 

 

 

_______________

(1)

 

"General Account and Other Affiliated Accounts" refers to assets held in the general accounts of our insurance companies and other assets on which we bear the investment risk.

(2)

 

"Separate Accounts" refers to the separate account investment assets of our insurance subsidiaries excluding any assets on which we bear the investment risk.

(3)

 

As of December 31, 2023 and December 31, 2022, Separate Account and General Account AUM is inclusive of $12.5 billion and $49 million as well as $12.1 billion and $56 million, respectively, Account Value ceded to Venerable. For additional information on the Venerable transaction see Note 13 of the Notes to Consolidated Financial Statements within the 10-K.

(4)

 

As of December 31, 2023 and December 31, 2022, Separate Account and General Account AUM is inclusive of $6.4 billion and $3.6 billion as well as $5.6 billion and $3.9 billion, respectively, Account Value ceded to Global Atlantic. For additional information on the Global Atlantic transaction see MD&A - Executive Summary 'Global Atlantic Reinsurance Transaction' within the 10-K.

_______________
1 Cash flow is net dividends and distributions to Equitable Holdings from its subsidiaries.
2 Includes Individual Retirement and Group Retirement segments.
3 This press release includes certain Non-GAAP financial measures. More information on these measures and reconciliations to the most comparable U.S. GAAP measures can be found in the "Use of Non-GAAP Financial Measures" section of this release.
4 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
5 Under this authorization, the Company may, from time to time, purchase shares of its common stock through various means including open market transactions, privately negotiated transactions, forward, derivative, accelerated repurchase, or automatic share repurchase transactions, or tender offers. The authorization for the share repurchase program may be terminated, increased or decreased by the board of directors at any time.
6 Cash generation is the cash flow from asset and wealth management subsidiaries, along with capital generated in excess of the target combined NAIC RBC ratio at the insurance subsidiaries. Financial guidance assumes normal market conditions including 6% equity return, 2% dividend yield and interest rates following the forward curve.
7 Please refer to Exhibit 1 for detailed reconciliation and definitions related to notable items.
8 Refers to AllianceBernstein L.P. and AllianceBernstein Holding L.P., collectively.
9 Under this authorization, the Company may, from time to time, purchase shares of its common stock through various means including open market transactions, privately negotiated transactions, forward, derivative, accelerated repurchase, or automatic share repurchase transactions, or tender offers. The authorization for the share repurchase program may be terminated, increased or decreased by the board of directors at any time.
10 Cash generation is the cash flow from asset and wealth management subsidiaries, along with capital generated in excess of the target combined NAIC RBC ratio at the insurance subsidiaries. Financial guidance assumes normal market conditions including 6% equity return, 2% dividend yield and interest rates following the forward curve.
11 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
12 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.
13 Please refer to Exhibit 1 for a detailed reconciliation and definitions related to notable items.


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