Close

Form 8-K GENWORTH FINANCIAL INC For: Feb 01

February 1, 2022 4:52 PM EST

Get inside Wall Street with StreetInsider Premium. Claim your 1-week free trial here.

Exhibit 99.1

 

LOGO

Genworth Financial Announces Fourth Quarter 2021 Results

Fourth Quarter Net Income of $163 Million and Adjusted Operating Income of $164 Million;

2021 Full Year Net Income of $904 Million and Adjusted Operating Income of $765 Million

 

 

Enact segment adjusted operating income of $125 million, with nine percent annual growth in primary insurance in force and a loss ratio of three percent

 

 

Enact’s PMIERs1 sufficiency ratio estimated at 165 percent, approximately $2.0 billion above published requirements

 

 

U.S. Life Insurance segment adjusted operating income of $41 million driven by long term care insurance (LTC) results benefitting from in force rate actions and higher net investment income

 

 

Annual U.S. GAAP assumption review completed for U.S. Life Insurance segment:

 

   

LTC U.S. GAAP active life margins remained positive and in the prior year range of $0.5 to $1.0 billion

 

   

Net unfavorable impact of $70 million after-tax in life insurance

 

 

Strong U.S. Life Insurance companies’ statutory income driving estimated year-end RBC to 290%

 

 

Received $163 million dividend payment from Enact

 

 

Significant holding company debt retirement in the fourth quarter of 2021 and approximately $2.1 billion principal retired in the year

 

 

Genworth holding company cash and liquid assets of $356 million at year-end

Richmond, VA (February 1, 2022) – Genworth Financial, Inc. (NYSE: GNW) today reported results for the quarter ended December 31, 2021. The company reported net income2 of $163 million, or $0.32 per diluted share, in the fourth quarter of 2021, compared with net income of $267 million, or $0.52 per diluted share, in the fourth quarter of 2020. The company reported adjusted operating income3 of $164 million, or $0.32 per diluted share, in the fourth quarter of 2021, compared with adjusted operating income of $188 million, or $0.37 per diluted share, in the fourth quarter of 2020.

 

 

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.


The company reported full year net income of $904 million, or $1.76 per diluted share, in 2021, compared with net income of $178 million, or $0.35 per diluted share in 2020. The company reported adjusted operating income of $765 million, or $1.48 per diluted share, in 2021, compared with adjusted operating income of $310 million, or $0.61 per diluted share, in 2020.

“Genworth delivered strong operating performance, including outstanding statutory results in its U.S. Life Insurance business, in what was an exceptional year for the company,” said Tom McInerney, Genworth President and CEO. “While driving this performance, Genworth made significant progress against its strategic priorities. In 2021, we completed a partial IPO of Enact, retired more than $2.0 billion of holding company debt, made progress toward stabilizing our legacy long term care insurance business, reduced expenses and advanced long-term care growth initiatives. The combination of our strong underlying operating performance in Enact and LTC, improved balance sheet, reduced cost of capital and 81.6% ownership of Enact is creating value for Genworth’s shareholders over both the near- and long-term.”

Fourth Quarter of 2021 Strategic Highlights

 

 

Reduced holding company debt by $518 million in the fourth quarter, including full retirement of the senior notes due in August 2023 ($400 million principal) and reduction of the February 2024 senior notes by $118 million principal. As of December 31, 2021, Genworth had approximately $1.2 billion of parent holding company long-term debt outstanding and $356 million in cash and liquid assets.

 

 

Continued progress against LTC multi-year rate action plan, with an estimated $19.6 billion net present value from achieved LTC rate actions since 2012.

 

 

Shareholder return program will be evaluated once the company reaches its holding company debt target of $1.0 billion and Enact initiates its regular common dividend.

Financial Performance

 

Consolidated Net Income &                                                                     

Adjusted Operating Income

                                                                    
     Three months ended December 31            Twelve months ended December 31         
     2021      2020            2021      2020         
            Per             Per                   Per             Per         
            diluted             diluted      Total            diluted             diluted      Total  

(Amounts in millions, except per share)

   Total      share      Total      share      % change     Total      share      Total      share      % change  

Net income available to Genworth’s common stockholders

   $ 163      $ 0.32      $ 267      $ 0.52        (39 )%    $ 904      $ 1.76      $ 178      $ 0.35        NM  4 

Adjusted operating income

   $ 164      $ 0.32      $ 188      $ 0.37        (13 )%    $ 765      $ 1.48      $ 310      $ 0.61        147

Weighted-average diluted common shares

     515.6           512.5             514.7           511.6        

 

     As of December 31  
     2021      2020  

Book value per share

   $ 30.57      $ 30.28  

Book value per share, excluding accumulated other comprehensive income (loss)

   $ 22.96      $ 21.54  

 

4

The company defines “NM” as not meaningful for increases or decreases greater than 200 percent.


Net investment gains, net of taxes and other adjustments, increased net income by $106 million in the current quarter, compared with $114 million in the fourth quarter of 2020. The investment gains in the current quarter were primarily from mark-to-market gains on limited partnership investments held in the LTC business.

In December 2021, the company entered into a new third-party reinsurance agreement to cede certain term life insurance policies as part of a life block transaction. The transaction resulted in a net after-tax U.S. GAAP loss of $73 million for the amounts initially ceded. However, this transaction generated statutory capital of approximately $170 million for Genworth Life Insurance Company and its subsidiaries.

Net investment income was $866 million in the quarter, compared to $859 million in the prior quarter and $846 million in the prior year. Net investment income was higher compared to both the prior quarter and the prior year as a result of higher variable investment income, primarily driven by income from limited partnerships in the LTC business. The reported yield and the core yield3 for the current quarter were 5.26 percent and 5.01 percent, respectively, compared to 5.19 percent and 4.95 percent, respectively, in the prior quarter.

Genworth’s effective tax rate on income from continuing operations for the current quarter was approximately 24 percent. The effective tax rate was increased by the tax effect of forward starting swap gains settled prior to the change in the corporate tax rate under the 2017 Tax Cuts and Jobs Act, which continue to be tax effected at 35 percent as they are amortized into net investment income.

The below table shows adjusted operating income (loss) by segment and for Corporate and Other activities:

 

Adjusted Operating Income (Loss)                     

(Amounts in millions)

   Q4 21      Q3 21      Q4 20  

Enact

   $ 125      $ 134      $ 95  

U.S. Life Insurance

     41        93        129  

Runoff

     16        11        13  

Corporate and Other

     (18      1        (49
  

 

 

    

 

 

    

 

 

 

Total Adjusted Operating Income

   $ 164      $ 239      $ 188  
  

 

 

    

 

 

    

 

 

 

Adjusted operating income (loss) represents income (loss) from continuing operations excluding the after-tax effects of income (loss) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and other adjustments, net of taxes. A reconciliation of net income to adjusted operating income is included at the end of this press release.


Enact

 

Operating Metrics                   

(Dollar amounts in millions)

   Q4 21     Q3 21     Q4 20  

Adjusted operating income

   $ 125     $ 134     $ 95  

Primary new insurance written

   $ 21,400     $ 24,000     $ 27,000  

Loss ratio

     3     14     35

Enact reported adjusted operating income of $125 million, compared with $134 million in the prior quarter and $95 million in the prior year. Enact’s primary insurance in force increased nine percent versus the prior year from new insurance written (NIW), partially offset by historically low persistency. Primary NIW decreased 11 percent from the prior quarter and was also down 21 percent versus the prior year primarily from a smaller private mortgage insurance market driven in part by a decline in refinance activity. Earned premiums in the current quarter were lower compared to both the prior quarter and the prior year as insurance in force growth was offset by a decrease in single premium policy cancellations, the continued lapse of older, higher priced policies and higher ceded premiums versus the prior year. Enact’s expenses in the current quarter were $59 million, resulting in an expense ratio of 25 percent, which increased slightly versus the prior quarter.

Enact’s current quarter results reflected losses of $6 million and a loss ratio of three percent. Results in the prior quarter and prior year reflected losses of $34 million and $89 million, and a loss ratio of 14 percent and 35 percent, respectively. New delinquencies in the current quarter were 8,282, an increase of 12 percent from 7,427 in the prior quarter, driven by elevated delinquencies from FEMA5 impacted areas and recent large books entering their expected loss development pattern. Current quarter new delinquencies decreased 31 percent from 11,923 in the prior year. Losses in the current quarter included a $32 million pre-tax reserve release on pre-COVID-19 delinquencies, while losses in the prior year included a $37 million pre-tax reserve strengthening on existing delinquencies. The favorable reserve development decreased the current quarter loss ratio by 13 points. Despite the sequential increase in new delinquencies, the current quarter new delinquency rate of 0.9 percent remained consistent with pre-pandemic levels. Approximately 29 percent of new primary delinquencies in the current quarter were reported in forbearance plans which may cure at elevated rates.

 

 

5

Federal Emergency Management Agency


U.S. Life Insurance

 

Adjusted Operating Income (Loss)                     

(Amounts in millions)

   Q4 21      Q3 21      Q4 20  

Long Term Care Insurance

   $ 119      $ 133      $ 129  

Life Insurance

     (98      (68      (20

Fixed Annuities

     20        28        20  
  

 

 

    

 

 

    

 

 

 

Total U.S. Life Insurance

   $ 41      $ 93      $ 129  
  

 

 

    

 

 

    

 

 

 

 

Long Term Care Insurance In Force Rate Action Performance                     

(Amounts in millions)

   Q4 21      Q3 21      Q4 20  

Adjusted Operating Income from In Force Rate Actions6,7

   $ 296      $ 304      $ 225  

Long Term Care Insurance

Long term care insurance reported adjusted operating income of $119 million, compared with $133 million in the prior quarter and $129 million in the prior year. Earnings from in force rate actions were more favorable than the prior year, driven primarily by higher benefit reductions, which included policyholder benefit reduction elections made as part of a legal settlement, net of litigation expenses and taxes. LTC results also reflected higher net investment income of $26 million after-tax versus the prior year and $9 million after-tax versus the prior quarter primarily from limited partnerships, bond calls, commercial mortgage loan prepayments and gains on Treasury Inflation-Protected Securities.

Claim terminations in the current quarter remained elevated versus pre-pandemic levels, increasing compared to the prior quarter but decreasing compared to the prior year. Beginning in the fourth quarter of 2020, the company established a temporary COVID-19 mortality adjustment, reflecting the assumption that the pandemic had accelerated its mortality experience on the most vulnerable claimants, leaving its overall claim population less likely to terminate compared to the pre-pandemic average population. In the current quarter, the company released $8 million of this reserve, leaving a pre-tax balance of $134 million as of December 31, 2021. As the COVID-19 pandemic continues to develop, short-term mortality experience may fluctuate, and the COVID-19 mortality adjustment would be reduced accordingly if mortality experience becomes unfavorable until the reserve is exhausted.

 

 

6

Excludes reserve updates resulting from profits followed by losses.

7

Includes estimated premium tax, commissions, and other expenses, net of tax of $(61) million, $(61) million and $(14) million in the fourth quarter of 2021, third quarter of 2021 and fourth quarter of 2020, respectively. Also includes estimated impacts from a legal settlement, net of tax and litigation expenses, of $57 million and $48 million in the fourth quarter of 2021 and third quarter of 2021, respectively.


New claim incidence increased versus the prior year but has remained lower than pre-pandemic levels. With the historically low new claim incidence since the onset of the COVID-19 pandemic, favorable development on incurred but not reported (IBNR) claim reserves has continued, but to a lesser extent. Since the second quarter of 2020, IBNR has been strengthened to reflect the company’s assumption that incidence during the COVID-19 pandemic has been temporarily delayed. In the current quarter, IBNR claim reserves were reduced by $34 million after-tax, compared to a strengthening of $37 million after-tax in the prior year.

In the current quarter, the company completed its annual review of LTC claim reserve assumptions and methodologies and made no changes to existing claim reserves, as experience in the aggregate was in line with expectations. In the prior year, earnings included a net benefit of $13 million after-tax from the completion of the annual review of LTC assumptions and methodologies, primarily related to claim reserves.

In the current quarter, the company also completed its annual review of U.S. GAAP LTC active life margins, referred to as loss recognition testing. All key margin testing assumptions were reviewed and updated where appropriate. As of December 31, 2021, the combined loss recognition testing margins for the separately tested LTC acquired and historic blocks were positive and remained within the $0.5 to $1.0 billion range. The company updated several assumptions with respect to benefit utilization trends, lapses, mortality, expenses and interest rates. The most significant update was to the benefit utilization growth trend, reflecting increased cost of care growth, which was offset by a higher modeled benefit from planned future in force rate actions. As margins remained positive, there was no reserve strengthening required, and therefore no resulting charge to current quarter earnings.

Life Insurance

Life insurance reported an adjusted operating loss of $98 million, compared with $68 million in the prior quarter and $20 million in the prior year. During the current quarter, the company completed its annual review of life insurance assumptions and recorded an unfavorable charge of $70 million after-tax, driven by assumption changes primarily related to unfavorable pre-COVID-19 mortality experience, particularly in the term universal life insurance products, and interest rates. Results in the prior year included a benefit of $60 million after-tax related to the company’s annual review of life insurance assumptions.

Mortality, attributable in part to the COVID-19 pandemic, was lower compared to both the prior quarter and the prior year. Current quarter results also included a $32 million after-tax charge related to DAC recoverability testing in the company’s term universal and universal life insurance products versus a $30 million after-tax charge in the prior quarter and $50 million in the prior year. Results in the prior year reflected higher DAC amortization compared to the current year, as the large 20-year level-premium term life insurance block written at the end of 2000 entered its post-level premium period.


Fixed Annuities

Fixed annuities reported adjusted operating income of $20 million, compared with $28 million in the prior quarter and $20 million in the prior year. Results in the current quarter reflected an unfavorable adjustment related to state guaranty funds. Mortality in the single premium immediate annuity product was favorable compared to both the prior quarter and prior year.

Runoff

Runoff reported adjusted operating income of $16 million, compared with $11 million in the prior quarter and $13 million in the prior year. Current quarter results in the variable annuity products were impacted by equity market and interest rate performance which was favorable compared to the prior quarter and less favorable than the prior year. Mortality experience in the corporate-owned life insurance products was also higher in the prior quarter. Results in the prior year included a $5 million after-tax charge in the company’s variable annuity products from annual assumption updates.

Corporate And Other

Corporate and Other reported an adjusted operating loss of $18 million, compared to adjusted operating income of $1 million in the prior quarter and an adjusted operating loss of $49 million in the prior year. Results in the prior quarter included tax benefits of $21 million from a reduction in uncertain tax positions due to the expiration of certain statute of limitations. Current quarter results included lower interest expense from the reduction of Genworth holding company debt and lower corporate expenses.


Capital & Liquidity

Genworth maintains the following capital positions in its operating subsidiaries:

 

Key Capital & Liquidity Metrics                   

(Dollar amounts in millions)

   Q4 21     Q3 21     Q4 20  

Enact

      

Consolidated Risk-To-Capital Ratio8

     12.2:1       11.8:1       12.1:1  

Genworth Mortgage Insurance Corporation Risk-To-Capital Ratio8

     12.3:1       11.9:1       12.3:1  

Private Mortgage Insurer Eligibility Requirements (PMIERs) Sufficiency Ratio8,9

     165     181     137

U.S. Life Insurance Companies

      

Consolidated Risk-Based Capital (RBC) Ratio8

     290     291     229

Holding Company Cash and Liquid Assets10, 11

   $ 356     $ 638     $ 1,103  

Key Points

 

   

Enact’s PMIERs sufficiency ratio is estimated to be 165 percent, $2,003 million above published PMIERs requirements12. The PMIERs sufficiency ratio was down 16 points, or $284 million, sequentially, driven by the dividend paid in the current quarter, NIW and amortization of existing reinsurance transactions, partially offset by elevated lapse from prevailing low interest rates, business cash flows and lower delinquencies;

 

   

PMIERs sufficiency benefited from a 0.30 multiplier applied to the risk based required asset factor for certain non-performing loans, which resulted in a reduction of the published PMIERs required assets by an estimated $390 million at the end of the current quarter, compared to $570 million at the end of the prior quarter and $1,046 million at the end of the fourth quarter of 2020. These amounts are gross of incremental reinsurance benefits from the elimination of the 0.30 multiplier;

 

   

In January 2022, Enact completed an excess of loss reinsurance transaction, which will provide $294 million of reinsurance coverage on a portion of current and expected new insurance written for the 2022 book year;

 

 

8

Company estimate for the fourth quarter of 2021 due to timing of the preparation and filing of statutory statements.

9

The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within the published PMIERs. As of December 31, 2021, September 30, 2021 and December 31, 2020, the PMIERs sufficiency ratios were $2,003 million, $2,287 million and $1,229 million, respectively, of available assets above the published PMIERs requirements.

10

Holding company cash and liquid assets comprises assets held in Genworth Holdings, Inc. (the issuer of outstanding public debt) which is a wholly-owned subsidiary of Genworth Financial, Inc.

11

Genworth Holdings, Inc. had $331 million, $588 million and $1,078 million of cash, cash equivalents and restricted cash as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively, which included $46 million of restricted cash and cash equivalents as of December 31, 2020. Genworth Holdings, Inc. also held $25 million, $50 million and $25 million in U.S. government securities as of December 31, 2021, September 30, 2021 and December 31, 2020, respectively, which included $3 million, $3 million and $25 million, respectively, of restricted assets.

12

The government-sponsored enterprises’ (GSEs) have imposed certain capital restrictions which remain in effect until certain conditions are met. These restrictions required Genworth Mortgage Insurance Corporation, the company’s principal U.S. mortgage insurance subsidiary, to maintain 115 percent of PMIERs minimum required assets among other restrictions as of December 31, 2021. Effective January 1, 2022, these requirements increased to 120 percent.


   

U.S. life insurance companies’ statutory and cash flow testing results remain in process and will be made available with year-end statutory filings. The company estimates fourth quarter of 2021 RBC to be 290 percent, slightly down from 291 percent in the prior quarter due to the expected negative impacts of assumption updates and cash flow testing, offset by the benefit from the life block transaction completed in the fourth quarter. The company’s estimate for RBC in the fourth quarter of 2021 is significantly higher than 229 percent reported in the prior year, primarily attributable to the strong statutory earnings in the current year, driven by LTC premium increases and benefit reductions from in force rate actions, including the impacts from a legal settlement, favorable investment performance and favorable terminations. Statutory income through the third quarter of 2021 was $693 million; and

 

   

Genworth’s holding company ended the quarter with $356 million of cash and liquid assets, including $3 million that is restricted. Cash sources in the quarter included a $163 million dividend from Enact and $75 million from intercompany tax arrangements. During the current quarter, the company redeemed all of its $400 million of outstanding principal due in August 2023 through a combination of open market repurchases and a make-whole tender. In addition, the company reduced its February 2024 debt obligation by $118 million through open market repurchases, leaving $282 million principal remaining. Genworth’s parent holding company public debt outstanding was approximately $1.2 billion as of December 31, 2021.

About Genworth Financial

Genworth Financial, Inc. (NYSE: GNW) is a Fortune 500 provider of products, services and solutions that help families address the financial challenges of aging. Headquartered in Richmond, Virginia, Genworth applies its nearly 150 years of experience each day to helping people navigate caregiving options and fund their long term care needs. Genworth is also the parent company of publicly traded Enact (Nasdaq: ACT), a leading U.S. mortgage insurance provider. For more information on Genworth, visit genworth.com. From time to time Enact separately releases financial and other information about its operations. This information can be found at ir.enactmi.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.


Conference Call And Financial Supplement Information

This press release and the fourth quarter 2021 financial supplement are now posted on the company’s website. Additional information regarding business results will be posted on the company’s website, http://investor.genworth.com, by 8:00 a.m. on February 2, 2022. Investors are encouraged to review these materials.

Genworth will conduct a conference call on February 2, 2022 at 9:00 a.m. (ET) to discuss the quarter’s results. Genworth’s conference call will be accessible via telephone and the Internet. The dial-in number for Genworth’s February 2nd conference call is 888-208-1820 or 323-794-2110 (outside the U.S.); conference ID #4404709. 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.

A replay of the call will be available at 888-203-1112 or 719-457-0820 (outside the U.S.); conference ID #4404709 through February 16, 2022. The webcast will also be archived on the company’s website for one year.

Prior to Genworth’s conference call, Enact will hold a conference call on February 2, 2022 at 8:00 a.m. (ET) to discuss its results from the fourth quarter. Enact’s conference call will be accessible via telephone and the Internet. The dial-in number for Enact’s February 2nd conference call is 833-730-3978 or 720-405-2123 (outside the U.S.); conference ID #7969025. To participate in the call by webcast, register at http://ir.enactmi.com/news-and-events/events at least 15 minutes prior to the webcast to download and install any necessary software.


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) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Initial 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 initial 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 estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial 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.

Adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) assume a 21 percent tax rate and are net of the portion attributable to noncontrolling interests. Net investment gains (losses) are also adjusted for DAC and other intangible amortization and certain benefit reserves.


In the fourth and third quarters of 2021, the company paid a pre-tax make-whole premium of $20 million and $6 million, respectively, related to the early redemption of Genworth Holdings, Inc.’s (Genworth Holdings) senior notes originally scheduled to mature in August 2023 and September 2021, respectively. In the fourth quarter of 2021, the company repurchased $209 million principal amount of Genworth Holdings’ senior notes due in 2023 and 2024 for a pre-tax loss of $15 million. In the first quarter of 2021, the company repurchased $146 million principal amount of Genworth Holdings’ senior notes due in September 2021 for a pre-tax loss of $4 million. During 2020, the company repurchased $84 million principal amount of Genworth Holdings’ senior notes with 2021 maturity dates for a pre-tax gain of $3 million and $1 million in the second and first quarters of 2020, respectively. In January 2020, the company paid a pre-tax make-whole expense of $9 million related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature in June 2020 and Rivermont Life Insurance Company I, the company’s indirect wholly-owned special purpose consolidated captive insurance subsidiary, early redeemed all of its $315 million outstanding non-recourse funding obligations originally due in 2050 resulting in a pre-tax loss of $4 million from the write-off of deferred borrowing costs. These transactions were excluded from adjusted operating income as they relate to gains (losses) on the early extinguishment of debt.

In the fourth quarter of 2021, the company recorded a pre-tax loss of $92 million as a result of ceding certain term life insurance policies as part of a life block transaction.

The company recorded a pre-tax expense of $5 million, $3 million, $5 million and $21 million in the fourth, third, second and first quarters of 2021, respectively, and $1 million in each of the fourth, second and first quarters of 2020 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 during the periods presented.

The tables at the end of this press release provide a reconciliation of net income available to Genworth Financial, Inc.’s common stockholders to adjusted operating income for the three and twelve months ended December 31, 2021 and 2020, as well as for the three months ended September 30, 2021, 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 businesses at the U.S. corporate federal income tax rate of 21 percent. Each segment is then adjusted to reflect the unique tax attributes of that segment such as permanent differences between U.S. GAAP and 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 products included in the company’s Enact segment. The company considers new insurance written to be a measure of the operating performance of its Enact segment because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.

Management regularly monitors and reports insurance in force and risk in force for the company’s Enact segment. Insurance in force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by the company’s U.S. mortgage insurance subsidiaries. Risk in force is based on the coverage percentage applied to the estimated current outstanding loan balance. The company considers insurance in force and risk in force to be measures of the operating performance of its Enact segment 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 U.S. mortgage insurance business included in the company’s Enact segment, 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 included in the company’s U.S. Life Insurance segment, 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.

Management also regularly monitors and reports adjusted operating income from in force rate actions in the long term care insurance business included in the company’s U.S. Life Insurance segment. Adjusted operating income from in force rate actions includes premium rate increases and associated benefit reductions on its long term care insurance products implemented since 2012, which are net of estimated premium tax, commissions, and other expenses on an after-tax basis. Estimates for in force rate actions reflect certain simplifying assumptions that may vary materially from actual historical results, including but not limited to a uniform rate of coinsurance and premium taxes in addition to consistent policyholder behavior over time. Actual behavior may differ significantly from these assumptions. In addition, estimates exclude reserve updates resulting from profits followed by losses. The company considers adjusted operating income from in force rate actions to be a measure of its operating performance because it helps bring older generation long term care insurance blocks closer to a break-even point over time and helps bring the loss ratios on newer long term care insurance blocks back towards their original pricing.

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.


Statutory Accounting Data

The company presents certain supplemental statutory data for Genworth Life Insurance Company (GLIC) and its consolidating life insurance subsidiaries that has been prepared on the basis of statutory accounting principles (SAP). GLIC and its consolidating life insurance subsidiaries file financial statements with state insurance regulatory authorities and the National Association of Insurance Commissioners that are prepared using SAP, an accounting basis either prescribed or permitted by such authorities. Due to differences in methodology between SAP and U.S. GAAP, the values for assets, liabilities and equity reflected in financial statements prepared in accordance with U.S. GAAP are materially different from those reflected in financial statements prepared under SAP. This supplemental statutory data should not be viewed as an alternative to U.S. GAAP or used in lieu of U.S. GAAP.

This supplemental statutory data includes risk-based capital ratios for GLIC and its consolidating life insurance subsidiaries as well as statutory earnings. Management uses and provides this supplemental statutory data because it believes it provides a useful measure of among other things the adequacy of capital. Management uses this data to measure against its policy to manage the U.S. life insurance businesses with internally generated capital.


Cautionary Note Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by words such as “expects,” “intends,” “anticipates,” “plans,” “believes,” “seeks,” “estimates,” “will” or words of similar meaning and include, but are not limited to, statements regarding the outlook for the company’s future business and financial performance. Examples of forward-looking statements include statements the company makes relating to future reductions of debt, potential dividends or share repurchases, and future strategic investments, including new products and services designed to assist individuals with navigating and financing long term care, as well as statements the company makes regarding the potential impacts of the COVID-19 pandemic. 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:

 

   

the company may be unable to successfully execute its strategic plans including: reducing the company’s debt maturities and other near-term liabilities and financial obligations, reducing costs, stabilizing its U.S. life insurance businesses, improving overall capital and ratings; returning capital to the company’s shareholders through dividends and/or share repurchases; and launching either unilaterally or with a strategic partner new product and service offerings designed to assist individuals with navigating and financing long-term care due to a variety of risks and constraints, including but not limited to: dependency on Enact Holdings’ to pay dividends, including constraints as a result of the GSEs’ amendments to PMIERs in response to COVID-19 as well as additional PMIERs requirements or other restrictions that the GSEs may place on the ability of Enact Holdings to pay dividends; an inability to establish new long term care insurance business or product offerings due to commercial and/or regulatory challenges; an inability to identify and contract with a strategic partner regarding a new long-term care insurance business; an inability to increase the capital needed in the company’s businesses in a timely manner and on anticipated terms, including through improved business performance, reinsurance or similar transactions, asset sales, debt issuances, securities offerings or otherwise, in each case as and when required; the company’s strategic plans change or become more costly or difficult to successfully address than currently anticipated or the benefits achieved being less than anticipated; an inability to achieve anticipated cost-savings in a timely manner; and adverse tax or accounting charges, including new accounting guidance (that is effective for the company on January 1, 2023) related to long-duration insurance contracts;

 

   

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 related 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; the inability to accurately estimate the impacts of the COVID-19 pandemic, including whether borrower’s in a forbearance plan ultimately cure or result in a claim; 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 future 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); and changes in valuation of fixed maturity and equity securities;


   

liquidity, financial strength ratings, credit and counterparty risks including: the impact on holding company liquidity caused by the inability to receive dividends or other returns of capital from Enact Holdings, including as a result of the COVID-19 pandemic; continued availability of capital and financing; future adverse rating agency actions against the company or Enact Holdings, including with respect to rating downgrades or potential downgrades or being put on review for potential downgrade, all of which could have adverse implications, 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; defaults on the company’s commercial mortgage loans; defaults on mortgage loans or other assets underlying the company’s investments in its mortgage-backed and asset-backed securities and volatility in performance;

 

   

risks relating to economic, market and political conditions including: downturns and volatility in global economies and equity and credit markets, including as a result of unemployment, low labor participation, inflation, supply chain disruptions, a sustained low interest rate environment and other displacements caused by the COVID-19 pandemic; interest rates and changes in rates have adversely impacted, and may continue to materially adversely impact, the company’s business and profitability, including in connection with high mortgage refinancing resulting in the cancellation of private mortgage insurance consequently reducing Enact Holdings’ persistency on its insurance in-force; rising interest rates could reduce the volume of mortgage originations thereby adversely effecting Enact Holdings new insurance written and results of operations; deterioration in economic conditions or a decline in home prices that adversely affect Enact Holdings’ loss experience; political and economic instability or changes in government policies; and fluctuations in 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 Enact Holdings, 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, heightened regulatory restrictions resulting from the COVID-19 pandemic, and other insurance, regulatory or corporate law restrictions; the inability to successfully seek in force rate action increases (including increased premiums and associated benefit reductions) in the company’s long term care insurance business, including as a result of the COVID-19 pandemic; adverse change in regulatory requirements, including risk-based capital; Enact Holdings ability to continue to maintain PMIERs; risks on Enact Holdings’ ability to pay holding company dividends as a result of the GSEs’ amendments to PMIERs in response to COVID-19 or additional PMIERs requirements or other restrictions that the GSEs may place on the ability of Enact Holdings to pay holding company dividends; the impact on capital levels due to increased delinquencies caused by the COVID-19 pandemic; inability of the company’s U.S. mortgage insurance subsidiaries to meet minimum statutory capital requirements; the influence of Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and a small number of large mortgage lenders in 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 Enact Holdings; additional restrictions placed on Enact Holdings by government and government-owned enterprises and the GSEs in connection with additional capital transactions; inability to continue to implement actions to mitigate the impact of statutory reserve requirements; changes in tax laws; and changes in accounting and reporting standards, including new accounting guidance (that is not yet effective for the company) related to long-duration insurance contracts which will likely materially impact the company’s financial position and significantly reduce the company’s equity upon adoption (including its equity at the accounting transition date of January 1, 2021) and could result in increased volatility in the company’s results of operations, as well as other comprehensive income (loss);


   

operational risks including: the inability to retain, attract and motivate qualified employees or senior management; reliance on, and loss of, key customer or distribution relationships; 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, business continuity plans and failures to safeguard or breaches of confidential information;

 

   

insurance and product-related risks including: the company’s inability to increase premiums and reduce benefits sufficiently, and in a timely manner, on its in force long term care insurance policies, in each case, as currently anticipated and as may be required from time to time in the future (including as a result of a delay or failure to obtain any necessary regulatory approvals, including as a result of the COVID-19 pandemic, 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; decreases in the volume of 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 Enact Holdings’ U.S. contract underwriting services; Enact Holdings’ delegated underwriting program may subject its mortgage insurance subsidiaries to unanticipated claims; 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: the occurrence of natural or man-made disasters or a public health emergency, including pandemics, could materially adversely affect the company’s business, financial condition and results of operations.

The company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise. This press release does not constitute an offering of any securities.

# # #

Contact Information:

 

Investors:

  

Sarah Crews

  

[email protected]

Media:

  

Amy Rein

  

[email protected]


Condensed Consolidated Statements of Income

(Amounts in millions, except per share amounts)

(Unaudited)

 

     Three months ended
December 31,
    Twelve months ended
December 31,
    Three months
ended
September 30,
2021
 
     2021     2020     2021      2020  

Revenues:

           

Premiums

   $ 576     $ 970     $ 3,435      $ 3,836     $ 944  

Net investment income

     866       846       3,370        3,227       859  

Net investment gains (losses)

     132       147       323        492       88  

Policy fees and other income

     162       191       704        729       179  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total revenues

     1,736       2,154       7,832        8,284       2,070  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Benefits and expenses:

           

Benefits and other changes in policy reserves

     861       1,157       4,383        5,214       1,143  

Interest credited

     127       132       508        549       123  

Acquisition and operating expenses, net of deferrals

     354       253       1,223        935       290  

Amortization of deferred acquisition costs and intangibles

     108       174       377        463       106  

Interest expense

     31       55       160        195       35  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Total benefits and expenses

     1,481       1,771       6,651        7,356       1,697  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income from continuing operations before income taxes

     255       383       1,181        928       373  

Provision for income taxes

     62       82       263        230       67  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income from continuing operations

     193       301       918        698       306  

Income (loss) from discontinued operations, net of taxes

     (1     (35     27        (486     12  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income

     192       266       945        212       318  

Less: net income from continuing operations attributable to noncontrolling interests

     29       —         33        —         4  

Less: net income (loss) from discontinued operations attributable to noncontrolling interests

     —         (1     8        34       —    
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to Genworth Financial, Inc.’s common stockholders

   $ 163     $ 267     $ 904      $ 178     $ 314  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to Genworth Financial, Inc.’s common stockholders:

           

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders

   $ 164     $ 301     $ 885      $ 698     $ 302  

Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders

     (1     (34     19        (520     12  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to Genworth Financial, Inc.’s common stockholders

   $ 163     $ 267     $ 904      $ 178     $ 314  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share:

           

Basic

   $ 0.32     $ 0.60     $ 1.75      $ 1.38     $ 0.59  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.32     $ 0.59     $ 1.72      $ 1.36     $ 0.59  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Net income available to Genworth Financial, Inc.’s common stockholders per share:

           

Basic

   $ 0.32     $ 0.53     $ 1.78      $ 0.35     $ 0.62  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

   $ 0.32     $ 0.52     $ 1.76      $ 0.35     $ 0.61  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Weighted-average common shares outstanding:

           

Basic

     507.4       505.6       506.9        505.2       507.4  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Diluted

     515.6       512.5       514.7        511.6       514.2  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 


Reconciliation of Net Income to Adjusted Operating Income

(Amounts in millions, except per share amounts)

(Unaudited)

 

     Three     Twelve     Three  
     months ended     months ended     months ended  
     December 31,     December 31,     September 30,  
     2021     2020     2021     2020     2021  

Net income available to Genworth Financial, Inc.’s common stockholders

   $ 163     $ 267     $ 904     $ 178     $ 314  

Add: net income from continuing operations attributable to noncontrolling interests

     29       —         33       —         4  

Add: net income (loss) from discontinued operations attributable to noncontrolling interests

     —         (1     8       34       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     192       266       945       212       318  

Less: income (loss) from discontinued operations, net of taxes

     (1     (35     27       (486     12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations

     193       301       918       698       306  

Less: net income from continuing operations attributable to noncontrolling interests

     29       —         33       —         4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income from continuing operations available to Genworth Financial, Inc.’s common stockholders

     164       301       885       698       302  

Adjustments to income from continuing operations available to Genworth Financial, Inc.’s common stockholders:

          

Net investment (gains) losses, net13

     (133     (144     (324     (503     (88

Losses on early extinguishment of debt

     35       —         45       9       6  

Initial loss from life block transaction

     92       —         92       —         —    

Expenses related to restructuring

     5       1       34       3       3  

Taxes on adjustments

     1       30       33       103       16  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 164     $ 188     $ 765     $ 310     $ 239  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income (loss):

          

Enact segment

   $ 125     $ 95     $ 520     $ 381     $ 134  

U.S. Life Insurance segment:

          

Long Term Care Insurance

     119       129       445       237       133  

Life Insurance

     (98     (20     (269     (247     (68

Fixed Annuities

     20       20       91       78       28  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total U.S. Life Insurance segment

     41       129       267       68       93  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Runoff segment

     16       13       54       43       11  

Corporate and Other

     (18     (49     (76     (182     1  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 164     $ 188     $ 765     $ 310     $ 239  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to Genworth Financial, Inc.’s common stockholders per share:

          

Basic

   $ 0.32     $ 0.53     $ 1.78     $ 0.35     $ 0.62  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.32     $ 0.52     $ 1.76     $ 0.35     $ 0.61  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income per share:

          

Basic

   $ 0.32     $ 0.37     $ 1.51     $ 0.61     $ 0.47  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.32     $ 0.37     $ 1.48     $ 0.61     $ 0.46  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average common shares outstanding:

          

Basic

     507.4       505.6       506.9       505.2       507.4  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     515.6       512.5       514.7       511.6       514.2  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

 

13

For the three months ended December 31, 2021 and 2020 and the twelve months ended December 31, 2021 and 2020, net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves of $(1) million, $3 million, $(1) million and $(11) million, respectively.


Reconciliation of Adjusted Operating Income Previously Reported to Adjusted Operating Income

Re-Presented to Exclude Discontinued Operations

(Amounts in millions)

 

     Three months ended     Twelve months ended  
     December 31,     December 31,  
     2020     2020  

Adjusted operating income as previously reported

   $ 173     $ 317  

Remove Australia Mortgage Insurance segment adjusted operating (income) loss reported as discontinued operations

     16       (1

Adjustment for corporate overhead allocations, net of taxes14

     (5     (17

Tax adjustments15

     4       11  
  

 

 

   

 

 

 

Re-presented adjusted operating income

   $ 188     $ 310  
  

 

 

   

 

 

 

 

 

14

Expenses previously reported in the Australia Mortgage Insurance segment and moved to Corporate and Other activities.

15

Tax impacts resulting from the classification of Genworth Australia as discontinued operations.


Condensed Consolidated Balance Sheets

(Amounts in millions)

(Unaudited)

 

     December 31,     December 31,  
     2021     2020  

Assets

    

Cash, cash equivalents, restricted cash and invested assets

   $ 74,496     $ 77,917  

Deferred acquisition costs

     1,146       1,487  

Intangible assets

     143       157  

Reinsurance recoverable, net

     16,813       16,819  

Deferred tax and other assets

     507       469  

Separate account assets

     6,066       6,081  

Assets related to discontinued operations

     —         2,817  
  

 

 

   

 

 

 

Total assets

   $ 99,171     $ 105,747  
  

 

 

   

 

 

 

Liabilities and equity

    

Liabilities:

    

Future policy benefits

   $ 41,528     $ 42,695  

Policyholder account balances

     19,354       21,503  

Liability for policy and contract claims

     11,841       11,486  

Unearned premiums

     672       775  

Other liabilities

     1,511       1,614  

Long-term borrowings

     1,899       3,403  

Separate account liabilities

     6,066       6,081  

Liabilities related to discontinued operations

     34       2,370  
  

 

 

   

 

 

 

Total liabilities

     82,905       89,927  
  

 

 

   

 

 

 

Equity:

    

Common stock

     1       1  

Additional paid-in capital

     11,858       12,008  

Accumulated other comprehensive income (loss)

     3,861       4,425  

Retained earnings

     2,490       1,584  

Treasury stock, at cost

     (2,700     (2,700
  

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     15,510       15,318  

Noncontrolling interests

     756       502  
  

 

 

   

 

 

 

Total equity

     16,266       15,820  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 99,171     $ 105,747  
  

 

 

   

 

 

 


Reconciliation of Reported Yield to Core Yield

 

     Three  
     months ended  
     December 31,     September 30,  
     2021     2021  

(Assets - amounts in billions)

    

Reported Total Invested Assets and Cash

   $ 73.8     $ 74.7  

Subtract:

    

Unrealized gains (losses)

     8.2       8.5  
  

 

 

   

 

 

 

Adjusted End of Period Invested Assets and Cash

   $ 65.6     $ 66.2  
  

 

 

   

 

 

 

Average Invested Assets and Cash Used in Reported and Core Yield Calculation

   $ 65.9     $ 66.2  
  

 

 

   

 

 

 

(Income - amounts in millions)

    

Reported Net Investment Income

   $ 866     $ 859  

Subtract:

    

Bond calls and commercial mortgage loan prepayments

     38       43  

Other non-core items16

     2       (4
  

 

 

   

 

 

 

Core Net Investment Income

   $ 826     $ 820  
  

 

 

   

 

 

 

Reported Yield

     5.26     5.19
  

 

 

   

 

 

 

Core Yield

     5.01     4.95
  

 

 

   

 

 

 

 

16

Includes cost basis adjustments on structured securities and various other immaterial items.

  

Exhibit 99.2

 

LOGO   


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

 

Table of Contents

   Page  

Investor Letter

     3  

Use of Non-GAAP Measures

     4  

Results of Operations and Selected Operating Performance Measures

     5  

Financial Highlights

     6  

Consolidated Quarterly Results

  

Consolidated Net Income (Loss) by Quarter

     8  

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

     9  

Consolidated Balance Sheets

     10-11  

Consolidated Balance Sheets by Segment

     12-13  

Deferred Acquisition Costs (DAC) Rollforward

     14  

Quarterly Results by Business

  

Adjusted Operating Income (Loss) and Sales - Enact Segment

     16-21  

Adjusted Operating Income (Loss) - U.S. Life Insurance Segment

     23-26  

Adjusted Operating Income (Loss) - Runoff Segment

     28  

Adjusted Operating Income (Loss) - Corporate and Other Activities

     30  

Additional Financial Data

  

Investments Summary

     32  

Fixed Maturity Securities Summary

     33  

General Account U.S. GAAP Net Investment Income Yields

     34  

Net Investment Gains (Losses), Net - Detail

     35  

Reconciliations of Non-GAAP Measures

  

Reconciliation of Operating Return On Equity (ROE)

     37  

Reconciliation of Reported Yield to Core Yield

     38  

Corporate Information

  

Financial Strength Ratings

     40  

Note:

Unless otherwise stated, all references in this financial supplement to income (loss) from continuing operations, income (loss) from continuing operations per share, net income (loss), net income (loss) per share, adjusted operating income (loss), adjusted operating income (loss) per share, book value and book value per share should be read as income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders, income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders per share, net income (loss) available to Genworth Financial, Inc.’s common stockholders, net income (loss) available to Genworth Financial, Inc.’s common stockholders per share, non-U.S. Generally Accepted Accounting Principles (U.S. GAAP) adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders, non-GAAP adjusted operating income (loss) available to Genworth Financial, Inc.’s common stockholders per share, book value available to Genworth Financial, Inc.’s common stockholders and book value available to Genworth Financial, Inc.’s common stockholders per share, respectively.

 

2


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Dear Investor,

On September 20, 2021, the company completed a minority initial public offering of 18.4% of Enact Holdings, Inc. (Enact Holdings), an indirect subsidiary, and now reflects net income attributable to noncontrolling interests in its Enact segment (formerly known as the U.S. Mortgage Insurance segment). Differences in the results of operations between the company’s Enact segment included herein and the Enact Holdings standalone results are predominantly due to the allocation of corporate overhead expenses, tax differences and operating results of Enact Holdings’ mortgage insurance run-off block with reference properties in Mexico as well as the operating results of its minority ownership interest in a mortgage guarantee business in India, which the company reports in Corporate and Other activities.

On March 3, 2021, the company completed the sale of its entire ownership interest of approximately 52% in Genworth Mortgage Insurance Australia Limited (“Genworth Australia”) through an underwriting agreement. Genworth Australia, previously the primary business in the Australia Mortgage Insurance segment, is reported as discontinued operations for all periods presented. Accordingly, all prior periods reflected herein have been re-presented on this basis. The following table presents a reconciliation of adjusted operating income (loss) as previously reported to adjusted operating income (loss) re-presented to reflect the Australia mortgage insurance business as discontinued operations for the periods indicated:

 

(Amounts in millions)

   2020  
   4Q     3Q     2Q     1Q     Total  

ADJUSTED OPERATING INCOME (LOSS) AS PREVIOUSLY REPORTED

   $ 173     $ 132     $ (21   $ 33     $ 317  

Remove Australia Mortgage Insurance segment adjusted operating (income) loss reported as discontinued operations

     16       (7     (1     (9     (1

Adjustment for corporate overhead allocations, net of taxes(1)

     (5     (4     (4     (4     (17

Tax adjustments(2)

     4       4       3       —         11  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

RE-PRESENTED ADJUSTED OPERATING INCOME (LOSS)

   $ 188     $ 125     $ (23   $ 20     $ 310  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

Expenses previously reported in the Australia Mortgage Insurance segment and moved to Corporate and Other activities.

(2) 

Tax impacts resulting from the classification of Genworth Australia as discontinued operations.

Thank you for your continued interest in Genworth Financial, Inc.

Regards,

Investor Relations

[email protected]

 

3


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

 

Use of Non-GAAP Measures

This financial supplement 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) from continuing operations attributable to noncontrolling interests, net investment gains (losses), gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Initial 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 initial 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 estimated future credit losses, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, initial 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.

Adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) assume a 21% tax rate and are net of the portion attributable to noncontrolling interests. Net investment gains (losses) are also adjusted for DAC and other intangible amortization and certain benefit reserves (see page 35).

In the fourth and third quarters of 2021, the company paid a pre-tax make-whole premium of $20 million and $6 million, respectively, related to the early redemption of Genworth Holdings, Inc.’s (Genworth Holdings) senior notes originally scheduled to mature in August 2023 and September 2021, respectively. In the fourth quarter of 2021, the company repurchased $209 million principal amount of Genworth Holdings’ senior notes due in 2023 and 2024 for a pre-tax loss of $15 million. In the first quarter of 2021, the company repurchased $146 million principal amount of Genworth Holdings’ senior notes due in September 2021 for a pre-tax loss of $4 million. During 2020, the company repurchased $84 million principal amount of Genworth Holdings’ senior notes with 2021 maturity dates for a pre-tax gain of $3 million and $1 million in the second and first quarters of 2020, respectively. In January 2020, the company paid a pre-tax make-whole expense of $9 million related to the early redemption of Genworth Holdings’ senior notes originally scheduled to mature in June 2020 and Rivermont Life Insurance Company I, the company’s indirect wholly-owned special purpose consolidated captive insurance subsidiary, early redeemed all of its $315 million outstanding non-recourse funding obligations originally due in 2050 resulting in a pre-tax loss of $4 million from the write-off of deferred borrowing costs. These transactions were excluded from adjusted operating income (loss) as they relate to gains (losses) on the early extinguishment of debt.

In the fourth quarter of 2021, the company recorded a pre-tax loss of $92 million as a result of ceding certain term life insurance policies as part of a life block transaction.

The company recorded a pre-tax expense of $5 million, $3 million, $5 million and $21 million in the fourth, third, second and first quarters of 2021, respectively, and $1 million in each of the fourth, second and first quarters of 2020 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.

The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 37 and 38 of this financial supplement.

 

4


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

 

Results of Operations and Selected Operating Performance Measures

The company’s chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.

The company taxes its businesses at the U.S. corporate federal income tax rate of 21%. Each segment is then adjusted to reflect the unique tax attributes of that segment, such as permanent differences between U.S. GAAP and 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.

This financial supplement contains 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 products included in the company’s Enact segment. The company considers new insurance written to be a measure of the operating performance of its Enact segment because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of revenues or profitability during that period.

Management regularly monitors and reports insurance in-force and risk in-force for the company’s Enact segment. Insurance in-force is a measure of the aggregate unpaid principal balance as of the respective reporting date for loans insured by the company’s U.S. mortgage insurance subsidiaries. Risk in-force is based on the coverage percentage applied to the estimated current outstanding loan balance. The company considers insurance in-force and risk in-force to be measures of the operating performance of its Enact segment 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 U.S. mortgage insurance business included in the company’s Enact segment, 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 included in the company’s U.S. Life Insurance segment, 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.

 

5


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

 

Financial Highlights

(amounts in millions, except per share data)

 

Balance Sheet Data

  December 31,
        2021        
    September 30,
        2021        
    June 30,
        2021        
    March 31,
        2021        
    December 31,
    2020        
 

Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other
comprehensive income

  $ 11,649     $ 11,476     $ 11,330     $ 11,083     $ 10,893  

Total accumulated other comprehensive income

    3,861       3,800       3,834       3,675       4,425  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

  $ 15,510     $ 15,276     $ 15,164     $ 14,758     $ 15,318  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Book value per share

  $ 30.57     $ 30.11     $ 29.89     $ 29.14     $ 30.28  

Book value per share, excluding accumulated other comprehensive income

  $ 22.96     $ 22.62     $ 22.33     $ 21.88     $ 21.54  

Common shares outstanding as of the balance sheet date

    507.4       507.4       507.4       506.5       505.8  
    Twelve months ended  

Twelve Month Rolling Average ROE

  December 31,
2021
    September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 

U.S. GAAP Basis ROE

    8.0     9.1     10.3     4.0     1.7

Operating ROE(1)

    6.8     7.1     6.2     4.3     2.9
    Three months ended  

Quarterly Average ROE

  December 31,
2021
    September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 

U.S. GAAP Basis ROE

    5.6     11.0     8.6     6.8     9.9

Operating ROE(1)

    5.7     8.4     6.9     6.1     7.0

 

Basic and Diluted Shares

   Three months ended
December 31, 2021
     Twelve months ended
December 31, 2021
 

Weighted-average common shares used in basic earnings per share calculations

     507.4        506.9  

Potentially dilutive securities:

     

Stock options, restricted stock units and stock appreciation rights

     8.2        7.8  
  

 

 

    

 

 

 

Weighted-average common shares used in diluted earnings per share calculations

     515.6        514.7  
  

 

 

    

 

 

 

 

(1) 

See page 37 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

 

6


Consolidated Quarterly Results

  

 

 

7


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Consolidated Net Income (Loss) by Quarter

(amounts in millions, except per share amounts)

 

     2021      2020  
     4Q      3Q      2Q     1Q      Total      4Q     3Q      2Q     1Q     Total  

REVENUES:

                           

Premiums

   $ 576      $ 944      $ 947     $ 968      $ 3,435      $ 970     $ 963      $ 957     $ 946     $ 3,836  

Net investment income

     866        859        844       801        3,370        846       820        779       782       3,227  

Net investment gains (losses)

     132        88        70       33        323        147       351        93       (99     492  

Policy fees and other income

     162        179        180       183        704        191       184        174       180       729  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total revenues

     1,736        2,070        2,041       1,985        7,832        2,154       2,318        2,003       1,809       8,284  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

BENEFITS AND EXPENSES:

                           

Benefits and other changes in policy reserves

     861        1,143        1,161       1,218        4,383        1,157       1,273        1,447       1,337       5,214  

Interest credited

     127        123        127       131        508        132       137        139       141       549  

Acquisition and operating expenses, net of deferrals

     354        290        304       275        1,223        253       235        210       237       935  

Amortization of deferred acquisition costs and intangibles

     108        106        86       77        377        174       94        87       108       463  

Interest expense

     31        35        43       51        160        55       47        42       51       195  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total benefits and expenses

     1,481        1,697        1,721       1,752        6,651        1,771       1,786        1,925       1,874       7,356  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     255        373        320       233        1,181        383       532        78       (65     928  

Provision (benefit) for income taxes

     62        67        75       59        263        82       130        23       (5     230  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     193        306        245       174        918        301       402        55       (60     698  

Income (loss) from discontinued operations, net of taxes(1)

     (1      12        (5     21        27        (35     34        (473     (12     (486
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     192        318        240       195        945        266       436        (418     (72     212  

Less: net income from continuing operations attributable to noncontrolling interests

     29        4        —         —          33        —         —          —         —         —    

Less: net income (loss) from discontinued operations attributable to noncontrolling interests

     —          —          —         8        8        (1     18        23       (6     34  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

   $ 163      $ 314      $ 240     $ 187      $ 904      $ 267     $ 418      $ (441   $ (66   $ 178  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                           

Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders

   $ 164      $ 302      $ 245     $ 174      $ 885      $ 301     $ 402      $ 55     $ (60   $ 698  

Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders

     (1      12        (5     13        19        (34     16        (496     (6     (520
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

   $ 163      $ 314      $ 240     $ 187      $ 904      $ 267     $ 418      $ (441   $ (66   $ 178  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
                               

Earnings (Loss) Per Share Data:

                         

Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders per share

                         

Basic

   $ 0.32      $ 0.59      $ 0.48     $ 0.35      $ 1.75      $ 0.60     $ 0.79      $ 0.11     $ (0.12   $ 1.38  

Diluted

   $ 0.32      $ 0.59      $ 0.47     $ 0.34      $ 1.72      $ 0.59     $ 0.79      $ 0.11     $ (0.12   $ 1.36  

Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share

                         

Basic

   $ 0.32      $ 0.62      $ 0.47     $ 0.37      $ 1.78      $ 0.53     $ 0.83      $ (0.87   $ (0.13   $ 0.35  

Diluted

   $ 0.32      $ 0.61      $ 0.47     $ 0.37      $ 1.76      $ 0.52     $ 0.82      $ (0.86   $ (0.13   $ 0.35  

Weighted-average common shares outstanding

                         

Basic

     507.4        507.4        507.0       506.0        506.9        505.6       505.6        505.4       504.3       505.2  

Diluted(2)

     515.6        514.2        515.0       513.8        514.7        512.5       511.5        512.5       504.3       511.6  

 

(1) 

Income (loss) from discontinued operations relates to the company’s former Australia mortgage insurance business that was sold on March 3, 2021 and its former lifestyle protection insurance business that was sold on December 1, 2015. Refer to page 30 for operating results of Genworth Australia reported as discontinued operations. The company recorded an after-tax unfavorable adjustment of $1 million in the fourth quarter of 2021 and an after-tax favorable adjustment of $11 million in the first quarter of 2021 associated with a refinement to its tax matters agreement liability. During the third, second and first quarters of 2021 and the fourth, third and second quarters of 2020, the company recorded after-tax income (loss) of $9 million, $(4) million, $(1) million, $(30) million, $(22) million and $(520) million, respectively, related to a secured promissory note with AXA S.A. (AXA) resulting from a settlement agreement reached in 2020 regarding a dispute over payment protection insurance claims sold by the company’s former lifestyle protection insurance business. During the first quarter of 2021 and the third quarter of 2020, based on an updated estimate, the company adjusted a liability associated with underwriting losses on a product sold by a distributor in the company’s former lifestyle protection insurance business which resulted in an after-tax benefit (loss) of $(4) million and $23 million, respectively.

(2) 

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 loss from continuing operations for the three months ended March 31, 2020, 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 March 31, 2020, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 5.4 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended March 31, 2020, dilutive potential weighted-average common shares outstanding would have been 509.7 million.

 

8


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

(amounts in millions, except per share amounts)

 

     2021     2020  
     4Q      3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S

                       

COMMON STOCKHOLDERS

   $ 163      $ 314     $ 240     $ 187     $ 904     $ 267     $ 418     $ (441   $ (66   $ 178  

Add: net income from continuing operations attributable to noncontrolling interests

     29        4       —         —         33       —         —         —         —         —    

Add: net income (loss) from discontinued operations attributable to noncontrolling interests

     —          —         —         8       8       (1     18       23       (6     34  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NET INCOME (LOSS)

     192        318       240       195       945       266       436       (418     (72     212  

Less: income (loss) from discontinued operations, net of taxes

     (1      12       (5     21       27       (35     34       (473     (12     (486
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     193        306       245       174       918       301       402       55       (60     698  

Less: net income from continuing operations attributable to noncontrolling interests

     29        4       —         —         33       —         —         —         —         —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

     164        302       245       174       885       301       402       55       (60     698  
                       

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO

                              

GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                       

Net investment (gains) losses, net(1)

     (133      (88     (70     (33     (324     (144     (350     (97     88       (503

(Gains) losses on early extinguishment of debt

     35        6       —         4       45       —         —         (3     12       9  

Initial loss from life block transaction

     92        —         —         —         92       —         —         —         —         —    

Expenses related to restructuring

     5        3       5       21       34       1       —         1       1       3  

Taxes on adjustments

     1        16       14       2       33       30       73       21       (21     103  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ 164      $ 239     $ 194     $ 168     $ 765     $ 188     $ 125     $ (23   $ 20     $ 310  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS):

                              

Enact segment

   $ 125      $ 134     $ 135     $ 126     $ 520     $ 95     $ 141     $ (3   $ 148     $ 381  

U.S. Life Insurance segment:

                       

Long-Term Care Insurance

     119        133       98       95       445       129       59       48       1       237  

Life Insurance

     (98      (68     (40     (63     (269     (20     (69     (81     (77     (247

Fixed Annuities

     20        28       13       30       91       20       24       28       6       78  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total U.S. Life Insurance segment

     41        93       71       62       267       129       14       (5     (70     68  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Runoff segment

     16        11       15       12       54       13       19       24       (13     43  

Corporate and Other

     (18      1       (27     (32     (76     (49     (49     (39     (45     (182
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ 164      $ 239     $ 194     $ 168     $ 765     $ 188     $ 125     $ (23   $ 20     $ 310  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                           

Earnings (Loss) Per Share Data:

                     

Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share

                     

Basic

   $ 0.32      $ 0.62     $ 0.47     $ 0.37     $ 1.78     $ 0.53     $ 0.83     $ (0.87   $ (0.13   $ 0.35  

Diluted

   $ 0.32      $ 0.61     $ 0.47     $ 0.37     $ 1.76     $ 0.52     $ 0.82     $ (0.86   $ (0.13   $ 0.35  

Adjusted operating income (loss) per share

                     

Basic

   $ 0.32      $ 0.47     $ 0.38     $ 0.33     $ 1.51     $ 0.37     $ 0.25     $ (0.05   $ 0.04     $ 0.61  

Diluted

   $ 0.32      $ 0.46     $ 0.38     $ 0.33     $ 1.48     $ 0.37     $ 0.25     $ (0.05   $ 0.04     $ 0.61  

Weighted-average common shares outstanding

                     

Basic

     507.4        507.4       507.0       506.0       506.9       505.6       505.6       505.4       504.3       505.2  

Diluted(2)

     515.6        514.2       515.0       513.8       514.7       512.5       511.5       512.5       504.3       511.6  

 

(1) 

Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves (see page 35 for reconciliation).

(2) 

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 loss from continuing operations for the three months ended March 31, 2020, 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 March 31, 2020, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 5.4 million would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations for the three months ended March 31, 2020, dilutive potential weighted-average common shares outstanding would have been 509.7 million.

 

9


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Consolidated Balance Sheets

(amounts in millions)

 

     December 31,
2021
     September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 

ASSETS

             

Investments:

             

Fixed maturity securities available-for-sale, at fair value(1)

   $ 60,480      $ 61,274     $ 61,649     $ 60,231     $ 63,495  

Equity securities, at fair value

     198        156       147       238       386  

Commercial mortgage loans(2)

     6,856        6,916       6,912       6,787       6,774  

Less: Allowance for credit losses

     (26      (30     (33     (32     (31
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Commercial mortgage loans, net

     6,830        6,886       6,879       6,755       6,743  

Policy loans

     2,050        2,067       2,083       1,976       1,978  

Limited partnerships

     1,900        1,617       1,354       1,160       1,049  

Other invested assets

     820        718       906       599       1,050  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total investments

     72,278        72,718       73,018       70,959       74,701  

Cash, cash equivalents and restricted cash

     1,571        1,937       2,214       1,964       2,561  

Accrued investment income

     647        626       573       704       655  

Deferred acquisition costs

     1,146        1,193       1,212       1,247       1,487  

Intangible assets

     143        147       151       155       157  

Reinsurance recoverable

     16,868        16,722       16,716       16,788       16,864  

Less: Allowance for credit losses

     (55      (51     (50     (44     (45
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Reinsurance recoverable, net

     16,813        16,671       16,666       16,744       16,819  

Other assets

     388        396       403       439       404  

Deferred tax asset

     119        209       211       314       65  

Separate account assets

     6,066        5,978       6,202       6,032       6,081  

Assets related to discontinued operations(3)

     —          —         —         —         2,817  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 99,171      $ 99,875     $ 100,650     $ 98,558     $ 105,747  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                 

 

(1)  Amortized cost of $52,611 million, $53,181 million, $53,111 million, $53,470 million and $53,417 million as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively, and allowance for credit losses of $—, $—, $—, $3 million and $4 million as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020, respectively.

(2)  Net of unamortized balance of loan origination fees and costs of $4 million as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021 and December 31, 2020.

(3)  Prior to the sale on March 3, 2021, the assets of Genworth Australia were segregated in the consolidated balance sheets. The major asset categories of Genworth Australia reported as discontinued operations were as follows:

   

   

   

     December 31,
2021
     September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 

ASSETS

           

Investments:

           

Fixed maturity securities available-for-sale, at fair value

   $ —        $ —       $ —       $ —       $ 2,295  

Equity securities, at fair value

     —          —         —         —         90  

Other invested assets

     —          —         —         —         154  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total investments

     —          —         —         —         2,539  

Cash, cash equivalents and restricted cash

     —          —         —         —         95  

Accrued investment income

     —          —         —         —         16  

Deferred acquisition costs

     —          —         —         —         42  

Intangible assets

     —          —         —         —         43  

Other assets

     —          —         —         —         40  

Deferred tax asset

     —          —         —         —         42  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Assets related to discontinued operations

   $      —        $       —       $     —       $     —       $     2,817  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

10


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Consolidated Balance Sheets

(amounts in millions)

 

     December 31,
2021
     September 30,
2021
    June 30,
2021
    March 31,
2021
    December 31,
2020
 

LIABILITIES AND EQUITY

             

Liabilities:

             

Future policy benefits

   $ 41,528      $ 41,794     $ 42,165     $ 40,634     $ 42,695  

Policyholder account balances

     19,354        19,607       19,944       19,999       21,503  

Liability for policy and contract claims

     11,841        11,743       11,546       11,415       11,486  

Unearned premiums

     672        685       695       728       775  

Other liabilities

     1,511        1,568       1,664       1,710       1,614  

Long-term borrowings

     1,899        2,412       2,924       2,922       3,403  

Separate account liabilities

     6,066        5,978       6,202       6,032       6,081  

Liabilities related to discontinued operations(1)

     34        36       346       360       2,370  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     82,905        83,823       85,486       83,800       89,927  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Equity:

             

Common stock

     1        1       1       1       1  

Additional paid-in capital

     11,858        11,850       12,018       12,011       12,008  

Accumulated other comprehensive income (loss)

     3,861        3,800       3,834       3,675       4,425  

Retained earnings

     2,490        2,325       2,011       1,771       1,584  

Treasury stock, at cost

     (2,700      (2,700     (2,700     (2,700     (2,700
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     15,510        15,276       15,164       14,758       15,318  

Noncontrolling interests

     756        776       —         —         502  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total equity

     16,266        16,052       15,164       14,758       15,820  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 99,171      $ 99,875     $ 100,650     $ 98,558     $ 105,747  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
                 

 

(1) 

Liabilities related to discontinued operations relates to a liability recorded in connection with a settlement agreement reached with AXA involving the sale of the company’s former lifestyle protection insurance business. Liabilities related to discontinued operations also includes an unrelated liability associated with underwriting losses on a product sold by a distributor in the company’s former lifestyle protection insurance business. In addition, prior to the sale on March 3, 2021, the liabilities of Genworth Australia were segregated in the consolidated balance sheets. The major liability categories of Genworth Australia reported as discontinued operations were as follows:

 

     December 31,
2021
     September 30,
2021
     June 30,
2021
     March 31,
2021
     December 31,
2020
 

LIABILITIES

              

Liability for policy and contract claims

   $ —        $ —        $ —        $ —        $ 331  

Unearned premiums

     —          —          —          —          1,193  

Other liabilities

     —          —          —          —          104  

Long-term borrowings

     —          —          —          —          145  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities related to discontinued operations

   $    —        $    —        $    —        $    —        $   1,773  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

11


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     December 31, 2021  
     Enact      U.S. Life
Insurance
    Runoff      Corporate
and
Other(1)
    Total  

ASSETS

            

Cash and investments

   $ 5,723      $ 64,084     $ 2,574      $ 2,115     $ 74,496  

Deferred acquisition costs and intangible assets

     37        1,129       113        10       1,289  

Reinsurance recoverable, net

     —          16,168       645        —         16,813  

Deferred tax and other assets

     90        (171     62        526       507  

Separate account assets

     —          —         6,066        —         6,066  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total assets

   $ 5,850      $ 81,210     $ 9,460      $ 2,651     $ 99,171  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

LIABILITIES AND EQUITY

            

Liabilities:

            

Future policy benefits

   $ —        $ 41,526     $ 2      $ —       $ 41,528  

Policyholder account balances

     —          16,343       3,011        —         19,354  

Liability for policy and contract claims

     641        11,183       8        9       11,841  

Unearned premiums

     246        423       3        —         672  

Other liabilities

     123        765       40        583       1,511  

Borrowings

     740        —         —          1,159       1,899  

Separate account liabilities

     —          —         6,066        —         6,066  

Liabilities related to discontinued operations

     —          —         —          34       34  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities

     1,750        70,240       9,130        1,785       82,905  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Equity:

            

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,276        7,159       324        890       11,649  

Allocated accumulated other comprehensive income (loss)

     68        3,811       6        (24     3,861  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,344        10,970       330        866       15,510  

Noncontrolling interests

     756        —         —          —         756  

Total equity

     4,100        10,970       330        866       16,266  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total liabilities and equity

   $ 5,850      $ 81,210     $ 9,460      $ 2,651     $ 99,171  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

(1) 

Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

 

12


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Consolidated Balance Sheet by Segment

(amounts in millions)

 

     September 30, 2021  
     Enact      U.S. Life
Insurance
     Runoff      Corporate
and
Other(1)
    Total  

ASSETS

             

Cash and investments

   $ 5,871      $ 64,627      $ 2,616      $ 2,167     $ 75,281  

Deferred acquisition costs and intangible assets

     39        1,175        115        11       1,340  

Reinsurance recoverable, net

     —          16,017        654        —         16,671  

Deferred tax and other assets

     77        426        55        47       605  

Separate account assets

     —          —          5,978        —         5,978  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total assets

   $ 5,987      $ 82,245      $ 9,418      $ 2,225     $ 99,875  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

LIABILITIES AND EQUITY

             

Liabilities:

             

Future policy benefits

   $ —        $ 41,792      $ 2      $ —       $ 41,794  

Policyholder account balances

     —          16,603        3,004        —         19,607  

Liability for policy and contract claims

     648        11,065        20        10       11,743  

Unearned premiums

     255        427        3        —         685  

Other liabilities

     122        741        40        665       1,568  

Borrowings

     740        —          —          1,672       2,412  

Separate account liabilities

     —          —          5,978        —         5,978  

Liabilities related to discontinued operations

     —          —          —          36       36  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities

     1,765        70,628        9,047        2,383       83,823  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Equity:

             

Allocated equity, excluding accumulated other comprehensive income (loss)

     3,337        7,907        365        (133     11,476  

Allocated accumulated other comprehensive income (loss)

     109        3,710        6        (25     3,800  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total Genworth Financial, Inc.’s stockholders’ equity

     3,446        11,617        371        (158     15,276  

Noncontrolling interests

     776        —          —          —         776  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total equity

     4,222        11,617        371        (158     16,052  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total liabilities and equity

   $ 5,987      $ 82,245      $ 9,418      $ 2,225     $ 99,875  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

(1) 

Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

 

13


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Deferred Acquisition Costs Rollforward

(amounts in millions)

 

     Enact     U.S. Life
Insurance
    Runoff     Total  

Unamortized balance as of September 30, 2021

   $ 28     $ 2,404     $ 136     $ 2,568  

Costs deferred

     1       1       —         2  

Amortization, net of interest accretion(1)

     (2     (126     (4     (132
  

 

 

   

 

 

   

 

 

   

 

 

 

Unamortized balance as of December 31, 2021

     27       2,279       132       2,438  

Effect of accumulated net unrealized investment (gains) losses

     —         (1,271     (21     (1,292
  

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2021

   $ 27     $ 1,008     $ 111     $ 1,146  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1) 

Effective December 1, 2021, the company entered into a new reinsurance agreement under which it wrote off maintenance reserves of $33 million associated with certain term life insurance policies in connection with a life block transaction.

 

14


 

Enact Segment

  

 

 

 

15


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Adjusted Operating Income (Loss) and Sales—Enact Segment

(amounts in millions)

 

     2021     2020  
     4Q      3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q      Total  

REVENUES:

                        

Premiums

   $ 237      $ 243     $ 243     $ 252     $ 975     $ 251     $ 251     $ 243     $ 226      $ 971  

Net investment income

     35        36       35       35       141       35       34       31       33        133  

Net investment gains (losses)

     —          1       (2     (1     (2     (1     (2     (1     —          (4

Policy fees and other income

     1        1       —         2       4       2       1       1       2        6  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total revenues

     273        281       276       288       1,118       287       284       274       261        1,106  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

BENEFITS AND EXPENSES:

                        

Benefits and other changes in policy reserves

     6        34       30       55       125       89       45       228       19        381  

Acquisition and operating expenses, net of deferrals

     55        55       63       57       230       55       54       47       50        206  

Amortization of deferred acquisition costs and intangibles

     4        3       4       4       15       10       3       4       4        21  

Interest expense

     13        13       12       13       51       12       6       —         —          18  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

Total benefits and expenses

     78        105       109       129       421       166       108       279       73        626  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

     195        176       167       159       697       121       176       (5     188        480  

Provision (benefit) for income taxes

     41        38       35       34       148       26       37       (1     40        102  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS

     154        138       132       125       549       95       139       (4     148        378  

Less: net income from continuing operations attributable to noncontrolling interests

     29        4       —         —         33       —         —         —         —          —    
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS

     125        134       132       125       516       95       139       (4     148        378  

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:

                        

Net investment (gains) losses

     —          (1     2       1       2       1       2       1       —          4  

Expenses related to restructuring

     —          1       2       —         3       —         —         —         —          —    

Taxes on adjustments

     —          —         (1     —         (1     (1     —         —         —          (1
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

ADJUSTED OPERATING INCOME (LOSS)

   $ 125      $ 134     $ 135     $ 126     $ 520     $ 95     $ 141     $ (3)     $ 148      $ 381  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 
                            

SALES:

                      

Primary New Insurance Written (NIW)

   $ 21,400      $ 24,000     $ 26,700     $ 24,900     $ 97,000     $ 27,000     $ 26,600     $ 28,400     $ 17,900      $ 99,900  
                            

 

 

16


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Primary New Insurance Written Metrics—Enact Segment

(amounts in millions)

 

     2021     2020  
     4Q      3Q     2Q     1Q     4Q     3Q     2Q     1Q  
     Primary
NIW
     % of
Primary
NIW
     Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
    Primary
NIW
     % of
Primary
NIW
 

Payment Type

                                           

Monthly

   $ 19,400        91    $ 21,500        90   $ 24,900        94   $ 23,400        94   $ 24,700        92   $ 23,400        88   $ 25,800        91   $ 16,200        91

Single

     2,000        9        2,400        10       1,700        6       1,400        6       2,200        8       3,100        12       2,500        9       1,500        8  

Other(1)

     —          —          100        —         100        —         100        —         100        —         100        —         100        —         200        1  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 21,400        100    $ 24,000        100   $ 26,700        100   $ 24,900        100   $ 27,000        100   $ 26,600        100   $ 28,400        100   $ 17,900        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Origination

                                           

Purchase

   $ 19,300        90    $ 21,000        88   $ 21,100        79   $ 15,500        62   $ 17,800        66   $ 20,000        75   $ 17,400        61   $ 12,000        67

Refinance

     2,100        10        3,000        12       5,600        21       9,400        38       9,200        34       6,600        25       11,000        39       5,900        33  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 21,400        100    $ 24,000        100   $ 26,700        100   $ 24,900        100   $ 27,000        100   $ 26,600        100   $ 28,400        100   $ 17,900        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

FICO Scores

                                           

Over 760

   $ 9,400        44    $ 10,700        45   $ 11,800        44   $ 10,500        42   $ 10,500        39   $ 11,300        43   $ 12,300        43   $ 7,500        42

740 - 759

     3,400        16        3,800        16       4,000        15       3,800        15       4,300        16       4,100        15       4,800        17       3,200        18  

720 - 739

     2,800        13        3,200        13       3,500        13       3,400        14       4,000        15       3,500        13       4,200        15       2,600        14  

700 - 719

     2,300        11        2,700        11       3,100        12       3,000        12       3,600        13       3,100        12       3,300        11       2,200        12  

680 - 699

     1,600        7        1,900        8       2,500        9       2,500        10       2,700        10       2,400        9       2,200        8       1,500        8  

660 - 679(2)

     1,100        5        1,000        4       1,100        4       1,000        4       1,100        4       1,300        5       900        3       500        3  

640 - 659

     600        3        500        2       500        2       500        2       600        2       600        2       500        2       300        2  

620 - 639

     200        1        200        1       200        1       200        1       200        1       300        1       200        1       100        1  

<620

     —          —          —          —         —          —         —          —         —          —         —          —         —          —         —          —    
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 21,400        100    $ 24,000        100   $ 26,700        100   $ 24,900        100   $ 27,000        100   $ 26,600        100   $ 28,400        100   $ 17,900        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Loan-To-Value Ratio

                                           

95.01% and above

   $ 3,700        17    $ 3,400        14   $ 2,800        11   $ 2,200        9   $ 2,900        11   $ 3,700        14   $ 3,200        11   $ 1,800        10

90.01% to 95.00%

     7,500        35        8,800        37       10,700        40       9,500        38       11,100        41       11,700        44       12,300        43       7,700        43  

85.01% to 90.00%

     6,200        29        7,500        31       8,600        32       8,400        34       8,100        30       7,100        27       8,100        29       5,500        31  

85.00% and below

     4,000        19        4,300        18       4,600        17       4,800        19       4,900        18       4,100        15       4,800        17       2,900        16  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 21,400        100    $ 24,000        100   $ 26,700        100   $ 24,900        100   $ 27,000        100   $ 26,600        100   $ 28,400        100   $ 17,900        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Debt-To-Income Ratio

                                           

45.01% and above

   $ 5,000        23    $ 4,200        17   $ 3,300        12   $ 2,600        10   $ 3,100        11   $ 3,100        12   $ 4,000        14   $ 3,500        20

38.01% to 45.00%

     7,000        33        7,900        33       9,200        35       8,700        35       10,200        38       9,900        37       9,600        34       6,000        33  

38.00% and below

     9,400        44        11,900        50       14,200        53       13,600        55       13,700        51       13,600        51       14,800        52       8,400        47  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 

Total Primary

   $ 21,400        100    $ 24,000        100   $ 26,700        100   $ 24,900        100   $ 27,000        100   $ 26,600        100   $ 28,400        100   $ 17,900        100
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

 
                                                     

 

(1) 

Includes loans with annual and split payment types.

(2) 

Loans with unknown FICO scores are included in the 660-679 category.

 

 

17


GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

FOURTH QUARTER 2021

Other Metrics—Enact Segment

(dollar amounts in millions)

 

    2021     2020  
    4Q      3Q     2Q     1Q     Total     4Q     3Q     2Q     1Q     Total  
 

Primary Insurance In-Force(1)<