Slide 1: AXA Equitable Holdings Second Quarter 2019 Earnings Results
AXA Equitable Holdings Second Quarter 2019 Earnings Results August 9, 2019
Slide 2: Note Regarding Forward-Looking and Non-GAAP Financial Measures
Note Regarding Forward-Looking and Non-GAAP Financial Measures This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “believes,” “anticipates,” “intends,” “seeks,” “aims,” “plans,” “assumes,” “estima
Slide 3: Highlights
Highlights Mixed macro ▪ Favorable equity markets in Q2; S&P 500 +4% environment ▪ 10-year UST rate down over 40 basis points Independent ▪ AXA ownership reduced to 38.9% following Q2 secondary offering EQH ▪ Meaningful progress on strategic priorities and separation initiatives ▪ Returned $891m to
Slide 4: Second quarter 2019 Financial Summary
Second quarter 2019 Financial Summary Non-GAAP Operating Earnings1 increased 15% to $559 million ▪ Non-GAAP Operating EPS2 increased 31% to $1.14 Business segment highlights: ▪ Individual Retirement first year premiums increased 12% to $2.1 billion ▪ Group Retirement operating earnings increased 23%
Slide 5: Strategic Priorities
Strategic Priorities Non-GAAP Operating Earnings growth is expected to result in Non-GAAP Operating ROE in the mid-teens by 2020 5-7% Target Non-GAAP Operating Earnings CAGR $2.2-$2.3bn Tax reform GA Optimization Productivity Growth Strategic priorities GA Optimization Productivity Growth $160m $75m
Slide 6: Second Quarter 2019 Consolidated Results Summary
Second Quarter 2019 Consolidated Results Summary Non-GAAP Operating Earnings Non-GAAP Operating EPS1 Financial Highlights $m $ Non-GAAP Operating EPS increased 31% to $1.14 per share +15% +31% primarily driven by: 559 1.14 ▪ Higher net investment income due 486 to higher asset balances and our 0.87
Slide 7: Individual Retirement
Individual Retirement Operating Earnings Highlights $m ▪ Operating earnings decline driven by: -11% o Lower fee-type revenue primarily driven by lower 405 SA balances 359 o Higher DAC amortization ▪ FYP increased 12%, including the highest ever quarterly sales of SCS, driven by deepening relationshi
Slide 8: Group Retirement
Group Retirement Operating Earnings Highlights $m ▪ Operating earnings increased primarily due to higher +23% net investment income driven by higher asset balances and our GA optimization initiative and lower 95 operating expenses 77 ▪ Net inflows of $164 million driven by strong inflows in the tax-
Slide 9: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings Highlights $m ▪ Operating earnings decline primarily attributable lower performance-based fees and higher expenses, partially -18% offset by higher base fees 97 80 ▪ Net inflows of $9.5 billion in 2Q19 were positive for a fourth straight qua
Slide 10: Protection Solutions
Protection Solutions Operating Earnings Highlights $m ▪ Operating earnings increased due to lower DAC 106 amortization, higher net investment income and lower expenses ▪ Continued momentum in Employee Benefits sales ▪ Benefit ratio decrease driven by higher revenues ▪ Non-GAAP Operating ROC improved
Slide 11: VA cash flows: 2018 vs. 2019 disclosure
VA cash flows: 2018 vs. 2019 disclosure Base case assumptions: 2018 2018-2020 VA distributable earnings ($bn) Disclosure PV of VA free cash flows and assets ($bn)2 Equity return: 6.25% 20192 2019-2021 VA distributable earnings ($bn) 10Y Treasury: follows forward curve to 2.9% by YE 20281 Disclosure
Slide 12: Capital Position and Management
Capital Position and Management Capital return supported by strong earnings and capitalization Capital return (YTD), $m Highlights Dividends Capital return to shareholders Repurchase from AXA Repurchases from market 818 ▪ $891m returned to shareholders YTD 68 ▪ Paid $73m of quarterly cash dividends
Slide 13: Highlights
Highlights Mixed macro ▪ Favorable equity markets in Q2; S&P 500 +4% environment ▪ 10-year UST rate down over 40 basis points Independent ▪ AXA ownership reduced to 38.9% following Q2 secondary offering EQH ▪ Meaningful progress on strategic priorities and separation initiatives ▪ Returned $891m to
Slide 14: Appendix
AXA Equitable Holdings Second Quarter 2019 Earnings Results Appendix August 9, 2019
Slide 15: Key Financial Targets
Key Financial Targets Maintain strong balance sheet while delivering disciplined financial growth AXA Equitable Holdings Non-GAAP Op. Earnings growth Payout ratio1 Pro Forma Non-GAAP Operating ROE 5-7% 50-60% Mid-teens CAGR through 2020 by 2020 (after tax reform) AXA Equitable Life AllianceBernstein
Slide 16: Net Income to Non-GAAP Operating Earnings, 2Q19
Net Income to Non-GAAP Operating Earnings, 2Q19 $m 67 (71) 559 200 363 Net Income (loss) VA Product Features All other adjustments1 Income tax expense Non-GAAP Operating Earnings All figures $m Description 2Q19 GMxB accounting asymmetry: • GMxB hedging 209 • Static hedge cash option cost (guidance o
Slide 17: Reconciliation of Non-GAAP and Other Financial Disclosures
Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Operating Earnings Three Months Ended June 30, 2019 2018 (in millions) Net income (loss) attributable to Holdings $ 363 $ 164 Adjustments related to: Variable annuity product features 200 249 Investment (gains) losses 12 22 Net
Slide 18: Reconciliation of Non-GAAP and Other Financial Disclosures
Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Pro Forma Non-GAAP Operating Return Operating on Equity Return(ROE) on Equity (ROE) Pro forma (1) Balances Balances as of as of (in millions USD, unless otherwise indicated) 09/30/2017 12/31/2017 3/31/2018 06/30/2018 09/30/2018
Slide 19: Supplemental Information on VA cash flows
Supplemental Information on VA cash flows The table below describes the five capital markets scenarios 1 assumed in the sensitivity analysis of the estimated cash flows and distributable earnings associated with our inforce VA business, as shown on page 11. Assumptions Base Case Upside Downside Extr
Slide 20: AXA Equitable Holdings Second Quarter 2019 Earnings Results
AXA Equitable Holdings Second Quarter 2019 Earnings Results August 9, 2019