Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q4 2019 Earnings Presentation
20 slides from Equitable's earnings presentation, Feb 27, 2020
Slide 1: Fourth Quarter 2019 Earnings Results
Equitable Holdings Fourth Quarter 2019 Earnings Results February 27, 2020 Equitable
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: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights We are Equitable • An iconic American brand synonymous with helping generations of people achieve financial well-being • AXA’s economic ownership interest effectively zero1 Strong Operating Performance Driving Capital Return • Strong earnings growth driven by c. $25 bi
Slide 4: Full Year 2019 Financial Summary
Full Year 2019 Financial Summary Non-GAAP operating earnings1 less notable items2 of $2.2 billion or $4.40 per share Business segment highlights: ▪ Individual Retirement sales of $8.2 billion, up 12% for the year ▪ Group Retirement net flows of $267 million, positive for the 7th consecutive year ▪ A
Slide 5: Fourth Quarter 2019 Consolidated Results Summary
Fourth Quarter 2019 Consolidated Results Summary Non-GAAP Operating Earnings Non-GAAP Operating EPS Financial Highlights $m $ Non-GAAP operating EPS of $1.37 +29% +47% increased 47% from the prior year period, driven primarily by: 652 1.37 504 ▪ Higher net investment income due to GA 0.93 rebalance
Slide 6: Individual Retirement
Individual Retirement Operating Earnings Highlights $m ▪ Operating earnings increased primarily due to higher net +12% investment income and fee-type revenue on higher AV 391 ▪ Notable items1 in the quarter of $11 million related to higher 348 net investment income ▪ FYP increased by 12%, led by the
Slide 7: Group Retirement
Group Retirement Operating Earnings Highlights $m ▪ Operating earnings increased primarily driven by higher fee- +8% type revenue on higher AV 102 110 ▪ Notable items1 in the quarter of $10 million related to higher net investment income ▪ Net flows improved by $75 million driven primarily by 10% gr
Slide 8: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings Highlights $m ▪ Operating earnings growth driven primarily by higher base +22% fees due to growth in AUM and stable fee rates, as well as higher performance fees 131 107 ▪ Fourth quarter net flows of $6.5 billion were positive for a sixth st
Slide 9: Protection Solutions
Protection Solutions Operating Earnings Highlights $m ▪ Operating earnings growth driven primarily by favorable mortality experience and ongoing efficiency gains 128 ▪ Notable items1 of $58 million primarily related to favorable mortality and a reserve release ▪ Growth in annualized premiums driven
Slide 10: Capital Management
Capital Management Capital Return (TTM) Highlights $m Dividends Capital return to shareholders Repurchase from AXA 818 Repurchases from market ▪ $1.6 billion returned to shareholders in 2019 (incl. $285 million in dividends, $1.35 billion in share repurchases) 68 ▪ Authorized new $600 million share
Slide 11: Key Financial Targets: 2021 (Pre-FASB TI)
Key Financial Targets: 2021 (Pre-FASB TI) Maintain strong balance sheet while delivering disciplined financial growth 8-10% Non-GAAP Operating EPS CAGR 50-60% Payout Ratio1 Mid-teens Non-GAAP Operating ROE new RBC – Equitable Life minimum capitalization 375-400% under new NAIC formula and internal e
Slide 12: Fourth Quarter 2019 Highlights
Fourth Quarter 2019 Highlights We are Equitable • An iconic American brand synonymous with helping generations of people achieve financial well-being • AXA’s economic ownership interest effectively zero1 Strong Operating Performance Driving Capital Return • Strong earnings growth driven by c. $25 bi
Slide 13: Appendix
Appendix Equitable Holdings Fourth Quarter 2019 Earnings Results
Slide 14: Strategic Priorities
Strategic Priorities 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 3-4% Pre-tax by 2020 Pre-tax by 2020 Non-GAAP Operating Earnings CAGR 2017 2020 4Q19 Earnings Presentation
Slide 15: Net Income to Non-GAAP Operating Earnings, 4Q19
Net Income to Non-GAAP Operating Earnings, 4Q19 $m 319 (424) 652 1,694 (937) Net Income (loss) VA Product Features All other adjustments1,2 Income tax expense Non-GAAP Operating Earnings All figures $m Description 4Q19 GMxB accounting asymmetry: • GMxB hedging 1,188 • Static hedge cash option cost 3
Slide 16: Reconciliation of Non-GAAP and Other Financial Disclosures
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Operating Earnings Three Months Ended December 31, Twelve Months Ended December 31, 2019 2018 2019 2018 (in millions) (in millions) Net income (loss) attributable to Holdings $ (937) $ 1,938 $ (1,733) $ 1,820 Adjustment
Slide 17: Impact of Notable Items by segment and category
Appendix Impact of Notable Items1 by segment and category Three Months Ended Twelve Months Ended Twelve Months Ended Non-GAAP Operating Earnings, less Notable Items, ($m) December 31, 2019 December 31, 2019 December 31, 2018 Non-GAAP Operating Earnings $ 652 $ 2,397 $ 2,166 Adjustments related to No
Slide 18: Impact of Notable Items by segment line items
Appendix Impact of Notable Items1 (including Actuarial Assumption Updates) by segment line items Individual Group Protection Three months ended 12/31/2019 ($m) Retirement Retirement Solutions Consolidated2,3 Total revenues 5 8 4 21 Net investment income 5 8 4 21 Total benefits and other deductions (
Slide 19: Reconciliation of Non-GAAP and Other Financial Disclosures
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures EQH Non-GAAP Operating Return on Equity Balances as of (in millions, unless otherwise indicated) 3/31/2018 06/30/2018 09/30/2018 12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 Equity Reconciliation Total equity attributable to
Slide 20: Non-GAAP Operating ROE
Appendix Reconciliation of Non-GAAP and Other Financial Disclosures Non-GAAP Operating ROE Twelve Months Ended (in millions) 12/31/2019 Non-GAAP Operating Earnings 2,397 Average equity attributable to Holdings, excluding AOCI 13,253 Non-GAAP Operating ROE 18.1% Non-GAAP Operating Earnings, less Nota