Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q4 2022 Earnings Presentation
27 slides from Equitable's earnings presentation, Feb 9, 2023
Slide 1: Full Year and Fourth Quarter 2022 Earnings Results
Equitable Holdings Full Year and Fourth Quarter 2022 Earnings Results February 9, 2023 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: Full year and fourth quarter highlights
Full year and fourth quarter highlights Strong performance despite turbulent 2022 markets • Full year non-GAAP operating earnings1 of $2.0bn, or $5.08 per share, GA optimization and cost-saves mitigating market fall • $754bn AUM, down 17% year to date but up 5% compared to Q3 • Full year net inflows
Slide 4: Unique retirement, asset management and advice businesses
Unique retirement, asset management and advice businesses ► Leveraging synergies between Equitable and AB to drive growth, with c. 70% of $10bn capital commitment1 deployed ► $0.8bn of Retirement premiums attributable to AB’s Life Income Solutions, future opportunities supported by Secure Act 2.0 ►
Slide 5: Full year 2022 review
Full year 2022 review Total company non-GAAP operating earnings of $2.0bn or $2.2bn adjusting for notable items1 Strong business performance with rising rates and strategic initiatives partially offsetting market headwinds Business segments delivering strong results Non-GAAP Operating Earnings,
Slide 6: Fourth quarter consolidated results summary
Fourth quarter consolidated results summary Non-GAAP operating earnings, Non-GAAP operating EPS, adjusted for notable items1 adjusted for notable items1 Financial Highlights $m $ Non-GAAP operating earnings of $436m, or $1.11 per share, decreased 28% from $1.54 -23% -17% in prior year 691 1.64 1.36
Slide 7: Mortality experience in past two years better than expectations
Mortality experience in past two years better than expectations Mortality experience vs. expectations in reserves1 ($m) Full Year vs. Expectations Favorable $34m favorable $20m favorable 38 36 2021 31 17 10 17% better [ -7 -14 Unfavorable -57 2022 18% better TBD 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q
Slide 8: Prudent capital management delivering shareholder value
Prudent capital management delivering shareholder value Strong capital position in volatile markets Delivered 57% payout ratio4, higher end of guidance Dividends Share Repurchases ▪ Returned $1.3bn to shareholders1, including $224m $349m in the fourth quarter, and over $6bn since IPO $70m $295m $275
Slide 9: Full year and fourth quarter highlights
Full year and fourth quarter highlights Strong performance despite turbulent 2022 markets Consistent cash flow generation and capital returns Continued momentum in retirement and asset management Looking Ahead • Early to mid-April 2023: Post-LDTI Financial Supplement with 2021 and 2022 financials •
Slide 10: Appendix
Appendix Equitable Holdings Full Year and Fourth Quarter 2022 Earnings Results
Slide 11: LDTI has no cash flow impact and reduces net income volatility
LDTI has no cash flow impact and reduces net income volatility LDTI better aligns liability movements to our economic hedging program, which protects cash flows Net income sensitivity Hedging instruments Changes to financials Movement Pre-LDTI Post-LDTI Difference Equities Futures and options Liabil
Slide 12: Explanation of footnotes
Explanation of footnotes Page 3 1Non-GAAP Operating Earnings equals our consolidated after-tax net income attributable to Holdings adjusted to eliminate the impact of certain items; Please see detailed non-GAAP reconciliation in Appendix 2Net inflows include $4.6 billion of Core Retirement inflows,
Slide 13: Individual Retirement
Individual Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to lower fee income on lower average account 328 values partially offset by increased NII associated with SCS 308 ▪ Notable items1 were $5m ref
Slide 14: Group Retirement
Group Retirement Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to the Global Atlantic transaction, lower NII and lower fee 153 income on lower average account values 115 ▪ Reinsurance transaction with Global Atl
Slide 15: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to lower base fees on lower average AUM and lower performance fees, partially offset by lower operating expenses 183 ▪ Fee ra
Slide 16: Protection Solutions
Protection Solutions Operating Earnings, adjusted for Notable Items1 Highlights $m ▪ Operating earnings adjusted for notable items1 decreased primarily due to lower NII 92 69 ▪ Notable items were $98m primarily reflecting excess mortality and lower NII from alternatives, partially offset by tax ▪ St
Slide 17: Net income to non-GAAP operating earnings, 4Q22
Net income to non-GAAP operating earnings, 4Q22 $m 227 1,324 436 (326) (789) Net Income VA Product Features All other adjustments1 Income tax expense Non-GAAP operating earnings All figures $m Description 4Q22 GMxB accounting asymmetry: • GMxB hedging 933 • Static hedge cash option cost 0 VA Product
Slide 18: Net income to non-GAAP operating earnings, FY22
Net income to non-GAAP operating earnings, FY22 $m 1,595 2,009 1,785 (56) (1,160) (155) Net Income VA Product Features Assumption update All other Income tax expense Non-GAAP adjustments1 operating earnings All figures $m Description FY22 GMxB accounting asymmetry: • GMxB hedging (535) • Static hedg
Slide 19: Investment portfolio overview
Investment portfolio overview General Account Investment Portfolio Fixed maturity portfolio U.S. Treasury, Gov’t and Agency <Baa 7% 4% 14% Structured Credit Baa Other Fixed Maturities $96bn 2% $72bn 35% 52% 1 Corporates 17% 61% Mortgage Loans Aaa, Aa, A 4% 4% Policy Loans Alts. & Other Average portf
Slide 20: 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 Year Ended December 31, December 31, (in millions) 2022 2021 2022 2021 Net income (loss) attributable to Holdings $ (789) $ 254 $ 1,785 $ (439) Adjustments related to: Variable annu
Slide 21: 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 USD, unless otherwise indicated) 3/31/2021 6/30/2021 9/30/2021 12/31/2021 3/31/2022 6/30/2022 9/30/2022 12/31/2022 Total Equity Attributable to Holdings Total equit
Slide 22: Impact of notable items by segment and by category
Appendix Impact of notable items1 by segment and corporate & other and by category Three Months Ended Three Months Ended Non-GAAP Operating Earnings, adjusted for Notable Items, ($m) Dec 31, 2022 Dec 31, 2021 Non-GAAP Operating Earnings $ 436 $ 649 Post-tax Adjustments related to Notable Items: Indi
Slide 23: Impact of notable items by segment and by category
Appendix Impact of notable items1 by segment and corporate & other and by category Twelve Months Ended Twelve Months Ended Non-GAAP Operating Earnings, adjusted for Notable Items, ($m) Dec 31, 2022 Dec 31, 2021 Non-GAAP Operating Earnings $ 2,009 $ 2,825 Post-tax Adjustments related to Notable Items
Slide 24: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Individual Group Protection Corporate Three months ended 12/31/2022 ($m) Retirement Retirement AB Solutions Consolidated & Other Non-GAAP Operating Earnings 303 110 94 (29) (42) 436 Pre-tax adjustments related to Notable Items: Actua
Slide 25: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Individual Group Protection Corporate Twelve months ended 12/31/2022 ($m) Retirement Retirement AB Solutions Consolidated & Other Non-GAAP Operating Earnings 1,140 525 424 179 (259) 2,009 Pre-tax adjustments related to Notable Items:
Slide 26: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Individual Group Protection Corporate Three months ended 12/31/2022 ($m) Retirement Retirement AB Solutions Consolidated & Other Total revenues 6 6 — 9 5 27 Policy charges, fee income and premiums — — — — — — Net investment income 6
Slide 27: Impact of notable items by segment and corporate & other
Appendix Impact of notable items1 by segment and corporate & other Individual Group Protection Corporate Twelve months ended 12/31/2022 ($m) Retirement Retirement AB Solutions & Other Consolidated Total revenues 19 4 — 45 3 70 Policy charges, fee income and premiums — — — 40 — 40 Net investment inco