Equitable Holdings, Inc. · NYSE:EQH
Equitable — Q3 2020 Earnings Presentation
18 slides from Equitable's earnings presentation, Nov 6, 2020
Slide 1: Equitable Holdings Third Quarter 2020 Earnings Results
Equitable Holdings Third Quarter 2020 Earnings Results November 5, 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: Third Quarter 2020 Highlights
Third Quarter 2020 Highlights Strong performance demonstrating adaptability and stable earnings profile • Non-GAAP operating earnings of $1.24 per share; or $1.31 per share excluding assumption update • AUM up 6% year-over-year to $746bn, supported by strong net flows • New business activity trended
Slide 4: Third Quarter Consolidated Results Summary
Third Quarter Consolidated Results Summary Non-GAAP Operating Earnings Non-GAAP Operating EPS Financial Highlights $m Assumption update impact $ Assumption update impact Non-GAAP operating earnings of $568 -16% -9% million, including $(31)m impact from 673 1.37 actuarial assumption updates 568 1.24
Slide 5: 2020 Actuarial Assumption Review
2020 Actuarial Assumption Review Managing to fair value-oriented economic model 3Q20 Assumption Updates ► Economic balance sheet immunized from − Limited financial impact; interest rates updates closely aligned to economic framework ► Reduced GAAP long-term interest rate − Impact to Non-GAAP Operati
Slide 6: Individual Retirement
Individual Retirement Operating Earnings Highlights Assumption update impact $m ▪ Operating earnings excluding assumption updates increased -20% due to the GA rebalance and alternatives income as well as 465 lower operating expenses 82 371 +3% ▪ FYP improved on a sequential basis driven by 18% incre
Slide 7: Group Retirement
Group Retirement Operating Earnings Highlights Assumption update impact $m +23% ▪ Operating earnings excluding assumption updates increased primarily due to higher asset balances, the GA rebalance and 129 an increase in alternatives income 105 +28% 3 ▪ Net outflows increased primarily driven by seas
Slide 8: Investment Management and Research (AB)
Investment Management and Research (AB) Operating Earnings Highlights $m ▪ Operating earnings growth driven by higher base fees on 12% higher average AUM and lower operating expenses 104 93 ▪ Net flows of $5.3bn2 excluding expected low-fee AXA redemptions were driven by inflows in all three client c
Slide 9: Protection Solutions
Protection Solutions Operating Earnings Highlights Assumption update impact $m ▪ Operating earnings declined due to the reestablishment of the -49% PFBL reserve upon exiting LRT, as well as lower premiums 100 ▪ Ongoing earnings volatility expected due to LRT / PFBL reserve accrual 51 104 3 ▪ Lower t
Slide 10: Strong capitalization and liquidity enabling capital return
Strong capitalization and liquidity enabling capital return Robust capitalization and liquidity Delivering on 50-60% payout ratio Dividends ▪ Returned $552m to shareholders year-to date, Repurchase from AXA including $176m in the third quarter 633 Repurchases from market 70 ▪ Cash & liquid assets of
Slide 11: Significant change in risk profile post-VA transaction
Significant change in risk profile post-VA transaction CTE required capital ($bn) RBC ratio (%) -64% 19 c. 490 +60 c. 430 -12 7 Pre-transaction1 Transaction Post-transaction 3Q20 Estimate Transaction Pro Forma Impact Impact Equitable credit ratings affirmed, outlook ▲ to positive at Moody’s, ▲ to st
Slide 12: Third Quarter 2020 Highlights
Third Quarter 2020 Highlights Strong performance demonstrating adaptability and stable earnings profile • Non-GAAP operating earnings of $1.24 per share; or $1.31 per share excluding assumption update • AUM up 6% year-over-year to $746bn, supported by strong net flows • New business activity trended
Slide 13: Appendix
Appendix Equitable Holdings Third Quarter 2020 Earnings Results
Slide 14: Net Income to Non-GAAP Operating Earnings, 3Q20
Net Income to Non-GAAP Operating Earnings, 3Q20 $m 35 84 (357) 568 (779) 1,585 Net loss VA Product Features Assumption update All other Income tax expense Non-GAAP adjustments1 operating earnings All figures $m Description 3Q20 GMxB accounting asymmetry: • GMxB hedging 842 • Static hedge cash option
Slide 15: Investment Portfolio Overview
Investment Portfolio Overview General Account Investment Portfolio Fixed maturity portfolio <Baa U.S. Treasury, Gov’t and Agency 3% 14% Other Fixed Maturities Baa 6% 32% 6% Short Duration 1 Corporates 54% $94bn 2 Fixed Maturities $70bn 14% 65% Mortgage Loans Aaa, Aa, A 2% 4% Policy Loans Alts. & Oth
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 September 30, 2020 2019 (in millions) Net income (loss) attributable to Holdings $ (779) $ (374) Adjustments related to: Variable annuity product features 1,620 1,431 Investment (ga
Slide 17: 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) 12/31/2018 3/31/2019 6/30/2019 9/30/2019 12/31/2019 3/31/2020 6/30/2020 9/30/2020 Total equity attributable to Holdings (ex. AOCI and
Slide 18: 2020 Actuarial Assumption Review
2020 Actuarial Assumption Review Line item impact of assumption updates on Operating Earnings1 Individual Protection Three months ended 9/30/2020 ($m) Group Retirement Consolidated2,3 Retirement Solutions Total revenues (23) (23) Policy charges, fee income and premiums (23) (23) Total benefits and o