EXHIBIT 99.1
3Q & 4Q 2003 SELECTED FINANCIAL DATA
| Table of Contents |
Page | |||
| Letter from Genworth Investor Relations | 2 | |||
| Basis of Historical and Pro Forma Selected Financial Information | 3 | |||
| Pro Forma Financial Data By Segment |
||||
| Pro Forma Segment Net Earnings - Protection | 5 | |||
| Pro Forma Segment Net Earnings - Retirement Income and Investments | 6 | |||
| Pro Forma Segment Net Earnings - Mortgage Insurance | 7 | |||
| Historical Financial Data By Segment |
||||
| Historical Segment Net Earnings - Protection | 9 | |||
| Historical Segment Net Earnings - Retirement Income and Investments | 10 | |||
| Historical Segment Net Earnings - Mortgage Insurance | 11 | |||
1
GENWORTH FINANCIAL
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Dear Investor/Analyst,
With the approach of the release of Genworth’s third quarter financial results, we are taking this opportunity to provide additional financial information on prior periods. While the aggregate financial data for these periods has been publicly disseminated, selected financial detail for the third and fourth quarters of 2003 had not previously been provided in a format consistent with our Quarterly Financial Supplement.
This financial data contains both historical and pro forma earnings and other financial information for the third and fourth quarters of 2003. The historical data presented herein includes results of operations that were part of Genworth prior to its reorganization, which was completed in conjunction with its initial public offering (IPO), on May 28, 2004. The pro forma financial information, which is presented herein to facilitate a comparison of Genworth’s period-to-period results, reflects the effects of the reinsurance transactions entered into as part of our corporate reorganization, as if these transactions had occurred on January 1, 2003.
Additional detail on the basis of presentation of historical and pro forma financial information is provided below.
Please call if you have any additional questions.
Regards,
Jean Peters
Senior Vice President
Investor Relations and Corporate Communications
804 662- 2693
Alicia Charity
Vice President
Investor Relations
804 662-2248
2
GENWORTH FINANCIAL
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Basis of Historical and Pro Forma Selected Financial Information
As part of a corporate reorganization effected in connection with the company’s IPO, the company acquired substantially all of the assets and liabilities of GE Financial Assurance Holdings, Inc. (GEFAHI), an indirect subsidiary of GE. The company also acquired certain other insurance businesses that were owned by other GE subsidiaries but managed by members of the company’s management team. In consideration for the assets that the company acquired and the liabilities that the company assumed, the company issued various equity and debt securities to GEFAHI.
The company has prepared its historical financial information as if the company had been in existence throughout all relevant periods. The historical financial information through the date of the corporate reorganization (May 24, 2004) includes all businesses that were owned by GEFAHI, including those that were not transferred to the company, as well as the other insurance businesses that the company acquired from other GE subsidiaries in connection with the corporate reorganization. The financial information after the date of the corporate reorganization does not include businesses that the company did not acquire from GEFAHI. As a result, the company’s historical financial information for periods prior to the corporate reorganization is not comparable to historical financial information for periods ending after that date.
Prior to the completion of the IPO, the company entered into several significant reinsurance transactions with Union Fidelity Life Insurance Company (UFLIC), an indirect subsidiary of GE. As part of these transactions, the company ceded to UFLIC, effective as of January 1, 2004, policy obligations under all of its in-force structured settlement contracts, which had reserves of $12.0 billion, and substantially all of its in-force variable annuity contracts, which had general account reserves of $2.8 billion and separate account reserves of $7.9 billion, each as of December 31, 2003. These contracts represent substantially all of the company’s contracts that were in force as of December 31, 2003 for these products. In addition, effective as of January 1, 2004, the company ceded to UFLIC policy obligations under a block of long-term care insurance policies, which had reserves of $1.5 billion as of December 31, 2003. As part of the reinsurance transactions, UFLIC ceded to the company in-force blocks of Medicare supplement insurance, which had reserves of $19 million.
The unaudited pro forma financial information contained herein reflects the company’s historical combined financial information as adjusted to give effect to the reinsurance transactions with UFLIC as if these transactions had occurred as of January 1, 2003.
The unaudited pro forma financial information is based upon available information and assumptions that the company believes are reasonable. The unaudited pro forma financial information is for illustrative and informational purposes only and is not intended to represent or be indicative of what the company’s financial condition or results of operations would have been had the transactions described above occurred on the dates indicated, nor what they may be in the future.
Note: The financial data below includes historical and pro forma results of operations for Genworth’s Protection, Retirement Income and Investments and Mortgage Insurance segments. Please note that these results of operations do not include realized investment gains and losses, all of which are recorded in Genworth’s Corporate and Other segment, whose results are not included in this report.
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GENWORTH FINANCIAL
3Q & 4Q 2003 SELECTED FINANCIAL DATA
PRO FORMA FINANCIAL DATA
4
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Pro Forma Segment Net Earnings - Protection
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
Life |
Long Term Care |
Payment Protection Ins. |
Group |
Total | |||||||||||
| REVENUES: |
||||||||||||||||
| Premiums |
$ | 175 | $ | 403 | $ | 374 | $ | 147 | $ | 1,099 | ||||||
| Net investment income |
106 | 133 | 28 | 10 | 277 | |||||||||||
| Policy fees and other income |
79 | — | 4 | 7 | 90 | |||||||||||
| Total revenues |
360 | 536 | 406 | 164 | 1,466 | |||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||
| Benefits and other changes in policy reserves |
139 | 373 | 101 | 94 | 707 | |||||||||||
| Interest credited |
64 | 28 | — | — | 92 | |||||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
42 | 57 | 138 | 43 | 280 | |||||||||||
| Amortization of deferred acquisition costs and intangibles |
31 | 12 | 131 | 7 | 181 | |||||||||||
| Interest expense |
1 | — | — | — | 1 | |||||||||||
| Total benefits and expenses |
277 | 470 | 370 | 144 | 1,261 | |||||||||||
| EARNINGS BEFORE INCOME TAXES |
83 | 66 | 36 | 20 | 205 | |||||||||||
| Provision for income taxes |
31 | 24 | 11 | 7 | 73 | |||||||||||
| SEGMENT NET EARNINGS |
$ | 52 | $ | 42 | $ | 25 | $ | 13 | $ | 132 | ||||||
| Three months ended December 31, 2003 |
Life |
Long Term Care |
Payment Protection Ins. |
Group |
Total | |||||||||||
| REVENUES: |
||||||||||||||||
| Premiums |
$ | 177 | $ | 415 | $ | 378 | $ | 153 | $ | 1,123 | ||||||
| Net investment income |
113 | 132 | 19 | 9 | 273 | |||||||||||
| Policy fees and other income |
78 | 5 | 5 | 6 | 94 | |||||||||||
| Total revenues |
368 | 552 | 402 | 168 | 1,490 | |||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||
| Benefits and other changes in policy reserves |
166 | 361 | 106 | 104 | 737 | |||||||||||
| Interest credited |
63 | 27 | — | — | 90 | |||||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
32 | 67 | 51 | 49 | 199 | |||||||||||
| Amortization of deferred acquisition costs and intangibles |
26 | 21 | 249 | 8 | 304 | |||||||||||
| Interest expense |
2 | — | — | — | 2 | |||||||||||
| Total benefits and expenses |
289 | 476 | 406 | 161 | 1,332 | |||||||||||
| EARNINGS BEFORE INCOME TAXES |
79 | 76 | (4 | ) | 7 | 158 | ||||||||||
| Provision for income taxes |
29 | 29 | 1 | 3 | 62 | |||||||||||
| SEGMENT NET EARNINGS |
$ | 50 | $ | 47 | $ | (5 | ) | $ | 4 | $ | 96 | |||||
5
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Pro Forma Segment Net Earnings - Retirement Income and Investments
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
Spread Based Retail Products |
Fee Based Products |
Spread Based Institutional Products |
Total | |||||||||
| REVENUES: |
|||||||||||||
| Premiums |
$ | 237 | $ | — | $ | — | $ | 237 | |||||
| Net investment income |
288 | 11 | 82 | 381 | |||||||||
| Policy fees and other income |
1 | 26 | — | 27 | |||||||||
| Total revenues |
526 | 37 | 82 | 645 | |||||||||
| BENEFITS AND EXPENSES: |
|||||||||||||
| Benefits and other changes in policy reserves |
299 | 15 | — | 314 | |||||||||
| Interest credited |
167 | 8 | 73 | 248 | |||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
26 | 6 | 1 | 33 | |||||||||
| Amortization of deferred acquisition costs and intangibles |
25 | 5 | — | 30 | |||||||||
| Interest expense |
— | — | — | — | |||||||||
| Total benefits and expenses |
517 | 34 | 74 | 625 | |||||||||
| EARNINGS BEFORE INCOME TAXES |
9 | 3 | 8 | 20 | |||||||||
| Provision for income taxes |
3 | (1 | ) | 3 | 5 | ||||||||
| SEGMENT NET EARNINGS |
$ | 6 | $ | 4 | $ | 5 | $ | 15 | |||||
| Three months ended December 31, 2003 |
Spread Based Retail Products |
Fee Based Products |
Spread Based Institutional Products |
Total | |||||||||
| REVENUES: |
|||||||||||||
| Premiums |
$ | 303 | $ | — | $ | — | $ | 303 | |||||
| Net investment income |
301 | 13 | 80 | 394 | |||||||||
| Policy fees and other income |
2 | 24 | — | 26 | |||||||||
| Total revenues |
606 | 37 | 80 | 723 | |||||||||
| BENEFITS AND EXPENSES: |
|||||||||||||
| Benefits and other changes in policy reserves |
345 | 11 | — | 356 | |||||||||
| Interest credited |
166 | 8 | 71 | 245 | |||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
38 | 23 | 3 | 64 | |||||||||
| Amortization of deferred acquisition costs and intangibles |
46 | (9 | ) | — | 37 | ||||||||
| Interest expense |
— | — | — | — | |||||||||
| Total benefits and expenses |
595 | 33 | 74 | 702 | |||||||||
| EARNINGS BEFORE INCOME TAXES |
11 | 4 | 6 | 21 | |||||||||
| Provision for income taxes |
3 | 4 | 2 | 9 | |||||||||
| SEGMENT NET EARNINGS |
$ | 8 | $ | — | $ | 4 | $ | 12 | |||||
6
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Pro Forma Segment Net Earnings - Mortgage Insurance
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
U. S. |
International |
Total | ||||||
| REVENUES: |
|||||||||
| Premiums |
$ | 123 | $ | 59 | $ | 182 | |||
| Net investment income |
31 | 25 | 56 | ||||||
| Policy fees and other Income |
9 | 4 | 13 | ||||||
| Total revenues |
163 | 88 | 251 | ||||||
| BENEFITS AND EXPENSES: |
|||||||||
| Benefits and other changes in policy reserves |
38 | 6 | 44 | ||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
55 | 19 | 74 | ||||||
| Amortization of deferred acquisition costs and intangibles |
6 | 4 | 10 | ||||||
| Total benefits and expenses |
99 | 29 | 128 | ||||||
| EARNINGS BEFORE INCOME TAXES |
64 | 59 | 123 | ||||||
| Provision for income taxes |
13 | 17 | 30 | ||||||
| SEGMENT NET EARNINGS |
$ | 51 | $ | 42 | $ | 93 | |||
| Three months ended December 31, 2003 |
U. S. |
International |
Total | ||||||
| REVENUES: |
|||||||||
| Premiums |
$ | 127 | $ | 67 | $ | 194 | |||
| Net investment income |
31 | 27 | 58 | ||||||
| Policy fees and other Income |
6 | 4 | 10 | ||||||
| Total revenues |
164 | 98 | 262 | ||||||
| BENEFITS AND EXPENSES: |
|||||||||
| Benefits and other changes in policy reserves |
42 | 4 | 46 | ||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
52 | 22 | 74 | ||||||
| Amortization of deferred acquisition costs and intangibles |
7 | 4 | 11 | ||||||
| Total benefits and expenses |
101 | 30 | 131 | ||||||
| EARNINGS BEFORE INCOME TAXES |
63 | 68 | 131 | ||||||
| Provision for income taxes |
24 | 30 | 54 | ||||||
| SEGMENT NET EARNINGS |
$ | 39 | $ | 38 | $ | 77 | |||
Pro Forma Segment Net Earnings is equivalent to Historical Segment Net Earnings for the Mortgage Insurance Segment.
7
GENWORTH FINANCIAL
3Q & 4Q 2003 SELECTED FINANCIAL DATA
HISTORICAL FINANCIAL DATA
8
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Historical Segment Net Earnings - Protection
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
Life |
Long Term Care |
Payment Protection Ins. |
Group |
Total | |||||||||||
| REVENUES: |
||||||||||||||||
| Premiums |
$ | 175 | $ | 454 | $ | 374 | $ | 147 | $ | 1,150 | ||||||
| Net investment income |
106 | 154 | 28 | 10 | 298 | |||||||||||
| Policy fees and other income |
79 | 1 | 4 | 7 | 91 | |||||||||||
| Total revenues |
360 | 609 | 406 | 164 | 1,539 | |||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||
| Benefits and other changes in policy reserves |
139 | 440 | 101 | 94 | 774 | |||||||||||
| Interest credited |
64 | 28 | — | — | 92 | |||||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
42 | 63 | 138 | 43 | 286 | |||||||||||
| Amortization of deferred acquisition costs and intangibles |
31 | 16 | 131 | 7 | 185 | |||||||||||
| Interest expense |
1 | — | — | — | 1 | |||||||||||
| Total benefits and expenses |
277 | 547 | 370 | 144 | 1,338 | |||||||||||
| EARNINGS BEFORE INCOME TAXES |
83 | 62 | 36 | 20 | 201 | |||||||||||
| Provision for income taxes |
31 | 22 | 11 | 7 | 71 | |||||||||||
| SEGMENT NET EARNINGS |
$ | 52 | $ | 40 | $ | 25 | $ | 13 | $ | 130 | ||||||
| Three months ended December 31, 2003 |
Life |
Long Term Care |
Payment Protection Ins. |
Group |
Total | |||||||||||
| REVENUES: |
||||||||||||||||
| Premiums |
$ | 177 | $ | 473 | $ | 378 | $ | 153 | $ | 1,181 | ||||||
| Net investment income |
113 | 164 | 19 | 9 | 305 | |||||||||||
| Policy fees and other income |
78 | 4 | 5 | 6 | 93 | |||||||||||
| Total revenues |
368 | 641 | 402 | 168 | 1,579 | |||||||||||
| BENEFITS AND EXPENSES: |
||||||||||||||||
| Benefits and other changes in policy reserves |
166 | 429 | 106 | 104 | 805 | |||||||||||
| Interest credited |
63 | 27 | — | — | 90 | |||||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
32 | 82 | 51 | 49 | 214 | |||||||||||
| Amortization of deferred acquisition costs and intangibles |
26 | 29 | 249 | 8 | 312 | |||||||||||
| Interest expense |
2 | — | — | — | 2 | |||||||||||
| Total benefits and expenses |
289 | 567 | 406 | 161 | 1,423 | |||||||||||
| EARNINGS BEFORE INCOME TAXES |
79 | 74 | (4 | ) | 7 | 156 | ||||||||||
| Provision for income taxes |
29 | 28 | 1 | 3 | 61 | |||||||||||
| SEGMENT NET EARNINGS |
$ | 50 | $ | 46 | $ | (5 | ) | $ | 4 | $ | 95 | |||||
9
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Historical Segment Net Earnings - Retirement Income and Investments
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
Spread Based Retail Products |
Fee Based Products |
Spread Based Institutional Products |
Total | ||||||||
| REVENUES: |
||||||||||||
| Premiums |
$ | 237 | $ | — | $ | — | $ | 237 | ||||
| Net investment income |
506 | 30 | 82 | 618 | ||||||||
| Policy fees and other income |
1 | 58 | — | 59 | ||||||||
| Total revenues |
744 | 88 | 82 | 914 | ||||||||
| BENEFITS AND EXPENSES: |
||||||||||||
| Benefits and other changes in policy reserves |
446 | 15 | — | 461 | ||||||||
| Interest credited |
216 | 26 | 73 | 315 | ||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
28 | 16 | 1 | 45 | ||||||||
| Amortization of deferred acquisition costs and intangibles |
26 | 23 | — | 49 | ||||||||
| Interest expense |
— | — | — | — | ||||||||
| Total benefits and expenses |
716 | 80 | 74 | 870 | ||||||||
| EARNINGS BEFORE INCOME TAXES |
28 | 8 | 8 | 44 | ||||||||
| Provision for income taxes |
10 | — | 3 | 13 | ||||||||
| SEGMENT NET EARNINGS |
$ | 18 | $ | 8 | $ | 5 | $ | 31 | ||||
| Three months ended December 31, 2003 |
Spread Based Retail Products |
Fee Based Products |
Spread Based Institutional Products |
Total | ||||||||
| REVENUES: |
||||||||||||
| Premiums |
$ | 303 | $ | — | $ | — | $ | 303 | ||||
| Net investment income |
519 | 31 | 80 | 630 | ||||||||
| Policy fees and other income |
1 | 57 | — | 58 | ||||||||
| Total revenues |
823 | 88 | 80 | 991 | ||||||||
| BENEFITS AND EXPENSES: |
||||||||||||
| Benefits and other changes in policy reserves |
495 | 13 | — | 508 | ||||||||
| Interest credited |
215 | 26 | 71 | 312 | ||||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
38 | 35 | 3 | 76 | ||||||||
| Amortization of deferred acquisition costs and intangibles |
47 | 10 | — | 57 | ||||||||
| Interest expense |
— | — | — | — | ||||||||
| Total benefits and expenses |
795 | 84 | 74 | 953 | ||||||||
| EARNINGS BEFORE INCOME TAXES |
28 | 4 | 6 | 38 | ||||||||
| Provision for income taxes |
11 | 2 | 2 | 15 | ||||||||
| SEGMENT NET EARNINGS |
$ | 17 | $ | 2 | $ | 4 | $ | 23 | ||||
10
3Q & 4Q 2003 SELECTED FINANCIAL DATA
Historical Segment Net Earnings - Mortgage Insurance
(Dollar amounts in millions)
| Three months ended September 30, 2003 |
U. S. |
International |
Total | ||||||
| REVENUES: |
|||||||||
| Premiums |
$ | 123 | $ | 59 | $ | 182 | |||
| Net investment income |
31 | 25 | 56 | ||||||
| Policy fees and other Income |
9 | 4 | 13 | ||||||
| Total revenues |
163 | 88 | 251 | ||||||
| BENEFITS AND EXPENSES: |
|||||||||
| Benefits and other changes in policy reserves |
38 | 6 | 44 | ||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
55 | 19 | 74 | ||||||
| Amortization of deferred acquisition costs and intangibles |
6 | 4 | 10 | ||||||
| Total benefits and expenses |
99 | 29 | 128 | ||||||
| EARNINGS BEFORE INCOME TAXES |
64 | 59 | 123 | ||||||
| Provision for income taxes |
13 | 17 | 30 | ||||||
| SEGMENT NET EARNINGS |
$ | 51 | $ | 42 | $ | 93 | |||
| Three months ended December 31, 2003 |
U. S. |
International |
Total | ||||||
| REVENUES: |
|||||||||
| Premiums |
$ | 127 | $ | 67 | $ | 194 | |||
| Net investment income |
31 | 27 | 58 | ||||||
| Policy fees and other Income |
6 | 4 | 10 | ||||||
| Total revenues |
164 | 98 | 262 | ||||||
| BENEFITS AND EXPENSES: |
|||||||||
| Benefits and other changes in policy reserves |
42 | 4 | 46 | ||||||
| Underwriting, acquisition and insurance expenses, net of deferrals |
52 | 22 | 74 | ||||||
| Amortization of deferred acquisition costs and intangibles |
7 | 4 | 11 | ||||||
| Total benefits and expenses |
101 | 30 | 131 | ||||||
| EARNINGS BEFORE INCOME TAXES |
63 | 68 | 131 | ||||||
| Provision for income taxes |
24 | 30 | 54 | ||||||
| SEGMENT NET EARNINGS |
$ | 39 | $ | 38 | $ | 77 | |||
Pro Forma Segment Net Earnings is equivalent to Historical Segment Net Earnings for the Mortgage Insurance Segment.
11
GENWORTH FINANCIAL
3Q & 4Q 2003 SELECTED FINANCIAL DATA
About Genworth Financial
Genworth is a leading insurance holding company, serving the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, and has operations in 20 countries, including the U.S., Canada, Australia, the U.K. and more than a dozen other European countries. For more information, visit www.genworth.com
Inquiries:
Genworth Financial, Inc., Richmond
Jean Peters, 804/662-2693
jean.peters@genworth.com
Alicia Charity, 804/662-2248
alicia.charity@genworth.com
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