Exhibit 99.2
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Table of Contents |
Page | |
Use of Non-GAAP Measures |
3 | |
Financial Highlights |
4 | |
Third Quarter Results |
||
Reconciliation of Net Income to Net Operating Income |
6 | |
Net Income and Net Operating Income |
7 | |
Consolidated Net Income and Net Operating Income by Quarter |
8 | |
Consolidated Balance Sheet |
9-10 | |
Deferred Acquisition Costs Rollforward |
11 | |
Quarterly Results by Segment |
||
Consolidated Segment Net Income and Segment Net Operating Income |
13-16 | |
Segment Net Income and Segment Net Operating Income and SalesProtection |
17-21 | |
Segment Net Income and Segment Net Operating Income and SalesRetirement Income and Investments |
22-25 | |
Segment Net Income and Segment Net Operating Income and SalesMortgage Insurance |
26-28 | |
Segment Net Loss and Segment Net Operating LossCorporate and Other |
29 | |
Additional Financial Data |
||
Investments Summary |
31-32 | |
Fixed Maturities Summary |
33 | |
Commercial Mortgage Loans Data |
34-35 | |
General Account GAAP Net Investment Income Yields |
36 | |
Life Insurance In-force |
37 | |
Assets Under ManagementRetirement Income and Investments |
38-41 | |
Selected Key Performance MeasuresMortgage Insurance |
42-45 | |
Reconciliations of Non-GAAP Measures |
46-50 | |
Corporate Information |
||
Industry Ratings |
51-53 |
2
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
This financial supplement includes the non-GAAP* financial measure entitled net operating income. The company defines net operating income as net income from continuing operations, excluding after-tax net investment gain (losses), net of taxes and other adjustments, changes in accounting principles and infrequent or unusual non-operating items. There were no infrequent or unusual non-operating items excluded from net operating income for the periods presented in this financial supplement.
Management believes that analysis of net operating income enhances understanding and comparability of performance by highlighting underlying business activity and profitability drivers. However, net operating income should not be viewed as a substitute for GAAP net income. In addition, the companys definition of net operating income may differ from the definitions used by other companies. The table on page 6 of this report provides a reconciliation of net income to net operating income (as defined above) for the three and nine months ended September 30, 2006 and 2005.
During 2006, we began allocating net investment gains (losses) to the segments in determining segment net income. We exclude the net investment gains (losses), net of taxes and other adjustments, from segment net operating income for each of the segments. Other adjustments represent amortization of deferred acquisition costs and other intangible assets associated with the net investment gains (losses). During 2005, all net investment gains (losses) were recorded in the Corporate and Other segment.
This financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 47 through 50 of this financial supplement.
* | U.S. Generally Accepted Accounting Principles |
3
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Financial Highlights
(amounts in millions, except per share data)
Balance Sheet Data |
2006 | 2005 | |||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||||
Total stockholders equity, excluding accumulated other comprehensive income |
$ | 12,143 | $ | 11,977 | $ | 11,738 | $ | 11,906 | $ | 11,615 | $ | 11,343 | $ | 11,062 | |||||||||
Total accumulated other comprehensive income |
1,166 | 233 | 740 | 1,404 | 1,713 | 2,163 | 1,458 | ||||||||||||||||
Total stockholders equity |
$ | 13,309 | $ | 12,210 | $ | 12,478 | $ | 13,310 | $ | 13,328 | $ | 13,506 | $ | 12,520 | |||||||||
Book value per common share |
$ | 29.44 | $ | 26.84 | $ | 27.37 | $ | 28.26 | $ | 28.31 | $ | 28.69 | $ | 26.62 | |||||||||
Book value per common share, excluding accumulated other comprehensive income |
$ | 26.86 | $ | 26.33 | $ | 25.74 | $ | 25.28 | $ | 24.67 | $ | 24.10 | $ | 23.52 | |||||||||
Common shares outstanding as of balance sheet date |
452.1 | 454.9 | 456.0 | 470.9 | 470.8 | 470.7 | 470.2 | ||||||||||||||||
Twelve months ended | |||||||||||||||||||||||
Return on Equity (ROE) |
September 30, 2006 |
December 31, 2005 |
|||||||||||||||||||||
GAAP Basis ROE |
10.6 | % | 10.7 | % | |||||||||||||||||||
Operating ROE |
10.9 | % | 10.7 | % |
See page 47 herein for a reconciliation of GAAP Basis ROE to Operating ROE.
Basic and Diluted Shares |
Three months ended September 30, 2006 |
Nine months ended September 30, 2006 |
||||||||||||
Weighted-average shares used in basic earnings per common share calculations |
453.8 | 458.8 | ||||||||||||
Dilutive securities: |
||||||||||||||
Stock purchase contracts underlying equity units(1) |
8.1 | 7.7 | ||||||||||||
Stock options, restricted stock units and stock appreciation rights |
5.3 | 5.2 | ||||||||||||
Weighted-average shares used in diluted earnings per common share calculations |
467.2 | 471.7 | ||||||||||||
(1) | For more information on our Equity Units, see note 13 (d) in our audited financial statements filed on Form 10-K for the year ended December 31, 2005. |
Dilutive Effect of Stock Purchase Contracts Underlying Equity Units |
Average market price |
Incremental shares(a) |
|||||||||||||
$ | 31.00 | 6.1 | |||||||||||||
$ | 32.00 | 6.7 | |||||||||||||
$ | 33.00 | 7.3 | |||||||||||||
$ | 34.00 | 7.8 | |||||||||||||
$ | 35.00 | 8.3 | |||||||||||||
$ | 36.00 | 8.8 | |||||||||||||
$ | 37.00 | 9.2 | |||||||||||||
$ | 38.00 | 9.7 | |||||||||||||
$ | 39.00 | 10.1 | |||||||||||||
$ | 40.00 | 10.5 |
(a) | Incremental shares are calculated using the treasury stock method. |
4
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Third Quarter Results
5
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Reconciliation of Net Income to Net Operating Income
(amounts in millions, except per share data)
Three months ended September 30, |
Nine months ended September 30, | |||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||
Net income |
$ | 304 | $ | 307 | $ | 955 | $ | 914 | ||||
Less cumulative effect of accounting change, net of taxes |
| | 4 | | ||||||||
Net income before accounting change |
304 | 307 | 951 | 914 | ||||||||
Net investment (gains) losses, net of taxes and other adjustments |
3 | 4 | 40 | 8 | ||||||||
Net operating income |
$ | 307 | $ | 311 | $ | 991 | $ | 922 | ||||
Net earnings per common share: |
||||||||||||
Basic |
$ | 0.67 | $ | 0.65 | $ | 2.08 | $ | 1.92 | ||||
Diluted |
$ | 0.65 | $ | 0.64 | $ | 2.02 | $ | 1.88 | ||||
Net operating earnings per common share: |
||||||||||||
Basic |
$ | 0.68 | $ | 0.66 | $ | 2.16 | $ | 1.93 | ||||
Diluted |
$ | 0.66 | $ | 0.65 | $ | 2.10 | $ | 1.90 | ||||
Weighted-average common shares outstanding: |
||||||||||||
Basic |
453.8 | 470.7 | 458.8 | 476.7 | ||||||||
Diluted |
467.2 | 481.1 | 471.7 | 484.7 | ||||||||
6
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Net Income and Net Operating Income
(amounts in millions)
Three months ended September 30, |
Nine months ended September 30, |
|||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
REVENUES: |
||||||||||||||||
Premiums |
$ | 1,680 | $ | 1,547 | $ | 4,867 | $ | 4,766 | ||||||||
Net investment income |
944 | 902 | 2,821 | 2,595 | ||||||||||||
Net investment gains (losses) |
(6 | ) | (7 | ) | (77 | ) | (13 | ) | ||||||||
Policy fees and other income |
186 | 186 | 572 | 501 | ||||||||||||
Total revenues |
2,804 | 2,628 | 8,183 | 7,849 | ||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||
Benefits and other changes in policy reserves |
1,183 | 1,026 | 3,314 | 3,152 | ||||||||||||
Interest credited |
383 | 364 | 1,134 | 1,051 | ||||||||||||
Acquisition and operating expenses, net of deferrals |
533 | 506 | 1,529 | 1,476 | ||||||||||||
Amortization of deferred acquisition costs and intangibles |
170 | 217 | 551 | 618 | ||||||||||||
Interest expense |
87 | 72 | 257 | 213 | ||||||||||||
Total benefits and expenses |
2,356 | 2,185 | 6,785 | 6,510 | ||||||||||||
INCOME BEFORE INCOME TAXES AND ACCOUNTING CHANGE |
448 | 443 | 1,398 | 1,339 | ||||||||||||
Provision for income taxes |
144 | 136 | 447 | 425 | ||||||||||||
Effective tax rate |
32.1 | % | 30.7 | % | 32.0 | % | 31.7 | % | ||||||||
NET INCOME BEFORE ACCOUNTING CHANGE |
304 | 307 | 951 | 914 | ||||||||||||
Cumulative effect of accounting change, net of taxes |
| | 4 | | ||||||||||||
NET INCOME |
304 | 307 | 955 | 914 | ||||||||||||
ADJUSTMENTS TO NET INCOME: |
||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
3 | 4 | 40 | 8 | ||||||||||||
Cumulative effect of accounting change, net of taxes |
| | (4 | ) | | |||||||||||
NET OPERATING INCOME |
$ | 307 | $ | 311 | $ | 991 | $ | 922 | ||||||||
Effective tax rate (operating income) |
32.1 | % | 30.9 | % | 32.1 | % | 31.8 | % |
7
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Net Income and Net Operating Income by Quarter
(amounts in millions, except per share amounts)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 1,680 | $ | 1,648 | $ | 1,539 | $ | 4,867 | $ | 1,531 | $ | 1,547 | $ | 1,614 | $ | 1,605 | $ | 6,297 | ||||||||||||||||||
Net investment income |
944 | 953 | 924 | 2,821 | 941 | 902 | 842 | 851 | 3,536 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(6 | ) | (49 | ) | (22 | ) | (77 | ) | 11 | (7 | ) | | (6 | ) | (2 | ) | ||||||||||||||||||||
Policy fees and other income |
186 | 202 | 184 | 572 | 172 | 186 | 154 | 161 | 673 | |||||||||||||||||||||||||||
Total revenues |
2,804 | 2,754 | 2,625 | 8,183 | 2,655 | 2,628 | 2,610 | 2,611 | 10,504 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1,183 | 1,096 | 1,035 | 3,314 | 1,053 | 1,026 | 1,051 | 1,075 | 4,205 | |||||||||||||||||||||||||||
Interest credited |
383 | 378 | 373 | 1,134 | 374 | 364 | 347 | 340 | 1,425 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
533 | 521 | 475 | 1,529 | 513 | 506 | 523 | 447 | 1,989 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
170 | 207 | 174 | 551 | 176 | 217 | 208 | 193 | 794 | |||||||||||||||||||||||||||
Interest expense |
87 | 88 | 82 | 257 | 80 | 72 | 69 | 72 | 293 | |||||||||||||||||||||||||||
Total benefits and expenses |
2,356 | 2,290 | 2,139 | 6,785 | 2,196 | 2,185 | 2,198 | 2,127 | 8,706 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
448 | 464 | 486 | 1,398 | 459 | 443 | 412 | 484 | 1,798 | |||||||||||||||||||||||||||
Provision for income taxes |
144 | 147 | 156 | 447 | 152 | 136 | 127 | 162 | 577 | |||||||||||||||||||||||||||
NET INCOME BEFORE ACCOUNTING CHANGE |
304 | 317 | 330 | 951 | 307 | 307 | 285 | 322 | 1,221 | |||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | 4 | 4 | | | | | | |||||||||||||||||||||||||||
NET INCOME |
304 | 317 | 334 | 955 | 307 | 307 | 285 | 322 | 1,221 | |||||||||||||||||||||||||||
ADJUSTMENTS TO NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
3 | 22 | 15 | 40 | (7 | ) | 4 | | 4 | 1 | ||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | (4 | ) | (4 | ) | | | | | | |||||||||||||||||||||||||
NET OPERATING INCOME |
$ | 307 | $ | 339 | $ | 345 | $ | 991 | $ | 300 | $ | 311 | $ | 285 | $ | 326 | $ | 1,222 | ||||||||||||||||||
Effective tax rate (operating income) |
32.1 | % | 32.2 | % | 32.1 | % | 32.1 | % | 33.0 | % | 30.9 | % | 30.8 | % | 33.5 | % | 32.1 | % | ||||||||||||||||||
Earnings Per Share Data: |
||||||||||||||||||||||||||||||||||||
Earnings Per Share |
||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.67 | $ | 0.70 | $ | 0.72 | $ | 2.08 | $ | 0.65 | $ | 0.65 | $ | 0.61 | $ | 0.66 | $ | 2.57 | ||||||||||||||||||
Diluted |
$ | 0.65 | $ | 0.68 | $ | 0.70 | $ | 2.02 | $ | 0.64 | $ | 0.64 | $ | 0.60 | $ | 0.65 | $ | 2.52 | ||||||||||||||||||
Operating Earnings Per Share |
||||||||||||||||||||||||||||||||||||
Basic |
$ | 0.68 | $ | 0.74 | $ | 0.74 | $ | 2.16 | $ | 0.64 | $ | 0.66 | $ | 0.61 | $ | 0.67 | $ | 2.57 | ||||||||||||||||||
Diluted |
$ | 0.66 | $ | 0.72 | $ | 0.72 | $ | 2.10 | $ | 0.62 | $ | 0.65 | $ | 0.60 | $ | 0.66 | $ | 2.52 | ||||||||||||||||||
Shares Outstanding |
||||||||||||||||||||||||||||||||||||
Basic |
453.8 | 455.8 | 467.0 | 458.8 | 470.9 | 470.7 | 470.4 | 488.8 | 475.3 | |||||||||||||||||||||||||||
Diluted |
467.2 | 468.3 | 479.5 | 471.7 | 482.6 | 481.1 | 477.4 | 494.3 | 484.6 |
8
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Balance Sheet
(amounts in millions)
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
December 31, 2005 |
September 30, 2005 | |||||||||||
ASSETS |
|||||||||||||||
Investments: |
|||||||||||||||
Fixed maturity securities available-for-sale, at fair value |
$ | 54,280 | $ | 52,316 | $ | 53,559 | $ | 53,937 | $ | 53,740 | |||||
Equity securities available-for-sale, at fair value |
192 | 187 | 193 | 206 | 195 | ||||||||||
Commercial mortgage loans |
8,315 | 8,203 | 7,854 | 7,558 | 7,272 | ||||||||||
Policy loans |
1,498 | 1,485 | 1,362 | 1,350 | 1,353 | ||||||||||
Restricted investments held by securitization entities |
| | | 685 | 753 | ||||||||||
Other invested assets |
3,050 | 1,840 | 2,738 | 3,174 | 3,224 | ||||||||||
Total investments |
67,335 | 64,031 | 65,706 | 66,910 | 66,537 | ||||||||||
Cash and cash equivalents |
2,302 | 2,351 | 1,909 | 1,875 | 1,834 | ||||||||||
Accrued investment income |
760 | 663 | 788 | 733 | 749 | ||||||||||
Deferred acquisition costs |
6,166 | 6,042 | 5,817 | 5,586 | 5,391 | ||||||||||
Intangible assets |
884 | 942 | 817 | 782 | 778 | ||||||||||
Goodwill |
1,488 | 1,486 | 1,451 | 1,450 | 1,455 | ||||||||||
Reinsurance recoverable |
17,661 | 17,789 | 18,003 | 18,245 | 18,331 | ||||||||||
Other assets |
1,167 | 717 | 716 | 967 | 1,691 | ||||||||||
Separate account assets |
10,084 | 9,625 | 9,700 | 9,106 | 8,923 | ||||||||||
Total assets |
$ | 107,847 | $ | 103,646 | $ | 104,907 | $ | 105,654 | $ | 105,689 | |||||
9
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Balance Sheet (continued)
(amounts in millions)
September 30, 2006 |
June 30, 2006 |
March 31, 2006 |
December 31, 2005 |
September 30, 2005 |
||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||
Liabilities: |
||||||||||||||||||||
Future annuity and contract benefits |
$ | 63,593 | $ | 63,614 | $ | 63,632 | $ | 63,749 | $ | 63,786 | ||||||||||
Liability for policy and contract claims |
3,389 | 3,297 | 3,279 | 3,364 | 3,315 | |||||||||||||||
Unearned premiums |
4,180 | 3,956 | 3,706 | 3,647 | 3,567 | |||||||||||||||
Other policyholder liabilities |
509 | 484 | 443 | 507 | 518 | |||||||||||||||
Other liabilities |
5,167 | 3,652 | 4,551 | 4,937 | 5,337 | |||||||||||||||
Non-recourse funding obligations |
2,450 | 2,150 | 2,150 | 1,400 | 1,400 | |||||||||||||||
Short-term borrowings |
295 | 295 | 380 | 152 | 167 | |||||||||||||||
Long-term borrowings |
2,730 | 2,741 | 2,729 | 2,736 | 2,761 | |||||||||||||||
Senior notes underlying equity units |
600 | 600 | 600 | 600 | 600 | |||||||||||||||
Mandatorily redeemable preferred stock |
100 | 100 | 100 | 100 | 100 | |||||||||||||||
Deferred tax liability |
1,441 | 922 | 1,159 | 1,386 | 1,177 | |||||||||||||||
Borrowings related to securitization entities |
| | | 660 | 710 | |||||||||||||||
Separate account liabilities |
10,084 | 9,625 | 9,700 | 9,106 | 8,923 | |||||||||||||||
Total liabilities |
94,538 | 91,436 | 92,429 | 92,344 | 92,361 | |||||||||||||||
Commitments and contingencies |
||||||||||||||||||||
Stockholders equity: |
||||||||||||||||||||
Common stock |
| | | | | |||||||||||||||
Additional paid-in capital |
10,737 | 10,713 | 10,682 | 10,671 | 10,651 | |||||||||||||||
Accumulated other comprehensive income (loss): |
||||||||||||||||||||
Net unrealized investment gains (losses) |
437 | (312 | ) | 223 | 760 | 1,040 | ||||||||||||||
Derivatives qualifying as hedges |
377 | 212 | 280 | 389 | 399 | |||||||||||||||
Foreign currency translation and other adjustments |
352 | 333 | 237 | 255 | 274 | |||||||||||||||
Total accumulated other comprehensive income (loss) |
1,166 | 233 | 740 | 1,404 | 1,713 | |||||||||||||||
Retained earnings |
2,581 | 2,317 | 2,035 | 1,735 | 1,464 | |||||||||||||||
Treasury stock, at cost |
(1,175 | ) | (1,053 | ) | (979 | ) | (500 | ) | (500 | ) | ||||||||||
Total stockholders equity |
13,309 | 12,210 | 12,478 | 13,310 | 13,328 | |||||||||||||||
Total liabilities and stockholders equity |
$ | 107,847 | $ | 103,646 | $ | 104,907 | $ | 105,654 | $ | 105,689 | ||||||||||
10
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
DEFERRED ACQUISITION COSTS ROLLFORWARD
(amounts in millions)
Deferred Acquisition Costs Rollforward |
Protection | Retirement Income and Investments |
Mortgage Insurance |
Corporate and Other |
Total | ||||||||||||||
Unamortized balance as of June 30, 2006 |
$ | 4,830 | $ | 906 | $ | 148 | $ | | $ | 5,884 | |||||||||
Costs deferred |
219 | 60 | 23 | | 302 | ||||||||||||||
Amortization, net of interest accretion(1) |
(90 | ) | (42 | ) | (15 | ) | | (147 | ) | ||||||||||
Impact of foreign currency translation |
7 | | 1 | | 8 | ||||||||||||||
Reclassification from future annuity and contract benefits |
69 | | | | 69 | ||||||||||||||
Unamortized balance as of September 30, 2006 |
5,035 | 924 | 157 | | 6,116 | ||||||||||||||
Accumulated effect of net unrealized investment gains (losses) |
(9 | ) | 59 | | | 50 | |||||||||||||
Balance as of September 30, 2006 |
$ | 5,026 | $ | 983 | $ | 157 | $ | | $ | 6,166 | |||||||||
(1) | Amortization, net of interest accretion, includes $2 million of amortization related to net investment gains (losses) for our investment contracts. |
11
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Quarterly Results by Segment
12
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Segment Net Income and Segment Net Operating Income
(amounts in millions)
Protection | Retirement Income and Investments | Mortgage | Corporate and Other |
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2006 |
Life | Long- Term Care |
Payment Protection Insurance |
Group Life and Health |
Total | Spread- Based Retail Products |
Fee-Based Products |
Spread- Based Institutional Products |
Total | U.S. | International | Total | ||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 228 | $ | 485 | $ | 310 | $ | 176 | $ | 1,199 | $ | 210 | $ | | $ | | $ | 210 | $ | 118 | $ | 144 | $ | 262 | $ | 9 | $ | 1,680 | ||||||||||||||||||||||||||||
Net investment income |
146 | 182 | 23 | 12 | 363 | 326 | 5 | 144 | 475 | 34 | 52 | 86 | 20 | 944 | ||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
(3 | ) | 5 | | | 2 | (6 | ) | (1 | ) | (1 | ) | (8 | ) | 1 | (1 | ) | | | (6 | ) | |||||||||||||||||||||||||||||||||||
Policy fees and other income |
74 | 7 | 7 | 2 | 90 | 6 | 79 | | 85 | 5 | 3 | 8 | 3 | 186 | ||||||||||||||||||||||||||||||||||||||||||
Total revenues |
445 | 679 | 340 | 190 | 1,654 | 536 | 83 | 143 | 762 | 158 | 198 | 356 | 32 | 2,804 | ||||||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
183 | 468 | 49 | 122 | 822 | 281 | 3 | | 284 | 44 | 32 | 76 | 1 | 1,183 | ||||||||||||||||||||||||||||||||||||||||||
Interest credited |
59 | 37 | | 1 | 97 | 155 | 3 | 128 | 286 | | | | | 383 | ||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
39 | 88 | 187 | 42 | 356 | 27 | 47 | 2 | 76 | 35 | 41 | 76 | 25 | 533 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
7 | 23 | 65 | 11 | 106 | 39 | 6 | 1 | 46 | 9 | 8 | 17 | 1 | 170 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense |
34 | | | | 34 | 2 | | | 2 | | | | 51 | 87 | ||||||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
322 | 616 | 301 | 176 | 1,415 | 504 | 59 | 131 | 694 | 88 | 81 | 169 | 78 | 2,356 | ||||||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
123 | 63 | 39 | 14 | 239 | 32 | 24 | 12 | 68 | 70 | 117 | 187 | (46 | ) | 448 | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
45 | 22 | 13 | 5 | 85 | 12 | 4 | 4 | 20 | 17 | 36 | 53 | (14 | ) | 144 | |||||||||||||||||||||||||||||||||||||||||
78 | 41 | 26 | 9 | 154 | 20 | 20 | 8 | 48 | 53 | 81 | 134 | (32 | ) | 304 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||
SEGMENT NET INCOME (LOSS) |
78 | 41 | 26 | 9 | 154 | 20 | 20 | 8 | 48 | 53 | 81 | 134 | (32 | ) | 304 | |||||||||||||||||||||||||||||||||||||||||
ADJUSTMENTS TO SEGMENT NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | (3 | ) | | | (2 | ) | 3 | 1 | 1 | 5 | | | | | 3 | ||||||||||||||||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | | | | | | | | | | | | | ||||||||||||||||||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME (LOSS) |
$ | 79 | $ | 38 | $ | 26 | $ | 9 | $ | 152 | $ | 23 | $ | 21 | $ | 9 | $ | 53 | $ | 53 | $ | 81 | $ | 134 | $ | (32 | ) | $ | 307 | |||||||||||||||||||||||||||
Effective tax rate (operating income) |
37.3 | % | 34.5 | % | 33.3 | % | 35.7 | % | 35.9 | % | 36.1 | % | 16.0 | % | 30.8 | % | 28.4 | % | 23.2 | % | 31.4 | % | 28.3 | % | 30.4 | % | 32.1 | % |
13
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Segment Net Income and Segment Net Operating Income (continued)
(amounts in millions)
Protection | Retirement Income and Investments | Mortgage | Corporate and Other |
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2005 |
Life | Long- Term Care |
Payment Protection Insurance |
Group Life and Health |
Total | Spread- Based Retail Products |
Fee-Based Products |
Spread- Based Institutional Products |
Total | U.S. | International | Total | ||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 212 | $ | 412 | $ | 343 | $ | 166 | $ | 1,133 | $ | 189 | $ | | $ | | $ | 189 | $ | 111 | $ | 107 | $ | 218 | $ | 7 | $ | 1,547 | ||||||||||||||||||||||||||||
Net investment income |
122 | 165 | 23 | 11 | 321 | 338 | 4 | 113 | 455 | 34 | 39 | 73 | 53 | 902 | ||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | | | | | (7 | ) | (7 | ) | ||||||||||||||||||||||||||||||||||||||||
Policy fees and other income |
94 | 6 | 7 | 3 | 110 | 4 | 57 | | 61 | 6 | 6 | 12 | 3 | 186 | ||||||||||||||||||||||||||||||||||||||||||
Total revenues |
428 | 583 | 373 | 180 | 1,564 | 531 | 61 | 113 | 705 | 151 | 152 | 303 | 56 | 2,628 | ||||||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
168 | 389 | 68 | 115 | 740 | 245 | 2 | | 247 | 27 | 9 | 36 | 3 | 1,026 | ||||||||||||||||||||||||||||||||||||||||||
Interest credited |
59 | 31 | | | 90 | 172 | 1 | 101 | 274 | | | | | 364 | ||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
36 | 80 | 176 | 40 | 332 | 29 | 35 | 2 | 66 | 49 | 32 | 81 | 27 | 506 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
39 | 19 | 93 | 12 | 163 | 28 | 5 | | 33 | 13 | 5 | 18 | 3 | 217 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense |
13 | | | | 13 | 1 | | | 1 | | | | 58 | 72 | ||||||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
315 | 519 | 337 | 167 | 1,338 | 475 | 43 | 103 | 621 | 89 | 46 | 135 | 91 | 2,185 | ||||||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
113 | 64 | 36 | 13 | 226 | 56 | 18 | 10 | 84 | 62 | 106 | 168 | (35 | ) | 443 | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
40 | 23 | 13 | 5 | 81 | 17 | 4 | 4 | 25 | 4 | 38 | 42 | (12 | ) | 136 | |||||||||||||||||||||||||||||||||||||||||
SEGMENT NET INCOME (LOSS) |
73 | 41 | 23 | 8 | 145 | 39 | 14 | 6 | 59 | 58 | 68 | 126 | (23 | ) | 307 | |||||||||||||||||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | | | | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME (LOSS) |
$ | 73 | $ | 41 | $ | 23 | $ | 8 | $ | 145 | $ | 39 | $ | 14 | $ | 6 | $ | 59 | $ | 58 | $ | 68 | $ | 126 | $ | (19 | ) | $ | 311 | |||||||||||||||||||||||||||
Effective tax rate (operating income) |
35.4 | % | 35.9 | % | 36.1 | % | 38.5 | % | 35.8 | % | 30.4 | % | 22.2 | % | 40.0 | % | 29.8 | % | 6.5 | % | 35.8 | % | 25.0 | % | 32.1 | % | 30.9 | % |
14
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Segment Net Income and Segment Net Operating Income (continued)
(amounts in millions)
Protection | Retirement Income and Investments | Mortgage | Corporate and Other |
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2006 |
Life | Long- Term Care |
Payment Protection Insurance |
Group Life and Health |
Total | Spread- Based Retail |
Fee-Based | Spread- Based Institutional |
Total | U.S. | International | Total | ||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 675 | $ | 1,368 | $ | 923 | $ | 512 | $ | 3,478 | $ | 590 | $ | | $ | | $ | 590 | $ | 350 | $ | 426 | $ | 776 | $ | 23 | $ | 4,867 | ||||||||||||||||||||||||||||
Net investment income |
430 | 540 | 68 | 35 | 1,073 | 991 | 15 | 421 | 1,427 | 106 | 145 | 251 | 70 | 2,821 | ||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
(4 | ) | 8 | | | 4 | (55 | ) | (1 | ) | (6 | ) | (62 | ) | 2 | | 2 | (21 | ) | (77 | ) | |||||||||||||||||||||||||||||||||||
Policy fees and other income |
243 | 20 | 20 | 7 | 290 | 19 | 227 | | 246 | 15 | 11 | 26 | 10 | 572 | ||||||||||||||||||||||||||||||||||||||||||
Total revenues |
1,344 | 1,936 | 1,011 | 554 | 4,845 | 1,545 | 241 | 415 | 2,201 | 473 | 582 | 1,055 | 82 | 8,183 | ||||||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
537 | 1,299 | 151 | 360 | 2,347 | 785 | 7 | | 792 | 87 | 85 | 172 | 3 | 3,314 | ||||||||||||||||||||||||||||||||||||||||||
Interest credited |
179 | 107 | | 2 | 288 | 470 | 11 | 365 | 846 | | | | | 1,134 | ||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
110 | 262 | 541 | 123 | 1,036 | 83 | 139 | 6 | 228 | 99 | 121 | 220 | 45 | 1,529 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
66 | 77 | 207 | 31 | 381 | 104 | 17 | 1 | 122 | 24 | 21 | 45 | 3 | 551 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense |
93 | | | | 93 | 4 | | | 4 | | | | 160 | 257 | ||||||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
985 | 1,745 | 899 | 516 | 4,145 | 1,446 | 174 | 372 | 1,992 | 210 | 227 | 437 | 211 | 6,785 | ||||||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
359 | 191 | 112 | 38 | 700 | 99 | 67 | 43 | 209 | 263 | 355 | 618 | (129 | ) | 1,398 | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
131 | 68 | 32 | 14 | 245 | 37 | 17 | 15 | 69 | 65 | 107 | 172 | (39 | ) | 447 | |||||||||||||||||||||||||||||||||||||||||
228 | 123 | 80 | 24 | 455 | 62 | 50 | 28 | 140 | 198 | 248 | 446 | (90 | ) | 951 | ||||||||||||||||||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | | | | | | | | | | | 4 | 4 | ||||||||||||||||||||||||||||||||||||||||||
SEGMENT NET INCOME (LOSS) |
228 | 123 | 80 | 24 | 455 | 62 | 50 | 28 | 140 | 198 | 248 | 446 | (86 | ) | 955 | |||||||||||||||||||||||||||||||||||||||||
ADJUSTMENTS TO SEGMENT NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
2 | (5 | ) | | | (3 | ) | 26 | 1 | 4 | 31 | (1 | ) | | (1 | ) | 13 | 40 | ||||||||||||||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | | | | | | | | | | | (4 | ) | (4 | ) | ||||||||||||||||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME (LOSS) |
$ | 230 | $ | 118 | $ | 80 | $ | 24 | $ | 452 | $ | 88 | $ | 51 | $ | 32 | $ | 171 | $ | 197 | $ | 248 | $ | 445 | $ | (77 | ) | $ | 991 | |||||||||||||||||||||||||||
Effective tax rate (operating income) |
36.6 | % | 35.5 | % | 28.6 | % | 36.8 | % | 35.1 | % | 36.7 | % | 25.0 | % | 34.7 | % | 33.2 | % | 24.5 | % | 30.1 | % | 27.8 | % | 28.7 | % | 32.1 | % |
15
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Consolidated Segment Net Income and Segment Net Operating Income (continued)
(amounts in millions)
Protection | Retirement Income and Investments | Mortgage | Corporate and Other |
Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine months ended September 30, 2005 |
Life | Long- Term Care |
Payment Protection Insurance |
Group Life and Health |
Total | Spread- Based Retail |
Fee-Based | Spread- Based Institutional |
Total | U.S. | International | Total | ||||||||||||||||||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premiums |
$ | 606 | $ | 1,251 | $ | 1,062 | $ | 493 | $ | 3,412 | $ | 674 | $ | | $ | | $ | 674 | $ | 335 | $ | 318 | $ | 653 | $ | 27 | $ | 4,766 | ||||||||||||||||||||||||||||
Net investment income |
359 | 481 | 75 | 33 | 948 | 991 | 13 | 316 | 1,320 | 97 | 113 | 210 | 117 | 2,595 | ||||||||||||||||||||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | | | | | (13 | ) | (13 | ) | ||||||||||||||||||||||||||||||||||||||||
Policy fees and other income |
237 | 10 | 20 | 10 | 277 | 12 | 169 | | 181 | 20 | 14 | 34 | 9 | 501 | ||||||||||||||||||||||||||||||||||||||||||
Total revenues |
1,202 | 1,742 | 1,157 | 536 | 4,637 | 1,677 | 182 | 316 | 2,175 | 452 | 445 | 897 | 140 | 7,849 | ||||||||||||||||||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
505 | 1,148 | 202 | 340 | 2,195 | 849 | 7 | | 856 | 67 | 29 | 96 | 5 | 3,152 | ||||||||||||||||||||||||||||||||||||||||||
Interest credited |
176 | 94 | | 1 | 271 | 503 | 8 | 269 | 780 | | | | | 1,051 | ||||||||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
98 | 219 | 571 | 126 | 1,014 | 90 | 95 | 6 | 191 | 123 | 92 | 215 | 56 | 1,476 | ||||||||||||||||||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
85 | 81 | 277 | 33 | 476 | 80 | 12 | | 92 | 26 | 16 | 42 | 8 | 618 | ||||||||||||||||||||||||||||||||||||||||||
Interest expense |
33 | | | | 33 | 2 | | | 2 | | | | 178 | 213 | ||||||||||||||||||||||||||||||||||||||||||
Total benefits and expenses |
897 | 1,542 | 1,050 | 500 | 3,989 | 1,524 | 122 | 275 | 1,921 | 216 | 137 | 353 | 247 | 6,510 | ||||||||||||||||||||||||||||||||||||||||||
INCOME (LOSS) BEFORE INCOME TAXES |
305 | 200 | 107 | 36 | 648 | 153 | 60 | 41 | 254 | 236 | 308 | 544 | (107 | ) | 1,339 | |||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes |
109 | 71 | 38 | 13 | 231 | 45 | 15 | 15 | 75 | 45 | 111 | 156 | (37 | ) | 425 | |||||||||||||||||||||||||||||||||||||||||
SEGMENT NET INCOME (LOSS) |
196 | 129 | 69 | 23 | 417 | 108 | 45 | 26 | 179 | 191 | 197 | 388 | (70 | ) | 914 | |||||||||||||||||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME (LOSS): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | | | | 8 | 8 | ||||||||||||||||||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME (LOSS) |
$ | 196 | $ | 129 | $ | 69 | $ | 23 | $ | 417 | $ | 108 | $ | 45 | $ | 26 | $ | 179 | $ | 191 | $ | 197 | $ | 388 | $ | (62 | ) | $ | 922 | |||||||||||||||||||||||||||
Effective tax rate (operating income) |
35.7 | % | 35.5 | % | 35.5 | % | 36.1 | % | 35.6 | % | 29.4 | % | 25.0 | % | 36.6 | % | 29.5 | % | 19.1 | % | 36.0 | % | 28.7 | % | 34.0 | % | 31.8 | % |
16
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating IncomeProtection
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 1,199 | $ | 1,174 | $ | 1,105 | $ | 3,478 | $ | 1,109 | $ | 1,133 | $ | 1,141 | $ | 1,138 | $ | 4,521 | ||||||||||||||||||
Net investment income |
363 | 364 | 346 | 1,073 | 339 | 321 | 312 | 315 | 1,287 | |||||||||||||||||||||||||||
Net investment gains (losses) |
2 | (2 | ) | 4 | 4 | | | | | | ||||||||||||||||||||||||||
Policy fees and other income |
90 | 103 | 97 | 290 | 94 | 110 | 78 | 89 | 371 | |||||||||||||||||||||||||||
Total revenues |
1,654 | 1,639 | 1,552 | 4,845 | 1,542 | 1,564 | 1,531 | 1,542 | 6,179 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
822 | 778 | 747 | 2,347 | 731 | 740 | 710 | 745 | 2,926 | |||||||||||||||||||||||||||
Interest credited |
97 | 96 | 95 | 288 | 98 | 90 | 91 | 90 | 369 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
356 | 350 | 330 | 1,036 | 336 | 332 | 352 | 330 | 1,350 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
106 | 153 | 122 | 381 | 121 | 163 | 161 | 152 | 597 | |||||||||||||||||||||||||||
Interest expense |
34 | 34 | 25 | 93 | 19 | 13 | 11 | 9 | 52 | |||||||||||||||||||||||||||
Total benefits and expenses |
1,415 | 1,411 | 1,319 | 4,145 | 1,305 | 1,338 | 1,325 | 1,326 | 5,294 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
239 | 228 | 233 | 700 | 237 | 226 | 206 | 216 | 885 | |||||||||||||||||||||||||||
Provision for income taxes |
85 | 79 | 81 | 245 | 86 | 81 | 73 | 77 | 317 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
154 | 149 | 152 | 455 | 151 | 145 | 133 | 139 | 568 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(2 | ) | 2 | (3 | ) | (3 | ) | | | | | | ||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 152 | $ | 151 | $ | 149 | $ | 452 | $ | 151 | $ | 145 | $ | 133 | $ | 139 | $ | 568 | ||||||||||||||||||
Effective tax rate (operating income) |
35.9 | % | 34.3 | % | 34.9 | % | 35.1 | % | 36.3 | % | 35.8 | % | 35.4 | % | 35.6 | % | 35.8 | % |
17
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesLife
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 228 | $ | 226 | $ | 221 | $ | 675 | $ | 207 | $ | 212 | $ | 193 | $ | 201 | $ | 813 | ||||||||||||||||||
Net investment income |
146 | 146 | 138 | 430 | 134 | 122 | 116 | 121 | 493 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(3 | ) | (1 | ) | | (4 | ) | | | | | | ||||||||||||||||||||||||
Policy fees and other income |
74 | 86 | 83 | 243 | 80 | 94 | 65 | 78 | 317 | |||||||||||||||||||||||||||
Total revenues |
445 | 457 | 442 | 1,344 | 421 | 428 | 374 | 400 | 1,623 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
183 | 171 | 183 | 537 | 158 | 168 | 165 | 172 | 663 | |||||||||||||||||||||||||||
Interest credited |
59 | 60 | 60 | 179 | 59 | 59 | 58 | 59 | 235 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
39 | 35 | 36 | 110 | 36 | 36 | 28 | 34 | 134 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
7 | 38 | 21 | 66 | 26 | 39 | 26 | 20 | 111 | |||||||||||||||||||||||||||
Interest expense |
34 | 34 | 25 | 93 | 19 | 13 | 11 | 9 | 52 | |||||||||||||||||||||||||||
Total benefits and expenses |
322 | 338 | 325 | 985 | 298 | 315 | 288 | 294 | 1,195 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
123 | 119 | 117 | 359 | 123 | 113 | 86 | 106 | 428 | |||||||||||||||||||||||||||
Provision for income taxes |
45 | 43 | 43 | 131 | 44 | 40 | 31 | 38 | 153 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
78 | 76 | 74 | 228 | 79 | 73 | 55 | 68 | 275 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | 1 | | 2 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 79 | $ | 77 | $ | 74 | $ | 230 | $ | 79 | $ | 73 | $ | 55 | $ | 68 | $ | 275 | ||||||||||||||||||
Effective tax rate (operating income) |
37.3 | % | 35.8 | % | 36.8 | % | 36.6 | % | 35.8 | % | 35.4 | % | 36.0 | % | 35.8 | % | 35.7 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||
Term Life |
$ | 36 | $ | 37 | $ | 34 | $ | 107 | $ | 37 | $ | 38 | $ | 34 | $ | 29 | $ | 138 | ||||||||||||||||||
Universal Life: |
||||||||||||||||||||||||||||||||||||
Annualized first-year deposits |
9 | 10 | 9 | 28 | 7 | 7 | 6 | 7 | 27 | |||||||||||||||||||||||||||
Excess deposits |
24 | 22 | 19 | 65 | 20 | 12 | 8 | 6 | 46 | |||||||||||||||||||||||||||
Total Universal Life |
33 | 32 | 28 | 93 | 27 | 19 | 14 | 13 | 73 | |||||||||||||||||||||||||||
Total Sales |
$ | 69 | $ | 69 | $ | 62 | $ | 200 | $ | 64 | $ | 57 | $ | 48 | $ | 42 | $ | 211 | ||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 1 | $ | 1 | $ | 1 | $ | 3 | $ | 1 | $ | 1 | $ | 1 | $ | 3 | $ | 6 | ||||||||||||||||||
Independent Producers |
68 | 68 | 61 | 197 | 63 | 56 | 47 | 39 | 205 | |||||||||||||||||||||||||||
Total Sales |
$ | 69 | $ | 69 | $ | 62 | $ | 200 | $ | 64 | $ | 57 | $ | 48 | $ | 42 | $ | 211 | ||||||||||||||||||
Sales from our term life insurance product represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period. Sales from our universal life product represent annualized first-year deposits and excess deposits.
18
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesLong-Term Care
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 485 | $ | 458 | $ | 425 | $ | 1,368 | $ | 429 | $ | 412 | $ | 431 | $ | 408 | $ | 1,680 | ||||||||||||||||||
Net investment income |
182 | 184 | 174 | 540 | 171 | 165 | 160 | 156 | 652 | |||||||||||||||||||||||||||
Net investment gains (losses) |
5 | (1 | ) | 4 | 8 | | | | | | ||||||||||||||||||||||||||
Policy fees and other income |
7 | 8 | 5 | 20 | 5 | 6 | 2 | 2 | 15 | |||||||||||||||||||||||||||
Total revenues |
679 | 649 | 608 | 1,936 | 605 | 583 | 593 | 566 | 2,347 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
468 | 435 | 396 | 1,299 | 399 | 389 | 371 | 388 | 1,547 | |||||||||||||||||||||||||||
Interest credited |
37 | 36 | 34 | 107 | 38 | 31 | 32 | 31 | 132 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
88 | 93 | 81 | 262 | 79 | 80 | 74 | 65 | 298 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
23 | 28 | 26 | 77 | 22 | 19 | 45 | 17 | 103 | |||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | |||||||||||||||||||||||||||
Total benefits and expenses |
616 | 592 | 537 | 1,745 | 538 | 519 | 522 | 501 | 2,080 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
63 | 57 | 71 | 191 | 67 | 64 | 71 | 65 | 267 | |||||||||||||||||||||||||||
Provision for income taxes |
22 | 21 | 25 | 68 | 24 | 23 | 25 | 23 | 95 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
41 | 36 | 46 | 123 | 43 | 41 | 46 | 42 | 172 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
(3 | ) | 1 | (3 | ) | (5 | ) | | | | | | ||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 38 | $ | 37 | $ | 43 | $ | 118 | $ | 43 | $ | 41 | $ | 46 | $ | 42 | $ | 172 | ||||||||||||||||||
Effective tax rate (operating income) |
34.5 | % | 36.2 | % | 35.8 | % | 35.5 | % | 35.8 | % | 35.9 | % | 35.2 | % | 35.4 | % | 35.6 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 12 | $ | 11 | $ | 10 | $ | 33 | $ | 9 | $ | 10 | $ | 9 | $ | 10 | $ | 38 | ||||||||||||||||||
Independent Producers |
21 | 16 | 17 | 54 | 15 | 12 | 13 | 13 | 53 | |||||||||||||||||||||||||||
Dedicated Sales Specialist |
11 | 14 | 14 | 39 | 14 | 16 | 16 | 15 | 61 | |||||||||||||||||||||||||||
Total Individual Long-Term Care |
44 | 41 | 41 | 126 | 38 | 38 | 38 | 38 | 152 | |||||||||||||||||||||||||||
Group Long-Term Care |
| 1 | | 1 | 5 | | 1 | | 6 | |||||||||||||||||||||||||||
Medicare Supplement and Other A&H |
7 | 9 | 7 | 23 | 3 | 3 | 3 | 3 | 12 | |||||||||||||||||||||||||||
Total Sales |
$ | 51 | $ | 51 | $ | 48 | $ | 150 | $ | 46 | $ | 41 | $ | 42 | $ | 41 | $ | 170 | ||||||||||||||||||
Sales from our long-term care products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period.
19
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesPayment Protection Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 310 | $ | 322 | $ | 291 | $ | 923 | $ | 307 | $ | 343 | $ | 352 | $ | 367 | $ | 1,369 | ||||||||||||||||||
Net investment income |
23 | 23 | 22 | 68 | 22 | 23 | 25 | 27 | 97 | |||||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | | |||||||||||||||||||||||||||
Policy fees and other income |
7 | 7 | 6 | 20 | 6 | 7 | 8 | 5 | 26 | |||||||||||||||||||||||||||
Total revenues |
340 | 352 | 319 | 1,011 | 335 | 373 | 385 | 399 | 1,492 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
49 | 54 | 48 | 151 | 61 | 68 | 61 | 73 | 263 | |||||||||||||||||||||||||||
Interest credited |
| | | | | | | | | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
187 | 182 | 172 | 541 | 176 | 176 | 209 | 186 | 747 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
65 | 77 | 65 | 207 | 63 | 93 | 78 | 106 | 340 | |||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | |||||||||||||||||||||||||||
Total benefits and expenses |
301 | 313 | 285 | 899 | 300 | 337 | 348 | 365 | 1,350 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
39 | 39 | 34 | 112 | 35 | 36 | 37 | 34 | 142 | |||||||||||||||||||||||||||
Provision for income taxes |
13 | 10 | 9 | 32 | 14 | 13 | 13 | 12 | 52 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
26 | 29 | 25 | 80 | 21 | 23 | 24 | 22 | 90 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 26 | $ | 29 | $ | 25 | $ | 80 | $ | 21 | $ | 23 | $ | 24 | $ | 22 | $ | 90 | ||||||||||||||||||
Effective tax rate (operating income) |
33.3 | % | 25.6 | % | 26.5 | % | 28.6 | % | 40.0 | % | 36.1 | % | 35.1 | % | 35.3 | % | 36.6 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
Payment Protection Insurance |
$ | 552 | $ | 500 | $ | 419 | $ | 1,471 | $ | 421 | $ | 454 | $ | 501 | $ | 453 | $ | 1,829 | ||||||||||||||||||
Mexico Operations |
18 | 15 | 16 | 49 | 16 | 14 | 12 | 12 | 54 | |||||||||||||||||||||||||||
Total Sales |
$ | 570 | $ | 515 | $ | 435 | $ | 1,520 | $ | 437 | $ | 468 | $ | 513 | $ | 465 | $ | 1,883 | ||||||||||||||||||
Sales from our payment protection insurance business represent total written premiums, deposits and premium equivalents for third-party administered business, gross of ceded reinsurance and cancellations, during the specified period. Payment protection sales for the three and nine months ended September 30, 2006 include $96 million and $128 million, respectively, of gross deposits related to reciprocal reinsurance agreements. Sales from our Mexican-domiciled operations represent total written premiums net of cancellations.
Beginning in 2006, our Mexican-domiciled operations are reported within the payment protection insurance business. All quarters presented have been revised to combine our Mexican-domiciled operations with payment protection insurance. The revision has also been made to reflect the impact on the Corporate and Other segment where our Mexican-domiciled operations results were previously reported.
20
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesGroup Life and Health
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 176 | $ | 168 | $ | 168 | $ | 512 | $ | 166 | $ | 166 | $ | 165 | $ | 162 | $ | 659 | ||||||||||||||||||
Net investment income |
12 | 11 | 12 | 35 | 12 | 11 | 11 | 11 | 45 | |||||||||||||||||||||||||||
Net investment gains (losses) |
| | | | | | | | | |||||||||||||||||||||||||||
Policy fees and other income |
2 | 2 | 3 | 7 | 3 | 3 | 3 | 4 | 13 | |||||||||||||||||||||||||||
Total revenues |
190 | 181 | 183 | 554 | 181 | 180 | 179 | 177 | 717 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
122 | 118 | 120 | 360 | 113 | 115 | 113 | 112 | 453 | |||||||||||||||||||||||||||
Interest credited |
1 | | 1 | 2 | 1 | | 1 | | 2 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
42 | 40 | 41 | 123 | 45 | 40 | 41 | 45 | 171 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
11 | 10 | 10 | 31 | 10 | 12 | 12 | 9 | 43 | |||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | |||||||||||||||||||||||||||
Total benefits and expenses |
176 | 168 | 172 | 516 | 169 | 167 | 167 | 166 | 669 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
14 | 13 | 11 | 38 | 12 | 13 | 12 | 11 | 48 | |||||||||||||||||||||||||||
Provision for income taxes |
5 | 5 | 4 | 14 | 4 | 5 | 4 | 4 | 17 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
9 | 8 | 7 | 24 | 8 | 8 | 8 | 7 | 31 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 9 | $ | 8 | $ | 7 | $ | 24 | $ | 8 | $ | 8 | $ | 8 | $ | 7 | $ | 31 | ||||||||||||||||||
Effective tax rate (operating income) |
35.7 | % | 38.5 | % | 36.4 | % | 36.8 | % | 33.3 | % | 38.5 | % | 33.3 | % | 36.4 | % | 35.4 | % | ||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||
Independent Producers |
$ | 41 | $ | 44 | $ | 34 | $ | 119 | $ | 69 | $ | 37 | $ | 38 | $ | 30 | $ | 174 |
Sales from our group life and health insurance products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period.
21
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating IncomeRetirement Income and Investments
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 210 | $ | 200 | $ | 180 | $ | 590 | $ | 181 | $ | 189 | $ | 241 | $ | 244 | $ | 855 | ||||||||||||||||||
Net investment income |
475 | 487 | 465 | 1,427 | 493 | 455 | 432 | 433 | 1,813 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(8 | ) | (45 | ) | (9 | ) | (62 | ) | | | | | | |||||||||||||||||||||||
Policy fees and other income |
85 | 84 | 77 | 246 | 63 | 61 | 62 | 58 | 244 | |||||||||||||||||||||||||||
Total revenues |
762 | 726 | 713 | 2,201 | 737 | 705 | 735 | 735 | 2,912 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
284 | 267 | 241 | 792 | 255 | 247 | 301 | 308 | 1,111 | |||||||||||||||||||||||||||
Interest credited |
286 | 282 | 278 | 846 | 276 | 274 | 256 | 250 | 1,056 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
76 | 80 | 72 | 228 | 68 | 66 | 66 | 59 | 259 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
46 | 40 | 36 | 122 | 39 | 33 | 32 | 27 | 131 | |||||||||||||||||||||||||||
Interest expense |
2 | 1 | 1 | 4 | 1 | 1 | 1 | | 3 | |||||||||||||||||||||||||||
Total benefits and expenses |
694 | 670 | 628 | 1,992 | 639 | 621 | 656 | 644 | 2,560 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
68 | 56 | 85 | 209 | 98 | 84 | 79 | 91 | 352 | |||||||||||||||||||||||||||
Provision for income taxes |
20 | 19 | 30 | 69 | 30 | 25 | 19 | 31 | 105 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
48 | 37 | 55 | 140 | 68 | 59 | 60 | 60 | 247 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
5 | 20 | 6 | 31 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 53 | $ | 57 | $ | 61 | $ | 171 | $ | 68 | $ | 59 | $ | 60 | $ | 60 | $ | 247 | ||||||||||||||||||
Effective tax rate (operating income) |
28.4 | % | 35.2 | % | 35.1 | % | 33.2 | % | 30.6 | % | 29.8 | % | 24.1 | % | 34.1 | % | 29.8 | % |
22
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesSpread-Based Retail
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 210 | $ | 200 | $ | 180 | $ | 590 | $ | 181 | $ | 189 | $ | 241 | $ | 244 | $ | 855 | ||||||||||||||||||
Net investment income |
326 | 336 | 329 | 991 | 361 | 338 | 322 | 331 | 1,352 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(6 | ) | (42 | ) | (7 | ) | (55 | ) | | | | | | |||||||||||||||||||||||
Policy fees and other income |
6 | 7 | 6 | 19 | 5 | 4 | 5 | 3 | 17 | |||||||||||||||||||||||||||
Total revenues |
536 | 501 | 508 | 1,545 | 547 | 531 | 568 | 578 | 2,224 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
281 | 264 | 240 | 785 | 255 | 245 | 297 | 307 | 1,104 | |||||||||||||||||||||||||||
Interest credited |
155 | 155 | 160 | 470 | 165 | 172 | 166 | 165 | 668 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
27 | 29 | 27 | 83 | 28 | 29 | 31 | 30 | 118 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
39 | 34 | 31 | 104 | 34 | 28 | 28 | 24 | 114 | |||||||||||||||||||||||||||
Interest expense |
2 | 1 | 1 | 4 | 1 | 1 | 1 | | 3 | |||||||||||||||||||||||||||
Total benefits and expenses |
504 | 483 | 459 | 1,446 | 483 | 475 | 523 | 526 | 2,007 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
32 | 18 | 49 | 99 | 64 | 56 | 45 | 52 | 217 | |||||||||||||||||||||||||||
Provision for income taxes |
12 | 7 | 18 | 37 | 21 | 17 | 10 | 18 | 66 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
20 | 11 | 31 | 62 | 43 | 39 | 35 | 34 | 151 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
3 | 18 | 5 | 26 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 23 | $ | 29 | $ | 36 | $ | 88 | $ | 43 | $ | 39 | $ | 35 | $ | 34 | $ | 151 | ||||||||||||||||||
Effective tax rate (operating income) |
36.1 | % | 38.3 | % | 35.7 | % | 36.7 | % | 32.8 | % | 30.4 | % | 22.2 | % | 34.6 | % | 30.4 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||
Structured Settlements |
$ | 37 | $ | 43 | $ | 47 | $ | 127 | $ | 51 | $ | 50 | $ | 93 | $ | 153 | $ | 347 | ||||||||||||||||||
Single Premium Immediate Annuities |
250 | 215 | 200 | 665 | 193 | 190 | 164 | 166 | 713 | |||||||||||||||||||||||||||
Fixed Annuities |
360 | 261 | 189 | 810 | 343 | 378 | 686 | 364 | 1,771 | |||||||||||||||||||||||||||
Total Sales |
$ | 647 | $ | 519 | $ | 436 | $ | 1,602 | $ | 587 | $ | 618 | $ | 943 | $ | 683 | $ | 2,831 | ||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 517 | $ | 409 | $ | 323 | $ | 1,249 | $ | 467 | $ | 487 | $ | 771 | $ | 441 | $ | 2,166 | ||||||||||||||||||
Independent Producers |
112 | 106 | 107 | 325 | 113 | 124 | 164 | 230 | 631 | |||||||||||||||||||||||||||
Dedicated Sales Specialists |
18 | 4 | 6 | 28 | 7 | 7 | 8 | 12 | 34 | |||||||||||||||||||||||||||
Total Sales |
$ | 647 | $ | 519 | $ | 436 | $ | 1,602 | $ | 587 | $ | 618 | $ | 943 | $ | 683 | $ | 2,831 | ||||||||||||||||||
Sales from our life-contingent spread-based retail products represent annualized first-year premiums. Annualized first-year premiums are calculated as if premiums are consistently paid for the full period of the sale even if they were actually paid for only a portion of such period. Sales from our non-life-contingent spread-based retail products represent new and additional premiums/deposits.
23
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesFee-Based
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
. | |||||||||||||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Net investment income |
5 | 6 | 4 | 15 | 6 | 4 | 5 | 4 | 19 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(1 | ) | | | (1 | ) | | | | | | |||||||||||||||||||||||||
Policy fees and other income |
79 | 77 | 71 | 227 | 58 | 57 | 57 | 55 | 227 | |||||||||||||||||||||||||||
Total revenues |
83 | 83 | 75 | 241 | 64 | 61 | 62 | 59 | 246 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
3 | 3 | 1 | 7 | | 2 | 4 | 1 | 7 | |||||||||||||||||||||||||||
Interest credited |
3 | 4 | 4 | 11 | 5 | 1 | 4 | 3 | 13 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
47 | 49 | 43 | 139 | 36 | 35 | 33 | 27 | 131 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
6 | 6 | 5 | 17 | 5 | 5 | 4 | 3 | 17 | |||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | |||||||||||||||||||||||||||
Total benefits and expenses |
59 | 62 | 53 | 174 | 46 | 43 | 45 | 34 | 168 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
24 | 21 | 22 | 67 | 18 | 18 | 17 | 25 | 78 | |||||||||||||||||||||||||||
Provision for income taxes |
4 | 6 | 7 | 17 | 4 | 4 | 3 | 8 | 19 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
20 | 15 | 15 | 50 | 14 | 14 | 14 | 17 | 59 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | | | 1 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 21 | $ | 15 | $ | 15 | $ | 51 | $ | 14 | $ | 14 | $ | 14 | $ | 17 | $ | 59 | ||||||||||||||||||
Effective tax rate (operating income) |
16.0 | % | 28.6 | % | 31.8 | % | 25.0 | % | 22.2 | % | 22.2 | % | 17.6 | % | 32.0 | % | 24.4 | % | ||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||
Income Distribution Series(1) |
$ | 327 | $ | 307 | $ | 264 | $ | 898 | $ | 201 | $ | 99 | $ | 95 | $ | 86 | $ | 481 | ||||||||||||||||||
Traditional Variable Annuities |
111 | 140 | 138 | 389 | 134 | 142 | 159 | 178 | 613 | |||||||||||||||||||||||||||
Variable Life |
3 | 1 | 4 | 8 | 3 | 3 | 5 | 3 | 14 | |||||||||||||||||||||||||||
Asset Management |
602 | 643 | 582 | 1,827 | 473 | 429 | 378 | 323 | 1,603 | |||||||||||||||||||||||||||
Total Sales |
$ | 1,043 | $ | 1,091 | $ | 988 | $ | 3,122 | $ | 811 | $ | 673 | $ | 637 | $ | 590 | $ | 2,711 | ||||||||||||||||||
Sales by Distribution Channel: |
||||||||||||||||||||||||||||||||||||
Financial Intermediaries |
$ | 408 | $ | 420 | $ | 375 | $ | 1,203 | $ | 308 | $ | 221 | $ | 243 | $ | 247 | $ | 1,019 | ||||||||||||||||||
Independent Producers |
385 | 426 | 308 | 1,119 | 236 | 218 | 228 | 202 | 884 | |||||||||||||||||||||||||||
Dedicated Sales Specialist |
250 | 245 | 305 | 800 | 267 | 234 | 166 | 141 | 808 | |||||||||||||||||||||||||||
Total Sales |
$ | 1,043 | $ | 1,091 | $ | 988 | $ | 3,122 | $ | 811 | $ | 673 | $ | 637 | $ | 590 | $ | 2,711 | ||||||||||||||||||
Sales from our fee-based products represent new and additional premiums/deposits.
(1) | Income distribution series products are comprised of our retirement income and annuity product and variable annuity riders that provide similar income features. |
24
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesSpread-Based Institutional
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | $ | | ||||||||||||||||||
Net investment income |
144 | 145 | 132 | 421 | 126 | 113 | 105 | 98 | 442 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(1 | ) | (3 | ) | (2 | ) | (6 | ) | | | | | | |||||||||||||||||||||||
Policy fees and other income |
| | | | | | | | | |||||||||||||||||||||||||||
Total revenues |
143 | 142 | 130 | 415 | 126 | 113 | 105 | 98 | 442 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
| | | | | | | | | |||||||||||||||||||||||||||
Interest credited |
128 | 123 | 114 | 365 | 106 | 101 | 86 | 82 | 375 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
2 | 2 | 2 | 6 | 4 | 2 | 2 | 2 | 10 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | | | 1 | | | | | | |||||||||||||||||||||||||||
Interest expense |
| | | | | | | | | |||||||||||||||||||||||||||
Total benefits and expenses |
131 | 125 | 116 | 372 | 110 | 103 | 88 | 84 | 385 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
12 | 17 | 14 | 43 | 16 | 10 | 17 | 14 | 57 | |||||||||||||||||||||||||||
Provision for income taxes |
4 | 6 | 5 | 15 | 5 | 4 | 6 | 5 | 20 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
8 | 11 | 9 | 28 | 11 | 6 | 11 | 9 | 37 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
1 | 2 | 1 | 4 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 9 | $ | 13 | $ | 10 | $ | 32 | $ | 11 | $ | 6 | $ | 11 | $ | 9 | $ | 37 | ||||||||||||||||||
Effective tax rate (operating income) |
30.8 | % | 35.0 | % | 37.5 | % | 34.7 | % | 31.3 | % | 40.0 | % | 35.3 | % | 35.7 | % | 35.1 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
Sales by Product: |
||||||||||||||||||||||||||||||||||||
Guaranteed Investment Contracts (GICs) |
$ | 146 | $ | 29 | $ | 57 | $ | 232 | $ | 31 | $ | 81 | $ | 105 | $ | 49 | $ | 266 | ||||||||||||||||||
Funding Agreements Backing Notes |
450 | 300 | 700 | 1,450 | 500 | 1,000 | 150 | 300 | 1,950 | |||||||||||||||||||||||||||
Funding Agreements |
| 50 | | 50 | | | 100 | | 100 | |||||||||||||||||||||||||||
Total Sales |
$ | 596 | $ | 379 | $ | 757 | $ | 1,732 | $ | 531 | $ | 1,081 | $ | 355 | $ | 349 | $ | 2,316 | ||||||||||||||||||
Sales from our spread-based institutional products represent new and additional premiums/deposits. These products are sold through specialized brokers and investment brokers as well as directly to the contractholder.
25
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating IncomeMortgage Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 262 | $ | 267 | $ | 247 | $ | 776 | $ | 229 | $ | 218 | $ | 220 | $ | 215 | $ | 882 | ||||||||||||||||||
Net investment income |
86 | 85 | 80 | 251 | 77 | 73 | 68 | 69 | 287 | |||||||||||||||||||||||||||
Net investment gains (losses) |
| 1 | 1 | 2 | | | | | | |||||||||||||||||||||||||||
Policy fees and other income |
8 | 11 | 7 | 26 | 11 | 12 | 12 | 10 | 45 | |||||||||||||||||||||||||||
Total revenues |
356 | 364 | 335 | 1,055 | 317 | 303 | 300 | 294 | 1,214 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
76 | 50 | 46 | 172 | 66 | 36 | 39 | 21 | 162 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
76 | 76 | 68 | 220 | 74 | 81 | 75 | 59 | 289 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
17 | 13 | 15 | 45 | 14 | 18 | 13 | 11 | 56 | |||||||||||||||||||||||||||
Total benefits and expenses |
169 | 139 | 129 | 437 | 154 | 135 | 127 | 91 | 507 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
187 | 225 | 206 | 618 | 163 | 168 | 173 | 203 | 707 | |||||||||||||||||||||||||||
Provision for income taxes |
53 | 62 | 57 | 172 | 44 | 42 | 52 | 62 | 200 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
134 | 163 | 149 | 446 | 119 | 126 | 121 | 141 | 507 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| (1 | ) | | (1 | ) | | | | | | |||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 134 | $ | 162 | $ | 149 | $ | 445 | $ | 119 | $ | 126 | $ | 121 | $ | 141 | $ | 507 | ||||||||||||||||||
Effective tax rate (operating income) |
28.3 | % | 27.7 | % | 27.3 | % | 27.8 | % | 27.0 | % | 25.0 | % | 30.1 | % | 30.5 | % | 28.3 | % |
26
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Income and Segment Net Operating Income and SalesU.S. Mortgage Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 118 | $ | 116 | $ | 116 | $ | 350 | $ | 112 | $ | 111 | $ | 113 | $ | 111 | $ | 447 | ||||||||||||||||||
Net investment income |
34 | 37 | 35 | 106 | 33 | 34 | 32 | 31 | 130 | |||||||||||||||||||||||||||
Net investment gains (losses) |
1 | 1 | | 2 | | | | | | |||||||||||||||||||||||||||
Policy fees and other income |
5 | 6 | 4 | 15 | 6 | 6 | 7 | 7 | 26 | |||||||||||||||||||||||||||
Total revenues |
158 | 160 | 155 | 473 | 151 | 151 | 152 | 149 | 603 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
44 | 24 | 19 | 87 | 50 | 27 | 25 | 15 | 117 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
35 | 32 | 32 | 99 | 38 | 49 | 40 | 34 | 161 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
9 | 7 | 8 | 24 | 9 | 13 | 7 | 6 | 35 | |||||||||||||||||||||||||||
Total benefits and expenses |
88 | 63 | 59 | 210 | 97 | 89 | 72 | 55 | 313 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
70 | 97 | 96 | 263 | 54 | 62 | 80 | 94 | 290 | |||||||||||||||||||||||||||
Provision for income taxes |
17 | 24 | 24 | 65 | 7 | 4 | 19 | 22 | 52 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
53 | 73 | 72 | 198 | 47 | 58 | 61 | 72 | 238 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| (1 | ) | | (1 | ) | | | | | | |||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 53 | $ | 72 | $ | 72 | $ | 197 | $ | 47 | $ | 58 | $ | 61 | $ | 72 | $ | 238 | ||||||||||||||||||
Effective tax rate (operating income) |
23.2 | % | 25.0 | % | 25.0 | % | 24.5 | % | 13.0 | % | 6.5 | % | 23.8 | % | 23.4 | % | 17.9 | % | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
New Insurance Written (NIW): |
||||||||||||||||||||||||||||||||||||
Flow |
$ | 6,951 | $ | 6,651 | $ | 5,544 | $ | 19,146 | $ | 6,567 | $ | 7,073 | $ | 6,533 | $ | 4,983 | $ | 25,156 | ||||||||||||||||||
Bulk |
1,172 | 1,462 | 1,258 | 3,892 | 62 | 147 | 687 | 683 | 1,579 | |||||||||||||||||||||||||||
Pool |
74 | 63 | 41 | 178 | 61 | | | | 61 | |||||||||||||||||||||||||||
Total U.S. Mortgage NIW |
$ | 8,197 | $ | 8,176 | $ | 6,843 | $ | 23,216 | $ | 6,690 | $ | 7,220 | $ | 7,220 | $ | 5,666 | $ | 26,796 | ||||||||||||||||||
Sales represent new insurance written. New insurance written represents the original principal balance of mortgages covered by newly issued mortgage insurance during the specified period.
27
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Earnings and Segment Net Operating Earnings and SalesInternational Mortgage Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 144 | $ | 151 | $ | 131 | $ | 426 | $ | 117 | $ | 107 | $ | 107 | $ | 104 | $ | 435 | ||||||||||||||||||
Net investment income |
52 | 48 | 45 | 145 | 44 | 39 | 36 | 38 | 157 | |||||||||||||||||||||||||||
Net investment gains (losses) |
(1 | ) | | 1 | | | | | | | ||||||||||||||||||||||||||
Policy fees and other income |
3 | 5 | 3 | 11 | 5 | 6 | 5 | 3 | 19 | |||||||||||||||||||||||||||
Total revenues |
198 | 204 | 180 | 582 | 166 | 152 | 148 | 145 | 611 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
32 | 26 | 27 | 85 | 16 | 9 | 14 | 6 | 45 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
41 | 44 | 36 | 121 | 36 | 32 | 35 | 25 | 128 | |||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
8 | 6 | 7 | 21 | 5 | 5 | 6 | 5 | 21 | |||||||||||||||||||||||||||
Total benefits and expenses |
81 | 76 | 70 | 227 | 57 | 46 | 55 | 36 | 194 | |||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES |
117 | 128 | 110 | 355 | 109 | 106 | 93 | 109 | 417 | |||||||||||||||||||||||||||
Provision for income taxes |
36 | 38 | 33 | 107 | 37 | 38 | 33 | 40 | 148 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
81 | 90 | 77 | 248 | 72 | 68 | 60 | 69 | 269 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| | | | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 81 | $ | 90 | $ | 77 | $ | 248 | $ | 72 | $ | 68 | $ | 60 | $ | 69 | $ | 269 | ||||||||||||||||||
Effective tax rate (operating income) |
31.4 | % | 29.7 | % | 29.4 | % | 30.1 | % | 33.9 | % | 35.8 | % | 35.5 | % | 36.7 | % | 35.5 | % | ||||||||||||||||||
SEGMENT OPERATING INCOME BY PLATFORM: |
||||||||||||||||||||||||||||||||||||
Australia |
$ | 26 | $ | 35 | $ | 30 | $ | 91 | $ | 24 | $ | 28 | $ | 25 | $ | 29 | $ | 106 | ||||||||||||||||||
Canada |
54 | 51 | 46 | 151 | 46 | 38 | 35 | 34 | 153 | |||||||||||||||||||||||||||
Europe and Rest of World |
1 | 4 | 1 | 6 | 2 | 2 | | 6 | 10 | |||||||||||||||||||||||||||
SEGMENT NET INCOME |
81 | 90 | 77 | 248 | 72 | 68 | 60 | 69 | 269 | |||||||||||||||||||||||||||
ADJUSTMENT TO SEGMENT NET INCOME: |
||||||||||||||||||||||||||||||||||||
Net investment gains (losses), net of taxes and other adjustments |
| | | | | | | | | |||||||||||||||||||||||||||
SEGMENT NET OPERATING INCOME |
$ | 81 | $ | 90 | $ | 77 | $ | 248 | $ | 72 | $ | 68 | $ | 60 | $ | 69 | $ | 269 | ||||||||||||||||||
SALES: |
||||||||||||||||||||||||||||||||||||
New Insurance Written (NIW): |
||||||||||||||||||||||||||||||||||||
Flow |
$ | 23,295 | $ | 19,990 | $ | 19,714 | $ | 62,999 | $ | 19,230 | $ | 18,556 | $ | 14,070 | $ | 12,743 | $ | 64,599 | ||||||||||||||||||
Bulk |
5,379 | 1,677 | 667 | 7,723 | 2,650 | 2,474 | 7,333 | 1,500 | 13,957 | |||||||||||||||||||||||||||
Total International Mortgage NIW |
$ | 28,674 | $ | 21,667 | $ | 20,381 | $ | 70,722 | $ | 21,880 | $ | 21,030 | $ | 21,403 | $ | 14,243 | $ | 78,556 | ||||||||||||||||||
Sales represent new insurance written. New insurance written represents the original principal balance of mortgages covered by newly issued mortgage insurance during the specified period.
28
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Segment Net Loss and Segment Net Operating LossCorporate and Other
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
REVENUES: |
||||||||||||||||||||||||||||||||||||
Premiums |
$ | 9 | $ | 7 | $ | 7 | $ | 23 | $ | 12 | $ | 7 | $ | 12 | $ | 8 | $ | 39 | ||||||||||||||||||
Net investment income |
20 | 17 | 33 | 70 | 32 | 53 | 30 | 34 | 149 | |||||||||||||||||||||||||||
Net investment gains (losses) |
| (3 | ) | (18 | ) | (21 | ) | 11 | (7 | ) | | (6 | ) | (2 | ) | |||||||||||||||||||||
Policy fees and other income |
3 | 4 | 3 | 10 | 4 | 3 | 2 | 4 | 13 | |||||||||||||||||||||||||||
Total revenues |
32 | 25 | 25 | 82 | 59 | 56 | 44 | 40 | 199 | |||||||||||||||||||||||||||
BENEFITS AND EXPENSES: |
||||||||||||||||||||||||||||||||||||
Benefits and other changes in policy reserves |
1 | 1 | 1 | 3 | 1 | 3 | 1 | 1 | 6 | |||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
25 | 15 | 5 | 45 | 35 | 27 | 30 | (1 | ) | 91 | ||||||||||||||||||||||||||
Amortization of deferred acquisition costs and intangibles |
1 | 1 | 1 | 3 | 2 | 3 | 2 | 3 | 10 | |||||||||||||||||||||||||||
Interest expense |
51 | 53 | 56 | 160 | 60 | 58 | 57 | 63 | 238 | |||||||||||||||||||||||||||
Total benefits and expenses |
78 | 70 | 63 | 211 | 98 | 91 | 90 | 66 | 345 | |||||||||||||||||||||||||||
LOSS BEFORE INCOME TAXES AND ACCOUNTING CHANGE |
(46 | ) | (45 | ) | (38 | ) | (129 | ) | (39 | ) | (35 | ) | (46 | ) | (26 | ) | (146 | ) | ||||||||||||||||||
Benefit from income taxes |
(14 | ) | (13 | ) | (12 | ) | (39 | ) | (8 | ) | (12 | ) | (17 | ) | (8 | ) | (45 | ) | ||||||||||||||||||
(32 | ) | (32 | ) | (26 | ) | (90 | ) | (31 | ) | (23 | ) | (29 | ) | (18 | ) | (101 | ) | |||||||||||||||||||
SEGMENT NET LOSS BEFORE ACCOUNTING CHANGE |
||||||||||||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | 4 | 4 | | | | | | |||||||||||||||||||||||||||
SEGMENT NET LOSS |
(32 | ) | (32 | ) | (22 | ) | (86 | ) | (31 | ) | (23 | ) | (29 | ) | (18 | ) | (101 | ) | ||||||||||||||||||
ADJUSTMENTS TO SEGMENT NET LOSS: |
||||||||||||||||||||||||||||||||||||
Net investment (gains) losses, net of taxes and other adjustments |
| 1 | 12 | 13 | (7 | ) | 4 | | 4 | 1 | ||||||||||||||||||||||||||
Cumulative effect of accounting change, net of taxes |
| | (4 | ) | (4 | ) | | | | | | |||||||||||||||||||||||||
SEGMENT NET OPERATING LOSS |
$ | (32 | ) | $ | (31 | ) | $ | (14 | ) | $ | (77 | ) | $ | (38 | ) | $ | (19 | ) | $ | (29 | ) | $ | (14 | ) | $ | (100 | ) | |||||||||
Effective tax rate (operating income) |
30.4 | % | 26.2 | % | 30.0 | % | 28.7 | % | 24.0 | % | 32.1 | % | 37.0 | % | 30.0 | % | 30.6 | % |
29
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
ADDITIONAL FINANCIAL DATA
30
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Investments Summary
(amounts in millions)
September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||||||||||||
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
|||||||||||||||||||||
Composition of Investment Portfolio |
||||||||||||||||||||||||||||||
Fixed maturity securities: |
||||||||||||||||||||||||||||||
Investment grade |
||||||||||||||||||||||||||||||
Other public |
$ | 24,608 | 36 | % | $ | 23,431 | 36 | % | $ | 24,118 | 36 | % | $ | 25,184 | 37 | % | $ | 25,250 | 37 | % | ||||||||||
Other private |
10,577 | 15 | 10,302 | 16 | 10,272 | 15 | 10,200 | 15 | 10,171 | 15 | ||||||||||||||||||||
Mortgage and asset-backed |
13,448 | 19 | 12,915 | 19 | 13,464 | 20 | 12,803 | 19 | 12,434 | 18 | ||||||||||||||||||||
Tax exempt |
2,720 | 4 | 2,802 | 4 | 2,900 | 4 | 2,886 | 4 | 2,909 | 4 | ||||||||||||||||||||
Non-investment grade |
2,927 | 4 | 2,866 | 4 | 2,805 | 4 | 2,864 | 4 | 2,976 | 4 | ||||||||||||||||||||
Equity securities: |
||||||||||||||||||||||||||||||
Common stocks and mutual funds |
45 | | 44 | | 45 | | 54 | | 62 | | ||||||||||||||||||||
Preferred stocks |
147 | | 143 | | 148 | | 152 | | 133 | | ||||||||||||||||||||
Commercial mortgage loans |
8,315 | 12 | 8,203 | 12 | 7,854 | 12 | 7,558 | 11 | 7,272 | 11 | ||||||||||||||||||||
Policy loans |
1,498 | 2 | 1,485 | 2 | 1,362 | 2 | 1,350 | 2 | 1,353 | 2 | ||||||||||||||||||||
Restricted investments held by securitization entities |
| | | | | | 685 | 1 | 753 | 1 | ||||||||||||||||||||
Cash, cash equivalents and short-term investments |
2,307 | 3 | 2,353 | 5 | 1,962 | 3 | 1,900 | 3 | 1,860 | 3 | ||||||||||||||||||||
Securities lending |
1,618 | 3 | 935 | 1 | 1,597 | 2 | 1,820 | 3 | 2,212 | 3 | ||||||||||||||||||||
Other invested assets |
1,427 | 2 | 903 | 1 | 1,088 | 2 | 1,329 | 1 | 986 | 2 | ||||||||||||||||||||
Total invested assets and cash |
$ | 69,637 | 100 | % | $ | 66,382 | 100 | % | $ | 67,615 | 100 | % | $ | 68,785 | 100 | % | $ | 68,371 | 100 | % | ||||||||||
31
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Investments Summary (continued)
(amounts in millions)
September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||||||||||||||||
Public Fixed MaturitiesCredit Quality: |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
||||||||||||||||||||||||
NAIC Designation |
Rating Agency Equivalent Designation |
|||||||||||||||||||||||||||||||||
1 | Aaa/Aa/A | $ | 29,776 | 74 | % | $ | 28,641 | 74 | % | $ | 29,269 | 73 | % | $ | 29,295 | 72 | % | $ | 28,966 | 72 | % | |||||||||||||
2 | Baa | 8,124 | 20 | 7,910 | 20 | 8,512 | 22 | 9,072 | 23 | 9,345 | 23 | |||||||||||||||||||||||
3 | Ba | 1,437 | 4 | 1,442 | 4 | 1,504 | 4 | 1,466 | 4 | 1,575 | 4 | |||||||||||||||||||||||
4 | B | 656 | 2 | 625 | 2 | 548 | 1 | 557 | 1 | 440 | 1 | |||||||||||||||||||||||
5 | Caa and lower | 22 | | 25 | | 81 | | 79 | | 122 | | |||||||||||||||||||||||
6 | In or near default | 9 | | 9 | | 9 | | 13 | | 12 | | |||||||||||||||||||||||
Not rated | Not rated | | | | | 5 | | 57 | | 47 | | |||||||||||||||||||||||
Total public fixed maturities | $ | 40,024 | 100 | % | $ | 38,652 | 100 | % | $ | 39,928 | 100 | % | $ | 40,539 | 100 | % | $ | 40,507 | 100 | % | ||||||||||||||
Private Fixed MaturitiesCredit Quality: |
||||||||||||||||||||||||||||||||||
NAIC Designation |
Rating Agency |
|||||||||||||||||||||||||||||||||
1 | Aaa/Aa/A | $ | 8,046 | 57 | % | $ | 7,603 | 56 | % | $ | 7,707 | 57 | % | $ | 7,452 | 56 | % | $ | 7,201 | 55 | % | |||||||||||||
2 | Baa | 5,408 | 38 | 5,297 | 39 | 5,266 | 39 | 5,252 | 39 | 5,252 | 40 | |||||||||||||||||||||||
3 | Ba | 606 | 4 | 549 | 4 | 450 | 3 | 470 | 4 | 535 | 4 | |||||||||||||||||||||||
4 | B | 172 | 1 | 163 | 1 | 161 | 1 | 157 | 1 | 139 | 1 | |||||||||||||||||||||||
5 | Caa and lower | 12 | | 12 | | 13 | | 16 | | 36 | | |||||||||||||||||||||||
6 | In or near default | 11 | | 39 | | 34 | | 34 | | 50 | | |||||||||||||||||||||||
Not rated | Not rated | 1 | | 1 | | | | 17 | | 20 | | |||||||||||||||||||||||
Total private fixed maturities | $ | 14,256 | 100 | % | $ | 13,664 | 100 | % | $ | 13,631 | 100 | % | $ | 13,398 | 100 | % | $ | 13,233 | 100 | % | ||||||||||||||
32
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Fixed Maturities Summary
(amounts in millions)
September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||||||||||||
Estimated Fair Value |
% of Total |
Estimated Fair Value |
% of Total |
Estimated Fair Value |
% of Total |
Estimated Fair Value |
% of Total |
Estimated Fair Value |
% of Total |
|||||||||||||||||||||
Fixed MaturitiesSecurity Sector: |
||||||||||||||||||||||||||||||
U.S. government, agencies & government sponsored entities |
$ | 715 | 1 | % | $ | 688 | 1 | % | $ | 657 | 1 | % | $ | 805 | 2 | % | $ | 715 | 1 | % | ||||||||||
Tax exempt |
2,720 | 5 | 2,803 | 5 | 2,900 | 6 | 2,890 | 6 | 2,913 | 6 | ||||||||||||||||||||
Foreign government |
1,771 | 4 | 1,842 | 4 | 1,825 | 4 | 1,806 | 3 | 1,793 | 3 | ||||||||||||||||||||
U.S. corporate |
25,082 | 46 | 24,398 | 47 | 25,314 | 47 | 26,122 | 48 | 26,617 | 50 | ||||||||||||||||||||
Foreign corporate |
10,442 | 19 | 9,561 | 18 | 9,291 | 17 | 9,390 | 17 | 9,144 | 17 | ||||||||||||||||||||
Mortgage-backed |
8,701 | 16 | 8,324 | 16 | 8,836 | 16 | 8,834 | 16 | 8,659 | 16 | ||||||||||||||||||||
Asset-backed |
4,849 | 9 | 4,700 | 9 | 4,736 | 9 | 4,090 | 8 | 3,899 | 7 | ||||||||||||||||||||
Total fixed maturities |
$ | 54,280 | 100 | % | $ | 52,316 | 100 | % | $ | 53,559 | 100 | % | $ | 53,937 | 100 | % | $ | 53,740 | 100 | % | ||||||||||
Corporate Bond HoldingsIndustry Sector: |
||||||||||||||||||||||||||||||
Finance and insurance |
$ | 11,956 | 34 | % | $ | 11,323 | 33 | % | $ | 11,617 | 33 | % | $ | 11,385 | 32 | % | $ | 11,151 | 31 | % | ||||||||||
Utilities and energy |
6,424 | 18 | 6,151 | 18 | 6,552 | 19 | 6,836 | 19 | 6,963 | 19 | ||||||||||||||||||||
Consumernon cyclical |
4,273 | 12 | 4,137 | 12 | 4,477 | 13 | 4,632 | 13 | 4,734 | 13 | ||||||||||||||||||||
Consumercyclical |
2,494 | 7 | 2,442 | 7 | 2,328 | 7 | 2,642 | 7 | 2,719 | 8 | ||||||||||||||||||||
Capital goods |
1,985 | 6 | 1,871 | 6 | 1,833 | 5 | 2,043 | 6 | 2,134 | 6 | ||||||||||||||||||||
Industrial |
2,040 | 6 | 2,068 | 6 | 2,064 | 6 | 2,141 | 6 | 2,146 | 6 | ||||||||||||||||||||
Technology and communications |
2,517 | 7 | 2,453 | 7 | 2,530 | 7 | 2,424 | 7 | 2,476 | 7 | ||||||||||||||||||||
Transportation |
1,256 | 3 | 1,227 | 4 | 1,237 | 4 | 1,325 | 4 | 1,317 | 4 | ||||||||||||||||||||
Other |
2,579 | 7 | 2,287 | 7 | 1,967 | 6 | 2,084 | 6 | 2,121 | 6 | ||||||||||||||||||||
Total |
$ | 35,524 | 100 | % | $ | 33,959 | 100 | % | $ | 34,605 | 100 | % | $ | 35,512 | 100 | % | $ | 35,761 | 100 | % | ||||||||||
Fixed MaturitiesContractual Maturity Dates: |
||||||||||||||||||||||||||||||
Due in one year or less |
$ | 2,915 | 5 | % | $ | 2,879 | 5 | % | $ | 2,750 | 5 | % | $ | 2,812 | 5 | % | $ | 2,646 | 5 | % | ||||||||||
Due after one year through five years |
10,164 | 19 | 9,715 | 19 | 9,923 | 19 | 10,129 | 19 | 10,331 | 19 | ||||||||||||||||||||
Due after five years through ten years |
10,440 | 19 | 10,426 | 20 | 10,723 | 20 | 11,218 | 21 | 11,567 | 22 | ||||||||||||||||||||
Due after ten years |
17,211 | 32 | 16,272 | 31 | 16,591 | 31 | 16,854 | 31 | 16,638 | 31 | ||||||||||||||||||||
Subtotal |
40,730 | 75 | 39,292 | 75 | 39,987 | 75 | 41,013 | 76 | 41,182 | 77 | ||||||||||||||||||||
Mortgage and asset-backed |
13,550 | 25 | 13,024 | 25 | 13,572 | 25 | 12,924 | 24 | 12,558 | 23 | ||||||||||||||||||||
Total fixed maturities |
$ | 54,280 | 100 | % | $ | 52,316 | 100 | % | $ | 53,559 | 100 | % | $ | 53,937 | 100 | % | $ | 53,740 | 100 | % | ||||||||||
33
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Commercial Mortgage Loans Data
(amounts in millions)
September 30, 2006 |
June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||||||||||||
Summary of Commercial Mortgage Loans |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
Carrying Amount |
% of Total |
||||||||||||||||||||
Geographic Region |
||||||||||||||||||||||||||||||
Pacific |
$ | 2,404 | 29 | % | $ | 2,391 | 29 | % | $ | 2,285 | 29 | % | $ | 2,272 | 30 | % | $ | 2,191 | 30 | % | ||||||||||
South Atlantic |
1,768 | 21 | 1,747 | 21 | 1,668 | 21 | 1,586 | 21 | 1,508 | 21 | ||||||||||||||||||||
Middle Atlantic |
1,131 | 14 | 1,119 | 14 | 1,113 | 14 | 1,088 | 14 | 1,081 | 15 | ||||||||||||||||||||
East North Central |
834 | 10 | 840 | 10 | 868 | 11 | 794 | 11 | 766 | 10 | ||||||||||||||||||||
Mountain |
778 | 9 | 737 | 9 | 612 | 8 | 580 | 8 | 514 | 7 | ||||||||||||||||||||
West South Central |
332 | 4 | 366 | 4 | 345 | 4 | 336 | 4 | 346 | 5 | ||||||||||||||||||||
West North Central |
534 | 6 | 477 | 6 | 450 | 6 | 440 | 6 | 431 | 6 | ||||||||||||||||||||
East South Central |
310 | 4 | 307 | 4 | 292 | 4 | 280 | 4 | 268 | 4 | ||||||||||||||||||||
New England |
224 | 3 | 219 | 3 | 221 | 3 | 182 | 2 | 167 | 2 | ||||||||||||||||||||
Total |
$ | 8,315 | 100 | % | $ | 8,203 | 100 | % | $ | 7,854 | 100 | % | $ | 7,558 | 100 | % | $ | 7,272 | 100 | % | ||||||||||
Property Type |
||||||||||||||||||||||||||||||
Office |
$ | 2,353 | 28 | % | $ | 2,371 | 29 | % | $ | 2,293 | 29 | % | $ | 2,197 | 29 | % | $ | 2,156 | 30 | % | ||||||||||
Industrial |
2,226 | 27 | 2,211 | 27 | 2,176 | 28 | 2,109 | 28 | 2,017 | 28 | ||||||||||||||||||||
Retail |
2,213 | 27 | 2,144 | 26 | 2,103 | 27 | 2,092 | 28 | 2,046 | 28 | ||||||||||||||||||||
Apartments |
1,002 | 12 | 983 | 12 | 952 | 12 | 833 | 11 | 746 | 10 | ||||||||||||||||||||
Mixed use/other |
521 | 6 | 494 | 6 | 330 | 4 | 327 | 4 | 307 | 4 | ||||||||||||||||||||
Total |
$ | 8,315 | 100 | % | $ | 8,203 | 100 | % | $ | 7,854 | 100 | % | $ | 7,558 | 100 | % | $ | 7,272 | 100 | % | ||||||||||
34
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Commercial Mortgage Loans Data (continued)
(amounts in millions)
September 30, 2006 | June 30, 2006 | March 31, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||||||||||||||
Summary of Commercial Mortgage Loans |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
Principal Balance |
% of Total |
||||||||||||||||||||||
Loan Size |
||||||||||||||||||||||||||||||||
Under $5 million |
$ | 3,645 | 44 | % | $ | 3,588 | 43 | % | $ | 3,514 | 45 | % | $ | 3,407 | 45 | % | $ | 3,330 | 46 | % | ||||||||||||
$5 million but less than $10 million |
1,878 | 22 | 1,903 | 23 | 1,854 | 23 | 1,831 | 24 | 1,720 | 23 | ||||||||||||||||||||||
$10 million but less than $20 million |
1,640 | 20 | 1,537 | 19 | 1,498 | 19 | 1,427 | 19 | 1,382 | 19 | ||||||||||||||||||||||
$20 million but less than $30 million |
558 | 7 | 548 | 7 | 525 | 7 | 448 | 6 | 466 | 6 | ||||||||||||||||||||||
$30 million and over |
603 | 7 | 635 | 8 | 487 | 6 | 469 | 6 | 429 | 6 | ||||||||||||||||||||||
Total |
$ | 8,324 | 100 | % | $ | 8,211 | 100 | % | $ | 7,878 | 100 | % | $ | 7,582 | 100 | % | $ | 7,327 | 100 | % | ||||||||||||
September 30, 2006 |
December 31, 2005 |
|||||||||||||||||||||||||||||||
Allowance for Losses on Commercial Mortgage Loans |
||||||||||||||||||||||||||||||||
Balance, beginning of year |
$ | 31 | $ | 52 | ||||||||||||||||||||||||||||
Provisions |
| 11 | ||||||||||||||||||||||||||||||
Releases |
(16 | ) | (32 | ) | ||||||||||||||||||||||||||||
Deductions for write-downs and dispositions |
| | ||||||||||||||||||||||||||||||
Balance, end of year |
$ | 15 | $ | 31 | ||||||||||||||||||||||||||||
35
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
General Account GAAP Net Investment Income Yields
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
GAAP Net Investment Income |
||||||||||||||||||||||||||||||||||||
Fixed maturitiestaxable |
$ | 735 | $ | 731 | $ | 719 | $ | 2,185 | $ | 706 | $ | 690 | $ | 658 | $ | 665 | $ | 2,719 | ||||||||||||||||||
Fixed maturitiesnon-taxable |
32 | 31 | 31 | 94 | 32 | 31 | 32 | 33 | 128 | |||||||||||||||||||||||||||
Commercial mortgage loans |
126 | 138 | 121 | 385 | 145 | 116 | 98 | 98 | 457 | |||||||||||||||||||||||||||
Equity securities |
6 | 7 | 7 | 20 | 7 | 6 | 6 | 6 | 25 | |||||||||||||||||||||||||||
Other investments |
9 | 12 | 11 | 32 | 12 | 25 | 19 | 17 | 73 | |||||||||||||||||||||||||||
Policy loans |
32 | 32 | 30 | 94 | 30 | 27 | 27 | 26 | 110 | |||||||||||||||||||||||||||
Restricted investments held by securitization entities |
| | 7 | 7 | 11 | 12 | 13 | 14 | 50 | |||||||||||||||||||||||||||
Cash, cash equivalents and short-term investments |
23 | 20 | 17 | 60 | 18 | 13 | 5 | 9 | 45 | |||||||||||||||||||||||||||
Gross investment income before expenses and fees |
963 | 971 | 943 | 2,877 | 961 | 920 | 858 | 868 | 3,607 | |||||||||||||||||||||||||||
Expenses and fees |
(19 | ) | (18 | ) | (19 | ) | (56 | ) | (20 | ) | (18 | ) | (16 | ) | (17 | ) | (71 | ) | ||||||||||||||||||
Net investment income |
$ | 944 | $ | 953 | $ | 924 | $ | 2,821 | $ | 941 | $ | 902 | $ | 842 | $ | 851 | $ | 3,536 | ||||||||||||||||||
Annualized Yields |
||||||||||||||||||||||||||||||||||||
Fixed maturitiestaxable |
5.8 | % | 5.8 | % | 5.7 | % | 5.8 | % | 5.7 | % | 5.7 | % | 5.4 | % | 5.5 | % | 5.6 | % | ||||||||||||||||||
Fixed maturitiesnon-taxable |
4.7 | % | 4.5 | % | 4.4 | % | 4.6 | % | 4.5 | % | 4.5 | % | 4.5 | % | 4.5 | % | 4.5 | % | ||||||||||||||||||
Commercial mortgage loans |
6.1 | % | 6.9 | % | 6.3 | % | 6.4 | % | 7.8 | % | 6.6 | % | 6.0 | % | 6.4 | % | 6.7 | % | ||||||||||||||||||
Equity securities |
15.9 | % | 16.1 | % | 12.3 | % | 13.7 | % | 9.4 | % | 0.3 | % | 8.6 | % | 8.8 | % | 8.9 | % | ||||||||||||||||||
Other investments |
4.0 | % | 6.4 | % | 5.2 | % | 4.9 | % | 5.3 | % | 9.9 | % | 8.6 | % | 8.5 | % | 8.1 | % | ||||||||||||||||||
Policy loans |
8.5 | % | 9.1 | % | 8.8 | % | 8.8 | % | 8.6 | % | 8.5 | % | 8.9 | % | 8.3 | % | 8.6 | % | ||||||||||||||||||
Restricted investments held by securitization entities |
| | 8.2 | % | 5.4 | % | 6.2 | % | 6.3 | % | 6.3 | % | 6.9 | % | 6.4 | % | ||||||||||||||||||||
Cash, cash equivalents and short-term investments |
4.0 | % | 3.6 | % | 3.6 | % | 3.8 | % | 3.9 | % | 3.0 | % | 1.4 | % | 1.9 | % | 2.5 | % | ||||||||||||||||||
Gross investment income before expenses and fees |
5.8 | % | 5.9 | % | 5.7 | % | 5.8 | % | 5.9 | % | 5.8 | % | 5.5 | % | 5.6 | % | 5.7 | % | ||||||||||||||||||
Expenses and fees |
-0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | -0.1 | % | ||||||||||||||||||
Net investment income |
5.7 | % | 5.8 | % | 5.6 | % | 5.7 | % | 5.8 | % | 5.7 | % | 5.4 | % | 5.5 | % | 5.6 | % | ||||||||||||||||||
Yields for fixed maturities and equity securities are based on amortized cost and cost, respectively. Yields for securities lending activity, which is included in other investments, are calculated net of the corresponding securities lending liability. All other yields are based on average carrying values.
36
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Life Insurance In-force
(amounts in millions)
2006 | 2005 | ||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||
Term life insurance |
|||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 422,163 | $ | 409,103 | $ | 393,812 | $ | 379,378 | $ | 366,131 | $ | 350,224 | $ | 337,927 | |||||||
Life insurance in-force before reinsurance |
$ | 583,780 | $ | 571,014 | $ | 554,472 | $ | 540,257 | $ | 525,264 | $ | 508,330 | $ | 494,431 | |||||||
Universal and whole life insurance |
|||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 41,595 | $ | 40,850 | $ | 40,890 | $ | 40,711 | $ | 41,722 | $ | 42,110 | $ | 42,428 | |||||||
Life insurance in-force before reinsurance |
$ | 49,337 | $ | 49,207 | $ | 49,335 | $ | 49,353 | $ | 49,613 | $ | 49,846 | $ | 50,805 | |||||||
Total life insurance |
|||||||||||||||||||||
Life insurance in-force, net of reinsurance |
$ | 463,758 | $ | 449,953 | $ | 434,702 | $ | 420,089 | $ | 407,853 | $ | 392,334 | $ | 380,355 | |||||||
Life insurance in-force before reinsurance |
$ | 633,117 | $ | 620,221 | $ | 603,807 | $ | 589,610 | $ | 574,877 | $ | 558,176 | $ | 545,236 |
37
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Assets Under ManagementRetirement Income and Investments
(amounts in millions)
2006 |
2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
Spread-Based Retail |
||||||||||||||||||||||||||||
Fixed Annuities |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
$ | 14,835 | $ | 15,241 | $ | 15,547 | $ | 15,676 | $ | 15,540 | $ | 15,214 | $ | 15,113 | ||||||||||||||
Deposits |
424 | 326 | 267 | 356 | 530 | 699 | 285 | |||||||||||||||||||||
Interest credited |
137 | 139 | 145 | 151 | 154 | 150 | 150 | |||||||||||||||||||||
Surrenders, benefits and product charges |
(947 | ) | (871 | ) | (718 | ) | (636 | ) | (548 | ) | (523 | ) | (334 | ) | ||||||||||||||
Account value, net of reinsurance, end of period |
14,449 | 14,835 | 15,241 | 15,547 | 15,676 | 15,540 | 15,214 | |||||||||||||||||||||
Single Premium Immediate Annuities |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
5,888 | 5,772 | 5,680 | 5,578 | 5,488 | 5,415 | 5,344 | |||||||||||||||||||||
Premiums and deposits |
294 | 290 | 250 | 240 | 230 | 215 | 212 | |||||||||||||||||||||
Interest credited |
82 | 78 | 80 | 79 | 77 | 80 | 77 | |||||||||||||||||||||
Surrenders, benefits and product charges |
(200 | ) | (252 | ) | (238 | ) | (217 | ) | (217 | ) | (222 | ) | (218 | ) | ||||||||||||||
Account value, net of reinsurance, end of period |
6,064 | 5,888 | 5,772 | 5,680 | 5,578 | 5,488 | 5,415 | |||||||||||||||||||||
Structured Settlements |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
966 | 925 | 871 | 831 | 765 | 653 | 533 | |||||||||||||||||||||
Premiums and deposits |
37 | 45 | 58 | 41 | 69 | 116 | 124 | |||||||||||||||||||||
Interest credited |
14 | 13 | 12 | 12 | 11 | 11 | 11 | |||||||||||||||||||||
Surrenders, benefits and product charges |
(14 | ) | (17 | ) | (16 | ) | (13 | ) | (14 | ) | (15 | ) | (15 | ) | ||||||||||||||
Account value, net of reinsurance, end of period |
1,003 | 966 | 925 | 871 | 831 | 765 | 653 | |||||||||||||||||||||
Total Spread-Based Retail, net of reinsurance |
$ | 21,516 | $ | 21,689 | $ | 21,938 | $ | 22,098 | $ | 22,085 | $ | 21,793 | $ | 21,282 | ||||||||||||||
Spread-Based Institutional |
||||||||||||||||||||||||||||
GICs, Funding Agreements and Funding Agreements Backing Notes |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
$ | 9,886 | $ | 9,766 | $ | 9,777 | $ | 9,998 | $ | 9,162 | $ | 9,408 | $ | 9,541 | ||||||||||||||
Deposits |
676 | 498 | 980 | 587 | 1,402 | 871 | 841 | |||||||||||||||||||||
Interest credited |
128 | 123 | 114 | 107 | 101 | 86 | 82 | |||||||||||||||||||||
Surrenders and benefits |
(878 | ) | (501 | ) | (1,105 | ) | (915 | ) | (667 | ) | (1,203 | ) | (1,056 | ) | ||||||||||||||
Account value, end of period |
9,812 | 9,886 | 9,766 | 9,777 | 9,998 | 9,162 | 9,408 | |||||||||||||||||||||
Total Spread-Based Retail and Institutional |
$ | 31,328 | $ | 31,575 | $ | 31,704 | $ | 31,875 | $ | 32,083 | $ | 30,955 | $ | 30,690 | ||||||||||||||
38
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Assets Under ManagementRetirement Income and Investments (continued)
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
Fee-Based |
||||||||||||||||||||||||||||
Income Distribution Series |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
$ | 1,555 | $ | 1,235 | $ | 911 | $ | 747 | $ | 634 | $ | 540 | $ | 462 | ||||||||||||||
Deposits |
334 | 350 | 281 | 170 | 109 | 92 | 85 | |||||||||||||||||||||
Interest credited and investment performance |
68 | (5 | ) | 59 | 6 | 13 | 8 | (4 | ) | |||||||||||||||||||
Surrenders, benefits and product charges |
(28 | ) | (25 | ) | (16 | ) | (12 | ) | (9 | ) | (6 | ) | (3 | ) | ||||||||||||||
Account value, net of reinsurance, end of period |
1,929 | 1,555 | 1,235 | 911 | 747 | 634 | 540 | |||||||||||||||||||||
Traditional Variable Annuities |
||||||||||||||||||||||||||||
Account value, net of reinsurance, beginning of period |
1,458 | 1,360 | 1,182 | 1,048 | 902 | 747 | 632 | |||||||||||||||||||||
Deposits |
105 | 147 | 132 | 123 | 137 | 145 | 143 | |||||||||||||||||||||
Interest credited and investment performance |
54 | (19 | ) | 78 | 32 | 35 | 29 | (13 | ) | |||||||||||||||||||
Surrenders, benefits and product charges |
(32 | ) | (30 | ) | (32 | ) | (21 | ) | (26 | ) | (19 | ) | (15 | ) | ||||||||||||||
Account value, net of reinsurance, end of period |
1,585 | 1,458 | 1,360 | 1,182 | 1,048 | 902 | 747 | |||||||||||||||||||||
Variable Life Insurance |
||||||||||||||||||||||||||||
Account value, beginning of the period |
367 | 377 | 363 | 355 | 347 | 335 | 345 | |||||||||||||||||||||
Deposits |
7 | 7 | 9 | 8 | 7 | 11 | 8 | |||||||||||||||||||||
Interest credited and investment performance |
10 | (5 | ) | 18 | 12 | 13 | 11 | (11 | ) | |||||||||||||||||||
Surrenders, benefits and product charges |
(13 | ) | (12 | ) | (13 | ) | (12 | ) | (12 | ) | (10 | ) | (7 | ) | ||||||||||||||
Account value, end of period |
371 | 367 | 377 | 363 | 355 | 347 | 335 | |||||||||||||||||||||
Third-Party Assets |
||||||||||||||||||||||||||||
Genworth Financial Asset Management |
||||||||||||||||||||||||||||
Account value, beginning of the period |
3,945 | 3,756 | 3,352 | 3,137 | 2,907 | 2,753 | 2,775 | |||||||||||||||||||||
Deposits |
411 | 460 | 370 | 275 | 242 | 224 | 212 | |||||||||||||||||||||
Interest credited and investment performance |
129 | (121 | ) | 169 | 67 | 120 | 44 | (94 | ) | |||||||||||||||||||
Surrenders, benefits and product charges |
(117 | ) | (150 | ) | (135 | ) | (127 | ) | (132 | ) | (114 | ) | (140 | ) | ||||||||||||||
Account value, end of period |
4,368 | 3,945 | 3,756 | 3,352 | 3,137 | 2,907 | 2,753 | |||||||||||||||||||||
Genworth Financial Advisors |
||||||||||||||||||||||||||||
Account value, beginning of the period |
2,198 | 2,068 | 1,828 | 1,640 | 1,428 | 1,293 | 1,198 | |||||||||||||||||||||
Deposits |
191 | 183 | 212 | 198 | 187 | 135 | 112 | |||||||||||||||||||||
Interest credited and investment performance |
25 | (38 | ) | 85 | 5 | 40 | 14 | (2 | ) | |||||||||||||||||||
Surrenders, benefits and product charges |
(16 | ) | (15 | ) | (57 | ) | (15 | ) | (15 | ) | (14 | ) | (15 | ) | ||||||||||||||
Account value, end of period |
2,398 | 2,198 | 2,068 | 1,828 | 1,640 | 1,428 | 1,293 | |||||||||||||||||||||
Total Third-Party Assets |
6,766 | 6,143 | 5,824 | 5,180 | 4,777 | 4,335 | 4,046 | |||||||||||||||||||||
Total Fee-Based Assets Under Management |
$ | 10,651 | $ | 9,523 | $ | 8,796 | $ | 7,636 | $ | 6,927 | $ | 6,218 | $ | 5,668 | ||||||||||||||
Assets Under Management, Net of Reinsurance |
$ | 41,979 | $ | 41,098 | $ | 40,500 | $ | 39,511 | $ | 39,010 | $ | 37,173 | $ | 36,358 | ||||||||||||||
39
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Assets Under ManagementRetirement Income and Investments (continued)
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
Reinsured Products |
||||||||||||||||||||||||||||
Account value, beginning of period |
$ | 20,089 | $ | 20,817 | $ | 21,004 | $ | 21,293 | $ | 21,542 | $ | 21,789 | $ | 22,291 | ||||||||||||||
Deposits |
6 | 10 | 11 | 7 | 15 | 32 | 37 | |||||||||||||||||||||
Interest credited and investment performance |
447 | (5 | ) | 643 | 416 | 496 | 433 | 60 | ||||||||||||||||||||
Surrenders, benefits and product charges |
(686 | ) | (733 | ) | (841 | ) | (712 | ) | (760 | ) | (712 | ) | (599 | ) | ||||||||||||||
Account value, end of period |
$ | 19,856 | $ | 20,089 | $ | 20,817 | $ | 21,004 | $ | 21,293 | $ | 21,542 | $ | 21,789 | ||||||||||||||
40
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Institutional Assets Under Management by Contract TypeRetirement Income and Investments
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||
Spread-Based Institutional |
||||||||||||||||||||||
Guaranteed Investment Contracts |
$ | 2,373 | $ | 2,619 | $ | 2,849 | $ | 3,142 | $ | 3,217 | $ | 3,264 | $ | 3,302 | ||||||||
Funding agreements backing notes |
4,741 | 4,569 | 4,270 | 3,957 | 4,054 | 3,172 | 3,381 | |||||||||||||||
Funding agreements |
2,698 | 2,698 | 2,647 | 2,678 | 2,727 | 2,726 | 2,725 | |||||||||||||||
$ | 9,812 | $ | 9,886 | $ | 9,766 | $ | 9,777 | $ | 9,998 | $ | 9,162 | $ | 9,408 | |||||||||
Funding agreements by liquidity provisions: |
||||||||||||||||||||||
90 day |
$ | 425 | $ | 425 | $ | 425 | $ | 558 | $ | 858 | $ | 1,108 | $ | 1,308 | ||||||||
180 day |
450 | 450 | 450 | 450 | 550 | 350 | 150 | |||||||||||||||
No put |
1,235 | 1,485 | 1,485 | 1,385 | 1,035 | 985 | 1,010 | |||||||||||||||
13 month rolling maturity |
575 | 325 | 275 | 275 | 275 | 275 | 250 | |||||||||||||||
Accrued interest |
13 | 13 | 12 | 10 | 9 | 8 | 7 | |||||||||||||||
Total funding agreements |
$ | 2,698 | $ | 2,698 | $ | 2,647 | $ | 2,678 | $ | 2,727 | $ | 2,726 | $ | 2,725 | ||||||||
41
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Selected Key Performance MeasuresU.S. Mortgage Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
Primary Insurance In-force |
$ | 104,000 | $ | 102,000 | $ | 100,500 | $ | 100,200 | $ | 101,900 | $ | 104,300 | $ | 106,000 | ||||||||||||||
New Insurance Written |
$ | 8,200 | $ | 8,200 | $ | 6,800 | $ | 6,700 | $ | 7,200 | $ | 7,200 | $ | 5,700 | ||||||||||||||
Net Premiums Written |
$ | 121 | $ | 119 | $ | 115 | $ | 112 | $ | 112 | $ | 111 | $ | 109 | ||||||||||||||
Loss Ratio(a) |
37 | % | 21 | % | 16 | % | 45 | % | 24 | % | 22 | % | 14 | % | ||||||||||||||
Expense Ratio(b) |
36 | % | 33 | % | 35 | % | 42 | % | 55 | % | 42 | % | 37 | % | ||||||||||||||
New Risk Written |
||||||||||||||||||||||||||||
Flow |
$ | 1,773 | $ | 1,697 | $ | 1,404 | $ | 1,667 | $ | 1,820 | $ | 1,713 | $ | 1,263 | ||||||||||||||
Bulk |
40 | 41 | 102 | 2 | 10 | 19 | 9 | |||||||||||||||||||||
Total Primary |
1,813 | 1,738 | 1,506 | 1,669 | 1,830 | 1,732 | 1,272 | |||||||||||||||||||||
Pool |
3 | 2 | 2 | 2 | | | | |||||||||||||||||||||
Total New Risk Written |
$ | 1,816 | $ | 1,740 | $ | 1,508 | $ | 1,671 | $ | 1,830 | $ | 1,732 | $ | 1,272 | ||||||||||||||
Risk In-force |
||||||||||||||||||||||||||||
Flow |
$ | 21,962 | $ | 21,555 | $ | 21,328 | $ | 21,375 | $ | 21,500 | $ | 21,848 | $ | 22,103 | ||||||||||||||
Bulk |
534 | 498 | 460 | 363 | 370 | 369 | 284 | |||||||||||||||||||||
Total Primary |
22,496 | 22,053 | 21,788 | 21,738 | 21,870 | 22,217 | 22,387 | |||||||||||||||||||||
Pool |
468 | 494 | 516 | 554 | 590 | 643 | 682 | |||||||||||||||||||||
Total Risk In-force |
$ | 22,964 | $ | 22,547 | $ | 22,304 | $ | 22,292 | $ | 22,460 | $ | 22,860 | $ | 23,069 | ||||||||||||||
(a) | The ratio of incurred losses and loss adjustment expense to net premiums earned. |
(b) | The ratio of an insurers general expenses to net premiums written. In our business, general expenses consist of acquisition and insurance expenses, net of deferrals, and amortization of DAC and intangibles. |
42
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Selected Key Performance MeasuresU.S. Mortgage Insurance
(amounts in millions)
2006 | 2005 | ||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | |||||||||||||||
Risk In-force by Credit Quality |
|||||||||||||||||||||
Flow by FICO Scores >619 (%) |
91 | % | 92 | % | 92 | % | 92 | % | 92 | % | 92 | % | 92 | % | |||||||
Flow by FICO Scores 575-619 |
7 | % | 6 | % | 6 | % | 6 | % | 6 | % | 6 | % | 6 | % | |||||||
Flow by FICO Scores <575 |
2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | |||||||
Bulk by FICO Scores >619 |
95 | % | 95 | % | 94 | % | 96 | % | 95 | % | 95 | % | 92 | % | |||||||
Bulk by FICO Scores 575-619 |
3 | % | 3 | % | 4 | % | 2 | % | 3 | % | 3 | % | 4 | % | |||||||
Bulk by FICO Scores <575 |
2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 2 | % | 4 | % | |||||||
Primary A minus and sub-prime |
11.1 | % | 10.8 | % | 10.6 | % | 10.4 | % | 10.1 | % | 9.9 | % | 9.9 | % | |||||||
Primary Loans |
|||||||||||||||||||||
Primary total loans in-force |
744,867 | 740,091 | 740,562 | 744,970 | 763,988 | 786,959 | 804,839 | ||||||||||||||
Primary total loans in default |
23,083 | 22,069 | 23,127 | 27,391 | 24,478 | 23,613 | 24,376 | ||||||||||||||
Primary loans total default rate |
3.1 | % | 3.0 | % | 3.1 | % | 3.7 | % | 3.2 | % | 3.0 | % | 3.0 | % | |||||||
Flow loans in default |
22,001 | 21,021 | 22,070 | 26,163 | 23,284 | 22,392 | 22,891 | ||||||||||||||
Flow loans default rate |
3.5 | % | 3.3 | % | 3.5 | % | 4.1 | % | 3.5 | % | 3.3 | % | 3.3 | % | |||||||
Bulk loans in default |
1,082 | 1,048 | 1,057 | 1,228 | 1,194 | 1,221 | 1,485 | ||||||||||||||
Bulk loans default rate |
1.0 | % | 0.9 | % | 1.0 | % | 1.2 | % | 1.1 | % | 1.1 | % | 1.4 | % | |||||||
A minus and sub-prime loans in default |
6,773 | 6,185 | 6,064 | 7,072 | 6,420 | 5,930 | 6,058 | ||||||||||||||
A minus and sub-prime loans default rate |
9.3 | % | 8.8 | % | 8.8 | % | 10.5 | % | 9.6 | % | 8.9 | % | 8.9 | % | |||||||
Pool Loans |
|||||||||||||||||||||
Pool loans in default |
446 | 477 | 500 | 597 | 542 | 597 | 648 | ||||||||||||||
Pool loans default rate |
2.5 | % | 2.6 | % | 2.7 | % | 3.1 | % | 2.7 | % | 2.8 | % | 2.7 | % | |||||||
Claims Paid |
|||||||||||||||||||||
Primary Claims Paid (includes LAE) |
36.0 | 32.2 | 30.6 | 33.8 | 34.0 | 37.9 | 39.6 | ||||||||||||||
Pool Claims Paid (includes LAE) |
0.0 | 0.4 | 0.1 | 0.1 | 0.0 | 0.2 | 0.1 | ||||||||||||||
Primary Average Claim Severity |
98 | % | 95 | % | 96 | % | 95 | % | 94 | % | 95 | % | 95 | % | |||||||
Other Measures |
|||||||||||||||||||||
Flow Persistency(a) |
74 | % | 71 | % | 72 | % | 68 | % | 59 | % | 63 | % | 66 | % | |||||||
Gross written premiums ceded to captives/total direct written premiums |
23 | % | 24 | % | 24 | % | 24 | % | 24 | % | 24 | % | 25 | % | |||||||
Risk to capital ratio(b) |
7.9:1 | 8.0:1 | 8.1:1 | 8.2:1 | 8.6:1 | 8.9:1 | 9.4:1 |
(a) | Excludes bulk transactions and the effect of periodic reconciliations involving single premium mortgage insurance. Including the effect of the periodic reconciliations, flow persistency would be 71% and 65% for the three months ended March 31, 2006 and December 31, 2005, respectively. All other periods shown were unafffected. |
(b) | Certain states limit a private mortgage insurers risk in-force to 25 times the total of the insurers policyholders surplus plus the statutory contingent reserve, commonly known as the risk to capital requirement. The risk to capital ratio for our U.S. mortgage insurance business was computed as of the beginning of the period indicated. |
43
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Primary Risk In-force and Primary Default Rate
by Region and State
September 30, 2006 | December 31, 2005 | September 30, 2005 | ||||||||||||||||
% of Primary Risk In-force |
Primary Default Rate |
% of Primary Risk In-force |
Primary Default Rate |
% of Primary Risk In-force |
Primary Default Rate |
|||||||||||||
By Region |
||||||||||||||||||
Southeast(1) |
25 | % | 3.28 | % | 25 | % | 4.03 | % | 24 | % | 3.44 | % | ||||||
South Central(2) |
17 | 3.31 | % | 17 | 4.91 | % | 17 | 3.48 | % | |||||||||
Northeast(3) |
14 | 3.29 | % | 14 | 3.66 | % | 14 | 3.51 | % | |||||||||
North Central(4) |
12 | 2.69 | % | 12 | 2.84 | % | 12 | 2.77 | % | |||||||||
Great Lakes(5) |
10 | 4.63 | % | 9 | 4.96 | % | 9 | 4.61 | % | |||||||||
Pacific(6) |
8 | 1.51 | % | 9 | 1.79 | % | 9 | 1.78 | % | |||||||||
Plains(7) |
6 | 2.34 | % | 6 | 2.60 | % | 6 | 2.46 | % | |||||||||
New England(8) |
4 | 2.67 | % | 4 | 2.56 | % | 4 | 2.33 | % | |||||||||
Mid-Atlantic(9) |
4 | 2.21 | % | 4 | 2.52 | % | 5 | 2.53 | % | |||||||||
Total |
100 | % | 3.10 | % | 100 | % | 3.68 | % | 100 | % | 3.20 | % | ||||||
By State |
||||||||||||||||||
Florida |
9 | % | 1.95 | % | 9 | % | 2.43 | % | 9 | % | 1.91 | % | ||||||
Texas |
7 | % | 4.04 | % | 7 | % | 5.09 | % | 7 | % | 4.24 | % | ||||||
New York |
6 | % | 2.51 | % | 6 | % | 2.87 | % | 6 | % | 2.71 | % | ||||||
Illinois |
5 | % | 2.84 | % | 5 | % | 3.16 | % | 5 | % | 3.11 | % | ||||||
Georgia |
4 | % | 4.16 | % | 4 | % | 4.51 | % | 4 | % | 4.52 | % | ||||||
North Carolina |
4 | % | 3.96 | % | 4 | % | 4.51 | % | 4 | % | 4.21 | % | ||||||
Pennsylvania |
4 | % | 4.44 | % | 4 | % | 4.83 | % | 4 | % | 4.70 | % | ||||||
Ohio |
4 | % | 4.84 | % | 4 | % | 5.40 | % | 4 | % | 5.11 | % | ||||||
New Jersey |
3 | % | 3.05 | % | 3 | % | 3.36 | % | 4 | % | 3.15 | % | ||||||
Arizona |
3 | % | 1.53 | % | 3 | % | 1.85 | % | 3 | % | 1.72 | % | ||||||
California |
3 | % | 0.96 | % | 3 | % | 1.14 | % | 4 | % | 1.06 | % |
(1) | Alabama, Arkansas, Florida, Georgia, Mississippi, North Carolina, South Carolina and Tennessee |
(2) | Arizona, Colorado, Louisiana, New Mexico, Oklahoma, Texas and Utah |
(3) | New Jersey, New York and Pennsylvania |
(4) | Illinois, Minnesota, Missouri and Wisconsin |
(5) | Indiana, Kentucky, Michigan and Ohio |
(6) | Alaska, California, Hawaii, Nevada, Oregon and Washington |
(7) | Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota, South Dakota and Wyoming |
(8) | Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont |
(9) | Delaware, Maryland, Virginia, Washington D.C. and West Virginia |
44
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Selected Key Performance MeasuresInternational Mortgage Insurance
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | ||||||||||||||||||||||
Primary Insurance In-force |
||||||||||||||||||||||||||||
Canada |
$ | 112,200 | $ | 101,900 | $ | 92,800 | $ | 89,300 | $ | 81,000 | $ | 71,500 | $ | 77,100 | ||||||||||||||
Australia |
167,300 | 133,100 | 133,600 | 127,300 | 123,800 | 114,900 | 110,800 | |||||||||||||||||||||
Europe and Rest of World |
40,100 | 36,600 | 30,400 | 27,600 | 26,200 | 23,800 | 22,000 | |||||||||||||||||||||
Total International Primary Insurance In-force |
$ | 319,600 | $ | 271,600 | $ | 256,800 | $ | 244,200 | $ | 231,000 | $ | 210,200 | $ | 209,900 | ||||||||||||||
New Insurance Written |
||||||||||||||||||||||||||||
Canada |
$ | 10,800 | $ | 6,200 | $ | 4,000 | $ | 7,400 | $ | 5,900 | $ | 4,600 | $ | 3,300 | ||||||||||||||
Australia |
12,500 | 9,600 | 12,400 | 10,400 | 12,200 | 11,400 | 9,200 | |||||||||||||||||||||
Europe and Rest of World |
5,400 | 5,900 | 4,000 | 4,100 | 2,900 | 5,400 | 1,700 | |||||||||||||||||||||
Total International New Insurance Written |
$ | 28,700 | $ | 21,700 | $ | 20,400 | $ | 21,900 | $ | 21,000 | $ | 21,400 | $ | 14,200 | ||||||||||||||
Total Risk In-force(a) |
$ | 102,700 | $ | 86,600 | $ | 82,800 | $ | 79,000 | $ | 74,500 | $ | 67,800 | $ | 68,000 | ||||||||||||||
Net Premiums Written |
$ | 311 | $ | 244 | $ | 204 | $ | 212 | $ | 204 | $ | 168 | $ | 137 | ||||||||||||||
Loss Ratio(b) |
||||||||||||||||||||||||||||
Canada |
14 | % | 7 | % | 16 | % | 12 | % | 10 | % | 13 | % | 15 | % | ||||||||||||||
Australia |
37 | % | 30 | % | 29 | % | 20 | % | 5 | % | 13 | % | -14 | % | ||||||||||||||
Europe and Rest of World |
18 | % | 15 | % | 14 | % | 9 | % | 9 | % | 11 | % | 17 | % | ||||||||||||||
Total International Loss Ratio |
22 | % | 17 | % | 21 | % | 14 | % | 8 | % | 13 | % | 6 | % | ||||||||||||||
Expense Ratio(c) |
||||||||||||||||||||||||||||
Canada |
11 | % | 18 | % | 23 | % | 16 | % | 15 | % | 17 | % | 19 | % | ||||||||||||||
Australia |
13 | % | 15 | % | 14 | % | 13 | % | 14 | % | 16 | % | 15 | % | ||||||||||||||
Europe and Rest of World |
43 | % | 34 | % | 41 | % | 50 | % | 52 | % | 90 | % | 79 | % | ||||||||||||||
Total International Expense Ratio |
16 | % | 20 | % | 21 | % | 19 | % | 18 | % | 24 | % | 22 | % |
(a) | Our businesses in Australia, New Zealand and Canada currently provide 100% coverage on the majority of the loans we insure in those markets. For the purpose of representing our risk in-force, we have computed an Effective Risk In-force amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor that represents our highest expected average per-claim payment for any one underwriting year over the life of our businesses in Australia, New Zealand and Canada. This factor was 35% for all periods presented. |
(b) | The ratio of incurred losses and loss adjustment expense to net premiums earned. |
(c) | The ratio of an insurers general expenses to net premiums written. In our business, general expenses consist of acquisition and insurance expenses, net of deferrals, and amortization of DAC and intangibles. |
45
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
RECONCILIATIONS OF NON-GAAP MEASURES
46
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Reconciliation of Operating ROE
(amounts in millions)
Twelve months ended | ||||||||
September 30, 2006 |
December 31, 2005 |
|||||||
GAAP Basis ROE |
||||||||
Net income for the twelve months ended (1) |
$ | 1,262 | $ | 1,221 | ||||
Quarterly average stockholders equity, excluding accumulated other comprehensive income (2) |
$ | 11,876 | $ | 11,437 | ||||
GAAP Basis ROE (1) divided by (2) |
10.6 | % | 10.7 | % | ||||
Operating ROE |
||||||||
Net operating income for the twelve months ended (1) |
$ | 1,291 | $ | 1,222 | ||||
Quarterly average stockholders equity, excluding accumulated other comprehensive income (2) |
$ | 11,876 | $ | 11,437 | ||||
Operating ROE (1) divided by (2) |
10.9 | % | 10.7 | % |
(1) | The twelve months ended information is derived by adding the four quarters of net income and net operating income from page 8 herein. |
(2) | Quarterly average stockholders equity, excluding accumulated other comprehensive income, is derived by averaging stockholders' equity, excluding accumulated other comprehensive income, for the most recent five quarters. |
Non-GAAP Definition for Operating ROE
The company references the non-GAAP financial measure entitled operating return on equity or operating ROE. The company defines operating ROE as net operating income divided by average stockholders equity, excluding accumulated other comprehensive income (AOCI) in average stockholders equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE as defined by the company should not be viewed as a substitute for GAAP net income divided by average stockholders equity.
47
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Reconciliation of Expense Ratio
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||||||||||
GAAP Basis Expense Ratio |
||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals (1) |
$ | 533 | $ | 521 | $ | 475 | $ | 1,529 | $ | 513 | $ | 506 | $ | 523 | $ | 447 | $ | 1,989 | ||||||||||||||||||
Total revenues (2) |
$ | 2,804 | $ | 2,754 | $ | 2,625 | $ | 8,183 | $ | 2,655 | $ | 2,628 | $ | 2,610 | $ | 2,611 | $ | 10,504 | ||||||||||||||||||
Expense ratio (1) divided by (2) |
19.0 | % | 18.9 | % | 18.1 | % | 18.7 | % | 19.3 | % | 19.3 | % | 20.0 | % | 17.1 | % | 18.9 | % | ||||||||||||||||||
GAAP Basis, As AdjustedExpense Ratio |
||||||||||||||||||||||||||||||||||||
Acquisition and operating expenses, net of deferrals |
$ | 533 | $ | 521 | $ | 475 | $ | 1,529 | $ | 513 | $ | 506 | $ | 523 | $ | 447 | $ | 1,989 | ||||||||||||||||||
Less payment protection insurance business |
187 | 182 | 172 | 541 | 176 | 176 | 209 | 186 | 747 | |||||||||||||||||||||||||||
Adjusted acquisition and operating expenses, net of deferrals (3) |
$ | 346 | $ | 339 | $ | 303 | $ | 988 | $ | 337 | $ | 330 | $ | 314 | $ | 261 | $ | 1,242 | ||||||||||||||||||
Total revenues |
$ | 2,804 | $ | 2,754 | $ | 2,625 | $ | 8,183 | $ | 2,655 | $ | 2,628 | $ | 2,610 | $ | 2,611 | $ | 10,504 | ||||||||||||||||||
Less payment protection insurance business |
340 | 352 | 319 | 1,011 | 335 | 373 | 385 | 399 | 1,492 | |||||||||||||||||||||||||||
Less net investment gains (losses) |
(6 | ) | (49 | ) | (22 | ) | (77 | ) | 11 | (7 | ) | | (6 | ) | (2 | ) | ||||||||||||||||||||
Adjusted total revenues (4) |
$ | 2,470 | $ | 2,451 | $ | 2,328 | $ | 7,249 | $ | 2,309 | $ | 2,262 | $ | 2,225 | $ | 2,218 | $ | 9,014 | ||||||||||||||||||
Adjusted expense ratio (3) divided by (4) |
14.0 | % | 13.8 | % | 13.0 | % | 13.6 | % | 14.6 | % | 14.6 | % | 14.1 | % | 11.8 | % | 13.8 | % | ||||||||||||||||||
Non-GAAP Definition for Expense Ratio
The company references the non-GAAP financial measure entitled expense ratio as a measure of productivity. The company defines expense ratio as acquisition and operating expenses, net of deferrals, divided by total revenues, excluding the effects of the companys payment protection insurance business. The payment protection insurance business is excluded from this ratio as its expense base is comprised of varying levels of non-deferrable acquisition costs. Management believes that the expense ratio analysis enhances understanding of the productivity of the company. However, the expense ratio as defined by the company should not be viewed as a substitute for GAAP acquisition and operating expenses, net of deferrals, divided by total revenues.
48
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Reconciliation of Core Premiums
(amounts in millions)
2006 | 2005 | |||||||||||||||||||||||||||
Q3 | Q2 | Q1 | Total | Q4 | Q3 | Q2 | Q1 | Total | ||||||||||||||||||||
Reported premiums |
$ | 1,680 | $ | 1,648 | $ | 1,539 | $ | 4,867 | $ | 1,531 | $ | 1,547 | $ | 1,614 | $ | 1,605 | $ | 6,297 | ||||||||||
Less payment protection insurance run-off premiums |
22 | 35 | 19 | 76 | 34 | 64 | 64 | 74 | 236 | |||||||||||||||||||
Less spread-based retail premiums |
210 | 200 | 180 | 590 | 181 | 189 | 241 | 244 | 855 | |||||||||||||||||||
Core premiums |
$ | 1,448 | $ | 1,413 | $ | 1,340 | $ | 4,201 | $ | 1,316 | $ | 1,294 | $ | 1,309 | $ | 1,287 | $ | 5,206 | ||||||||||
Reported premium percentage change from prior year |
8.6 | % | ||||||||||||||||||||||||||
Core premium percentage change from prior year |
11.9 | % |
Non-GAAP Definition for Core Premiums
The company references the non-GAAP financial measure entitled core premiums as a measure of premium growth. The company defines core premiums as earned premiums less premiums on a run-off block in our payment protection insurance business and less premiums from our spread-based retail business. The spread-based retail premiums are excluded in this measure primarily because these are single premiums and are not an indication of future premiums. Management believes that analysis of core premiums enhances understanding of premium growth of the company. However, core premiums as defined by the company should not be viewed as a substitute for GAAP earned premiums.
49
GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Reconciliation of Core Yield
2006 | 2005 | 2004 | |||||||||||||||||||||||||||||||
(Assetsamounts in billions) | Q3 | Q2 | Q1 | Q4 | Q3 | Q2 | Q1 | Q4 | |||||||||||||||||||||||||
ReportedTotal Invested Assets and Cash | $ | 69.6 | $ | 66.4 | $ | 67.6 | $ | 68.8 | $ | 68.4 | $ | 67.9 | $ | 66.7 | $ | 67.1 | |||||||||||||||||
Subtract: | |||||||||||||||||||||||||||||||||
Securities lending |
1.6 | 0.9 | 1.6 | 1.8 | 2.2 | 2.7 | 3.0 | 3.2 | |||||||||||||||||||||||||
Unrealized gains (losses) |
0.6 | (0.7 | ) | 0.2 | 1.2 | 1.7 | 2.6 | 1.5 | 1.9 | ||||||||||||||||||||||||
Derivative counterparty collateral |
0.4 | 0.2 | 0.3 | 0.4 | | | | | |||||||||||||||||||||||||
Adjusted end-of-period invested assets | $ | 67.0 | $ | 66.0 | $ | 65.5 | $ | 65.4 | $ | 64.5 | $ | 62.6 | $ | 62.2 | $ | 62.1 | |||||||||||||||||
(A) |
Average Invested Assets used in Reported Yield | $ | 66.5 | $ | 65.7 | $ | 65.5 | $ | 64.9 | $ | 63.5 | $ | 62.4 | $ | 62.1 | ||||||||||||||||||
Subtract: limited partnership investments (average balance) | 0.2 | 0.1 | 0.1 | 0.2 | 0.2 | 0.2 | 0.2 | ||||||||||||||||||||||||||
(B) |
Average Invested Assets used in Core Yield Calculation | 66.3 | 65.6 | 65.3 | 64.8 | 63.4 | 62.2 | 62.0 | |||||||||||||||||||||||||
Subtract: portfolios supporting floating and short-term products | 10.4 | 10.0 | 9.1 | 8.3 | 7.6 | 6.9 | 6.8 | ||||||||||||||||||||||||||
(C) |
Average Invested Assets used in Core Yield (excl. Floating & Short-Term) Calculation | $ | 55.9 | $ | 55.6 | $ | 56.2 | $ | 56.5 | $ | 55.8 | $ | 55.3 | $ | 55.1 | ||||||||||||||||||
(Incomeamounts in millions) | |||||||||||||||||||||||||||||||||
(D) |
ReportedNet Investment Income | $ | 944 | $ | 953 | $ | 924 | $ | 941 | $ | 902 | $ | 842 | $ | 851 | ||||||||||||||||||
Subtract certain investment items(1) | 9 | 38 | 27 | 68 | 49 | 14 | 24 | ||||||||||||||||||||||||||
(E) |
Core Net Investment Income | 935 | 915 | 897 | 873 | 853 | 828 | 827 | |||||||||||||||||||||||||
Subtract: investment income from portfolios supporting floating and short-term products | 147 | 139 | 120 | 100 | 83 | 74 | 59 | ||||||||||||||||||||||||||
(F) |
Core Net Investment Income (excl. Floating and Short-Term) | $ | 788 | $ | 776 | $ | 777 | $ | 773 | $ | 770 | $ | 754 | $ | 767 | ||||||||||||||||||
(D)/(A) |
Reported Yield | 5.7 | % | 5.8 | % | 5.6 | % | 5.8 | % | 5.7 | % | 5.4 | % | 5.5 | % | ||||||||||||||||||
(E)/(B) |
Core Yield | 5.6 | % | 5.6 | % | 5.5 | % | 5.4 | % | 5.4 | % | 5.3 | % | 5.3 | % | ||||||||||||||||||
(F)/(C) |
Core Yield (excl. Floating and Short-Term) | 5.6 | % | 5.6 | % | 5.5 | % | 5.5 | % | 5.5 | % | 5.4 | % | 5.6 | % |
Notes: | Columns may not add due to rounding. |
Yields have been annualized. |
Non-GAAP Definition for Core Yield
The company references the non-GAAP financial measure entitled core yield as a measure of investment yield. The company defines core yield as the investment yield adjusted for those items that are not recurring in nature. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield as defined by the company should not be viewed as a substitute for GAAP investment yield.
(1) | Includes bond calls, prepayments, limited partnerships, non-qualifying derivatives, commercial mortgage loan loss reserves and other items. |
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GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
CORPORATE INFORMATION
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GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Industry Ratings
Our principal life insurance subsidiaries are rated by A.M. Best, S&P, Moodys and Fitch as follows:
Company |
A.M. Best rating | S&P rating | Moodys rating | Fitch rating | ||||
American Mayflower Life Insurance Company of New York |
A+ | AA- | Aa3 | AA- | ||||
Continental Life Insurance Company of Brentwood, Tennessee |
A- | Not rated | Not rated | Not rated | ||||
Federal Home Life Insurance Company |
A+ | Not rated | Aa3 | AA- | ||||
First Colony Life Insurance Company |
A+ | AA- | Aa3 | AA- | ||||
Genworth Life Insurance Company of New York |
A+ | AA- | Aa3 | AA- | ||||
Genworth Life and Annuity Insurance Company |
A+ | AA- | Aa3 | AA- | ||||
Genworth Life and Annuity Insurance Company (short term rating) |
Not rated | A-1+ | P-1 | Not rated | ||||
Genworth Life and Health Insurance Company |
A | AA- | Not rated | Not rated | ||||
Genworth Life Insurance Company |
A+ | AA- | Aa3 | AA- | ||||
Genworth Life Insurance Company (short term rating) |
Not rated | A-1+ | P-1 | Not rated |
Our mortgage insurance subsidiaries are rated by S&P, Moodys and Fitch as follows:
Company(a) |
S&P rating | Moodys rating | Fitch rating | |||
Genworth Mortgage Insurance Corporation |
AA | Aa2 | AA | |||
Genworth Financial Mortgage Insurance Pty. Limited |
AA | Aa2 | AA | |||
Genworth Financial Mortgage Insurance Limited |
AA | Aa2 | AA | |||
Genworth Residential Mortgage Insurance Corporation of NC |
AA | Aa2 | AA | |||
Private Residential Mortgage Insurance Corporation |
Not Rated | Aa2 | AA |
(a) | Our Canadian mortgage insurance company, Genworth Financial Mortgage Insurance Company Canada, is not rated by any of the rating agencies shown above, but is rated AA by Dominion Bond Rating Service. |
The A.M. Best, S&P, Moodys and Fitch ratings are not designed to be, and do not serve as, measures of protection or valuation offered to investors. These financial strength ratings should not be relied on with respect to making an investment in our securities.
A.M. Best states that its A+ (Superior) rating is assigned to those companies that have, in its opinion, a superior ability to meet their ongoing obligations to policyholders. The A+ (Superior) rating is the second-highest of fifteen ratings assigned by A.M. Best, which range from A++ to S.
S&P states that an insurer rated AA (Very Strong) has very strong financial security characteristics that outweigh any vulnerabilities, and is highly likely to have the ability to meet financial commitments. The AA range is the second-highest of the four ratings ranges that meet these criteria, and also is the second-highest of nine financial strength rating ranges assigned by S&P, which range from AAA to R. A plus (+) or minus () shows relative standing in a rating category. Accordingly, the AA and AA ratings are the third-and fourth-highest of S&Ps 20 ratings categories. The short-term A-1 rating is the highest rating and shows the capacity to meet financial commitments is strong. Within this category, the designation of a plus sign (+) indicates capacity to meet its financial commitments is extremely strong.
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GENWORTH FINANCIAL, INC.
3Q 2006 FINANCIAL SUPPLEMENT
Industry Ratings (continued)
Moodys states that insurance companies rated Aa (Excellent) offer excellent financial security. Moodys states that companies in this group constitute what are generally known as high-grade companies. The Aa range is the second-highest of nine financial strength rating ranges assigned by Moodys, which range from Aaa to C. Numeric modifiers are used to refer to the ranking within the group, with 1 being the highest and 3 being the lowest. Accordingly, the Aa2 and Aa3 ratings are the third- and fourth-highest of Moodys 21 ratings categories. Short-term rating P1 is the highest rating and shows superior ability for repayment of short-term debt obligations.
Fitch states that AA (Very Strong) rated insurance companies are viewed as possessing very strong capacity to meet policyholder and contract obligations. Risk factors are modest, and the impact of any adverse business and economic factors is expected to be very small. The AA rating category is the second-highest of eight financial strength rating categories, which range from AAA to D. The symbol (+) or (-) may be appended to a rating to indicate the relative position of a credit within a rating category. These suffixes are not added to ratings in the AAA category or to ratings below the CCC category. Accordingly, the AA and AA- ratings are the third- and fourth-highest of Fitchs 24 ratings categories.
Dominion Bond Rating states that long-term debt rated AA is of superior credit quality, and protection of interest and principal is considered high. In many cases they differ from long-term debt rated AAA only to a small degree. Given the extremely restrictive definition DBRS has for the AAA category, entities rated AA are also considered to be strong credits, typically exemplifying above-average strength in key areas of consideration and unlikely to be significantly affected by reasonably foreseeable events.
A.M. Best, S&P, Moodys, Fitch and Dominion Bond Rating review their ratings periodically and we cannot assure you that we will maintain our current ratings in the future. Other agencies may also rate our company or our insurance subsidiaries on a solicited or an unsolicited basis.
On June 2, 2006, A.M. Best removed Continental Life Insurance Company of Brentwood, Tennessee from under review and upgraded the financial strength ratings to A- (excellent) from B++ (very good). The outlook for the rating is positive.
On October 25, 2006, Fitch Ratings and Moodys Investor Services assigned a rating to Private Residential Mortgage Insurance Corporation (PRMIC). PRMIC has been reactivated in order to insure certain types of loans that would not be permitted under Genworth Mortgage Insurance Corporation existing monoline insurance charter.
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 24 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.
Jean Peters, 804-662-2693
jean.peters@genworth.com
Alicia Charity, 804-662-2248
alicia.charity@genworth.com
Linnea Olsen, 804-662-2536
linnea.olsen@genworth.com
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