Genworth Financial Q2 2024: Assets, Liabilities & Derivatives

TL;DR

Genworth Q2 2024: Gross assets/liabilities shown, derivatives excluded, Level 3 shifts noted.

AI Summary

Genworth Financial Inc. reported its Q2 2024 results, with total assets and liabilities presented gross before netting arrangements. The company's financial statements exclude amounts related to embedded derivatives as of June 30, 2024, and December 31, 2023. Transfers into and out of Level 3 fair value hierarchy for fixed maturity securities were influenced by pricing sources and observability of external information.

Why It Matters

This filing provides insight into Genworth's financial position and how it accounts for complex financial instruments like derivatives, impacting investor understanding of its risk exposure.

Risk Assessment

Risk Level: medium — The disclosure of derivative accounting and fair value hierarchy shifts indicates potential complexity and volatility in the company's financial instruments.

Key Numbers

• N/A — Total Assets/Liabilities (Presented gross before netting arrangements.)
• N/A — Embedded Derivatives (Amounts excluded as of June 30, 2024, and December 31, 2023.)

Key Players & Entities

• Genworth Financial Inc. (company) — Filer of the 10-Q
• June 30, 2024 (date) — Reporting period end date
• December 31, 2023 (date) — Prior period end date

FAQ

Key Financial Figures

• $0.001 — 9,640 shares of Common Stock, par value $0.001 per share, were outstanding. Table of

Filing Documents

• d844928d10q.htm (10-Q) — 9377KB
• d844928dex311.htm (EX-31.1) — 6KB
• d844928dex312.htm (EX-31.2) — 6KB
• d844928dex321.htm (EX-32.1) — 4KB
• d844928dex322.htm (EX-32.2) — 4KB
• g844928g11s01.jpg (GRAPHIC) — 59KB
• 0001193125-24-192025.txt ( ) — 41746KB
• gnw-20240630.xsd (EX-101.SCH) — 121KB
• gnw-20240630_cal.xml (EX-101.CAL) — 90KB
• gnw-20240630_def.xml (EX-101.DEF) — 1006KB
• gnw-20240630_lab.xml (EX-101.LAB) — 963KB
• gnw-20240630_pre.xml (EX-101.PRE) — 1067KB
• d844928d10q_htm.xml (XML) — 13569KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item 1.

Financial Statements

Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 3 Condensed Consolidated Statements of Income for the three and six months ended June 30, 2024 and 2023 (Unaudited) 4 Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2024 and 2023 (Unaudited) 5 Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2024 and 2023 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited) 8 Notes to Condensed Consolidated Financial Statements (Unaudited) 9 Note 1 — Business and Basis of Presentation 9 Note 2 — Accounting Changes 10 Note 3 — Earnings Per Share 11 Note 4 — Investments 12 Note 5 — Derivative Instruments 25 Note 6 — Fair Value of Financial Instruments 31 Note 7 — Deferred Acquisition Costs 52 Note 8 — Future Policy Benefits 53 Note 9 — Policyholder Account Balances 58 Note 10 — Additional Insurance Liabilities 61 Note 11 — Market Risk Benefits 62 Note 12 — Separate Accounts 63 Note 13 — Liability for Policy and Contract Claims 64 Note 14 — Borrowings and Other Financings 65 Note 15 — Income Taxes 67 Note 16 — Segment Information 67 Note 17 — Commitments and Contingencies 70 Note 18 — Changes in Accumulated Other Comprehensive Income (Loss) 75 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 78 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 124 Item 4.

Controls and Procedures

Controls and Procedures 125

—OTHER INFORMATION

PART II—OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 126 Item 1A.

Risk Factors

Risk Factors 126 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 126 Item 5. Other Information 126 Item 6. Exhibits 127

Signatures

Signatures 128 2 Table of Contents

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION Item1.

Financial Statements

Financial Statements GENWORTH FINANCIAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in millions, except par value and share amounts) June 30, 2024 December 31, 2023 (Unaudited) Assets Investments: Fixed maturity securities available-for-sale, at fair value (amortized cost of $ 48,998 and $ 49,365 , respectively, and allowance for credit losses of $ — and $ 7 , respectively, as of June 30, 2024 and December 31, 2023) $ 45,233 $ 46,781 Equity securities, at fair value 435 396 Commercial mortgage loans (net of unamortized balance of loan origination fees and costs of $ 4 as of June 30, 2024 and December 31, 2023) 6,692 6,829 Less: Allowance for credit losses ( 30 ) ( 27 ) Commercial mortgage loans, net 6,662 6,802 Policy loans 2,359 2,220 Limited partnerships 2,968 2,821 Other invested assets 702 731 Total investments 58,359 59,751 Cash, cash equivalents and restricted cash 1,932 2,215 Accrued investment income 549 647 Deferred acquisition costs 1,884 1,988 Intangible assets 197 198 Reinsurance recoverable 17,739 19,054 Less: Allowance for credit losses ( 26 ) ( 29 ) Reinsurance recoverable, net 17,713 19,025 Other assets 518 489 Deferred tax asset 1,784 1,952 Market risk benefit assets 54 43 Separate account assets 4,553 4,509 Total assets $ 87,543 $ 90,817 Liabilities and equity Liabilities: Future policy benefits $ 53,774 $ 57,655 Policyholder account balances 15,047 15,540 Market risk benefit liabilities 500 625 Liability for policy and contract claims 649 652 Unearned premiums 130 149 Other liabilities 1,973 1,768 Long-term borrowings 1,564 1,584 Separate account liabilities 4,553 4,509 Total liabilities 78,190 82,482 Commitments and contingencies (Note 17) Equity: Common stock, $ 0.001 par value; 1,500,000,000 shares authorized; 606,303,648 and 603,151,611 shares issued as of J