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Jun 30, 2020
Equitable Holdings Q2 2020 Earnings Report
Equitable Holdings' Q2 2020 results demonstrated business model resilience and manageable COVID-19 impacts.
Key Takeaways
Equitable Holdings reported a GAAP Net loss of $4.0 billion, or $8.96 per common share, but a Non-GAAP operating earnings of $459 million, or $1.00 per common share. The company's assets under management grew by 3% year-over-year to $711 billion. They returned $102 million to shareholders in Q2, and $376 million YTD.
Total AUM was $711 billion, a year-over-year increase of 3%.
Net loss attributable to Holdings for the second quarter of 2020 was $(4.0) billion.
Non-GAAP operating earnings in the second quarter of 2020 was $459 million.
Combined RBC ratio of approximately 415%, reflecting $1.2 billion distribution from Equitable Financial in May.
Equitable Holdings
Equitable Holdings
Equitable Holdings Revenue by Segment
Revenue by Segment
Individual Retirement Revenue
CapyFin.comGroup Retirement Revenue
CapyFin.comAsset Management Revenue
CapyFin.comProtection Solutions Revenue
CapyFin.com Forward Guidance
The Company currently estimates a net operating earnings impact of $30-60 million per 100,000 excess COVID-19 related deaths. Holdings is revising its prior guidance related to Variable annuity product features from $700 million to $1.0-1.3 billion per annum assuming a base case scenario of 6.5% equity markets and interest rates increasing 10 basis points. Holdings is revising its prior guidance related to Variable annuity product features from $700 million to $1.0-1.3 billion per annum assuming a base case scenario of 6.5% equity markets and interest rates increasing 10 basis points
Positive Outlook
- Achieved net savings run rate of $68 million
- The Company remains on track to deliver $75 million pre-tax productivity gains, net of reinvestment, by year-end
- Holdings recognized an incremental $25 million of expense savings relative to expectations in the second quarter
- Completed execution of the Company’s general account rebalance in the third quarter of 2019
- Delivered the $160 million annualized net investment income goal.
Challenges Ahead
- net operating earnings impact of $30-60 million per 100,000 excess COVID-19 related deaths
- mismatch between derivative assets and GAAP liabilities has increased
- magnifying the Company’s GAAP Net income sensitivity
- Statutory sensitivity has increased
- options budget guidance of $200-250 million per annum
Revenue & Expenses
Visualization of income flow from segment revenue to net income