Equitable(EQH) - 2025 Q2 - Quarterly Report

Note Regarding Forward-Looking Statements and Information This section cautions that forward-looking statements are based on current expectations but involve risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on management's current expectations and beliefs, but actual results may differ materially due to various risks and uncertainties[10] - Key risk factors include conditions in financial markets and economy (geopolitical conflicts, interest rate fluctuations, equity market volatility), operational factors (reliance on subsidiary dividends, data protection, strategic transactions), credit and investment risks (counterparty default, economic downturns), reinsurance and hedging programs, product features (variable annuity guarantees), estimates and valuations, asset management segment fluctuations, employee retention, legal and regulatory risks, common stock risks, and general industry competition[11] PART I - FINANCIAL INFORMATION Item 1. Consolidated Financial Statements This section presents the unaudited consolidated financial statements, including balance sheets, income, comprehensive income, equity, and cash flow statements, with detailed notes Consolidated Balance Sheets The Consolidated Balance Sheets provide a snapshot of the company's financial position, showing an increase in total assets and liabilities, while equity attributable to Holdings decreased | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :-------------------------- | :-------------------------- | :-------------------------- | | Total Assets | $303,088 | $295,727 | | Total Liabilities | $300,125 | $292,179 | | Total Equity | $2,605 | $3,423 | | Equity attributable to Holdings | $1,149 | $1,565 | Key Asset Changes (June 30, 2025 vs. December 31, 2024) | Asset Category | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | Change (in millions) | | :------------------------------ | :-------------------------- | :------------------------- | :------------------- | | Total investments | $121,798 | $116,441 | $5,357 | | Cash and cash equivalents | $14,957 | $6,964 | $7,993 | | Purchased market risk benefits | $5,543 | $7,376 | $(1,833) | | Separate Accounts assets | $131,683 | $134,717 | $(3,034) | Key Liability Changes (June 30, 2025 vs. December 31, 2024) | Liability Category | June 30, 2025 (in millions) | Dec 31, 2024 (in millions) | Change (in millions) | | :---------------------------------- | :-------------------------- | :------------------------- | :------------------- | | Policyholders' account balances | $123,359 | $110,929 | $12,430 | | Liability for market risk benefits | $10,187 | $11,810 | $(1,623) | | Long-term debt | $4,332 | $3,833 | $499 | | Separate Accounts liabilities | $131,683 | $134,717 | $(3,034) | Consolidated Statements of Income (Loss) The Consolidated Statements of Income (Loss) reflect a shift from net income in Q2 2024 to a net loss in Q2 2025, primarily due to substantial net derivative losses | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | | :------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | | Net income (loss) attributable to Holdings | $(349) | $428 | | Diluted EPS | $(1.21) | $1.23 | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net income (loss) attributable to Holdings | $(286) | $520 | | Diluted EPS | $(1.04) | $1.45 | Key Revenue Changes (Three Months Ended June 30, 2025 vs. 2024) | Revenue Category | 2025 (in millions) | 2024 (in millions) | Change (in millions) | | :-------------------------------- | :----------------- | :----------------- | :------------------- | | Net derivative gains (losses) | $(1,374) | $(208) | $(1,166) | | Net investment income (loss) | $1,355 | $1,167 | $188 | | Investment management and service fees | $1,272 | $1,240 | $32 | Key Benefits and Other Deductions Changes (Three Months Ended June 30, 2025 vs. 2024) | Deduction Category | 2025 (in millions) | 2024 (in millions) | Change (in millions) | | :---------------------------------------------------------- | :----------------- | :----------------- | :------------------- | | Change in market risk benefits and purchased market risk benefits | $(606) | $(132) | $(474) | | Interest credited to policyholders' account balances | $796 | $599 | $197 | | Policyholders' benefits | $787 | $667 | $120 | Consolidated Statements of Comprehensive Income (Loss) The Consolidated Statements of Comprehensive Income (Loss) show a shift to a comprehensive loss in Q2 2025, but a significant comprehensive income for the six-month period, driven by investment gains | Metric | Three Months Ended June 30, 2025 (in millions) | Three Months Ended June 30, 2024 (in millions) | | :---------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Comprehensive income (loss) attributable to Holdings | $(214) | $(56) | | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :---------------------------------------------- | :------------------------------------------- | :------------------------------------------- | | Comprehensive income (loss) attributable to Holdings | $994 | $(358) | Total Other Comprehensive Income (Loss), Net of Income Taxes (Six Months Ended June 30, 2025 vs. 2024) | OCI Component | 2025 (in millions) | 2024 (in millions) | Change (in millions) | | :---------------------------------------------------------- | :----------------- | :----------------- | :------------------- | | Change in unrealized gains (losses), net of reclassification adjustment | $918 | $(922) | $1,840 | | Change in market risk benefits - instrument-specific credit risk | $414 | $(139) | $553 | | Change in liability for future policy benefits - current discount rate | $(92) | $165 | $(257) | Consolidated Statements of Equity The Consolidated Statements of Equity show a decrease in total equity for the six months ended June 30, 2025, primarily due to share repurchases and preferred stock redemption | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :---------- | :-------------------------- | :-------------------------- | | Total Equity | $2,605 | $3,423 | Key Changes in Equity Attributable to Holdings (Six Months Ended June 30, 2025) | Item | Amount (in millions) | | :---------------------------------- | :------------------- | | Balance, beginning of period | $1,565 | | Purchase of treasury stock | $(497) | | Purchase of AB Holding units | $(443) | | Dividends on common stock | $(156) | | Dividends on preferred stock | $(32) | | Redemption of preferred stock | $(279) | | Net income (loss) | $(286) | | Other comprehensive income (loss) | $1,280 | | Balance, end of period | $1,149 | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows indicate a significant increase in cash and cash equivalents, primarily driven by financing activities, despite decreased cash from operating and investing activities | Metric | Six Months Ended June 30, 2025 (in millions) | Six Months Ended June 30, 2024 (in millions) | | :------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net cash provided by (used in) operating activities | $499 | $923 | | Net cash provided by (used in) investing activities | $(3,717) | $(7,927) | | Net cash provided by (used in) financing activities | $11,170 | $8,309 | | Cash and cash equivalents, end of period | $14,957 | $9,684 | Key Financing Activities (Six Months Ended June 30, 2025) | Item | Amount (in millions) | | :------------------------------------------ | :------------------- | | Policyholders' account balances: Deposits | $14,931 | | Policyholders' account balances: Withdrawals | $(4,637) | | Change in collateralized pledged liabilities | $1,298 | | Issuance of long-term debt | $495 | | Proceeds from notes issued by consolidated VIEs | $1,203 | | Purchase of AllianceBern