Genworth(US:GNW)2022-05-04 16:00PART I—FINANCIAL INFORMATION This part details Genworth Financial's unaudited condensed consolidated financial statements, management's analysis, market risk, and controls Item 1. Financial Statements This section presents Genworth Financial's unaudited condensed consolidated financial statements and accompanying notes Condensed Consolidated Balance Sheets This section presents Genworth Financial's condensed consolidated balance sheets for March 31, 2022, and December 31, 2021 | Metric | March 31, 2022 (Millions) | December 31, 2021 (Millions) | | :---------------------- | :------------------------ | :--------------------------- | | Total Assets | $93,487 | $99,171 | | Total Liabilities | $78,335 | $82,905 | | Total Equity | $15,152 | $16,266 | - Total assets decreased by $5,684 million, primarily due to decreases in fixed maturity securities, cash, cash equivalents, restricted cash, and other invested assets, partially offset by increases in deferred acquisition costs and deferred tax assets9465466 - Total liabilities decreased by $4,570 million, mainly driven by decreases in future policy benefits, policyholder account balances, and other liabilities, partially offset by an increase in derivative liabilities and legal settlement accruals9467468 Condensed Consolidated Statements of Income This section presents Genworth Financial's condensed consolidated statements of income for the three months ended March 31, 2022 and 2021 | Metric | Three months ended March 31, 2022 (Millions) | Three months ended March 31, 2021 (Millions) | Change (Millions) | Change (%) | | :------------------------------------------------------------------- | :------------------------------------------- | :------------------------------------------- | :---------------- | :--------- | | Total Revenues | $1,892 | $1,985 | $(93) | (5)% | | Total Benefits and Expenses | $1,653 | $1,752 | $(99) | (6)% | | Income from continuing operations before income taxes | $239 | $233 | $6 | 3% | | Net income | $179 | $195 | $(16) | (8)% | | Net income available to Genworth Financial, Inc.'s common stockholders | $149 | $187 | $(38) | (20)% | - Net income available to common stockholders decreased by 20% year-over-year, primarily due to a loss from discontinued operations in 2022 compared to income in 2021, and an increase in net income attributable to noncontrolling interests13271 Condensed Consolidated Statements of Comprehensive Income This section presents Genworth Financial's condensed consolidated statements of comprehensive income for the three months ended March 31, 2022 and 2021 | Metric | Three months ended March 31, 2022 (Millions) | Three months ended March 31, 2021 (Millions) | | :------------------------------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net income | $179 | $195 | | Total other comprehensive income (loss) | $(1,292) | $(603) | | Total comprehensive loss | $(1,113) | $(408) | | Total comprehensive loss available to Genworth Financial, Inc.'s common stockholders | $(1,102) | $(563) | - Total other comprehensive loss significantly increased to $(1,292) million in Q1 2022 from $(603) million in Q1 2021, primarily driven by net unrealized losses on securities without an allowance for credit losses and derivatives qualifying as hedges15 Condensed Consolidated Statements of Changes in Equity This section presents Genworth Financial's condensed consolidated statements of changes in equity for the three months ended March 31, 2022 and 2021 | Metric | March 31, 2022 (Millions) | December 31, 2021 (Millions) | | :------------------------------------------------------------------ | :------------------------ | :--------------------------- | | Total Genworth Financial, Inc.'s stockholders' equity | $14,407 | $15,510 | | Noncontrolling interests | $745 | $756 | | Total equity | $15,152 | $16,266 | | Accumulated other comprehensive income (loss) (March 31, 2022) | $2,610 | $3,861 | | Retained earnings (March 31, 2022) | $2,639 | $2,490 | - Total Genworth Financial, Inc.'s stockholders' equity decreased by $1,103 million from December 31, 2021, to March 31, 2022, primarily due to a significant other comprehensive loss of $(1,251) million, partially offset by net income of $149 million17 Condensed Consolidated Statements of Cash Flows This section presents Genworth Financial's condensed consolidated statements of cash flows for the three months ended March 31, 2022 and 2021 | Cash Flow Activity | Three months ended March 31, 2022 (Millions) | Three months ended March 31, 2021 (Millions) | | :------------------------------------------------ | :------------------------------------------- | :------------------------------------------- | | Net cash used by operating activities | $(92) | $(247) | | Net cash from investing activities | $138 | $335 | | Net cash used by financing activities | $(326) | $(780) | | Net change in cash, cash equivalents and restricted cash | $(280) | $(692) | - Net cash used by operating activities decreased from $(247) million in Q1 2021 to $(92) million in Q1 2022, primarily due to lower payments to AXA, partially offset by higher net cash disbursements for derivative contracts20471 - Net cash from investing activities decreased from $335 million in Q1 2021 to $138 million in Q1 2022, mainly due to proceeds from the sale of Genworth Australia in the prior year and net purchases of short-term investments in the current year20471 - Net cash used by financing activities decreased from $(780) million in Q1 2021 to $(326) million in Q1 2022, driven by lower repayment of long-term debt and reduced net withdrawals from investment contracts20472 Notes to Condensed Consolidated Financial Statements This section provides detailed notes explaining Genworth's accounting policies, segment information, investments, derivatives, and other financial disclosures (1) Formation of Genworth and Basis of Presentation Genworth Financial operates through Enact, U.S. Life Insurance, and Runoff segments, with unaudited financial statements prepared under U.S. GAAP - Genworth operates through three segments: Enact (mortgage insurance), U.S. Life Insurance (long-term care, traditional life, fixed annuities), and Runoff (variable annuity, variable life, corporate-owned life insurance, funding agreements)23 - Corporate and Other activities include debt financing expenses, unallocated corporate income/expenses, inter-segment eliminations, and international mortgage insurance businesses/discontinued operations24 - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and SEC rules, requiring estimates and assumptions that may lead to actual results differing from estimates25 (2) Accounting Changes Genworth is preparing for new FASB accounting guidance for long-duration insurance contracts, effective January