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BUSINESS SEGMENT INFORMATION | 3 Months Ended
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Mar. 31, 2025
Segment Reporting [Abstract] |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION We have six reportable segments: Individual Retirement, Group Retirement, Asset Management, Protection Solutions, Wealth Management and Legacy. These segments reflect the manner by which the Company’s chief operating decision maker (“CODM”) views and manages the business. A brief description of these segments follows: •The Individual Retirement (“IR”) segment offers a diverse suite of variable annuity products which are primarily sold to affluent and high net worth individuals saving for retirement or seeking retirement income. •The Group Retirement (“GR”) segment offers tax-deferred investment and retirement services or products to plans sponsored by educational entities, municipalities, and not-for-profit entities, as well as small and medium-sized businesses. •The Asset Management (“AM”) segment provides diversified investment management and related solutions globally to a broad range of clients through three main client channels - Institutional, Retail and Private Wealth. •The Protection Solutions (“PS”) segment includes our life insurance and group EB businesses. •The Wealth Management (“WM”) segment offers discretionary and non-discretionary investment advisory accounts, financial planning and advice, life insurance, and annuity products through Equitable Advisors. •The Legacy (“L”) segment primarily consists of the capital intensive fixed-rate GMxB business written in the Individual Retirement market prior to 2011. The CODM is the chief executive officer and President of Holdings. The CODM evaluates the reported measure of a segment’s profit or loss in assessing segment performance and deciding how to allocate resources. Significant segment expenses are part of the CODM review and are critically important to understand the level of profitability of operating segments but also the overall company performance. This assessment will inform the way the allocation of resources will be done among the different operating segments. Measurement Operating earnings (loss) is the financial measure which primarily focuses on the Company’s segments’ results of operations as well as the underlying profitability of the Company’s core business. By excluding items that can be distortive and unpredictable such as investment gains (losses) and investment income (loss) from derivative instruments, the Company believes operating earnings (loss) by segment enhances the understanding of the Company’s underlying drivers of profitability and trends in the Company’s segments. Operating earnings is calculated by adjusting each segment’s net income (loss) attributable to Holdings for the following items: •Items related to variable annuity product features, which include: (i) changes in the fair value of MRB and purchased MRB, including the related attributed fees and claims, offset by derivatives and other securities used to hedge the MRB which result in residual net income volatility as the change in fair value of certain securities is reflected in OCI and due to our statutory capital hedge program; and (ii) market adjustments to deposit asset or liability accounts arising from reinsurance agreements which do not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk; •Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances; •Net actuarial (gains) losses, which includes actuarial gains and losses as a result of differences between actual and expected experience on pension plan assets or projected benefit obligation during a given period related to pension, other postretirement benefit obligations, and the one-time impact of the settlement of the defined benefit obligation; •Other adjustments, which primarily include restructuring costs related to severance and separation, lease write-offs related to non-recurring restructuring activities, net derivative gains (losses) on certain Non-GMxB derivatives, net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments, unrealized gain/losses and realized capital gains/losses from sales or disposals of select securities, certain legal accruals; a bespoke deal to repurchase UL policies from one entity that had invested in numerous policies purchased in the life settlement market, which disposed of the risk of additional COI litigation by that entity related to those UL policies, impact of the annual actuarial assumption updates attributable to LFPB when the majority of the impact relates to the non-core business; and •Income tax expense (benefit) related to the above items and non-recurring tax items, which includes the effect of uncertain tax positions for a given audit period and changes to the deferred tax valuation allowance. The General Account investment portfolio is used to support the insurance and annuity liabilities of our Individual Retirement, Group Retirement, Protection Solutions and Legacy business segments. During the third quarter 2024, the Company moved revenues and expenses related to payout annuitizations from the Legacy segment to the Individual Retirement segment. Now all payout annuities are reported within the Individual Retirement segment as the block is managed on an aggregate basis. Prior periods have been recast to reflect this change. Revenues derived from any customer did not exceed 10% of revenues for the three months ended March 31, 2025 and 2024. The Company accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, that is, at current market prices. The table below presents operating earnings (loss) by segment and Corporate and Other (C&O):
| Three Months Ended March 31, 2025
| IR | GR | AM | PS | WM | L | C&O | Eliminations | Total
| (in millions)
Segment revenues | $ | 997 |  | $ | 316 |  | $ | 1,088 |  | $ | 826 |  | $ | 463 |  | $ | 120 |  | $ | 204 |  | $ | (230) |  | $ | 3,784 |
Benefits and other deductions |  |  |  |  |  |  |  |  |
Policyholders’ benefits | 92 |  | — |  | — |  | 556 |  | — |  | — |  | 111 |  | — |  | 759 |
Interest credited to policyholders’ account balances | 365 |  | 63 |  | — |  | 121 |  | — |  | 7 |  | 107 |  | — |  | 663 |
Commissions and distribution related payments | 98 |  | 43 |  | 201 |  | 42 |  | 293 |  | 36 |  | 6 |  | (218) |  | 501 |
Amortization of deferred policy acquisition costs | 124 |  | 15 |  | — |  | 32 |  | — |  | 15 |  | 2 |  | — |  | 188 |
Compensation and benefits | 18 |  | 12 |  | 422 |  | 38 |  | 82 |  | 7 |  | 13 |  | — |  | 592 |
Interest expense and financing fees | — |  | — |  | 7 |  | 2 |  | — |  | — |  | 53 |  | (4) |  | 58 |
Significant segment expenses | 697 |  | 133 |  | 630 |  | 791 |  | 375 |  | 65 |  | 292 |  | (222) |  | 2,761 |
Other segment items (1) | 45 |  | 30 |  | 185 |  | 54 |  | 27 |  | 27 |  | 31 |  | (8) |  | 391 |
Income taxes | (39) |  | (23) |  | (41) |  | 3 |  | (15) |  | (4) |  | 17 |  | — |  | (102) |
Less: Operating (earnings) loss attributable to the noncontrolling interest | — |  | — |  | 106 |  | 1 |  | — |  | — |  | 2 |  | — |  | 109 |
Operating earnings (loss) | $ | 216 |  | $ | 130 |  | $ | 126 |  | $ | (17) |  | $ | 46 |  | $ | 24 |  | $ | (104) |  | $ | — |  | $ | 421 |
_____________ (1)Other segment items include Remeasurment for liability for future policy benefits and Other operating expenses and costs. Additionally, other segment items reflected in Asset Management segment is primarily driven by other operating expense and costs related to general and administrative costs and promotion and servicing expenses.
| Three Months Ended March 31, 2024
| IR | GR | AM | PS | WM | L | C&O | Eliminations | Total
| (in millions)
Segment revenues | $ | 840 |  | $ | 291 |  | $ | 1,093 |  | $ | 824 |  | $ | 423 |  | $ | 129 |  | $ | 255 |  | $ | (216) |  | $ | 3,639 |
Benefits and other deductions |  |  |  |  |  |  |  |  |
Policyholders’ benefits | 77 |  | — |  | — |  | 487 |  | — |  | — |  | 113 |  | — |  | 677 |
Interest credited to policyholders’ account balances | 248 |  | 52 |  | — |  | 128 |  | — |  | 9 |  | 142 |  | — |  | 579 |
Commissions and distribution related payments | 77 |  | 44 |  | 173 |  | 40 |  | 260 |  | 40 |  | 3 |  | (200) |  | 437 |
Amortization of deferred policy acquisition costs | 109 |  | 15 |  | — |  | 30 |  | — |  | 16 |  | 2 |  | — |  | 172 |
Compensation and benefits | 17 |  | 10 |  | 447 |  | 36 |  | 78 |  | 9 |  | 2 |  | — |  | 599 |
Interest expense and financing fees | — |  | — |  | 17 |  | — |  | — |  | — |  | 56 |  | (10) |  | 63 |
Significant segment expenses | 528 |  | 121 |  | 637 |  | 721 |  | 338 |  | 74 |  | 318 |  | (210) |  | 2,527 |
Other segment items (1) | 34 |  | 25 |  | 208 |  | 52 |  | 27 |  | 16 |  | 61 |  | (6) |  | 417 |
Income taxes | (40) |  | (21) |  | (44) |  | (7) |  | (15) |  | (6) |  | 23 |  | — |  | (110) |
Less: Operating (earnings) loss attributable to the noncontrolling interest | — |  | — |  | 98 |  | — |  | — |  | — |  | 10 |  | — |  | 108 |
Operating earnings (loss) | $ | 238 |  | $ | 124 |  | $ | 106 |  | $ | 44 |  | $ | 43 |  | $ | 33 |  | $ | (111) |  | $ | — |  | $ | 477 |
_____________ (1)Other segment items include Remeasurment for liability for future policy benefits and Other operating expenses and costs. Additionally, other segment items reflected in Asset Management segment is primarily driven by other operating expense and costs related to general and administrative costs and promotion and servicing expenses. The table below presents a reconciliation to net income (loss) attributable to Holdings:
|  |  | Three Months Ended March 31,
|  |  |  |  | 2025 |  | 2024 |  |
|  |  |  |  | (in millions)
Net income (loss) attributable to Holdings |  |  |  |  | $ | 63 |  |  | $ | 92 |  |  |
Adjustments related to: |  |  |  |  |  |  |  |  |
Variable annuity product (1) |  |  |  |  | 211 |  |  | 330 |  |  |
Investment (gains) losses |  |  |  |  | 14 |  |  | 39 |  |  |
Net actuarial (gains) losses related to pension and other postretirement benefit obligations |  |  |  |  | 11 |  |  | 17 |  |  |
Other adjustments (2) |  |  |  |  | 205 |  |  | 91 |  |  |
Income tax expense (benefit) related to above adjustments |  |  |  |  | (92) |  |  | (100) |  |  |
Non-recurring tax items |  |  |  |  | 9 |  |  | 8 |  |  |
Operating earnings (loss) |  |  |  |  | $ | 421 |  |  | $ | 477 |  |  |
_____________ (1)As a result of the novation of certain Legacy VA policies completed during the first quarter, the Company recorded a loss of $499 million for the three months ended March 31, 2025. (2)Includes a loss of $165 million on Non-GMxB derivatives, including our statutory capital hedging program for the three months ended March 31, 2025 and includes certain gross legal expenses related to the COI litigation of $106 million for the three months ended March 31, 2024. Segment revenues is a measure of the Company’s revenue by segment as adjusted to exclude certain items. The following table reconciles segment revenues to total revenues by excluding the following items: •Items related to variable annuity product features, which include certain changes in the fair value of the derivatives and other securities we use to hedge these features and changes in the fair value of the embedded derivatives reflected within the net derivative results of variable annuity product features; •Investment (gains) losses, which includes credit loss impairments of securities/investments, sales or disposals of securities/investments, realized capital gains/losses and valuation allowances; •Other adjustments, which primarily includes net derivative gains (losses) on certain Non-GMxB derivatives and Net investment income from certain items including consolidated VIE investments, seed capital mark-to-market adjustments and unrealized gain/losses associated with equity securities. The table below presents revenues by segment and C&O:
| Three Months Ended March 31,
| 2025 |  | 2024 |  |
| (in millions)
Segment revenues: |  |  |  |  |
Individual Retirement (1) | $ | 997 |  |  | $ | 840 |  |  |
Group Retirement (1) | 316 |  |  | 291 |  |  |
Asset Management (2) | 1,088 |  |  | 1,093 |  |  |
Protection Solutions (1) | 826 |  |  | 824 |  |  |
Wealth Management (3) | 463 |  |  | 423 |  |  |
Legacy (1) | 120 |  |  | 129 |  |  |
Corporate and Other (1) | 204 |  |  | 255 |  |  |
Eliminations | (230) |  |  | (216) |  |  |
Adjustments related to: |  |  |  |  |
Variable annuity product features, excluding change in MRBs (4) | 975 |  |  | (1,419) |  |  |
Investment gains (losses), net | (14) |  |  | (39) |  |  |
Other adjustments to segment revenues (4) | (169) |  |  | 49 |  |  |
Total revenues | $ | 4,576 |  |  | $ | 2,230 |  |  |
______________ (1)Includes investment expenses charged by AB of $34 million and $36 million for the three months ended March 31, 2025 and 2024, respectively, for services provided to the Company. (2)Inter-segment investment management and other fees of $42 million and $42 million for the three months ended March 31, 2025 and 2024, respectively, are included in segment revenues of the Asset Management segment. (3)Inter-segment distribution fees of $218 million and $200 million for the three months ended March 31, 2025 and 2024, respectively, are included in segment revenues of the Wealth Management segment. (4)Prior periods were revised to conform with current presentation. Total assets by segment were as follows:
| March 31, 2025 |  | December 31, 2024
| (in millions)
Total assets by segment: |  |  |
Individual Retirement | $ | 118,123 |  |  | $ | 110,358 |
Group Retirement | 50,353 |  |  | 51,269 |
Asset Management | 10,845 |  |  | 10,514 |
Protection Solutions | 41,725 |  |  | 41,583 |
Wealth Management | 191 |  |  | 168 |
Legacy | 34,955 |  |  | 42,373 |
Corporate and Other | 31,174 |  |  | 39,462 |
Total assets | $ | 287,366 |  |  | $ | 295,727 |

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- Definition The entire disclosure for reporting segments including data and tables. 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