Condensed Consolidating Financial Information (Tables)

9 Months Ended

Sep. 30, 2017

Condensed Consolidating Balance Sheet

The following table presents the condensed consolidating balance sheet information as of September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Assets
Investments:
Fixed maturity securities available-for-sale, at fair value	$	—		$	—		$	62,752		$	(200	)	$	62,552
Equity securities available-for-sale, at fair value		—			—			765			—			765
Commercial mortgage loans		—			—			6,268			—			6,268
Restricted commercial mortgage loans related to securitization entities		—			—			111			—			111
Policy loans		—			—			1,818			—			1,818
Other invested assets		—			75			1,517			(2	)		1,590
Investments in subsidiaries		13,191			12,459			—			(25,650	)		—
Total investments		13,191			12,534			73,231			(25,852	)		73,104
Cash and cash equivalents		—			754			2,082			—			2,836
Accrued investment income		—			—			639			—			639
Deferred acquisition costs		—			—			2,342			—			2,342
Intangible assets and goodwill		—			—			315			—			315
Reinsurance recoverable		—			—			17,553			—			17,553
Other assets		—			90			470			(8	)		552
Intercompany notes receivable		—			161			33			(194	)		—
Deferred tax assets		—			—			24			—			24
Separate account assets		—			—			7,264			—			7,264
Total assets	$	13,191		$	13,539		$	103,953		$	(26,054	)	$	104,629
Liabilities and equity
Liabilities:
Future policy benefits	$	—		$	—		$	38,022		$	—		$	38,022
Policyholder account balances		—			—			24,531			—			24,531
Liability for policy and contract claims		—			—			9,384			—			9,384
Unearned premiums		—			—			3,512			—			3,512
Other liabilities		8			163			1,842			(11	)		2,002
Intercompany notes payable		145			232			17			(394	)		—
Borrowings related to securitization entities		—			—			59			—			59
Non-recourse funding obligations		—			—			310			—			310
Long-term borrowings		—			3,722			502			—			4,224
Deferred tax liability		(31	)		(862	)		1,127			—			234
Separate account liabilities		—			—			7,264			—			7,264
Total liabilities		122			3,255			86,570			(405	)		89,542
Equity:
Common stock		1			—			3			(3	)		1
Additional paid-in capital		11,973			9,096			18,381			(27,477	)		11,973
Accumulated other comprehensive income (loss)		3,035			3,040			3,057			(6,097	)		3,035
Retained earnings		760			(1,852	)		(6,376	)		8,228			760
Treasury stock, at cost		(2,700	)		—			—			—			(2,700	)
Total Genworth Financial, Inc.’s stockholders’ equity		13,069			10,284			15,065			(25,349	)		13,069
Noncontrolling interests		—			—			2,318			(300	)		2,018
Total equity		13,069			10,284			17,383			(25,649	)		15,087
Total liabilities and equity	$	13,191		$	13,539		$	103,953		$	(26,054	)	$	104,629

The following table presents the condensed consolidating balance sheet information as of December 31, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Assets
Investments:
Fixed maturity securities available-for-sale, at fair value	$	—		$	—		$	60,772		$	(200	)	$	60,572
Equity securities available-for-sale, at fair value		—			—			632			—			632
Commercial mortgage loans		—			—			6,111			—			6,111
Restricted commercial mortgage loans related to securitization entities		—			—			129			—			129
Policy loans		—			—			1,742			—			1,742
Other invested assets		—			105			1,966			—			2,071
Restricted other invested assets related to securitization entities, at fair value		—			—			312			—			312
Investments in subsidiaries		12,730			12,308			—			(25,038	)		—
Total investments		12,730			12,413			71,664			(25,238	)		71,569
Cash and cash equivalents		—			998			1,786			—			2,784
Accrued investment income		—			—			663			(4	)		659
Deferred acquisition costs		—			—			3,571			—			3,571
Intangible assets and goodwill		—			—			348			—			348
Reinsurance recoverable		—			—			17,755			—			17,755
Other assets		9			134			530			—			673
Intercompany notes receivable		—			84			67			(151	)		—
Deferred tax assets		28			—			(28	)		—			—
Separate account assets		—			—			7,299			—			7,299
Total assets	$	12,767		$	13,629		$	103,655		$	(25,393	)	$	104,658
Liabilities and equity
Liabilities:
Future policy benefits	$	—		$	—		$	37,063		$	—		$	37,063
Policyholder account balances		—			—			25,662			—			25,662
Liability for policy and contract claims		—			—			9,256			—			9,256
Unearned premiums		—			—			3,378			—			3,378
Other liabilities		39			301			2,581			(5	)		2,916
Intercompany notes payable		84			267			—			(351	)		—
Borrowings related to securitization entities		—			—			74			—			74
Non-recourse funding obligations		—			—			310			—			310
Long-term borrowings		—			3,716			464			—			4,180
Deferred tax liability		—			(816	)		869			—			53
Separate account liabilities		—			—			7,299			—			7,299
Total liabilities		123			3,468			86,956			(356	)		90,191
Equity:
Common stock		1			—			—			—			1
Additional paid-in capital		11,962			9,097			20,252			(29,349	)		11,962
Accumulated other comprehensive income (loss)		3,094			3,135			3,116			(6,251	)		3,094
Retained earnings		287			(2,071	)		(8,792	)		10,863			287
Treasury stock, at cost		(2,700	)		—			—			—			(2,700	)
Total Genworth Financial, Inc.’s stockholders’ equity		12,644			10,161			14,576			(24,737	)		12,644
Noncontrolling interests		—			—			2,123			(300	)		1,823
Total equity		12,644			10,161			16,699			(25,037	)		14,467
Total liabilities and equity	$	12,767		$	13,629		$	103,655		$	(25,393	)	$	104,658

Condensed Consolidating Income Statement

The following table presents the condensed consolidating income statement information for the three months ended September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Revenues:
Premiums	$	—		$	—		$	1,135		$	—		$	1,135
Net investment income		(1	)		2			800			(4	)		797
Net investment gains (losses)		—			(4	)		89			—			85
Policy fees and other income		—			4			195			(1	)		198
Total revenues		(1	)		2			2,219			(5	)		2,215
Benefits and expenses:
Benefits and other changes in policy reserves		—			—			1,344			—			1,344
Interest credited		—			—			164			—			164
Acquisition and operating expenses, net of deferrals		20			(2	)		247			—			265
Amortization of deferred acquisition costs and intangibles		—			—			83			—			83
Interest expense		—			66			12			(5	)		73
Total benefits and expenses		20			64			1,850			(5	)		1,929
Income (loss) from continuing operations before income taxes and equity in income of subsidiaries		(21	)		(62	)		369			—			286
Provision (benefit) for income taxes		(5	)		(21	)		128			—			102
Equity in income of subsidiaries		123			71			—			(194	)		—
Income from continuing operations		107			30			241			(194	)		184
Income (loss) from discontinued operations, net of taxes		—			4			(13	)		—			(9	)
Net income		107			34			228			(194	)		175
Less: net income attributable to noncontrolling interests		—			—			68			—			68
Net income available to Genworth Financial, Inc.’s common stockholders	$	107		$	34		$	160		$	(194	)	$	107

The following table presents the condensed consolidating income statement information for the three months ended September 30, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Revenues:
Premiums	$	—		$	—		$	1,108		$	—		$	1,108
Net investment income		(2	)		1			810			(4	)		805
Net investment gains (losses)		—			(1	)		21			—			20
Policy fees and other income		—			—			217			—			217
Total revenues		(2	)		—			2,156			(4	)		2,150
Benefits and expenses:
Benefits and other changes in policy reserves		—			—			1,662			—			1,662
Interest credited		—			—			173			—			173
Acquisition and operating expenses, net of deferrals		13			—			256			—			269
Amortization of deferred acquisition costs and intangibles		—			—			94			—			94
Interest expense		—			69			12			(4	)		77
Total benefits and expenses		13			69			2,197			(4	)		2,275
Loss from continuing operations before income taxes and equity in loss of subsidiaries		(15	)		(69	)		(41	)		—			(125	)
Provision (benefit) for income taxes		(4	)		155			71			—			222
Equity in loss of subsidiaries		(369	)		(207	)		—			576			—
Loss from continuing operations		(380	)		(431	)		(112	)		576			(347	)
Income from discontinued operations, net of taxes		—			11			4			—			15
Net loss		(380	)		(420	)		(108	)		576			(332	)
Less: net income attributable to noncontrolling interests		—			—			48			—			48
Net loss available to Genworth Financial, Inc.’s common stockholders	$	(380	)	$	(420	)	$	(156	)	$	576		$	(380	)

The following table presents the condensed consolidating income statement information for the nine months ended September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Revenues:
Premiums	$	—		$	—		$	3,382		$	—		$	3,382
Net investment income		(3	)		5			2,397			(11	)		2,388
Net investment gains (losses)		—			(12	)		232			—			220
Policy fees and other income		—			3			617			(1	)		619
Total revenues		(3	)		(4	)		6,628			(12	)		6,609
Benefits and expenses:
Benefits and other changes in policy reserves		—			—			3,796			—			3,796
Interest credited		—			—			494			—			494
Acquisition and operating expenses, net of deferrals		48			(2	)		729			—			775
Amortization of deferred acquisition costs and intangibles		—			—			316			—			316
Interest expense		—			187			34			(12	)		209
Total benefits and expenses		48			185			5,369			(12	)		5,590
Income (loss) from continuing operations before income taxes and equity in income of subsidiaries		(51	)		(189	)		1,259			—			1,019
Provision (benefit) for income taxes		(9	)		(65	)		422			—			348
Equity in income of subsidiaries		506			339			—			(845	)		—
Income from continuing operations		464			215			837			(845	)		671
Income (loss) from discontinued operations, net of taxes		—			4			(13	)		—			(9	)
Net income		464			219			824			(845	)		662
Less: net income attributable to noncontrolling interests		—			—			198			—			198
Net income available to Genworth Financial, Inc.’s common stockholders	$	464		$	219		$	626		$	(845	)	$	464

The following table presents the condensed consolidating income statement information for the nine months ended September 30, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Revenues:
Premiums	$	—		$	—		$	3,029		$	—		$	3,029
Net investment income		(3	)		1			2,386			(11	)		2,373
Net investment gains (losses)		—			(14	)		45			—			31
Policy fees and other income		—			(6	)		745			(1	)		738
Total revenues		(3	)		(19	)		6,205			(12	)		6,171
Benefits and expenses:
Benefits and other changes in policy reserves		—			—			3,715			—			3,715
Interest credited		—			—			523			—			523
Acquisition and operating expenses, net of deferrals		118			38			834			—			990
Amortization of deferred acquisition costs and intangibles		—			—			305			—			305
Interest expense		1			210			63			(12	)		262
Total benefits and expenses		119			248			5,440			(12	)		5,795
Income (loss) from continuing operations before income taxes and equity in income (loss) of subsidiaries		(122	)		(267	)		765			—			376
Provision (benefit) for income taxes		(31	)		88			298			—			355
Equity in income (loss) of subsidiaries		(62	)		78			—			(16	)		—
Income (loss) from continuing operations		(153	)		(277	)		467			(16	)		21
Loss from discontinued operations, net of taxes		(2	)		(7	)		(16	)		—			(25	)
Net income (loss)		(155	)		(284	)		451			(16	)		(4	)
Less: net income attributable to noncontrolling interests		—			—			151			—			151
Net income (loss) available to Genworth Financial, Inc.’s common stockholders	$	(155	)	$	(284	)	$	300		$	(16	)	$	(155	)

Condensed Consolidating Statement of Comprehensive Income

The following table presents the condensed consolidating comprehensive income statement information for the three months ended September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Net income	$	107		$	34		$	228		$	(194	)	$	175
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities not other-than-temporarily impaired		(72	)		(71	)		(89	)		143			(89	)
Derivatives qualifying as hedges		(12	)		(12	)		(12	)		24			(12	)
Foreign currency translation and other adjustments		24			12			80			(35	)		81
Total other comprehensive income (loss)		(60	)		(71	)		(21	)		132			(20	)
Total comprehensive income (loss)		47			(37	)		207			(62	)		155
Less: comprehensive income attributable to noncontrolling interests		—			—			108			—			108
Total comprehensive income (loss) available to Genworth Financial, Inc.’s common stockholders	$	47		$	(37	)	$	99		$	(62	)	$	47

The following table presents the condensed consolidating comprehensive income statement information for the three months ended September 30, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Net loss	$	(380	)	$	(420	)	$	(108	)	$	576		$	(332	)
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities not other-than-temporarily impaired		66			63			73			(130	)		72
Net unrealized gains (losses) on other-than-temporarily impaired securities		5			4			4			(8	)		5
Derivatives qualifying as hedges		54			54			57			(111	)		54
Foreign currency translation and other adjustments		(11	)		(3	)		—			13			(1	)
Total other comprehensive income (loss)		114			118			134			(236	)		130
Total comprehensive income (loss)		(266	)		(302	)		26			340			(202	)
Less: comprehensive income attributable to noncontrolling interests		—			—			64			—			64
Total comprehensive loss available to Genworth Financial, Inc.’s common stockholders	$	(266	)	$	(302	)	$	(38	)	$	340		$	(266	)

The following table presents the condensed consolidating comprehensive income statement information for the nine months ended September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Net income	$	464		$	219		$	824		$	(845	)	$	662
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities not other-than-temporarily impaired		(155	)		(172	)		(173	)		327			(173	)
Net unrealized gains (losses) on other-than-temporarily impaired securities		1			1			1			(2	)		1
Derivatives qualifying as hedges		(33	)		(33	)		(32	)		65			(33	)
Foreign currency translation and other adjustments		128			109			260			(236	)		261
Total other comprehensive income (loss)		(59	)		(95	)		56			154			56
Total comprehensive income		405			124			880			(691	)		718
Less: comprehensive income attributable to noncontrolling interests		—			—			313			—			313
Total comprehensive income available to Genworth Financial, Inc.’s common stockholders	$	405		$	124		$	567		$	(691	)	$	405

The following table presents the condensed consolidating comprehensive income statement information for the nine months ended September 30, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	(155	)	$	(284	)	$	451	$	(16	)	$	(4	)
Other comprehensive income (loss), net of taxes:
Net unrealized gains (losses) on securities not other-than-temporarily impaired		1,600			1,555			1,625		(3,156	)		1,624
Net unrealized gains (losses) on other-than-temporarily impaired securities		6			5			6		(11	)		6
Derivatives qualifying as hedges		448			447			481		(928	)		448
Foreign currency translation and other adjustments		138			65			224		(204	)		223
Total other comprehensive income (loss)		2,192			2,072			2,336		(4,299	)		2,301
Total comprehensive income		2,037			1,788			2,787		(4,315	)		2,297
Less: comprehensive income attributable to noncontrolling interests		—			—			260		—			260
Total comprehensive income available to Genworth Financial, Inc.’s common stockholders	$	2,037		$	1,788		$	2,527	$	(4,315	)	$	2,037

Condensed Consolidating Statement of Cash Flows

The following table presents the condensed consolidating cash flows statement information for the nine months ended September 30, 2017:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	464		$	219		$	824		$	(845	)	$	662
Less loss from discontinued operations, net of taxes		—			(4	)		13			—			9
Adjustments to reconcile net income to net cash from operating activities:
Equity in income from subsidiaries		(506	)		(339	)		—			845			—
Dividends from subsidiaries		—			119			(119	)		—			—
Amortization of fixed maturity securities discounts and premiums and limited partnerships		—			4			(111	)		—			(107	)
Net investment (gains) losses		—			12			(232	)		—			(220	)
Charges assessed to policyholders		—			—			(534	)		—			(534	)
Acquisition costs deferred		—			—			(67	)		—			(67	)
Amortization of deferred acquisition costs and intangibles		—			—			316			—			316
Deferred income taxes		6			(47	)		275			—			234
Trading securities, held-for-sale investments and derivative instruments		—			(46	)		762			—			716
Stock-based compensation expense		23			—			6			—			29
Change in certain assets and liabilities:
Accrued investment income and other assets		2			(2	)		(25	)		4			(21	)
Insurance reserves		—			—			1,202			—			1,202
Current tax liabilities		(6	)		(75	)		54			—			(27	)
Other liabilities, policy and contract claims and other policy-related balances		(29	)		34			(259	)		(6	)		(260	)
Net cash from operating activities		(46	)		(125	)		2,105			(2	)		1,932
Cash flows used by investing activities:
Proceeds from maturities and repayments of investments:
Fixed maturity securities		—			—			3,396			—			3,396
Commercial mortgage loans		—			—			454			—			454
Restricted commercial mortgage loans related to securitization entities		—			—			18			—			18
Proceeds from sales of investments:
Fixed maturity and equity securities		—			—			3,269			—			3,269
Purchases and originations of investments:
Fixed maturity and equity securities		—			—			(6,709	)		—			(6,709	)
Commercial mortgage loans		—			—			(608	)		—			(608	)
Other invested assets, net		—			25			(548	)		2			(521	)
Policy loans, net		—			—			28			—			28
Intercompany notes receivable		—			(77	)		34			43			—
Capital contributions to subsidiaries		(7	)		—			7			—			—
Payments for business purchased, net of cash acquired		(7	)		—			2			—			(5	)
Net cash used by investing activities		(14	)		(52	)		(657	)		45			(678	)
Cash flows used by financing activities:
Deposits to universal life and investment contracts		—			—			902			—			902
Withdrawals from universal life and investment contracts		—			—			(2,003	)		—			(2,003	)
Repayment of borrowings related to securitization entities		—			—			(16	)		—			(16	)
Repurchase of subsidiary shares		—			—			(31	)		—			(31	)
Dividends paid to noncontrolling interests		—			—			(92	)		—			(92	)
Proceeds from intercompany notes payable		61			(35	)		17			(43	)		—
Other, net		(1	)		(32	)		3			—			(30	)
Net cash used by financing activities		60			(67	)		(1,220	)		(43	)		(1,270	)
Effect of exchange rate changes on cash and cash equivalents		—			—			68			—			68
Net change in cash and cash equivalents		—			(244	)		296			—			52
Cash and cash equivalents at beginning of period		—			998			1,786			—			2,784
Cash and cash equivalents at end of period	$	—		$	754		$	2,082		$	—		$	2,836

The following table presents the condensed consolidating cash flows statement information for the nine months ended September 30, 2016:

(Amounts in millions)	Parent Guarantor			Issuer			All Other Subsidiaries			Eliminations			Consolidated
Cash flows from operating activities:
Net income (loss)	$	(155	)	$	(284	)	$	451		$	(16	)	$	(4	)
Less loss from discontinued operations, net of taxes		2			7			16			—			25
Adjustments to reconcile net income (loss) to net cash from operating activities:
Equity in (income) loss from subsidiaries		62			(78	)		—			16			—
Dividends from subsidiaries		—			250			(250	)		—			—
(Gain) loss on sale of businesses		—			1			(27	)		—			(26	)
Amortization of fixed maturity securities discounts and premiums and limited partnerships		—			3			(115	)		—			(112	)
Net investment (gains) losses		—			14			(45	)		—			(31	)
Charges assessed to policyholders		—			—			(574	)		—			(574	)
Acquisition costs deferred		—			—			(124	)		—			(124	)
Amortization of deferred acquisition costs and intangibles		—			—			305			—			305
Deferred income taxes		8			304			(139	)		—			173
Trading securities, held-for-sale investments and derivative instruments		—			5			754			—			759
Stock-based compensation expense		18			—			7			—			25
Change in certain assets and liabilities:
Accrued investment income and other assets		(3	)		(4	)		(246	)		(5	)		(258	)
Insurance reserves		—			—			691			—			691
Current tax liabilities		11			(4	)		37			—			44
Other liabilities, policy and contract claims and other policy-related balances		(1	)		(22	)		928			—			905
Net cash from operating activities		(58	)		192			1,669			(5	)		1,798
Cash flows used by investing activities:
Proceeds from maturities and repayments of investments:
Fixed maturity securities		—			150			2,496			—			2,646
Commercial mortgage loans		—			—			555			—			555
Restricted commercial mortgage loans related to securitization entities		—			—			27			—			27
Proceeds from sales of investments:
Fixed maturity and equity securities		—			—			4,064			—			4,064
Purchases and originations of investments:
Fixed maturity and equity securities		—			—			(8,758	)		—			(8,758	)
Commercial mortgage loans		—			—			(405	)		—			(405	)
Other invested assets, net		—			—			(143	)		5			(138	)
Policy loans, net		—			—			(80	)		—			(80	)
Intercompany notes receivable		—			(58	)		(18	)		76			—
Proceeds from sale of businesses, net of cash transferred		—			1			38			—			39
Net cash used by investing activities		—			93			(2,224	)		81			(2,050	)
Cash flows used by financing activities:
Deposits to universal life and investment contracts		—			—			1,028			—			1,028
Withdrawals from universal life and investment contracts		—			—			(1,463	)		—			(1,463	)
Redemption of non-recourse funding obligations		—			—			(1,620	)		—			(1,620	)
Repayment and repurchase of long-term debt		—			(326	)		(36	)		—			(362	)
Repayment of borrowings related to securitization entities		—			—			(37	)		—			(37	)
Return of capital to noncontrolling interests		—			—			(70	)		—			(70	)
Dividends paid to noncontrolling interests		—			—			(126	)		—			(126	)
Proceeds from intercompany notes payable		58			18			—			(76	)		—
Other, net		—			(36	)		(13	)		—			(49	)
Net cash used by financing activities		58			(344	)		(2,337	)		(76	)		(2,699	)
Effect of exchange rate changes on cash and cash equivalents		—			—			36			—			36
Net change in cash and cash equivalents		—			(59	)		(2,856	)		—			(2,915	)
Cash and cash equivalents at beginning of period		—			1,124			4,869			—			5,993
Cash and cash equivalents at end of period	$	—		$	1,065		$	2,013		$	—		$	3,078