Noncontrolling Interests

12 Months Ended

Dec. 31, 2018

Noncontrolling Interests

(23) Noncontrolling Interests

Canada

In July 2009, Genworth Canada, our indirect subsidiary, completed an IPO of its common shares and we beneficially owned 57.5% of the common shares of Genworth Canada through subsidiaries. We currently hold approximately 57.0% of the outstanding common shares of Genworth Canada on a consolidated basis through subsidiaries. In addition, we have the right, exercisable at our discretion, to purchase for cash these common shares of Genworth Canada from our U.S. mortgage insurance companies at the then-current market price. We also have a right of first refusal with respect to the transfer of these common shares of Genworth Canada by our U.S. mortgage insurance companies.

In May 2018, Genworth Canada announced acceptance by the Toronto Stock Exchange (“TSX”) of its Notice of Intention to Make a Normal Course Issuer Bid (“NCIB”). Pursuant to the NCIB, Genworth Canada may, if considered advisable, purchase from time to time through May 6, 2019, up to an aggregate of approximately 4.5 million of its issued and outstanding common shares. During 2018, Genworth Canada repurchased approximately 2.4 million of its shares for CAD$100 million through the NCIB. We participated in order to maintain our ownership position of approximately 57.0% and received $41 million in cash. Of the $41 million of cash proceeds received, $14 million was paid as a dividend to Genworth Holdings in 2018, $13 million was retained by GMICO and we expect the remaining amount of $14 million to be paid to Genworth Holdings as a dividend in the first quarter of 2019. If Genworth Canada decides to repurchase additional shares through the NCIB, we intend to participate in order to maintain our overall ownership at its current level.

In May 2017, Genworth Canada announced acceptance by the TSX of its Notice of Intention to Make an NCIB. Pursuant to the NCIB, Genworth Canada repurchased approximately 1.1 million of its shares for CAD$40 million in 2017 through the NCIB. As the majority shareholder, we participated in order to maintain our ownership position and received $18 million in cash. Of the $18 million of cash proceeds received, $12 million was paid as a dividend to Genworth Holdings and $6 million was retained by GMICO. In March 2018, Genworth Canada completed its share repurchases under this program, repurchasing approximately 1.2 million shares for CAD$50 million. We participated in order to maintain our ownership position and received $22 million in cash. Of the $22 million of cash proceeds received, $16 million was paid as a dividend to Genworth Holdings and $6 million was retained by GMICO.

In 2018, 2017 and 2016, dividends of $57 million, $54 million and $50 million, respectively, were paid to the noncontrolling interests of Genworth Canada.

Australia

In May 2014, Genworth Australia, a holding company for our Australian mortgage insurance business, completed an IPO of its ordinary shares and we beneficially owned 66.2% of the ordinary shares of Genworth Australia through subsidiaries.

On May 11, 2015, we sold 92.3 million of our shares in Genworth Australia at AUD$3.08 per ordinary share. The offering closed on May 15, 2015. Following completion of the offering, we beneficially owned approximately 52.0% of the ordinary shares of Genworth Australia through subsidiaries. The majority of the net proceeds of the offering were distributed to Genworth Holdings. The net proceeds of the offering were approximately $226 million.

In May 2018, Genworth Australia announced its intention to commence an on-market share buy-back program for shares up to a maximum aggregate amount of AUD$100 million. Pursuant to the program, Genworth Australia repurchased approximately 36 million of its shares for AUD$100 million. As the majority shareholder, we participated in on-market sales transactions during the buy-back period to maintain our ownership position of approximately 52.0% and received $37 million in cash, which was paid as dividends to Genworth Holdings.

In August 2017, Genworth Australia announced its intention to commence an on-market share buy-back program for shares up to a maximum aggregate amount of AUD$100 million. Pursuant to the program, Genworth Australia repurchased approximately 17 million of its shares for AUD$51 million in 2017. As the majority shareholder, we participated in on-market sales transactions during the buy-back period to maintain our ownership position and received $20 million in cash, which was paid as dividends to Genworth Holdings. In February 2018, Genworth Australia completed its share repurchases under this program, repurchasing approximately 19 million of its shares for AUD$49 million. We participated in on-market sales transactions to maintain our ownership position and received $20 million in cash, which was paid as a dividend to Genworth Holdings.

On June 1, 2016, Genworth Australia completed a capital management initiative of AUD$202 million representing a return of capital of AUD$0.34 per share. As a result of the return of capital every one share was converted into 0.8555 shares. We received $76 million for our portion of the capital reduction and our ownership percentage remained at 52.0%.

In 2018, 2017 and 2016, dividends of $40 million, $53 million and $88 million, respectively, were paid to the noncontrolling interests of Genworth Australia.