(1)

In accordance with accounting guidance on the deconsolidation of a subsidiary or group of assets, the carrying amount of any noncontrolling interests in the subsidiary sold (adjusted to reflect amounts in accumulated other comprehensive income (loss) recognized upon final disposition) is added to the total fair value of the consideration received.

(2)	Represents the aggregate of the net cash proceeds received upon sale closing plus the adjusted carrying amount of noncontrolling interests in the subsidiary sold.

(3)	Amount consists of $160 million of cumulative losses on foreign currency translation adjustments, partially offset by cumulative unrealized investment gains of $29 million and deferred tax gains of $22 million.

In addition, we recorded an

after-tax

favorable adjustment of $10 million in 2021 associated with a refinement to our tax matters agreement liability.

The assets and liabilities related to Genworth Australia were segregated in our consolidated balance sheet until deconsolidation. The major asset and liability categories of Genworth Australia were as follows as of December 31:


(Amounts in millions)	2021		2020
Assets
Investments:
Fixed maturity securities available-for-sale, at fair value	$	—	$	2,295
Equity securities, at fair value		—		90
Other invested assets		—		154

Total investments		—		2,539
Cash, cash equivalents and restricted cash		—		95
Accrued investment income		—		16
Deferred acquisition costs		—		42
Intangible assets		—		43
Other assets		—		40
Deferred tax asset		—		42

Assets related to discontinued operations	$	—	$	2,817

Liabilities
Liability for policy and contract claims	$	—	$	331
Unearned premiums		—		1,193
Other liabilities		—		104
Long-term borrowings		—		145

Liabilities related to discontinued operations	$	—	$	1,773

Deferred tax assets and liabilities that result in future taxable or deductible amounts to the remaining consolidated group have been reflected in assets or liabilities of continuing operations and not reflected in assets or liabilities related to discontinued operations.

A summary of operating results related to Genworth Australia reported as discontinued operations was as follows for the years ended December 31:


(Amounts in millions)	2021			2020		2019
Revenues:
Premiums	$	51		$	274	$	312
Net investment income		4			33		56
Net investment gains (losses)		(5	)		66		23
Policy fees and other income		—			1		—

Total revenues		50			374		391

Benefits and expenses:
Benefits and other changes in policy reserves		11			177		104
Acquisition and operating expenses, net of deferrals		7			53		53
Amortization of deferred acquisition costs and intangibles		6			29		33
Goodwill impairment		—			5		—
Interest expense		1			7		8

Total benefits and expenses		25			271		198

Income before income taxes and gain (loss) on sale (1)		25			103		193
Provision for income taxes		8			40		56

Income before gain (loss) on sale		17			63		137
Gain (loss) on sale, net of taxes		—			—		—

Income from discontinued operations, net of taxes		17			63		137

Less: net income from discontinued operations attributable to noncontrolling interests		8			34		64

Income from discontinued operations available to Genworth Financial, Inc.’s common stockholders	$	9		$	29	$	73

(1)	The years ended December 31, 2021, 2020 and 2019 include pre-tax income from discontinued operations available to Genworth Financial, Inc.’s common stockholders of $13 million, $54 million and $100 million, respectively.

Lifestyle protection insurance

On December 1, 2015, Genworth Financial, through its subsidiaries, completed the sale of its lifestyle protection insurance business to AXA. In 2017, AXA sued us for damages on an indemnity in the 2015 agreement related to alleged remediation it paid to customers who purchased payment protection insurance (“PPI”). On July 20, 2020, we reached a settlement agreement related to losses incurred from mis-selling complaints on policies sold from 1970 through 2004. As part of the settlement agreement, Genworth Holdings agreed to make payments for certain PPI mis-selling claims, along with a significant portion of future claims that are still being processed. Under the settlement agreement, Genworth Holdings issued a secured promissory note to AXA, in which it agreed to make deferred cash payments in two installments in June 2022 and September 2022.

In connection with the Genworth Australia sale, Genworth Holdings made a mandatory principal payment to AXA of approximately £176 million ($245 million) in March 2021. The mandatory payment fully repaid the first installment obligation originally due in June 2022 and partially prepaid the September 2022 installment payment.

On September 21, 2021, Genworth Holdings used a portion of the net proceeds from the minority IPO of Enact Holdings to repay the remaining outstanding balance of the secured promissory note of approximately £215 million ($296 million), excluding future claims still being processed. As of December 31, 2021, we accrued approximately £22 million ($30 million) of estimated future claims still in process of being invoiced. In February 2022, Genworth Holdings paid AXA the majority of the remaining unprocessed claims of approximately $30 million. We have established our current best estimates for claims still being processed by AXA, as well as other expenses; however, there may be future adjustments to this estimate. If amounts are different from our estimate, it could result in an adjustment to our liability and an additional amount reflected in income (loss) from discontinued operations.

The following table presents the amounts owed to AXA under the settlement agreement reflected as liabilities related to discontinued operations in our consolidated balance sheets as of December 31:


(Amounts in millions)	British Pounds						U.S. Dollar
(Amounts in millions)	2021			2020			2021			2020
Installment payments due to AXA:
June 2022:
Beginning balance	£	159		£	159		$	217		$	217
Prepayments (1)		(159	)		—			(217	)		—

Ending balance		—			159			—			217

September 2022:
Beginning balance		187			158			256			217
Amounts billed as future losses		45			29			61			39
Prepayments (1)		(232	)		—			(324	)		—
Foreign exchange and other		—			—			7			—

Ending balance		—			187			—			256

Total amounts due under the promissory note		—			346			—			473
Future claims:
Estimated beginning balance		79			107			108			146
Change in estimated future claims		(10	)		1			(14	)		1
Less: Amounts billed and included as mandatory prepayments		(45	)		(29	)		(61	)		(39	)
Less: Amounts paid		(2	)		—			(3	)		—

Estimated future billings		22			79			30			108

Total amounts due to AXA under the settlement agreement	£	22		£	425		$	30		$	581

(1)

On March 3, 2021, we completed the sale of Genworth Australia and received net proceeds of approximately AUD483 million ($370 million). The sale of Genworth Australia resulted in a mandatory principal payment of approximately £176 million ($245 million) related to our outstanding secured promissory note issued to AXA, dated as of July 20, 2020, as amended by the parties in connection with the Genworth Australia sale. On September 21, 2021, Genworth Holdings used a portion of the net proceeds from the minority IPO of Enact Holdings to repay the remaining outstanding balance of the secured promissory note of approximately £215 million ($296 million).

For the years ended December 31, 2021, 2020 and 2019, we recorded

after-tax

income (loss) from discontinued operations of $4 million, $(572) million and $(110) million, respectively, related to the settlement agreement with AXA. To secure our obligation under the amended promissory note, Genworth Financial granted a 19.9% security interest in the outstanding common stock of Enact Holdings to AXA. AXA did not have the right to sell or repledge the collateral and was not entitled to any voting rights. Following the full repayment of the secured promissory note, AXA released its 19.9% security interest in the outstanding common shares of Enact Holdings. Accordingly, the collateral arrangement had no impact on our consolidated financial statements. Prior to the full repayment, the promissory note was also subject to certain mandatory prepayments, negative and affirmative covenants, restrictions imposed on the collateral, representations and warranties and customary events of default.

In the event AXA recovers amounts from third parties related to the mis-selling losses, including from the distributor responsible for the sale of the policies, we have certain rights to share in those recoveries to recoup payments for the underlying mis-selling losses. As of December 31, 2021, we have not recorded any amounts associated with recoveries from third parties.

In addition to the future claims still being processed under the settlement agreement, we also have an unrelated liability that is owed to AXA associated with underwriting losses on a product sold by a distributor in our former lifestyle protection insurance business. For the years ended December 31, 2021, 2020 and 2019, we recorded

after-tax

income (loss) of $(4) million, $23 million and $—, respectively, associated with adjustments to the underwriting loss liability. As of December 31, 2021 and 2020, the balance of the liability is $4 million and $16 million, respectively, and is included as liabilities related to discontinued operations in our consolidated balance sheets. During the second quarter of 2021, we reached a settlement with AXA and made a cash payment of approximately €15 million ($18 million) for the amounts owed related to the underwriting loss liability. The remaining amount accrued as of December 31, 2021 represents our best estimate of amounts owed for a tax gross up associated with the underwriting losses.

Canada mortgage insurance business

On December 12, 2019, we completed the sale of Genworth Canada to Brookfield Business Partners L.P. (“Brookfield”) and received approximately $1.7 billion in net cash proceeds. In the fourth quarter of 2019 and prior to sale closing, we also received a special dividend of approximately $54 million from Genworth Canada. This special dividend reduced the sales price on a per purchased share basis by CAD$1.45 per common share. During 2019, we recognized an

after-tax

loss on sale of $121 million principally driven by cumulative losses on foreign currency translation adjustments and deferred tax losses, partially offset by unrealized investment gains. These amounts, which were previously recorded in accumulated other comprehensive income, were recognized as part of the loss on sale.

The following table provides a summary of the loss on sale recorded in connection with the disposition of Genworth Canada for the year ended December 31, 2019:


(Amounts in millions)
Net cash proceeds	$	1,736
Add: carrying value of noncontrolling interests (1)		1,417

Total adjusted consideration (2)		3,153
Carrying value of the disposal group before accumulated other comprehensive loss		3,022
Add: total accumulated other comprehensive loss of disposal group (3)		325

Total adjusted carrying value of the disposal group		3,347
Pre-tax loss on sale		(194	)
Tax benefit on sale		73

After-tax loss on sale	$	(121	)

(1)

(2)	Represents the aggregate of the net cash proceeds received upon sale closing plus the adjusted carrying amount of noncontrolling interests in the subsidiary sold.

(3)	Amount consists of cumulative losses on foreign currency translation adjustments of $369 million and deferred tax losses of $71 million, partially offset by unrealized investment gains of $115 million.

A summary of operating results for Genworth Canada reported as discontinued operations was as follows for the year ended December 31, 2019:


(Amounts in millions)
Revenues:
Premiums	$	466
Net investment income		132
Net investment gains (losses)		(13	)

Total revenues		585

Benefits and expenses:
Benefits and other changes in policy reserves		79
Acquisition and operating expenses, net of deferrals		64
Amortization of deferred acquisition costs and intangibles		39
Interest expense (1)		50

Total benefits and expenses		232

Income before income taxes and loss on sale (2)		353
Provision for income taxes		111

Income before loss on sale		242
Loss on sale, net of taxes		(121	)

Income from discontinued operations, net of taxes		121

Less: net income from discontinued operations attributable to noncontrolling interests		123

Loss from discontinued operations available to Genworth Financial, Inc.’s common stockholders	$	(2	)

(1)

Interest on debt assumed by Brookfield and interest on debt that was repaid as a result of the sale of Genworth Canada was allocated and reported in discontinued operations. The Term Loan, owed by Genworth Holdings and secured by GFIH’s ownership interest in Genworth Canada’s outstanding common shares, was repaid in connection with the close of the Genworth Canada sale. Accordingly, interest expense related to the Term Loan of $

million was allocated and reported in discontinued operations.

(2)	The year ended December 31, 2019 includes pre-tax income from discontinued operations available to Genworth Financial, Inc.’s common stockholders of $186 million.