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Schedule II Genworth Financial, Inc. (Parent Company Only)
 12 Months Ended
Dec. 31, 2023
Schedule II Genworth Financial, Inc. (Parent Company Only)
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Balance Sheets
(Amounts in millions)
 
 
  
December 31,
 
 
  
2023
 
 
2022
 
 
  
(As adjusted)
 
Assets:
                 
Investments in subsidiaries
    $ 7,517     $ 7,655  
Deferred tax asset
      3       6  
Other assets
      3       3  
    
 
 
    
 
 
  
Total assets
    $ 7,523     $ 7,664  
    
 
 
    
 
 
  
 
 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
                 
Liabilities:
                 
Other liabilities
    $ 12     $ 7  
Intercompany notes payable
      31       26  
    
 
 
    
 
 
  
Total liabilities
      43       33  
    
 
 
    
 
 
  
 
 
 
 
 
 
 
 
 
Commitments and contingencies
             
     
Stockholders’ equity:
                 
Common stock
      1       1  
Additional
paid-in
capital
      11,884       11,869  
Accumulated other comprehensive income (loss)
      (2,555 )     (2,614 ) 
Retained earnings
      1,213       1,139  
Treasury stock, at cost
      (3,063 )      (2,764 ) 
    
 
 
    
 
 
  
Total Genworth Financial, Inc.’s stockholders’ equity
      7,480       7,631  
    
 
 
    
 
 
  
Total liabilities and stockholders’ equity
    $ 7,523     $ 7,664  
    
 
 
    
 
 
  
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Statements of Income
(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Years ended December 31,
  
    
2023
    
2022
    
2021
  
          
(As adjusted)
    
(As adjusted)
  
Revenues:
                         
Net investment income
    $ —      $ —      $ (3 ) 
    
 
 
    
 
 
    
 
 
  
Total revenues
      —        —        (3 ) 
    
 
 
    
 
 
    
 
 
  
Expenses:
                         
Acquisition and operating expenses, net of deferrals
      35       31       25  
Interest expense
      7       —        (1 ) 
    
 
 
    
 
 
    
 
 
  
Total expenses
      42       31       24  
    
 
 
    
 
 
    
 
 
  
Loss before income taxes and equity in income of subsidiaries
      (42 )      (31 )      (27 ) 
Benefit from income taxes
      (4 )     (3 )      (1 ) 
Equity in income of subsidiaries
      114       944       876  
    
 
 
    
 
 
    
 
 
  
Net income available to Genworth Financial, Inc.’s common stockholders
    $ 76     $ 916     $ 850  
    
 
 
    
 
 
    
 
 
  
 
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Statements of Comprehensive Income
(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Years ended December 31,
  
    
2023
    
2022
    
2021
  
          
(As adjusted)
    
(As adjusted)
  
Net income available to Genworth Financial, Inc.’s common stockholders
    $ 76     $ 916     $ 850  
Other comprehensive income (loss), net of taxes:
                         
Net unrealized gains (losses) on securities without an allowance for credit losses
      1,277       (9,484 )      (1,723 ) 
Net unrealized gains (losses) on securities with an allowance for credit losses
      —        —        6  
Derivatives qualifying as hedges
      (190 )      (825 )      (186 ) 
Change in discount rate used to measure future policy benefits
      (1,036 )     13,515       3,202  
Change in instrument-specific credit risk of market risk benefits
      2       5       4  
Foreign currency translation and other adjustments
      6       30       (24 ) 
    
 
 
    
 
 
    
 
 
  
Total other comprehensive income
      59       3,241       1,279  
    
 
 
    
 
 
    
 
 
  
Total comprehensive income available to Genworth Financial, Inc.’s common stockholders
    $ 135     $ 4,157     $ 2,129  
    
 
 
    
 
 
    
 
 
  
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Statements of Cash Flows
(Amounts in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
Years ended December 31,
  
    
2023
    
2022
    
2021
  
          
(As adjusted)
    
(As adjusted)
  
Cash flows from (used by) operating activities:
                         
Net income available to Genworth Financial, Inc.’s common stockholders
    $ 76     $ 916     $ 850  
Adjustments to reconcile net income available to Genworth Financial, Inc.’s common stockholders to net cash from (used by) operating activities:
                         
Equity in income from subsidiaries
      (114 )     (944 )      (876 ) 
Deferred income taxes
      (4 )      (6 )      —   
Long-term incentive compensation expense
      34       27       40  
Change in certain assets and liabilities:
                         
Accrued investment income and other assets
      —       2       (1 ) 
Current tax assets
      (1 )      2       (5 ) 
Other liabilities
      14       15       (13 ) 
    
 
 
    
 
 
    
 
 
  
Net cash from (used by) operating activities
      5       12       (5 ) 
    
 
 
    
 
 
    
 
 
  
Cash flows used by investing activities:
                         
Capital contributions paid to subsidiaries
      (3 )      (3 )      (2 ) 
    
 
 
    
 
 
    
 
 
  
Net cash used by investing activities
      (3 )      (3 )      (2 ) 
    
 
 
    
 
 
    
 
 
  
Cash flows from (used by) financing activities:
                         
Intercompany notes payable, net
      307       64       12  
Treasury stock acquired in connection with share repurchases
      (296 )      (64 )      —   
Other, net
      (13 )      (9 )      (5 ) 
    
 
 
    
 
 
    
 
 
  
Net cash from (used by) financing activities
      (2 )      (9 )      7  
    
 
 
    
 
 
    
 
 
  
Effect of exchange rate changes on cash, cash equivalents and restricted cash
      —        —        —   
    
 
 
    
 
 
    
 
 
  
Net change in cash, cash equivalents and restricted cash
      —        —        —   
Cash, cash equivalents and restricted cash at beginning of year
      —        —        —   
    
 
 
    
 
 
    
 
 
  
Cash, cash equivalents and restricted cash at end of year
    $ —      $ —      $ —   
    
 
 
    
 
 
    
 
 
  
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Notes to Schedule II
Years Ended December 31, 2023, 2022 and 2021
(1) Organization and Basis of Presentation
Genworth Holdings (formerly known as Genworth Financial, Inc.) was incorporated in Delaware in 2003 in preparation for an IPO of its common stock, which was completed on May 28, 2004. On April 1, 2013, Genworth Holdings completed a holding company reorganization pursuant to which Genworth Holdings became a direct, 100% owned subsidiary of a new public holding company that it had formed. The new public holding company was incorporated in Delaware on December 5, 2012, in connection with the reorganization, and was renamed Genworth Financial upon the completion of the reorganization.
Genworth Financial is a holding company whose subsidiaries offer mortgage and long-term care insurance products and service life insurance and annuity products.
The parent company financial information reflects Genworth Financial’s direct subsidiaries using the equity method of accounting. Under this method, investments in subsidiaries are recorded at cost and adjusted for the subsidiaries’ cumulative results of operations, capital contributions and distributions, and other changes in equity. The parent company financial statements should be read in conjunction with the consolidated financial statements of Genworth Financial and its subsidiaries and the notes thereto.
On May 2, 2022, Genworth Financial’s Board of Directors authorized a share repurchase program under which Genworth Financial could repurchase u
p to $350 million of its outstanding Class A common stock. On July 31, 2023, Genworth Financial’s Board of Directors authorized an additional $350 million of share repurchases under the existing share repurchase program. Pursuant to the program, during 2023, Genworth Financial repurchased 51,739,098 shares of its common stock at an average price of $5.70 per share for a total cost of $299 
million, including excise taxes and other costs paid in connection with acquiring the shares. The repurchased shares were recorded at cost and presented as treasury stock in a separate caption in equity in the parent company balance sheets. In 2024, Genworth Financial also authorized share repurchases through a
Rule 10b5-1
trading plan under which 4,197,740 shares of its common stock were repurchased through
February 13, 2024
for
approximately
$25 million before excise taxes. Approximately $316 million remained
available 
under the share repurchase program as of February
13
, 2024. Under the program, share repurchases may be made at Genworth’s discretion from time to time in open market transactions, privately negotiated transactions or other means, including through Rule
10b5-1
trading plans. The timing and number of future shares repurchased under the share repurchase program will depend on a variety of factors, including Genworth Financial’s stock price and trading volume, and general business and market conditions, among other factors. The authorization has no expiration date and may be modified, suspended or terminated at any time.
(2) Accounting Changes
On January 1, 2023, Genworth Financial adopted LDTI, which significantly changed the recognition and measurement of long-duration insurance contracts. This new accounting guidance directly impacted DAC, intangible assets and insurance assets and liabilities of Genworth Financial’s U.S. life insurance subsidiaries. Genworth Financial adopted this new accounting guidance using the modified retrospective transition method for all topics except for MRBs, which was required to be applied using the retrospective transition method. The modified retrospective transition method generally results in applying the guidance to contracts on the basis of existing carrying values as of the Transition Date. The new accounting guidance, for all topics, was applied as of
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Notes to Schedule II
Years Ended December 31, 2023, 2022 and 2021
 
the Transition Date with an adjustment to beginning retained earnings and accumulated other comprehensive income (loss). In addition, prior period financial information has been re-presented in accordance with the new accounting standard. As of the Transition Date, Genworth Financial’s total stockholders’ equity decreased by
$
13.7 
billion
after-tax,
which included a reduction to retained earnings of $
2.2 
billion and a reduction in accumulated other comprehensive income (loss) of $
11.5
 billion. For a discussion of accounting policies related to insurance assets and liabilities associated with long-duration insurance contracts, see note 2 in the consolidated financial statements of Genworth Financial and its subsidiaries.
The following table presents the impacted lines of the parent company balance sheet reflecting the impact of adopting LDTI on January 1, 2023 as of December 31, 2022:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Amounts in millions)
   
As originally
reported
     
Effect of
adopting LDTI
     
As adjusted
  
Assets:
                           
Investments in subsidiaries
    $ 10,008      $ (2,353 )     $ 7,655  
Total assets
    $ 10,017      $ (2,353 )     $ 7,664  
Equity:
                           
Accumulated other comprehensive income (loss)
    $ (2,220 )     $ (394 )     $ (2,614 ) 
Retained earnings
    $ 3,098      $ (1,959 )     $ 1,139  
Total Genworth Financial, Inc.’s stockholders’ equity
    $ 9,984      $ (2,353 )     $ 7,631  
The following table presents the impacted lines of the parent company statements of income reflecting the impact of adopting LDTI on January 1, 2023 for the years ended December 31:
 
 
 
2022
 
 
2021
 
(Amounts in millions)
 
As originally
reported
 
 
Effect of
adopting LDTI
 
 
As adjusted
 
 
As originally
reported
 
 
Effect of
adopting LDTI
 
 
As adjusted
 
Equity in income of subsidiaries
 
$
637
 
 
$
307
 
 
$
944
 
 
$
930
 
 
$
(54
) 
 
$
876
 
Net income available to Genworth Financial, Inc.’s common stockholders
 
$
609
 
 
$
307
 
 
$
916
 
 
$
904
 
 
$
(54
) 
 
$
850
 
The following table presents the impacted lines of the parent company statements of cash flows reflecting the impact of adopting LDTI on January 1, 2023 for the years ended December 31:

 
 
2022
 
 
2021
 
(Amounts in millions)
 
As originally
reported
 
 
Effect of
adopting LDTI
 
 
As adjusted
 
 
As originally
reported
 
 
Effect of
adopting LDTI
 
 
As adjusted
 
Cash flows from (used by) operating activities:
 
      
 
      
 
      
 
      
 
      
 
      
Net income available to Genworth
Financial, Inc.’s common
 
stockholders
    $ 609     $ 307     $ 916     $ 904     $ (54 )    $ 850  
Equity in income from subsidiaries
    $ (637 )    $ (307 )    $ (944 )    $ (930 )    $ 54     $ (876 ) 
Schedule II
Genworth Financial, Inc.
(Parent Company Only)
Notes to Schedule II
Years Ended December 31, 2023, 2022 and 2021
 
On January 1, 2021, Genworth Financial adopted new accounting guidance related to simplifying the accounting for income taxes. The guidance eliminates certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. Genworth Financial adopted this new accounting guidance using the retrospective method or modified retrospective method for certain changes and prospective method for all other changes, which did not have a significant impact on Genworth Financial’s financial statements and disclosures.
(3) Commitments
Genworth Financial provides a full and unconditional guarantee to the trustee of Genworth Holdings’ outstanding senior and subordinated notes and the holders of the senior and subordinated notes, on an unsecured unsubordinated and subordinated basis, respectively, of the full and punctual payment of the principal of, premium, if any, and interest on, and all other amounts payable under, the outstanding senior and subordinated notes and their respective indentures.
(4) Income Taxes
As of December 31, 2023 and 2022, Genworth Financial had a deferred tax asset of $3 million and $6 million, respectively, primarily comprised of share-based compensation. As of December 31, 2023 and 2022, Genworth Financial had a current income tax receivable of $2 million and $
—
, respectively. Net cash paid for taxes was $1 million, $1 million and $4 million for the years ended December 31, 2023, 2022 and 2021, respectively.
(5) Supplemental Cash Flow Information
In 2023 and 2022, Genworth Holdings forgave intercompany loans of $302 million and $50 million, respectively, due from Genworth Financial. The extinguishment of the loans between the related parties was treated as
non-cash
deemed dividends to Genworth Financial and accordingly had no impact on Genworth Financial’s cash flows for the years ended December 31, 2023 and 2022.