Capital Structure

12 Months Ended

Dec. 31, 2023


Note 13			Capital Structure


Total debt outstanding
	As of December 31,
($ in millions)	2023		2022
Floating Rate Senior Notes, due 2023 (1)	$	—	$	250
3.150% Senior Notes, due 2023 (2)	—		500
6.750% Senior Notes due 2024 (2) (4)	350		350
0.750% Senior Notes, due 2025 (2)	600		600
3.280% Senior Notes, due 2026 (2)	550		550
Due in one year through five years	1,500		2,250
1.450% Senior Notes, due 2030 (2)	600		600
6.125% Senior Notes, due 2032 (2)	159		159
5.250% Senior Notes due 2033 (2)	750		—
5.350% Senior Notes due 2033 (2)	323		323
Due after five years through ten years	1,832		1,082
5.550% Senior Notes due 2035 (2)	546		546
5.950% Senior Notes, due 2036 (2)	386		386
6.900% Senior Debentures, due 2038	165		165
5.200% Senior Notes, due 2042 (2)	62		62
4.500% Senior Notes, due 2043 (2)	500		500
4.200% Senior Notes, due 2046 (2)	700		700
3.850% Senior Notes, due 2049 (2)	500		500
Floating Rate Subordinated Debentures, due 2053 (3)	500		500
Floating Rate Subordinated Debentures, due 2053 (3)	800		800
6.500% Junior Subordinated Debentures, due 2067	500		500
Due after ten years	4,659		4,659

Long-term debt total principal	7,991		7,991
Fair value adjustments (4)	7		26
Debt issuance costs	(56)		(53)
Total long-term debt	7,942		7,964
Short-term debt (5)	—		—
Total debt	$	7,942	$	7,964

(1)2023 Floating Rate Senior Notes were not redeemable prior to the applicable maturity dates and bear interest at a floating rate equal to three-month LIBOR, reset quarterly on each interest reset date, plus 0.63% per year.

(2)Senior Notes are subject to redemption at the Company’s option in whole or in part at any time at the greater of either 100% of the principal amount plus accrued and unpaid interest to the redemption date or the discounted sum of the present values of the remaining scheduled payments of principal and interest and accrued and unpaid interest to the redemption date.

(3)2053 Subordinated Debentures became floating rate in 2023.

(4)Debt acquired as part of the National General acquisition completed on January 4, 2021.

(5)The Company classifies any borrowings which have a maturity of twelve months or less at inception as short-term debt.

Debt maturities


Debt maturities for each of the next five years and thereafter (excluding issuance costs and other)
($ in millions)
2024	$	350
2025	600
2026	550
2027	—
2028	—
Thereafter	6,491
Total long-term debt principal	$	7,991

Repayment of debt On March 29, 2023, the Company repaid, at maturity, $250 million of Floating Rate Senior Notes that bear interest at a floating rate equal to three-month London Interbank Offered Rate

(“LIBOR”) plus 0.63% per year. On June 15, 2023, the Company repaid, at maturity, $500 million of 3.15% Senior Notes.

Issuance of debt On March 31, 2023, the Company issued $750 million of 5.250% Senior Notes due 2033. Interest on the Senior Notes is payable semi-annually in arrears on March 30 and September 30 of each year, beginning on September 30, 2023. The Senior Notes are redeemable at any time at the applicable redemption price prior to the maturity date. The net proceeds of this issuance were used to repay the $500 million senior debt maturity and for general corporate purposes.

LIBOR-linked debt The administrator of LIBOR ceased the publication of the U.S. dollar (“USD”) LIBOR settings on June 30, 2023. LIBOR was used as a

benchmark or reference rate for Subordinated Debentures that the Company has issued.

Subordinated Debentures The Subordinated Debentures allow for the use of an alternative methodology to determine the interest rate if LIBOR is no longer available. The Federal Reserve Board adopted a final rule that implemented the Adjustable Interest Rate (LIBOR) Act on December 16, 2022. This guidance impacts the alternative rate methodology utilized by the Subordinated Debentures.

Both Subordinated Debentures replaced the three-month LIBOR with the CME Term SOFR Reference Rate published for a three-month tenor plus a spread adjustment of 0.26161% effective for interest paid under the terms of each of the Subordinated Debentures after June 30, 2023, as shown in the table below.

Interest rates for LIBOR-linked debt

($ in millions)

5.100% Subordinated Debentures, due 2053

5.750% Subordinated Debentures, due 2053

Debt outstanding

500

800

Dividend accrual date (1)

July 15, 2023

August 15, 2023

Rate following commencement date

3-month SOFR + 3.165% + 0.26161%

3-month SOFR

+ 2.938% + 0.26161%

(1)First dividend accrual date following the last published three-month LIBOR rate on June 30, 2023.

The Subordinated Debentures may be redeemed (i) in whole at any time or in part from time to time on or after January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures at their principal amount plus accrued and unpaid interest to, but excluding, the date of redemption; provided that if the Subordinated Debentures are not redeemed in whole, at least $25 million aggregate principal amount must remain outstanding, or (ii) in whole, but not in part, prior to January 15, 2023 for the 5.100% Subordinated Debentures and August 15, 2023 for the 5.750% Subordinated Debentures, within 90 days after the occurrence of certain tax and rating agency events, at their principal amount or, if greater, a make-whole redemption price, plus accrued and unpaid interest to, but excluding, the date of redemption. The 5.750% Subordinated Debentures have this make-whole redemption price provision only when a reduction of equity credit assigned by a rating agency has occurred.

Interest on the 5.100% Subordinated Debentures was payable quarterly at the stated fixed annual rate to January 14, 2023, or any earlier redemption date, and then at an annual rate equal to the three-month LIBOR plus 3.165%. Interest on the 5.750% Subordinated Debentures was payable semi-annually at the stated fixed annual rate to August 14, 2023, or any earlier redemption date, and then quarterly at an annual rate equal to the three-month LIBOR plus 2.938%.

Junior Subordinated Debentures As of December 31, 2023, the Company had outstanding $500 million of Series A 6.500% Fixed-to-Floating Rate Junior Subordinated Debentures (“Junior Subordinated Debentures”). The scheduled maturity date for the Debentures is May 15, 2057 with a final maturity date of May 15, 2067. The Junior Subordinated Debentures may be redeemed (i) in whole or in part, at any time on or after May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption, or (ii) in certain circumstances, in whole or in part, prior to May 15, 2037 at the principal amount plus accrued and unpaid interest to the date of redemption or, if greater, a make-whole price.

Interest on the Junior Subordinated Debentures is payable semi-annually at the stated fixed annual rate to May 15, 2037, and then payable quarterly at an annual rate equal to the three-month LIBOR plus 2.120%. The LIBOR Act guidance impacted the alternative rate methodology utilized by the Debentures. The Junior Subordinated Debentures replaced the three-month LIBOR with the CME Term SOFR Reference Rate published for a three-month tenor plus a spread adjustment of 0.26161%. The Company may elect at one or more times to defer payment of interest on the Junior Subordinated Debentures for one or more consecutive interest periods that do not exceed 10 years. Interest compounds during such deferral periods at the rate in effect for each period. The interest deferral feature obligates the Company in certain circumstances to issue common stock or certain other types of securities if it cannot otherwise raise sufficient funds to make the required interest payments. The Company has reserved 75 million shares of its authorized and unissued common stock to satisfy this obligation.

The terms of the Subordinated Debentures and Junior Subordinated Debentures prohibit the Company from declaring or paying any dividends or distributions on common or preferred stock or redeeming, purchasing, acquiring, or making liquidation payments on common stock or preferred stock if the Company has elected to defer interest payments on the Subordinated Debentures or Junior Subordinated Debentures, respectively, subject to certain limited exceptions.

In connection with the issuance of the Junior Subordinated Debentures, the Company entered into a replacement capital covenant (“RCC”). This covenant was not intended for the benefit of the holders of the Junior Subordinated Debentures and could not be enforced by them. Rather, it was for the benefit of holders of one or more other designated series of the Company’s indebtedness (“covered debt”), currently the $800 million Floating Rate Subordinated Debentures due in 2053. Pursuant to the RCC, the Company has agreed that it will not repay, redeem, or purchase the Junior Subordinated Debentures on or before May 15, 2067 (or such earlier date on which the RCC terminates by its terms) unless, subject to certain limitations, the Company has received net cash proceeds in specified amounts from the sale of common stock or certain other qualifying securities.

The promises and covenants contained in the RCC will not apply if (i) S&P upgrades the Company’s issuer credit rating to A or above, (ii) the Company redeems the Junior Subordinated Debentures due to a tax event, (iii) after notice of redemption has been given by the Company and a market disruption event occurs preventing the Company from raising proceeds in accordance with the RCC, or (iv) the Company repurchases or redeems up to 10% of the outstanding principal of the Junior Subordinated Debentures in any one-year period, provided that no more than 25% will be so repurchased, redeemed or purchased in any ten-year period.

The RCC terminates in 2067. The RCC will terminate prior to its scheduled termination date if (i) the Junior Subordinated Debentures are no longer outstanding and the Company has fulfilled its obligations under the RCC or it is no longer applicable, (ii) the holders of a majority of the then-outstanding principal amount of the then-effective series of covered debt consent to agree to the termination of the RCC, (iii) the Company does not have any series of outstanding debt that is eligible to be treated as covered debt under the RCC, (iv) the Junior Subordinated Debentures are accelerated as a result of an event of default, (v) certain rating agency or change in control events occur, (vi) S&P, or any successor thereto, no longer assigns a solicited rating on senior debt issued or guaranteed by the Company, or (vii) the termination of the RCC would have no effect on the equity credit provided by S&P with respect to the Junior Subordinated Debentures. An event of default, as defined by the supplemental indenture, includes default in the payment of interest or principal and bankruptcy proceedings.

Other capital resources To manage short-term liquidity, the Company maintains a commercial paper program and a credit facility as a potential source of funds. In November, 2020, the Company entered into a new unsecured revolving credit facility agreement with a borrowing limit of $750 million. In November 2022, the maturity date was extended to November 2027 and the USD benchmark rate was amended from LIBOR to SOFR. This facility contains an increase provision that would allow up to an additional $500 million of borrowing. This facility has a financial covenant requiring the Company not to exceed a 37.5% debt to capitalization ratio as defined in the agreement. Although the right to borrow under the facility is not subject to a minimum rating requirement, the costs of maintaining the facility and borrowing under it are based on the ratings of the Company’s senior unsecured, unguaranteed long-term debt. The total amount outstanding at any point in time under

the combination of the commercial paper program and the credit facility cannot exceed the amount that can be borrowed under the credit facility. No amounts were outstanding under the credit facility as of December 31, 2023 or 2022. The Company had no commercial paper outstanding as of December 31, 2023 or 2022.

The Company paid $355 million, $323 million and $321 million of interest on debt in 2023, 2022 and 2021, respectively.

The Company had $209 million and $371 million of investment-related debt that is reported in other liabilities and accrued expenses as of December 31, 2023 and 2022, respectively.

During 2021, the Company filed a universal shelf registration statement with the Securities and Exchange Commission (“SEC”) that expires in 2024. The registration statement covers an unspecified amount of securities and can be used to issue debt securities, common stock, preferred stock, depositary shares, warrants, stock purchase contracts, stock purchase units and securities of trust subsidiaries.

Common stock The Company had 900 million shares of issued common stock of which 262 million shares were outstanding and 638 million shares were held in treasury as of December 31, 2023. In 2023, the Company acquired 3 million shares at an average cost of $118.18 and reissued 2 million net shares under equity incentive plans.

Preferred stock All outstanding preferred stock represents noncumulative perpetual preferred stock with a $1.00 par value per share and a liquidation preference of $25,000 per share.

Redemption of preferred stock On April 17, 2023, the Company redeemed all 23,000 shares of Fixed Rate Noncumulative Preferred Stock, Series G, par value $1.00 per share and liquidation preference amount of $25,000 per share, and the corresponding depositary shares for a total redemption payment of $575 million. The Company recognized $18 million of original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity.

Issuance of preferred stock On May 18, 2023, the Company issued 24,000 shares of Fixed Rate Noncumulative Preferred Stock, Series J, par value $1.00 per share and liquidation preference amount of $25,000 per share, and the corresponding depositary shares for gross proceeds of $600 million.


Total preferred stock outstanding
	As of December 31,		Aggregate liquidation preference ($ in millions)						Dividend per depository share (1)						Aggregate dividend payment ($ in millions)
	2023	2022	2023		2022		Dividend rate		2023		2022		2021		2023			2022		2021





Series G (2)	—	23,000	$	—	$	575.0	5.625	%	$	0.70	$	1.41	$	1.41	$	16	(3)	$	32	$	32
Series H	46,000	46,000	1,150.0		1,150.0		5.100	%	1.28		1.28		1.28		59			59		59
Series I	12,000	12,000	300.0		300.0		4.750	%	1.19		1.19		1.19		14			14		14
Series J	24,000	—	600.0		—		7.375	%	0.75		—		—		18			—		—
National General Series (4)															—			—		9
Total	82,000	81,000	$	2,050	$	2,025									$	107		$	105	$	114

(1)Each depository share represents a 1/1,000th interest in a share of preferred stock.

(2)On April 17, 2023, the Company redeemed all outstanding shares of Preferred Stock Series G.

(3)Excludes $18 million related to original issuance costs in preferred stock dividends on the Consolidated Statements of Operations and Consolidated Statements of Shareholders’ Equity as a result of the preferred stock redemptions.

(4)On February 2, 2021 and July 15, 2021, the Company redeemed all outstanding shares of National General Series A, B and D, and National General Preferred Stock Series C, respectively.

The preferred stock ranks senior to the Company’s common stock with respect to the payment of dividends and liquidation rights. The Company will pay dividends on the preferred stock on a noncumulative basis only when, as and if declared by the Company’s board of directors (or a duly authorized committee of the board) and to the extent that the Company has legally available funds to pay dividends. If dividends are declared on the preferred stock, they will be payable quarterly in arrears at an annual fixed rate. Dividends on the preferred stock are not cumulative. Accordingly, in the event dividends are not declared on the preferred stock for payment on any dividend payment date, then those dividends will cease to be payable. If the Company has not declared a dividend before the dividend payment date for any dividend period, the Company has no obligation to pay dividends for that dividend period, whether or not dividends are declared for any future dividend period. No dividends may be paid or declared on the Company’s common stock and no shares of the Company’s common stock may be repurchased unless the full dividends for the latest completed dividend period on the preferred stock have been declared and paid or provided for.

The preferred stock does not have voting rights except with respect to certain changes in the terms of the preferred stock, in the case of certain dividend nonpayments, certain other fundamental corporate events, mergers or consolidations and as otherwise provided by law. If and when dividends have not been declared and paid in full for at least six quarterly dividend periods or their equivalent (whether or not consecutive), the authorized number of directors then constituting the Company’s board of directors will be increased by two. The holders of the preferred stock, together with the holders of all other affected classes and series of voting parity stock, voting as a single class, will be entitled to elect the two additional members of the board of directors of the Company, subject to certain conditions. The board of directors

shall at no time have more than two preferred stock directors.

The preferred stock is perpetual and has no maturity date. The preferred stock is redeemable at the Company’s option in whole or in part, on or after October 15, 2024 for Series H, January 15, 2025 for Series I and July 15, 2028 for Series J at a redemption price of $25,000 per share, plus declared and unpaid dividends. Prior to October 15, 2024 for Series H, January 15, 2025 for Series I and July 15, 2028 for Series J, the preferred stock is redeemable at the Company’s option, in whole but not in part, within 90 days after the occurrence of certain regulatory capital events at a redemption price equal to $25,000 per share or within 90 days after the occurrence of a certain rating agency event at a redemption price equal to $25,500 per share, plus declared and unpaid dividends for Series H, I and J, respectively.