EX-99.2

EX-99.2 3 d610764dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018


Table of Contents	Page
Investor Letter		3
Use of Non-GAAP Measures		4
Results of Operations and Selected Operating Performance Measures		5
Financial Highlights		6

*Consolidated Quarterly Results*
Consolidated Net Income by Quarter		8
Reconciliation of Net Income to Adjusted Operating Income		9
Consolidated Balance Sheets		10-11
Consolidated Balance Sheets by Segment		12-13
Deferred Acquisition Costs (DAC) Rollforward		14

*Quarterly Results by Business*
Adjusted Operating Income and Sales—U.S. Mortgage Insurance Segment		16-22
Adjusted Operating Income and Sales—Canada Mortgage Insurance Segment		24-27
Adjusted Operating Income (Loss) and Sales—Australia Mortgage Insurance Segment		29-32
Adjusted Operating Income (Loss)—U.S. Life Insurance Segment		34-37
Adjusted Operating Income—Runoff Segment		39
Adjusted Operating Income (Loss)—Corporate and Other Activities		41

*Additional Financial Data*
Investments Summary		43
Fixed Maturity Securities Summary		44
General Account U.S. GAAP Net Investment Income Yields		45
Net Investment Gains (Losses), Net—Detail		46

*Reconciliations of Non-GAAP Measures*
Reconciliation of Operating Return On Equity (ROE)		48
Reconciliation of Core Yield		49

*Corporate Information*
Financial Strength Ratings		51

Note:

Unless otherwise stated, all references in this financial supplement to income from continuing operations, income from continuing operations per share, net income, net income per share, adjusted operating income, adjusted operating income per share, book value and book value per share should be read as income from continuing operations available to Genworth Financial, Inc.’s common stockholders, income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share, net income available to Genworth Financial, Inc.’s common stockholders, net income available to Genworth Financial, Inc.’s common stockholders per share, non-U.S. Generally Accepted Accounting Principles (U.S. GAAP) adjusted operating income available to Genworth Financial, Inc.’s common stockholders, non-GAAP adjusted operating income available to Genworth Financial, Inc.’s common stockholders per share, book value available to Genworth Financial, Inc.’s common stockholders and book value available to Genworth Financial, Inc.’s common stockholders per share, respectively.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Dear Investor,

Thank you for your continued interest in Genworth Financial.

Regards,

Investor Relations

InvestorInfo@genworth.com

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Use of Non-GAAP Measures

This financial supplement includes the non-GAAP financial measures entitled “adjusted operating income (loss)” and “adjusted operating income (loss) per share.” Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The company defines adjusted operating income (loss) as income (loss) from continuing operations excluding the after-tax effects of income (loss) attributable to noncontrolling interests, net investment gains (losses), goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions, restructuring costs and infrequent or unusual non-operating items. Gains (losses) on insurance block transactions are defined as gains (losses) on the early extinguishment of non-recourse funding obligations, early termination fees for other financing restructuring and/or resulting gains (losses) on reinsurance restructuring for certain blocks of business. The company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the company’s segments and Corporate and Other activities. A component of the company’s net investment gains (losses) is the result of impairments, the size and timing of which can vary significantly depending on market credit cycles. In addition, the size and timing of other investment gains (losses) can be subject to the company’s discretion and are influenced by market opportunities, as well as asset-liability matching considerations. Goodwill impairments, gains (losses) on the sale of businesses, gains (losses) on the early extinguishment of debt, gains (losses) on insurance block transactions and restructuring costs are also excluded from adjusted operating income (loss) because, in the company’s opinion, they are not indicative of overall operating trends. Infrequent or unusual non-operating items are also excluded from adjusted operating income (loss) if, in the company’s opinion, they are not indicative of overall operating trends.

While some of these items may be significant components of net income (loss) available to Genworth Financial, Inc.’s common stockholders in accordance with U.S. GAAP, the company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. However, the items excluded from adjusted operating income (loss) have occurred in the past and could, and in some cases will, recur in the future. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Genworth Financial, Inc.’s common stockholders or net income (loss) available to Genworth Financial, Inc.’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.

On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was signed into law. The TCJA reduced the U.S. corporate federal income tax rate to 21% effective for taxable years beginning on January 1, 2018. Therefore, beginning in the first quarter of 2018, the company assumed a tax rate of 21% on certain adjustments to reconcile net income available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (unless otherwise indicated). In the prior year, the company assumed a tax rate of 35%, the previous U.S. corporate federal income tax rate prior to the enactment of the TCJA, on certain adjustments to reconcile net income available to Genworth Financial, Inc.’s common stockholders and adjusted operating income. These adjustments are also net of the portion attributable to noncontrolling interests and net investment gains (losses) are adjusted for DAC and other intangible amortization and certain benefit reserves (see page 46).

In the third and first quarters of 2017, the company recorded a pre-tax expense of $1 million related to restructuring costs as the company continued to evaluate and appropriately size its organizational needs and expenses. There were no infrequent or unusual items excluded from adjusted operating income during the periods presented.

The table on page 9 of this financial supplement provides a reconciliation of net income available to Genworth Financial, Inc.’s common stockholders to adjusted operating income for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. The financial supplement includes other non-GAAP measures management believes enhances the understanding and comparability of performance by highlighting underlying business activity and profitability drivers. These additional non-GAAP measures are on pages 48 and 49 of this financial supplement.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Results of Operations and Selected Operating Performance Measures

The company’s chief operating decision maker evaluates segment performance and allocates resources on the basis of adjusted operating income (loss). The table on page 9 of this financial supplement provides a reconciliation of net income available to Genworth Financial, Inc.’s common stockholders to adjusted operating income for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.

On December 22, 2017, the TCJA was signed into law. The TCJA reduced the U.S. corporate federal income tax rate to 21% effective for taxable years beginning on January 1, 2018 and migrated the worldwide tax system to a territorial international tax system. Therefore, beginning on January 1, 2018 the company taxed its international businesses at their local statutory tax rates and its domestic businesses at the new enacted tax rate of 21%. The company allocates its consolidated provision for income taxes to its operating segments. The allocation methodology applies a specific tax rate to the pre-tax income (loss) of each segment, which is then adjusted in each segment to reflect the tax attributes of items unique to that segment such as foreign income. The difference between the consolidated provision for income taxes and the sum of the provision for income taxes in each segment is reflected in Corporate and Other activities.

The annually-determined tax rates and adjustments to each segment’s provision for income taxes are estimates which are subject to review and could change from year to year.

This financial supplement contains selected operating performance measures including “sales” and “insurance in-force” or “risk in-force” which are commonly used in the insurance industry as measures of operating performance.

Management regularly monitors and reports sales metrics as a measure of volume of new business generated in a period. Sales refer to new insurance written for mortgage insurance. The company considers new insurance written to be a measure of the company’s operating performance because it represents a measure of new sales of insurance policies during a specified period, rather than a measure of the company’s revenues or profitability during that period.

Management regularly monitors and reports insurance in-force and risk in-force. Insurance in-force for the mortgage insurance businesses is a measure of the aggregate original loan balance for outstanding insurance policies as of the respective reporting date. Risk in-force for the U.S. mortgage insurance business is based on the coverage percentage applied to the estimated current outstanding loan balance. For risk in-force in the mortgage insurance businesses in Canada and Australia, the company has computed an “effective” risk in-force amount, which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor of 35% that represents the highest expected average per-claim payment for any one underwriting year over the life of the company’s mortgage insurance businesses in Canada and Australia. In Australia, the company has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor. The company considers insurance in-force and risk in-force to be measures of the company’s operating performance because they represent measures of the size of the business at a specific date which will generate revenues and profits in a future period, rather than measures of the company’s revenues or profitability during that period.

Management also regularly monitors and reports a loss ratio for the company’s businesses. For the mortgage insurance businesses, the loss ratio is the ratio of benefits and other changes in policy reserves to net earned premiums. For the long-term care insurance business, the loss ratio is the ratio of benefits and other changes in reserves less tabular interest on reserves less loss adjustment expenses to net earned premiums. The company considers the loss ratio to be a measure of underwriting performance in these businesses and helps to enhance the understanding of the operating performance of the businesses.

These operating performance measures enable the company to compare its operating performance across periods without regard to revenues or profitability related to policies or contracts sold in prior periods or from investments or other sources.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Financial Highlights

(amounts in millions, except per share data)


Balance Sheet Data	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income	$	10,583		$	10,391		$	10,391		$	10,034		$	9,923
Total accumulated other comprehensive income		2,327			2,627			3,027			3,035			3,095

Total Genworth Financial, Inc.’s stockholders’ equity	$	12,910		$	13,018		$	13,418		$	13,069		$	13,018

Book value per share	$	25.78		$	26.00		$	26.88		$	26.19		$	26.08
Book value per share, excluding accumulated other comprehensive income	$	21.14		$	20.76		$	20.82		$	20.10		$	19.88
Common shares outstanding as of the balance sheet date		500.7			500.6			499.2			499.1			499.1

	Twelve months ended
Twelve Month Rolling Average ROE	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
U.S. GAAP Basis ROE		7.4	%		7.7	%		8.2	%		3.5	%		-1.5	%
Operating ROE⁽¹⁾		7.1	%		6.7	%		7.0	%		2.4	%		-2.5	%

	Three months ended
Quarterly Average ROE	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
U.S. GAAP Basis ROE		7.2	%		4.3	%		13.8	%		4.3	%		8.2	%
Operating ROE⁽¹⁾		7.6	%		4.8	%		12.8	%		3.0	%		6.2	%


Basic and Diluted Shares	Three months ended June 30, 2018		Six months ended June 30, 2018
Weighted-average common shares used in basic earnings per share calculations		500.6		500.1
Potentially dilutive securities:
Stock options, restricted stock units and stock appreciation rights		2.0		2.5

Weighted-average common shares used in diluted earnings per share calculations		502.6		502.6

⁽¹⁾	See page 48 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

Consolidated Quarterly Results

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Consolidated Net Income by Quarter

(amounts in millions, except per share amounts)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q		1Q		Total
REVENUES:
Premiums	$	1,136		$	1,140		$	2,276		$	622		$	1,135		$	1,111	$	1,136	$	4,004
Net investment income		828			804			1,632			812			797			801		790		3,200
Net investment gains (losses)		(14	)		(31	)		(45	)		45			85			101		34		265
Policy fees and other income		209			202			411			207			198			210		211		826

Total revenues		2,159			2,115			4,274			1,686			2,215			2,223		2,171		8,295

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,205			1,311			2,516			1,383			1,344			1,206		1,246		5,179
Interest credited		152			156			308			152			164			163		167		646
Acquisition and operating expenses, net of deferrals		253			240			493			247			265			240		270		1,022
Amortization of deferred acquisition costs and intangibles		112			104			216			119			83			139		94		435
Interest expense		77			76			153			75			73			74		62		284

Total benefits and expenses		1,799			1,887			3,686			1,976			1,929			1,822		1,839		7,566

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		360			228			588			(290	)		286			401		332		729
Provision (benefit) for income taxes		111			63			174			(555	)		102			130		116		(207	)

INCOME FROM CONTINUING OPERATIONS		249			165			414			265			184			271		216		936
Loss from discontinued operations, net of taxes⁽¹⁾		—			—			—			—			(9	)		—		—		(9	)

NET INCOME		249			165			414			265			175			271		216		927
Less: net income (loss) attributable to noncontrolling interests		59			53			112			(88	)		68			69		61		110

NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	190		$	112		$	302		$	353		$	107		$	202	$	155	$	817

Earnings Per Share Data:
Income from continuing operations available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.38		$	0.22		$	0.60		$	0.71		$	0.23		$	0.40	$	0.31	$	1.66
Diluted	$	0.38		$	0.22		$	0.60		$	0.70		$	0.23		$	0.40	$	0.31	$	1.65
Net income available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.38		$	0.22		$	0.60		$	0.71		$	0.21		$	0.40	$	0.31	$	1.64
Diluted	$	0.38		$	0.22		$	0.60		$	0.70		$	0.21		$	0.40	$	0.31	$	1.63
Weighted-average common shares outstanding
Basic		500.6			499.6			500.1			499.2			499.1			499.0		498.6		499.0
Diluted		502.6			502.7			502.6			502.1			501.6			501.2		501.0		501.4

⁽¹⁾

Loss from discontinued operations related to the lifestyle protection insurance business that was sold on December 1, 2015. During the third quarter of 2017, the company recorded an additional after-tax loss of $9 million related to certain claims adjustments and tax items associated with the lifestyle protection insurance business.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Reconciliation of Net Income to Adjusted Operating Income

(amounts in millions, except per share amounts)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
NET INCOME AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	190		$	112		$	302		$	353		$	107		$	202		$	155		$	817
Add: net income (loss) attributable to noncontrolling interests		59			53			112			(88	)		68			69			61			110

NET INCOME		249			165			414			265			175			271			216			927
Loss from discontinued operations, net of taxes		—			—			—			—			(9	)		—			—			(9	)

INCOME FROM CONTINUING OPERATIONS		249			165			414			265			184			271			216			936
Less: income (loss) from continuing operations attributable to noncontrolling interests		59			53			112			(88	)		68			69			61			110

INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		190			112			302			353			116			202			155			826
ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		12			17			29			(41	)		(62	)		(79	)		(20	)		(202	)
Expenses related to restructuring		—			—			—			—			1			—			1			2
Taxes on adjustments		(2	)		(4	)		(6	)		14			21			28			7			70

ADJUSTED OPERATING INCOME	$	200		$	125		$	325		$	326		$	76		$	151		$	143		$	696


ADJUSTED OPERATING INCOME (LOSS):
U.S. Mortgage Insurance segment	$	137		$	111		$	248		$	74		$	73		$	91		$	73		$	311
Canada Mortgage Insurance segment		46			49			95			43			37			41			36			157
Australia Mortgage Insurance segment		22			19			41			(125	)		12			12			13			(88	)
U.S. Life Insurance segment:
Long-Term Care Insurance		22			(32	)		(10	)		17			(5	)		33			14			59
Life Insurance		4			(1	)		3			(85	)		(9	)		(1	)		16			(79	)
Fixed Annuities		31			28			59			(1	)		13			7			23			42

Total U.S. Life Insurance segment		57			(5	)		52			(69	)		(1	)		39			53			22

Runoff segment		13			10			23			13			13			11			14			51
Corporate and Other		(75	)		(59	)		(134	)		390			(58	)		(43	)		(46	)		243

ADJUSTED OPERATING INCOME	$	200		$	125		$	325		$	326		$	76		$	151		$	143		$	696


Earnings Per Share Data:
Net income available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.38		$	0.22		$	0.60		$	0.71		$	0.21		$	0.40		$	0.31		$	1.64
Diluted	$	0.38		$	0.22		$	0.60		$	0.70		$	0.21		$	0.40		$	0.31		$	1.63
Adjusted operating income per share
Basic	$	0.40		$	0.25		$	0.65		$	0.65		$	0.15		$	0.30		$	0.29		$	1.40
Diluted	$	0.40		$	0.25		$	0.65		$	0.65		$	0.15		$	0.30		$	0.29		$	1.39
Weighted-average common shares outstanding
Basic		500.6			499.6			500.1			499.2			499.1			499.0			498.6			499.0
Diluted		502.6			502.7			502.6			502.1			501.6			501.2			501.0			501.4

⁽¹⁾	Net investment (gains) losses were adjusted for the portion attributable to noncontrolling interests and DAC and other intangible amortization and certain benefit reserves (see page 46 for reconciliation).

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Consolidated Balance Sheets

(amounts in millions)


	June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value	$	60,032	$	61,080	$	62,525	$	62,552	$	61,944
Equity securities, at fair value		758		799		820		765		855
Commercial mortgage loans		6,480		6,336		6,341		6,268		6,237
Restricted commercial mortgage loans related to securitization entities		90		99		107		111		118
Policy loans		1,872		1,789		1,786		1,818		1,824
Other invested assets		1,650		1,674		1,813		1,590		2,177
Restricted other invested assets related to securitization entities		—		—		—		—		81

Total investments		70,882		71,777		73,392		73,104		73,236
Cash, cash equivalents and restricted cash		2,243		2,843		2,875		2,836		2,853
Accrued investment income		602		698		644		639		599
Deferred acquisition costs		3,086		2,699		2,329		2,342		2,378
Intangible assets and goodwill		354		339		301		315		334
Reinsurance recoverable		17,385		17,482		17,569		17,553		17,609
Other assets		574		431		453		552		715
Deferred tax asset		601		602		504		24		23
Separate account assets		6,750		6,902		7,230		7,264		7,269

Total assets	$	102,477	$	103,773	$	105,297	$	104,629	$	105,016

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Consolidated Balance Sheets

(amounts in millions)


	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	37,913		$	37,946		$	38,472		$	38,022		$	37,772
Policyholder account balances		23,366			23,751			24,195			24,531			24,971
Liability for policy and contract claims		9,665			9,651			9,594			9,384			9,239
Unearned premiums		3,669			3,797			3,967			3,512			3,400
Other liabilities		1,965			1,841			1,910			2,002			2,629
Borrowings related to securitization entities		28			32			40			59			63
Non-recourse funding obligations		310			310			310			310			310
Long-term borrowings		4,047			4,654			4,224			4,224			4,205
Deferred tax liability		23			27			27			234			162
Separate account liabilities		6,750			6,902			7,230			7,264			7,269

Total liabilities		87,736			88,911			89,969			89,542			90,020

Equity:
Common stock		1			1			1			1			1
Additional paid-in capital		11,981			11,979			11,977			11,973			11,969

Accumulated other comprehensive income (loss):
Net unrealized investment gains (losses):
Net unrealized gains (losses) on securities not other-than-temporarily impaired		726			905			1,075			1,098			1,170
Net unrealized gains (losses) on other-than-temporarily impaired securities		10			12			10			10			10

Net unrealized investment gains (losses)		736			917			1,085			1,108			1,180
Derivatives qualifying as hedges		1,863			1,927			2,065			2,052			2,064
Foreign currency translation and other adjustments		(272	)		(217	)		(123	)		(125	)		(149	)

Total accumulated other comprehensive income		2,327			2,627			3,027			3,035			3,095
Retained earnings		1,301			1,111			1,113			760			653
Treasury stock, at cost		(2,700	)		(2,700	)		(2,700	)		(2,700	)		(2,700	)

Total Genworth Financial, Inc.’s stockholders’ equity		12,910			13,018			13,418			13,069			13,018
Noncontrolling interests		1,831			1,844			1,910			2,018			1,978

Total equity		14,741			14,862			15,328			15,087			14,996

Total liabilities and equity	$	102,477		$	103,773		$	105,297		$	104,629		$	105,016

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Consolidated Balance Sheet by Segment

(amounts in millions)


	June 30, 2018
	U.S. Mortgage Insurance			Canada Mortgage Insurance			Australia Mortgage Insurance		U.S. Life Insurance		Runoff			Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,195		$	4,992		$	2,443	$	60,167	$	2,695		$	235		$	73,727
Deferred acquisition costs and intangible assets		47			138			84		2,942		221			8			3,440
Reinsurance recoverable		—			—			2		16,614		769			—			17,385
Deferred tax and other assets		151			125			167		202		37			493			1,175
Separate account assets		—			—			—		—		6,750			—			6,750

Total assets	$	3,393		$	5,255		$	2,696	$	79,925	$	10,472		$	736		$	102,477

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—		$	—		$	—	$	37,911	$	2		$	—		$	37,913
Policyholder account balances		—			—			—		20,384		2,982			—			23,366
Liability for policy and contract claims		352			83			206		9,008		9			7			9,665
Unearned premiums		418			1,576			1,146		524		5			—			3,669
Non-recourse funding obligations		—			—			—		310		—			—			310
Deferred tax and other liabilities		125			241			160		624		74			764			1,988
Borrowings and capital securities		—			330			146		—		—			3,599			4,075
Separate account liabilities		—			—			—		—		6,750			—			6,750

Total liabilities		895			2,230			1,658		68,761		9,822			4,370			87,736

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		2,523			1,955			465		8,577		654			(3,591	)		10,583
Allocated accumulated other comprehensive income (loss)		(25	)		(238	)		50		2,587		(4	)		(43	)		2,327

Total Genworth Financial, Inc.’s stockholders’ equity		2,498			1,717			515		11,164		650			(3,634	)		12,910
Noncontrolling interests		—			1,308			523		—		—			—			1,831

Total equity		2,498			3,025			1,038		11,164		650			(3,634	)		14,741

Total liabilities and equity	$	3,393		$	5,255		$	2,696	$	79,925	$	10,472		$	736		$	102,477

⁽¹⁾	Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Consolidated Balance Sheet by Segment

(amounts in millions)


	March 31, 2018
	U.S. Mortgage Insurance			Canada Mortgage Insurance			Australia Mortgage Insurance		U.S. Life Insurance			Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,089		$	5,057		$	2,543	$	60,984		$	2,749	$	896		$	75,318
Deferred acquisition costs and intangible assets		47			141			94		2,519			229		8			3,038
Reinsurance recoverable		—			—			—		16,697			785		—			17,482
Deferred tax and other assets		180			109			192		(267	)		18		801			1,033
Separate account assets		—			—			—		—			6,902		—			6,902

Total assets	$	3,316		$	5,307		$	2,829	$	79,933		$	10,683	$	1,705		$	103,773

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—		$	—		$	—	$	37,944		$	2	$	—		$	37,946
Policyholder account balances		—			—			—		20,765			2,986		—			23,751
Liability for policy and contract claims		415			84			211		8,921			13		7			9,651
Unearned premiums		411			1,606			1,240		535			5		—			3,797
Non-recourse funding obligations		—			—			—		310			—		—			310
Deferred tax and other liabilities		52			239			180		553			46		798			1,868
Borrowings and capital securities		—			336			152		—			—		4,198			4,686
Separate account liabilities		—			—			—		—			6,902		—			6,902

Total liabilities		878			2,265			1,783		69,028			9,954		5,003			88,911

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		2,453			1,929			444		8,099			727		(3,261	)		10,391
Allocated accumulated other comprehensive income (loss)		(15	)		(201	)		72		2,806			2		(37	)		2,627

Total Genworth Financial, Inc.’s stockholders’ equity		2,438			1,728			516		10,905			729		(3,298	)		13,018
Noncontrolling interests		—			1,314			530		—			—		—			1,844

Total equity		2,438			3,042			1,046		10,905			729		(3,298	)		14,862

Total liabilities and equity	$	3,316		$	5,307		$	2,829	$	79,933		$	10,683	$	1,705		$	103,773

⁽¹⁾	Includes inter-segment eliminations and other businesses that are managed outside the operating segments.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Deferred Acquisition Costs Rollforward

(amounts in millions)


	U.S. Mortgage Insurance			Canada Mortgage Insurance			Australia Mortgage Insurance			U.S. Life Insurance⁽¹⁾			Runoff⁽²⁾			Corporate and Other		Total
Unamortized balance as of March 31, 2018	$	28		$	125		$	47		$	3,513		$	214		$	—	$	3,927
Costs deferred		3			11			2			6			—			—		22
Amortization, net of interest accretion		(3	)		(9	)		(4	)		(74	)		(7	)		—		(97	)
Impact of foreign currency translation		—			(3	)		(2	)		—			—			—		(5	)

Unamortized balance as of June 30, 2018		28			124			43			3,445			207			—		3,847
Effect of accumulated net unrealized investment (gains) losses		—			—			—			(765	)		4			—		(761	)

Balance as of June 30, 2018	$	28		$	124		$	43		$	2,680		$	211		$	—	$	3,086

⁽¹⁾	Amortization, net of interest accretion, included $1 million of amortization related to net investment gains for the policyholder account balances.

⁽²⁾	Amortization, net of interest accretion, included $1 million of amortization related to net investment gains for the policyholder account balances.

U.S. Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income and Sales—U.S. Mortgage Insurance Segment

(amounts in millions)


	2018							2017
	2Q			1Q		Total		4Q		3Q		2Q		1Q		Total
REVENUES:
Premiums	$	184		$	179	$	363	$	181	$	175	$	170	$	169	$	695
Net investment income		23			21		44		20		18		18		17		73
Net investment gains (losses)		—			—		—		—		—		—		—		—
Policy fees and other income		1			—		1		1		1		1		1		4

Total revenues		208			200		408		202		194		189		187		772

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		(14	)		16		2		40		35		3		29		107
Acquisition and operating expenses, net of deferrals		45			39		84		41		43		41		40		165
Amortization of deferred acquisition costs and intangibles		3			4		7		4		3		3		4		14

Total benefits and expenses		34			59		93		85		81		47		73		286

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		174			141		315		117		113		142		114		486
Provision for income taxes		37			30		67		43		40		51		41		175

INCOME FROM CONTINUING OPERATIONS		137			111		248		74		73		91		73		311

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS:
Net investment (gains) losses		—			—		—		—		—		—		—		—
Taxes on adjustments		—			—		—		—		—		—		—		—

ADJUSTED OPERATING INCOME	$	137		$	111	$	248	$	74	$	73	$	91	$	73	$	311


SALES:
Flow New Insurance Written (NIW)	$	11,400		$	9,000	$	20,400	$	10,200	$	11,300	$	9,800	$	7,600	$	38,900

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Flow New Insurance Written Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2018										2017
	2Q					1Q					4Q					3Q					2Q					1Q
	Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW			Flow NIW		% of Flow NIW
Product
Monthly⁽¹⁾	$	9,700		85	%	$	7,300		81	%	$	7,900		77	%	$	8,600		76	%	$	7,900		81	%	$	6,100		80	%
Single		1,700		15			1,700		19			2,300		23			2,700		24			1,900		19			1,500		20

Total Flow	$	11,400		100	%	$	9,000		100	%	$	10,200		100	%	$	11,300		100	%	$	9,800		100	%	$	7,600		100	%

FICO Scores
Over 735	$	6,900		60	%	$	5,300		59	%	$	5,900		58	%	$	6,900		61	%	$	6,000		61	%	$	4,700		62	%
680-735		3,700		32			3,000		33			3,400		33			3,500		31			3,100		32			2,300		30
660-679⁽²⁾		400		4			400		5			500		5			500		4			400		4			300		4
620-659		400		4			300		3			400		4			400		4			300		3			300		4
<620		—		—			—		—			—		—			—		—			—		—			—		—

Total Flow	$	11,400		100	%	$	9,000		100	%	$	10,200		100	%	$	11,300		100	%	$	9,800		100	%	$	7,600		100	%

Loan-To-Value Ratio
95.01% and above	$	2,400		21	%	$	1,600		18	%	$	1,700		17	%	$	1,600		14	%	$	1,100		11	%	$	800		11	%
90.01% to 95.00%		4,900		43			3,900		43			4,500		44			5,200		46			4,700		48			3,500		46
85.01% to 90.00%		2,900		25			2,500		28			2,900		28			3,300		29			2,900		30			2,300		30
85.00% and below		1,200		11			1,000		11			1,100		11			1,200		11			1,100		11			1,000		13

Total Flow	$	11,400		100	%	$	9,000		100	%	$	10,200		100	%	$	11,300		100	%	$	9,800		100	%	$	7,600		100	%

Origination
Purchase	$	10,700		94	%	$	8,000		89	%	$	9,100		89	%	$	10,300		91	%	$	9,000		92	%	$	6,300		83	%
Refinance		700		6			1,000		11			1,100		11			1,000		9			800		8			1,300		17

Total Flow	$	11,400		100	%	$	9,000		100	%	$	10,200		100	%	$	11,300		100	%	$	9,800		100	%	$	7,600		100	%

⁽¹⁾	Includes loans with annual and split payment types.

⁽²⁾	Loans with unknown FICO scores are included in the 660-679 category.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Other Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	191		$	185		$	376		$	196		$	200		$	186		$	175		$	757

Flow New Risk Written	$	2,866		$	2,247		$	5,113		$	2,539		$	2,846		$	2,478		$	1,864		$	9,727

Primary Insurance In-Force⁽¹⁾	$	159,500		$	154,900					$	151,800		$	148,000		$	143,000		$	139,300
Risk In-Force
Flow⁽²⁾	$	38,433		$	37,252					$	36,498		$	35,567		$	34,286		$	33,347
Bulk⁽³⁾		195			202						212			252			257			266

Total Primary		38,628			37,454						36,710			35,819			34,543			33,613
Pool		75			80						83			86			92			96

Total Risk In-Force	$	38,703		$	37,534					$	36,793		$	35,905		$	34,635		$	33,709


Primary Risk In-Force That Is GSE Conforming		94	%		94	%					94	%		95	%		95	%		95	%

Expense Ratio (Net Earned Premiums)⁽⁴⁾		26	%		24	%		25	%		25	%		26	%		26	%		26	%		26	%

Expense Ratio (Net Premiums Written)⁽⁵⁾		25	%		23	%		24	%		23	%		23	%		24	%		25	%		24	%

Flow Persistency		83	%		84	%					83	%		83	%		82	%		83	%

Risk To Capital Ratio⁽⁶⁾		12.6:1			12.5:1						12.7:1			12.8:1			13.0:1			13.6:1

PMIERs Sufficiency Ratio⁽⁷⁾		129	%		124	%					121	%		122	%		122	%		118	%

Average Primary Loan Size (in thousands)	$	209		$	207					$	205		$	203		$	200		$	198

The expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾

Primary insurance in-force represents aggregate loan balances for outstanding insurance policies and is used to determine premiums. Original loan balances are presented for policies with level renewal premiums. Amortized loan balances are presented for policies with annual, amortizing renewal premiums.

⁽²⁾	Flow risk in-force represents current loan balances as provided by servicers, lenders and investors and conforms to the presentation under the Private Mortgage Insurer Eligibility Requirements (PMIERs).

⁽³⁾	As of June 30, 2018, 88% of the bulk risk in-force was related to loans financed by lenders who participated in the mortgage programs sponsored by the Federal Home Loan Banks.

⁽⁴⁾	The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁵⁾	The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁶⁾

Certain states limit a private mortgage insurer’s risk in-force to 25 times the total of the insurer’s policyholders’ surplus plus the statutory contingency reserve, commonly known as the “risk to capital” requirement. The current period risk to capital ratio is an estimate due to the timing of the filing of statutory statements and is prepared consistent with the presentation of the statutory financial statements in the combined annual statement of the U.S. mortgage insurance business.

⁽⁷⁾

The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within the current PMIERs. The current period PMIERs sufficiency ratio is an estimate due to the timing of the PMIERs filing for the U.S. mortgage insurance business. As of June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, the PMIERs sufficiency ratios were in excess of $700 million, $600 million, $550 million, $500 million, $500 million and $400 million, respectively, of available assets above the current PMIERs requirements. The PMIERs sufficiency ratio as of June 30, 2018, March 31, 2018 and December 31, 2017 was negatively impacted by approximately two, four and four points, respectively, by the increase in new delinquencies reported in the fourth quarter of 2017 in areas impacted by hurricanes Harvey and Irma.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Loss Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims
Flow
Direct⁽¹⁾	$	45		$	53		$	98		$	41		$	62		$	92		$	76		$	271
Assumed⁽²⁾		—			1			1			1			—			—			2			3
Ceded		—			(1	)		(1	)		—			—			—			(1	)		(1	)
Loss adjustment expenses		2			2			4			2			2			2			2			8

Total Flow		47			55			102			44			64			94			79			281
Bulk		—			1			1			1			1			1			1			4

Total Primary		47			56			103			45			65			95			80			285
Pool		1			—			1			—			1			1			—			2

Total Paid Claims	$	48		$	56		$	104		$	45		$	66		$	96		$	80		$	287


Average Paid Claim (in thousands)⁽¹⁾	$	43.1		$	47.5					$	51.0		$	50.6		$	46.6		$	51.2

Average Reserve Per Delinquency (in thousands)
Flow⁽³⁾	$	19.6		$	20.2					$	19.7		$	22.6		$	24.1		$	25.8
Bulk loans with established reserve	$	18.4		$	17.6					$	18.1		$	18.7		$	19.5		$	19.1

Reserves:
Flow direct case	$	314		$	372					$	408		$	412		$	440		$	530
Bulk direct case		8			8						10			11			12			12
Assumed⁽²⁾		2			2						3			3			4			4
All other⁽⁴⁾		28			33						34			34			34			37

Total Reserves	$	352		$	415					$	455		$	460		$	490		$	583


Beginning Reserves	$	415		$	455		$	455		$	460		$	490		$	583		$	635		$	635
Paid claims		(48	)		(57	)		(105	)		(45	)		(66	)		(96	)		(81	)		(288	)
Increase (decrease) in reserves		(15	)		17			2			40			36			3			29			108

Ending Reserves	$	352		$	415		$	352		$	455		$	460		$	490		$	583		$	455


Beginning Reinsurance Recoverable⁽⁵⁾	$	—		$	1		$	1		$	1		$	1		$	1		$	2		$	2
Ceded paid claims		—			(1	)		(1	)		—			—			—			(1	)		(1	)

Ending Reinsurance Recoverable	$	—		$	—		$	—		$	1		$	1		$	1		$	1		$	1

Loss Ratio⁽⁶⁾		(8	)%		9	%		—	%		22	%		20	%		2	%		17	%		15	%

The loss ratio included above was calculated using whole dollars and may be different than the ratio calculated using the rounded numbers included herein.

⁽¹⁾	Direct paid claims and average paid claim in the second quarter of 2017 included payments in relation to an agreement on non-performing loans.

⁽²⁾	Assumed is comprised of reinsurance arrangements with state governmental housing finance agencies.

⁽³⁾

Average reserve per delinquency in the fourth quarter of 2017 reflected a decrease in the hurricanes Harvey and Irma impacted areas. There were approximately three thousand new delinquencies in impacted areas. However, the company’s experience indicated that these delinquencies had different ultimate claim rates and, therefore, the company lowered its expected claim frequency for the incremental delinquencies.

⁽⁴⁾	Other includes loss adjustment expenses, pool and incurred but not reported reserves.

⁽⁵⁾	Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received.

⁽⁶⁾

The ratio of benefits and other changes in policy reserves to net earned premiums. During the second quarter of 2018, the company recorded a favorable reserve adjustment of $28 million, which reduced the loss ratio by 15 percentage points and eight percentage points for the three and six months ended June 30, 2018, respectively. The second quarter of 2017 also included a $15 million favorable reserve adjustment. The fourth quarter of 2017 reflected an increase in the hurricanes Harvey and Irma impacted areas, which negatively impacted benefits and other changes in policy reserves by approximately $5 million.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Delinquency Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Number of Primary Delinquencies
Flow⁽¹⁾		17,505			20,007						22,483			19,765			19,733			22,036
Bulk loans with an established reserve		445			494						614			631			653			695
Bulk loans with no reserve⁽²⁾		101			101						91			112			291			288

Total Number of Primary Delinquencies		18,051			20,602						23,188			20,508			20,677			23,019


Beginning Number of Primary Delinquencies		20,602			23,188			23,188			20,508			20,677			23,019			25,709			25,709
New delinquencies⁽¹⁾		7,049			8,409			15,458			11,979			8,753			7,776			8,456			36,964
Delinquency cures⁽¹⁾		(8,488	)		(9,840	)		(18,328	)		(8,419	)		(7,654	)		(8,085	)		(9,583	)		(33,741	)
Paid claims		(1,112	)		(1,155	)		(2,267	)		(880	)		(1,268	)		(2,033	)		(1,563	)		(5,744	)

Ending Number of Primary Delinquencies		18,051			20,602			18,051			23,188			20,508			20,677			23,019			23,188


Composition of Cures
Reported delinquent and cured-intraquarter		1,514			2,288						2,007			1,713			1,697			2,350
Number of missed payments delinquent prior to cure:
3 payments or less		4,568			5,413						4,547			4,104			4,285			5,375
4 - 11 payments		2,070			1,719						1,346			1,305			1,678			1,432
12 payments or more		336			420						519			532			425			426

Total⁽¹⁾		8,488			9,840						8,419			7,654			8,085			9,583


Primary Delinquencies by Missed Payment Status
3 payments or less		7,539			8,335						10,852			8,542			7,877			8,114
4 - 11 payments		5,657			6,875						6,319			5,420			5,520			6,341
12 payments or more		4,855			5,392						6,017			6,546			7,280			8,564

Primary Delinquencies⁽¹⁾		18,051			20,602						23,188			20,508			20,677			23,019



	June 30, 2018
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies			Direct Case Reserves⁽³⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		7,318		$	29		$	318			9	%
4 - 11 payments in default		5,556			104			260			40	%
12 payments or more in default		4,631			181			232			78	%

Total		17,505		$	314		$	810			39	%


	December 31, 2017
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies⁽¹⁾			Direct Case Reserves⁽³⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		10,594		$	46		$	474			10	%
4 - 11 payments in default		6,178			125			279			45	%
12 payments or more in default		5,711			237			281			84	%

Total		22,483		$	408		$	1,034			39	%

⁽¹⁾	The number of delinquencies, new delinquencies and delinquency cures in the fourth quarter of 2017 reflected increases in the hurricanes Harvey and Irma impacted areas.

⁽²⁾	Reserves were not established on loans where the company was in a secondary loss position due to an existing deductible and the company believes they currently have no risk for claim.

⁽³⁾	Direct flow case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment


	2018						2017
	2Q			1Q			4Q			3Q			2Q			1Q
Primary Loans
Primary loans in-force		762,727			749,145			742,094			730,174			714,254			703,214
Primary delinquent loans⁽¹⁾		18,051			20,602			23,188			20,508			20,677			23,019
Primary delinquency rate⁽¹⁾		2.37	%		2.75	%		3.12	%		2.81	%		2.89	%		3.27	%

Flow loans in-force		748,497			734,411			725,748			712,848			695,383			683,532
Flow delinquent loans⁽¹⁾		17,505			20,007			22,483			19,765			19,733			22,036
Flow delinquency rate⁽¹⁾		2.34	%		2.72	%		3.10	%		2.77	%		2.84	%		3.22	%

Bulk loans in-force		14,230			14,734			16,346			17,326			18,871			19,682
Bulk delinquent loans		546			595			705			743			944			983
Bulk delinquency rate		3.84	%		4.04	%		4.31	%		4.29	%		5.00	%		4.99	%

A minus and sub-prime loans in-force		16,928			17,964			18,912			19,828			20,797			22,056
A minus and sub-prime delinquent loans		3,058			3,557			4,054			4,080			4,148			4,572
A minus and sub-prime delinquency rate		18.06	%		19.80	%		21.44	%		20.58	%		19.95	%		20.73	%

Pool Loans
Pool loans in-force		4,774			4,961			5,039			5,145			5,406			5,586
Pool delinquent loans		204			220			249			252			276			276
Pool delinquency rate		4.27	%		4.43	%		4.94	%		4.90	%		5.11	%		4.94	%

Primary Risk In-Force by Credit Quality
Over 735		57	%		57	%		57	%		57	%		56	%		55	%
680-735		32	%		32	%		31	%		31	%		31	%		31	%
660-679⁽²⁾		5	%		5	%		6	%		6	%		6	%		6	%
620-659		5	%		5	%		5	%		5	%		5	%		6	%
<620		1	%		1	%		1	%		1	%		2	%		2	%

⁽¹⁾	Delinquent loans and delinquency rates in the fourth quarter of 2017 reflected increases in the hurricanes Harvey and Irma impacted areas.

⁽²⁾	Loans with unknown FICO scores are included in the 660-679 category.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	June 30, 2018
Policy Year	Average Rate⁽¹⁾			% of Total Reserves⁽²⁾			Primary Insurance In-Force		% of Total			Primary Risk In-Force		% of Total			Delinquency Rate
2004 and prior		6.02	%		9.7	%	$	1,900		1.2	%	$	361		0.9	%		12.34	%
2005		5.57	%		8.6			1,784		1.1			422		1.1			11.05	%
2006		5.71	%		14.0			3,383		2.1			791		2.0			10.38	%
2007		5.64	%		30.3			8,870		5.5			2,060		5.3			9.47	%
2008		5.16	%		15.0			7,355		4.6			1,693		4.4			5.80	%
2009		4.91	%		0.5			644		0.4			136		0.4			2.24	%
2010		4.64	%		0.6			755		0.5			175		0.5			2.17	%
2011		4.54	%		0.6			1,284		0.8			300		0.8			1.72	%
2012		3.85	%		0.9			3,468		2.2			838		2.2			1.11	%
2013		4.07	%		1.8			6,587		4.1			1,626		4.2			1.23	%
2014		4.44	%		3.9			10,472		6.6			2,548		6.6			1.57	%
2015		4.13	%		5.5			20,401		12.8			4,972		12.9			1.20	%
2016		3.87	%		5.6			35,993		22.6			8,704		22.5			0.78	%
2017		4.24	%		2.9			36,477		22.9			8,974		23.2			0.48	%
2018		4.59	%		0.1			20,165		12.6			5,028		13.0			0.06	%

Total		4.44	%		100.0	%	$	159,538		100.0	%	$	38,628		100.0	%		2.37	%


	June 30, 2018						March 31, 2018					June 30, 2017
	Primary Risk In-Force			Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate			Primary Risk In-Force		Primary Delinquency Rate
Lender concentration (by original applicant)	$	38,628			2.37	%	$	37,454		2.75	%	$	34,543		2.89	%
Top 10 lenders	$	11,249			2.83	%	$	10,935		3.29	%	$	10,348		3.52	%
Top 20 lenders	$	15,014			2.75	%	$	14,604		3.18	%	$	13,774		3.29	%

Loan-to-value ratio
95.01% and above	$	6,594			4.22	%	$	6,245		4.96	%	$	5,696		5.59	%
90.01% to 95.00%		20,088			1.75	%		19,474		2.06	%		17,776		1.98	%
80.01% to 90.00%		11,762			2.05	%		11,544		2.36	%		10,830		2.52	%
80.00% and below		184			2.81	%		191		2.89	%		241		3.21	%

Total	$	38,628			2.37	%	$	37,454		2.75	%	$	34,543		2.89	%

Loan grade
Prime	$	38,035			2.01	%	$	36,826		2.33	%	$	33,814		2.38	%
A minus and sub-prime		593			18.06	%		628		19.80	%		729		19.95	%

Total	$	38,628			2.37	%	$	37,454		2.75	%	$	34,543		2.89	%

⁽¹⁾	Average Annual Mortgage Interest Rate.

⁽²⁾	Total reserves were $352 million as of June 30, 2018.

Canada Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income and Sales—Canada Mortgage Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	131		$	139		$	270		$	136		$	131		$	126		$	126		$	519
Net investment income		34			34			68			36			33			31			32			132
Net investment gains (losses)		(15	)		(15	)		(30	)		15			55			47			11			128
Policy fees and other income		—			—			—			—			1			—			—			1

Total revenues		150			158			308			187			220			204			169			780

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		19			18			37			12			18			4			20			54
Acquisition and operating expenses, net of deferrals		20			17			37			23			20			16			21			80
Amortization of deferred acquisition costs and intangibles		11			10			21			11			11			11			10			43
Interest expense		4			5			9			5			4			5			4			18

Total benefits and expenses		54			50			104			51			53			36			55			195

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		96			108			204			136			167			168			114			585
Provision for income taxes		24			30			54			44			55			56			36			191

INCOME FROM CONTINUING OPERATIONS		72			78			150			92			112			112			78			394
Less: income from continuing operations attributable to noncontrolling interests		32			36			68			44			54			54			38			190

INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		40			42			82			48			58			58			40			204

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		8			9			17			(9	)		(32	)		(27	)		(6	)		(74	)
Expenses related to restructuring		—			—			—			—			1			—			—			1
Taxes on adjustments		(2	)		(2	)		(4	)		4			10			10			2			26

ADJUSTED OPERATING INCOME⁽²⁾	$	46		$	49		$	95		$	43		$	37		$	41		$	36		$	157


SALES:
New Insurance Written (NIW)
Flow	$	3,700		$	2,500		$	6,200		$	3,600		$	4,400		$	3,700		$	2,300		$	14,000
Bulk		900			900			1,800			800			600			800			8,000			10,200

Total Canada NIW⁽³⁾	$	4,600		$	3,400		$	8,000		$	4,400		$	5,000		$	4,500		$	10,300		$	24,200


⁽¹⁾ Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below:
Net investment (gains) losses, gross	$	15		$	15		$	30		$	(15	)	$	(55	)	$	(47	)	$	(11	)	$	(128	)
Adjustment for net investment gains (losses) attributable to noncontrolling interests		(7	)		(6	)		(13	)		6			23			20			5			54

Net investment (gains) losses, net	$	8		$	9		$	17		$	(9	)	$	(32	)	$	(27	)	$	(6	)	$	(74	)

⁽²⁾	Adjusted operating income for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $44 million and $90 million for the three and six months ended June 30, 2018, respectively.

⁽³⁾	New insurance written for the Canadian platform adjusted for foreign exchange as compared to the prior year period was $4,300 million and $7,600 million for the three and six months ended June 30, 2018, respectively.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	133		$	92		$	225		$	131		$	156		$	126		$	96		$	509
Loss Ratio⁽¹⁾		15	%		13	%		14	%		9	%		14	%		4	%		16	%		10	%
Expense Ratio (Net Earned Premiums)⁽²⁾		23	%		20	%		21	%		25	%		23	%		21	%		25	%		24	%
Expense Ratio (Net Premiums Written)⁽³⁾		23	%		30	%		26	%		26	%		20	%		21	%		32	%		24	%

Primary Insurance In-Force⁽⁴⁾	$	380,200		$	384,600					$	392,500		$	390,700		$	371,500		$	358,900
Primary Risk In-Force⁽⁵⁾
Flow	$	89,800		$	90,500					$	92,300		$	91,400		$	86,500		$	83,200
Bulk		43,300			44,100						45,100			45,300			43,500			42,400

Total	$	133,100		$	134,600					$	137,400		$	136,700		$	130,000		$	125,600



	June 30, 2018									March 31, 2018
Risk In-Force by Loan-To-Value Ratio⁽⁶⁾	Primary			Flow			Bulk			Primary			Flow			Bulk
95.01% and above	$	44,660		$	44,660		$	—		$	44,793		$	44,793		$	—
90.01% to 95.00%		26,612			26,612			—			26,869			26,869			—
80.01% to 90.00%		15,462			15,459			3			15,681			15,678			3
80.00% and below		46,352			3,082			43,270			47,252			3,136			44,116

Total	$	133,086		$	89,813		$	43,273		$	134,595		$	90,476		$	44,119

The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾	The ratio of benefits and other changes in policy reserves to net earned premiums.

⁽²⁾	The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽³⁾	The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles.

⁽⁴⁾

As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding balances in Canada from almost all of its customers. As a result, the company estimates that the outstanding balance of insured mortgages was approximately $162.0 billion, $168.0 billion, $174.0 billion, $178.0 billion, $174.0 billion and $170.0 billion as of June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017, June 30, 2017 and March 31, 2017, respectively. This is based on the extrapolation of the amounts reported by lenders to the entire insured population.

⁽⁵⁾

The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Canada has computed an “effective risk in-force” amount which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor that represents the highest expected average per-claim payment for any one underwriting year over the life of the business. This factor was 35% for all periods presented.

⁽⁶⁾	Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Insured loans in-force^(1),(2)		2,137,221			2,123,727			2,110,324			2,098,771			2,082,586
Insured delinquent loans		1,742			1,723			1,718			1,759			1,809
Insured delinquency rate^(2),(3)		0.08	%		0.08	%		0.08	%		0.08	%		0.09	%

Flow loans in-force⁽¹⁾		1,470,826			1,456,573			1,447,794			1,434,662			1,418,076
Flow delinquent loans		1,406			1,385			1,369			1,434			1,476
Flow delinquency rate⁽³⁾		0.10	%		0.10	%		0.09	%		0.10	%		0.10	%

Bulk loans in-force⁽¹⁾		666,395			667,154			662,530			664,109			664,510
Bulk delinquent loans		336			338			349			325			333
Bulk delinquency rate⁽³⁾		0.05	%		0.05	%		0.05	%		0.05	%		0.05	%

Loss Metrics	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Beginning Reserves	$	84		$	87		$	97		$	94		$	109
Paid claims⁽⁴⁾		(20	)		(19	)		(21	)		(19	)		(21	)
Increase in reserves		21			18			12			18			4
Impact of changes in foreign exchange rates		(2	)		(2	)		(1	)		4			2

Ending Reserves	$	83		$	84		$	87		$	97		$	94


	June 30, 2018						March 31, 2018						June 30, 2017
Province and Territory	% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate
Ontario		47	%		0.03	%		47	%		0.03	%		47	%		0.03	%
Alberta		16			0.17	%		16			0.17	%		16			0.19	%
British Columbia		14			0.04	%		15			0.04	%		15			0.06	%
Quebec		13			0.10	%		13			0.10	%		13			0.13	%
Saskatchewan		3			0.28	%		3			0.30	%		3			0.26	%
Nova Scotia		2			0.15	%		2			0.15	%		2			0.17	%
Manitoba		2			0.10	%		2			0.10	%		2			0.08	%
New Brunswick		1			0.15	%		1			0.17	%		1			0.12	%
All Other		2			0.20	%		1			0.19	%		1			0.16	%

Total		100	%		0.08	%		100	%		0.08	%		100	%		0.09	%


By Policy Year
2009 and prior		36	%		0.04	%		36	%		0.04	%		37	%		0.05	%
2010		5			0.12	%		5			0.12	%		5			0.15	%
2011		5			0.13	%		5			0.15	%		5			0.19	%
2012		6			0.18	%		6			0.18	%		7			0.20	%
2013		6			0.15	%		6			0.17	%		7			0.18	%
2014		8			0.16	%		8			0.16	%		8			0.16	%
2015		11			0.11	%		11			0.10	%		12			0.09	%
2016		13			0.08	%		14			0.07	%		14			0.04	%
2017		7			0.04	%		7			0.03	%		5			0.01	%
2018		3			—	%		2			—	%		—			—	%

Total		100	%		0.08	%		100	%		0.08	%		100	%		0.09	%

⁽¹⁾	Insured loans in-force represent the original number of loans insured for which the coverage term has not expired, and for which no policy level cancellation or termination has been received.

⁽²⁾

As part of an ongoing effort to improve the estimate of outstanding insurance exposure, the company is receiving updated outstanding loans in-force in Canada from almost all of its customers. As a result, the company estimates that the outstanding loans in-force were 935,000 as of June 30, 2018, 946,000 as of March 31, 2018, 949,000 as of December 31, 2017, 967,000 as of September 30, 2017 and 981,000 as of June 30, 2017. This is based on the extrapolation of the amounts reported by lenders to the entire insured population. The corresponding insured delinquency rate was 0.19% as of June 30, 2018 and 0.18% as of March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017.

⁽³⁾	Delinquency rates are based on insured loans in-force.

⁽⁴⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Canada Mortgage Insurance Segment

(Canadian dollar amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims⁽¹⁾
Flow	$	26		$	23		$	49		$	25		$	25		$	30		$	28		$	108
Bulk		1			2			3			2			1			2			3			8

Total Paid Claims	$	27		$	25		$	52		$	27		$	26		$	32		$	31		$	116


Average Paid Claim (in thousands)	$	79.4		$	68.5					$	68.8		$	66.6		$	73.6		$	65.3

Average Reserve Per Delinquency (in thousands)	$	62.5		$	62.7					$	63.5		$	68.8		$	67.8		$	69.7

Loss Metrics
Beginning Reserves	$	108		$	109		$	109		$	121		$	123		$	145		$	151		$	151
Paid claims⁽¹⁾		(27	)		(25	)		(52	)		(27	)		(26	)		(32	)		(31	)		(116	)
Increase in reserves		28			24			52			15			24			10			25			74

Ending Reserves	$	109		$	108		$	109		$	109		$	121		$	123		$	145		$	109

Loan Amount⁽²⁾

Over $550K		9	%		8	%					8	%		8	%		8	%		8	%
$400K to $550K		15			15						15			14			14			14
$250K to $400K		34			34						34			34			34			34
$100K to $250K		39			39						39			40			40			40
$100K or Less		3			4						4			4			4			4

Total		100	%		100	%					100	%		100	%		100	%		100	%


Average Primary Loan Size (in thousands)	$	234		$	233					$	233		$	232		$	231		$	230

All amounts presented in Canadian dollars.

⁽¹⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

⁽²⁾	The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force.

Australia Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss) and Sales—Australia Mortgage Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums⁽¹⁾	$	106		$	98		$	204		$	(377	)	$	78		$	78		$	81		$	(140	)
Net investment income		18			17			35			18			19			17			21			75
Net investment gains (losses)		12			(9	)		3			2			1			2			20			25
Policy fees and other income		—			1			1			—			—			—			—			—

Total revenues		136			107			243			(357	)		98			97			122			(40	)

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		29			30			59			25			29			27			28			109
Acquisition and operating expenses, net of deferrals		17			17			34			17			18			9			23			67
Amortization of deferred acquisition costs and intangibles⁽¹⁾		12			11			23			(7	)		10			17			4			24
Interest expense		2			2			4			2			3			2			2			9

Total benefits and expenses		60			60			120			37			60			55			57			209

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		76			47			123			(394	)		38			42			65			(249	)
Provision (benefit) for income taxes		23			14			37			(138	)		12			14			22			(90	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		53			33			86			(256	)		26			28			43			(159	)
Less: income (loss) from continuing operations attributable to noncontrolling interests		27			17			44			(132	)		14			15			23			(80	)

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		26			16			42			(124	)		12			13			20			(79	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽²⁾		(6	)		4			(2	)		(1	)		(1	)		—			(11	)		(13	)
Taxes on adjustments		2			(1	)		1			—			1			(1	)		4			4

ADJUSTED OPERATING INCOME (LOSS)^(1),(3)	$	22		$	19		$	41		$	(125	)	$	12		$	12		$	13		$	(88	)



SALES:
New Insurance Written (NIW)
Flow	$	3,700		$	3,400		$	7,100		$	4,200		$	3,700		$	4,100		$	4,100		$	16,100
Bulk		900			—			900			—			600			600			1,000			2,200

Total Australia NIW^(4),(5)	$	4,600		$	3,400		$	8,000		$	4,200		$	4,300		$	4,700		$	5,100		$	18,300

⁽¹⁾

In the fourth quarter of 2017, the Australian platform completed a review of its premium earnings pattern, which resulted in refinements to premium recognition factors. These refinements decreased premiums by $468 million and decreased amortization of deferred acquisition costs and intangibles by $18 million in the fourth quarter of 2017. After noncontrolling interests and taxes, these adjustments unfavorably impacted adjusted operating income (loss) by $141 million in the fourth quarter of 2017.

⁽²⁾	Net investment (gains) losses were adjusted for the portion of net investment gains (losses) attributable to noncontrolling interests as reconciled below:


Net investment (gains) losses, gross	$	(12	)	$	9		$	(3	)	$	(2	)	$	(1	)	$	(2	)	$	(20	)	$	(25	)
Adjustment for net investment gains (losses) attributable to noncontrolling interests		6			(5	)		1			1			—			2			9			12

Net investment (gains) losses, net	$	(6	)	$	4		$	(2	)	$	(1	)	$	(1	)	$	—		$	(11	)	$	(13	)

⁽³⁾	Adjusted operating income (loss) for the Australian platform adjusted for foreign exchange as compared to the prior year period was $22 million and $40 million for the three and six months ended June 30, 2018, respectively.

⁽⁴⁾	New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $4,600 million and $7,800 million for the three and six months ended June 30, 2018, respectively.

⁽⁵⁾	The business currently has structured insurance transactions with two lenders where it is in a secondary loss position. The new insurance written associated with these arrangements is excluded from these metrics.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	56		$	60		$	116		$	63		$	56		$	58		$	54		$	231
Loss Ratio⁽¹⁾		28	%		30	%		29	%		(7	)%		37	%		34	%		35	%		(79	)%
Expense Ratio (Net Earned Premiums)⁽²⁾		27	%		29	%		28	%		(3	)%		37	%		34	%		33	%		(65	)%
Expense Ratio (Net Premiums Written)⁽³⁾		50	%		47	%		48	%		15	%		51	%		46	%		49	%		39	%

Primary Insurance In-Force⁽⁴⁾	$	229,400		$	246,300					$	251,400		$	252,200		$	247,700		$	246,400
Primary Risk In-Force^(4),(5)
Flow	$	74,000		$	79,600					$	81,200		$	81,300		$	80,000		$	79,700
Bulk		5,900			6,100						6,300			6,400			6,200			6,000

Total	$	79,900		$	85,700					$	87,500		$	87,700		$	86,200		$	85,700



	June 30, 2018									March 31, 2018
Risk In-Force by Loan-To-Value Ratio^(4),(6)	Primary			Flow			Bulk			Primary			Flow			Bulk
95.01% and above	$	12,220		$	12,220		$	—		$	13,362		$	13,362		$	—
90.01% to 95.00%		21,953			21,948			5			23,489			23,483			6
80.01% to 90.00%		22,968			22,905			63			24,358			24,289			69
80.00% and below		22,710			16,913			5,797			24,510			18,436			6,074

Total	$	79,851		$	73,986		$	5,865		$	85,719		$	79,570		$	6,149

The loss and expense ratios included above were calculated using whole dollars and may be different than the ratios calculated using the rounded numbers included herein.

⁽¹⁾

The ratio of benefits and other changes in policy reserves to net earned premiums. During the fourth quarter of 2017, the company decreased net earned premiums $468 million from refinements to premium recognition factors from the review of its premium earnings pattern. This adjustment reduced the loss ratio by 35 percentage points and 112 percentage points for the three and twelve months ended December 31, 2017, respectively.

⁽²⁾

The ratio of an insurer’s general expenses to net earned premiums. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. During the fourth quarter of 2017, the company decreased net earned premiums $468 million and DAC amortization $18 million from refinements to premium recognition factors from the review of its premium earnings pattern. These adjustments reduced the expense ratio (net earned premiums) by 33 percentage points and 98 percentage points for the three and twelve months ended December 31, 2017, respectively.

⁽³⁾

The ratio of an insurer’s general expenses to net premiums written. In the business, general expenses consist of acquisition and operating expenses, net of deferrals, and amortization of DAC and intangibles. During the fourth quarter of 2017, the company decreased DAC amortization $18 million from refinements to premium recognition factors from the review of its premium earnings pattern. This adjustment reduced the expense ratio (net premiums written) by 29 percentage points and eight percentage points for the three and twelve months ended December 31, 2017, respectively.

⁽⁴⁾

The business currently has structured insurance transactions with two lenders where it is in a secondary loss position. The insurance in-force and risk in-force associated with these arrangements are excluded from these metrics. The risk in-force on these transactions was approximately $159 million and $160 million as of June 30, 2018 and March 31, 2018, respectively.

⁽⁵⁾

The business currently provides 100% coverage on the majority of the loans the company insures. For the purpose of representing the risk in-force, Australia has computed an “effective risk in-force” amount which recognizes that the loss on any particular loan will be reduced by the net proceeds received upon sale of the property. Effective risk in-force has been calculated by applying to insurance in-force a factor that represents the highest expected average per-claim payment for any one underwriting year over the life of the business. This factor was 35% for all periods presented. Australia also has certain risk share arrangements where it provides pro-rata coverage of certain loans rather than 100% coverage. As a result, for loans with these risk share arrangements, the applicable pro-rata coverage amount provided is used when applying the factor.

⁽⁶⁾	Loan amount in loan-to-value ratio calculation includes capitalized premiums, where applicable.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance⁽¹⁾	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Insured loans in-force		1,354,614			1,407,431			1,416,525			1,422,501			1,438,100
Insured delinquent loans		7,306			6,958			6,696			7,146			7,285
Insured delinquency rate		0.54	%		0.49	%		0.47	%		0.50	%		0.51	%

Flow loans in-force		1,247,229			1,296,055			1,303,928			1,308,998			1,325,477
Flow delinquent loans		7,076			6,735			6,476			6,912			7,007
Flow delinquency rate		0.57	%		0.52	%		0.50	%		0.53	%		0.53	%

Bulk loans in-force		107,385			111,376			112,597			113,503			112,623
Bulk delinquent loans		230			223			220			234			278
Bulk delinquency rate		0.21	%		0.20	%		0.20	%		0.21	%		0.25	%

Loss Metrics	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Beginning Reserves	$	211		$	218		$	232		$	231		$	227
Paid claims⁽²⁾		(25	)		(35	)		(41	)		(33	)		(30	)
Increase in reserves		29			31			27			29			33
Impact of changes in foreign exchange rates		(9	)		(3	)		—			5			1

Ending Reserves	$	206		$	211		$	218		$	232		$	231


	June 30, 2018						March 31, 2018						June 30, 2017
State and Territory⁽¹⁾	% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate			% of Primary Risk In-Force			Primary Delinquency Rate
New South Wales		28	%		0.37	%		28	%		0.33	%		28	%		0.32	%
Queensland		23			0.73	%		23			0.67	%		23			0.72	%
Victoria		23			0.42	%		23			0.39	%		23			0.41	%
Western Australia		12			0.99	%		12			0.88	%		12			0.86	%
South Australia		6			0.67	%		6			0.63	%		6			0.65	%
Australian Capital Territory		3			0.18	%		3			0.18	%		3			0.20	%
Tasmania		2			0.34	%		2			0.32	%		2			0.37	%
New Zealand		2			0.06	%		2			0.06	%		2			0.08	%
Northern Territory		1			0.61	%		1			0.52	%		1			0.44	%

Total		100	%		0.54	%		100	%		0.49	%		100	%		0.51	%


By Policy Year^(1),(3)
2009 and prior		43	%		0.49	%		44	%		0.45	%		46	%		0.48	%
2010		4			0.60	%		5			0.56	%		5			0.57	%
2011		5			0.75	%		5			0.65	%		5			0.71	%
2012		6			0.92	%		7			0.87	%		7			0.83	%
2013		7			0.87	%		8			0.77	%		8			0.74	%
2014		9			0.79	%		9			0.71	%		9			0.66	%
2015		8			0.59	%		8			0.47	%		9			0.37	%
2016		8			0.35	%		7			0.26	%		8			0.12	%
2017		7			0.11	%		6			0.06	%		3			—	%
2018		3			—	%		1			—	%		—			—	%

Total		100	%		0.54	%		100	%		0.49	%		100	%		0.51	%

⁽¹⁾	The business currently has structured insurance transactions with two lenders where it is in a secondary loss position. The loans in-force, including delinquent loans, and risk in-force associated with these arrangements are excluded from these metrics.

⁽²⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

⁽³⁾	Certain March 31, 2018 percentages of primary risk in-force by policy year have been re-presented to reflect an adjustment to the related risk in-force balance.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(Australian dollar amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims⁽¹⁾
Flow	$	33		$	44		$	77		$	51		$	42		$	40		$	33		$	166
Bulk		—			—			—			1			—			—			—			1

Total Paid Claims	$	33		$	44		$	77		$	52		$	42		$	40		$	33		$	167


Average Paid Claim (in thousands)	$	110.1		$	119.5					$	134.4		$	110.6		$	112.7		$	92.5

Average Reserve Per Delinquency (in thousands)	$	38.2		$	39.4					$	41.8		$	41.5		$	41.3		$	42.8

Loss Metrics
Beginning Reserves	$	274		$	280		$	280		$	297		$	301		$	297		$	293		$	293
Paid claims⁽¹⁾		(33	)		(44	)		(77	)		(52	)		(42	)		(40	)		(33	)		(167	)
Increase in reserves		38			38			76			35			38			44			37			154

Ending Reserves	$	279		$	274		$	279		$	280		$	297		$	301		$	297		$	280

Loan Amount^(2),(3)

Over $550K		17	%		17	%					17	%		17	%		16	%		16	%
$400K to $550K		21			20						20			20			20			20
$250K to $400K		34			35						35			35			35			35
$100K to $250K		23			23						23			23			24			24
$100K or Less		5			5						5			5			5			5

Total		100	%		100	%					100	%		100	%		100	%		100	%


Average Primary Loan Size (in thousands)⁽³⁾	$	229		$	228					$	227		$	226		$	224		$	223

All amounts presented in Australian dollars.

⁽¹⁾	Paid claims exclude adjustments for expected recoveries related to loss reserves and prior paid claims.

⁽²⁾	The percentages in this table are based on the amount of primary insurance in-force in each loan band as a percentage of total insurance in-force.

⁽³⁾	The business currently has structured insurance transactions with two lenders where it is in a secondary loss position. The loans in-force associated with these arrangements are excluded from these metrics.

U.S. Life Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	712		$	722		$	1,434		$	680		$	748		$	736		$	758		$	2,922
Net investment income		707			688			1,395			697			683			694			681			2,755
Net investment gains (losses)		(10	)		8			(2	)		43			27			57			7			134
Policy fees and other income		169			163			332			166			154			170			170			660

Total revenues		1,578			1,581			3,159			1,586			1,612			1,657			1,616			6,471

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,163			1,238			2,401			1,298			1,255			1,163			1,164			4,880
Interest credited		116			119			235			117			128			129			132			506
Acquisition and operating expenses, net of deferrals		146			141			287			122			149			144			157			572
Amortization of deferred acquisition costs and intangibles		78			71			149			107			50			101			70			328
Interest expense		4			4			8			4			3			3			3			13

Total benefits and expenses		1,507			1,573			3,080			1,648			1,585			1,540			1,526			6,299

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		71			8			79			(62	)		27			117			90			172
Provision (benefit) for income taxes		21			6			27			(23	)		10			41			32			60

INCOME (LOSS) FROM CONTINUING OPERATIONS		50			2			52			(39	)		17			76			58			112

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		9			(9	)		—			(45	)		(28	)		(57	)		(8	)		(138	)
Taxes on adjustments		(2	)		2			—			15			10			20			3			48

ADJUSTED OPERATING INCOME (LOSS)	$	57		$	(5	)	$	52		$	(69	)	$	(1	)	$	39		$	53		$	22


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	10		$	(8	)	$	2		$	(43	)	$	(27	)	$	(57	)	$	(7	)	$	(134	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		(1	)		(1	)		(2	)		(2	)		(1	)		—			(1	)		(4	)

Net investment (gains) losses, net	$	9		$	(9	)	$	—		$	(45	)	$	(28	)	$	(57	)	$	(8	)	$	(138	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Long-Term Care Insurance

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	632		$	631		$	1,263		$	595		$	641		$	623		$	634		$	2,493
Net investment income		399			382			781			386			369			369			356			1,480
Net investment gains (losses)		3			6			9			17			23			44			3			87
Policy fees and other income		1			1			2			1			—			—			1			2

Total revenues		1,035			1,020			2,055			999			1,033			1,036			994			4,062

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		874			928			1,802			853			896			821			835			3,405
Interest credited		—			—			—			—			—			—			—			—
Acquisition and operating expenses, net of deferrals		101			93			194			80			98			97			112			387
Amortization of deferred acquisition costs and intangibles		22			27			49			22			23			23			23			91
Interest expense		—			—			—			—			—			—			—			—

Total benefits and expenses		997			1,048			2,045			955			1,017			941			970			3,883

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		38			(28	)		10			44			16			95			24			179
Provision (benefit) for income taxes		14			(1	)		13			15			6			34			8			63

INCOME (LOSS) FROM CONTINUING OPERATIONS		24			(27	)		(3	)		29			10			61			16			116

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		(3	)		(6	)		(9	)		(17	)		(23	)		(44	)		(3	)		(87	)
Taxes on adjustments		1			1			2			5			8			16			1			30

ADJUSTED OPERATING INCOME (LOSS)	$	22		$	(32	)	$	(10	)	$	17		$	(5	)	$	33		$	14		$	59


RATIOS:
Loss Ratio⁽¹⁾		74.6	%		84.1	%		79.4	%		82.0	%		78.8	%		71.0	%		72.0	%		75.9	%
Gross Benefits Ratio⁽²⁾		137.7	%		147.2	%		142.5	%		143.3	%		139.8	%		131.8	%		131.6	%		136.6	%

⁽¹⁾	The loss ratio was calculated by dividing benefits and other changes in policy reserves less tabular interest on reserves less loss adjustment expenses by net earned premiums.

⁽²⁾	The gross benefits ratio was calculated by dividing benefits and other changes in policy reserves by net earned premiums.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Life Insurance

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	80		$	91		$	171		$	85		$	107		$	113		$	124		$	429
Net investment income		125			124			249			117			124			126			125			492
Net investment gains (losses)		(2	)		5			3			11			7			5			3			26
Policy fees and other income		164			159			323			161			151			167			165			644

Total revenues		367			379			746			374			389			411			417			1,591

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		225			247			472			324			280			248			261			1,113
Interest credited		60			61			121			55			63			62			63			243
Acquisition and operating expenses, net of deferrals		33			35			68			34			36			33			33			136
Amortization of deferred acquisition costs and intangibles		42			29			71			78			13			62			29			182
Interest expense		4			4			8			4			3			3			3			13

Total benefits and expenses		364			376			740			495			395			408			389			1,687

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		3			3			6			(121	)		(6	)		3			28			(96	)
Provision (benefit) for income taxes		1			—			1			(43	)		(2	)		1			10			(34	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		2			3			5			(78	)		(4	)		2			18			(62	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		2			(5	)		(3	)		(11	)		(7	)		(5	)		(3	)		(26	)
Taxes on adjustments		—			1			1			4			2			2			1			9

ADJUSTED OPERATING INCOME (LOSS)	$	4		$	(1	)	$	3		$	(85	)	$	(9	)	$	(1	)	$	16		$	(79	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss)—U.S. Life Insurance Segment—Fixed Annuities

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net investment income		183			182			365			194			190			199			200			783
Net investment gains (losses)		(11	)		(3	)		(14	)		15			(3	)		8			1			21
Policy fees and other income		4			3			7			4			3			3			4			14

Total revenues		176			182			358			213			190			210			205			818

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		64			63			127			121			79			94			68			362
Interest credited		56			58			114			62			65			67			69			263
Acquisition and operating expenses, net of deferrals		12			13			25			8			15			14			12			49
Amortization of deferred acquisition costs and intangibles		14			15			29			7			14			16			18			55
Interest expense		—			—			—			—			—			—			—			—

Total benefits and expenses		146			149			295			198			173			191			167			729

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		30			33			63			15			17			19			38			89
Provision for income taxes		6			7			13			5			6			6			14			31

INCOME FROM CONTINUING OPERATIONS		24			26			50			10			11			13			24			58

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		10			2			12			(17	)		2			(8	)		(2	)		(25	)
Taxes on adjustments		(3	)		—			(3	)		6			—			2			1			9

ADJUSTED OPERATING INCOME (LOSS)	$	31		$	28		$	59		$	(1	)	$	13		$	7		$	23		$	42


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	11		$	3		$	14		$	(15	)	$	3		$	(8	)	$	(1	)	$	(21	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		(1	)		(1	)		(2	)		(2	)		(1	)		—			(1	)		(4	)

Net investment (gains) losses, net	$	10		$	2		$	12		$	(17	)	$	2		$	(8	)	$	(2	)	$	(25	)

Runoff Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income—Runoff Segment

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Net investment income	$	43		$	42		$	85		$	41		$	40		$	41		$	38		$	160
Net investment gains (losses)		(1	)		(14	)		(15	)		(8	)		9			7			8			16
Policy fees and other income		38			40			78			40			41			41			41			163

Total revenues		80			68			148			73			90			89			87			339

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		7			8			15			8			5			9			4			26
Interest credited		36			37			73			35			36			34			35			140
Acquisition and operating expenses, net of deferrals		14			15			29			14			16			16			15			61
Amortization of deferred acquisition costs and intangibles		8			7			15			4			7			7			6			24
Interest expense		—			—			—			1			—			1			—			2

Total benefits and expenses		65			67			132			62			64			67			60			253

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		15			1			16			11			26			22			27			86
Provision for income taxes		3			—			3			2			8			7			8			25

INCOME FROM CONTINUING OPERATIONS		12			1			13			9			18			15			19			61

ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		1			12			13			7			(8	)		(7	)		(7	)		(15	)
Taxes on adjustments		—			(3	)		(3	)		(3	)		3			3			2			5

ADJUSTED OPERATING INCOME	$	13		$	10		$	23		$	13		$	13		$	11		$	14		$	51


⁽¹⁾ Net investment (gains) losses were adjusted for DAC and other intangible amortization and certain benefit reserves as reconciled below:
Net investment (gains) losses, gross	$	1		$	14		$	15		$	8		$	(9	)	$	(7	)	$	(8	)	$	(16	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		—			(2	)		(2	)		(1	)		1			—			1			1

Net investment (gains) losses, net	$	1		$	12		$	13		$	7		$	(8	)	$	(7	)	$	(7	)	$	(15	)

Corporate and Other

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Adjusted Operating Income (Loss)—Corporate and Other⁽¹⁾

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	3		$	2		$	5		$	2		$	3		$	1		$	2		$	8
Net investment income		3			2			5			—			4			—			1			5
Net investment gains (losses)		—			(1	)		(1	)		(7	)		(7	)		(12	)		(12	)		(38	)
Policy fees and other income		1			(2	)		(1	)		—			1			(2	)		(1	)		(2	)

Total revenues		7			1			8			(5	)		1			(13	)		(10	)		(27	)

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1			1			2			—			2			—			1			3
Acquisition and operating expenses, net of deferrals		11			11			22			30			19			14			14			77
Amortization of deferred acquisition costs and intangibles		—			1			1			—			2			—			—			2
Interest expense		67			65			132			63			63			63			53			242

Total benefits and expenses		79			78			157			93			86			77			68			324

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(72	)		(77	)		(149	)		(98	)		(85	)		(90	)		(78	)		(351	)
Provision (benefit) for income taxes		3			(17	)		(14	)		(483	)		(23	)		(39	)		(23	)		(568	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		(75	)		(60	)		(135	)		385			(62	)		(51	)		(55	)		217

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		—			1			1			7			7			12			12			38
Expenses related to restructuring		—			—			—			—			—			—			1			1
Taxes on adjustments		—			—			—			(2	)		(3	)		(4	)		(4	)		(13	)

ADJUSTED OPERATING INCOME (LOSS)	$	(75	)	$	(59	)	$	(134	)	$	390		$	(58	)	$	(43	)	$	(46	)	$	243

⁽¹⁾	Includes inter-segment eliminations and the results of other businesses that are managed outside the operating segments, including certain smaller international mortgage insurance businesses.

Additional Financial Data

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Investments Summary

(amounts in millions)


		June 30, 2018						March 31, 2018					December 31, 2017					September 30, 2017					June 30, 2017
		Carrying Amount			% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total			Carrying Amount		% of Total
Composition of Investment Portfolio
Fixed maturity securities:
Investment grade:
Public fixed maturity securities		$	32,813			45	%	$	33,438		45	%	$	34,281		45	%	$	34,315		45	%	$	33,699		44	%
Private fixed maturity securities			12,362			17			12,278		16			12,504		16			12,354		16			12,058		16
Residential mortgage-backed securities⁽¹⁾			3,522			5			3,780		5			4,000		6			4,148		6			4,257		6
Commercial mortgage-backed securities			3,340			5			3,332		4			3,426		5			3,393		5			3,387		5
Other asset-backed securities			2,950			4			3,067		4			3,060		4			3,057		4			3,181		4
State and political subdivisions			2,855			4			2,876		4			2,926		4			2,860		4			2,805		4
Non-investment grade fixed maturity securities			2,190			3			2,309		3			2,328		3			2,425		3			2,557		3
Equity securities:
Common stocks and mutual funds			164			—			210		1			229		—			211		—			219		—
Preferred stocks			594			1			589		1			591		1			554		1			636		1
Commercial mortgage loans			6,480			9			6,336		8			6,341		8			6,268		8			6,237		8
Restricted commercial mortgage loans related to securitization entities			90			—			99		—			107		—			111		—			118		—
Policy loans			1,872			3			1,789		2			1,786		3			1,818		3			1,824		2
Cash, cash equivalents, restricted cash and short-term investments			2,951			4			3,605		5			3,777		5			3,623		5			3,799		5
Securities lending			211			—			252		1			268		—			237		—			226		1
Other invested assets:	Limited partnerships		335			—			301		1			258		—			244		—			240		—
	Derivatives:
	Long-term care (LTC) forward starting swap—cash flow		191			—			54		—			74		—			70		—			243		—
	Other cash flow		2			—			114		—			1		—			2		—			2		—
	Equity index options—non-qualified		70			—			60		—			80		—			81		—			81		—
	Other non-qualified		(33	)		—			1		—			121		—			108		—			418		1
	Restricted other invested assets related to securitization entities		—			—			—		—			—		—			—		—			81		—
	Other		166			—			130		—			109		—			61		—			21		—

Total invested assets and cash		$	73,125			100	%	$	74,620		100	%	$	76,267		100	%	$	75,940		100	%	$	76,089		100	%

Public Fixed Maturity Securities—Credit Quality:
NRSRO⁽²⁾ Designation
AAA		$	12,269			29	%	$	12,673		29	%	$	13,248		29	%	$	13,494		30	%	$	13,541		30	%
AA			4,428			10			4,409		10			4,380		10			4,221		9			4,244		9
A			12,174			28			12,637		28			13,261		29			13,328		29			13,044		29
BBB			12,929			30			13,164		30			13,271		29			13,262		29			12,972		29
BB			1,221			3			1,328		3			1,356		3			1,413		3			1,476		3
B			123			—			126		—			109		—			115		—			114		—
CCC and lower			31			—			40		—			40		—			49		—			60		—

Total public fixed maturity securities		$	43,175			100	%	$	44,377		100	%	$	45,665		100	%	$	45,882		100	%	$	45,451		100	%

Private Fixed Maturity Securities—Credit Quality:
NRSRO⁽²⁾ Designation
AAA		$	2,045			12	%	$	1,973		12	%	$	1,848		11	%	$	1,818		11	%	$	1,753		11	%
AA			2,156			13			2,125		13			2,148		13			2,039		12			2,023		12
A			4,750			28			4,731		28			4,856		29			4,835		29			4,957		30
BBB			7,091			42			7,059		42			7,185		43			7,130		43			6,853		42
BB			733			4			762		5			765		4			801		5			854		5
B			80			1			51		—			48		—			38		—			40		—
CCC and lower			2			—			2		—			10		—			9		—			13		—

Total private fixed maturity securities		$	16,857			100	%	$	16,703		100	%	$	16,860		100	%	$	16,670		100	%	$	16,493		100	%

⁽¹⁾	The company does not have any material exposure to residential mortgage-backed securities collateralized debt obligations (CDOs).

⁽²⁾	Nationally Recognized Statistical Rating Organizations.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Fixed Maturity Securities Summary

(amounts in millions)


	June 30, 2018					March 31, 2018					December 31, 2017					September 30, 2017					June 30, 2017
	Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total			Fair Value		% of Total
Fixed Maturity Securities—Security Sector:
U.S. government, agencies and government-sponsored enterprises	$	5,353		9	%	$	5,398		9	%	$	5,548		9	%	$	5,670		9	%	$	5,629		9	%
State and political subdivisions		2,855		5			2,876		5			2,926		5			2,860		5			2,806		4
Foreign government		2,380		4			2,299		4			2,233		4			2,226		4			2,091		3
U.S. corporate		27,569		46			27,998		46			28,636		46			28,482		45			28,071		47
Foreign corporate		12,002		20			12,257		20			12,611		20			12,623		20			12,430		20
Residential mortgage-backed securities		3,567		6			3,836		6			4,057		6			4,209		7			4,319		7
Commercial mortgage-backed securities		3,349		5			3,342		5			3,446		5			3,414		5			3,406		5
Other asset-backed securities		2,957		5			3,074		5			3,068		5			3,068		5			3,192		5

Total fixed maturity securities	$	60,032		100	%	$	61,080		100	%	$	62,525		100	%	$	62,552		100	%	$	61,944		100	%

Corporate Bond Holdings—Industry Sector:
Investment Grade:
Finance and insurance	$	8,616		22	%	$	8,934		22	%	$	9,064		22	%	$	9,062		22	%	$	8,961		22	%
Utilities		5,785		15			5,800		15			5,951		15			5,920		14			5,832		14
Energy		3,310		8			3,381		8			3,442		8			3,360		8			3,151		8
Consumer—non-cyclical		5,042		13			5,124		13			5,363		13			5,385		13			5,346		13
Consumer—cyclical		1,875		5			1,866		5			1,973		5			1,950		5			1,907		5
Capital goods		2,815		7			2,838		7			2,837		7			2,753		7			2,706		7
Industrial		2,028		5			2,089		5			2,143		5			2,141		5			2,093		5
Technology and communications		3,346		8			3,329		8			3,422		8			3,336		8			3,302		8
Transportation		1,973		5			1,943		5			2,001		5			1,993		5			1,853		4
Other		2,836		7			2,909		7			3,001		7			3,066		8			3,077		8

Subtotal		37,626		95			38,213		95			39,197		95			38,966		95			38,228		94

Non-Investment Grade:
Finance and insurance		196		—			201		1			199		1			221		1			219		1
Utilities		56		—			77		—			64		—			65		—			69		—
Energy		359		1			456		1			506		1			543		1			653		2
Consumer—non-cyclical		201		1			224		1			180		1			159		—			182		—
Consumer—cyclical		220		1			176		—			172		—			188		1			186		1
Capital goods		157		—			173		—			163		—			155		—			155		—
Industrial		232		1			219		1			247		1			263		1			266		1
Technology and communications		442		1			418		1			405		1			418		1			416		1
Transportation		6		—			17		—			11		—			31		—			30		—
Other		76		—			81		—			103		—			96		—			97		—

Subtotal		1,945		5			2,042		5			2,050		5			2,139		5			2,273		6

Total	$	39,571		100	%	$	40,255		100	%	$	41,247		100	%	$	41,105		100	%	$	40,501		100	%

Fixed Maturity Securities—Contractual Maturity Dates:
Due in one year or less	$	1,701		3	%	$	1,677		3	%	$	1,738		3	%	$	1,966		3	%	$	1,906		3	%
Due after one year through five years		11,149		19			11,146		18			11,197		18			11,333		18			10,967		18
Due after five years through ten years		12,601		21			12,876		21			12,865		20			12,933		21			12,722		21
Due after ten years		24,708		41			25,129		41			26,154		42			25,629		41			25,432		41

Subtotal		50,159		84			50,828		83			51,954		83			51,861		83			51,027		83
Mortgage and asset-backed securities		9,873		16			10,252		17			10,571		17			10,691		17			10,917		17

Total fixed maturity securities	$	60,032		100	%	$	61,080		100	%	$	62,525		100	%	$	62,552		100	%	$	61,944		100	%

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

General Account U.S. GAAP Net Investment Income Yields

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
U.S. GAAP Net Investment Income
Fixed maturity securities—taxable	$	651		$	635		$	1,286		$	648		$	640		$	649		$	641		$	2,578
Fixed maturity securities—non-taxable		3			3			6			3			3			3			3			12
Commercial mortgage loans		77			82			159			75			78			76			77			306
Restricted commercial mortgage loans related to securitization entities		2			2			4			2			3			2			2			9
Equity securities		10			10			20			10			9			9			8			36
Other invested assets		42			37			79			39			35			30			31			135
Limited partnerships		11			2			13			12			4			5			1			22
Restricted other invested assets related to securitization entities		—			—			—			—			—			1			—			1
Policy loans		41			43			84			33			39			39			42			153
Cash, cash equivalents, restricted cash and short-term investments		14			12			26			10			10			10			6			36

Gross investment income before expenses and fees		851			826			1,677			832			821			824			811			3,288
Expenses and fees		(23	)		(22	)		(45	)		(20	)		(24	)		(23	)		(21	)		(88	)

Net investment income	$	828		$	804		$	1,632		$	812		$	797		$	801		$	790		$	3,200

Annualized Yields
Fixed maturity securities—taxable		4.5	%		4.4	%		4.5	%		4.5	%		4.5	%		4.6	%		4.5	%		4.5	%
Fixed maturity securities—non-taxable		3.8	%		3.7	%		3.8	%		3.7	%		3.7	%		3.7	%		3.7	%		3.7	%
Commercial mortgage loans		4.8	%		5.2	%		5.0	%		4.8	%		5.0	%		4.9	%		5.0	%		4.9	%
Restricted commercial mortgage loans related to securitization entities		8.4	%		7.8	%		8.1	%		7.3	%		10.5	%		6.7	%		6.4	%		7.7	%
Equity securities		5.1	%		5.1	%		5.2	%		5.4	%		5.1	%		5.3	%		4.9	%		5.2	%
Other invested assets		150.0	%		129.8	%		131.7	%		167.7	%		1251.7	%		601.0	%		81.1	%		132.4	%
Limited partnerships⁽¹⁾		13.8	%		2.9	%		8.7	%		19.1	%		6.6	%		8.6	%		1.9	%		9.4	%
Restricted other invested assets related to securitization entities		—	%		—	%		—	%		—	%		—	%		4.8	%		—	%		1.1	%
Policy loans		9.0	%		9.6	%		9.3	%		7.3	%		8.6	%		8.7	%		9.6	%		8.6	%
Cash, cash equivalents, restricted cash and short-term investments		1.7	%		1.3	%		1.5	%		1.1	%		1.1	%		1.0	%		0.7	%		1.0	%

Gross investment income before expenses and fees		4.8	%		4.8	%		4.8	%		4.7	%		4.7	%		4.7	%		4.7	%		4.7	%
Expenses and fees		-0.1	%		-0.2	%		-0.2	%		-0.1	%		-0.2	%		-0.1	%		-0.2	%		-0.1	%

Net investment income		4.7	%		4.6	%		4.6	%		4.6	%		4.5	%		4.6	%		4.5	%		4.6	%

Yields are based on net investment income as reported under U.S. GAAP and are consistent with how the company measures its investment performance for management purposes. Yields are annualized, for interim periods, and are calculated as net investment income as a percentage of average quarterly asset carrying values except for fixed maturity and equity securities, derivatives and derivative counterparty collateral, which exclude unrealized fair value adjustments and securities lending activity, which is included in other invested assets and is calculated net of the corresponding securities lending liability. See page 49 herein for average invested assets and cash used in the yield calculation.

⁽¹⁾	Limited partnership investments are equity-based and do not have fixed returns by period.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Net Investment Gains (Losses), Net—Detail

(amounts in millions)


	2018									2017
	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net realized gains (losses) on available-for-sale securities:
Fixed maturity securities:
U.S. corporate	$	(7	)	$	(3	)	$	(10	)	$	38		$	27		$	56		$	15		$	136
U.S. government, agencies and government-sponsored enterprises		—			—			—			1			—			1			(10	)		(8	)
Foreign corporate		(2	)		(3	)		(5	)		1			(2	)		3			20			22
Foreign government		—			—			—			—			(1	)		1			2			2
Mortgage-backed securities		2			(2	)		—			(1	)		—			—			—			(1	)
Asset-backed securities		(1	)		—			(1	)		(1	)		—			(8	)		(5	)		(14	)
Equity securities⁽¹⁾		—			—			—			2			3			—			2			7
Foreign exchange		—			(1	)		(1	)		1			3			10			5			19

Total net realized gains (losses) on available-for-sale securities		(8	)		(9	)		(17	)		41			30			63			29			163

Impairments:
Corporate fixed maturity securities		—			—			—			—			—			—			(1	)		(1	)
Limited partnerships		—			—			—			(1	)		—			(1	)		—			(2	)
Equity securities		—			—			—			(1	)		(1	)		(1	)		—			(3	)

Total impairments		—			—			—			(2	)		(1	)		(2	)		(1	)		(6	)

Net realized gains (losses) on equity securities sold⁽¹⁾		8			2			10			—			—			—			—			—
Net unrealized gains (losses) on equity securities still held⁽¹⁾		3			(18	)		(15	)		—			—			—			—			—
Trading securities		—			—			—			—			—			1			—			1
Limited partnerships		(2	)		7			5			—			—			—			—			—
Commercial mortgage loans held-for-sale market valuation allowance		—			—			—			—			1			1			1			3
Net gains (losses) related to securitization entities		—			—			—			2			1			2			2			7
Derivative instruments		(15	)		(13	)		(28	)		4			54			36			3			97

Net investment gains (losses), gross		(14	)		(31	)		(45	)		45			85			101			34			265
Adjustment for DAC and other intangible amortization and certain benefit reserves		1			3			4			3			—			—			—			3
Adjustment for net investment (gains) losses attributable to noncontrolling interests		1			11			12			(7	)		(23	)		(22	)		(14	)		(66	)

Net investment gains (losses), net	$	(12	)	$	(17	)	$	(29	)	$	41		$	62		$	79		$	20		$	202

⁽¹⁾	The change in the classification of equity securities related to the impact of adopting new accounting guidance related to the recognition and measurement of financial assets and financial liabilities on January 1, 2018.

Reconciliations of Non-GAAP Measures

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Reconciliation of Operating ROE

(amounts in millions)


Twelve Month Rolling Average ROE	Twelve months ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
U.S. GAAP Basis ROE
Net income (loss) available to Genworth Financial, Inc.’s common stockholders for the twelve months ended⁽¹⁾	$	762		$	774		$	817		$	342		$	(145	)
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss)⁽²⁾	$	10,264		$	10,091		$	9,923		$	9,778		$	9,781
U.S. GAAP Basis ROE ^(1)/(2)		7.4	%		7.7	%		8.2	%		3.5	%		-1.5	%

Operating ROE
Adjusted operating income (loss) for the twelve months ended⁽¹⁾	$	727		$	678		$	696		$	233		$	(248	)
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss)⁽²⁾	$	10,264		$	10,091		$	9,923		$	9,778		$	9,781
Operating ROE ^(1)/(2)		7.1	%		6.7	%		7.0	%		2.4	%		-2.5	%

Quarterly Average ROE	Three months ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
U.S. GAAP Basis ROE
Net income available to Genworth Financial, Inc.’s common stockholders for the period ended⁽³⁾	$	190		$	112		$	353		$	107		$	202
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income (loss)⁽⁴⁾	$	10,487		$	10,391		$	10,213		$	9,979		$	9,820
Annualized U.S. GAAP Quarterly Basis ROE ^(3)/(4)		7.2	%		4.3	%		13.8	%		4.3	%		8.2	%

Operating ROE
Adjusted operating income for the period ended⁽³⁾	$	200		$	125		$	326		$	76		$	151
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income (loss)⁽⁴⁾	$	10,487		$	10,391		$	10,213		$	9,979		$	9,820
Annualized Operating Quarterly Basis ROE ^(3)/(4)		7.6	%		4.8	%		12.8	%		3.0	%		6.2	%

Non-GAAP Definition for Operating ROE

The company references the non-GAAP financial measure entitled “operating return on equity” or “operating ROE.” The company defines operating ROE as adjusted operating income (loss) divided by average ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss) in average ending Genworth Financial, Inc.’s stockholders’ equity. Management believes that analysis of operating ROE enhances understanding of the efficiency with which the company deploys its capital. However, operating ROE is not a substitute for net income (loss) available to Genworth Financial, Inc.’s common stockholders divided by average ending Genworth Financial, Inc.’s stockholders’ equity determined in accordance with U.S. GAAP.

⁽¹⁾	The twelve months ended information is derived by adding the four quarters of net income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss) from page 9 herein.

⁽²⁾	Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), for the most recent five quarters.

⁽³⁾	Net income available to Genworth Financial, Inc.’s common stockholders and adjusted operating income from page 9 herein.

⁽⁴⁾	Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss), is derived by averaging ending Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income (loss).

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Reconciliation of Core Yield


		2018									2017
	(Assets—amounts in billions)	2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
	Reported—Total Invested Assets and Cash	$	73.1		$	74.6		$	73.1		$	76.3		$	75.9		$	76.1		$	74.7		$	76.3
	Subtract:
	Securities lending		0.2			0.2			0.2			0.3			0.2			0.2			0.3			0.3
	Unrealized gains (losses)		2.7			3.7			2.7			5.4			5.1			5.6			4.6			5.4

	Adjusted end of period invested assets and cash	$	70.2		$	70.7		$	70.2		$	70.6		$	70.6		$	70.3		$	69.8		$	70.6

(A)	Average Invested Assets and Cash Used in Reported Yield Calculation	$	70.4		$	70.7		$	70.5		$	70.6		$	70.5		$	70.1		$	69.7		$	70.1
	Subtract:
	Restricted commercial mortgage loans and other invested assets related to securitization entities⁽¹⁾		—			0.1			—			—			0.1			0.1			0.1			0.1

(B)	Average Invested Assets and Cash Used in Core Yield Calculation	$	70.4		$	70.6		$	70.5		$	70.6		$	70.4		$	70.0		$	69.6		$	70.0


	(Income—amounts in millions)

(C)	Reported—Net Investment Income	$	828		$	804		$	1,632		$	812		$	797		$	801		$	790		$	3,200
	Subtract:
	Bond calls and commercial mortgage loan prepayments		9			11			20			13			10			8			6			37
	Other non-core items⁽²⁾		2			(2	)		—			3			3			8			3			17
	Restricted commercial mortgage loans and other invested assets related to securitization entities⁽¹⁾		—			1			1			2			1			2			1			6

(D)	Core Net Investment Income	$	817		$	794		$	1,611		$	794		$	783		$	783		$	780		$	3,140


(C) / (A)	Reported Yield		4.70	%		4.55	%		4.63	%		4.60	%		4.52	%		4.57	%		4.53	%		4.56	%
(D) / (B)	Core Yield		4.64	%		4.50	%		4.57	%		4.50	%		4.45	%		4.47	%		4.48	%		4.48	%

Note: Yieldshave been annualized.

Non-GAAP Definition for Core Yield

The company references the non-GAAP financial measure entitled “core yield” as a measure of investment yield. The company defines core yield as the investment yield adjusted for items that do not reflect the underlying performance of the investment portfolio. Management believes that analysis of core yield enhances understanding of the investment yield of the company. However, core yield is not a substitute for investment yield determined in accordance with U.S. GAAP.

⁽¹⁾ Represents the incremental assets and investment income related to restricted commercial mortgage loans and other invested assets.

⁽²⁾ Includes cost basis adjustments on structured securities and various other immaterial items.

Corporate Information

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

SECOND QUARTER 2018

Financial Strength Ratings As Of July 30, 2018


Company	Standard & Poor’s Financial Services LLC (S&P)	Moody’s Investors Service, Inc. (Moody’s)	A.M. Best Company, Inc. (A.M. Best)
Genworth Mortgage Insurance Corporation	BB+ (Marginal)	Ba1 (Questionable)	Not rated
Genworth Financial Mortgage Insurance Company Canada⁽¹⁾	A+ (Strong)	Not rated	Not rated
Genworth Financial Mortgage Insurance Pty Limited (Australia)⁽²⁾	A+ (Strong)	Baa1 (Adequate)	Not rated
Genworth Life Insurance Company	B+ (Weak)	B3 (Poor)	B- (Fair)
Genworth Life and Annuity Insurance Company	B+ (Weak)	Ba3 (Questionable)	B+ (Good)
Genworth Life Insurance Company of New York	B+ (Weak)	B3 (Poor)	B- (Fair)

The S&P, Moody’s, A.M. Best, Dominion Bond Rating Service (DBRS) and Fitch Rating Service (Fitch) ratings included are not designed to be, and do not serve as, measures of protection or valuation offered to investors. These financial strength ratings should not be relied on with respect to making an investment in the company’s securities.

S&P states that insurers rated “A” (Strong), “BB” (Marginal) or “B” (Weak) have strong, marginal or weak financial security characteristics, respectively. The “A,” “BB” and “B” ranges are the third-, fifth- and sixth-highest of nine financial strength rating ranges assigned by S&P, which range from “AAA” to “R.” A plus (+) or minus (-) shows relative standing within a major rating category. These suffixes are not added to ratings in the “AAA” category or to ratings below the “CCC” category. Accordingly, the “A+,” “BB+” and “B+” ratings are the fifth-, eleventh- and fourteenth-highest of S&P’s 21 ratings categories.

Moody’s states that insurance companies rated “Baa” (Adequate) offer adequate financial security and that insurance companies rated “Ba” (Questionable) or “B” (Poor) offer questionable financial security. The “Baa” (Adequate), “Ba” (Questionable) and “B” (Poor) ranges are the fourth-, fifth- and sixth-highest, respectively, of nine financial strength rating ranges assigned by Moody’s, which range from “Aaa” to “C.” Numeric modifiers are used to refer to the ranking within the group, with 1 being the highest and 3 being the lowest. These modifiers are not added to ratings in the “Aaa” category or to ratings below the “Caa” category. Accordingly, the “Baa1,” “Ba1,” “Ba3” and “B3” ratings are the eighth-, eleventh-, thirteenth and sixteenth-highest, respectively, of Moody’s 21 ratings categories.

A.M. Best states that its “B+” (Good) rating is assigned to those companies that have, in its opinion, a good ability to meet their ongoing insurance obligations while “B-” (Fair) is assigned to those companies that have, in its opinion, a fair ability to meet their ongoing insurance obligations. The “B+” (Good) and “B-” (Fair) ratings are the sixth- and eighth-highest of 15 ratings assigned by A.M. Best, which range from “A++” to “F.”

DBRS states that long-term obligations rated “AA” are of superior credit quality. The capacity for the payment of financial obligations is considered high and unlikely to be significantly vulnerable to future events. Credit quality differs from “AAA” only to a small degree.

The Australian mortgage insurance subsidiary also solicits a rating from Fitch. Fitch states that “A” (Strong) rated insurance companies are viewed as possessing strong capacity to meet policyholder and contract obligations. The “A” rating category is the third-highest of nine financial strength rating categories, which range from “AAA” to “C.” The symbol (+) or (-) may be appended to a rating to indicate the relative position of a credit within a rating category. These suffixes are not added to ratings in the “AAA” category or to ratings below the “B” category. Accordingly, the “A+” rating is the fifth-highest of Fitch’s 21 ratings categories.

The company also solicits a rating from HR Ratings on a local scale for Genworth Seguros de Credito a la Vivienda S.A. de C.V., its Mexican mortgage insurance subsidiary, with a short-term rating of “HR1” and long-term rating of “HR AA-.” For short-term ratings, HR Ratings states that “HR1” rated companies are viewed as exhibiting high capacity for timely payment of debt obligations in the short-term and maintain low credit risk. The “HR1” short-term rating category is the highest of six short-term rating categories, which range from “HR1” to “HR D.” For long-term ratings, HR Ratings states that “HR AA-” rated companies are viewed as having high credit quality and offer high safety for timely payment of debt obligations and maintain low credit risk under adverse economic scenarios. The “HR AA-” long-term rating is the second-highest of HR Rating’s eight long-term rating categories, which range from “HR AAA” to “HR D.”

S&P, Moody’s, A.M. Best, DBRS, Fitch and HR Ratings review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. Other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.

⁽¹⁾	Genworth Financial Mortgage Insurance Company Canada is also rated “AA” by DBRS.

⁽²⁾	Genworth Financial Mortgage Insurance Pty Limited (Australia) is also rated “A+” by Fitch.