EX-99.2

EX-99.2 3 d824452dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

LOGO

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019


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 (Loss) by Quarter		8
Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)		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—Australia Mortgage Insurance Segment		24-27
Adjusted Operating Income (Loss)—U.S. Life Insurance Segment		29-32
Adjusted Operating Income (Loss)—Runoff Segment		34
Adjusted Operating Loss—Corporate and Other Activities		36

*Additional Financial Data*
Investments Summary		38
Fixed Maturity Securities Summary		39
General Account U.S. GAAP Net Investment Income Yields		40
Net Investment Gains (Losses), Net—Detail		41

*Reconciliations of Non-GAAP Measures*
Reconciliation of Operating Return On Equity (ROE)		43
Reconciliation of Core Yield		44

*Corporate Information*
Financial Strength Ratings		46

Note:

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

THIRD QUARTER 2019

Dear Investor,

Beginning in the third quarter of 2019, the Canada mortgage insurance business (Genworth Canada), previously the only business in the Canada Mortgage Insurance segment, is reported as discontinued operations. Accordingly, all prior periods herein have been re-presented. During the third quarter of 2019, in connection with the plan to sell Genworth Canada, the company recorded an estimated after-tax loss of approximately $164 million. In accordance with the accounting guidance for groups of assets that are held-for-sale, an impairment and cost to sell of $196 million was recorded to reduce the carrying value of the business to its fair value, which was based on estimated cash proceeds of $1.8 billion less a special declared dividend of CAD$1.45 per common share and closing costs. Genworth Financial International Holdings, LLC and Genworth Mortgage Insurance Corporation, indirect wholly-owned subsidiaries of the company that own 40.4% and 16.5%, respectively, of the issued and outstanding shares of Genworth Canada, will receive the net cash proceeds based upon their respective ownership percentage upon deal closing. The sale is targeted to close by the end of 2019 and is subject to other customary conditions, including requisite regulatory approvals.

The following table presents a reconciliation of adjusted operating income (loss) as previously reported to adjusted operating income (loss) re-presented to reflect the Canada mortgage insurance business as discontinued operations for the periods indicated:


	2019						2018
(Amounts in millions)	2Q			1Q			4Q			3Q			2Q			1Q			Total
ADJUSTED OPERATING INCOME (LOSS) AS PREVIOUSLY REPORTED	$	204		$	121		$	(291	)	$	145		$	200		$	125		$	179
Remove Canada Mortgage Insurance segment adjusted operating income reported as discontinued operations		(41	)		(41	)		(48	)		(44	)		(46	)		(49	)		(187	)
Adjustment for corporate overhead allocations, net of taxes⁽¹⁾		(5	)		(4	)		(4	)		(4	)		(3	)		(4	)		(15	)
Adjustment for interest on debt that is required to be repaid as a result of the disposal transaction, net of taxes⁽²⁾		6			6			7			6			5			2			20
Tax adjustments⁽³⁾		14			13			31			(4	)		(26	)		(3	)		(2	)

RE-PRESENTED ADJUSTED OPERATING INCOME (LOSS)	$	178		$	95		$	(305	)	$	99		$	130		$	71		$	(5	)

⁽¹⁾	Expenses previously reported in the Canada Mortgage Insurance segment and moved to Corporate and Other Activities.

⁽²⁾	Interest on a senior secured term loan facility owed by Genworth Holdings, Inc. previously reported in Corporate and Other Activities and moved to discontinued operations.

⁽³⁾	Tax impacts resulting from the classification of Genworth Canada as held-for-sale.

Thank you for your continued interest in Genworth Financial, Inc.

Regards,

Investor Relations

InvestorInfo@genworth.com

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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) from continuing operations 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.

In 2019, the company revised how it taxes the adjustments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) to align the tax rate used in the reconciliation to each segment’s local jurisdictional tax rate. Beginning in the first quarter of 2019, the company used a tax rate of 30% for its Australia Mortgage Insurance segment to tax effect its adjustments. Its domestic segments remain at a 21% tax rate. In 2018, the company assumed a flat 21% tax rate on adjustments for all of its segments to reconcile net income (loss) available to Genworth Financial, Inc.’s common stockholders and adjusted operating income (loss). 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 41).

Prior year amounts have not been re-presented to reflect this revised presentation; however, the previous methodology would not have resulted in a materially different segment-level adjusted operating income (loss).

The company recorded a pre-tax expense of $4 million in the first quarter of 2019 and $2 million in the third quarter of 2018 related to restructuring costs as it continues to evaluate and appropriately size its organizational needs and expenses. There were no infrequent or unusual items excluded from adjusted operating income (loss) during the periods presented other than fees incurred during the fourth quarter of 2018 related to Genworth Holdings, Inc.’s bond consent solicitation of $6 million for broker, advisor and investment banking fees.

The table on page 9 of this financial supplement provides a reconciliation of net income (loss) available to Genworth Financial, Inc.’s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting. This 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 43 and 44 of this financial supplement.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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 (loss) available to Genworth Financial, Inc.'s common stockholders to adjusted operating income (loss) for the periods presented and reflects adjusted operating income (loss) as determined in accordance with accounting guidance related to segment reporting.

The company taxes its international businesses at their local jurisdictional tax rates and its domestic businesses at the U.S. corporate federal income tax rate of 21%. The company's segment tax methodology applies the respective jurisdictional or domestic 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 withholding taxes and permanent differences between U.S. GAAP and local tax law. 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 products. 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 company’s 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 company's U.S. mortgage insurance business is based on the coverage percentage applied to the estimated current outstanding loan balance. Risk in-force in the Australia mortgage insurance business is computed using 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 business in Australia. The company also has certain risk share arrangements in Australia 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 its operating performance because they represent measures of the size of its business at a specific date which will generate revenues and profits in a future period, rather than measures of its 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

THIRD QUARTER 2019

Financial Highlights

(amounts in millions, except per share data)


Balance Sheet Data	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Total Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income	$	10,765		$	10,744		$	10,582		$	10,406		$	10,731
Total accumulated other comprehensive income		3,622			3,013			2,492			2,044			2,067

Total Genworth Financial, Inc.’s stockholders’ equity	$	14,387		$	13,757		$	13,074		$	12,450		$	12,798

Book value per share	$	28.57		$	27.32		$	25.98		$	24.86		$	25.56
Book value per share, excluding accumulated other comprehensive income	$	21.38		$	21.34		$	21.03		$	20.78		$	21.43
Common shares outstanding as of the balance sheet date		503.5			503.5			503.3			500.8			500.8

	Twelve months ended
Twelve Month Rolling Average ROE	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
U.S. GAAP Basis ROE		0.3	%		1.5	%		1.7	%		1.1	%		7.7	%
Operating ROE⁽¹⁾		0.9	%		0.6	%		0.2	%		—	%		5.7	%

	Three months ended
Quarterly Average ROE	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
U.S. GAAP Basis ROE		0.7	%		6.3	%		6.6	%		(12.5	)%		5.5	%
Operating ROE⁽¹⁾		4.6	%		6.7	%		3.6	%		(11.5	)%		3.7	%


Basic and Diluted Shares	Three months ended September 30, 2019		Nine months ended September 30, 2019
Weighted-average common shares used in basic earnings per share calculations		503.5		502.7
Potentially dilutive securities:
Stock options, restricted stock units and stock appreciation rights		7.7		6.8

Weighted-average common shares used in diluted earnings per share calculations		511.2		509.5

⁽¹⁾	See page 43 herein for a reconciliation of U.S. GAAP Basis ROE to Operating ROE.

Consolidated Quarterly Results

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Consolidated Net Income (Loss) by Quarter

(amounts in millions, except per share amounts)


	2019											2018
	3Q			2Q			1Q		Total			4Q			3Q			2Q		1Q			Total
REVENUES:
Premiums	$	1,015		$	1,001		$	988	$	3,004		$	993		$	995		$	1,005	$	1,001		$	3,994
Net investment income		816			816			794		2,426			779			780			792		770			3,121
Net investment gains (losses)		(2	)		(46	)		75		27			22			(16	)		1		(16	)		(9	)
Policy fees and other income		191			223			187		601			191			193			209		202			795

Total revenues		2,020			1,994			2,044		6,058			1,985			1,952			2,007		1,957			7,901

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,284			1,251			1,282		3,817			1,824			1,303			1,186		1,293			5,606
Interest credited		146			146			147		439			152			151			152		156			611
Acquisition and operating expenses, net of deferrals		247			229			237		713			249			231			236		227			943
Amortization of deferred acquisition costs and intangibles		112			84			81		277			81			72			101		94			348
Interest expense		59			60			60		179			61			60			66		69			256

Total benefits and expenses		1,848			1,770			1,807		5,425			2,367			1,817			1,741		1,839			7,764

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		172			224			237		633			(382	)		135			266		118			137
Provision (benefit) for income taxes		34			66			69		169			(109	)		30			113		36			70

INCOME (LOSS) FROM CONTINUING OPERATIONS		138			158			168		464			(273	)		105			153		82			67
Income (loss) from discontinued operations, net of taxes⁽¹⁾		(80	)		60			62		42			(54	)		105			96		83			230

NET INCOME (LOSS)		58			218			230		506			(327	)		210			249		165			297
Less: net income from continuing operations attributable to noncontrolling interests		10			15			20		45			8			18			27		17			70
Less: net income (loss) from discontinued operations attributable to noncontrolling interests		30			35			36		101			(6	)		46			32		36			108

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	18		$	168		$	174	$	360		$	(329	)	$	146		$	190	$	112		$	119

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders	$	128		$	143		$	148	$	419		$	(281	)	$	87		$	126	$	65		$	(3	)
Income (loss) from discontinued operations available to Genworth Financial, Inc.’s common stockholders		(110	)		25			26		(59	)		(48	)		59			64		47			122

NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	18		$	168		$	174	$	360		$	(329	)	$	146		$	190	$	112		$	119


Earnings (Loss) Per Share Data:
Income (loss) from continuing operations available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.25		$	0.29		$	0.29	$	0.83		$	(0.56	)	$	0.17		$	0.25	$	0.13		$	(0.01	)
Diluted	$	0.25		$	0.28		$	0.29	$	0.82		$	(0.56	)	$	0.17		$	0.25	$	0.13		$	(0.01	)
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.04		$	0.33		$	0.35	$	0.72		$	(0.66	)	$	0.29		$	0.38	$	0.22		$	0.24
Diluted	$	0.04		$	0.33		$	0.34	$	0.71		$	(0.66	)	$	0.29		$	0.38	$	0.22		$	0.24
Weighted-average common shares outstanding
Basic		503.5			503.4			501.2		502.7			500.8			500.7			500.6		499.6			500.4
Diluted⁽²⁾		511.2			508.7			508.6		509.5			500.8			503.3			502.6		502.7			500.4

⁽¹⁾	Income (loss) from discontinued operations related to the Canada mortgage insurance business. Refer to page 36 for operating results of discontinued operations.

⁽²⁾

Under applicable accounting guidance, companies in a loss position are required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share. Therefore, as a result of the loss from continuing operations available to Genworth Financial, Inc.’s common stockholders for the three and twelve months ended December 31, 2018, the company was required to use basic weighted-average common shares outstanding in the calculation of diluted loss per share for the three and twelve months ended December 31, 2018, as the inclusion of shares for stock options, restricted stock units and stock appreciation rights of 7.6 million and 3.8 million, respectively, would have been antidilutive to the calculation. If the company had not incurred a loss from continuing operations available to Genworth Financial, Inc.’s common stockholders for the three and twelve months ended December 31, 2018, dilutive potential weighted-average common shares outstanding would have been 508.4 million and 504.2 million, respectively.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Reconciliation of Net Income (Loss) to Adjusted Operating Income (Loss)

(amounts in millions, except per share amounts)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
NET INCOME (LOSS) AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	18		$	168		$	174		$	360		$	(329	)	$	146		$	190		$	112		$	119
Add: net income from continuing operations attributable to noncontrolling interests		10			15			20			45			8			18			27			17			70
Add: net income (loss) from discontinued operations attributable to noncontrolling interests		30			35			36			101			(6	)		46			32			36			108

NET INCOME (LOSS)		58			218			230			506			(327	)		210			249			165			297
Less: income (loss) from discontinued operations, net of taxes		(80	)		60			62			42			(54	)		105			96			83			230

INCOME (LOSS) FROM CONTINUING OPERATIONS		138			158			168			464			(273	)		105			153			82			67
Less: net income from continuing operations attributable to noncontrolling interests		10			15			20			45			8			18			27			17			70

INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		128			143			148			419			(281	)		87			126			65			(3	)
ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		(5	)		43			(71	)		(33	)		(36	)		14			4			8			(10	)
Expenses related to restructuring		—			—			4			4			—			2			—			—			2
Fees associated with bond consent solicitation		—			—			—			—			6			—			—			—			6
Taxes on adjustments		—			(8	)		14			6			6			(4	)		—			(2	)		—

ADJUSTED OPERATING INCOME (LOSS)	$	123		$	178		$	95		$	396		$	(305	)	$	99		$	130		$	71		$	(5	)

ADJUSTED OPERATING INCOME (LOSS):
U.S. Mortgage Insurance segment	$	137		$	147		$	124		$	408		$	124		$	118		$	137		$	111		$	490
Australia Mortgage Insurance segment		12			13			14			39			18			17			22			19			76
U.S. Life Insurance segment:
Long-Term Care Insurance		21			37			(20	)		38			(314	)		(24	)		22			(32	)		(348	)
Life Insurance		(25	)		10			(2	)		(17	)		(108	)		(2	)		4			(1	)		(107	)
Fixed Annuities		3			19			17			39			(3	)		23			31			28			79

Total U.S. Life Insurance segment		(1	)		66			(5	)		60			(425	)		(3	)		57			(5	)		(376	)

Runoff segment		10			9			20			39			(2	)		14			13			10			35
Corporate and Other		(35	)		(57	)		(58	)		(150	)		(20	)		(47	)		(99	)		(64	)		(230	)

ADJUSTED OPERATING INCOME (LOSS)	$	123		$	178		$	95		$	396		$	(305	)	$	99		$	130		$	71		$	(5	)


Earnings (Loss) Per Share Data:
Net income (loss) available to Genworth Financial, Inc.’s common stockholders per share
Basic	$	0.04		$	0.33		$	0.35		$	0.72		$	(0.66	)	$	0.29		$	0.38		$	0.22		$	0.24
Diluted	$	0.04		$	0.33		$	0.34		$	0.71		$	(0.66	)	$	0.29		$	0.38		$	0.22		$	0.24
Adjusted operating income (loss) per share
Basic	$	0.25		$	0.35		$	0.19		$	0.79		$	(0.61	)	$	0.20		$	0.26		$	0.14		$	(0.01	)
Diluted	$	0.24		$	0.35		$	0.19		$	0.78		$	(0.61	)	$	0.20		$	0.26		$	0.14		$	(0.01	)
Weighted-average common shares outstanding
Basic		503.5			503.4			501.2			502.7			500.8			500.7			500.6			499.6			500.4
Diluted⁽²⁾		511.2			508.7			508.6			509.5			500.8			503.3			502.6			502.7			500.4

⁽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 41 for reconciliation).

⁽²⁾

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Consolidated Balance Sheets

(amounts in millions)


	September 30, 2019		June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value	$	61,233	$	59,491	$	57,153	$	55,589	$	55,167
Equity securities, at fair value		239		262		251		275		320
Commercial mortgage loans⁽¹⁾		7,033		7,019		6,988		6,749		6,655
Policy loans		2,069		2,076		1,994		1,861		1,859
Other invested assets		1,693		1,396		1,106		1,072		1,167

Total investments		72,267		70,244		67,492		65,546		65,168
Cash, cash equivalents and restricted cash		1,629		1,715		2,020		1,974		2,297
Accrued investment income		643		595		685		645		619
Deferred acquisition costs		1,881		1,980		2,097		3,142		3,208
Intangible assets and goodwill		210		229		250		333		340
Reinsurance recoverable		17,180		17,211		17,257		17,278		17,351
Other assets		479		516		467		395		421
Deferred tax asset		236		383		573		736		650
Separate account assets		6,005		6,187		6,210		5,859		6,745
Assets held for sale related to discontinued operations⁽²⁾		5,123		5,246		5,137		5,015		5,322

Total assets	$	105,653	$	104,306	$	102,188	$	100,923	$	102,121

⁽¹⁾	Included restricted commercial mortgage loans of $53 million, $56 million, $59 million, $62 million and $87 million, respectively, as of September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018 and September 30, 2018 related to a securitization entity.

⁽²⁾	The assets held for sale related to discontinued operations have been segregated in the consolidated balance sheets. The major asset categories for discontinued operations were as follows:


	September 30, 2019			June 30, 2019		March 31, 2019		December 31, 2018		September 30, 2018
ASSETS
Investments:
Fixed maturity securities available-for-sale, at fair value	$	4,225		$	4,283	$	4,207	$	4,072	$	4,237
Equity securities, at fair value		373			382		384		380		463
Other invested assets		129			139		102		116		187

Total investments		4,727			4,804		4,693		4,568		4,887
Cash, cash equivalents and restricted cash		362			223		201		203		208
Accrued investment income		38			31		41		30		38
Deferred acquisition costs		125			125		122		121		128
Intangible assets and goodwill		15			15		15		14		15
Other assets		52			48		65		79		46

Assets held for sale related to discontinued operations		5,319			5,246		5,137		5,015		5,322
Impairment of disposal group and cost to sell		(196	)		—		—		—		—

Total assets held for sale related to discontinued operations	$	5,123		$	5,246	$	5,137	$	5,015	$	5,322

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Consolidated Balance Sheets

(amounts in millions)


	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	40,489		$	39,583		$	38,369		$	37,940		$	38,018
Policyholder account balances		22,607			22,673			22,651			22,968			22,993
Liability for policy and contract claims		10,780			10,586			10,448			10,295			9,762
Unearned premiums		1,863			1,917			1,964			2,013			2,041
Other liabilities		1,445			1,604			1,564			1,529			1,672
Borrowings related to a securitization entity		—			—			—			—			20
Non-recourse funding obligations		311			311			311			311			310
Long-term borrowings		3,706			3,711			3,711			3,707			3,715
Separate account liabilities		6,005			6,187			6,210			5,859			6,745
Liabilities held for sale related to discontinued operations⁽¹⁾		2,302			2,142			2,078			2,112			2,224

Total liabilities		89,508			88,714			87,306			86,734			87,500

Equity:
Common stock		1			1			1			1			1
Additional paid-in capital		11,986			11,983			11,989			11,987			11,983

Accumulated other comprehensive income (loss):
Net unrealized investment gains (losses):
Net unrealized gains (losses) on securities not other-than-temporarily impaired		1,664			1,294			932			585			598
Net unrealized gains (losses) on other-than-temporarily impaired securities		11			11			11			10			10

Net unrealized investment gains (losses)		1,675			1,305			943			595			608
Derivatives qualifying as hedges		2,259			1,983			1,850			1,781			1,717
Foreign currency translation and other adjustments		(312	)		(275	)		(301	)		(332	)		(258	)

Total accumulated other comprehensive income		3,622			3,013			2,492			2,044			2,067
Retained earnings		1,478			1,460			1,292			1,118			1,447
Treasury stock, at cost		(2,700	)		(2,700	)		(2,700	)		(2,700	)		(2,700	)

Total Genworth Financial, Inc.'s stockholders' equity		14,387			13,757			13,074			12,450			12,798
Noncontrolling interests		1,758			1,835			1,808			1,739			1,823

Total equity		16,145			15,592			14,882			14,189			14,621

Total liabilities and equity	$	105,653		$	104,306		$	102,188		$	100,923		$	102,121



⁽¹⁾ The liabilities held for sale related to discontinued operations have been segregated in the consolidated balance sheets. The major liability categories for discontinued operations were as follows:
	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
LIABILITIES
Liability for policy and contract claims	$	95		$	91		$	88		$	84		$	82
Unearned premiums		1,588			1,571			1,518			1,533			1,627
Other liabilities		264			121			119			154			161
Long-term borrowings		329			333			324			318			336
Deferred tax liability		26			26			29			23			18

Liabilities held for sale related to discontinued operations	$	2,302		$	2,142		$	2,078		$	2,112		$	2,224

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Consolidated Balance Sheet by Segment

(amounts in millions)


	September 30, 2019
	U.S. Mortgage Insurance		Australia Mortgage Insurance		U.S. Life Insurance			Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,995	$	2,179	$	64,213		$	3,004	$	1,148		$	74,539
Deferred acquisition costs and intangible assets		49		58		1,809			165		10			2,091
Reinsurance recoverable		—		—		16,450			730		—			17,180
Deferred tax and other assets		95		153		(94	)		27		534			715
Separate account assets		—		—		—			6,005		—			6,005
Assets held for sale related to discontinued operations		—		—		—			—		5,123			5,123

Total assets	$	4,139	$	2,390	$	82,378		$	9,931	$	6,815		$	105,653

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—	$	40,487		$	2	$	—		$	40,489
Policyholder account balances		—		—		19,293			3,314		—			22,607
Liability for policy and contract claims		247		204		10,311			10		8			10,780
Unearned premiums		413		949		497			4		—			1,863
Non-recourse funding obligations		—		—		311			—		—			311
Other liabilities		78		199		564			43		561			1,445
Borrowings and capital securities		—		135		—			—		3,571			3,706
Separate account liabilities		—		—		—			6,005		—			6,005
Liabilities held for sale related to discontinued operations		—		—		—			—		2,302			2,302

Total liabilities		738		1,487		71,463			9,378		6,442			89,508

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		3,307		419		7,192			537		(690	)		10,765
Allocated accumulated other comprehensive income (loss)		94		27		3,723			16		(238	)		3,622

Total Genworth Financial, Inc.'s stockholders' equity		3,401		446		10,915			553		(928	)		14,387
Noncontrolling interests		—		457		—			—		1,301			1,758

Total equity		3,401		903		10,915			553		373			16,145

Total liabilities and equity	$	4,139	$	2,390	$	82,378		$	9,931	$	6,815		$	105,653

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Consolidated Balance Sheet by Segment

(amounts in millions)


	June 30, 2019
	U.S. Mortgage Insurance		Australia Mortgage Insurance		U.S. Life Insurance		Runoff		Corporate and Other⁽¹⁾			Total
ASSETS
Cash and investments	$	3,846	$	2,303	$	62,499	$	2,896	$	1,010		$	72,554
Deferred acquisition costs and intangible assets		50		65		1,911		173		10			2,209
Reinsurance recoverable		—		2		16,474		735		—			17,211
Deferred tax and other assets		81		154		118		27		519			899
Separate account assets		—		—		—		6,187		—			6,187
Assets held for sale related to discontinued operations		—		—		—		—		5,246			5,246

Total assets	$	3,977	$	2,524	$	81,002	$	10,018	$	6,785		$	104,306

LIABILITIES AND EQUITY
Liabilities:
Future policy benefits	$	—	$	—	$	39,581	$	2	$	—		$	39,583
Policyholder account balances		—		—		19,434		3,239		—			22,673
Liability for policy and contract claims		254		209		10,102		13		8			10,586
Unearned premiums		419		997		497		4		—			1,917
Non-recourse funding obligations		—		—		311		—		—			311
Other liabilities		79		185		560		52		728			1,604
Borrowings and capital securities		—		140		—		—		3,571			3,711
Separate account liabilities		—		—		—		6,187		—			6,187
Liabilities held for sale related to discontinued operations		—		—		—		—		2,142			2,142

Total liabilities		752		1,531		70,485		9,497		6,449			88,714

Equity:
Allocated equity, excluding accumulated other comprehensive income (loss)		3,148		453		7,419		515		(791	)		10,744
Allocated accumulated other comprehensive income (loss)		77		40		3,098		6		(208	)		3,013

Total Genworth Financial, Inc.'s stockholders' equity		3,225		493		10,517		521		(999	)		13,757
Noncontrolling interests		—		500		—		—		1,335			1,835

Total equity		3,225		993		10,517		521		336			15,592

Total liabilities and equity	$	3,977	$	2,524	$	81,002	$	10,018	$	6,785		$	104,306

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Deferred Acquisition Costs Rollforward

(amounts in millions)


	U.S. Mortgage Insurance			Australia Mortgage Insurance			U.S. Life Insurance			Runoff			Total
Unamortized balance as of June 30, 2019	$	28		$	37		$	3,260		$	184		$	3,509
Costs deferred		3			3			—			—			6
Amortization, net of interest accretion		(2	)		(2	)		(82	)		(9	)		(95	)
Impact of foreign currency translation		—			(2	)		—			—			(2	)

Unamortized balance as of September 30, 2019		29			36			3,178			175			3,418
Effect of accumulated net unrealized investment (gains) losses		—			—			(1,519	)		(18	)		(1,537	)

Balance as of September 30, 2019	$	29		$	36		$	1,659		$	157		$	1,881

U.S. Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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

(amounts in millions)


	2019								2018
	3Q		2Q		1Q		Total		4Q		3Q		2Q			1Q		Total
REVENUES:
Premiums	$	219	$	206	$	194	$	619	$	193	$	190	$	184		$	179	$	746
Net investment income		31		28		28		87		26		23		23			21		93
Net investment gains (losses)		—		—		—		—		—		—		—			—		—
Policy fees and other income		1		1		1		3		—		1		1			—		2

Total revenues		251		235		223		709		219		214		208			200		841

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		23		—		16		39		14		20		(14	)		16		15,800
Acquisition and operating expenses, net of deferrals		51		44		46		141		44		41		45			39		169
Amortization of deferred acquisition costs and intangibles		3		4		4		11		3		4		3			4		14

Total benefits and expenses		77		48		66		191		61		65		34			59		219

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		174		187		157		518		158		149		174			141		622
Provision for income taxes		37		40		33		110		34		31		37			30		132

INCOME FROM CONTINUING OPERATIONS		137		147		124		408		124		118		137			111		490

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

ADJUSTED OPERATING INCOME	$	137	$	147	$	124	$	408	$	124	$	118	$	137		$	111	$	490


SALES:
Flow New Insurance Written (NIW)	$	18,900	$	15,800	$	9,600	$	44,300	$	9,300	$	10,300	$	11,400		$	9,000	$	40,000

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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

(amounts in millions)


	2019															2018
	3Q					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			Flow NIW		% of Flow NIW
Product
Monthly⁽¹⁾	$	16,800		89	%	$	13,900		88	%	$	8,400		87	%	$	7,900		85	%	$	8,400		82	%	$	9,700		85	%	$	7,300		81	%
Single		2,100		11			1,900		12			1,200		13			1,400		15			1,900		18			1,700		15			1,700		19

Total Flow	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

FICO Scores
Over 735	$	11,300		60	%	$	9,200		58	%	$	5,500		57	%	$	5,200		56	%	$	6,000		58	%	$	6,900		60	%	$	5,300		59	%
680-735		6,300		33			5,500		35			3,300		35			3,200		35			3,300		32			3,700		32			3,000		33
660-679⁽²⁾		700		4			600		4			400		4			500		5			500		5			400		4			400		5
620-659		600		3			500		3			400		4			400		4			500		5			400		4			300		3
<620		—		—			—		—			—		—			—		—			—		—			—		—			—		—

Total Flow	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

Loan-To-Value Ratio
95.01% and above	$	2,900		16	%	$	2,900		18	%	$	1,800		19	%	$	2,000		21	%	$	2,000		19	%	$	2,400		21	%	$	1,600		18	%
90.01% to 95.00%		8,000		42			6,900		44			4,200		44			4,000		43			4,500		44			4,900		43			3,900		43
85.01% to 90.00%		5,500		29			4,300		27			2,500		26			2,300		25			2,800		27			2,900		25			2,500		28
85.00% and below		2,500		13			1,700		11			1,100		11			1,000		11			1,000		10			1,200		11			1,000		11

Total Flow	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		100	%

Origination
Purchase	$	14,900		79	%	$	13,900		88	%	$	8,600		90	%	$	8,800		95	%	$	9,800		95	%	$	10,700		94	%	$	8,000		89	%
Refinance		4,000		21			1,900		12			1,000		10			500		5			500		5			700		6			1,000		11

Total Flow	$	18,900		100	%	$	15,800		100	%	$	9,600		100	%	$	9,300		100	%	$	10,300		100	%	$	11,400		100	%	$	9,000		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

THIRD QUARTER 2019

Other Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	213		$	204		$	193		$	610		$	192		$	195		$	191		$	185		$	763

Flow New Risk Written	$	4,647		$	3,931		$	2,403		$	10,981		$	2,300		$	2,559		$	2,866		$	2,247		$	9,972

Primary Insurance In-Force⁽¹⁾	$	186,300		$	178,500		$	170,400					$	166,700		$	163,200		$	159,500		$	154,900

Risk In-Force
Flow⁽²⁾	$	44,885		$	42,917		$	41,020					$	40,115		$	39,304		$	38,433		$	37,252
Bulk⁽³⁾		160			167			173						178			188			195			202

Total Primary		45,045			43,084			41,193						40,293			39,492			38,628			37,454
Pool		59			62			66						69			72			75			80

Total Risk In-Force	$	45,104		$	43,146		$	41,259					$	40,362		$	39,564		$	38,703		$	37,534


Primary Risk In-Force That Is GSE Conforming		93	%		93	%		93	%					94	%		94	%		94	%		94	%

Expense Ratio (Net Earned Premiums)⁽⁴⁾		24	%		24	%		25	%		24	%		24	%		23	%		26	%		24	%		25	%

Expense Ratio (Net Premiums Written)⁽⁵⁾		25	%		24	%		26	%		25	%		25	%		23	%		25	%		23	%		24	%

Flow Persistency		75	%		82	%		86	%					86	%		84	%		83	%		84	%

Risk To Capital Ratio⁽⁶⁾		11.9:1			11.8:1			11.9:1						12.2:1			12.3:1			12.6:1			12.5:1

PMIERs Sufficiency Ratio⁽⁷⁾		129	%		123	%		123	%					129	%		130	%		129	%		124	%

Average Primary Loan Size (in thousands)	$	221		$	218		$	215					$	213		$	211		$	209		$	207

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 September 30, 2019, 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 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 September 30, 2019, June 30, 2019 and March 31, 2019, the PMIERs sufficiency ratios were in excess of $850 million, $650 million and $600 million, respectively, of available assets above the PMIERs requirements. As of December 31, 2018, September 30, 2018, June 30, 2018 and March 31, 2018, the PMIERs sufficiency ratios were in excess of $750 million, $750 million, $700 million and $600 million, respectively, of available assets above the prior PMIERs requirements.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Loss Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid claims
Flow
Direct	$	28		$	24		$	30		$	82		$	34		$	52		$	45		$	53		$	184
Assumed⁽¹⁾		—			—			—			—			—			—			—			1			1
Ceded		—			—			—			—			—			—			—			(1	)		(1	)
Loss adjustment expenses		1			2			2			5			—			3			2			2			7

Total Flow		29			26			32			87			34			55			47			55			191
Bulk		—			—			—			—			—			1			—			1			2

Total Primary		29			26			32			87			34			56			47			56			193
Pool		1			—			—			1			—			—			1			—			1

Total Paid Claims	$	30		$	26		$	32		$	88		$	34		$	56		$	48		$	56		$	194


Average Paid Claim (in thousands)	$	44.2		$	45.4		$	49.0					$	41.4		$	45.9		$	43.1		$	47.5

Average Reserve Per Delinquency (in thousands)
Flow	$	15.5		$	16.5		$	17.4					$	17.3		$	18.8		$	19.6		$	20.2
Bulk loans with established reserve	$	13.3		$	14.1		$	13.8					$	14.6		$	17.6		$	18.4		$	17.6

Reserves:
Flow direct case	$	216		$	222		$	246					$	261		$	280		$	314		$	372
Bulk direct case		4			4			4						5			7			8			8
Assumed⁽¹⁾		1			1			1						2			2			2			2
All other⁽²⁾		26			27			29						28			28			28			33

Total Reserves	$	247		$	254		$	280					$	296		$	317		$	352		$	415


Beginning Reserves	$	254		$	280		$	296		$	296		$	317		$	352		$	415		$	455		$	455
Paid claims		(30	)		(26	)		(32	)		(88	)		(34	)		(56	)		(48	)		(57	)		(195	)
Increase (decrease) in reserves		23			—			16			39			13			21			(15	)		17			36

Ending Reserves	$	247		$	254		$	280		$	247		$	296		$	317		$	352		$	415		$	296


Beginning Reinsurance Recoverable⁽³⁾	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	1		$	1
Ceded paid claims		—			—			—			—			—			—			—			(1	)		(1	)

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

Loss Ratio⁽⁴⁾		11	%		—	%		8	%		6	%		7	%		11	%		(8	)%		9	%		5	%

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

⁽²⁾	Other includes loss adjustment expenses, pool and incurred but not reported reserves.

⁽³⁾	Reinsurance recoverable excludes ceded unearned premium recoveries and amounts for which cash proceeds have not yet been received.

⁽⁴⁾

The ratio of benefits and other changes in policy reserves to net earned premiums. During the second quarter of 2019, the company recorded a favorable reserve adjustment of $10 million, which reduced the loss ratio by five percentage points for the three months ended June 30, 2019. During the second quarter of 2018, the company recorded a favorable reserve adjustment of $28 million, which reduced the loss ratio by four percentage points for the twelve months ended December 31, 2018 and 15 percentage points for the three months ended June 30, 2018.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Delinquency Metrics—U.S. Mortgage Insurance Segment

(dollar amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Number of Primary Delinquencies
Flow		15,575			15,070			15,764						16,670			16,367			17,505			20,007
Bulk loans with an established reserve		375			347			360						403			415			445			494
Bulk loans with no reserve⁽¹⁾		55			65			82						86			92			101			101

Total Number of Primary Delinquencies		16,005			15,482			16,206						17,159			16,874			18,051			20,602


Beginning Number of Primary Delinquencies		15,482			16,206			17,159			17,159			16,874			18,051			20,602			23,188			23,188
New delinquencies		8,650			7,705			8,539			24,894			8,719			7,884			7,049			8,409			32,061
Delinquency cures		(7,451	)		(7,872	)		(8,835	)		(24,158	)		(7,601	)		(7,857	)		(8,488	)		(9,840	)		(33,786	)
Paid claims		(676	)		(557	)		(657	)		(1,890	)		(833	)		(1,204	)		(1,112	)		(1,155	)		(4,304	)

Ending Number of Primary Delinquencies		16,005			15,482			16,206			16,005			17,159			16,874			18,051			20,602			17,159

Composition of Cures
Reported delinquent and cured-intraquarter		1,803			1,621			2,342						1,767			1,651			1,514			2,288
Number of missed payments delinquent prior to cure:
3 payments or less		4,280			4,567			4,862						4,131			3,951			4,568			5,413
4 - 11 payments		1,132			1,434			1,345						1,382			1,943			2,070			1,719
12 payments or more		236			250			286						321			312			336			420

Total		7,451			7,872			8,835						7,601			7,857			8,488			9,840

Primary Delinquencies by Missed Payment Status
3 payments or less		8,398			7,807			7,873						8,578			7,853			7,539			8,335
4 - 11 payments		4,411			4,243			4,755						4,689			4,745			5,657			6,875
12 payments or more		3,196			3,432			3,578						3,892			4,276			4,855			5,392

Primary Delinquencies		16,005			15,482			16,206						17,159			16,874			18,051			20,602



	September 30, 2019
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies			Direct Case Reserves⁽²⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		8,201		$	29		$	369			8	%
4 - 11 payments in default		4,319			76			199			38	%
12 payments or more in default		3,055			111			155			72	%

Total		15,575		$	216		$	723			30	%


	December 31, 2018
Flow Delinquencies and Percentage Reserved by Payment Status	Delinquencies			Direct Case Reserves⁽²⁾			Risk In-Force			Reserves as % of Risk In-Force
3 payments or less in default		8,360		$	31		$	365			8	%
4 - 11 payments in default		4,591			88			208			42	%
12 payments or more in default		3,719			142			188			76	%

Total		16,670		$	261		$	761			34	%

⁽¹⁾	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.

⁽²⁾	Direct flow case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment


	2019									2018
	3Q			2Q			1Q			4Q			3Q			2Q			1Q
Primary Loans
Primary loans in-force		842,692			818,358			792,800			783,288			773,290			762,727			749,145
Primary delinquent loans		16,005			15,482			16,206			17,159			16,874			18,051			20,602
Primary delinquency rate		1.90	%		1.89	%		2.04	%		2.19	%		2.18	%		2.37	%		2.75	%

Flow loans in-force		831,586			806,739			780,733			770,657			759,965			748,497			734,411
Flow delinquent loans		15,575			15,070			15,764			16,670			16,367			17,505			20,007
Flow delinquency rate		1.87	%		1.87	%		2.02	%		2.16	%		2.15	%		2.34	%		2.72	%

Bulk loans in-force		11,106			11,619			12,067			12,631			13,325			14,230			14,734
Bulk delinquent loans		430			412			442			489			507			546			595
Bulk delinquency rate		3.87	%		3.55	%		3.66	%		3.87	%		3.80	%		3.84	%		4.04	%

A minus and sub-prime loans in-force		13,450			14,180			14,712			15,348			16,087			16,928			17,964
A minus and sub-prime delinquent loans		2,339			2,367			2,530			2,727			2,817			3,058			3,557
A minus and sub-prime delinquency rate		17.39	%		16.69	%		17.20	%		17.77	%		17.51	%		18.06	%		19.80	%

Pool Loans
Pool loans in-force		4,261			4,331			4,470			4,535			4,636			4,774			4,961
Pool delinquent loans		168			177			187			220			215			204			220
Pool delinquency rate		3.94	%		4.09	%		4.18	%		4.85	%		4.64	%		4.27	%		4.43	%

Primary Risk In-Force by Credit Quality
Over 735		57	%		57	%		57	%		57	%		57	%		57	%		57	%
680-735		33	%		32	%		32	%		32	%		32	%		32	%		32	%
660-679⁽¹⁾		5	%		5	%		5	%		5	%		5	%		5	%		5	%
620-659		4	%		5	%		5	%		5	%		5	%		5	%		5	%
<620		1	%		1	%		1	%		1	%		1	%		1	%		1	%

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Portfolio Quality Metrics—U.S. Mortgage Insurance Segment

(amounts in millions)


	September 30, 2019
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		6.12	%		8.0	%	$	1,436		0.8	%	$	271		0.6	%		11.27	%
2005 to 2008		5.47	%		54.6			16,534		8.9			3,797		8.4			8.17	%
2009 to 2012		4.29	%		2.3			3,525		1.9			813		1.8			1.92	%
2013		4.29	%		2.0			4,276		2.3			1,043		2.3			1.60	%
2014		4.12	%		4.1			7,630		4.1			1,854		4.1			1.80	%
2015		4.45	%		6.2			15,529		8.3			3,753		8.4			1.40	%
2016		4.15	%		7.9			28,607		15.3			6,894		15.3			1.08	%
2017		3.89	%		8.5			31,414		16.9			7,634		17.0			1.08	%
2018		4.25	%		5.6			34,328		18.4			8,388		18.6			0.76	%
2019		4.77	%		0.8			42,976		23.1			10,598		23.5			0.12	%

Total		4.41	%		100.0	%	$	186,255		100.0	%	$	45,045		100.0	%		1.90	%


	September 30, 2019						June 30, 2019					September 30, 2018
	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)	$	45,045			1.90	%	$	43,084		1.89	%	$	39,492		2.18	%
Top 10 lenders	$	13,474			2.04	%	$	12,597		2.11	%	$	11,196		2.56	%
Top 20 lenders	$	17,647			1.88	%	$	16,729		2.03	%	$	15,005		2.51	%

Loan-to-value ratio
95.01% and above	$	8,238			3.19	%	$	7,837		3.16	%	$	6,857		3.88	%
90.01% to 95.00%		23,314			1.53	%		22,389		1.49	%		20,527		1.62	%
80.01% to 90.00%		13,340			1.54	%		12,699		1.59	%		11,931		1.86	%
80.00% and below		153			2.42	%		159		2.43	%		177		2.73	%

Total	$	45,045			1.90	%	$	43,084		1.89	%	$	39,492		2.18	%

Loan grade
Prime	$	44,572			1.65	%	$	42,587		1.63	%	$	38,930		1.86	%
A minus and sub-prime		473			17.39	%		497		16.69	%		562		17.51	%

Total	$	45,045			1.90	%	$	43,084		1.89	%	$	39,492		2.18	%

⁽¹⁾	Average Annual Mortgage Interest Rate.

⁽²⁾	Total reserves were $247 million as of September 30, 2019.

Australia Mortgage Insurance Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Adjusted Operating Income and Sales—Australia Mortgage Insurance Segment

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	77		$	80		$	83		$	240		$	82		$	87		$	106		$	98		$	373
Net investment income		13			15			16			44			15			17			18			17			67
Net investment gains (losses)		(9	)		1			12			4			(19	)		1			12			(9	)		(15	)
Policy fees and other income		1			—			(1	)		—			1			—			—			1			2

Total revenues		82			96			110			288			79			105			136			107			427

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		28			26			28			82			24			27			29			30			110
Acquisition and operating expenses, net of deferrals		17			17			17			51			16			15			17			17			65
Amortization of deferred acquisition costs and intangibles		9			9			9			27			10			10			12			11			43
Interest expense		2			2			2			6			2			3			2			2			9

Total benefits and expenses		56			54			56			166			52			55			60			60			227

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		26			42			54			122			27			50			76			47			200
Provision for income taxes		8			13			16			37			8			15			23			14			60

INCOME FROM CONTINUING OPERATIONS		18			29			38			85			19			35			53			33			140
Less: net income from continuing operations attributable to noncontrolling interests		10			15			20			45			8			18			27			17			70

INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS		8			14			18			40			11			17			26			16			70
ADJUSTMENTS TO INCOME FROM CONTINUING OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS:
Net investment (gains) losses, net⁽¹⁾		5			(1	)		(6	)		(2	)		10			—			(6	)		4			8
Taxes on adjustments		(1	)		—			2			1			(3	)		—			2			(1	)		(2	)

ADJUSTED OPERATING INCOME⁽²⁾	$	12		$	13		$	14		$	39		$	18		$	17		$	22		$	19		$	76



SALES:
New Insurance Written (NIW)
Flow	$	4,600		$	3,700		$	3,400		$	11,700		$	4,000		$	3,800		$	3,700		$	3,400		$	14,900
Bulk		—			1,200			500			1,700			800			—			900			—			1,700

Total Australia NIW^(3),(4)	$	4,600		$	4,900		$	3,900		$	13,400		$	4,800		$	3,800		$	4,600		$	3,400		$	16,600


⁽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	$	9		$	(1	)	$	(12	)	$	(4	)	$	19		$	(1	)	$	(12	)	$	9		$	15
Adjustment for net investment gains (losses) attributable to noncontrolling interests		(4	)		—			6			2			(9	)		1			6			(5	)		(7	)

Net investment (gains) losses, net	$	5		$	(1	)	$	(6	)	$	(2	)	$	10		$	—		$	(6	)	$	4		$	8

⁽²⁾	Adjusted operating income for the Australian platform adjusted for foreign exchange as compared to the prior year period was $13 million and $43 million for the three and nine months ended September 30, 2019, respectively.

⁽³⁾	New insurance written for the Australian platform adjusted for foreign exchange as compared to the prior year period was $5,000 million and $14,600 million for the three and nine months ended September 30, 2019, respectively.

⁽⁴⁾	The business currently has structured insurance transactions with three 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

THIRD QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net Premiums Written	$	70		$	58		$	52		$	180		$	70		$	56		$	56		$	60		$	242
Loss Ratio⁽¹⁾		36	%		34	%		34	%		34	%		29	%		31	%		28	%		30	%		30	%
Expense Ratio (Net Earned Premiums)⁽²⁾		34	%		33	%		31	%		32	%		32	%		29	%		27	%		29	%		29	%
Expense Ratio (Net Premiums Written)⁽³⁾		38	%		44	%		50	%		43	%		38	%		46	%		50	%		47	%		45	%

Primary Insurance In-Force⁽⁴⁾	$	206,400		$	215,600		$	219,200					$	218,200		$	222,500		$	229,400		$	246,300
Primary Risk In-Force^(4),(5)
Flow	$	66,400		$	69,100		$	70,600					$	70,300		$	71,900		$	74,000		$	79,600
Bulk		5,500			6,000			5,700						5,700			5,600			5,900			6,100

Total	$	71,900		$	75,100		$	76,300					$	76,000		$	77,500		$	79,900		$	85,700



	September 30, 2019												June 30, 2019
Risk In-Force by Loan-To-Value Ratio^(4),(6)	Primary			Flow			Bulk						Primary			Flow			Bulk
95.01% and above	$	9,986		$	9,985		$	1					$	10,624		$	10,624		$	—
90.01% to 95.00%		20,195			20,190			5						20,938			20,932			6
80.01% to 90.00%		22,171			22,112			59						22,722			22,656			66
80.00% and below		19,544			14,160			5,384						20,809			14,924			5,885

Total	$	71,896		$	66,447		$	5,449					$	75,093		$	69,136		$	5,957

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⁾

The business currently has structured insurance transactions with three 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 $152 million, $157 million, $157 million, $154 million, $158 million, $159 million and $160 million as of September 30, 2019, June 30, 2019, March 31, 2019, December 31, 2018, September 30, 2018, 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

THIRD QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(dollar amounts in millions)


Primary Insurance⁽¹⁾	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Insured loans in-force		1,293,961			1,308,811			1,323,172			1,332,906			1,335,133
Insured delinquent loans		7,713			7,891			7,490			7,145			7,350
Insured delinquency rate		0.60	%		0.60	%		0.57	%		0.54	%		0.55	%

Flow loans in-force		1,192,282			1,200,603			1,217,050			1,226,219			1,229,558
Flow delinquent loans		7,469			7,642			7,265			6,931			7,133
Flow delinquency rate		0.63	%		0.64	%		0.60	%		0.57	%		0.58	%

Bulk loans in-force		101,679			108,208			106,122			106,687			105,575
Bulk delinquent loans		244			249			225			214			217
Bulk delinquency rate		0.24	%		0.23	%		0.21	%		0.20	%		0.21	%

Loss Metrics	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
Beginning Reserves	$	209		$	204		$	196		$	201		$	206
Paid claims⁽²⁾		(24	)		(20	)		(22	)		(25	)		(27	)
Increase in reserves		27			27			28			25			26
Impact of changes in foreign exchange rates		(8	)		(2	)		2			(5	)		(4	)

Ending Reserves	$	204		$	209		$	204		$	196		$	201


	September 30, 2019						June 30, 2019						September 30, 2018
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	%		0.45	%		27	%		0.45	%		28	%		0.38	%
Queensland		23			0.80	%		23			0.81	%		23			0.73	%
Victoria		22			0.43	%		23			0.45	%		23			0.42	%
Western Australia		13			1.06	%		13			1.10	%		12			1.01	%
South Australia		6			0.69	%		6			0.68	%		6			0.70	%
Australian Capital Territory		3			0.26	%		3			0.25	%		3			0.15	%
Tasmania		2			0.31	%		2			0.31	%		2			0.35	%
New Zealand		2			0.02	%		2			0.02	%		2			0.05	%
Northern Territory		1			0.85	%		1			0.83	%		1			0.70	%

Total		100	%		0.60	%		100	%		0.60	%		100	%		0.55	%


By Policy Year⁽¹⁾
2010 and prior		43	%		0.51	%		44	%		0.52	%		46	%		0.50	%
2011		4			0.77	%		4			0.80	%		5			0.75	%
2012		6			1.04	%		6			1.11	%		6			0.93	%
2013		6			1.13	%		7			1.10	%		7			0.92	%
2014		8			1.01	%		8			0.97	%		9			0.84	%
2015		7			0.86	%		7			0.82	%		8			0.64	%
2016		7			0.60	%		7			0.60	%		7			0.42	%
2017		7			0.41	%		7			0.36	%		7			0.19	%
2018		7			0.22	%		7			0.15	%		5			0.02	%
2019		5			0.01	%		3			0.01	%		—			—	%

Total		100	%		0.60	%		100	%		0.60	%		100	%		0.55	%

⁽¹⁾	The business currently has structured insurance transactions with three 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.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Selected Key Performance Measures—Australia Mortgage Insurance Segment

(Australian dollar amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Paid Claims⁽¹⁾
Flow	$	35		$	28		$	30		$	93		$	34		$	38		$	33		$	44		$	149

Total Paid Claims	$	35		$	28		$	30		$	93		$	34		$	38		$	33		$	44		$	149


Average Paid Claim (in thousands)	$	97.9		$	94.1		$	94.2					$	104.2		$	117.2		$	110.1		$	119.5

Average Reserve Per Delinquency (in thousands)	$	39.2		$	37.8		$	38.4					$	39.0		$	37.9		$	38.2		$	39.4

Loss Metrics
Beginning Reserves	$	298		$	288		$	279		$	279		$	278		$	279		$	274		$	280		$	280
Paid claims⁽¹⁾		(35	)		(28	)		(30	)		(93	)		(34	)		(38	)		(33	)		(44	)		(149	)
Increase in reserves		39			38			39			116			35			37			38			38			148

Ending Reserves	$	302		$	298		$	288		$	302		$	279		$	278		$	279		$	274		$	279


Loan Amount^(2),(3)
Over $550K		19	%		19	%		18	%					18	%		18	%		17	%		17	%
$400K to $550K		22			21			21						21			21			21			20
$250K to $400K		33			33			34						34			34			34			35
$100K to $250K		21			22			22						22			22			23			23
$100K or Less		5			5			5						5			5			5			5

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


Average Primary Loan Size (in thousands)⁽³⁾	$	236		$	235		$	233					$	232		$	231		$	229		$	228

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 three 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

THIRD QUARTER 2019

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

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	717		$	713		$	709		$	2,139		$	716		$	717		$	712		$	722		$	2,867
Net investment income		722			724			701			2,147			690			696			707			688			2,781
Net investment gains (losses)		11			(36	)		84			59			38			(7	)		(10	)		8			29
Policy fees and other income		152			187			151			490			154			155			169			163			641

Total revenues		1,602			1,588			1,645			4,835			1,598			1,561			1,578			1,581			6,318

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		1,225			1,211			1,236			3,672			1,767			1,248			1,163			1,238			5,416
Interest credited		106			106			106			318			113			113			116			119			461
Acquisition and operating expenses, net of deferrals		158			142			148			448			153			144			146			141			584
Amortization of deferred acquisition costs and intangibles		89			67			66			222			55			53			78			71			257
Interest expense		4			4			5			13			4			4			4			4			16

Total benefits and expenses		1,582			1,530			1,561			4,673			2,092			1,562			1,507			1,573			6,734

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		20			58			84			162			(494	)		(1	)		71			8			(416	)
Provision (benefit) for income taxes		10			19			24			53			(101	)		6			21			6			(68	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		10			39			60			109			(393	)		(7	)		50			2			(348	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		(14	)		35			(86	)		(65	)		(41	)		6			9			(9	)		(35	)
Expenses related to restructuring		—			(1	)		4			3			—			—			—			—			—
Taxes on adjustments		3			(7	)		17			13			9			(2	)		(2	)		2			7

ADJUSTED OPERATING INCOME (LOSS)	$	(1	)	$	66		$	(5	)	$	60		$	(425	)	$	(3	)	$	57		$	(5	)	$	(376	)


⁽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	)	$	36		$	(84	)	$	(59	)	$	(38	)	$	7		$	10		$	(8	)	$	(29	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		(3	)		(1	)		(2	)		(6	)		(3	)		(1	)		(1	)		(1	)		(6	)

Net investment (gains) losses, net	$	(14	)	$	35		$	(86	)	$	(65	)	$	(41	)	$	6		$	9		$	(9	)	$	(35	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	652		$	640		$	628		$	1,920		$	650		$	648		$	632		$	631		$	2,561
Net investment income		432			428			406			1,266			398			397			399			382			1,576
Net investment gains (losses)		28			(15	)		80			93			46			4			3			6			59
Policy fees and other income		(2	)		2			—			—			—			(1	)		1			1			1

Total revenues		1,110			1,055			1,114			3,279			1,094			1,048			1,035			1,020			4,197

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		916			896			927			2,739			1,311			944			874			928			4,057
Interest credited		—			—			—			—			—			—			—			—			—
Acquisition and operating expenses, net of deferrals		106			93			101			300			105			99			101			93			398
Amortization of deferred acquisition costs and intangibles		25			26			25			76			25			24			22			27			98
Interest expense		—			—			—			—			—			—			—			—			—

Total benefits and expenses		1,047			1,015			1,053			3,115			1,441			1,067			997			1,048			4,553

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		63			40			61			164			(347	)		(19	)		38			(28	)		(356	)
Provision (benefit) for income taxes		19			15			19			53			(69	)		1			14			(1	)		(55	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		44			25			42			111			(278	)		(20	)		24			(27	)		(301	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		(28	)		15			(80	)		(93	)		(46	)		(4	)		(3	)		(6	)		(59	)
Expenses related to restructuring		—			(1	)		2			1			—			—			—			—			—
Taxes on adjustments		5			(2	)		16			19			10			—			1			1			12

ADJUSTED OPERATING INCOME (LOSS)	$	21		$	37		$	(20	)	$	38		$	(314	)	$	(24	)	$	22		$	(32	)	$	(348	)


RATIOS:
Loss Ratio⁽¹⁾		76	%		74	%		81	%		77	%		138	%		83	%		75	%		84	%		95	%
Gross Benefits Ratio⁽²⁾		140	%		140	%		148	%		143	%		202	%		146	%		138	%		147	%		158	%

⁽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

THIRD QUARTER 2019

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

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	65		$	73		$	81		$	219		$	66		$	69		$	80		$	91		$	306
Net investment income		133			130			133			396			127			128			125			124			504
Net investment gains (losses)		(2	)		(3	)		10			5			(5	)		(4	)		(2	)		5			(6	)
Policy fees and other income		151			182			148			481			151			152			164			159			626

Total revenues		347			382			372			1,101			339			345			367			379			1,430

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		228			244			242			714			367			239			225			247			1,078
Interest credited		60			58			58			176			61			59			60			61			241
Acquisition and operating expenses, net of deferrals		40			37			34			111			35			33			33			35			136
Amortization of deferred acquisition costs and intangibles		50			28			27			105			14			16			42			29			101
Interest expense		4			4			5			13			4			4			4			4			16

Total benefits and expenses		382			371			366			1,119			481			351			364			376			1,572

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(35	)		11			6			(18	)		(142	)		(6	)		3			3			(142	)
Provision (benefit) for income taxes		(8	)		3			1			(4	)		(30	)		(1	)		1			—			(30	)

INCOME (LOSS) FROM CONTINUING OPERATIONS		(27	)		8			5			(14	)		(112	)		(5	)		2			3			(112	)

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses		2			3			(10	)		(5	)		5			4			2			(5	)		6
Expenses related to restructuring		—			—			1			1			—			—			—			—			—
Taxes on adjustments		—			(1	)		2			1			(1	)		(1	)		—			1			(1	)

ADJUSTED OPERATING INCOME (LOSS)	$	(25	)	$	10		$	(2	)	$	(17	)	$	(108	)	$	(2	)	$	4		$	(1	)	$	(107	)

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

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

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—
Net investment income		157			166			162			485			165			171			183			182			701
Net investment gains (losses)		(15	)		(18	)		(6	)		(39	)		(3	)		(7	)		(11	)		(3	)		(24	)
Policy fees and other income		3			3			3			9			3			4			4			3			14

Total revenues		145			151			159			455			165			168			176			182			691

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		81			71			67			219			89			65			64			63			281
Interest credited		46			48			48			142			52			54			56			58			220
Acquisition and operating expenses, net of deferrals		12			12			13			37			13			12			12			13			50
Amortization of deferred acquisition costs and intangibles		14			13			14			41			16			13			14			15			58
Interest expense		—			—			—			—			—			—			—			—			—

Total benefits and expenses		153			144			142			439			170			144			146			149			609

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(8	)		7			17			16			(5	)		24			30			33			82
Provision (benefit) for income taxes		(1	)		1			4			4			(2	)		6			6			7			17

INCOME (LOSS) FROM CONTINUING OPERATIONS		(7	)		6			13			12			(3	)		18			24			26			65

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		12			17			4			33			—			6			10			2			18
Expenses related to restructuring		—			—			1			1			—			—			—			—			—
Taxes on adjustments		(2	)		(4	)		(1	)		(7	)		—			(1	)		(3	)		—			(4	)

ADJUSTED OPERATING INCOME (LOSS)	$	3		$	19		$	17		$	39		$	(3	)	$	23		$	31		$	28		$	79


⁽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	$	15		$	18		$	6		$	39		$	3		$	7		$	11		$	3		$	24
Adjustment for DAC and other intangible amortization and certain benefit reserves		(3	)		(1	)		(2	)		(6	)		(3	)		(1	)		(1	)		(1	)		(6	)

Net investment (gains) losses, net	$	12		$	17		$	4		$	33		$	—		$	6		$	10		$	2		$	18

Runoff Segment

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Adjusted Operating Income (Loss)—Runoff Segment

(amounts in millions)


	2019											2018
	3Q			2Q			1Q		Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Net investment income	$	48		$	47		$	47	$	142		$	45		$	44		$	43		$	42		$	174
Net investment gains (losses)		(9	)		(4	)		—		(13	)		(15	)		(3	)		(1	)		(14	)		(33	)
Policy fees and other income		35			35			35		105			37			38			38			40			153

Total revenues		74			78			82		234			67			79			80			68			294

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		8			13			1		22			17			7			7			8			39
Interest credited		40			40			41		121			39			38			36			37			150
Acquisition and operating expenses, net of deferrals		13			13			13		39			14			14			14			15			57
Amortization of deferred acquisition costs and intangibles		10			4			2		16			13			5			8			7			33

Total benefits and expenses		71			70			57		198			83			64			65			67			279

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		3			8			25		36			(16	)		15			15			1			15
Provision (benefit) for income taxes		—			1			5		6			(3	)		2			3			—			2

INCOME (LOSS) FROM CONTINUING OPERATIONS		3			7			20		30			(13	)		13			12			1			13

ADJUSTMENTS TO INCOME (LOSS) FROM CONTINUING OPERATIONS:
Net investment (gains) losses, net⁽¹⁾		9			2			—		11			13			1			1			12			27
Taxes on adjustments		(2	)		—			—		(2	)		(2	)		—			—			(3	)		(5	)

ADJUSTED OPERATING INCOME (LOSS)	$	10		$	9		$	20	$	39		$	(2	)	$	14		$	13		$	10		$	35


⁽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	$	9		$	4		$	—	$	13		$	15		$	3		$	1		$	14		$	33
Adjustment for DAC and other intangible amortization and certain benefit reserves		—			(2	)		—		(2	)		(2	)		(2	)		—			(2	)		(6	)

Net investment (gains) losses, net	$	9		$	2		$	—	$	11		$	13		$	1		$	1		$	12		$	27

Corporate and Other

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Adjusted Operating Loss—Corporate and Other^(1),(2)

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	2		$	2		$	2		$	6		$	2		$	1		$	3		$	2		$	8
Net investment income		2			2			2			6			3			—			1			2			6
Net investment gains (losses)		5			(7	)		(21	)		(23	)		18			(7	)		—			(1	)		10
Policy fees and other income		2			—			1			3			(1	)		(1	)		1			(2	)		(3	)

Total revenues	11			(3)			(16)			(8)			22			(7)			5			1			21

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		—			1			1			2			2			1			1			1			5
Acquisition and operating expenses, net of deferrals		8			13			13			34			22			17			14			15			68
Amortization of deferred acquisition costs and intangibles		1			—			—			1			—			—			—			1			1
Interest expense		53			54			53			160			55			53			60			63			231

Total benefits and expenses	62			68			67			197			79			71			75			80			305

LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES		(51	)		(71	)		(83	)		(205	)		(57	)		(78	)		(70	)		(79	)		(284	)
Provision (benefit) for income taxes		(21	)		(7	)		(9	)		(37	)		(47	)		(24	)		29			(14	)		(56	)

LOSS FROM CONTINUING OPERATIONS		(30	)		(64	)		(74	)		(168	)		(10	)		(54	)		(99	)		(65	)		(228	)

ADJUSTMENTS TO LOSS FROM CONTINUING OPERATIONS:
Net investment (gains) losses		(5	)		7			21			23			(18	)		7			—			1			(10	)
Expenses related to restructuring		—			1			—			1			—			2			—			—			2
Fees associated with bond consent solicitation		—			—			—			—			6			—			—			—			6
Taxes on adjustments		—			(1	)		(5	)		(6	)		2			(2	)		—			—			—

ADJUSTED OPERATING LOSS	$	(35	)	$	(57	)	$	(58	)	$	(150	)	$	(20	)	$	(47	)	$	(99	)	$	(64	)	$	(230	)


⁽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. ⁽²⁾Income (loss) from discontinued operations is considered part of Corporate and Other Activities but is excluded from the above table. Operating results of the Canada mortgage insurance business presented as discontinued operations on pages 8 and 9 herein were as follows:
	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
REVENUES:
Premiums	$	130		$	125		$	126		$	381		$	128		$	127		$	131		$	139		$	525
Net investment income		37			36			35			108			36			35			36			34			141
Net investment gains (losses)		(12	)		1			(1	)		(12	)		(136	)		29			(15	)		(15	)		(137	)

Total revenues		155			162			160			477			28			191			152			158			529

BENEFITS AND EXPENSES:
Benefits and other changes in policy reserves		23			19			19			61			23			18			19			18			78
Acquisition and operating expenses, net of deferrals		20			18			14			52			12			12			17			13			54
Amortization of deferred acquisition costs and intangibles		11			11			10			32			11			11			11			10			43
Interest expense		12			13			12			37			13			12			11			7			43

Total benefits and expenses		66			61			55			182			59			53			58			48			218

INCOME (LOSS) BEFORE INCOME TAXES AND LOSS ON SALE		89			101			105			295			(31	)		138			94			110			311
Provision (benefit) for income taxes		5			41			43			89			23			33			(2	)		27			81

INCOME (LOSS) BEFORE LOSS ON SALE		84			60			62			206			(54	)		105			96			83			230
Loss on sale, net of taxes		(164	)		—			—			(164	)		—			—			—			—			—

INCOME (LOSS) FROM DISCONTINUED OPERATIONS, NET OF TAXES		(80	)		60			62			42			(54	)		105			96			83			230

Less: net income (loss) from discontinued operations attributable to noncontrolling interests		30			35			36			101			(6	)		46			32			36			108

INCOME (LOSS) FROM DISCONTINUED OPERATIONS AVAILABLE TO GENWORTH FINANCIAL, INC.’S COMMON STOCKHOLDERS	$	(110	)	$	25		$	26		$	(59	)	$	(48	)	$	59		$	64		$	47		$	122

Additional Financial Data

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Investments Summary

(amounts in millions)


		September 30, 2019					June 30, 2019					March 31, 2019					December 31, 2018					September 30, 2018
		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		$	34,280		46	%	$	32,958		46	%	$	31,497		46	%	$	30,588		45	%	$	30,341		45	%
Private fixed maturity securities			13,411		18			13,091		18			12,566		18			11,790		18			11,438		17
Residential mortgage-backed securities⁽¹⁾			2,335		3			2,395		3			2,498		4			2,572		4			2,687		4
Commercial mortgage-backed securities			3,051		4			2,970		4			2,943		4			3,007		4			3,146		5
Other asset-backed securities			3,337		5			3,287		5			3,021		4			3,024		4			2,647		4
State and political subdivisions			2,729		4			2,636		4			2,546		4			2,552		4			2,795		4
Non-investment grade fixed maturity securities			2,090		3			2,154		3			2,082		3			2,056		3			2,113		3
Equity securities:
Common stocks and mutual funds			107		—			111		—			103		—			141		—			171		—
Preferred stocks			132		—			151		—			148		—			134		—			149		—
Commercial mortgage loans			6,980		10			6,963		10			6,929		10			6,687		10			6,568		10
Restricted commercial mortgage loans related to a securitization entity			53		—			56		—			59		—			62		—			87		—
Policy loans			2,069		3			2,076		3			1,994		3			1,861		3			1,859		3
Cash, cash equivalents, restricted cash and short-term investments			1,839		2			1,907		3			2,117		3			2,169		3			2,594		4
Securities lending			62		—			113		—			106		—			102		—			166		—
Other invested assets:	Limited partnerships		565		1			512		1			462		1			409		1			372		1
	Derivatives:
	Interest rate swaps		402		1			144		—			59		—			42		—			36		—
	Foreign currency swaps		10		—			5		—			3		—			6		—			2		—
	Equity index options		62		—			65		—			60		—			39		—			80		—
	Other foreign currency contracts		13		—			8		—			5		—			10		—			2		—
	Other		369		—			357		—			314		—			269		1			212		—

Total invested assets and cash		$	73,896		100	%	$	71,959		100	%	$	69,512		100	%	$	67,520		100	%	$	67,465		100	%

Public Fixed Maturity Securities—Credit Quality:
NRSRO⁽²⁾ Designation
AAA		$	10,561		25	%	$	10,195		24	%	$	9,995		25	%	$	10,031		25	%	$	10,790		27	%
AA			3,758		9			3,674		9			3,558		9			3,608		9			3,820		10
A			12,040		28			11,690		28			11,431		28			11,177		28			11,095		28
BBB			15,418		35			14,768		36			13,872		35			13,306		35			12,627		32
BB			1,093		3			1,128		3			1,081		3			1,149		3			1,156		3
B			53		—			76		—			76		—			93		—			130		—
CCC and lower			25		—			25		—			25		—			25		—			27		—

Total public fixed maturity securities		$	42,948		100	%	$	41,556		100	%	$	40,038		100	%	$	39,389		100	%	$	39,645		100	%

Private Fixed Maturity Securities—Credit Quality:
NRSRO⁽²⁾ Designation
AAA		$	1,594		9	%	$	1,504		8	%	$	1,480		9	%	$	1,531		9	%	$	1,138		7	%
AA			2,254		12			2,315		13			2,165		13			1,994		12			1,999		13
A			5,296		29			5,286		30			5,032		29			4,670		29			4,494		29
BBB			8,222		45			7,905		44			7,538		44			7,216		45			7,091		46
BB			851		5			865		5			839		5			733		5			720		5
B			66		—			58		—			59		—			54		—			78		—
CCC and lower			2		—			2		—			2		—			2		—			2		—

Total private fixed maturity securities		$	18,285		100	%	$	17,935		100	%	$	17,115		100	%	$	16,200		100	%	$	15,522		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

THIRD QUARTER 2019

Fixed Maturity Securities Summary

(amounts in millions)


	September 30, 2019					June 30, 2019					March 31, 2019					December 31, 2018					September 30, 2018
	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	$	5,254		9	%	$	4,987		8	%	$	4,731		8	%	$	4,631		8	%	$	5,181		9	%
State and political subdivisions		2,729		4			2,636		4			2,546		4			2,552		5			2,795		5
Foreign government		1,359		2			1,336		2			1,311		2			1,268		2			1,217		2
U.S. corporate		32,424		54			31,329		53			29,872		53			28,698		52			27,494		50
Foreign corporate		10,656		17			10,462		18			10,149		19			9,770		18			9,940		18
Residential mortgage-backed securities		2,375		4			2,436		4			2,540		4			2,618		5			2,731		5
Commercial mortgage-backed securities		3,071		5			2,989		5			2,962		5			3,016		5			3,156		6
Other asset-backed securities		3,365		5			3,316		6			3,042		5			3,036		5			2,653		5

Total fixed maturity securities	$	61,233		100	%	$	59,491		100	%	$	57,153		100	%	$	55,589		100	%	$	55,167		100	%

Corporate Bond Holdings—Industry Sector:

Investment Grade:
Finance and insurance	$	9,995		22	%	$	9,669		23	%	$	9,255		24	%	$	8,731		23	%	$	8,347		22	%
Utilities		5,868		14			5,697		14			5,491		14			5,445		14			5,451		15
Energy		3,801		9			3,732		9			3,596		9			3,294		9			3,192		9
Consumer—non-cyclical		6,293		15			6,043		14			5,735		14			5,534		14			5,180		14
Consumer—cyclical		2,003		5			1,836		4			1,731		4			1,693		4			1,645		4
Capital goods		3,243		8			3,108		7			2,956		7			2,833		7			2,751		7
Industrial		2,188		5			2,093		5			1,981		5			1,915		5			1,870		5
Technology and communications		3,919		9			3,821		10			3,580		9			3,443		9			3,282		9
Transportation		2,189		5			2,121		5			2,051		5			1,907		5			1,830		5
Other		1,691		4			1,719		4			1,770		4			1,806		5			1,977		5

Subtotal		41,190		96			39,839		95			38,146		95			36,601		95			35,525		95


Non-Investment Grade:
Finance and insurance		208		—			216		1			200		1			183		—			177		—
Utilities		85		—			100		—			94		—			51		—			57		—
Energy		346		1			331		1			308		1			339		1			357		1
Consumer—non-cyclical		138		—			155		—			168		—			192		1			193		1
Consumer—cyclical		233		1			243		1			237		1			217		1			220		1
Capital goods		137		—			157		—			146		—			130		—			154		—
Industrial		224		1			207		—			189		—			222		1			215		1
Technology and communications		425		1			465		2			452		2			438		1			448		1
Transportation		8		—			8		—			13		—			23		—			13		—
Other		86		—			70		—			68		—			72		—			75		—

Subtotal		1,890		4			1,952		5			1,875		5			1,867		5			1,909		5

Total	$	43,080		100	%	$	41,791		100	%	$	40,021		100	%	$	38,468		100	%	$	37,434		100	%

Fixed Maturity Securities—Contractual Maturity Dates:

Due in one year or less	$	1,587		3	%	$	1,684		3	%	$	1,777		3	%	$	1,653		3	%	$	1,496		3	%
Due after one year through five years		9,655		16			9,689		16			9,380		16			9,298		17			9,311		17
Due after five years through ten years		12,387		20			11,985		20			11,554		20			11,294		20			11,312		21
Due after ten years		28,793		47			27,392		46			25,898		46			24,674		44			24,508		44

Subtotal		52,422		86			50,750		85			48,609		85			46,919		84			46,627		85
Mortgage and asset-backed securities		8,811		14			8,741		15			8,544		15			8,670		16			8,540		15

Total fixed maturity securities	$	61,233		100	%	$	59,491		100	%	$	57,153		100	%	$	55,589		100	%	$	55,167		100	%

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

General Account U.S. GAAP Net Investment Income Yields

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
U.S. GAAP Net Investment Income
Fixed maturity securities—taxable	$	631		$	634		$	613		$	1,878		$	617		$	613		$	621		$	605		$	2,456
Fixed maturity securities—non-taxable		2			2			2			6			2			3			3			3			11
Commercial mortgage loans		86			84			81			251			80			81			77			82			320
Restricted commercial mortgage loans related to a securitization entity		1			1			1			3			2			1			2			2			7
Equity securities		4			5			4			13			4			6			5			5			20
Other invested assets		49			47			44			140			49			41			42			37			169
Limited partnerships		13			12			15			40			(4	)		3			11			2			12
Policy loans		47			45			46			138			44			41			41			43			169
Cash, cash equivalents, restricted cash and short-term investments		8			11			11			30			11			12			13			12			48

Gross investment income before expenses and fees		841			841			817			2,499			805			801			815			791			3,212
Expenses and fees		(25	)		(25	)		(23	)		(73	)		(26	)		(21	)		(23	)		(21	)		(91	)

Net investment income	$	816		$	816		$	794		$	2,426		$	779		$	780		$	792		$	770		$	3,121

Annualized Yields
Fixed maturity securities—taxable		4.7	%		4.7	%		4.6	%		4.7	%		4.6	%		4.6	%		4.7	%		4.6	%		4.6	%
Fixed maturity securities—non-taxable		6.1	%		6.1	%		6.1	%		6.1	%		3.7	%		3.9	%		3.8	%		3.7	%		4.0	%
Commercial mortgage loans		4.9	%		4.8	%		4.8	%		4.9	%		4.8	%		5.0	%		4.8	%		5.2	%		4.9	%
Restricted commercial mortgage loans related to a securitization entity		7.3	%		7.0	%		6.7	%		7.0	%		10.8	%		4.5	%		8.4	%		7.8	%		7.9	%
Equity securities		6.4	%		7.8	%		6.1	%		6.8	%		5.0	%		7.5	%		5.9	%		5.9	%		6.3	%
Other invested assets⁽¹⁾		54.0	%		56.1	%		65.7	%		59.3	%		99.0	%		107.9	%		150.0	%		129.8	%		111.9	%
Limited partnerships⁽²⁾		9.7	%		9.9	%		13.8	%		11.0	%		(4.1	)%		3.4	%		13.8	%		2.9	%		3.6	%
Policy loans		9.1	%		8.8	%		9.5	%		9.2	%		9.5	%		8.8	%		9.0	%		9.6	%		9.2	%
Cash, cash equivalents, restricted cash and short-term investments		1.7	%		2.2	%		2.1	%		2.0	%		1.8	%		1.8	%		1.7	%		1.4	%		1.7	%

Gross investment income before expenses and fees		5.1	%		5.1	%		5.0	%		5.1	%		4.9	%		4.9	%		5.0	%		4.8	%		4.9	%
Expenses and fees		(0.2	)%		(0.1	)%		(0.2	)%		(0.2	)%		(0.1	)%		(0.1	)%		(0.2	)%		(0.1	)%		(0.1	)%

Net investment income		4.9	%		5.0	%		4.8	%		4.9	%		4.8	%		4.8	%		4.8	%		4.7	%		4.8	%

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 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 44 herein for average invested assets and cash used in the yield calculation.

⁽¹⁾	Investment income for other invested assets includes amortization of terminated cash flow hedges, which have no corresponding book value within the yield calculation.

⁽²⁾	Limited partnership investments are primarily equity-based and do not have fixed returns by period.

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Net Investment Gains (Losses), Net—Detail

(amounts in millions)


	2019												2018
	3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
Net realized gains (losses) on available-for-sale securities:
Fixed maturity securities:
U.S. corporate	$	11		$	(16	)	$	30		$	25		$	10		$	(6	)	$	(7	)	$	(3	)	$	(6	)
U.S. government, agencies and government-sponsored enterprises		—			2			33			35			54			1			—			—			55
Foreign corporate		1			(1	)		(1	)		(1	)		(6	)		—			(1	)		(3	)		(10	)
Foreign government		2			2			—			4			(4	)		(2	)		—			—			(6	)
State and political subdivisions		—			—			—			—			(1	)		—			—			—			(1	)
Mortgage-backed securities		1			1			(2	)		—			(5	)		(2	)		2			(2	)		(7	)
Asset-backed securities		—			—			(1	)		(1	)		—			—			(1	)		—			(1	)
Foreign exchange		1			1			(1	)		1			1			—			—			—			1

Total net realized gains (losses) on available-for-sale securities		16			(11	)		58			63			49			(9	)		(7	)		(8	)		25

Net realized gains (losses) on equity securities sold		6			—			3			9			1			—			8			2			11
Net unrealized gains (losses) on equity securities still held		(4	)		5			12			13			(23	)		(2	)		4			(13	)		(34	)
Limited partnerships		6			(11	)		15			10			3			3			(2	)		7			11
Commercial mortgage loans		(1	)		1			(1	)		(1	)		—			—			—			—			—
Derivative instruments		(29	)		(30	)		(12	)		(71	)		(8	)		(8	)		(2	)		(4	)		(22	)
Other		4			—			—			4			—			—			—			—			—

Net investment gains (losses), gross		(2	)		(46	)		75			27			22			(16	)		1			(16	)		(9	)
Adjustment for DAC and other intangible amortization and certain benefit reserves		3			3			2			8			5			3			1			3			12
Adjustment for net investment (gains) losses attributable to noncontrolling interests		4			—			(6	)		(2	)		9			(1	)		(6	)		5			7

Net investment gains (losses), net	$	5		$	(43	)	$	71		$	33		$	36		$	(14	)	$	(4	)	$	(8	)	$	10

Reconciliations of Non-GAAP Measures

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Reconciliation of Operating ROE

(amounts in millions)


Twelve Month Rolling Average ROE	Twelve months ended
	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
U.S. GAAP Basis ROE
Net income available to Genworth Financial, Inc.’s common stockholders for the twelve months ended⁽¹⁾	$	31		$	159		$	181		$	119		$	801
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,646		$	10,609		$	10,539		$	10,500		$	10,426
U.S. GAAP Basis ROE^(1)/(2)		0.3	%		1.5	%		1.7	%		1.1	%		7.7	%

Operating ROE
Adjusted operating income (loss) for the twelve months ended⁽¹⁾	$	91		$	67		$	19		$	(5	)	$	590
Quarterly average Genworth Financial, Inc.’s stockholders’ equity, excluding accumulated other comprehensive income⁽²⁾	$	10,646		$	10,609		$	10,539		$	10,500		$	10,426
Operating ROE^(1)/(2)		0.9	%		0.6	%		0.2	%		—	%		5.7	%

Quarterly Average ROE	Three months ended
	September 30, 2019			June 30, 2019			March 31, 2019			December 31, 2018			September 30, 2018
U.S. GAAP Basis ROE
Net income (loss) available to Genworth Financial, Inc.’s common stockholders for the period ended⁽³⁾	$	18		$	168		$	174		$	(329	)	$	146
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,755		$	10,663		$	10,494		$	10,569		$	10,657
Annualized U.S. GAAP Quarterly Basis ROE^(3)/(4)		0.7	%		6.3	%		6.6	%		(12.5	)%		5.5	%

Operating ROE
Adjusted operating income (loss) for the period ended⁽³⁾	$	123		$	178		$	95		$	(305	)	$	99
Quarterly average Genworth Financial, Inc.’s stockholders’ equity for the period, excluding accumulated other comprehensive income⁽⁴⁾	$	10,755		$	10,663		$	10,494		$	10,569		$	10,657
Annualized Operating Quarterly Basis ROE^(3)/(4)		4.6	%		6.7	%		3.6	%		(11.5	)%		3.7	%

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

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

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

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Reconciliation of Core Yield


		2019												2018
	(Assets—amounts in billions)		3Q			2Q			1Q			Total			4Q			3Q			2Q			1Q			Total
	Reported—Total Invested Assets and Cash	$	73.9		$	72.0		$	69.5		$	73.9		$	67.5		$	67.5		$	68.2		$	69.6		$	67.5
	Subtract:
	Securities lending		0.1			0.1			0.1			0.1			0.1			0.2			0.2			0.2			0.1
	Unrealized gains (losses)		7.5			5.7			3.7			7.5			1.8			2.1			2.6			3.5			1.8

	Adjusted end of period invested assets and cash	$	66.3		$	66.2		$	65.7		$	66.3		$	65.6		$	65.2		$	65.4		$	65.9		$	65.6

(A)	Average Invested Assets and Cash Used in Reported Yield Calculation	$	66.2		$	66.0		$	65.7		$	66.0		$	65.4		$	65.3		$	65.6		$	65.7		$	65.5
	Subtract:
	Restricted commercial mortgage loans related to a securitization entity⁽¹⁾		—			—			0.1			—			—			—			—			0.1			—

(B)	Average Invested Assets and Cash Used in Core Yield Calculation	$	66.2		$	66.0		$	65.6		$	66.0		$	65.4		$	65.3		$	65.6		$	65.6		$	65.5

	(Income—amounts in millions)

(C)	Reported—Net Investment Income	$	816		$	816		$	794		$	2,426		$	779		$	780		$	792		$	770		$	3,121
	Subtract:
	Bond calls and commercial mortgage loan prepayments		13			7			6			26			8			8			9			11			36
	Other non-core items⁽²⁾		8			7			2			17			2			1			2			(2	)		3
	Restricted commercial mortgage loans related to a securitization entity⁽¹⁾		—			—			—			—			1			1			—			1			3

(D)	Core Net Investment Income	$	795		$	802		$	786		$	2,383		$	768		$	770		$	781		$	760		$	3,079


(C) / (A)	Reported Yield		4.93	%		4.95	%		4.83	%		4.90	%		4.76	%		4.78	%		4.83	%		4.69	%		4.76	%
(D) / (B)	Core Yield		4.80	%		4.86	%		4.79	%		4.82	%		4.70	%		4.72	%		4.76	%		4.63	%		4.70	%

Note: Yields have 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.

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

Corporate Information

GENWORTH FINANCIAL, INC.

FINANCIAL SUPPLEMENT

THIRD QUARTER 2019

Financial Strength Ratings As Of October 28, 2019


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)	Baa3 (Adequate)	N/A
Genworth Financial Mortgage Insurance Pty Limited (Australia)⁽¹⁾	A (Strong)	N/A	N/A
Genworth Life Insurance Company	B- (Weak)	B3 (Poor)	C++ (Marginal)
Genworth Life and Annuity Insurance Company	B- (Weak)	B1 (Poor)	B (Fair)
Genworth Life Insurance Company of New York	B- (Weak)	B3 (Poor)	C++ (Marginal)

The S&P, Moody’s, A.M. Best, Fitch Rating Service (Fitch) and HR Ratings 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 an insurer rated “A” (Strong) has strong financial security characteristics that outweigh any vulnerabilities and is highly likely to have the ability to meet financial commitments. 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 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 sixth-, eleventh- and sixteenth-highest of S&P’s 21 ratings categories.

Moody’s states that insurance companies rated “Baa” (Adequate) offer adequate financial security and those rated “B” (Poor) offer questionable financial security. The “Baa” (Adequate) and “B” (Poor) ranges are the fourth- 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 groups, 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 “Baa3,” “B1” and “B3” ratings are the tenth-, fourteenth- and sixteenth-highest, respectively, of Moody’s 21 ratings categories.

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

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, Fitch and HR Ratings review their ratings periodically and the company cannot assure you that it will maintain the current ratings in the future. These and other agencies may also rate the company or its insurance subsidiaries on a solicited or an unsolicited basis.

⁽¹⁾	Genworth Financial Mortgage Insurance Pty Limited (Australia) is also rated “A+” by Fitch.