Equitable Holdings, Inc. Annual Report - Your Comprehensive 2024 Review

Considering an investment in Equitable Holdings, Inc., or simply want to understand their latest performance? This review offers a clear, investor-focused look at their 2024 results and strategic direction.

Business Overview: Who is Equitable Holdings? Equitable Holdings stands as a leading financial services company, delivering a broad spectrum of financial advice, wealth management, and insurance solutions. Its core business segments include:

• Individual Retirement: Offers variable annuities, fixed-rate annuities, and structured products, helping individuals save for retirement.
• Group Retirement: Provides retirement plans and services to employers and their employees.
• Life Insurance: Delivers various life insurance products designed to protect individuals and families.
• Investment Management: This segment primarily features Equitable's approximately 65% majority ownership stake in AllianceBernstein (AB Holding), a global asset manager. AB significantly contributes to Equitable's overall assets under management and earnings.

Equitable's substantial investment portfolio, which backs policyholder obligations, includes corporate bonds, government securities, and various mortgage loans (commercial, agricultural, and residential). The company actively manages this portfolio, continuously monitoring credit quality and market exposures.

Financial Performance: 2024 Financial Highlights - The Numbers You Need to Know Equitable Holdings achieved a solid performance in 2024, demonstrating resilience amidst a dynamic market:

• Total Revenue: Grew 5% to approximately $20.5 billion in 2024, up from $19.5 billion in 2023. Strong investment performance and growth in fee-based revenue drove this increase.
• Net Income: Rose 10% to $2.5 billion for the year, compared to $2.27 billion in 2023. Favorable market conditions, which boosted investment returns, and effective expense management primarily contributed to this improvement.
• Diluted Earnings Per Share (EPS): Reached $6.00 in 2024, a healthy increase from $5.40 in 2023.
• Assets Under Management (AUM): Expanded 7% to $750 billion by year-end 2024, up from $700 billion in 2023. This growth reflects positive market movements and net inflows into their retirement and investment products.
• Shareholder Equity: Increased to $30 billion as of December 31, 2024, supported by retained earnings and a stable capital base.
• Investment Portfolio Performance: The company reported $1.2 billion in net unrealized gains on its investment portfolio at year-end 2024. This marks a significant improvement from net unrealized losses of $500 million in 2023, positively impacting Equitable's balance sheet and regulatory capital.
• Capital Returns: Equitable returned $500 million to shareholders through share repurchases and maintained a quarterly dividend of $0.20 per share throughout 2024, underscoring its commitment to shareholder value.

Management Discussion: Key Strategic Moves & Business Developments in 2024 In the past year, Equitable Holdings executed several strategic adjustments and operational improvements:

• Annual Assumption Updates: Consistent with industry practice, Equitable completed its annual actuarial assumption updates in the fourth quarter of 2024. These updates, which reflect changes in mortality rates, life expectancy, policyholder behavior, and investment returns, resulted in a $300 million pre-tax charge. While impacting net income, these updates ensure the long-term accuracy of the company's financial reserves.
• AllianceBernstein (AB) Strategic Management: Although no major sales occurred in 2024, Equitable continued to strategically manage its stake in AB. Following year-end, in February and April 2025, Equitable sold AB units totaling approximately $450 million, further optimizing its capital structure and providing liquidity.
• Reinsurance Transactions: In April and June 2025 (subsequent events), Equitable entered into new reinsurance agreements with RGA Reinsurance Company. These agreements transferred a portion of its long-term care and annuity liabilities, aiming to reduce risk exposure and free up capital, with an estimated capital benefit of $200 million.
• "Novation" Event: In early 2025, Equitable completed a significant "novation" event for certain derivatives contracts. This process involved replacing existing counterparty agreements with new ones, streamlining its hedging program and potentially improving collateral efficiency. The financial impact is expected to be neutral to slightly positive on an ongoing basis.
• Product Innovation: Equitable continued to enhance its variable annuity products, launching new features that focus on guaranteed income benefits and expanded investment options to meet evolving client needs.

Risk Factors: Understanding the Risks Investing in financial services companies like Equitable Holdings carries inherent risks, which their 10-K filing thoroughly details:

• Market Volatility: Fluctuations in equity and fixed-income markets can significantly impact investment performance, AUM, and the value of Equitable's derivatives.
• Interest Rate Risk: Changes in interest rates can affect the profitability of its insurance products, the value of its investment portfolio, and its ability to meet guaranteed returns.
• Longevity and Mortality Risk: As an insurer, Equitable faces the risk that policyholders live longer than expected (longevity risk for annuities) or die sooner than expected (mortality risk for life insurance), which impacts claims and reserves.
• Credit Risk: The company's large investment portfolio faces the risk of default by bond issuers or mortgage borrowers.
• Regulatory and Legal Risks: The financial services industry is highly regulated. Changes in laws or regulations, as well as litigation, can impact Equitable's operations and profitability.

Financial Health: Capital, Debt, and Liquidity Equitable Holdings maintains a robust financial position, characterized by a strong capital base and prudent balance sheet management. The company manages its capital ratios to exceed regulatory requirements, providing a buffer against adverse market conditions and supporting strategic growth initiatives.

Equitable actively manages its outstanding borrowings to optimize its cost of capital and maintain financial flexibility. This includes accessing various capital markets to fund operations and strategic investments.

Liquidity remains a key focus. The company maintains substantial cash and highly liquid investment holdings to meet policyholder obligations, operational needs, and potential market dislocations. Its diversified investment portfolio provides both long-term returns and sufficient liquidity. Equitable also utilizes committed credit facilities to further enhance its liquidity position.

Future Outlook: Strategy & Outlook Equitable Holdings focuses on several key strategic priorities for the coming years:

• Growth in High-Value Segments: Continuing to expand its presence in the Individual Retirement and Wealth Management markets, leveraging its strong distribution network and product innovation.
• Capital Optimization: Actively managing its capital structure, including strategic dispositions (like the AB unit sales) and reinsurance transactions, to enhance financial flexibility and shareholder returns.
• Operational Efficiency: Investing in technology and digital capabilities to streamline operations, improve customer experience, and reduce costs.
• Risk Management: Maintaining a robust risk management framework to effectively navigate market uncertainties and regulatory changes.

Equitable Holdings aims to deliver sustainable growth and strong shareholder returns by focusing on its core strengths, adapting to market conditions, and prudently managing its capital and risks.

Competitive Position Equitable Holdings operates in highly competitive financial services markets, facing a diverse range of competitors across its segments. These include other large insurance companies, global asset managers, banks, and specialized financial advisory firms.

Key competitive factors in the industry include product innovation, pricing, distribution capabilities, brand recognition, financial strength ratings, and the ability to attract and retain talent.

Equitable leverages several competitive advantages, including its strong brand reputation, extensive distribution network of financial professionals, diversified product offerings in retirement and insurance, and its significant stake in AllianceBernstein, which provides world-class investment management expertise. The company's focus on delivering holistic financial advice and tailored solutions further differentiates it in the marketplace.